The Lynch v. Household Finance Corp case in 1971 revolved around the issue of whether federal courts had jurisdiction over state law claims, which were tied to a federal question. The plaintiffs, who were borrowers from Household Finance Corporation (HFC), claimed that HFC violated the Truth in Lending Act by not disclosing certain loan information and also alleged usury under Connecticut law. They sought damages for themselves and on behalf of all other similarly situated borrowers across the nation. However, they filed their claim in a federal court instead of a state court because their claim involved interpretation of a federal statute - The Truth In Lending Act. The Supreme Court held that while there was indeed a substantial federal question giving rise to jurisdiction due to potential violation of the Truth In Lending Act, it did not extend this jurisdiction to include related state-law claims such as usury unless these are so intertwined with the resolution of the Federal questions that they cannot be separated from them without denying justice.

In the dissenting opinion for Lynch et al. v. Household Finance Corp., Justice Douglas argued that the majority's decision effectively allowed state usury laws to be circumvented by national banks, thereby undermining states' rights and protections for consumers against predatory lending practices. He contended that this interpretation of the National Bank Act was incorrect and would lead to a dangerous precedent where federal law could override state consumer protection laws at will, leading to potential exploitation of borrowers. Furthermore, he expressed concern about the implications this ruling might have on other areas of commerce if similar interpretations were applied elsewhere in future cases.