In the case of Lyon, Superintendent of Banks v. Singer (1949), the U.S. Supreme Court was asked to decide on a dispute involving banking regulations and bankruptcy laws in New York State. The issue at hand was whether or not certain assets held by insolvent banks could be used to pay off debts owed to general creditors, as opposed to being reserved for specific types of claims such as those made by depositors or other banks. The court ruled in favor of Singer, holding that under New York law these assets were indeed available for distribution among all creditors rather than being restricted only for special classes of claimants. This decision clarified how state insolvency laws interacted with federal bankruptcy rules and provided guidance on how similar disputes should be resolved in future cases.

In the dissenting opinion for Lyon v. Singer, Justice Jackson argued that the majority's ruling was a departure from established principles of law and an intrusion into state affairs. He contended that it was not within the Supreme Court's jurisdiction to decide on matters related to New York State banking laws or how they should be applied in this case. Furthermore, he believed that by deciding on these issues, the court had overstepped its boundaries and interfered with states' rights. The justice also expressed concern about potential negative implications of such interference for future cases involving state laws and regulations.