In the 1935 case of McNutt, Governor of Indiana, et al. v. McHenry Chevrolet Co., Inc., the U.S Supreme Court ruled that a state court could not enjoin enforcement of an order made by a state administrative agency without first determining whether the agency had exceeded its statutory authority. The dispute arose when McHenry Chevrolet Co., Inc challenged an order from Indiana's Department of Financial Institutions which required them to obtain a license for selling installment contracts on automobiles and pay certain fees associated with it. They argued this was beyond the department's power as defined by statute and sought to prevent its enforcement in state court. However, instead of examining if the department had overstepped its bounds, the lower courts simply issued injunctions against enforcing it based on their own interpretation of what constituted "reasonable" regulations under law. The Supreme Court reversed these decisions stating that before issuing such injunctions, courts must first determine whether or not administrative agencies have acted within their given powers - effectively establishing judicial review over actions taken by such bodies at both federal and state levels.

In the dissenting opinion for McNutt, Governor of Indiana, et al. v. McHenry Chevrolet Co., Inc., Justice Cardozo disagreed with the majority's decision to remand the case back to state court without deciding on its merits. He argued that it was within the Supreme Court’s jurisdiction and duty to decide whether or not a tax imposed by Indiana on an out-of-state corporation violated constitutional principles of equality and uniformity in taxation. According to him, there were sufficient facts presented before them which could have been used as a basis for making such determination instead of sending it back down for further proceedings at lower courts level where same issues would be re-litigated again thereby causing unnecessary delay and expense.