In the case of Mercer County v. Hackett, the Supreme Court was asked to decide whether a state court had jurisdiction over an action brought by a citizen of another state against citizens of that same other state in matters arising out of contracts made within its borders. The Court held that it did not have such jurisdiction and reversed the judgment below. It reasoned that under Article IV, Section 2, Clause 1 (the "Privileges and Immunities" clause) of the Constitution, states are prohibited from discriminating against citizens from other states with respect to their civil rights or privileges; thus they cannot deny them access to their courts for actions based on contracts entered into within their borders. Furthermore, since Congress has not provided otherwise through legislation granting concurrent jurisdiction between federal and state courts in this area, only federal courts can exercise such power as per Article III's grant of judicial power exclusively to those tribunals created by Congress itself.

In Mercer County v. Hackett, the Supreme Court was asked to decide whether a state court had jurisdiction over an action brought by citizens of one state against citizens of another in which the amount sought exceeded $500. The majority opinion held that such actions were not within the scope of federal judicial power and thus could only be heard in a state court. Justice Field dissented from this ruling, arguing that Congress had expressly granted federal courts exclusive jurisdiction over cases involving more than $500 between citizens of different states and therefore it should have been decided at the federal level rather than being left up to individual states. He further argued that allowing each state to make its own decision would lead to confusion and uncertainty as well as unequal treatment for litigants depending on where they lived or what forum their case happened to fall into.