The City of Milwaukee v. Cement Division, National Gypsum Company case in 1994 revolved around the issue of whether a city could sue manufacturers for damages related to asbestos removal under federal common law or if such claims were preempted by the Clean Air Act (CAA). The Supreme Court ruled that the CAA did indeed preempt these types of lawsuits. The court reasoned that Congress had intended for the Environmental Protection Agency to regulate air pollution and it would be inappropriate for courts to interfere with this regulatory scheme through tort litigation. Therefore, any disputes over liability for asbestos-related damages should be resolved under state law rather than federal common law.

In the dissenting opinion for the case City of Milwaukee v. Cement Division, National Gypsum Company et al., Justice Blackmun argued that the majority's decision to allow a city to unilaterally alter its contracts with private companies was fundamentally unfair and violated basic principles of contract law. He contended that allowing such actions would undermine confidence in municipal bonds and other forms of public debt, which could have serious economic consequences. Furthermore, he disagreed with the majority's interpretation of federal bankruptcy law, arguing that it did not give cities carte blanche to ignore their contractual obligations. Instead, he believed it should be used as a last resort when all other options had been exhausted.