In the case of Montgomery Ward & Co. v. Duncan, 1940, the U.S Supreme Court was tasked with deciding whether a state could impose sales tax on goods sold by an out-of-state retailer to in-state customers when those goods were shipped from outside the state directly to customers within it. The court ruled that such taxation did not violate the Commerce Clause of the Constitution and thus upheld Oklahoma's imposition of use tax on purchases made by its residents from Montgomery Ward & Co., an Illinois-based mail-order company. This decision established that states have jurisdiction over interstate commerce transactions if they can prove a sufficient nexus between their taxing power and either party involved in said transaction.

In the dissenting opinion for Montgomery Ward & Co. v. Duncan, Justice Black argued that the majority's decision to uphold a state law allowing employees to sue their employers over workplace injuries was inconsistent with previous Supreme Court rulings on similar issues. He believed that this inconsistency undermined the authority of federal courts and threatened individual liberties by giving states too much power over interstate commerce. Furthermore, he contended that such laws could potentially lead to unfair treatment of businesses operating in multiple states as they would be subject to different rules and regulations in each jurisdiction. This, according to Justice Black, contradicted the purpose of having a national economy regulated by federal law.