In the case of New Orleans v. Louisiana Construction Company, 1890, the city of New Orleans filed a suit against the Louisiana Construction and Improvement Company for allegedly failing to fulfill their contractual obligations related to public works projects. The company had been granted certain privileges by an act of legislature in exchange for undertaking these projects but failed to complete them as agreed upon. The Supreme Court ruled that while it was within its jurisdiction to hear cases involving contracts between private corporations and states, this particular case did not present any federal question or involve constitutional rights violations. Therefore, it fell outside its purview since there were no grounds on which they could review decisions made by state courts regarding local laws or contracts unless those decisions infringed upon federal law or constitutionally protected rights.

In the dissenting opinion for New Orleans v. Louisiana Construction Company, it was argued that the city of New Orleans had no right to sue because they were not directly affected by the actions of the construction company. The dissenting justices believed that only those who suffered direct harm from a party's actions have standing to bring a lawsuit against them. They also disagreed with majority’s interpretation of state law and felt there was an overreach in federal jurisdiction into matters better left to local or state courts. Furthermore, they expressed concern about setting a precedent where any entity could potentially sue another without having experienced direct injury or damage as result of their actions.