In the case of Niagara Hudson Power Corp. v. Leventritt, 1950, the United States Supreme Court was tasked with determining whether a New York state law that allowed public utility companies to issue new stock without first obtaining shareholder approval violated the Commerce Clause of the U.S. Constitution. The plaintiff, Niagara Hudson Power Corporation argued that this law interfered with interstate commerce and therefore should be deemed unconstitutional. The defendant in this case was Irving Leventritt who had filed suit against Niagara Hudson Power Corporation for issuing additional shares without seeking prior approval from existing shareholders as per New York's Martin Act. However, after careful consideration, it was ruled by Justice Felix Frankfurter on behalf of an unanimous court that there were no violations made against either federal laws or constitutionally protected rights under the Commerce Clause through application of such state legislation regulating local aspects of business operations within its jurisdictional boundaries even if they have incidental effects on interstate commerce activities.

In the dissenting opinion for Niagara Hudson Power Corp. v. Leventritt, Justice Frankfurter disagreed with the majority's interpretation of New York law and its application to this case. He argued that under New York law, a corporation cannot be forced into involuntary dissolution unless it is insolvent or unable to meet its obligations as they mature - conditions which were not met in this instance by Niagara Hudson Power Corporation according to him. Furthermore, he contended that even if these conditions were met, dissolution would still require approval from two-thirds of shareholders who have voting rights at an annual meeting; a requirement also unfulfilled in this case. Therefore, he believed that the court had overstepped its bounds by ordering the company's liquidation without proper legal justification.