In the case of North Dakota et al. v. United States in 1989, the Supreme Court ruled on whether federal law preempted state laws regarding alcohol content labeling on beer cans and bottles. The states argued that they had a right to regulate this under their police powers, while the federal government contended that it was within its jurisdiction due to interstate commerce regulations. The court held in favor of the federal government with a 7-2 decision, stating that when there is conflict between state and federal law over matters related to interstate commerce, such as product labeling requirements for goods sold across state lines, then federal law takes precedence according to the Supremacy Clause of Constitution. This ruling effectively invalidated several states' laws requiring additional or different information about alcohol content than what was mandated by Federal Alcohol Administration Act (FAAA).

In the dissenting opinion for North Dakota et al. v. United States, it was argued that the majority's decision to uphold federal regulations over state-owned liquor stores contradicted previous rulings and principles of federalism. The dissenters believed that states should have control over their own operations without interference from Congress unless there is a clear constitutional provision or conflict with national interests at stake. They pointed out that in this case, no such conflicts existed as states were not competing against private entities but merely operating within their jurisdictional boundaries. Furthermore, they contended that by allowing Congress to regulate state activities under its commerce power would blur the distinction between what is truly national and what is truly local - a fundamental aspect of our system of government which ensures balance between different levels of governance.