The U.S. Supreme Court case Panhandle Eastern Pipe Line Co. v. Michigan Public Service Commission et al., 1950, revolved around the issue of whether a state could regulate rates for natural gas sold directly to consumers within its borders by an interstate pipeline company, even though that company was already regulated by the Federal Power Commission (FPC). The court ruled in favor of Panhandle Eastern Pipe Line Company stating that states cannot regulate sales made directly to consumers from interstate pipelines because such regulation would interfere with FPC's jurisdiction over wholesale rates and transportation services provided by these companies under Natural Gas Act. This decision effectively limited the power of individual states in regulating certain aspects of energy commerce and reinforced federal authority over interstate natural gas transactions.

In the dissenting opinion for Panhandle Eastern Pipe Line Co. v. Michigan Public Service Commission et al., Justice Frankfurter, joined by Justices Douglas and Burton, argued that the majority's decision was a departure from established principles of federalism and judicial restraint. They contended that states should be allowed to regulate natural gas companies within their borders as long as they do not interfere with interstate commerce or conflict with federal law. The dissenters believed that Michigan had acted within its rights in requiring Panhandle to obtain a certificate of public convenience before building additional facilities in the state, especially since this requirement did not contradict any provision of the Natural Gas Act or impede interstate commerce. Furthermore, they pointed out that Congress had explicitly left room for state regulation when it passed this act and warned against unnecessary judicial interference in matters best left to legislative bodies.