In the case of Powerex Corp. v. Reliant Energy Services, Inc., et al., 2006, the Supreme Court dealt with a dispute over energy transactions during California's energy crisis in 2000-01. Powerex Corp, a Canadian company and subsidiary of BC Hydro (a Crown corporation), was sued by several American companies for alleged price manipulation and antitrust violations related to these transactions. The main issue before the court was whether or not Powerex could claim sovereign immunity as an arm of the provincial government under Canada’s Foreign Sovereign Immunities Act (FSIA). The Ninth Circuit Court had previously ruled that it couldn't because it engaged in commercial activity within U.S jurisdiction. However, on appeal to the Supreme Court, this decision was reversed based on two key points: firstly that FSIA did not apply because BC Hydro is owned by a province rather than being part of federal government; secondly that even if FSIA did apply there would still be no grounds for denying immunity since any commercial activities were carried out outside U.S jurisdiction.

In the dissenting opinion for Powerex Corp. v. Reliant Energy Services, Inc., it was argued that the majority's decision to dismiss Powerex from litigation due to its status as an arm of a foreign state contradicted previous court rulings and federal law regarding sovereign immunity. The dissent pointed out that while Powerex is indeed owned by a Canadian province, it operates commercially in the U.S., which should make it subject to American jurisdiction under established legal principles. Furthermore, they contended that dismissing Powerex could potentially disrupt international commerce by allowing foreign-owned companies operating within U.S borders to evade liability simply because of their ownership structure.