The case of Public Service Commission of Puerto Rico v. Havemeyer et al., 1935, revolved around the issue of whether or not the Public Service Commission in Puerto Rico had jurisdiction over a foreign corporation that was operating on the island. The company in question, American Railroad Company of Porto Rico, was incorporated under New Jersey law but conducted all its business operations within Puerto Rico. The Supreme Court ruled that even though it is a foreign corporation, since it operates solely within Puerto Rican territory and serves local communities there, it falls under the regulatory authority of the Public Service Commission. This decision affirmed that territorial governments have power to regulate businesses operating exclusively within their borders regardless if they are domestic or foreign corporations.

In the dissenting opinion for Public Service Commission of Puerto Rico v. Havemeyer, Justice Stone argued that the majority's decision was a misinterpretation of both the Jones Act and prior court rulings. He contended that Congress had intended to grant Puerto Rico full sovereignty over local matters when it passed the Jones Act in 1917, which included control over public utilities like those at issue in this case. Furthermore, he pointed out that previous Supreme Court decisions had upheld Puerto Rico's right to regulate its own affairs without interference from federal courts unless there was a clear conflict with U.S law or constitutional rights were being violated. In his view, neither condition applied here; therefore, he believed that the lower court should not have intervened in what was essentially a dispute between a local government agency and private businesses operating within its jurisdiction.