In the case of Rice et al. v. Santa Fe Elevator Corp. et al., 1946, the U.S Supreme Court was tasked with determining whether state laws could apply to a business that had been federally regulated under the United States Warehouse Act (USWA). The plaintiffs, grain producers in Illinois, sued Santa Fe Elevator Corporation for allegedly charging excessive storage rates and violating Illinois' public utilities law. However, Santa Fe argued that they were operating under federal licenses granted by USWA and therefore not subject to state regulation. The court ruled in favor of Santa Fe Elevator Corp., establishing an important precedent regarding federal preemption over state laws when it comes to regulating interstate commerce activities. The decision clarified that if Congress has legislated on a matter within its domain and intended such legislation as a replacement of state law rather than supplementary to it, then states cannot regulate in this area even if their intention is merely protective or complementary.

In the dissenting opinion for Rice et al. v. Santa Fe Elevator Corp., Justice Frankfurter argued that the majority's decision to apply federal law over state law in this case was a departure from established principles of federalism and judicial restraint. He contended that there was no clear indication from Congress that it intended to supersede state laws related to grain storage, as required by precedent for such preemption cases. Furthermore, he pointed out inconsistencies in how the Court had interpreted similar language in other statutes and suggested these discrepancies indicated an unwarranted expansion of federal power at the expense of states' rights. Ultimately, Frankfurter believed that deference should have been given to Illinois’ regulatory scheme unless there was a direct conflict with specific provisions within the U.S Warehouse Act.