In the case of Rice v. Sioux City Memorial Park Cemetery, Inc., the U.S. Supreme Court ruled in 1954 that a privately owned cemetery corporation was not exempt from anti-discrimination laws despite its private status. The plaintiff, Mrs. Rice, had purchased plots at Sioux City Memorial Park Cemetery for her family but when she attempted to bury her husband there, who was African American, she was denied on racial grounds as it violated their policy of only allowing burials of white individuals and their immediate families. She sued under Iowa's Civil Rights Act which prohibited discrimination by "any public accommodation." The defendants argued they were not subject to this law because they were a private entity; however both lower courts disagreed with them and so did the Supreme Court upon appeal. The court held that even though the cemetery is privately owned it serves a public function and therefore must adhere to state civil rights laws prohibiting racial discrimination in places of public accommodation.

In the dissenting opinion for Rice v. Sioux City Memorial Park Cemetery, Inc., Justice Robert H. Jackson disagreed with the majority's decision to apply federal law over state law in a case involving racial discrimination by a private cemetery corporation. He argued that this was not an issue of interstate commerce and therefore should not fall under federal jurisdiction as per the Commerce Clause of the Constitution. Instead, he believed it was a matter of civil rights within individual states' purview and should be addressed through local or state laws against racial discrimination rather than forcing integration via federal authority. Furthermore, he expressed concern about potential implications on other areas such as housing and education if similar logic were applied broadly.