In the case of Royer v. Coupe, 1892, the United States Supreme Court examined whether a state court could issue an order to prevent a federal court from proceeding with a bankruptcy case. The dispute arose when Mr. Royer filed for bankruptcy in federal court and his creditors sought relief in state court to stop him from discharging his debts under federal law. The California State Court issued an injunction against Mr. Coupe, who was overseeing the bankruptcy proceedings as assignee, preventing him from continuing with the process. The U.S Supreme Court ruled that while states have concurrent jurisdiction over certain matters related to bankruptcies (such as property distribution), they cannot interfere with or obstruct ongoing proceedings in federal courts due to supremacy clause of Constitution which gives Federal laws precedence over State laws where there is conflict between two . Therefore, it held that California's attempt to halt the bankruptcy proceedings was unconstitutional because it interfered with Congress' power under Article I Section 8 Clause 4 of US constitution ,to establish uniform Laws on subject of Bankruptcies throughout United States.

In the dissenting opinion for Royer v. Coupe, it was argued that the majority's decision failed to consider important aspects of contract law and property rights. The dissenting justices believed that a debtor should not be able to avoid paying their debts by simply moving from one state to another, as this would undermine the fundamental principles of contract enforcement and fairness in financial transactions. They also disagreed with the majority's interpretation of Article IV, Section 1 (the Full Faith and Credit Clause) of the U.S Constitution, arguing that judgments rendered in one state should be enforceable in all states without exception or qualification. Furthermore, they contended that allowing debtors to escape their obligations so easily could potentially destabilize commerce between states by creating uncertainty about whether contracts will be honored across state lines.