In the 1983 case Schneider Moving & Storage Co. v. Robbins et al., the United States Supreme Court ruled that a bankruptcy court does not have jurisdiction to adjudicate a state law contract claim against an entity that is not otherwise part of the bankruptcy proceedings. The dispute arose when Schneider Moving & Storage Company filed for Chapter 11 bankruptcy and sought to recover payments made to Robbins, who had leased property to them prior to their filing for bankruptcy protection. The company argued these payments were preferential transfers under federal law and should be returned as part of their reorganization plan. The Supreme Court held that while Bankruptcy Courts do have broad powers in cases before them, they cannot extend those powers into areas where Congress has not given express authorization - such as deciding on state law issues between two parties outside of the immediate scope of the bankruptcy proceedings at hand.

In the dissenting opinion for Schneider Moving & Storage Co. v. Robbins et al., Justice Stevens argued that the majority's decision to uphold a state law requiring moving companies to obtain permission from existing businesses before establishing new operations was misguided and harmful to competition. He contended that this protectionist measure served only the interests of established businesses, not those of consumers or society at large, by limiting competition and stifling innovation in service delivery. Furthermore, he asserted that such laws could be used as tools for discrimination against newcomers or outsiders seeking entry into local markets. In his view, these types of regulations were inconsistent with free market principles and should be struck down as unconstitutional under the Commerce Clause.