The Securities and Exchange Commission v. W. J. Howey Co., et al., 1945, is a landmark Supreme Court case that established the "Howey Test" to determine what constitutes an investment contract under U.S securities laws. The W.J Howey Company of Florida was selling real estate contracts for citrus groves coupled with a service contract to cultivate and harvest the produce, which they argued did not constitute an investment contract and thus were not subject to SEC regulations. However, the Supreme Court disagreed stating these transactions indeed constituted as investment contracts because buyers were led to expect profits solely from the efforts of Howey Company who promised significant returns on their investments through their services in cultivating and harvesting oranges from those lands sold by them.

In the dissenting opinion for SECURITIES & EXCHANGE COMMISSION v. W. J. HOWEY CO., Justice Frank Murphy argued that the majority's interpretation of an "investment contract" was too broad and could potentially encompass many ordinary commercial transactions not intended to be covered by securities laws. He contended that this expansive definition would lead to unnecessary litigation and regulatory overreach, as businesses would have to navigate complex legal terrain even in simple transactions like selling goods or leasing property. Furthermore, he expressed concern about federal intrusion into areas traditionally regulated by state law, such as real estate contracts and agricultural arrangements.