In the case of State Board of Insurance et al. v. Todd Shipyards Corp., 1961, the U.S Supreme Court ruled in favor of Todd Shipyards Corporation, a shipbuilding company based in Texas that was disputing an insurance premium tax imposed by the state's Board of Insurance. The court held that under federal law (the McCarran-Ferguson Act), states could regulate and tax insurance business within their borders but not when it interferes with interstate commerce or foreign trade. In this case, Todd Shipyards had purchased its insurance from insurers located outside Texas to cover its operations nationwide and abroad; therefore, imposing a tax on these premiums would interfere with interstate commerce and violate federal law.

In the dissenting opinion for the case of State Board of Insurance et al. v. Todd Shipyards Corp., Justice Frankfurter disagreed with the majority's interpretation of a Texas statute that required out-of-state insurance companies to consent to suit in Texas as a condition for doing business within its borders. He argued that this requirement did not apply to marine insurers like Todd Shipyards' underwriter, because they were governed by federal maritime law, not state law. Furthermore, he contended that even if it did apply, it would be unconstitutional because it violated due process rights by forcing non-resident defendants into distant and potentially prejudiced courts without their explicit agreement or any meaningful connection between them and the forum state.