The U.S. Supreme Court case Texas v. Florida et al., 1938, revolved around a dispute between states over the division of assets from an oil company that had gone bankrupt. The Standard Oil Company of California and its subsidiary, the California Petroleum Corporation, were incorporated in Delaware but operated primarily in Texas and Louisiana. When they went bankrupt, these states claimed taxes on their assets while other states where the companies held property also made claims to repay debts owed by them. Texas filed suit against nine other states (Florida among them) seeking to establish priority for its tax claim over those of creditors in other jurisdictions. The Supreme Court was asked to decide which state's laws should govern distribution of the insolvent corporations' assets - whether it should be divided according to federal bankruptcy law or apportioned among various claimants under conflicting state laws. In a unanimous decision written by Justice Benjamin Cardozo, the court ruled that federal bankruptcy law applied and therefore all valid claims must be paid before any funds could go towards paying off tax liabilities.

In the dissenting opinion for Texas v. Florida et al., 1938, Justice McReynolds expressed his disagreement with the majority's decision to dismiss Texas' bill of complaint. He argued that the Court should have taken jurisdiction over this case as it involved a dispute between states, which falls under its original jurisdiction according to Article III of the Constitution. Furthermore, he contended that there was no other forum where such disputes could be resolved appropriately and justly. Therefore, in his view, dismissing this case would leave unresolved issues between states without any legal recourse or resolution mechanism available to them - an outcome he believed was contrary to both constitutional principles and practical considerations.