In the case of Sterling, Governor of Texas, et al. v. Constantin et al., 1932, the Supreme Court ruled on a dispute between state and federal power over oil production regulation in Texas. The governor had declared martial law to limit oil production due to an oversupply that was damaging the industry's profitability and causing environmental harm from wasteful practices. However, this action was challenged by some producers who argued it violated their constitutional rights under the Fourteenth Amendment's Due Process Clause because they were not given a hearing before being shut down. The Supreme Court sided with these producers in a decision emphasizing limits on executive power during emergencies unless explicitly granted by legislation or constitutionally justified for preserving public safety or health. It held that while states have broad powers to regulate industries within their borders for economic stability and environmental protection purposes, such actions must still respect individual property rights protected under federal law unless there is clear evidence justifying emergency measures without normal legal processes.

In the dissenting opinion for Sterling, Governor of Texas, et al. v. Constantin et al., Justice McReynolds disagreed with the majority's decision to uphold a governor's power to declare martial law and seize control of privately owned oil wells in order to prevent waste and maintain public safety. He argued that this was an overreach of executive authority that violated property rights without due process, as protected by the Fourteenth Amendment. Furthermore, he contended that there was no immediate danger or insurrection justifying such drastic action; instead it seemed more like an attempt at regulation under guise of emergency powers which should be left up to legislative bodies rather than executive discretion. The justice also expressed concern about setting a dangerous precedent where governors could arbitrarily interfere with private business operations based on their own judgment.