The U.S. Supreme Court case Terry L. Stewart, Director, Arizona Department of Corrections v. Robert Douglas Smith in 2001 revolved around the issue of whether a federal court could grant habeas corpus relief based on its belief that an earlier state supreme court decision was incorrect under federal law. The respondent, Robert Douglas Smith, had been convicted for murder and sentenced to death by an Arizona court but argued his sentencing was unconstitutional due to ineffective assistance from his counsel during the penalty phase of his trial. While lower courts agreed with him and granted habeas corpus relief (which would have allowed him a new trial), the Supreme Court reversed this decision in a unanimous ruling led by Justice Clarence Thomas. The justices held that under section 2254(d)(1) of Title 28 - part of the Antiterrorism and Effective Death Penalty Act - it wasn't enough for a federal judge to believe that the state's application of federal law was erroneous; they must also find it objectively unreasonable which hadn't been proven here.

In the dissenting opinion for Terry L. Stewart, Director, Arizona Department of Corrections v. Robert Douglas Smith (2001), Justice Scalia argued that the majority's decision to grant habeas corpus relief was based on a misinterpretation of federal law and an overreach into state court decisions. He contended that under the Antiterrorism and Effective Death Penalty Act (AEDPA) of 1996, federal courts should defer to state court rulings unless they are contrary to or involve an unreasonable application of clearly established Federal law as determined by the Supreme Court itself. In this case, he believed there was no clear precedent from previous Supreme Court cases which would justify overturning Arizona’s ruling against Smith who had been convicted for murder in 1981 and sentenced to death penalty after his retrial in 1995 due to ineffective assistance from his counsel during sentencing phase at first trial.