The Treigle v. Acme Homestead Association case in 1935 revolved around the issue of whether a building and loan association incorporated under Louisiana law could legally reduce its stock's par value without obtaining consent from all stockholders. The plaintiff, Treigle, argued that such an action violated his contract rights as per the Fourteenth Amendment. However, the defendant, Acme Homestead Association contended that they were within their rights to do so according to state laws which permitted corporations to alter or amend their articles of incorporation with approval from two-thirds majority of shareholders' votes at a meeting called for this purpose. The U.S Supreme Court ruled in favor of Treigle stating that any alteration which diminishes or impairs a shareholder’s interest is illegal unless it has been assented by every party concerned.

In the dissenting opinion for Treigle v. Acme Homestead Association, Justice Cardozo argued that the majority's decision to allow a shareholder to sue on behalf of a corporation in federal court, even when state law would not permit such an action, was incorrect. He believed this ruling undermined states' rights and interfered with their ability to regulate corporations within their jurisdiction. Furthermore, he contended that it created unnecessary confusion by allowing different rules for corporate governance in state and federal courts. His view was that if a shareholder is barred from bringing suit under state law because they did not own shares at the time of the alleged wrongdoing or because they acquired shares after filing suit, then those same restrictions should apply in federal court as well.