In the United States v. Budd case of 1891, the Supreme Court ruled on a matter concerning maritime law and its application to crimes committed at sea. The defendant, Mr. Budd, was charged with embezzlement while serving as an officer aboard a U.S.-registered ship sailing in international waters between Hong Kong and San Francisco. He argued that U.S courts did not have jurisdiction over his alleged crime because it occurred outside of American territory. However, the court disagreed with this argument stating that under maritime law, nations have jurisdiction over their vessels regardless of where they are located globally when a crime is committed onboard by or against their citizens or interests. The Supreme Court held that ships flying the flag of a particular nation are considered part of that country's territory for legal purposes even when they sail through international waters; thus subjecting them to its laws and regulations including criminal offenses such as embezzlement. This ruling established important precedents regarding national sovereignty and extraterritoriality in maritime law which continue to be relevant today.

In the dissenting opinion for United States v. Budd, Justice Lamar argued that the majority's interpretation of the Constitution was too broad and could potentially lead to an overreach of federal power. He contended that while Congress has authority to regulate interstate commerce, it does not have unlimited power to control all aspects related to such commerce. In this case, he believed that regulating a ship's crew wages did not fall under Congress' constitutional powers as it pertained more closely to labor laws within individual states rather than interstate trade or commerce itself. Therefore, according his view, the law in question should be deemed unconstitutional as it exceeded congressional authority granted by Commerce Clause of U.S Constitution.