In the United States v. Cannelton Sewer Pipe Co., 1959, the Supreme Court ruled on a case involving tax deductions for mining companies. The Cannelton Sewer Pipe Company had been deducting its clay and shale extraction costs as mining expenses under section 114(b)(4) of the Internal Revenue Code of 1939, which allowed higher depletion allowances for businesses involved in "mining." However, the IRS argued that these activities were part of manufacturing process rather than mining operations and thus not eligible for such deductions. The court sided with the IRS stating that if a taxpayer's primary income is from manufacturing or sale of finished products, then they cannot claim their raw material extraction as 'mining' to get additional tax benefits even though it involves mineral extraction processes similar to those in traditional mining industries.

In the dissenting opinion for United States v. Cannelton Sewer Pipe Co., Justice Brennan, joined by Justices Warren and Douglas, argued that the majority's decision to limit percentage depletion deductions to mining operations was inconsistent with congressional intent. They contended that Congress intended for all extractive industries, including those involved in manufacturing like Cannelton, to be eligible for such tax benefits as a means of encouraging domestic production. The dissenters criticized the majority's reliance on legislative history and asserted that it failed to consider relevant statutory language indicating broader applicability of these deductions. Furthermore, they warned against judicial interference in matters better left to administrative agencies or Congress itself due its potential impact on other industries beyond clay pipe manufacturers.