The United States brought a case against John and Hipolite Fitzgerald, claiming that the two brothers had illegally sold liquor to Native Americans in violation of federal law. The defendants argued that they were not subject to federal laws because their land was located within the boundaries of an Indian reservation. The Supreme Court disagreed with this argument, ruling that Congress has authority over all persons living on lands owned by the United States regardless of whether or not those lands are part of an Indian reservation. This decision established precedent for future cases involving similar issues regarding tribal sovereignty and congressional power over reservations.

In the United States v. John Fitzgerald and Hipolite Fitzgerald, the Supreme Court was tasked with deciding whether a state court had jurisdiction over an action brought by citizens of one state against citizens of another in which the amount in controversy exceeded $500. The majority opinion held that it did not have such jurisdiction, as Article III Section 2 of the Constitution only grants federal courts exclusive original jurisdiction when there is diversity between parties from different states and where more than $500 is at stake. In his dissent, Justice McLean argued that this interpretation would lead to absurd results; if two individuals from different states were involved in a dispute worth less than $500 then they could be forced into separate suits before each respective state's court system instead of having their case heard together under federal law. He further argued that Congress should have been given authority to decide on matters concerning diversity cases involving smaller amounts since it has already been granted power to do so for larger sums.