In the case of United States by and through Internal Revenue Service v. Bruce J. McDermott et al., 1992, the Supreme Court was asked to determine whether a federal tax lien on property could take precedence over a previously recorded judgment lien under Washington state law. The IRS had filed a notice of federal tax lien against McDermott for unpaid taxes in 1981 but did not record it until after two creditors obtained judgments against him and recorded their liens in 1984 and 1985 respectively. The court held that "in enacting §6323(a) Congress intended to adopt the common-law rule that 'the first in time is the first in right.'" Therefore, even though the IRS's claim arose before those of other creditors, because they didn't file their claim until after others had done so, those other claims took priority over theirs.

In the dissenting opinion for United States by and Through Internal Revenue Service v. Bruce J. McDermott et al., Justice Blackmun argued that the majority's decision was a departure from previous interpretations of federal tax lien law, which he believed should be interpreted to protect innocent third parties from government claims on property they have acquired in good faith. He contended that this interpretation is more consistent with Congress' intent when it enacted the Federal Tax Lien Act of 1966, as well as subsequent amendments to it. Furthermore, he criticized the majority's reliance on common-law principles rather than statutory text or legislative history in reaching their conclusion. In his view, this approach unduly favored governmental interests over those of private citizens and undermined public confidence in federal tax administration.