In the United States v. New River Collieries Company case of 1922, the Supreme Court was tasked with determining whether or not a tax imposed by Congress on coal mined and sold was constitutional. The tax in question had been established to fund compensation for miners who were injured while working underground, as well as their dependents if they died due to such injuries. The New River Collieries Company argued that this tax violated the Constitution's prohibition against direct taxes without apportionment among states according to population (Article I, Section 9). However, the Supreme Court ruled in favor of the United States government stating that it did not violate any provisions of the constitution because it was an excise tax rather than a direct one. An excise tax is levied on specific goods or services at purchase such as gasoline or tobacco and does not need to be apportioned among states based on population like direct taxes do.

In the dissenting opinion for United States v. New River Collieries Company, Justice McReynolds disagreed with the majority's interpretation of the Lever Act and its application to this case. He argued that Congress did not intend for coal companies to bear all costs associated with their operations when it passed this legislation during World War I. Instead, he believed that lawmakers intended these businesses to share some expenses with consumers in order to maintain a fair market price for coal and prevent profiteering during wartime. Therefore, he contended that requiring New River Collieries Company to pay freight charges without being able to pass them on violated both the letter and spirit of the law as well as principles of fairness and justice.