The U.S. Supreme Court case Commonwealth of Virginia v. State of West Virginia in 1906 was a dispute over the boundary line between the two states, specifically regarding Berkeley and Jefferson counties which had been part of Virginia but were claimed by West Virginia during the Civil War. The court ruled that when West Virginia became a state in 1863, it legally inherited all debts owed to it by these counties as well as their allegiance due to an agreement made with Congress at that time. Therefore, despite protests from the Commonwealth of Virginia claiming they should be returned to its jurisdiction after Reconstruction ended, these counties remained officially within the boundaries of West Virginia according to federal law.

In the dissenting opinion for the case Commonwealth of Virginia v. State of West Virginia, it was argued that West Virginia should not be held responsible for a portion of the public debt incurred by Virginia prior to their separation during the Civil War. The dissenting justices believed that when West Virginia became a separate state, they did so without any agreement or obligation to assume part of this debt. They contended that there was no legal basis upon which to enforce such an obligation after-the-fact and pointed out inconsistencies in how other states' debts were handled following similar separations. Furthermore, they suggested that imposing this financial burden on West Virginia could potentially discourage future statehood movements and infringe upon states' rights as outlined in the Constitution.