In the 1942 case of Wragg v. Federal Land Bank of New Orleans, the U.S Supreme Court ruled in favor of the defendant, Federal Land Bank (FLB) of New Orleans. The plaintiff, Wragg had defaulted on a loan from FLB and his property was subsequently foreclosed upon by FLB to recover their losses. After foreclosure proceedings were initiated but before they were completed, Congress passed an act that would have allowed farmers like Wragg to retain possession and use of their land while repaying debts over time under certain conditions. However, this law did not apply retroactively to cases where foreclosure proceedings had already begun prior to its enactment. Wragg argued that he should be able to benefit from these new provisions despite them being enacted after his foreclosure process began; however, the court disagreed with him stating that laws are generally presumed not intended for retroactive application unless expressly stated otherwise by Congress which wasn't done in this case. The ruling affirmed lower courts' decisions upholding FLB's right as a creditor institution protected under federal law against state interference or impairment through subsequent legislation.

In the dissenting opinion for Wragg v. Federal Land Bank of New Orleans, the justice argued that the majority's decision was inconsistent with previous rulings and failed to properly interpret relevant statutes. The dissent emphasized that federal land banks were created by Congress as governmental agencies, not private corporations, and therefore should be immune from state taxation under established principles of intergovernmental tax immunity. Furthermore, it was highlighted that these banks serve a public purpose by providing credit facilities for farmers at low rates which is crucial during times of economic distress. Therefore, subjecting them to state taxes would undermine their ability to fulfill this role effectively. The justice also criticized the majority's reliance on certain statutory language in reaching its conclusion arguing instead that a more holistic reading of legislative intent supports granting tax immunity to federal land banks.