Katt (defendant) sold Testa (plaintiff) an automobile in Rhode Island for $210 more than the vehicle’s established ceiling price. Testa sued Katt in a Rhode Island state court pursuant to the Emergency Price Control Act (Act), a federal law. Section 205(e) of the Act authorized suits for up to treble damages against those who sold goods in excess of their prescribed ceiling price. Section 205(c) of the Act specified that § 205(e) claims could be brought in any court of competent jurisdiction—federal, state, or territorial—within the district or county of the defendant’s residence or business. Testa prevailed in the state district court. Testa again prevailed, though for a smaller award, after a trial de novo in the state superior court. The Supreme Court of Rhode Island reversed on the ground that its state courts could not enforce § 205(e) because it was a “penal” statute that was “foreign” to Rhode Island. Testa petitioned the United States Supreme Court for certiorari.