The U.S. Supreme Court on Thursday ordered the states of California and Arizona to allow the public to share markets with each other.
The justices will take up the case of California’s sharing market and Arizona’s trading house rules on the same night, the Associated Press reported.
The state and federal governments argue the rules are necessary to protect consumers.
In the first major ruling on the issue in nearly two decades, the justices said the California-Arizona laws are preempted by federal law.
They also said Arizona’s rules are preemptable by the federal Trade Expansion Act.
The case has been widely watched as an early test of whether Congress will act quickly to repeal the trade act.
The trade act passed in 1986 after years of intense scrutiny by Congress.
The Supreme Court is expected to hear arguments in the case next month.
The court will consider a challenge to Arizona’s new laws by the California attorney general.
California and Arizona have been embroiled in a lawsuit over the state’s laws.
In September, a federal judge in Arizona ruled that the state could not ban non-essential travel to Arizona.
Arizona Attorney General Mark Brnovich has challenged that ruling.
California’s Attorney General Xavier Becerra has filed a legal brief supporting Arizona’s actions.