In the 1890 case of Allen v. Pullman's Palace Car Company, the U.S. Supreme Court ruled in favor of Pullman's Palace Car Company, a railroad car manufacturing company that also operated sleeping cars on many railroads. The plaintiff, Mr. Allen, had purchased tickets for himself and his wife to travel from Washington D.C., to Hot Springs Arkansas via Cincinnati and Louisville but was denied service due to racial discrimination policies enforced by the defendant at that time period (the late 19th century). He sued for damages based on breach of contract and humiliation suffered as a result of this incident. The court held that since Mr. Allen did not specifically inform or make it known at the time he bought his ticket that he was African American - which would have been relevant information given existing segregation laws - there could be no claim made against Pullman’s Palace Car Co., because they were unaware they were entering into an agreement with someone who fell under these discriminatory practices when selling him the ticket. This ruling reflected societal norms during this era where racial segregation was legally sanctioned; however, such rulings are now considered unconstitutional following landmark civil rights cases like Brown v Board Education.

In the dissenting opinion for Allen v. Pullman's Palace Car Company, Justice Bradley argued that the majority had incorrectly interpreted the Civil Rights Act of 1875. He contended that while this law did indeed prohibit racial discrimination in public accommodations, it was not intended to apply to private contracts or transactions such as those between a railroad company and its passengers. In his view, when an individual purchases a ticket from a railway company, they are entering into a private contract with that business rather than accessing a public accommodation. Therefore, he believed that any alleged acts of racial discrimination by Pullman's Palace Car Company were beyond the scope of federal jurisdiction under this legislation and should instead be addressed at state level if necessary.