In the 1898 case of Allen v. Southern Pacific Railroad Company, the U.S Supreme Court ruled in favor of Southern Pacific Railroad Company. The dispute arose when a shipment was damaged during transport and Allen sued for damages. However, there were contractual terms that limited liability on part of the railroad company unless negligence could be proven - which wasn't established by Allen's side. Therefore, despite acknowledging that damage occurred while in transit with Southern Pacific Railroad Co., since no evidence pointed to any neglect or misconduct from their end, they couldn't be held accountable for it as per their contract agreement with Allen.

The dissenting opinion in the case of Allen v. Southern Pacific Railroad Company argued that the plaintiff, a passenger on one of the defendant's trains who was injured due to an accident caused by negligence, should be entitled to sue for damages. The majority ruling held that because the ticket purchased by Allen contained a clause exempting the company from liability for negligence, he had no grounds to sue. However, those dissenting believed this exemption was unjust and against public policy as it allowed companies like Southern Pacific Railroad Company to shirk their responsibility towards ensuring safety and could potentially lead them not taking necessary precautions against accidents. They contended that such clauses were inherently unfair as passengers have little choice but accept these terms if they wish or need to travel.