In the 1936 case of Atchison, Topeka & Santa Fe Railway Co. v. Scarlett, the U.S Supreme Court ruled in favor of the railway company after it was sued by an employee who had been injured on duty due to alleged negligence by his employer. The plaintiff argued that he should be compensated for his injuries under the Federal Employers' Liability Act (FELA). However, upon review, it was found that there were no federal questions involved in this case and therefore it did not fall within FELA's jurisdiction as claimed by Scarlett. Instead, state law applied to this dispute which meant that any claims made against employers regarding workplace safety or compensation would have to be pursued through state courts rather than federally. This ruling clarified jurisdictional boundaries between federal and state laws when dealing with labor disputes involving railroad workers.

The dissenting opinion in the case of Atchison, Topeka & Santa Fe Railway Co. v. Scarlett argued that the court majority had incorrectly interpreted and applied federal law regarding employer liability for worker injuries. The dissent contended that the railway company should not be held liable for Scarlett's injury because it was not a result of negligence on part of the company but rather an unfortunate accident caused by unforeseen circumstances beyond their control. They believed this ruling set a dangerous precedent where employers could be unfairly penalized for accidents they couldn't reasonably prevent, potentially discouraging businesses from operating in high-risk industries or environments due to fear of excessive litigation and financial loss.