In the 1942 case of Bailey, Administratrix v. Central Vermont Railway, Inc., the U.S Supreme Court was tasked with determining whether a state could impose liability on an interstate railway for injuries sustained by one of its employees while working in another state. The plaintiff's husband had been employed by Central Vermont Railway and was killed during his work in Massachusetts. She sought compensation under Vermont law since it provided more generous benefits than Massachusetts law did at that time. The court ruled against Bailey, stating that applying Vermont’s workers' compensation laws to an accident occurring outside its jurisdiction would violate due process rights of the defendant company as per Fourteenth Amendment. The court held that states cannot extend their legislation beyond their borders so as to regulate activities or transactions carried out in other states; this is especially true when such extension infringes upon rights protected by federal constitution.

In the dissenting opinion for Bailey v. Central Vermont Railway, Inc., Justice Frankfurter disagreed with the majority's interpretation of the Federal Employers' Liability Act (FELA). He argued that FELA was not intended to provide a blanket liability for all injuries sustained by railway employees during their employment. Instead, he believed it should only cover those injuries directly resulting from negligence on part of the employer. In this case, where an employee died due to exposure while waiting in between shifts at his own discretion and without any specific direction from his employer, Justice Frankfurter did not see a clear link between negligence by Central Vermont Railway and Bailey's death. Therefore, he felt that applying FELA here would be stretching its intended scope too far.