In the case of Baltimore & Ohio Railroad Company v. Whitacre (1916), the U.S Supreme Court dealt with a dispute over damages awarded to an employee, Whitacre, who was injured while working for the railroad company. The injury occurred in West Virginia and under state law at that time, if an employer contributed in any way to a worker's injury through negligence or otherwise, they were liable for full damages. However, this conflicted with federal laws which stated that employers were only responsible for their proportionate share of liability in such cases. The court ruled 7-2 in favor of Baltimore & Ohio Railroad Company stating that federal law preempted state law on this issue because it involved interstate commerce - a domain regulated by Congress under the Constitution’s Commerce Clause. Therefore, according to federal Employers' Liability Act (FELA), Whitacre could only recover damages proportional to his employer's degree of fault.

In the dissenting opinion for Baltimore & Ohio Railroad Company v. Whitacre, Justice Holmes disagreed with the majority's decision to hold the railroad company liable for damages caused by a fire that started from sparks emitted by one of its locomotives. He argued that there was no negligence on part of the railroad company as it had taken all reasonable precautions to prevent such an incident and therefore should not be held responsible. The justice believed that this case fell under a category where harm could occur without fault, and thus liability should not be imposed. He further stated that imposing liability in such cases would set a dangerous precedent which could potentially lead to unjust outcomes in future similar situations.