In the Berizzi Brothers Company v. Steamship Pesaro case of 1925, the U.S Supreme Court ruled that foreign sovereigns are immune from suit in United States courts unless they waive their immunity or an exception applies. The dispute arose when a ship owned by the Italian government collided with another vessel owned by Berizzi Brothers Company in New York Harbor. The company sued for damages but was met with resistance as Italy claimed sovereign immunity under international law principles recognized by US courts at that time. In its decision, the court held that public ships of war of a friendly foreign power present within American waters were exempt from jurisdiction without consent from its government based on principles of comity and respect among nations.

In the dissenting opinion for Berizzi Brothers Company v. Steamship Pesaro, Justice McReynolds disagreed with the majority's decision to extend sovereign immunity to foreign government-owned commercial vessels. He argued that such an extension was not supported by historical precedent or international law and could lead to potential abuses of this privilege. Furthermore, he contended that it would be more appropriate for Congress rather than the courts to decide on matters related to diplomatic relations and international comity. In his view, extending sovereign immunity in this manner could potentially interfere with Congress's ability to regulate commerce effectively.