In the case of Chicago & Northwestern Railway Company v. Nye Schneider Fowler Company, 1922, the U.S. Supreme Court ruled in favor of Nye Schneider Fowler Company (NSF). The dispute arose when NSF sued the railway company for damages caused by a fire that started from sparks emitted by one of its locomotives and destroyed NSF's property located near the railroad tracks. The railway company argued it was not liable as it had taken all reasonable precautions to prevent such an incident and thus should be exempted under Nebraska state law which provided immunity if "due care" was exercised. However, this argument was rejected both at trial level and on appeal to Nebraska Supreme Court. The U.S. Supreme Court affirmed these decisions stating that while due care is necessary, it does not guarantee exemption from liability especially where there is evidence showing negligence or misconduct on part of defendant - in this case failure to equip locomotive with effective spark arresters despite knowing risks involved constituted negligence making them liable for damages.

In the dissenting opinion for the case of Chicago & Northwestern Railway Company v. Nye Schneider Fowler Company, it was argued that there should not be an absolute rule requiring a shipper to bear all loss and damage resulting from delays in transit due to strikes or other labor disturbances. The dissenting justices believed that such losses should be apportioned between the carrier and shipper based on their respective responsibilities under their contract of carriage. They contended that if a carrier has done everything reasonably within its power to prevent or mitigate delay but is still unable to perform timely delivery because of circumstances beyond its control, then it would be unjustly penalized by being held fully liable for any consequential damages suffered by the shipper as a result of late delivery. Conversely, they also pointed out that if a carrier could automatically disclaim liability for strike-related delays without regard to whether it had taken reasonable precautions against such contingencies, then shippers would effectively become insurers against risks over which they have no control.