In the 1931 case of Canada Malting Co., Ltd. v. Paterson Steamships, Ltd., the U.S Supreme Court ruled in favor of Paterson Steamships, a Canadian company that had been sued by another Canadian firm, Canada Malting Co., for damages incurred when a shipment was damaged during transport on Lake Erie. The court held that since both companies were from Canada and the incident occurred on waters shared by both countries (Lake Erie), it fell under Canadian jurisdiction rather than American jurisdiction as per principles of international law and comity among nations. Therefore, even though the lawsuit was filed in an American court (the United States District Court for Western New York), it should have been pursued through legal channels in their home country instead.

The dissenting opinion in the case of Canada Malting Co., Ltd. v. Paterson Steamships, Ltd., argued that the majority's decision to allow a Canadian company to sue another Canadian company in U.S. courts for damages sustained in Canada was an overreach of jurisdiction and contrary to principles of international law and comity among nations. The dissent contended that it is not appropriate or justifiable for U.S courts to intervene in disputes between foreign entities regarding incidents occurring outside American territory unless there are compelling reasons related directly with United States interests or its citizens' rights protection involved. They expressed concern about potential reciprocal actions from other countries, which could lead them into adjudicating matters involving American companies operating abroad based on their domestic laws rather than respecting US sovereignty and legal system.