In the case of Canadian Aviator, Limited v. United States in 1944, the Supreme Court ruled on a dispute involving an airplane crash that occurred in Canada but was caused by alleged negligence from U.S. air traffic controllers. The plaintiff, Canadian Aviator Ltd., sought damages for their lost aircraft and cargo under the Federal Tort Claims Act (FTCA), which allows private parties to sue the United States for most torts committed by persons acting on behalf of America within its borders. However, this act does not apply internationally. The key issue before the court was whether or not American law should be applied extraterritorially - outside U.S territory - as it would have been if such an incident had happened within U.S boundaries. The Supreme Court held that FTCA did not apply to actions occurring outside of US territories and therefore dismissed Canadian Aviators' claim against the United States government because they could not prove any negligent acts took place inside American borders leading directly to their loss.

In the dissenting opinion for Canadian Aviator, Limited v. United States, Justice Robert H. Jackson argued that the majority's decision to extend U.S jurisdiction over a foreign corporation was an overreach of power and could potentially harm international relations. He contended that while it is within Congress' authority to regulate commerce with foreign nations, this should not be interpreted as giving them unlimited control over all activities of foreign corporations in the U.S., especially when those activities are unrelated to interstate or international commerce. Furthermore, he expressed concern about how such broad interpretation might affect American businesses operating abroad if other countries decided to reciprocate similarly expansive views on their own jurisdictional reach.