In the 1946 case of Cardillo, Deputy Commissioner, United States Employees' Compensation Commission v. Liberty Mutual Insurance Co. et al., the U.S Supreme Court ruled in favor of Cardillo and upheld a compensation award to an injured employee under the Longshoremen's and Harbor Workers' Compensation Act (LHWCA). The insurance company had argued that they were not liable for compensation because there was no evidence directly linking their insured employer with the injury sustained by the worker. However, Justice Frankfurter writing for majority held that direct evidence is not necessary under LHWCA; it suffices if rational inference from circumstantial evidence establishes a causal connection between employment and injury. This ruling set precedent on how causality should be determined in workers’ compensation cases.

In the dissenting opinion for Cardillo v. Liberty Mutual Insurance Co., Justice Frankfurter disagreed with the majority's interpretation of Section 33 of the Longshoremen's and Harbor Workers' Compensation Act, which allowed an injured employee to sue a third party for damages while still receiving compensation from their employer. He argued that this provision was not intended to allow insurance companies to recover costs from third parties after compensating employees, but rather it was designed solely to protect workers' rights. The justice believed that allowing insurers such as Liberty Mutual Insurance Co. to seek reimbursement would undermine worker protections by discouraging employers from providing adequate coverage in fear of potential lawsuits against them by insurance companies seeking recovery.