In the case of Chicago, Milwaukee and St. Paul Railway Company v. Tompkins (1899), the U.S Supreme Court ruled in favor of the railway company, overturning a lower court's decision that had awarded damages to Tompkins for injuries he sustained while on one of their trains. The central issue was whether or not federal common law could be applied in this situation, as opposed to state law which would have been more favorable to Tompkins' claim. The Court held that there is no general federal common law; instead, when deciding cases involving diversity jurisdiction (where parties are from different states), federal courts must apply state laws unless they conflict with valid Federal statutes or constitutional provisions. This ruling established an important precedent known as "Erie Doctrine" which requires federal courts sitting in diversity to apply state substantive law.

The dissenting opinion in the case of Chicago, Milwaukee and St. Paul Railway Company v. Tompkins argued that the majority's decision was a departure from established principles of law regarding negligence and liability for damages caused by fires started by locomotive engines. The dissent contended that it is not enough to simply show that fire came from an engine; there must be proof of negligence on part of railway company or its employees. They believed this principle should apply regardless if state laws hold railways liable for all such fires without evidence of carelessness, as these laws are inconsistent with common law principles which require showing fault before imposing liability. Furthermore, they disagreed with the majority’s interpretation about how federal courts should handle diversity jurisdiction cases involving state laws - arguing instead for a more stringent adherence to federal common law rather than deference to varying state statutes.