The U.S. Supreme Court case Dampskibsselskabet Dannebrog v. Signal Oil & Gas Co., 1939, revolved around a dispute over damages caused by an oil spill in the Los Angeles Harbor. The Danish ship "Dannebrog" collided with the American tanker "Frank H. Buck," resulting in significant oil leakage from the latter vessel and subsequent damage to various properties along the harbor's shoreline due to this spilled oil. The owners of these damaged properties filed claims against both ships for compensation, leading to a legal battle over liability between Signal Oil (the owner of Frank H.Buck) and Dampskibsselskabet Dannebrog (the owner of Dannebrog). Ultimately, it was decided that under maritime law, only direct physical contact could establish liability for damages; thus, since there was no evidence that any property had been directly hit by either vessel during their collision or subsequently touched by them after they drifted apart post-collision - despite being affected by leaked oil - neither shipowner could be held liable for compensating those property owners.

In the dissenting opinion for Dampskibsselskabet Dannebrog v. Signal Oil & Gas Co., Justice Black argued that the majority's decision to hold a ship owner liable for damages caused by an independent contractor was inconsistent with maritime law principles and could have far-reaching implications. He contended that under established legal precedent, a ship owner should not be held responsible for actions of an independent contractor unless it can be proven they had control over their operations or were negligent in hiring them. In this case, there was no evidence of either condition being met. Therefore, he believed the ruling unjustly expanded liability rules beyond what is reasonable or fair and set a dangerous precedent which may lead to more litigation against innocent parties who lack control over those causing harm.