In the 1922 case of Davis, Director General of Railroads v. L.N. Dantzler Lumber Company, the U.S. Supreme Court ruled in favor of Davis, who represented the federal government's control over railroads during World War I under Section 206 of the Transportation Act of 1920. The dispute arose when Dantzler Lumber Company sued for damages caused by a delay in shipment due to alleged negligence on part of federally controlled railroads and won at lower courts level. However, upon reaching Supreme Court it was held that while private companies could sue for damages against railroad corporations under normal circumstances; this did not apply when those railroads were being operated by federal government as an act during wartime emergency measures - thus making them immune from such lawsuits.

In the dissenting opinion for Davis v. L.N. Dantzler Lumber Company, Justice Holmes disagreed with the majority's ruling that a lumber company could sue a railroad director general for damages caused by negligence during government control of railroads in World War I. He argued that since Congress had not explicitly provided such right to sue in the Transportation Act of 1920, it should be assumed they did not intend to allow it. Furthermore, he contended that allowing such lawsuits would open up floodgates of litigation and potentially disrupt crucial wartime operations as every accident or mistake could lead to legal action against high-ranking officials who were acting under extraordinary circumstances. In essence, his view was grounded on principles of statutory interpretation and concerns about practical implications.