In the case of Davis v. Virginian Railway Co., 1959, the U.S Supreme Court ruled in favor of a railway company that had been sued by an employee who was injured on the job. The plaintiff, Mr. Davis, argued that his injury was due to negligence on part of his employer and sought compensation under the Federal Employers' Liability Act (FELA). However, Virginian Railway Co contended they were not liable as per FELA because their operations were intrastate rather than interstate commerce at time of accident. The court agreed with this argument stating that for FELA to apply there must be some form of engagement in interstate commerce at time when injury occurred. Since it was established during trial proceedings that all activities performed by Mr.Davis and related equipment involved solely within-state coal transportation without any direct or immediate relation to interstate commerce; hence FELA did not cover such circumstances. This decision clarified interpretation regarding application scope for federal laws like FELA emphasizing requirement for clear connection with interstate commercial activity for them to take effect.

In the dissenting opinion for Davis v. Virginian Railway Co., Justice Frankfurter argued that the Court had overstepped its bounds by interpreting a state law, which was not within their jurisdiction. He believed it was inappropriate to apply federal common law in this case because it involved an interpretation of Virginia's wrongful death statute, a matter he felt should be left to Virginia courts. Furthermore, he disagreed with the majority’s decision to award damages based on future earnings without taking into account possible changes in earning capacity due to inflation or other economic factors. In his view, such speculative calculations were inconsistent with traditional principles of damage assessment and could lead to unjust results.