In the Duncan v. Navassa Phosphate Company case of 1890, the U.S Supreme Court ruled in favor of Navassa Phosphate Company. The dispute arose when a group of workers led by James E. Duncan revolted against their employer, Navassa Phosphate Co., due to harsh working conditions on an island off Haiti's coast that was claimed by the company under Guano Islands Act (1856). This act allowed American companies to claim uninhabited islands with guano deposits as US territories for mining purposes. During this revolt, one superintendent was killed and several others were injured which resulted in criminal charges against Duncan and his co-workers who were tried and convicted under federal law in Baltimore, Maryland where the company had its headquarters. On appeal to the Supreme Court, it upheld these convictions stating that Congress has authority over such places even if they are not incorporated into union as states or territories; hence federal laws apply there.

In the dissenting opinion for Duncan v. Navassa Phosphate Company, Justice Lamar argued that the Guano Islands Act did not extend U.S. laws to islands where guano was discovered and claimed by American citizens. He believed that Congress only intended to provide a means of protecting these claims from foreign interference, rather than making such locations part of the United States or subjecting them to its jurisdiction in all respects. Furthermore, he contended that if Congress had wanted to apply U.S law fully on these islands, it would have done so explicitly as it has with other territories acquired by the country. Therefore, according to Justice Lamar's interpretation of this act and international law principles regarding territorial sovereignty and jurisdiction over newly discovered lands, he disagreed with majority’s decision which held Navassa Phosphate Company liable under Maryland state law for an incident occurred on one such island.