In the case of E.I. DuPont de Nemours & Company v. Davis, Director General of Railroads, Agent (1923), the U.S Supreme Court was tasked with determining whether a railroad company operating under federal control during World War I could be held liable for damages caused by an explosion at a munitions factory it served. The plaintiff, E.I du Pont de Nemours & Company, argued that negligence on part of the railroad in handling explosives led to significant property damage and loss of life at its factory in New Jersey. The court ruled against DuPont stating that as per Federal Control Act passed by Congress during wartime which placed railroads under government control; any claims for losses or damages were to be directed towards the United States Treasury rather than individual companies running these railroads. This decision effectively shielded federally controlled entities from liability suits arising out their operations during war times.

The dissenting opinion in the case of E.I. DuPont de Nemours & Company v. Davis, Director General of Railroads, Agent argued that the majority's decision was a departure from established principles governing interstate commerce and taxation. The dissent contended that the tax imposed by West Virginia on explosives transported out-of-state was not an undue burden on interstate commerce because it did not discriminate against such commerce or provide preferential treatment to local businesses. Rather, it applied equally to all companies producing explosives within its borders regardless of where those products ended up being sold or used. Furthermore, they disagreed with the majority's view that this tax interfered with federal authority over rail transportation during World War I since there was no evidence presented showing any conflict between state taxation and federal control of railroads at this time.