In the 1906 case of Erie Railroad Company v. Erie and Western Transportation Company, the U.S Supreme Court was tasked with determining whether a railroad company could be held liable for damages to goods that were destroyed in a fire while being transported on one of its trains. The court ruled in favor of the transportation company, stating that even though there was no negligence on part of the railroad company, it still had an absolute duty as a common carrier to safely transport goods entrusted to it by customers. This ruling established an important precedent in American law regarding liability and responsibility within transportation contracts.

The dissenting opinion in the case of Erie Railroad Company v. Erie and Western Transportation Company argued that the majority's decision was inconsistent with previous rulings on similar issues. The dissenting justices believed that a corporation should not be allowed to own stock in another company if it does not have explicit permission from its state of incorporation to do so. They also disagreed with the majority's interpretation of Pennsylvania law, arguing that it did not permit corporations like the plaintiff to hold stock in other companies unless specifically authorized by their charters. Furthermore, they contended that allowing such ownership could potentially lead to monopolistic practices and undermine competition, which would be detrimental for public interest.