In the case of Erie Railroad Company v. Hamilton, County Treasurer of the County of Rockland, as Public Administrator of Mistschook (1918), the U.S Supreme Court ruled in favor of Erie Railroad Company. The dispute arose when a train owned by Erie struck and killed an individual named Mistschook. Following his death, Hamilton - acting as public administrator for Mistschook's estate - sued for damages under New York state law which allowed such suits against corporations involved in fatal accidents within its jurisdiction. However, since this accident occurred on federal territory (West Point Military Reservation) where Congress had exclusive legislative authority and no similar federal statute existed allowing such lawsuits, Erie argued that they were not liable under state law. The court agreed with this argument stating that while states have broad powers to regulate businesses within their borders including railroads; those powers do not extend to areas under exclusive federal control like West Point Military Reservation. Therefore it was held that New York’s wrongful death statute could not be applied here because doing so would infringe upon Congress’ power over places ceded by States to Federal Government.

The dissenting opinion in the case of Erie Railroad Company v. Hamilton, County Treasurer of the County of Rockland, as Public Administrator of Mistschook argued that the majority's decision to hold a corporation liable for damages resulting from an accident was incorrect. The dissenting justices believed that corporations should not be held responsible for accidents unless there is clear evidence showing negligence on their part. They contended that it was unfair to impose liability on corporations simply because they have deep pockets and can afford to pay large sums in damages. Furthermore, they expressed concern about setting a dangerous precedent where businesses could be sued and forced into bankruptcy over incidents beyond their control or foresight.