In the case of Ex parte IN THE MATTER OF THE UNITED STATES, OWNER OF THE AMERICAN STEAMSHIP WESTERN MAID (1921), the United States Supreme Court ruled on a matter concerning maritime law and sovereign immunity. The U.S. government had purchased a steamship called Western Maid during World War I for use in transporting cargo. After the war, while still owned by the government but operated by private entities, it collided with another vessel causing damage. A suit was filed against Western Maid to recover damages from this collision under maritime law which allows suits directly against vessels as if they were persons (in rem jurisdiction). However, since it was owned by the U.S., an issue arose whether such proceedings could be maintained given that governments traditionally enjoy sovereign immunity from lawsuits without their consent. The Supreme Court held that even though in rem proceedings are technically against "the thing" rather than its owner per se, they indirectly affect ownership rights and thus cannot proceed without consent when involving property of a sovereign entity like the U.S.. Therefore, despite being operated privately at time of incident, because Western Maid was owned by federal government - who did not give explicit permission for lawsuit - it enjoyed sovereign immunity protecting it from direct legal action.

In the dissenting opinion for Ex parte IN THE MATTER OF THE UNITED STATES, OWNER OF THE AMERICAN STEAMSHIP WESTERN MAID, 1921, Justice Holmes argued that the United States should not be allowed to use its sovereign immunity as a shield in this case. He believed that when the government enters into commercial activities it should be held to the same standards and responsibilities as any private entity. In his view, if a privately owned ship had caused damage in similar circumstances there would have been no question about liability; therefore he saw no reason why different rules should apply simply because of ownership by the U.S. Government. Furthermore, he disagreed with majority's interpretation of The Suits in Admiralty Act and felt it did not preclude suits against government-owned merchant vessels.