In the 1940 case Fleisher Engineering & Construction Co. et al. v. United States for the Use and Benefit of Hallenbeck, the Supreme Court ruled on a dispute involving a construction contract with the federal government. The plaintiffs, Fleisher Engineering & Construction Company and others, were contractors who had failed to complete their project within an agreed timeframe due to labor disputes and strikes which they argued were beyond their control. They sought relief from liquidated damages that had been imposed by the defendant, Hallenbeck acting for U.S Government's benefit under Miller Act (a federal law requiring performance bonds for public work contracts). However, Justice Reed delivered opinion of court denying such relief stating that these events did not constitute "unforeseeable causes beyond the control and without fault or negligence" as per terms in contract thus affirming lower courts' decision against contractors.

In the dissenting opinion for Fleisher Engineering & Construction Co. et al. v. United States for the Use and Benefit of Hallenbeck, it was argued that the majority's ruling contradicted established principles regarding surety bonds under federal law. The dissenting justices believed that a contractor’s bond is intended to protect all laborers and material suppliers involved in a project, not just those who have direct contracts with the principal contractor as determined by the majority decision. They contended that this interpretation would unfairly exclude subcontractors from protection if they were not directly contracted with the main contractor but still contributed work or materials to a federally funded project. Furthermore, they expressed concern about potential negative impacts on future construction projects due to increased risk for subcontractors.