In the case of Gulf, Mobile and Northern Railroad Company v. Wells (1927), the United States Supreme Court ruled in favor of Mrs. Wells, a passenger who was injured when a train derailed due to negligence on part of the railroad company's employees. The court held that under Mississippi law, which governed this case as it was where the accident occurred, an employee’s negligent act is imputed to their employer if it occurs within the scope of employment - even if not specifically authorized or directed by them. Therefore, despite arguments from Gulf Mobile & Northern Railroad Co., they were found liable for damages caused by their employee's negligence during work hours resulting in injury to Mrs.Wells.

In the dissenting opinion for Gulf, Mobile and Northern Railroad Company v. Wells, it was argued that the majority's decision to uphold a Mississippi statute allowing recovery of attorney fees in certain cases against railroads violated due process rights under the Fourteenth Amendment. The dissent contended that this law unfairly singled out railroad companies for special punitive treatment without any rational basis or justification. It further asserted that such legislation could potentially lead to arbitrary and discriminatory practices by encouraging litigation against railroads regardless of merit, thereby undermining their financial stability and ability to provide essential public services. Moreover, it questioned whether states had constitutional authority to regulate interstate commerce in this manner given potential conflicts with federal laws governing railway operations.