In the 1994 case of Albert Hess and Charles F. Walsh v. Port Authority Trans-Hudson Corporation, the U.S Supreme Court ruled that a federal agency could not be sued under state law for an injury occurring in another state, even if both states had agreed to allow such suits when creating the agency. The plaintiffs were New Jersey residents who were injured while working on a train owned by Port Authority Trans-Hudson (PATH), which is operated by both New York and New Jersey. They filed suit in Pennsylvania due to its more favorable laws regarding damages from workplace injuries but PATH argued it was immune from out-of-state lawsuits based on Federal Employees Liability Act (FELA). The court sided with PATH, stating that allowing such suits would undermine uniformity among federal agencies' liability exposure across different states.

In the dissenting opinion for Albert Hess and Charles F. Walsh v. Port Authority Trans-Hudson Corporation, Justice Stevens argued that the majority's decision to grant immunity from federal antitrust laws to a state agency was inconsistent with precedent and undermined Congress' intent in passing such laws. He contended that there was no clear evidence of New York or New Jersey explicitly intending to displace competition when they created the Port Authority, which is necessary for granting it immunity according to previous rulings by the Court. Furthermore, he pointed out that this ruling could potentially allow states to shield any number of businesses from federal regulation simply by creating agencies like the Port Authority, thus undermining national economic policy set by Congress through antitrust legislation.