In the case of Kenneth Hilton v. South Carolina Public Railways Commission, 1991, the U.S Supreme Court ruled in favor of South Carolina Public Railways Commission (SCPRC). The dispute arose when Kenneth Hilton sued SCPRC for injuries he sustained while working as a brakeman and conductor. He alleged that his employer was negligent under the Federal Employers' Liability Act (FELA), which allows railroad workers to sue their employers for on-the-job injuries caused by negligence. However, SCPRC argued it was immune from such lawsuits because it is an arm of the state government and therefore protected by sovereign immunity - a legal doctrine preventing states from being sued without their consent. The court agreed with SCPRC's argument stating that FELA did not abrogate state sovereign immunity; hence states could not be held liable under this act unless they consented to be sued. Therefore, despite FELA’s intention to protect railway employees’ rights nationwide, its application does not extend over entities covered by state sovereignty unless explicitly stated otherwise.

In the dissenting opinion for Kenneth Hilton v. South Carolina Public Railways Commission, Justice Blackmun disagreed with the majority's view that a state agency can claim immunity from suit in federal court under the Eleventh Amendment even when it is acting as a market participant rather than as a regulator. He argued that this interpretation of the amendment was overly broad and not supported by its text or history. Furthermore, he contended that such an expansive reading of state sovereign immunity could undermine important federal interests and policies, including those related to interstate commerce and antitrust law. In his view, when a state chooses to participate directly in the marketplace - particularly in areas traditionally occupied by private enterprise - it should be subject to the same legal rules and obligations as any other market participant.