The U.S. Supreme Court case Indian Towing Co., Inc. et al. v. United States in 1954 revolved around the issue of whether or not the federal government could be held liable for negligence under the Federal Tort Claims Act (FTCA). The case was initiated when a ship owned by Indian Towing Company ran aground due to a malfunctioning lighthouse operated by the Coast Guard, resulting in significant damage to the vessel and its cargo. The company sued, arguing that it had relied on this navigational aid and that its failure constituted negligence on part of the government. The court ruled in favor of Indian Towing Co., stating that once an undertaking is embarked upon which leads others to rely upon proper maintenance, then there exists a duty of care which makes negligent performance actionable even if undertaken voluntarily or gratuitously as long as reliance existed and injury resulted from failure to exercise due care therein. This decision expanded governmental liability under FTCA beyond traditional common law categories such as proprietary functions or uniquely governmental functions into new areas where private persons would be liable under state law but for their status as federal entities.

In the dissenting opinion for Indian Towing Co., Inc. v. United States, Justice Robert H. Jackson argued against the majority's decision to hold the government liable for negligence in operating a lighthouse, which resulted in damage to a commercial ship. He contended that this ruling expanded governmental liability beyond traditional boundaries and could potentially expose taxpayers to enormous financial burdens due to unforeseen claims of negligence by federal employees across various departments and services. Furthermore, he expressed concern about how such an expansion of liability might affect public service operations if they were constantly under threat of litigation for any perceived failures or mistakes made during their duties.