In Keegan v. United States (1944), the Supreme Court examined whether a federal court had jurisdiction over crimes committed in areas under U.S. military control but not formally annexed by the U.S., specifically, certain parts of Germany and Austria occupied by American forces after World War II. The defendants were civilians who worked for the Army Exchange Service and were charged with embezzlement while on duty overseas. They argued that they should have been tried in German courts as per international law norms rather than being subjected to American laws abroad. The Supreme Court ruled against them, stating that Congress has constitutional authority to make laws applicable beyond territorial limits of the United States when necessary for national security or foreign relations purposes; this includes establishing judicial structures to enforce such laws. Therefore, it was within Congress's power to authorize trial of civilian employees of an army occupying foreign territory before a U.S.-constituted tribunal.

In the dissenting opinion for Keegan v. United States, Justice Murphy argued that the majority's interpretation of the Espionage Act was too broad and could potentially infringe upon First Amendment rights. He contended that while it is necessary to protect national security, this should not come at the expense of individual liberties. The act in question criminalized any false statements made with intent to interfere with military operations or support for enemies during wartime; however, Murphy believed there needed to be a clear connection between such statements and actual harm caused to national defense efforts before they could be considered illegal under this law. Furthermore, he expressed concern over potential misuse of such legislation against political dissidents or those expressing unpopular opinions - essentially stifering free speech out of fear rather than due cause.