In the 1898 case of Lake Shore and Michigan Southern Railway Company v. Smith, the U.S. Supreme Court ruled in favor of the railway company, overturning a lower court's decision that had awarded damages to Smith for injuries he sustained while working as an employee for the railway company. The Supreme Court held that under federal law at that time, employers were not liable for injuries suffered by their employees due to negligence on part of fellow workers unless it could be proven that there was some fault or neglect on part of employer itself. In this particular case, it was found out during trial proceedings that Smith’s injury occurred because his co-worker failed to properly secure a piece of timber which fell and injured him; thus making it clear there wasn't any direct negligence from employer side leading to accident.

In the dissenting opinion for Lake Shore and Michigan Southern Railway Company v. Smith, it was argued that the majority's decision to allow a state court to exercise jurisdiction over an out-of-state corporation based on its business operations within the state could potentially infrive upon federal authority. The dissent contended that such a ruling would enable states to impose their own regulations on interstate commerce, which is constitutionally under federal control. Furthermore, they expressed concern about potential abuses of this power by states seeking to protect local interests at the expense of national ones. They also pointed out inconsistencies in how courts have previously interpreted laws relating to corporations' consent or submission to jurisdiction through their activities within a given state.