In the 1916 case of Lie, Master of the Norwegian Steamship 'Selja,' v. San Francisco & Portland Steamship Company, Claimant of the American Steamship 'Beaver,', a collision occurred between two ships in dense fog off Point Reyes, California. The Supreme Court was tasked with determining who was at fault for this accident. The court found that both vessels were to blame as they failed to comply with statutory rules requiring them to proceed at a moderate speed during conditions of reduced visibility due to fog and also failed in their duty to keep out of each other's way when they became aware that risk existed. Therefore, it held that damages should be divided equally between them according to established maritime law principles regarding mutual fault collisions.

In the dissenting opinion for Lie v. San Francisco & Portland Steamship Company, Justice Holmes disagreed with the majority's decision that held the Norwegian steamship 'Selja' liable for a collision with an American ship, 'Beaver'. He argued that both vessels were equally at fault and should share liability. The Selja had violated navigation rules by not blowing its whistle when it stopped in foggy conditions, but Beaver also failed to maintain a proper lookout as required by law. Holmes believed these mutual faults contributed to the accident and thus both parties should bear responsibility. Furthermore, he criticized the majority's reliance on English case law instead of adhering strictly to U.S maritime laws which clearly state shared liability in such situations of equal fault.