The Luckenbach Steamship Company v. United States case in 1926 revolved around the issue of whether or not a ship owner could be held liable for damages caused by a collision due to the negligence of an independent contractor pilot mandated by state law. The Supreme Court ruled that, under federal maritime law, a ship owner is generally not responsible for damage resulting from such negligence unless it can be shown that they had some control over the pilot's actions. This ruling was based on previous cases and established legal principles which assert that pilots are considered servants of the public rather than agents of their respective ships' owners when performing duties required by state laws. Therefore, any liability arising from their negligent acts should fall upon them personally or upon those who employed them directly (i.e., harbor authorities), but not on vessel owners who were compelled to use their services.

In the dissenting opinion for Luckenbach Steamship Company v. United States, it was argued that the majority's decision to hold a private company liable for damages caused by its vessel during wartime contradicted established international law principles. The dissenting justices believed that since the ship had been requisitioned and controlled by the U.S government at the time of incident, it should be considered as an auxiliary cruiser in public service rather than a privately owned commercial vessel. Therefore, they contended that any damage caused should fall under sovereign immunity rules which protect governments from being sued without their consent. They further emphasized on how such liability could discourage private companies from cooperating with government needs during times of war or emergency due to fear of potential financial repercussions.