In the case of Lumber Underwriters of New York v. Rife (1914), the U.S Supreme Court ruled in favor of Lumber Underwriters, reversing a decision made by the Kentucky Court of Appeals. The dispute arose from an insurance policy issued by Lumber Underwriters to Rife's sawmill business. After suffering losses due to fire damage, Rife claimed compensation under his insurance policy but was denied on grounds that he had violated certain conditions stipulated in the contract - specifically, maintaining a 'watchman' at all times and operating a steam boiler without proper supervision or safeguards against fire risks. The state court sided with Rife initially; however, upon appeal to the Supreme Court it was determined that these were material breaches which justified denial of claim by insurer as per terms agreed upon within their contract.

In the dissenting opinion for Lumber Underwriters of New York v. Rife, it was argued that the majority's decision to uphold a Kentucky law requiring foreign corporations to consent to service of process on an in-state agent as a condition of doing business within its borders violated due process rights. The dissent contended that this requirement essentially forced foreign corporations into surrendering their constitutional right not to be sued outside their home state without proper jurisdictional basis. It was further asserted that such laws could lead states towards enacting legislation designed primarily at coercing out-of-state entities into submitting themselves wholly under local jurisdictions, thereby undermining interstate commerce and federalism principles inherent in the U.S Constitution.