In the case of Mellon, Director General v. O'Neil in 1927, the United States Supreme Court ruled on a matter concerning railroad employees and their rights to compensation for injuries sustained while working. The plaintiff, O'Neil was an employee of a railway company that had been taken over by the federal government during World War I under authority granted by Congress through the Federal Control Act. He sought damages from his employer due to an injury he suffered at work after this takeover occurred. The defendant argued that as Director General of Railroads (a position held by Andrew W. Mellon), he could not be sued because sovereign immunity protected him from such legal action as per common law principles. The court disagreed with this argument and found in favor of O’Neil stating that when Congress passed legislation allowing for governmental control over railroads it did not intend to extend sovereign immunity protections to these entities or their representatives like Mellon who were acting on behalf of private corporations rather than directly representing federal interests. This ruling affirmed workers' rights to seek compensation for workplace injuries even if their employers are temporarily controlled by government officials.

In the dissenting opinion for Mellon, Director General v. O'Neil, Justice Stone disagreed with the majority's decision to deny compensation to a railroad worker who was injured while working in an interstate train yard. He argued that under the Federal Employers' Liability Act (FELA), workers should be entitled to compensation if they are injured as a result of their employer's negligence, regardless of whether or not they were engaged in interstate commerce at the time of their injury. According to Justice Stone, denying such protection would undermine FELA’s purpose and leave many railway employees without recourse when harmed on duty due to no fault of their own.