The case of Missouri, Kansas & Texas Railway Company of Texas et al. v. Ward et al., and Houston & Texas Central Railroad Company in 1916 revolved around the issue of railway companies' liability for damages caused by fires that started from their locomotives. The plaintiffs, landowners in Texas, claimed that sparks from passing trains ignited fires which damaged their property. They argued that under a state law enacted in 1893, railroad companies were liable for any fire damage caused by sparks or cinders emitted from their engines regardless of negligence on part of the company. However, the Supreme Court ruled against this interpretation stating it was unconstitutional to hold railroads strictly liable without proof they had been negligent or at fault. The court held that such laws violated the Fourteenth Amendment's due process clause as it deprived railway companies’ property without due process of law because there was no opportunity to demonstrate whether they had exercised proper care and caution to prevent such accidents.

In the dissenting opinion for Missouri, Kansas & Texas Railway Company of Texas et al. v. Ward et al., and Houston & Texas Central Railroad Company, Justice Holmes argued that the majority's decision was inconsistent with previous rulings regarding interstate commerce regulation. He contended that a state cannot regulate rates on goods transported from another state simply because they are temporarily stored in its territory before being sold to consumers within its borders. This would be an indirect attempt at regulating interstate commerce which is exclusively under federal jurisdiction according to the Commerce Clause of the Constitution. Furthermore, he disagreed with the majority's interpretation of "original package" doctrine stating it should not apply when goods have been removed from their original packages and mixed with other similar items before sale as this changes their character making them part of general mass within a state’s control.