In the case of National Steamship Company v. Tugman (1891), the U.S Supreme Court ruled on a dispute involving maritime law and liability for damages caused by negligence. The National Steamship Company had hired Tugman to tow its ship, but due to alleged negligence by Tugman's crew, the steamship ran aground and was damaged. The company sued for compensation. However, there was a clause in their contract limiting Tugman’s liability unless damage resulted from his personal fault or neglect. The lower court found in favor of the steamship company, ruling that such clauses were void as against public policy when they exempted parties from responsibility for their own negligent acts. On appeal however, the Supreme Court reversed this decision stating that it is not illegal or contrary to public policy for parties in a private contract to stipulate provisions which limit liability arising out of negligence so long as these do not involve gross negligence or willful misconduct. This case established an important precedent regarding contractual limitations on liability within maritime law.

In the dissenting opinion for the National Steamship Company v. Tugman case, it was argued that there should be a distinction between maritime torts and contracts in terms of jurisdiction. The majority ruling held that state courts could not exercise jurisdiction over cases involving maritime torts due to their exclusive nature under federal law. However, the dissenting justices believed this interpretation was too broad and restrictive on states' rights. They contended that while certain aspects of maritime law were indeed exclusively federal—such as those related to navigation or commerce—other areas like personal injury claims from accidents at sea could fall within concurrent jurisdiction of both state and federal courts. This view emphasized a more flexible approach towards determining whether specific issues fell under admiralty jurisdiction based on individual circumstances rather than applying an absolute rule across all situations.