In the 1919 case Newman, Administratrix of Erskine, et al. v. Moyers et al.; Partners, Trading as Moyers & Consaul, the U.S Supreme Court was asked to determine whether a federal court in New York had jurisdiction over a suit brought by an administratrix (a female administrator) of an estate against two individuals and their partnership firm based in Washington D.C., for alleged breach of contract and negligence that resulted in financial loss to the estate. The defendants argued that they were not residents or citizens of New York and therefore could not be sued there under existing laws governing diversity jurisdiction - which allows federal courts to hear cases involving parties from different states. However, it was found that one partner resided part-time in New York while conducting business on behalf of the firm; thus establishing sufficient contact with the state for its courts to exercise personal jurisdiction over him and his partners through their joint enterprise.

The dissenting opinion in the Newman, Administratrix of Erskine, et al. v. Moyers et al.; Partners, Trading as Moyers & Consaul case argued that the majority's decision was incorrect because it failed to consider key aspects of contract law and partnership liability. The dissent believed that a partner should be held liable for debts incurred by their firm during their tenure even if they were unaware of them or did not directly authorize them. They contended that this is an inherent risk associated with entering into a business partnership and one must accept responsibility for all actions taken by the firm while they are part of it. Furthermore, they disagreed with the majority's interpretation of 'notice' arguing instead that notice given to any partner should constitute notice given to all partners under common law principles governing partnerships.