In the 1914 case of Norfolk Southern Railroad Company v. Ferebe, the U.S Supreme Court ruled in favor of Norfolk Southern Railroad Company. The dispute arose when a train owned by the railroad company collided with a vehicle driven by Ferebe's husband, resulting in his death. Mrs. Ferebe sued for damages on behalf of her deceased husband under North Carolina law which allowed recovery if negligence could be proven even though contributory negligence was also present - an exception to common law principles at that time. However, since this accident occurred on federal territory (a naval base), it fell under federal jurisdiction and thus should follow general common law rules rather than state-specific laws according to Erie Doctrine established later in 1938. Under these rules, contributory negligence would bar any recovery. The court held that while states have power over their own tort laws within their boundaries, they cannot extend those laws into areas governed solely by federal authority such as military bases or other federally controlled lands where general common-law principles apply instead.

In the dissenting opinion for Norfolk Southern Railroad Company v. Ferebe, it was argued that the majority's decision to uphold a North Carolina law allowing recovery of damages without proof of negligence was unconstitutional. The dissenting justices believed this violated due process rights under the Fourteenth Amendment by depriving corporations of their property without fair legal proceedings. They contended that while states have power to regulate businesses within their jurisdiction, they cannot arbitrarily impose penalties or liabilities on them in absence of fault or neglect causing injury. Furthermore, they emphasized that such laws could potentially lead to abuse and unjust enrichment at expense of innocent parties who are held liable regardless of whether they acted negligently or not.