In the case of North Carolina Railroad Company v. Zachary, Administrator of Burgess (1913), the Supreme Court dealt with a dispute over damages awarded to an individual injured while working on a railroad. The plaintiff was employed by Southern Railway Company but was injured on tracks owned by North Carolina Railroad Company due to alleged negligence in maintaining safe conditions. The court had to decide whether liability lay with the employer or track owner and if state laws regarding employee compensation applied. The Supreme Court ruled that under federal law, as interpreted in previous cases such as St. Louis & San Francisco Railway Co v Seale, it is not necessary for an employee's work to be directly related to interstate commerce at the time of injury for them to receive protection under federal legislation governing railway workers' safety - only that they are generally engaged in such activities. However, because this accident occurred before enactment of these federal protections and since there were no contractual obligations between NCRR and Southern requiring NCRR maintain certain safety standards, liability fell upon Southern as Burgess’s direct employer rather than NCRR who merely owned the tracks where he worked.

In the dissenting opinion for North Carolina Railroad Company v. Zachary, it was argued that the majority's decision to uphold a state law requiring railroads to maintain fences along their tracks disregarded established principles of federalism and property rights. The dissenters believed that this ruling effectively allowed states to impose arbitrary regulations on private businesses without any regard for their potential impact on interstate commerce or individual liberty. They also contended that by upholding such an intrusive regulation, the Court had overstepped its constitutional bounds and encroached upon legislative territory. Furthermore, they expressed concern about the implications of this decision for future cases involving similar issues; if states were permitted to regulate railroad companies in such a manner, then there would be nothing stopping them from imposing even more burdensome restrictions in other areas of business activity.