This US Supreme Court case involved a dispute between The New York and Baltimore Transportation Company (appellants) and the Philadelphia and Savannah Steam Navigation Company, owners of the steamship Keystone State. At issue was whether or not the appellants were entitled to damages for losses they suffered when their goods were damaged while being transported on board the Keystone State. The court found that since there had been no negligence on behalf of either party, neither could be held liable for any damage caused by an act of God such as a storm at sea. However, it did find that if either party had acted negligently in loading or unloading cargo then they would have been responsible for any resulting damage. Ultimately, this decision set forth important legal principles regarding liability in cases involving transportation contracts which are still applicable today.

In the dissenting opinion of The New York and Baltimore Transportation Company v. The Philadelphia and Savannah Steam Navigation Company, Justice Grier argued that the lower court had erred in its decision to grant a decree of condemnation against the appellants. He believed that there was no evidence presented to support a finding of negligence on behalf of either party, nor any proof that damages were caused by such negligence. Furthermore, he noted that even if it could be proven beyond reasonable doubt that one or both parties acted negligently, then they should only be liable for actual damages suffered as opposed to punitive damages sought by appellee. In conclusion, Justice Grier concluded his dissent with an assertion that since neither party had been found negligent in causing harm or damage to each other's property rights then no compensation should have been awarded at all.