In the case of Panama Railroad Company v. Toppin, 1919, the Supreme Court dealt with a dispute over damages awarded to an injured employee of the railroad company. The plaintiff, Mr. Toppin had been working for the Panama Railroad Company in New York when he was injured due to negligence on part of his employer and sought compensation under New York's Employer's Liability Act. However, since both parties were citizens of different states (Toppin being from Connecticut), federal jurisdiction applied rather than state law as per diversity jurisdiction rules. The main issue before the court was whether or not federal common law should apply instead of local state laws in cases involving interstate commerce where there is diversity jurisdiction - this would mean that only general maritime laws would be applicable and not specific state labor protection statutes like New York’s Employer’s Liability Act. Ultimately, it was decided by Justice Day that while federal courts do have authority over such matters because they involve interstate commerce; however they must still respect and enforce individual state laws unless those are directly inconsistent with any constitutional provisions or acts passed by Congress related to interstate commerce regulation.

The dissenting opinion in the case of Panama Railroad Company v. Toppin argued that the majority's decision to dismiss the case on jurisdictional grounds was incorrect. The dissent contended that there was sufficient evidence to suggest a direct connection between the actions of the railroad company and injury suffered by Toppin, thus establishing cause for action under federal law. Furthermore, it disagreed with the majority's interpretation of maritime law and its application in this particular instance. It believed that even though some events occurred outside U.S territorial waters, they were still within reach of American laws due to their impact on an American citizen (Toppin). Therefore, according to this view, dismissing a legitimate claim based solely on geographical technicalities undermined justice and failed to uphold legal accountability.