In the case of Pennsylvania Railroad Company v. Puritan Coal Mining Company, 1914, the Supreme Court was asked to determine whether a railroad company could be held liable for damages caused by sparks from its locomotives igniting coal dust and causing an explosion in a mine owned by another party. The Puritan Coal Mining Co., whose mine had been damaged, argued that the railroad's negligence led to their loss. However, the court ruled in favor of Pennsylvania Railroad Co., stating that while it is true railroads are responsible for damage caused directly by sparks from their engines under common law principles of liability; they cannot be held accountable when there are intervening factors such as explosive gases within a coal mine which contribute significantly to any resulting damage or injury. This decision established important precedent regarding limits on corporate liability and responsibility.

In the dissenting opinion for the case of Pennsylvania Railroad Company v. Puritan Coal Mining Company, Justice Holmes disagreed with the majority's decision that a railroad company could be held liable for damages caused by its failure to provide sufficient cars to transport coal from a mining company. He argued that there was no contractual obligation on part of the railroad company to supply an unlimited number of cars upon demand and it should not be penalized for failing to do so during periods of high demand or shortage. Furthermore, he contended that such liability would impose undue burden on railroads as they would have to maintain excess capacity at all times just in case it might be needed which is economically unfeasible and unreasonable. The justice also pointed out inconsistencies in how courts were interpreting similar cases, leading him conclude that this ruling was unjustified.