In the 1916 case of Pennsylvania Railroad Company v. Sonman Shaft Coal Company, the Supreme Court ruled in favor of the Pennsylvania Railroad Company. The dispute arose when Sonman Shaft Coal Co., a coal mining company, claimed that it was entitled to damages due to an alleged breach of contract by Pennsylvania Railroad Co. According to Sonman, they had entered into a contract with the railroad for transportation services and accused them of failing to provide sufficient cars for transporting their coal as per agreement which resulted in financial loss for them. The court held that there was no such obligation on part of railroads under common law or statute law unless specifically agreed upon between parties involved. It further stated that even if there were any such contractual obligations, these could not be enforced through damage claims but only via specific performance suits (i.e., asking courts to compel party at fault to fulfill its contractual duties). Therefore, since no evidence suggested existence of any special agreement between two companies regarding provision of certain number or type(s)of cars within specified time period(s), court dismissed plaintiff's claim.

In the dissenting opinion for Pennsylvania Railroad Company v. Sonman Shaft Coal Company, Justice Holmes argued that the majority's decision to allow a coal company to sue a railroad for damages due to an alleged breach of contract was incorrect. He believed that there was no clear evidence of any contractual obligation on part of the railroad company towards maintaining specific rates or providing special services as claimed by the coal company. Furthermore, he emphasized that railroads are public utilities and should not be held liable in such cases unless it can be proven beyond doubt they have acted with malice or negligence. In his view, this ruling could set a dangerous precedent where railroads would constantly face lawsuits from disgruntled customers seeking compensation over minor grievances or perceived slights.