The U.S. Supreme Court case Philadelphia, Baltimore & Washington Railroad Company v. Smith in 1918 revolved around the issue of whether a railroad company could be held liable for injuries sustained by an employee while performing his duties. The plaintiff, Smith, was injured when he fell from a ladder on one of the defendant's cars due to its defective condition. He sued under the Federal Employers' Liability Act (FELA), which holds employers accountable for injuries to employees if they result from negligence or failure to provide safe working conditions. The court ruled in favor of Smith and upheld that FELA did apply in this situation as it was enacted specifically to protect railway workers from harm resulting from their employer’s negligence or unsafe work environments provided by them. It further stated that even though there might have been contributory negligence on part of the worker himself, it would not absolve the employer completely but only serve to diminish damages proportionately according to degree fault attributable.

In the dissenting opinion for Philadelphia, Baltimore & Washington Railroad Company v. Smith, Justice Holmes argued that the majority's decision was based on a misinterpretation of the Federal Employers' Liability Act (FELA). He contended that FELA did not intend to make employers liable for injuries sustained by employees in every circumstance but only when negligence could be proven. In this case, he believed there was no evidence of negligence on part of the employer and thus they should not be held responsible for damages. Furthermore, he disagreed with how broadly his colleagues interpreted "injury" under FELA as it would lead to an unreasonable expansion of liability beyond what Congress intended. The justice also expressed concern about potential negative impacts such broad interpretation might have on businesses and industries across America.