In the case of Puerto Rico v. Russell & Co., S. En C., 1941, the Supreme Court ruled that a civil suit brought by Puerto Rico against a corporation was not barred by the Eleventh Amendment, which prohibits suits against states without their consent. The court held that while Puerto Rico is an unincorporated territory and does not have all constitutional protections afforded to states, it still has sovereignty comparable to that of a state for certain purposes such as bringing lawsuits in federal courts. Therefore, its lawsuit could proceed despite objections from Russell & Co., who argued they were being sued by a foreign state without their consent in violation of the Eleventh Amendment.

In the dissenting opinion for Puerto Rico v. Russell & Co., S. En C., Justice Frank Murphy argued that the majority's decision was a misinterpretation of both constitutional law and precedent, which undermined Puerto Rico's sovereignty. He contended that by treating Puerto Rico as a federal entity rather than an autonomous one, the Court had effectively denied it its rightful powers to enforce its own laws and govern itself independently. Furthermore, he disagreed with the majority’s view that Congress could unilaterally alter or abolish those rights without consent from Puerto Rican authorities or people. In his view, this not only violated principles of democratic governance but also contradicted previous rulings affirming territorial self-governance rights under U.S law.