The case of Reed v. Director General of Railroads, United States Railroad Administration, Operating Philadelphia & Reading Railroad in 1921 revolved around the issue of whether or not a railroad company was liable for damages caused by an accident involving one of its trains. The plaintiff, Mrs. Reed, sued on behalf of her deceased husband who had been killed while working as a brakeman on one of the defendant's trains that derailed due to excessive speed and negligence in maintaining the track conditions. The Supreme Court ruled in favor of Mrs. Reed stating that under Federal Control Act (1918), which transferred control over railroads from private companies to federal government during World War I for military purposes but retained liability rules intact; hence making it possible for employees or their families to sue if they were injured or killed due to negligence at work.

In the dissenting opinion for Reed v. Director General of Railroads, Justice McReynolds disagreed with the majority's decision to deny compensation to Mrs. Reed for her husband's death due to negligence by a railroad company during World War I when railroads were under federal control. He argued that Congress did not intend to shield government-operated railroads from liability in cases of employee injury or death caused by negligence when it passed legislation related to wartime operation of railways. Furthermore, he contended that denying such claims would be contrary to public policy and justice as it would leave victims without any form of redress against negligent actions causing harm or loss. Therefore, he believed Mrs. Reed should have been allowed her claim against the railroad administration.