In the case of Rosenthal v. New York Life Insurance Co., 1937, the U.S Supreme Court ruled in favor of the defendant, New York Life Insurance Company. The plaintiff, Mrs. Rosenthal, had filed a lawsuit against her late husband's insurance company for refusing to pay out his life insurance policy after he committed suicide within two years of purchasing it - a period during which most policies do not cover death by suicide due to its "contestability clause". The court held that this clause was valid and enforceable under state law and did not contravene public policy or constitute fraud on part of the insurer as claimed by Mrs. Rosenthal. Therefore, she was denied recovery from her husband’s life insurance policy because his death occurred within this contestability period.

In the dissenting opinion for Rosenthal v. New York Life Insurance Co., it was argued that the majority's decision to uphold a lower court ruling, which found in favor of an insurance company after it denied a claim on grounds of misrepresentation, was incorrect. The dissenting justices believed that there were significant questions about whether or not the insured had intentionally misrepresented his health condition when applying for life insurance coverage. They felt these issues should have been resolved by a jury rather than decided upon by judges alone. Furthermore, they disagreed with the majority's interpretation of state law regarding what constitutes material misrepresentation in insurance contracts and contended that this issue also warranted further examination at trial level.