The Southern Pacific Company v. Industrial Accident Commission of the State of California case in 1919 revolved around a dispute over workers' compensation for an employee who was injured while working out-of-state. The plaintiff, Southern Pacific Company, argued that because the injury occurred outside California, they should not be liable under California's Workers Compensation Act. However, the defendant and respondent - Industrial Accident Commission (IAC) contended that since both parties were domiciled and contracted in California, state law should apply regardless of where the accident took place. The U.S Supreme Court ruled in favor of IAC stating that as long as a contract is made within a certain jurisdiction (in this case -California), then it remains enforceable even if work-related injuries occur elsewhere unless explicitly stated otherwise by contractual terms or statutes.

In the dissenting opinion for Southern Pacific Company v. Industrial Accident Commission of California, Justice Louis Brandeis argued that the majority's decision to apply federal law instead of state law was incorrect. He contended that this case should be governed by local laws because it involved a purely internal affair within a single state - an employee injured while working in California on a train destined for another location within the same state. According to him, there was no interstate commerce involved and hence no reason for federal jurisdiction or application of federal laws. He also pointed out that if every accident occurring on facilities used in part for interstate commerce were subject to federal control, then almost all accidents would fall under such category which is not what Congress intended when they passed relevant legislation regulating interstate commerce.