In the case of Southern Pacific Company v. Stewart, the U.S Supreme Court in 1917 ruled on a dispute involving railroad worker injury compensation. The plaintiff, Mr. Stewart, was an employee of Southern Pacific Company who suffered injuries while working in Arizona and sought damages under federal law - specifically the Employers' Liability Act (1908). However, his claim was rejected by lower courts due to a technicality that he had signed his employment contract in California where state laws did not provide for such compensations. Upon appeal to the Supreme Court, it held that since Mr. Stewart's work and subsequent injury occurred within federal territories (Arizona), he should be covered under federal law regardless of where his contract was signed or what its terms were regarding liability for workplace accidents. Therefore, reversing previous decisions made by lower courts against him.

In the dissenting opinion for Southern Pacific Company v. Stewart, it was argued that the majority's decision to hold a railroad company liable for injuries sustained by an employee who fell from a train due to his own negligence was unjust. The dissenting justices believed that this ruling contradicted previous decisions and established principles of law which held that employers are not responsible for accidents caused solely by their employees' carelessness or recklessness. They contended that there were no special circumstances in this case warranting such liability, as the worker knew about the risks involved with his job and failed to exercise proper caution while performing it. Furthermore, they disagreed with the majority's interpretation of federal safety laws related to railroads, asserting these regulations did not intend to impose absolute liability on companies regardless of fault but rather aimed at promoting safer working conditions through shared responsibility between employers and employees.