In the case of Southern Pacific Transportation Co. v. Commercial Metals Co., 1981, the U.S Supreme Court ruled in favor of Southern Pacific Transportation Company (SPTC). The dispute arose when SPTC sued Commercial Metals Company for damages to a railway car that was leased by Commercial Metals from SPTC and subsequently damaged during transit. The court held that under federal law, specifically the Carmack Amendment to the Interstate Commerce Act, a shipper is liable for damage caused to goods during transportation even if it did not cause or could not have prevented such damage. This ruling overturned an earlier decision made by Texas courts which had found in favor of Commercial Metals on grounds that they were not negligent and thus should not be held responsible for damages.

In the dissenting opinion for Southern Pacific Transportation Co. v. Commercial Metals Co., Justice Brennan, joined by Justices Marshall and Blackmun, argued that the majority's decision was inconsistent with previous rulings of the Court regarding liability under the Carmack Amendment to the Interstate Commerce Act. They contended that this amendment should be interpreted as imposing absolute liability on carriers for any damage occurring during transportation unless they can prove they were free from negligence and that damage was caused by an act of God, public enemy, authority of law or shipper himself. The dissenters believed there is no room in this framework for a comparative negligence defense which allows a carrier to reduce its liability proportionately if it can show that shipper’s own negligence contributed to loss or injury suffered.