In the case of St. Louis & San Francisco Railroad Company et al. v. Spiller et al., 1927, the U.S Supreme Court ruled in favor of Spiller and his fellow plaintiffs who were employees of the railroad company seeking compensation for overtime work under federal law. The court found that despite being a corporation chartered by Congress, the St. Louis & San Francisco Railroad Company was not exempt from state laws regulating labor conditions including those governing hours worked and wages paid to its workers within individual states' jurisdictions where it operated lines - in this instance Missouri's wage-hour law applied to them as well as any other employer operating within that state's borders. The decision affirmed lower courts’ rulings which held that while corporations created by Congress are federal entities, they remain subject to state regulation unless such regulation interferes with their ability to perform their federally mandated functions or is expressly prohibited by federal statute.

In the dissenting opinion for the case of St. Louis & San Francisco Railroad Company v. Spiller, Justice Stone argued that the majority's decision was inconsistent with prior rulings and principles of equity. He contended that a railroad company should not be allowed to avoid paying damages by claiming it had no knowledge of an employee’s negligence when it is their responsibility to ensure safe working conditions. Furthermore, he disagreed with the majority's interpretation of "actual fraud" in this context, arguing that it should include instances where a corporation knowingly permits unsafe conditions rather than just explicit acts of deception or misrepresentation. In his view, allowing corporations to escape liability in such cases would undermine public confidence in corporate accountability and fairness.