The Columbian Insurance Company brought a suit against Catlett, claiming that he had failed to pay for an insurance policy. The company argued that the policy was valid and enforceable under state law. However, Catlett countered by arguing that the contract was void because it violated public policy as set forth in the Constitution of Virginia. The Supreme Court ultimately sided with Catlett, ruling that contracts which violate public policy are not legally binding and cannot be enforced in court. This decision established a precedent for future cases involving contracts which conflict with public policies or laws enacted by states or other governing bodies.

In The Columbian Insurance Company v. Catlett, the Supreme Court was asked to decide whether a policy of insurance issued by the plaintiff in error (The Columbian Insurance Company) covered losses resulting from an act of Congress that prohibited foreign vessels from entering certain ports. In a dissenting opinion, Justice Story argued that the language used in the policy did not cover such losses and therefore should not be interpreted as doing so. He reasoned that if it had been intended for this type of loss to be covered, then specific words would have been included in order to make this clear. Furthermore, he noted that allowing policies like these to cover any kind of unforeseen event could lead insurers into insolvency due to their inability to predict future events or legislation which might affect them adversely. As such, Justice Story concluded that while some sympathy may exist for those who suffered losses due to acts of government beyond their control, it is necessary for courts and legislatures alike "to draw reasonable limits" on what can be recovered through insurance contracts so as not put insurers at risk financially