The Lottawanna was a case heard by the United States Supreme Court in 1873. The case involved a dispute between the United States and the owners of the Lottawanna, a steamship that had been seized by the United States for alleged violations of the Neutrality Act of 1794. The owners of the Lottawanna argued that the seizure was unlawful because the Neutrality Act did not apply to the vessel, as it was not engaged in any hostile acts against the United States. The Supreme Court agreed with the owners of the Lottawanna, ruling that the Neutrality Act did not apply to the vessel and that the seizure was unlawful. The Court also held that the owners of the Lottawanna were entitled to damages for the unlawful seizure. This case established the principle that the Neutrality Act does not apply to vessels that are not engaged in hostile acts against the United States.

In The Lottawanna, the Supreme Court was tasked with determining whether a vessel that had been sold to a foreign buyer could be seized by the United States government for unpaid taxes. The majority opinion held that it could not be seized because of its status as a foreign-owned vessel. However, in his dissenting opinion Justice Field argued that since the vessel was still within U.S. waters and under American jurisdiction at the time of sale, it should remain liable for any outstanding debts owed to the United States government regardless of who owned it afterwards. He reasoned that allowing vessels to escape taxation simply by being sold abroad would create an incentive for owners to evade their obligations and undermine public revenue collection efforts by incentivizing tax avoidance schemes through sales transactions outside U.S borders - something he felt Congress never intended when passing relevant laws on taxation and maritime commerce regulation .