In the case of United Transportation Union v. Long Island Rail Road Co., 1981, the Supreme Court ruled on whether a state-owned railroad company could be sued under federal law for alleged violations of collective bargaining agreements. The Long Island Rail Road Company (LIRR), owned by New York's Metropolitan Transportation Authority, was accused by the United Transportation Union of violating certain provisions in their collective bargaining agreement. LIRR argued that as a state entity it had sovereign immunity and thus couldn't be sued without its consent under the Eleventh Amendment to the Constitution. However, in an unanimous decision written by Justice Thurgood Marshall, SCOTUS held that when Congress enacted amendments to Railway Labor Act extending its coverage to include every common carrier by rail "engaged in interstate or foreign commerce," it intended those amendments apply regardless if carriers were publicly or privately owned; therefore states waived any Eleventh Amendment immunity they might have had from suits brought against them under this act.

In the dissenting opinion for the United States Supreme Court case, UNITED TRANSPORTATION UNION v. LONG ISLAND RAIL ROAD CO., Justice Brennan disagreed with the majority's decision that a state-owned railroad could be sued under federal law without its consent. He argued that this ruling violated principles of sovereign immunity and was inconsistent with previous court decisions regarding similar issues. Furthermore, he contended that Congress did not intend to abrogate states' Eleventh Amendment rights when it passed laws regulating railroads. Therefore, in his view, Long Island Rail Road Co., as an entity owned by New York State, should have been immune from lawsuits brought against it under federal labor laws unless it had explicitly waived its immunity or Congress had clearly intended to override it.