In the 1892 case of Union Pacific Railway Company v. Goodridge, the U.S. Supreme Court ruled in favor of Union Pacific Railway Company, reversing a decision by the Kansas Supreme Court that had awarded damages to Goodridge for loss of property due to fire caused by sparks from one of Union Pacific's locomotives. The court held that under federal law and regulations governing interstate commerce at that time, railroads were not liable for such accidental damage unless it could be proven they were negligent or failed to use best-practice technology available at the time to prevent fires. In this case, there was no evidence presented showing negligence on part of Union Pacific nor failure in using up-to-date equipment designed for preventing such accidents; hence, liability could not be established.

In the dissenting opinion for Union Pacific Railway Company v. Goodridge, it was argued that the majority's decision to allow a state court to exercise jurisdiction over an interstate railway company violated principles of federalism and threatened corporate rights. The dissenting justices contended that because Union Pacific operated across multiple states, it should be subject only to federal regulation and not individual state laws or courts. They also expressed concern about potential harm caused by allowing each state through which a railroad passed to impose its own rules on companies, potentially resulting in inconsistent regulations that could disrupt commerce and unfairly burden businesses. Furthermore, they disagreed with the majority's interpretation of "doing business," arguing instead for a narrower definition limited strictly to activities directly related to generating profit rather than any physical presence within a given jurisdiction.