In the case of United States Shipping Board Emergency Fleet Corporation v. Rosenberg Brothers & Company, 1927, the Supreme Court ruled in favor of the U.S. Shipping Board Emergency Fleet Corporation (Fleet Corp). The dispute arose when Rosenberg Brothers & Company claimed that they were owed money for services rendered under a contract with Fleet Corp during World War I. However, Fleet Corp argued that it was not liable to pay because it was an agent acting on behalf of the U.S government and therefore had sovereign immunity from such claims. The court agreed with this argument and held that since Congress had not explicitly waived its sovereign immunity in relation to contracts made by agents like Fleet Corp, there could be no legal claim against them for breach of contract.

In the dissenting opinion for UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION v. ROSENBERG BROTHERS & COMPANY, Justice Stone argued that the Emergency Fleet Corporation was not immune from state taxation as it was a private corporation and not an agency of the federal government. He contended that while Congress had created this entity to aid in World War I efforts, its operations were commercial rather than governmental in nature. The majority's decision to exempt it from local taxes would result in unfair competition with other businesses subject to such levies. Furthermore, he pointed out that no statute explicitly granted tax immunity to this corporation; thus, any claim of implied exemption should be rejected due to lack of clear legislative intent.