The United States Supreme Court case, United States Shipping Board Merchant Fleet Corp. et al. v. Rhodes, 1935, revolved around a dispute over the interpretation of the Suits in Admiralty Act (SIAA). The plaintiff, Mr. Rhodes had been injured while working on a ship owned by the U.S government and operated by the U.S Shipping Board Merchant Fleet Corporation - an entity created to manage ships owned by the government during World War I but was later dissolved with its assets transferred back to US Government control under Department of Commerce. Rhodes sued for damages under maritime law and won at both district court level and appeals court level as they ruled that he could sue directly against US Government due to SIAA provisions which waived sovereign immunity for such cases. However, when appealed again before Supreme Court it reversed lower courts' decisions stating that since Maritime Commission wasn't specifically mentioned in SIAA's waiver clause hence it did not waive sovereign immunity for suits against this specific agency i.e., suit should have been brought up against USA itself rather than any specific agency like Maritime Commission or its predecessor entities.

In the dissenting opinion for the United States Shipping Board Merchant Fleet Corp. et al. v. Rhodes case, Justice Stone argued that the majority's decision to allow a state court to exercise jurisdiction over a federal corporation was inconsistent with previous rulings and principles of federal sovereignty. He contended that allowing states to regulate or control federally created entities would undermine their purpose and function as intended by Congress, thus infringing upon federal supremacy. Furthermore, he expressed concern about potential inconsistencies in legal outcomes if different state courts were allowed to apply their own laws and procedures on matters concerning these corporations instead of uniform federal law being applied consistently across all jurisdictions.