In the case of United States v. Steamship Coamo, 1924, the U.S Supreme Court was tasked with determining whether or not a ship owned by an American company but registered under Spanish law could be held accountable for violating American prohibition laws. The ship had been transporting alcohol from Spain to Puerto Rico when it was seized by U.S authorities in international waters off the coast of New York. The owners argued that since their vessel was operating under Spanish registration and therefore subject to Spanish law which did not prohibit alcohol transportation, they were exempt from prosecution under US Prohibition laws. However, the court ruled against them stating that while ships on high seas generally follow the jurisdiction of their country's flag (in this case Spain), there are exceptions especially when such vessels enter within territorial limits of another nation where they must comply with its laws as well.

In the dissenting opinion for United States v. Steamship Coamo, Justice McReynolds disagreed with the majority's decision to hold a steamship company liable for damages caused by an accident involving one of their vessels. He argued that it was unreasonable to expect the ship's captain to foresee and prevent every possible mishap, especially when dealing with unpredictable elements like weather and sea conditions. Furthermore, he contended that there were no clear guidelines or standards in place at the time of the incident which could have helped determine whether or not negligence had occurred on part of the captain or crew members. In his view, this lack of clarity made it unfair to impose such a heavy burden on them after-the-fact.