The United States Supreme Court case of United States v. South Buffalo Railway Co. et al., 1947, revolved around the issue of whether or not a railroad company could be held liable for damages caused by sparks from one of its locomotives igniting flammable materials on government property. The incident in question occurred during World War II when sparks from a passing train ignited war materials stored at a naval ammunition depot causing significant damage. The U.S Government sued the railway company to recover losses incurred due to this fire. In their defense, the railway company argued that they were operating under federal control as part of wartime efforts and thus should be immune from such liability claims based on sovereign immunity principles - which generally protect governments and their agencies from lawsuits. However, the Supreme Court ruled against them stating that despite being under federal control at that time, it did not make them an agent or arm of the government thereby exempting them from liability for negligence resulting in damage to third parties' properties including those owned by U.S Government itself.

In the dissenting opinion for United States v. South Buffalo Railway Co., it was argued that the Interstate Commerce Commission (ICC) did not have jurisdiction over intrastate railroads, even if they were owned by interstate carriers. The dissenters believed that Congress had only given the ICC authority to regulate interstate commerce and this case involved purely local matters within New York State. They also disagreed with the majority's interpretation of "control" in relation to railroad companies, arguing that ownership does not necessarily equate control in a legal sense. Furthermore, they contended that allowing federal regulation of intrastate railroads could lead to an unwarranted expansion of federal power at the expense of state sovereignty.