In the United States v. Stevens case of 1937, the Supreme Court ruled on a dispute over inheritance tax. The decedent had transferred securities to his wife and children during his lifetime but retained life income from them. After his death, these transfers were included in gross estate for federal estate tax purposes under Revenue Act of 1926 which was contested by the administratrix of the deceased's will. The court held that since he had kept an interest in those assets for himself until death, they could be taxed as part of his gross estate despite being given away earlier. This decision established important precedent regarding taxation laws related to gifts and estates.

In the dissenting opinion for United States v. Stevens, Justice Cardozo disagreed with the majority's decision to uphold a lower court ruling that allowed recovery of damages under the Federal Tort Claims Act (FTCA) by an individual injured due to negligence on part of federal employees. He argued that Congress had not intended for such broad interpretation when it passed FTCA and did not intend to waive sovereign immunity in cases involving negligent acts committed by government employees within their official duties. According to him, allowing individuals to sue the government for actions taken in its capacity as a sovereign would lead to excessive litigation and could potentially disrupt effective governance. Furthermore, he contended that if Congress wanted such expansive waiver of governmental immunity, it should have explicitly stated so in legislation rather than leaving it up for judicial interpretation.