In the case of Van Beeck, Administrator v. Sabine Towing Co., Inc., et al. (1936), the U.S Supreme Court ruled that a ship owner's liability for damages is limited to the value of their interest in the vessel and its pending freight at the end of its voyage when an accident occurred. The court held this limitation applicable even if there was negligence on part of crew members or other employees, as long as such negligence was without privity or knowledge from ship owners themselves. This ruling came after a collision between two vessels led to loss and damage claims exceeding total post-voyage value of one involved vessel owned by Sabine Towing Company.

In the dissenting opinion for Van Beeck v. Sabine Towing Co., Inc., Justice Cardozo disagreed with the majority's decision to apply maritime law, arguing that state law should have been applied instead. He contended that while it was true that a federal statute had not explicitly provided for wrongful death in this case, there were principles of general maritime law which could be invoked to provide relief. According to him, these principles would allow recovery if they were considered as part of the common-law tradition rather than an extension of statutory remedies. The justice argued against limiting compensation only to instances where Congress has expressly legislated on such matters and emphasized on interpreting laws in ways that promote justice and fairness.