The Waters-Pierce Oil Company v. Deselms case in 1908 revolved around the issue of whether a corporation, incorporated under the laws of one state and doing business in another, could be held liable for punitive damages awarded by a jury in an action brought against it under the laws of that other state. The plaintiff alleged that he had been injured by reason of certain acts done by defendant's agents which were claimed to have been malicious and oppressive. The Supreme Court ruled that corporations are indeed subject to punitive damages if their actions cause harm or injury due to malice or oppression, even when they operate across different states. This decision upheld the principle that corporations must adhere to all local laws where they conduct business and can face penalties for any violations thereof.

In the dissenting opinion for Waters-Pierce Oil Company v. Deselms, Justice Harlan argued that the majority's decision was inconsistent with previous rulings and principles of justice. He contended that there was no evidence to suggest fraud or collusion in obtaining a judgment against Waters-Pierce Oil Company in Texas courts, which had been upheld by the Supreme Court of Texas. Therefore, he believed it inappropriate for the U.S Supreme Court to intervene and reverse this judgment based on its own interpretation of state law. Furthermore, he expressed concern about potential implications on federalism if national courts were allowed to overrule state court decisions without clear justification.