In the case of Western Union Telegraph Company v. Esteve Brothers & Company, 1920, the Supreme Court was tasked with determining whether a telegraph company could be held liable for mistakes in transmitted messages that were not repeated back for verification at an additional cost. The plaintiff, Esteve Brothers & Co., had sent a telegram via Western Union to purchase goods but due to an error in transmission by Western Union's operator, the wrong amount of goods was ordered leading to financial loss for Esteve Brothers. The court ruled in favor of Western Union stating that it would only be responsible if negligence could be proven and if there was failure on its part to use reasonable care or skill. Furthermore, since customers have the option (for an extra fee) to request their message is confirmed by repeating it back and this service wasn't used by Esteve Brothers & Co., they couldn’t claim damages from errors made during transmission.

In the dissenting opinion for Western Union Telegraph Company v. Esteve Brothers & Company, Justice Holmes disagreed with the majority's view that a telegraph company could be held liable for mistakes in transmission even when it had taken precautions to avoid such errors. He argued that liability should only arise if there was negligence on part of the telegraph company and not merely because an error occurred. According to him, this would mean holding companies to an unrealistic standard of perfection which is impractical given the nature of their business operations. Furthermore, he contended that customers who choose cheaper but riskier methods of communication should bear some responsibility for any resulting losses due to errors in transmission since they knowingly accepted those risks at outset.