In the 1921 case of Western Union Telegraph Company v. Louisville & Nashville Railroad Company, the Supreme Court was asked to determine whether a contract between two parties could be enforced if it violated federal law. The dispute arose when Western Union entered into an agreement with Louisville & Nashville Railroad to install telegraph lines along their railroad tracks. However, this arrangement contravened the Mann-Elkins Act of 1910 which required all telegraph companies to provide equal access and service rates for all railroads without discrimination or preference. The court ruled in favor of Western Union, stating that while contracts violating public policy are typically unenforceable, there were exceptions where enforcement would serve greater public interest than non-enforcement. In this instance, enforcing the contract would ensure continued operation and maintenance of essential communication infrastructure across vast areas served by these railroads - a benefit outweighing potential harm from violation of anti-discrimination provisions in federal law. This decision underscored that courts may consider broader societal implications beyond strict legal interpretations when adjudicating contractual disputes involving violations of statutory regulations.

In the dissenting opinion for Western Union Telegraph Company v. Louisville & Nashville Railroad Company, Justice Holmes argued that the majority's decision was inconsistent with previous rulings and failed to consider important aspects of contract law. He contended that Western Union had a contractual obligation to provide telegraph services along the railroad line, regardless of whether it owned or leased those lines. The fact that they did not own some sections of the line should not absolve them from their responsibility under this agreement. Furthermore, he disagreed with the majority's interpretation of "telegraph company" in Kentucky’s statute as only referring to companies owning telegraph lines rather than also including ones leasing such facilities. This narrow definition disregarded common business practices at that time where many businesses operated through leases instead of ownerships due to financial reasons or other practical considerations.