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The petitioner, a resident of North Carolina, sued respondent, a South Carolina corporation, for damages for injuries allegedly caused by the respondent's negligence. He was employed as a lineman in the construction crew of a construction contractor. Respondent Blue Ridge Rural Electrical Cooperative, Inc., a South Carolina corporation in the business of selling electric power, had contracted with R. H. Bouligny, Inc. for $334,300 to build approximately 24 miles of new power lines, reconvert about 88 miles of existing lines to higher capacities, and construct two new substations and a breaker station. The petitioner was injured while connecting power lines to one of the new substations. Byrd first recovered full benefits under the South Carolina Workmen's Compensation Law from his direct employer Bouligny. He then filed a negligence action against Blue Ridge in the United States District Court for the Western District of South Carolina under diversity jurisdiction pursuant to 28 U.S.C. § 1332. At trial Blue Ridge asserted an affirmative defense that Byrd qualified as its statutory employee because the contracted work was part of its trade, business, or occupation. Blue Ridge's manager testified on direct examination that three of its substations had been built by its own construction and maintenance crews. His answers on cross-examination created uncertainty that prompted the trial judge to note he appeared to have changed his testimony. Blue Ridge also introduced evidence that it financed the project with a federal loan, purchased the materials, and maintained an engineering service contract with an independent firm for design and supervision. Its charter under the South Carolina Rural Electric Cooperative Act authorized it to construct generating plants, buildings, and equipment necessary for its operations. After all evidence was presented the district judge struck the affirmative defense, ruling that Blue Ridge could not be a statutory employer because its crews performed work only for its own use rather than for others. The judge then denied Blue Ridge's motion for a directed verdict and submitted the negligence claim to the jury, which returned a verdict for Byrd in the amount of $126,786.80. The Court of Appeals for the Fourth Circuit reversed, resolved uncertainties in the manager's testimony in Blue Ridge's favor, and directed entry of judgment for Blue Ridge without remanding for further proceedings. Byrd petitioned for certiorari, which the Supreme Court granted. The case had previously been dismissed on the ground that Blue Ridge enjoyed tort immunity as a nonprofit corporation, but the Court of Appeals had reversed that dismissal and remanded for trial. On the present appeal the Court of Appeals did not reach other grounds raised by Blue Ridge because its resolution of the statutory employer issue disposed of the case.

The Village of Euclid is an Ohio municipal corporation that adjoins and is practically a suburb of the City of Cleveland. Its estimated population is between 5,000 and 10,000, and its area spans from twelve to fourteen square miles, with the greater part consisting of farm lands or unimproved acreage. It lies roughly in the form of a parallelogram measuring approximately three and one-half miles each way and is traversed east and west by three principal highways and two railroads. Ambler Realty Co. owns a tract of land containing 68 acres situated in the westerly end of the village. This tract abuts on Euclid Avenue to the south and the Nickel Plate railroad to the north. Adjoining this tract on both the east and the west, restricted residential plats have been laid out upon which residences have been erected. On November 13, 1922, the Village Council adopted an ordinance establishing a comprehensive zoning plan. The ordinance divides the village into six use districts denominated U-1 to U-6, three height districts denominated H-1 to H-3, and four area districts denominated A-1 to A-4. Appellee's tract is classified as U-2 for the first 620 feet north of Euclid Avenue, U-3 for the next 130 feet, and U-6 for the remainder. Enforcement of the ordinance is entrusted to the inspector of buildings under rules and regulations of the board of zoning appeals. The board holds public meetings, keeps minutes of its proceedings, and possesses authority to interpret the ordinance in cases of practical difficulty or unnecessary hardship, while penalties are prescribed for violations. Ambler Realty Co. filed suit alleging that the tract has been held for years for sale and development for industrial uses for which it is especially adapted. The bill further alleged that unrestricted market value is about $10,000 per acre but limited to residential purposes the value does not exceed $2,500 per acre, that the first 200 feet back from Euclid Avenue has a value of $150 per front foot if unrestricted but not in excess of $50 per front foot if limited to residential uses, and that the ordinance confiscates and destroys a great part of its value while deterring prospective buyers. The bill sought an injunction restraining enforcement of the ordinance. The district court overruled a motion to dismiss on the ground that the suit was premature. The district court held the ordinance unconstitutional and void and enjoined its enforcement.