In the 1972 case of Associated Enterprises, Inc., et al. v. Toltec Watershed Improvement District, the U.S Supreme Court was tasked with determining whether a Wyoming statute that allowed for the creation of watershed improvement districts and levying taxes on landowners within those districts violated constitutional rights to equal protection under law. The plaintiffs were corporations owning large tracts of land in one such district who argued they were unfairly burdened by these taxes as their lands did not benefit from improvements made by funds raised through this taxation system. However, the court ruled against them stating that it is not necessary for every piece of property or owner within a taxing district to derive direct benefits from its expenditures so long as overall public welfare is promoted.

The dissenting opinion in the case of Associated Enterprises, Inc. et al v. Toltec Watershed Improvement District argued that the majority's decision to uphold a tax levy imposed by the Toltec Watershed Improvement District was incorrect because it violated principles of equal protection under law. The dissenters contended that there was no rational basis for taxing only those lands within the watershed district while excluding other properties benefiting from its services and improvements. They also disagreed with the majority's interpretation of Wyoming statutes governing watershed districts, arguing they did not authorize such discriminatory taxation practices. Furthermore, they expressed concern about potential abuse if local governments were allowed to arbitrarily define their own boundaries for taxation purposes without any judicial review or oversight.