In the case of Cherokee Nation v. United States in 1925, the Supreme Court ruled on a dispute between the Cherokee Nation and the U.S. government regarding compensation for lands ceded under previous treaties. The Cherokees claimed that they were not adequately compensated for their land as per agreements made in 1835-36 (Treaty of New Echota) and 1846. They argued that these treaties had been violated by subsequent legislation which reduced payments to them, specifically an Act passed by Congress in July 1866 following Civil War-related disputes with several Native American tribes including Cherokees who sided with Confederacy during Civil War. The court held that while it was true Congress had altered terms of payment, this action was within its legislative power given extraordinary circumstances surrounding post-Civil War reconstruction period; hence no breach occurred on part of federal government towards obligations set out in aforementioned treaties. Furthermore, court stated that interpretation or enforcement of such treaty provisions fell outside its jurisdiction since it involved political questions better suited for executive or legislative branches rather than judiciary branch.

In the dissenting opinion for Cherokee Nation v. United States, Justice Holmes disagreed with the majority's decision to award damages to the Cherokee Nation based on a 1906 Act of Congress that dissolved tribal governments and distributed their assets among individual members. He argued that this act did not constitute a breach of contract by the U.S government but was rather an exercise of its plenary power over Indian affairs. According to him, it was within Congress' authority to alter or abolish tribal governments if deemed necessary for their welfare or in public interest. Furthermore, he contended that even if there had been any contractual obligations towards Cherokees under previous treaties, they were superseded by this later legislation which reflected changed policy considerations regarding Native American tribes. Therefore, he believed no compensation should be awarded as there was no legal basis for such claims.