In the case of Colorado v. New Mexico et al., 1983, the U.S. Supreme Court was asked to resolve a dispute over water rights between the two states. The issue at hand was whether Colorado could divert water from the Vermejo River, which flows into New Mexico, for its own use without compensating New Mexico for any potential harm caused by this diversion. The court ruled in favor of New Mexico and established that a state seeking to divert interstate waters must prove by "clear and convincing evidence" that benefits outweigh harms to other states affected by such action - an elevated standard compared with previous cases where only preponderance of evidence was required. This ruling set precedent on how future disputes over shared resources would be resolved among states.

In the dissenting opinion for Colorado v. New Mexico et al., Justice O'Connor, joined by Chief Justice Burger and Justices White and Rehnquist, disagreed with the majority's decision to apply a strict "clear and convincing" evidence standard in resolving interstate water disputes. The dissent argued that this high burden of proof was unnecessary given the equitable nature of apportionment cases. They contended that such a stringent standard could potentially hinder states from making necessary adjustments to their water usage in response to changing circumstances or needs over time. Furthermore, they expressed concern that it might unfairly favor downstream states at the expense of upstream ones due to inherent difficulties in providing clear and convincing evidence about future conditions related to water availability or need.