In the case of Escondido Mutual Water Co. et al. v. La Jolla Band of Mission Indians et al., 1983, the U.S Supreme Court ruled in favor of the La Jolla Band of Mission Indians and other local tribes who claimed water rights to a portion of San Luis Rey River in California under an 1851 treaty with the federal government. The court held that while Congress had not explicitly granted water rights to these tribes, their intent was clear when they reserved land for them which would have been useless without access to water resources necessary for basic survival and farming purposes - known as "implied-reservation-of-water doctrine". Therefore, it was determined that these tribal reservations did indeed include federally protected water rights.

In the dissenting opinion for Escondido Mutual Water Co. v. La Jolla Band of Mission Indians, Justice O'Connor disagreed with the majority's interpretation of federal law and its application to state water rights. She argued that Congress did not intend to preempt state water law when it passed legislation concerning Indian reservations, as suggested by the majority ruling. Instead, she believed that states should retain control over their own natural resources unless explicitly stated otherwise in federal statutes or treaties with Native American tribes. Furthermore, she contended that any ambiguities in these laws should be resolved through negotiation between states and tribes rather than judicial intervention. In her view, this approach would better respect tribal sovereignty while also preserving important principles of federalism.