In the case of City of Fresno v. California et al., 1962, the U.S Supreme Court was faced with a dispute over water rights between the city and state. The City of Fresno had constructed a sewage disposal plant that discharged treated waste into an unlined canal which seeped into groundwater supplies. The State argued this constituted an unlawful appropriation under California law as it resulted in contamination of downstream water sources used by other parties for irrigation purposes. However, the court ruled in favor of Fresno stating that there was no violation since it did not intentionally appropriate or divert any natural surface waters but merely allowed treated wastewater to percolate naturally through soil from its treatment facility into underlying groundwater basins.

In the dissenting opinion for the case of CITY OF FRESNO v. CALIFORNIA et al., Justice Douglas argued that the majority's decision to uphold a California law granting cities and counties authority over their water resources was flawed. He contended that this ruling violated both state and federal constitutional principles by allowing local governments to control resources beyond their jurisdiction, thereby infringing upon private property rights without due process or just compensation. Furthermore, he asserted that such laws could lead to monopolistic practices in resource distribution, which would be detrimental to public welfare and economic competition. In his view, these issues should have been addressed through legislation rather than judicial interpretation.