In the case of State of Georgia v. City of Chattanooga, Tennessee in 1923, the Supreme Court was asked to decide on a dispute over water rights between the state and city. The State of Georgia sued Chattanooga for diverting water from the Tennessee River which flowed into Georgia. The court had to determine whether or not it had jurisdiction over this interstate dispute and if so, what remedy should be provided. The Supreme Court ruled that it did have jurisdiction because it involved an interstate conflict about natural resources - a matter within its purview according to Article III Section 2 Clause 1 of the U.S Constitution. However, they found no substantial injury inflicted upon Georgia by Chattanooga's actions as there was still plenty amount of water flowing into their territory despite some diversion upstream by Chattanooga for municipal purposes. Therefore, while acknowledging that states do have sovereign rights over rivers passing through them unless limited by valid contracts or compacts with other states (which wasn't present here), they denied any relief sought by Georgia due to lack evidence showing significant harm caused.

In the dissenting opinion for the case of State of Georgia v. City of Chattanooga, Tennessee, it was argued that the majority's decision to dismiss Georgia's bill on grounds that it did not have a substantial interest in protecting its citizens from pollution caused by another state was incorrect. The dissent emphasized that states should be able to protect their citizens' health and welfare against harmful actions originating from other jurisdictions. It also highlighted how this ruling could potentially set a dangerous precedent where states would be unable to take legal action against entities causing cross-border harm or damage. Furthermore, they disagreed with the majority’s interpretation of jurisdictional boundaries as absolute barriers preventing one state from seeking redress for harms inflicted upon its residents by activities in another state.