In the 1914 case of Guffey v. James A. Smith, the United States Supreme Court dealt with a dispute over oil and gas leases in Pennsylvania. The plaintiff, Guffey, had leased land from Smith for oil and gas extraction but failed to pay rent as agreed upon in their contract due to lack of production on the property. As per their agreement, if no oil or gas was found within a year after drilling commenced or if any well ceased producing profitable quantities for more than sixty days at any time thereafter without further operations being conducted on it during that period then all rights granted under this lease would terminate unless lessee paid rental fees annually until such time as they resumed operations again. Smith sued Guffey for breach of contract when he did not receive his annual payment despite there being no active drilling or production occurring on his land; however, because Pennsylvania law at that time allowed mineral rights holders like Guffey to hold onto those rights indefinitely even without activity so long as they continued paying rents (a practice known colloquially among industry insiders as "dead hand control"), the court ruled in favor of him instead - effectively upholding this controversial aspect within state's laws regarding ownership over natural resources beneath one's property surface.

In the dissenting opinion for Guffey v. James A. Smith, Justice Holmes argued that the Pennsylvania statute in question was not unconstitutional and did not violate due process rights under the Fourteenth Amendment. He contended that it is within a state's power to regulate business activities such as mining, which have significant public interest implications, even if those regulations may impact private contract rights or property interests. Furthermore, he disagreed with the majority's view that this law constituted an unlawful delegation of legislative authority to private parties (the miners). Instead, he saw it as a permissible form of regulation where details were left to be worked out by those most directly involved in and knowledgeable about the industry being regulated.