In the 1892 case of Illinois Central Railroad Company v. Illinois, the U.S. Supreme Court ruled that a state could not permanently relinquish its control over property in which it held trust for public use. The case arose when the State of Illinois attempted to grant nearly all of Chicago's harbor and up to one mile into Lake Michigan to the Illinois Central Railroad Company. When later administrations sought to revoke this grant, litigation ensued with arguments centered on whether or not such a large-scale transfer was legal under public trust doctrine principles. The court concluded that while states can delegate limited control over such properties, they cannot abdicate their role as trustee entirely because doing so would defeat the purpose of holding these lands in trust for public use.

The dissenting opinion in the Illinois Central Railroad Company v. Illinois case argued that the state of Illinois had full authority to grant large portions of its harbor in Chicago to a private corporation, such as the railroad company. The dissenters believed that this was within the state's rights and did not constitute an abdication of control over public trust lands. They contended that states should have broad discretion when it comes to managing their own resources, including navigable waters and submerged lands beneath them. Furthermore, they disagreed with majority’s view on public trust doctrine by arguing it does not limit states' power to dispose off their property unless there is clear evidence showing harm or potential risk for general public interest.