In the case of Kennington et al. v. Palmer et al., 1920, the United States Supreme Court addressed a dispute over land ownership in Alaska. The plaintiffs, Kennington and others, claimed that they had purchased lots from an individual who allegedly owned them under a townsite law passed by Congress for Alaska in 1899. However, this law was repealed before any deeds were issued to the supposed owner from whom they bought their lots. The defendants, Palmer and others (who held mining claims on these lands), argued that since no valid title had been transferred to the original alleged owner due to repeal of said law prior to issuance of deeds; hence he could not have legally sold those properties onwards. The court ruled in favor of defendants stating that there was no legal basis for recognizing any rights or titles claimed by plaintiffs as it originated from an invalid source i.e., someone without proper title himself cannot transfer good title further down.

In the dissenting opinion for Kennington et al. v. Palmer et al., Justice Holmes disagreed with the majority's decision, arguing that it was not within the Court's jurisdiction to decide on matters of state law unless there is a clear violation of federal rights or laws. He believed that this case did not meet those criteria and therefore should have been left to Michigan courts to resolve. Furthermore, he argued against what he saw as an overreach by the Supreme Court in interpreting state law rather than sticking strictly to questions of constitutionality or federal law violations. This interpretation could potentially infringe upon states' rights and disrupt their legal processes, which would be contrary to principles of federalism enshrined in U.S Constitution.