In the 1908 case Laurel Oil and Gas Company v. Morrison, the United States Supreme Court dealt with a dispute over land rights in Louisiana. The plaintiff, Laurel Oil and Gas Company, claimed that it had acquired valid title to certain lands under an act of Congress from 1824 which granted pre-emption rights to settlers on public lands. However, the defendant argued that they held superior title due to a subsequent state law passed in 1832 which allowed for sale of swamp and overflowed lands by private individuals who could prove possession and cultivation for ten years or more. The court ruled in favor of Morrison (the defendant), stating that once land has been removed from federal jurisdiction through lawful means such as granting pre-emption rights or selling them off as per state laws, any subsequent changes made by Congress cannot affect those titles already vested unless explicitly stated otherwise.

In the dissenting opinion for Laurel Oil and Gas Company v. Morrison, it was argued that the majority's decision to uphold a lower court ruling in favor of Morrison contradicted established principles of contract law. The dissenting justices believed that Laurel Oil had not violated its lease agreement with Morrison because there was no explicit requirement in their contract stipulating continuous operation or production from the leased land. They contended that any such obligation should have been clearly stated within the terms of their agreement rather than being inferred by courts after-the-fact. Furthermore, they disagreed with the majority's interpretation of "reasonable diligence" as requiring constant drilling activity on all parts of a property at all times, arguing instead for a more flexible understanding based on industry norms and practices during periods when oil is not being produced or extracted.