In the Mammoth Oil Company v. United States case of 1927, the Supreme Court ruled in favor of the U.S. government, upholding its right to cancel oil leases on public lands that had been obtained fraudulently. The court held that these leases were void from their inception due to fraudulent misrepresentation and conspiracy by those involved in securing them. The defendants, including Mammoth Oil Company and others, had conspired to obtain these leases through false representations about their intended use for naval petroleum reserves when they actually planned commercial exploitation. This decision reinforced federal authority over public land management and set a precedent for future cases involving fraudulent acquisition or misuse of such resources.

In the dissenting opinion for Mammoth Oil Company et al. v. United States, Justice Holmes argued that the government did not have a right to seize oil produced from wells drilled on public lands without compensation to those who extracted it. He contended that while Congress had authority over public lands and could regulate their use, this power was not absolute and must respect private property rights under the Fifth Amendment of Constitution. In his view, once an individual or company invested labor and capital into extracting resources like oil from these lands, they acquired a legitimate claim to them which cannot be arbitrarily taken away by government action without just compensation.