In the 1923 case of McCurdy, County Treasurer, Osage County, Oklahoma v. United States, the Supreme Court ruled on a dispute involving taxation rights over oil and gas leases on land owned by Native American tribes in Oklahoma. The court held that under federal law and treaties with Native American tribes - specifically the Osage Nation - these lands were exempt from state and local taxes. The decision was based largely on an interpretation of Congress's intent when it passed laws regarding tribal lands: to protect them from being diminished or encroached upon by states or private interests without explicit Congressional approval. This ruling reinforced federal supremacy in matters relating to Native American affairs and upheld protections for tribal sovereignty.

In the dissenting opinion for McCurdy v. United States, Justice McReynolds argued that the majority's decision was a misinterpretation of Congress' intent and an overreach of federal power. He contended that the Osage Allotment Act did not intend to grant such extensive authority to the Secretary of Interior in managing oil leases on behalf of Native Americans. Instead, he believed it aimed at gradually transitioning them towards self-sufficiency by allowing individual members control over their property rights while providing some government oversight. The majority's interpretation essentially made these individuals wards under perpetual guardianship, which contradicted this goal and infringed upon state sovereignty by interfering with its taxation powers without clear congressional mandate.