In the case of Meeker et ux. v. Ambassador Oil Corp., the Supreme Court ruled on a dispute over oil and gas leases in Oklahoma. The plaintiffs, Mr. and Mrs. Meeker, had leased their land to Ambassador Oil Corporation for oil and gas exploration under a lease that provided them with royalties from any production but also allowed the company to use free gas for operations on the premises without paying royalties on it. When Ambassador began selling some of this "free" gas to an interstate pipeline company rather than using it all onsite, the Meekers sued for payment of royalties on this sold gas as well as damages for breach of contract. The Supreme Court held that while state law governed most aspects of oil and gas leases, federal law applied when such leases involved sales across state lines due to its jurisdiction over interstate commerce matters; thus making it applicable here where there was sale made by Ambassador Oil Corp., which was not used within their property but instead sold offsite via pipelines crossing states borders. However, despite applying federal law in this context - specifically Section 1(b) of Natural Gas Act (NGA), court found no violation by defendant since NGA did not require royalty payments be made upon removal or sale unless explicitly stated so in lease agreement between parties.

In the dissenting opinion for Meeker et ux. v. Ambassador Oil Corp., Justice Goldberg argued that the majority's decision failed to adequately protect the rights of landowners in oil and gas lease agreements. He contended that, under Oklahoma law, a lessee is required to operate leased premises with reasonable diligence and care, which includes protecting against drainage from wells on adjacent properties. In this case, he believed Ambassador Oil had not fulfilled this obligation as it did not drill an offset well or take other protective measures when another company drilled a producing well near their shared boundary line. The justice also disagreed with the majority's interpretation of "drainage," arguing that it should include both actual physical movement of oil or gas away from beneath leased property and reduction in pressure which diminishes potential production.