The U.S. Supreme Court case Miller & Lux, Incorporated v. East Side Canal & Irrigation Company in 1908 revolved around water rights and the legality of a contract between two parties regarding the use of such resources. The plaintiff, Miller & Lux Inc., argued that they had prior rights to certain waters from San Joaquin River which were being diverted by the defendant, East Side Canal & Irrigation Co., for irrigation purposes under a contract with another party (San Francisco). They claimed this diversion was causing them substantial injury as it reduced their supply for agricultural needs on their land downstream. The court ruled in favor of Miller & Lux Inc., stating that while contracts about water usage are generally valid, they cannot infringe upon existing rights without consent or compensation. This decision emphasized respect for established property rights and highlighted how these principles apply even when dealing with natural resources like water.

In the dissenting opinion for Miller & Lux, Incorporated v. East Side Canal & Irrigation Company, Justice Harlan argued that the majority's decision violated established principles of property law and water rights. He contended that a riparian owner has an inherent right to use water flowing through their land as long as it does not significantly interfere with downstream owners' similar rights. The majority's ruling effectively allowed upstream users to monopolize all available water without regard for those further down the stream, which he believed was fundamentally unjust and contrary to existing legal precedent. Furthermore, he criticized the court’s reliance on state legislation in determining federal common law rules regarding interstate streams, arguing this approach undermined uniformity in national jurisprudence concerning such matters.