In the case of City of Milwaukee et al. v. Illinois et al., 1980, the U.S Supreme Court ruled that federal common law governed disputes involving interstate water pollution and not state law. The State of Illinois had sued the city of Milwaukee for polluting Lake Michigan with sewage discharge, which was affecting its residents' health and welfare. The court held that when a controversy pertains to air or water in more than one state, it becomes an interest of all and requires a uniform system (federal common law) rather than individual local rules (state laws). However, this decision was later superseded by Congress's enactment of amendments to the Federal Water Pollution Control Act in 1972, also known as Clean Water Act; thus making such disputes subject to federal statutory law instead.

In the dissenting opinion for CITY OF MILWAUKEE et al. v. ILLINOIS et al., Justice Blackmun, joined by Justice Brennan and Marshall, argued that federal common law should continue to govern interstate water pollution disputes until Congress explicitly provides otherwise. They contended that the majority's decision to apply only Federal Water Pollution Control Act (FWPCA) standards disregarded previous Supreme Court precedent set in Illinois v. Milwaukee (1972), which recognized a federal common law nuisance claim for interstate water pollution cases even after FWPCA was enacted. The dissenters believed this abrupt departure from established legal principles could disrupt ongoing negotiations between states over shared resources and potentially leave some states without adequate remedies against polluters in other jurisdictions.