In the case of Montezuma Canal Company v. Smithville Canal Company, the U.S Supreme Court was tasked with resolving a dispute over water rights in Arizona. The Montezuma Canal Company claimed that it had senior rights to use water from the Gila River for irrigation purposes and accused Smithville Canal Company of illegally diverting this water. However, Smithville argued that they were entitled to use this water based on their own historical usage and an 1866 mining law which allowed them to construct canals or ditches on public lands for mining operations or agricultural purposes. The court ruled in favor of Montezuma, stating that prior appropriation gave them superior right to the river's flow regardless of subsequent federal legislation like the 1866 act invoked by Smithville.

The dissenting opinion in the Montezuma Canal Company v. Smithville Canal Company case argued that the majority's decision to uphold a lower court ruling, which granted water rights based on priority of appropriation rather than equitable apportionment, was incorrect. The dissenting justices believed that this approach failed to consider the broader public interest and could lead to wasteful use of water resources. They contended that granting exclusive rights based solely on who first appropriated the water did not take into account subsequent developments or changes in community needs over time. Instead, they advocated for an approach where courts would balance competing interests and allocate water resources in a manner most beneficial to society as a whole.