In the 1930 case New Jersey v. New York et al., the U.S. Supreme Court was tasked with resolving a dispute between these two states over jurisdictional rights to Ellis Island, an important immigration station at that time. The island had been expanded significantly using landfill and other materials, which led to confusion about who held sovereignty over different parts of it - especially as some of this expansion occurred on waters claimed by New Jersey. After considering historical treaties and agreements between the states, including one from 1834 where they agreed upon their border in the Hudson River but did not specifically mention Ellis Island, the court ruled in favor of New York. They found that while both states had certain rights related to navigation and fishing around Ellis Island due to its location in shared waters, only New York had political jurisdiction there because it possessed it before entering into any agreements with New Jersey.

In the dissenting opinion for New Jersey v. New York et al., Justice Holmes argued that the majority's decision to grant exclusive jurisdiction over Ellis Island to New York was incorrect. He contended that, based on historical evidence and previous agreements between the two states, both should have shared sovereignty over this territory. According to him, when a part of one state is separated by water from its main body and adjoins another state, it does not necessarily become subject solely to the latter’s jurisdiction unless explicitly agreed upon or legislated otherwise. In his view, since no such explicit agreement existed in this case regarding Ellis Island's status after landfill expansion using material from New Jersey waters had increased its size significantly; therefore it should be considered as under joint control of both states rather than being entirely within New York’s domain.