The case of New Jersey v. Sargent, Attorney General, et al., in 1925 revolved around a dispute over water rights between the states of New York and New Jersey. The state of New Jersey filed a suit against the U.S. Army Corps of Engineers (represented by Attorney General Sargent) to prevent them from diverting water from two rivers that flowed into both states for use by the city of New York. The Supreme Court ruled in favor of the defendants, stating that Congress had authorized this diversion under its power to regulate interstate commerce and it did not infringe upon any sovereign rights held by either state as per their compact agreement signed in 1834 which allowed each state equal access to these waters without interference from federal authorities unless approved by Congress.

The dissenting opinion in the case of New Jersey v. Sargent, Attorney General, et al., argued that the majority's decision to uphold a federal law regulating water power development was an overreach of Congress' powers under the Commerce Clause. The dissenters believed that this interpretation gave too much authority to the federal government at the expense of state sovereignty and private property rights. They contended that while Congress has jurisdiction over navigable waters for purposes related to commerce, it does not have unlimited control over all aspects relating to these waters such as hydroelectric power generation. This view held by some justices suggested a more limited role for federal regulation and greater respect for states' rights and individual property ownership.