In the case of State of New Mexico v. Lane, Secretary of the Interior, and Tallman, Commissioner of the General Land Office (1916), the Supreme Court ruled in favor of New Mexico. The dispute centered around whether certain lands within New Mexico were public domain or part of an Indian reservation. The state argued that these lands had been improperly classified as part of a reservation by federal officials and should be considered public land open for settlement under homesteading laws. In its decision, the court found that there was insufficient evidence to prove that Congress intended to include these disputed areas within a reservation when it passed legislation establishing boundaries for tribal lands in 1850 and 1868. Therefore, they held that these territories remained part of the public domain until otherwise designated by Congress.

In the dissenting opinion for the case of State of New Mexico v. Lane, Secretary of the Interior, and Tallman, Commissioner of the General Land Office (1916), Justice Holmes disagreed with his colleagues' interpretation that Congress had intended to grant New Mexico all lands within its borders not already owned or claimed by others when it was admitted as a state in 1912. He argued that such an interpretation would mean that any unclaimed land automatically became property of the state upon admission into Union - a concept he found inconsistent with historical precedent and practice. Instead, he believed that Congress only intended to give states those specific lands mentioned in their enabling acts; any other unappropriated public lands remained under federal control until specifically granted otherwise by Congress. Therefore, according to Justice Holmes's view, since these particular disputed lands were not explicitly given to New Mexico in its enabling act nor subsequently granted by Congress after statehood was achieved, they should remain federally controlled.