In the 1913 case of Peabody v. United States, the U.S Supreme Court ruled in favor of the government, upholding its right to seize coal lands in Alaska under a law that allowed it to reclaim public property obtained through fraudulent means. The court found that Richard S. Ryan and Clarence Cunningham had colluded with George H. Peabody and others to fraudulently obtain title deeds for over half a million acres of Alaskan land rich in coal deposits by falsely claiming they were agricultural lands suitable for homesteading purposes when their actual intent was commercial exploitation of these resources. The ruling emphasized that public lands are held as a trust for all citizens and cannot be appropriated by individuals or corporations through deceitful practices.

In the dissenting opinion for Peabody v. United States, 1913, Justice Holmes disagreed with the majority's decision to uphold a lower court ruling that allowed the federal government to seize coal lands in Alaska without compensation. He argued that this was an unconstitutional taking of private property and violated due process rights under the Fifth Amendment. The justice contended that while Congress has broad powers over public lands, it does not have unlimited authority to confiscate privately owned land without just compensation. Furthermore, he maintained that even if there were doubts about whether these lands should be considered "public" or "private," those doubts should be resolved in favor of protecting individual property rights rather than expanding governmental power.