In the case of Rio Grande Dam and Irrigation Company v. United States (1909), the U.S Supreme Court ruled in favor of the federal government, asserting its superior right to control water resources within its territories for public use over private interests. The Rio Grande Dam and Irrigation Company had constructed a dam on the Rio Grande River without obtaining permission from Congress, claiming that they were entitled to do so under New Mexico's territorial laws which allowed private appropriation of water for irrigation purposes. However, the court held that while states have considerable authority over their own natural resources, this power is subject to federal supremacy when it comes to navigable waters or where there are overriding national concerns such as treaty obligations with foreign nations (in this case Mexico). Therefore, any state law allowing such activities must yield if it conflicts with these broader national interests.

In the dissenting opinion for Rio Grande Dam and Irrigation Company v. United States, Justice Harlan argued that the majority's decision was a misinterpretation of both international law and U.S.-Mexico treaties. He contended that these legal frameworks did not grant exclusive control over boundary waters to either country but rather shared rights between them. Therefore, he believed it was incorrect to prevent an American company from using water resources on its side of the border based solely on potential harm to Mexican interests downstream. Furthermore, Harlan expressed concern about setting a precedent where domestic companies could be restricted in their operations due to foreign interests or diplomatic considerations without explicit legislative action by Congress defining such restrictions.