In the case of San Diego Land and Town Company v. Jasper, 1902, the U.S Supreme Court was tasked with determining whether a land grant made by Mexico before it ceded California to the United States in 1848 should be recognized as valid under American law. The plaintiff, San Diego Land and Town Company claimed that they had purchased land from individuals who were granted this property by Mexican authorities prior to California becoming part of America. However, defendant Jasper disputed their claim on grounds that these grants were not properly recorded according to US laws after acquisition of territory. The court ruled in favor of the defendant stating that although original grantees did have rights under Treaty of Guadalupe Hidalgo (which ended Mexican-American War), those rights could only be preserved if claims were presented within two years following treaty ratification - which hadn't been done in this case.

In the dissenting opinion for San Diego Land and Town Company v. Jasper, Justice Harlan disagreed with the majority's interpretation of California law regarding water rights. He argued that under state law, riparian owners had a right to use all naturally flowing water on their land as long as it did not interfere with other riparian owners' similar rights. The majority held that because the defendant diverted some of this water before it reached his property, he forfeited his right to any remaining flow. However, Justice Harlan contended that such forfeiture should only occur if there was an explicit agreement or clear intent by the owner to abandon these rights entirely - neither of which were present in this case. Therefore, he believed that even though some diversion occurred upstream from defendant’s property by another party (the plaintiff), this should not deprive him of his rightful share downstream.