In the 1917 case of San Pedro, Los Angeles & Salt Lake Railroad Company v. United States, the Supreme Court ruled in favor of the U.S. government regarding a dispute over land rights with a railroad company. The railroad company had claimed that it was entitled to certain lands under an 1866 Act which granted every alternate section of public land to aid in building railroads and telegraphs lines. However, some sections were within Indian reservations or had been selected by other rail companies prior to their claim. The court held that these lands were not available for grant at the time when they filed their map showing proposed route because they were already appropriated for another purpose or reserved from sale by law (Indian reservation). Therefore, those sections could not be included in any grant made afterwards even if such appropriation ceased before patent issued on railway line location.

In the dissenting opinion for San Pedro, Los Angeles & Salt Lake Railroad Company v. United States, Justice Holmes argued that the majority's decision was based on an incorrect interpretation of the law and a misunderstanding of its application to railroads. He contended that Congress had not intended to regulate every aspect of railroad operations when it passed legislation related to interstate commerce. Instead, he believed that lawmakers were primarily concerned with preventing unfair practices and ensuring competition among different carriers. According to Holmes, this case did not involve any such issues; therefore, federal authorities should not have intervened in what he saw as a purely private dispute between a company and its employees over wages and working conditions.