In Sanguinetti v. United States (1923), the Supreme Court ruled that the U.S. government was not liable for flood damage caused by a canal it had built, as there was no intent to cause harm and flooding was an unforeseen consequence of its construction. The plaintiff, Sanguinetti, owned land in Arizona which flooded due to overflow from a federal irrigation project on adjacent property. He sued under the Federal Tort Claims Act alleging negligence in design and maintenance of the canal system led to his loss. However, Justice Oliver Wendell Holmes Jr., writing for majority held that liability could only be established if it can be proven that damage resulted from act done with knowledge or reason to know that such damages would probably result; mere foreseeability is insufficient ground for imposing liability upon Government.

In the dissenting opinion for Sanguinetti v. United States, Justice Holmes argued that the government should be held liable for damages caused by a canal it constructed which resulted in flooding on private property. He disagreed with the majority's interpretation of "taking" under the Fifth Amendment and asserted that any physical invasion authorized by the government, whether intentional or not, constituted a taking if it directly resulted in damage to private property. In his view, this was consistent with previous case law where compensation had been awarded even when there was no direct appropriation of land but merely consequential injuries from public works carried out under statutory authority. Holmes also criticized what he saw as an arbitrary distinction made by the majority between cases involving permanent versus temporary invasions of property rights.