In the case of Santa Fe Pacific Railroad Company v. Fall, Secretary of the Interior in 1921, the Supreme Court ruled on a dispute over land rights between a railroad company and the federal government. The Santa Fe Pacific Railroad Company claimed that it had been granted certain lands under an 1866 statute which gave railroads every alternate section of public land along their routes for ten miles on each side. However, some sections within this area were reserved by an executive order for use as an Indian reservation before they could be patented to the railroad company. The court held that these lands were not "public lands" available for disposal at all when they fell within limits of grant because they had already been appropriated by Congress or set apart as Indian reservations prior to date when line of road was definitely fixed and approved by President's proclamation; therefore, such sections did not pass to grantee upon approval of map showing definite location.

In the dissenting opinion for Santa Fe Pacific Railroad Company v. Fall, Justice Holmes argued that the majority's interpretation of the law was incorrect and overly narrow. He contended that when Congress granted land to railroad companies, it intended to include not just surface rights but also subsurface mineral rights unless explicitly stated otherwise. Therefore, he believed that Santa Fe Pacific Railroad Company should retain its oil and gas rights in lands granted by Congress under an 1866 statute. According to him, this broad interpretation better aligned with historical context and Congressional intent at the time of granting these lands which were largely unknown in terms of their potential wealth or resources beneath them.