In the case of Santa Fe Pacific Railroad Company v. Work, Secretary of the Interior, 1924, the Supreme Court was asked to determine whether certain lands in Arizona were part of a land grant made by Congress to Southern Pacific Railroad's predecessor company in 1866. The dispute arose when Santa Fe Pacific claimed that it had acquired these lands through its merger with Southern Pacific and sought to have them classified as mineral rather than agricultural lands for tax purposes. The Department of Interior disagreed with this classification and argued that these lands were not included in the original grant because they fell within an Indian reservation established before the railroad’s charter was granted. The Supreme Court sided with the government, ruling that any ambiguity about which specific parcels were included in such grants should be resolved against private parties like railroads and instead favor public interests. It held that since there was no clear evidence showing Congress intended to include those particular plots within their land grant at issue here or dispossess Native Americans from their reservations without explicit language stating so; therefore, those disputed areas must remain under federal control as part of an Indian reservation.

In the dissenting opinion for Santa Fe Pacific Railroad Company v. Work, Secretary of the Interior, Justice McReynolds argued that the majority's decision was based on a misinterpretation of congressional intent and an overreach of judicial power. He contended that Congress had clearly intended to grant railroad companies like Santa Fe rights to land in exchange for constructing railroads across unsettled territories. The majority's interpretation effectively nullified these grants by allowing federal officials to reclaim lands they deemed necessary for public use without compensation or due process. This not only violated property rights but also undermined incentives for private investment in infrastructure development, which Congress sought to encourage through its original legislation. Furthermore, he criticized his colleagues' reliance on their own judgment rather than clear statutory language or legislative history as an inappropriate exercise of judicial discretion.