In the case of Sisseton and Wahpeton Bands of Sioux Indians v. United States (1927), the Supreme Court ruled in favor of the U.S. government, stating that it did not owe compensation to these Native American tribes for land ceded under an 1867 treaty. The tribes argued they were coerced into signing this treaty due to their dire circumstances following a failed uprising against settlers and soldiers in Minnesota five years prior, which resulted in many tribe members being killed or displaced from their homes. However, the court held that there was no evidence proving coercion by federal officials during negotiations for this treaty; rather, it found that tribal leaders willingly agreed to its terms because they believed it would benefit their people who were suffering greatly at the time. Furthermore, even if coercion had been proven, such actions would not have invalidated this agreement since treaties with Native American nations are considered political acts subject only to congressional authority—not judicial review—under U.S law.

In the dissenting opinion for SISSETON AND WAHPETON BANDS OF SIOUX INDIANS v. UNITED STATES, Justice Holmes disagreed with the majority's decision that the Sioux Indians were not entitled to compensation from land ceded to the United States government in 1867. He argued that despite any ambiguities in language or misunderstandings on part of Native Americans during negotiations, it was clear they had given up valuable property rights and should be compensated accordingly. Furthermore, he asserted that if there was any doubt about this issue due to unclear treaty terms or other factors, such doubts should be resolved in favor of indigenous peoples who have historically been disadvantaged by unequal power dynamics during treaty-making processes with federal authorities.