In the case of State of Wyoming v. State of Colorado et al., 1916, the Supreme Court was tasked with resolving a dispute over water rights between the two states. The controversy arose from Colorado's diversion of water from Laramie River for irrigation purposes, which Wyoming claimed infringed upon its own use and benefit from the river under an interstate compact. The court had to consider whether or not Colorado's actions were in violation of federal law and if they unjustly deprived Wyoming citizens' access to their rightful share of this natural resource. The Supreme Court ruled in favor of Wyoming, finding that while states have sovereignty over waters within their borders, it does not extend to depriving another state’s right without consent. It held that when rivers cross state lines, each state along its path has equal rights to use its waters subject only by limitations necessary for providing reasonable uses for all involved parties. This decision set a precedent regarding interstate water disputes and established principles governing equitable apportionment among states sharing common water resources.

In the dissenting opinion for the case of State of Wyoming v. State of Colorado, Justice Holmes disagreed with the majority's decision to grant Wyoming an injunction against Colorado's diversion of water from Laramie River. He argued that there was no clear violation by Colorado as both states had equal rights to use unappropriated waters within their boundaries under federal law and interstate compacts. Furthermore, he pointed out that any harm suffered by Wyoming due to this diversion was speculative at best since it hadn't been proven conclusively that they would suffer a shortage in future irrigation seasons because other sources could potentially compensate for it. Therefore, according to him, granting such an injunction without concrete evidence went beyond what equity demanded and set a dangerous precedent for similar disputes between states over shared resources.