In the case of State of Texas v. State of New Mexico (1987), the dispute centered around water rights to the Pecos River, which flows through both states. The Supreme Court was asked to resolve a disagreement over an interstate compact that had been signed in 1949, regulating how much water each state could take from the river. Texas claimed that New Mexico was taking more than its fair share and sued for enforcement of their perceived rights under this agreement. In response, New Mexico argued that changes in irrigation technology and increased salinity levels made it impossible for them to deliver as much usable water as they once did. The Supreme Court ruled in favor of Texas, stating that regardless of these challenges faced by New Mexico, they were still obligated to uphold their end of the compact agreement with regards to providing a certain amount of water flow into Texas. This ruling emphasized strict adherence to interstate compacts even when circumstances change after such agreements are made.

In the dissenting opinion for the case of State of Texas v. State of New Mexico, Justice Stevens disagreed with the majority's decision to deny Texas' motion for leave to file a complaint against New Mexico over water rights in the Pecos River. He argued that this dispute should be resolved by negotiation between states rather than through litigation, and that it was inappropriate for the Supreme Court to intervene at this stage. Furthermore, he contended that even if legal action were necessary, it would be more appropriate for Congress or an interstate compact commission to handle such matters as they have greater expertise in these complex issues related to water management and allocation. Finally, Justice Stevens expressed concern about setting a precedent where any state could sue another state directly before the Supreme Court without first attempting other means of resolution.