In the case of Texas et al. v. United States et al., 1933, the Supreme Court was asked to resolve a dispute between states over oil-rich lands submerged under water along their shared borders in the Gulf of Mexico. The controversy arose when Congress passed an act allowing coastal states to extend their boundaries three miles into sea, which led Texas and Louisiana to claim overlapping areas rich with oil deposits. The court ruled that federal law did not grant these states ownership rights over offshore resources within this boundary extension; instead, it held that such resources belonged to all Americans and were managed by the Federal Government on their behalf. This decision established important precedents for managing natural resource disputes among U.S. states and clarified federal versus state jurisdiction over offshore mineral rights.

In the dissenting opinion for Texas et al. v. United States et al., Justice McReynolds expressed his disagreement with the majority's decision to uphold a federal statute that regulated intrastate railroad rates in Texas, arguing it was an overreach of Congress' power under the Commerce Clause. He contended that while Congress has authority to regulate interstate commerce, this should not extend to control over purely local activities within states unless they have a direct effect on interstate commerce - which he did not believe was demonstrated in this case. Furthermore, he argued that allowing such broad interpretation of Congressional powers could lead to potential abuses and encroachments upon state sovereignty and individual liberties by enabling federal regulation of virtually any activity deemed remotely connected with commerce.