In the 1936 case Thompson et al. v. Consolidated Gas Utilities Corp. et al., the U.S Supreme Court ruled in favor of Consolidated Gas Utilities Corporation, reversing a decision by the Texas Supreme Court that had awarded damages to landowners for contamination caused by oil and gas operations on their property. The plaintiffs, who owned land adjacent to an area where Consolidated was conducting drilling operations, claimed that waste materials from these activities were seeping onto their property and damaging it. However, Justice Benjamin Cardozo writing for majority held that under Texas law at the time, there was no liability unless physical damage could be proven or if there was intentional misconduct or negligence involved in causing harm which wasn't established here as per court's opinion.

In the dissenting opinion for Thompson et al. v. Consolidated Gas Utilities Corp. et al., Justice Cardozo disagreed with the majority's decision to award damages to plaintiffs who had purchased land without knowledge of pre-existing oil and gas leases on it, which were not recorded in county records at time of purchase but were later validated by state law. He argued that this ruling violated principles of fairness and due process, as it retroactively applied a new rule to past transactions, thereby penalizing innocent purchasers who had no way of knowing about these leases when they bought their property. Furthermore, he contended that such a ruling could disrupt real estate markets by creating uncertainty around property rights and titles.