The U.S. Supreme Court case Twin Falls Salmon River Land & Water Company et al. v. Caldwell et al., 1924, revolved around a dispute over water rights in Idaho between the Twin Falls Salmon River Land and Water Company and several individual defendants including Caldwell. The company had constructed an irrigation system diverting water from Snake River to irrigate lands in southern Idaho but was challenged by individuals who claimed prior appropriation of the waters for their own lands under state law. The court ruled that while federal reclamation laws did not override existing state laws on water rights, they were intended to cooperate with them instead of superseding them entirely; thus, the company's diversion project could proceed as long as it didn't infringe upon established rights under state law.

In the dissenting opinion for Twin Falls Salmon River Land & Water Company v. Caldwell, Justice McReynolds disagreed with the majority's ruling that a water company could not claim rights to unappropriated waters based on an 1894 agreement with settlers. He argued that this decision ignored established principles of equity and was inconsistent with previous court rulings. According to him, when the settlers entered into their contract in 1894, they did so under Idaho law which allowed them to appropriate water for irrigation purposes. The fact that these rights were later transferred to a corporation should not negate their validity or priority over subsequent claims by others who had knowledge of these prior appropriations but chose not to contest them at the time. Furthermore, he contended that denying recognition of such contractual arrangements would disrupt settled expectations and undermine confidence in property transactions generally.