The United States Supreme Court case, United States v. Algoma Lumber Co., revolved around a dispute over timberland in California. The federal government claimed that the land was part of public domain and therefore belonged to them, while Algoma Lumber Company argued they had legally purchased it from private owners who held valid titles. The court ruled in favor of the lumber company, stating that the U.S. Government failed to provide sufficient evidence proving its ownership claim over the disputed land area before it was sold to private parties by Mexican authorities (prior to California becoming a state). Therefore, those sales were considered legitimate under existing laws at that time and could not be invalidated retroactively by subsequent legislation or legal interpretation changes.

The dissenting opinion in the United States v. Algoma Lumber Co. case argued that the majority's decision to uphold a tax on lumber companies was incorrect, as it violated principles of federalism and property rights. The dissenters believed that the tax imposed by California on standing timber was not within its jurisdiction because it interfered with interstate commerce, which is under federal control according to the Constitution. They also contended that this taxation constituted an unlawful taking of private property without just compensation, infringing upon Fifth Amendment rights. Furthermore, they disagreed with the majority's interpretation of "fair market value," arguing instead for a more literal understanding based on actual market conditions rather than hypothetical ones used by assessors for valuation purposes.