In the United States v. California case of 1976, the U.S. Supreme Court ruled in favor of the federal government over a dispute regarding offshore oil reserves within three miles off California's coast. The state had claimed ownership and control over these resources, but the court held that they were instead property of the federal government under provisions outlined in Submerged Lands Act (SLA) and Outer Continental Shelf Lands Act (OCSLA). The decision was based on an interpretation that these laws gave states rights to lands beneath navigable waters only up to three geographical miles from their coasts, while anything beyond this limit fell under federal jurisdiction. This ruling clarified boundaries between state and federal authority over submerged lands and natural resources therein.

In the dissenting opinion for United States v. California, Justice William Rehnquist disagreed with the majority's decision that federal law preempted state regulation of certain aspects of offshore oil drilling. He argued that Congress had not explicitly stated its intent to supersede state laws in this area and therefore, principles of federalism should allow California to enforce its own regulations regarding environmental protection and land use planning on federally leased lands within three miles off its coast. The justice contended that states have a legitimate interest in protecting their coastal environments from potential harm caused by offshore drilling activities. Furthermore, he believed there was no conflict between federal leasing objectives and state regulatory efforts because both aimed at responsible resource development while minimizing environmental risks. Thus, according to him, cooperative federalism would be more appropriate than preemption in this context.