In the United States v. California Bridge & Construction Company case of 1917, the U.S Supreme Court ruled in favor of the federal government. The dispute arose when California Bridge & Construction Company claimed ownership over a piece of land that was submerged under water during high tide but exposed during low tide, located within San Francisco Bay's navigable waters. The company argued it had acquired this land from private parties who held title since before California became a state. However, the court determined that upon its admission to Union in 1850, all lands beneath navigable waters within its borders passed to California as an incident of sovereignty and were held by it in trust for public uses such as navigation and fishing unless explicitly relinquished by Congress or constitutionally transferred elsewhere prior to statehood. Therefore, any subsequent conveyance by private individuals could not have included these tidelands because they never legally owned them.

In the dissenting opinion for United States v. California Bridge & Construction Company, it was argued that the government should not be allowed to recover damages from a contractor who had already completed their work under contract terms agreed upon by both parties. The justice believed that if there were any issues with the quality or cost of work done, these should have been addressed during negotiations before finalizing the contract. They also pointed out that allowing such recovery could set a dangerous precedent where contractors would constantly be at risk of additional financial burdens even after fulfilling their contractual obligations in good faith and as per agreed standards. This could potentially discourage businesses from entering into contracts with government entities due to this added uncertainty and risk.