In the case of United States v. Candelaria et al., 1925, the Supreme Court ruled on a dispute involving land grants in New Mexico dating back to Spanish colonial rule. The plaintiffs were descendants of original grantees who claimed that they had been dispossessed of their lands by subsequent American settlers and sought restitution from the U.S. government under provisions of the Treaty of Guadalupe Hidalgo, which ended the Mexican-American War in 1848 and transferred vast territories to American control while promising to respect existing property rights. However, these claims were complicated by ambiguities over whether communal or individual rights had been granted originally. The Supreme Court held that only those individuals who could demonstrate continuous possession since time immemorial (or at least prior to cession) could claim ownership under Spanish law as interpreted by American courts; mere membership in a community was insufficient for such claims if not accompanied by actual use or occupation. This decision effectively denied most Pueblo Indians' land claims and opened up large areas for further settlement or development.

In the dissenting opinion for United States v. Candelaria, Justice Oliver Wendell Holmes Jr. disagreed with the majority's interpretation of a treaty between Mexico and the U.S., arguing that it did not grant American courts jurisdiction over crimes committed by one Mexican citizen against another on American soil. He contended that such an interpretation was inconsistent with international law principles, which generally do not allow states to exercise criminal jurisdiction over foreign nationals for offenses committed outside their territory unless there is some special justification or agreement in place. Furthermore, he argued that even if such jurisdiction existed under the treaty, it would be unconstitutional as it violated due process rights by subjecting individuals to punishment without fair notice of what conduct is prohibited. In his view, this case represented an unwarranted extension of federal power at the expense of state sovereignty and individual liberty.