In the 1909 case United States v. Celestine, the U.S. Supreme Court ruled that federal laws could be applied to crimes committed by Native Americans on their own reservations. The defendant, a member of an Indian tribe living on a reservation in Washington State, was charged with selling liquor without a license - an act prohibited under federal law but not specifically addressed in tribal law. He argued that as he lived within the boundaries of his reservation and sold only to other members of his tribe, he should be subject only to tribal jurisdiction and not federal authority. The court disagreed with this argument stating that while tribes do have sovereignty rights over their internal affairs, they are still "domestic dependent nations" under U.S protection; therefore Congress has ultimate legislative authority over them including criminal matters unless explicitly stated otherwise by treaty or statute. This decision marked another step towards eroding tribal sovereignty and expanding Federal control over Native American affairs.

In the dissenting opinion for United States v. Celestine, Justice Harlan argued that the majority's decision was inconsistent with previous rulings and undermined tribal sovereignty. He contended that Indian tribes should be viewed as distinct political communities within which their laws are enforced by tribal courts unless Congress explicitly provides otherwise. According to him, federal jurisdiction over crimes committed on reservations should only apply when a non-Indian is involved or if it involves an offense against the U.S., not in cases like this where both offender and victim were members of the same tribe. Furthermore, he disagreed with applying state law to these situations because it would infrally upon tribal self-governance rights recognized by treaties and statutes. Thus, he believed Celestine should have been tried under tribal law rather than federal law.