In the United States v. Gerlach Live Stock Co., 1949, the U.S. Supreme Court ruled on a dispute over water rights in California's San Joaquin Valley between local farmers and ranchers and the federal government. The case arose from the construction of Friant Dam by Bureau of Reclamation as part of Central Valley Project which resulted in diverting water away from riparian landowners downstream who had historically relied on it for irrigation purposes. The court held that while Congress has broad powers to regulate interstate commerce, including navigation, this does not absolve them from compensating private property owners when their actions result in taking or damaging property without just compensation under Fifth Amendment’s Takings Clause. Therefore, even though dam was built for public use - flood control and improving navigation – its operation took valuable water rights without paying compensation which constituted an unconstitutional taking of private property.

In the dissenting opinion for United States v. Gerlach Live Stock Co., Justice Robert H. Jackson disagreed with the majority's decision to award compensation to landowners whose property value diminished due to a government-constructed dam that altered water flow in California's San Joaquin Valley. He argued that while it was true that these landowners had previously enjoyed an unrestricted and unregulated use of floodwaters, this did not constitute a legal right or interest which could be compensated under the Fifth Amendment when taken by public authority. He contended that such waters were more akin to "common enemy" than a beneficial resource, causing damage and destruction rather than providing consistent irrigation benefits. Therefore, he believed any incidental benefit derived from their unpredictable occurrence should not be considered as private property taken for public use when regulated or eliminated by government action.