In the case of United States v. Idaho, ex rel. Director, Idaho Department of Water Resources (1992), the Supreme Court ruled on a dispute over water rights between the federal government and state of Idaho. The issue at hand was whether or not federally reserved water rights for Indian reservations in Idaho were subject to regulation by the state's Department of Water Resources under its comprehensive water adjudication process. The court held that these federally reserved rights are not subject to such regulation because they predate any state law regarding water use and allocation due to their origin from treaties with Native American tribes before Idaho became a state. Therefore, it concluded that these special federal reservation rights supersede any subsequent conflicting provisions in state law.

In the dissenting opinion for United States v. Idaho, ex rel. Director, Idaho Department of Water Resources (1992), Justice Blackmun argued that the majority's decision was inconsistent with both precedent and principles of federalism. He contended that the McCarran Amendment should be interpreted to waive sovereign immunity only in cases where a comprehensive adjudication of water rights is at stake - not in isolated disputes over individual water rights like this one. Furthermore, he believed that allowing states to sue the federal government over such issues undermines its ability to manage public lands effectively and could lead to an unmanageable number of lawsuits from states seeking control over resources on federal land within their borders.