In United States v. Pico, the Supreme Court of the United States held that a federal statute prohibiting citizens from selling liquor to Native Americans on their reservations was constitutional. The case arose when Francisco Pico, a citizen of California and an Indian trader, sold alcohol to members of the Mission Indians tribe in violation of this law. He argued that Congress had no authority under Article I Section 8 Clause 3 (the Commerce Clause) to pass such legislation because it did not involve interstate commerce or foreign trade. However, the court found that Congress could regulate activities within states if they affected tribal relations with other tribes or with foreign nations as well as those involving interstate commerce or foreign trade; thus upholding the constitutionality of this particular statute.

In United States v. Pico, the Supreme Court was tasked with determining whether a Mexican land grant to Juan Francisco Pico in 1845 could be considered valid after California became part of the United States in 1850. The majority opinion held that since Congress had not acted on this particular grant, it must be deemed invalid and therefore subject to preemption by federal law. Justice Field dissented from this decision, arguing that while Congress may have had authority over public lands within its territories, it did not have any power over private property rights already established before statehood. He argued that if such an act were allowed then all other grants made prior to statehood would also become null and void without due process or compensation for those who received them; thus violating their constitutional right to just compensation for taking of private property by government action.