In the United States v. Rio Grande Dam and Irrigation Company case of 1901, the U.S Supreme Court ruled in favor of the federal government's right to control interstate waters. The Rio Grande Dam and Irrigation Company had constructed a dam on the Rio Grande River, which flows through Colorado, New Mexico, Texas and into Mexico. The company argued that since it was incorporated under New Mexico law where part of its operations were located, it should have rights over water usage from this river for irrigation purposes. However, the court held that rivers flowing across state lines or international borders are considered navigable waters subject to federal jurisdiction under Commerce Clause powers granted by Constitution Article I Section 8 Clause 3; therefore they cannot be monopolized by any entity without Congressional approval. This ruling affirmed Federal supremacy over states in matters involving interstate commerce including water resources management.

In the dissenting opinion for United States v. Rio Grande Dam and Irrigation Company, Justice Harlan argued that the majority's decision failed to adequately protect federal interests in navigable waters. He contended that under the Constitution, Congress has exclusive authority over interstate commerce, which includes navigation on all navigable rivers within U.S territory. Therefore, any state law or private contract interfering with this right is invalid. In his view, New Mexico had no power to grant a corporation rights that would obstruct or diminish the navigability of a river flowing through several states and into another country (Mexico). He also expressed concern about potential international disputes arising from such obstructions affecting shared waterways with other countries like Mexico.