The Supreme Court case Commonwealth of Virginia v. State of West Virginia in 1913 was a dispute over the boundary line between the two states. The controversy arose from differing interpretations of an agreement made in 1863 when West Virginia seceded from Virginia during the Civil War and became its own state. The main issue revolved around whether certain counties were part of one state or another, which had implications for tax revenue and political representation among other things. After much deliberation, the court ruled that Fairfax's map (a document used to determine boundaries at the time) should be followed as closely as possible given changes due to natural causes like river movement since it was drawn up. This decision favored West Virginia because it confirmed their claim on disputed territory.

In the dissenting opinion for Commonwealth of Virginia v. State of West Virginia, Justice Holmes disagreed with the majority's decision that West Virginia owed money to Virginia following its secession during the Civil War. He argued that when a new state is formed from an existing one, it should not be held responsible for any portion of the original state’s debt unless there was an agreement in place at the time of separation. In this case, no such agreement existed between West Virginia and Virginia regarding division or assumption of debt. Therefore, he believed that imposing financial obligations on West Virginian retroactively was unjustified and contrary to established principles governing formation and recognition of states within United States federalism system.