In the case of Watt, Secretary of the Interior, et al. v. Alaska (1980), the U.S Supreme Court ruled in favor of James G. Watt, who was serving as Secretary of Interior at that time. The dispute arose over a provision in the Alaska Statehood Act which granted every new state submerged lands and navigable waters within its boundaries up to three miles out from its coastlines for their use and benefit. However, it also allowed federal government control over these areas for national defense or international affairs purposes if necessary. The issue came into focus when President Jimmy Carter invoked this clause to withdraw large portions from mineral leasing under Outer Continental Shelf Lands Act (OCSLA). This action was challenged by Alaska on grounds that it violated their rights under Submerged Lands Act (SLA) and OCSLA. However, Justice William Rehnquist delivered majority opinion stating that while SLA did grant states ownership rights to submerged lands up to three miles off their coasts; OCSLA gave federal government authority over oil and gas leases on those lands beyond three-mile limit without any interference from states' laws or regulations.

In the dissenting opinion for Watt, Secretary of the Interior, et al. v. Alaska (1980), Justice William J. Brennan Jr., joined by Justices Thurgood Marshall and Harry Blackmun, argued that Congress had intended to reserve submerged lands in navigable waters within federal reserves for federal use when it passed the Submerged Lands Act in 1953. The majority's interpretation of this act was inconsistent with its legislative history and prior Supreme Court decisions on similar issues according to Brennan’s view. He also disagreed with their conclusion that a disclaimer clause in Alaska's Statehood Act prevented it from claiming these lands; he believed this clause only applied to land claims based on aboriginal title or rights rather than congressional grants or reservations.