In the 1934 case of Waxham v. Smith, the United States Supreme Court ruled on a dispute involving land ownership in California. The plaintiff, Waxham, claimed that he owned certain tidelands and submerged lands based on an 1850 act by Congress granting such lands to the state upon its admission to the Union. However, these lands had been sold by California to private parties before this grant was made known. The defendants argued that they held title through these sales and subsequent transfers over many years. In its decision, the court found for Smith et al., ruling that even though Congress intended to grant these types of land areas to states upon their admission into the Union, it did not specifically include them in California's enabling legislation or other relevant acts at that time; therefore those sales were valid when made and could not be undone retroactively once Congress' intent became clear later.

In the dissenting opinion for Waxham v. Smith, Justice Stone argued that the Court had overstepped its boundaries by invalidating a state statute based on their interpretation of what constitutes an "irrational" classification. He contended that it was not within the purview of judicial review to determine whether or not a legislative act is wise or unwise, but rather if it violates any specific prohibitions in the Constitution. In this case, he believed there were no such violations and thus saw no reason to strike down California's decision to classify certain lands as reclamation districts. Furthermore, he pointed out that similar classifications have been upheld in previous cases where they served public purposes like promoting agriculture and preventing floods - both relevant goals here given these lands' proximity to water sources. Therefore, Justice Stone felt strongly that this ruling represented an unwarranted intrusion into matters best left up to states themselves.