In the case of Wyoming v. Colorado in 1931, the Supreme Court was asked to settle a dispute over water rights between the two states. The controversy centered around whether or not Colorado had violated an earlier decree by diverting more water from the Laramie River than it was entitled to under that agreement. Wyoming claimed that this diversion caused significant harm to its own ability to use and benefit from this shared resource. After considering both sides' arguments, evidence presented, and relevant legal principles such as interstate compacts and equitable apportionment doctrine, the court ruled in favor of Wyoming. It found that Colorado had indeed breached its obligations under previous agreements by taking more than its fair share of water from Laramie River which resulted in substantial injury for downstream users in Wyoming.

In the dissenting opinion for Wyoming v. Colorado, it was argued that the Supreme Court should not have jurisdiction over this case as it involves a dispute between states about water rights, which is traditionally an issue handled by state courts or through interstate compacts. The dissenting justices believed that the majority's decision to assert jurisdiction and rule in favor of Wyoming set a dangerous precedent for federal intervention in matters typically left to individual states. They also disagreed with how the majority interpreted and applied principles of equitable apportionment, arguing instead that Colorado had made reasonable use of Laramie River water within its borders before Wyoming began using it downstream. Therefore, they felt Colorado should not be penalized for its prior use nor restricted from future uses necessary for growth and development.