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Royal Assent to the bill was reserved by Lieutenant Governor James Aikins and eventually the Judicial Committee of the Privy Council at Westminster ruled that, since the law affected an appointee of the federal Crown, it was ultra vires and struck down.
Besides the 1874 Supreme Court ruling, a critical moment came on December 15, 1879, when Judge Lorenzo Sawyer of the Ninth Circuit Court ruled in Orton, 32 F. 457 (C.C.D. Cal. 1879), that the federal government controlled the railroad land grants, and more importantly, the state could not control ultra vires acts of corporations.