President Grover Cleveland appointed Dawson to be the third judge of the Territorial District of Alaska on December 3, 1885. He took his oath of office on December 16. Scandal threatened to prevent Dawson's senate confirmation. Dawson and Governor Alfred P. Swineford recommended Adolph Lipman, a Maryville grocer indicted for violating liquor laws, as a commissioner of Alaska. Cleveland nominated Lipman, and when it was discovered that Dawson held a bill of sale for everything Lipman owned in Maryville, political furor erupted in July 1886 that made Dawson's confirmation appear unlikely. Lipman's nomination was withdrawn later that month, and Dawson was confirmed on August 4.
