* Of the Northern District of California, sit ting by

designation. 

# United Stat es Court of Appeals

For the First C ircuit

Nos. 00-1909, 01-2025, 03-2055 JAMES M. KNOTT, SR.; RIVERDALE POWER & ELECTRIC CO., INC.,

Petitioners,

v. FEDERAL ENERGY REGULATORY COMMISSION,

Respondent.

PETITION FOR REVIEW OF ORDERS OF THE FEDERAL ENERGY REGULATORY COMMISSION

Before Boudin, Chief Judge , Lynch, Circuit Judge , and Schwarzer, * Senior District Judge . JamyBuchanan Madeja , with whom Buchanan & Associates was on brief, for petitioners.

Robert H. Solomon , Deputy Solicitor, with whom Cynthia A. Marlette , General Counsel, and Dennis Lane , Solicitor were on brief, for respondent.

October 25, 2004-2- SCHWARZER, Senior District Judge . James M. Knott, Sr. andthe Riverd ale Po wer & Electric Co. (“Knott”) petition for review of three orders by the Federal Energy Regulatory Commission (“FERC”). The orders assert mandatory licensing authority over Knott’s hydr oelectric project, require him to install gages to

measure stream flow at the project, and direct him to submit project design revisions on microfiche cards. Knott alleges that FER C improperly asserted jurisdiction over the project, that t h e requiredcompliance would effect a Fifth Amendment taking of his property, that FERC improperly denied him an evidentiary hearing, andthat FERC unreasonably ordered gages and microfiche cards. For the reasons stated, we deny Knott’s petition for review.

FACTUAL AND PROCEDURAL BACKGROUND Originally built in the 19th century, Knott’s Riverdale Mills Project (“Project”) is located on the B lac kstone River in Worcester County, Massachusetts. The Project includes a 142-footlong, 10-foot-high dam, an 11.8-acre water impoundment, and a 150- kilowatt generator located within a mill building. Knott purchased the Project, which had been abandonedsince 1976, in 1979. Through

a separate entity, the Riverdale Mills Corporation, Knott uses the hydropower generated by the Project to produce steel wire for use in lobster traps.-3- The Federal Power Act (“FPA”), 16 U.S. C. § § 791a–825r, grants FERC two types of licensing authority over hydroelectric projects. Section 4(e) of the Act authorizes FERC to grant voluntarylicenses for any project that develops power in any body of water over which Congress has Commerce Clause authority. 16 U.S.C. § 7 97(e). Section 23(b)(1) requires the mandatory licensing of projects: (1) located on “any of the navigable waters of the United States;” or (2) located on a bodyof water over which Congress has Commerce Clause authority where project construction occurred on or after August 26, 1935, and the project affects the interests of interstate or foreign commerce. 16 U.S.C. § 817(1).

In 1985, Knott applied for and received a voluntary license to operate the Project, subject to numerous conditions. Because Knott received a voluntary license, FERC had no occasion to determine whether it had mandatory licensing jurisdiction over the Project. In early 1999 FERC recei ved l etters alleging extreme fluctuations in the Blackstone River below the Project and noted a

concern by state agencies an d co nservation groups that the fluctuations might be the result of Knott’s failure to operate his Project to allow a continuous stream flow. In a series of letters FERC repeatedly requested stream flow gaging records, and Knott repeatedlyresponded that he had no obliga tion to install stream flow gages. In December 1999 FERC issued a compliance order1 The terms and conditions of the voluntary license provide

that “[t]he Licensee shall in stal l and thereafter maintain gages andstream-gaging stations for the purpose of determining the stage andflow of the stream or streams on which the project is located.” App. 106. -4- requiring Knott to file a plan for installing stream flow gages at the Pr oject, in accordance with Article 6 of Knott’s license. 1 Knott filed a request for rehearing, which FERC denied on May 22, 2000. In November 2000 Knott filed for FERC approval to install

an unrelated “flood flow modul ar gat e.” FERC approved the proposal, but required Knott to file revised drawings of the gate

on aperture cards (3 1/4" x 7") on silver or gelatin 35 mm microfilm. Knott sought rehearing of this requirement, which FERC denied. FERC noted that its regulations require exhibit drawings to be microfilmed onto aperture cards, that aperture cards provide

an inexpensive and durable information medi um, and that some of Knott’s pape r drawings were inaccurate. Knott timely petitioned for review.

During the course of his earlier proceeding s, Knott contendedthat FERC had no jurisdiction over the Project and, thus, couldnot compel him to comply w ith e ither his license or agency regulations. In response, FERC instituted a p roce eding to reexamine the basis for its jurisdiction. In November 2000 FERC staff prepared a supplemental study of the navigability of the Blackstone River. The study described in detail a four-day-5-

expedition in Septem ber 20 00, organized by local businesses, environmental groups, and governmental bodies, in which approximately thirty canoeists traversed the river from Worcester, past the Project, into Rhode Island and then Narragansett Bay. Basedon this expedition, which was accomplished with a minimum of overlandtransport, or “portages,” FERC staff conc luded that the Blackstone River is suitable for interstate use by recreational boaters and is thus a navigable waterway within the meaning of FPA § 3(8). See 16 U.S.C. § 796(8) (defining “navigable waters”). FERC therefore concluded that the Project is subject to its mandatorylicensing authorit y, and ordered Knott to abide by its orders and all license terms and conditions.

Knott filed a request for rehearing, which FERC denied. FERC upheld the finding of the staff navigability report and also f oun d, as a separate basis for jurisdiction, that (1) the Blackstone River has an effect on interstate commerce; (2) the Project has a n effect on interstate commerce; and (3) Project construction had occurred since August 1935 because Knott had substant ia lly rebuilt Project facilities and returned them to operation after the Project had been abandoned in 1976. FERC additionally rejected Knott’s takings and due process ar gume nts. Knott timely petitioned for review.-6- DISCUSSION I. STANDARD OF REVIEW

“W e review FERC’s findings of fact for ‘substantial evidence,’ and if so support ed, such findings are conclusive.” Thomas Hodgson & Sons v. FERC , 49 F.3d 822, 825 (1st Cir. 1995); 16 U.S.C. § 825l. We “defer to the agency’s expertis e . . . so long as its decision is supported by ‘substantial evidence’ in the recorda nd reached by ‘reasoned decisionmaking,’ including an examination of the relevant data and a reasoned explanation supportedby a stated connection between the facts found and the choi ce made.” Northeast Utils. Serv. Co. v. FERC , 993 F.2d 93 7 , 944 (1st Cir. 1993) (citation omitted).

“‘Pure ’ legal errors require no deference to agency expertise, and are reviewedde novo.” Id. “Questions involving an interpretation of the FPA involve a de novo determination by the court of congressional intent; if that intent is ambiguous, FERC’s conclusion will only be rejected if it is unreasonable.” Id. (citing Chevron USAv. Natural Res. Def. Council , 467 U.S. 837, 842-45 (1984)).

We review FERC orders under the Administrative Procedure Act, 5 U.S.C. § 551, and must reverse an agency action that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Wis. Valley Improvement Co. v. FERC , 236 F.3d 738, 742 (D.C. Cir. 2001).-7-

II. MANDATORY JURISDICTION

Knott challenges both grounds upon which FERC based its finding of mandatory jurisdiction: (1) that the Blackstone River is navigable; and (2) that Knott’s reconstruction work after a periodof abandonment sufficed to confer jurisdiction. Because we holdthat FERC properly based its jurisdiction on a finding of navigability, we do not reach the issues of abandonment and reconstruction.

The FPA, adoptedin 1920, defines “navigable waters” as: [T]hose parts of streams or other bodi e s of water over which Congress has [Commerce Clause] jurisdiction . . . and which either in their natural or improved condition notwithstanding interruptions between the nav igable parts of such streams or waters b y falls, shallows, or rapids compelling land carriage , are used or suitable for use for the transportation of persons or property in interstate or foreign commerce, including therein all such interrupting falls, shallows, or rapids. 16 U.S.C. § 796(8) (emphases added). Based on this definition, and case law interpreting it, FERC correctly found that the September 2000 canoe trip demonstrated that the Blackstone River andProject site were “suitable for use” in interstate commerce notwithstanding the shallows “compelling land carriage.”

Knott first argues that FERC’s authority must be limited to waterways used for actual, ongoing interstate commerce, “not hypothetical possibilities of unrealized commerce.” This argument is unavailing. The statutory language applies to waters in use or2 Knott’s selective citations do not undermine these

principles. Knott incorrectly relies on Miami Valley Conservancy Dist. v. Alexander , 692 F.2d 447 (6th Cir. 1982), a case challenging Army Corps of Engineers jurisdiction under the Rivers andHarbors Act of 1899, and LeBlanc v. C leveland , 198 F.3d 353 (2ndCir. 1999), a personal injury su it ari sing under general admiraltylaw. Neither case evaluated or applied FPA § 3(8). -8- “suitable for use” for personal transportation, notwithstanding interruptions. Id. The Supreme Court has held that the absence of actual commercial traffic does not bar “a conclusion of

na viga bility where personal or private use by boats demonstrates the availability of the stream for the simpler types of commercial navigation.” Unite d S tates v. Appalachian Elec. Power Co. , 311 U.S. 377, 416 (1940); see also United States v. Utah , 283 U.S. 64, 82 (1931) (“The extent of existing commerce is not the test.”). Irregular canoe trips may support a finding of navigability. See FPL Energy Me. Hydro LLC v. FERC , 287 F.3d 1151, 1157 (D.C. Cir. 2002) (upholding a determination of navigability based on three

canoe trips made for the purpose of litigation).

Nor does the fact that the Blackstone River required portages defeat a finding of navigability. The statute explicitly contemplates that waterways may be navigable “notwithstanding interruptions between the navigable parts of such streams or waters by falls, shallows, or rapids compelling land carriage.” 16 U.S.C. § 796(8). “Such interruptions do not render an otherwise navigable streamnon-navigable.” Consol. Hydro, Inc. v. FERC , 968 F.2d 1258, 1262 (D.C. Cir. 1992) (citing cases). 2Knott also relies on Leonard Murphy , 98 F.E.R.C. 61,302 (2002), but

that decision reaffirmed that “[s]ection 3(8) provides that the streammay be found navigable if it was, is, or could be made suitable for such use. Such suitability may be shown through non-commercial or recreational uses of the stream.” Id. at 62,295. Duke Power , 74 F.E.R.C. 61,291 (1996), does not address the navigabilityquestion. Knott’s remaining citations predate the Court’s landmark decision in Appalachian Electric P ower Co. , 311 U.S. 377 (1940), a case Knott does not address. -9- Given this consensus, FERC’s interpret atio n of the FPA concerning the standard for navigability is reasonable and entitled to deference. The D.C. Circuit recently explained that:

As the [FPA] does not define w hen a waterway is “suitable for use . . . in . . . commerce,” we assume that Congress intended FERC to address the ambiguity in the statute and develop an appropriate test. See United States v. Mead Cor p. , 533 U.S. 218, 229 (2001). We findthat FERC’s interpretation of navigability under the FPA, which was based on test canoe trips and the Stream’s physical characteristics . . . was reasonable and entitled to deference. FPL , 287 F.3d at 1156. FERC thus applied the proper legal test requiredby the plain language of § 3(8) and the relevant case law.

Substantial evidence supports FERC’s factual determinati on t hat the Blackstone River is suitable “for the simpler types of commercial navigation.” Appalachian Elec. Power Co. , 311 U.S. at 416. FERC properly relied on the September 2000

canoe expedition, which was accomplishedw ith “few problems,” “relatively easy” portages, and “a minimum of difficulty.” Knott

as serts that the river is prone to dry or low flows and h as man y natural and constructed obstacles. However, the statutory3 Knott also asserts that FERC has repeatedly reversed itself

in determining the navigability of the Blackstone River, thus undermining its most recent order. This argument lacks foundation. FERC’s 1987 order issuing Knott a voluntary license made no finding on the navigability issue; FERC’s instant order th us pre sents no conflict. FERC did reverse itself with regard to a project located upstream from Knott’s facility, but only after the September 2000 canoe expedition demonstrated the navigability of the river at both locations. -10- defi nition of navigability explicitly allows for “land carriage” around“interruptions.” 16 U.S.C. § 796(8). Knott does not otherwise seriously dispute that the canoeists successfully navigatedthe waterway. He questions the participants’ motivation, b ut thi s is irrelevant; what matters is that the participants completedthe journey, regardless of motivation. See FPL , 287 F.3d at 1157 (affirming jurisdiction based on canoe trips made for the purpose of litigation). 3

FERC’s finding that the Blackstone River is navigable, as definedby 16 U. S.C. § 796(8), is supported by substantial evidence. We therefore hold that FERC properly asserted mandatory jurisdiction over the Project. III. KNOTT’S CONSTITUTIONAL RIGHTS

Knott argues that a findin g of m andatory licensing jurisdiction effects a taking of his private property rights, and that FERC violated his right to due process by deny ing him a n evidentiary hearing on the issue of staff bias.-11-

A. Fifth Amendment Takings Clause Knott alleges that mandatory FERC jurisdiction will deprive him of all economically viable use of his deeded right to divert water from the Blackstone River “as he shall see fit.” We lack jurisdiction to hear Knott’s taking claim because the Tucker Act, 28 U.S.C. § 1491(a)(1), and “Little Tucker Act,” 28 U.S.C. § 1346(a)(2), vest exclusive jurisdiction in the Court of Federal Claims (the district courts have co ncurrent jurisdiction over claims for $10,000 or less) to render judgment upon any claim against the United States for money damages that “is founded upon the Constitution, or any Act of C ongress or any regulation of an executive department.” 28 U.S.C. § 1491(a)(1). Although Knott’s peti tion for review does not specifically seek moneta r y compensation, the Supreme Court has stated that “taking claims against the Federal Government are premature until the property

owner has availed itself of the process provided by the Tucker Act.” Preseault v. ICC , 494 U.S. 1, 11 (1990). See also Ruckelshaus v. Monsanto Co. , 467 U.S. 986, 1016 (1984) (“Equitable relief is not available to enjoin an alleged taking of private property for public use, duly auth orize d by law, when a suit for compensation can be brought against the sovereign subsequent to the taking.”). “Accordingly, a claim for just compensation under th e Takings Clause must be brought to the Court of Federal Cla ims i n-12-

the fi rst instance, unless Congress has withdrawn the Tucker Act grant of jurisdiction in the relevant statute.” E. Enters. v. Apfel , 52 4 U.S. 498, 520 (1998). The courts have rejected an argument that the FPA represents such a withdrawal of jurisdiction. See Wis. Valley Improvem ent C o. v. FERC , 236 F.3d 738, 743 (D.C. Cir. 2001) (holding that while petitioner seek ing re view of FERC orders imposing conditions on its license “may be able to advance

a colorable Takings-Clause claim, it is not within our jurisdiction to adjudicate it”). Knott may thus file a takings action in the Court of Federal Claims, but may not pursue it on a petition for review brought under 16 U.S.C. § 825l. B. Evidentiary hearing Knott further alleges that FERC improperly denied him a “true” evidentiary hearing with regard to his “repeated allegations of official government witness bias and factual inac curacy .” We recently rejected a similar claim, and explained that:

The term “hearing” is notoriously malleable, but what petitioners got here was not only a hearing but a species of evidentiary hearing which is now quite common in ut ility and carrier regulation. Very extensive evidentiarysubmissions were made by both sides in t he form of affidavits from experts andothers, together with extensive written argument . . . . Cent. Me. Power Co. v. FERC , 252 F.3d 34, 46 (1st Cir. 2001) (citation omitted). We reconfirmed that a “true” hearing before an admini strative law judge is unnecessary if any genuine issues of-13-

material fact can be “adequately resolved on the written record.” Id. (citing cases).

The factual issues Knott sought to raise are not issues material to the dispute at hand. The alle ged biases of certain FERC staff are irrelevant to a finding of navigability or an order to complywith the terms of Knott’s voluntary license. Knott does not dispute that the September 2000 canoeists successfully navigatedthe Blackstone River an d Knott’s voluntary license, explicitlyrequiring him to install gages, predates the alleged biased acts and, thus, cannot be their result. Knott’s arguments were thus properly addressed by FERC through a paper hearing. IV. ORDERS REQUIRING COMPLIANCE WITH LICENSE AND REGULATIONS

Knott asserts that FERC acted unreasonably in demanding that he file project drawings on microfilm. Under the arbitrary and capricious standard, we consider whether an agency’s decision is “based on consideration of the relevant factors” and articulates

a “rational connectio n betw een the facts found and the choice made.” Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc. , 419 U.S. 281, 285 (1974) (citation omitted). FERC noted that its regulations require exhibit drawings to be microfi lme d onto aperture cards, 18 C.F.R. § 4.39, and that “[a]perture ca rds provide a durable medium for storing information about hydropower project features and are relatively inexpensive to produce, costing about $25-$50 for a set-up fee and one dollar for each original.”-14-

FERC also noted that Knott had modified his Project, rendering some of his previous drawings inaccurate. Knott describes the microfilm requirement as “antiquated” and lobbies for an “[i]nfusion of

mo dern technology,” but offers nothing further. FERC’s decision requiring records to be submitted on microfilm, in conformity with its existing record-keeping system and because of the me dium ’s dur abilityand relatively inexpensive cost, is not overl y burdensome and cannot be considered arbitrary or capricious.

Knott also argues that FERC acted arbitrarily in ordering himto install stream flow gages. He contends that such gages are not necessary because other gages exist, and that the license terms requiring such gages do not apply to his Project. These arguments

are also unpersuasive. FERC specifically rejected Knott’s argument that other gages sufficed to address the issue, finding that those gages were too distant to measure impacts from the Project. Knott’s license explicitly requires him to “install and thereafter maintain gages and strea m-ga ging stations for the purpose of determining the stage and flow of the stream or stream s on which the project is located” and to minimize fluctuations such that “flow in the Blackstone River, as measur ed immediately below the project approximates the instantaneous sum of inflow to the project reservoir” (emphasis added). 39 F.E.R.C. 62,308. FERC decided to enforce these conditions after receiving letters alleging extreme fluctuations in the Blackstone River below the Project, and-15-

expr essions of concern by state agencies and conservation groups that the fluctuations might be the result of Knott’s failure to operate his Project to allow a continuous stream flow. Knott’s contention that the terms and conditions of the license do not applyto his Project are without merit; the order issuing the license explicitly states that t he lic ense is subject to such terms. 39 F.E.R.C. 62,308. FERC’s orders for compliance with these terms are reason able. See Clifton Power Corp. v. FERC , 88 F.3d 1258, 1262 (D.C. Cir. 1996) (“It is simply not unreasonable for FERC t o requ ire [licensee] to install [stream gaging] devices to determine whether the dam is operating in the mode describedin its license application.”). CONCLUSION

For the reasons stated, we DENY Knott’s petition for review. PETITION DENIED.