Resolution of Legal Dispute Between the Department of

Energy and the Tennessee Valley Authority

The Tennessee Valley Authority is a part of the Executive Branch. The members of its board of 

directors serve at the pleasure o f the President. In a legal dispute between two Executive 

agencies whose heads serve at the pleasure of the President, Executive Order No. 12146 

requires that the dispute be referred to the Attorney General for resolution.

July 8, 1987

M e m o r a n d u m O p i n i o n f o r t h e G e n e r a l C o u n s e l ,

D e p a r t m e n t o f E n e r g y

This responds to your request of June 30, 1987 for the opinion of the 

Attorney General on whether a dispute between the Department of Energy 

(DOE) and the Tennessee Valley Authority (TVA) is subject to resolution 

under Executive Order No. 12146, 3 C.F.R. 409 (1979 Comp.).1 We believe 

that Executive Order No. 12146 requires that the dispute be submitted to the 

Attorney General for settlement.

Executive Order No. 12146 provides the President’s orders to his subordinates regarding inter-agency disputes. Section 1-4 states:

1—4. Resolution of Interagency Legal Disputes.

1—401. Whenever two or more Executive agencies are unable to 

resolve a legal dispute between them, including the question of 

which has jurisdiction to administer a particular program or to 

regulate a particular activity, each agency is encouraged to 

submit the dispute to the Attorney General.

1 The TVA and DOE disagree on the am ount o f money DOE owes the TVA for certain electric power. The 

TVA has filed suit against DOE. Dean v. Herrington, No. 3 -8 7 —436 (E.D. Tenn. filed June 16, 1987).

NOTE: A fter this opinion was issued by the Office of Legal Counsel, the District Court held that Executive 

O rder No. 12146 did not apply to the TVA . See Dean v. Herrington, 668 F. Supp. 646, 652-53 (E.D. Tenn. 

1987). W ithout deciding “whether TVA’s head ‘serves at the pleasure o f the President,” ’ id. at 653, the court 

found that Executive O rder No. 12146 w as intended to coordinate the legal resources o f agencies represented 

by the Justice Departm ent and therefore did not apply to agencies such as TVA that have independent 

litigating authority. Id. The Claims Court rejected that conclusion after the district court had transferred the 

case to it. A lthough finding the case justiciable, the Claims Court held that Executive Order No. 12146 did 

apply, see Dean v. Herrington, 13 Cl. Ct. 692 ,7 0 0 -0 2 (1987), and therefore temporarily suspended the action 

and ordered the parties to subm it the dispute to the Attorney General for administrative resolution Id. at 703.

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1—402. Whenever two or more Executive agencies whose heads 

serve at the pleasure of the President are unable to resolve such a 

legal dispute, the agencies shall submit the dispute to the Attorney General prior to proceeding in any court, except where there 

is specific statutory vesting of responsibility for a resolution 

elsewhere.

3 C.F.R. 411 (1979 Comp.). Because we believe that both DOE and the TVA 

are headed by individuals who serve at the pleasure of the President, we believe 

that § 1-402 requires that the TVA-DOE contract dispute be submitted to the 

Attorney General prior to any court resolution.

The Secretary of Energy is appointed by the President with the advice and 

consent of the Senate. 42 U.S.C. § 7131. The statute places no limit on the 

President’s power to remove the Secretary, and there is no question that the 

Secretary serves at the pleasure of the President within the meaning of § 1- 402.2

The TVA is a government corporation established by Congress and governed by a board of directors. 16 U.S.C. §§ 831, 832(a).3 Its board of directors 

is “composed of three members, to be appointed by the President, by and with 

the advice and consent of the Senate.” 16 U.S.C. § 832(a). In the absence of any 

other guidance, we are of the view that the President may remove board 

members in his discretion because, as with the Secretary of Energy, the statute 

places no limit on his removal authority.

The historical record supports this proposition. Shortly after the TVA was 

created in 1933, it was enveloped in scandal. As the board members quarreled 

over responsibility, President Roosevelt asked the chairman, Dr. A. E. Morgan, 

to provide evidence to support his charges of corruption among his fellow 

board members. When Dr. Morgan refused to do so, the President held a 

hearing and dismissed Dr. Morgan from office.4 Attorney General Robert 

Jackson subsequently issued an opinion that concluded that the TVA was an 

executive agency and that, therefore, the President could remove its members. 

39 Op. Att’y Gen. 145 (1938).

This view was not confined to the Executive Branch. Dr. Morgan sought 

relief in court, charging that the TVA was a quasi-legislative body responsible 

to Congress. The U.S. Court of Appeals for the Sixth Circuit rejected his claim:

It requires little to demonstrate that the Tennessee Valley Authority exercises predominantly an executive or administrative 

function. To it has been entrusted the carrying out of the dictates 

of the statute to construct dams, generate electricity, manage 

and develop government property. Many of these activities, 

prior to the setting up of the T. V.A., have rested with the several

2 See generally Myers v. United States, 272 U.S. 52(1926),Shurtleffv. United States, 189 U.S. 311 (1903); 

In re Hennen, 38 U.S. (13 Pet.) 230 (1839); Kalarts v Donovan, 697 F.2d 376, 389 (D.C. Cir ), cert, denied,

462 U.S. 1119(1983).

3 Government corporations are agencies o f the United States. Rainwater v. United Stales, 356 U S 590, 

591-92(1958).

"83 Cong. Rec. 3917-18, 3951-53 (1938).

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divisions of the executive branch of the government.. . . [The 

TVA] is not to be aligned with the Federal Trade Commission, 

the Interstate Commerce Commission, or other administrative 

bodies mainly exercising clearly quasi-legislative or quasi-judicial functions — it is predominantly an administrative arm of 

the executive department.

Morgan v. TVA, 115 F.2d 990 (6th Cir. 1940), cert, denied, 312 U.S. 701 

(1941). This decision, upholding the President’s authority to dismiss TVA 

directors, has remained the law for the last forty years.5

Because the Secretary of Energy and the members of the board of directors 

for the TVA carry out executive functions and serve under the direction and 

control of the President, the dispute between these two agencies must be 

submitted to the Attorney General for resolution. This would bring the two 

agencies into compliance with the Executive order and comply with the constitutional requirements pertaining to the separation of powers, which necessarily 

render judicial resolution of a dispute between two agencies in the Executive 

Branch, both of which are headed by officers answerable to the President of the 

United States, non-justiciable.6

D o u g l a s W . K m i e c

Deputy Assistant Attorney General

Office o f Legal Counsel

s See also TVA v. Kinzer, 142 F.2d 833, 837 (6lh Cir. 1944); 1959 Pub. Papers 566 (Aug. 6, 1959) (‘T V A 

is, however, part o f the Executive Branch o f the G overnm ent/') (statement of President Eisenhower on 

signing bill am ending T V A ’s authorizing statute).

6 See United States v. Easement &. Right o f Way Over Certain Land in Bedford County, Tennessee, 204 F. 

Supp. 837 (E.D. Tenn. 1962).

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