Source: https://openjurist.org/326/f2d/535/union-electric-company-v-federal-power-commission
Timestamp: 2017-10-17 17:40:15
Document Index: 251071468

Matched Legal Cases: ['§ 313', '§ 825', '§ 313', '§ 825', '§ 23', '§ 23', '§ 314', '§ 313', '§ 825', '§ 18', '§ 817', '§ 23', '§ 4']

326 F2d 535 Union Electric Company v. Federal Power Commission | OpenJurist
326 F. 2d 535 - Union Electric Company v. Federal Power Commission
326 F2d 535 Union Electric Company v. Federal Power Commission
326 F.2d 535
Rehearing Denied February 13, 1964.
Robert J. Keefe, St. Louis, Mo., made argument for petitioner and filed brief with Robert G. McClintock, Keefe, Schlafly, Griesedieck & Ferrell, St. Louis, Mo., and Charles J. Dougherty and Duane A. Patterson, St. Louis, Mo.
The petitioner, after filing an application for rehearing, which was denied, petitioned this Court for review of the opinion and order of the Federal Power Commission, pursuant to the provisions of § 313(b) of the Federal Power Act [U.S.C.A., Title 16 § 825l(b)] and in its petition not only takes issue on the merits of the findings and order of the Commission but contends that the Commission did not have jurisdiction to issue an order and consequently there is nothing for this Court to review. We shall first consider the jurisdictional issue.
Union contends that aforesaid § 313 (b), Part III of the Federal Power Act, U.S.C.A., Title 16, § 825l(b), providing, "(b) Any party to a proceeding under this Act aggrieved by an order issued by the Commission in such proceeding may obtain a review of such order in the Circuit Court of Appeals of the United States for any circuit wherein the licensee or public utility to which the order relates is located or has its principal place of business, or in the United States Court of Appeals for the District of Columbia, by filing in such court, within sixty days after the order of the Commission upon the application for rehearing, a written petition praying that the order of the Commission be modified or set aside in whole or in part",
The Commission further contends there is no reasonable ground for failure to raise this objection in the application for rehearing. Without making an exhaustive analysis and comment on the cases cited by the Commission, it has always been regarded as fundamental that jurisdiction over the subject matter cannot be waived by the parties by either action or lack of action. In other words, jurisdiction cannot be conferred where none exists. It, however, is not necessary for this Court to rule upon that contention for the reason that it finds that § 23(b) contemplates the issuance of an order based upon the findings and conclusions of the Commission and that such order is properly reviewable by this Court. Union contends that said § 23(b) contemplates only a finding by the Commission and that the Commission has no jurisdiction to issue an order requiring it to obtain a license. It is true that the Commission cannot make the petitioner obtain a license and construct the project, but it can impose the condition and sanction that if the project is to be constructed a license must be obtained. This is the only logical procedure for a proceeding under this Section. This Section certainly does not intend that resort to the Commission is mandatory to ascertain whether or not a license should be obtained, impose a flat prohibition against unlicensed construction if the Commission finds the project would affect interstate commerce, and at the same time permit this finding to be ignored, construction started by applicant in the face of civil and criminal penalties under §§ 314 and 316 of the Act, and thus place the burden on the Commission to sue in the District Courts for an injunction and allow the District Court to make a finding de novo on this essentially legislative matter. See United States v. Twin City Power Co., 350 U.S. 222, 224, 76 S.Ct. 259, 100 L.Ed. 240. Under Union's theory the burden of going forward after an adverse finding and order to it would be placed on the Commission. This would affect the quantum of proof and the burden of proof would be shifted from Union to the Commission. Here the burden of going forward after an adverse order should properly be upon Union by way of a petition for review of the Commission's findings and order. The only logical and properly expeditious method is for the Commission to issue an order based on its findings and allow a review of that order by the appropriate Court of Appeals. We find that the statute contemplates this type of proceeding.
The Commission's order or determinations have been judicially reviewed under § 313(b) in the following cases: Citizens Utilities Co. v. F. P. C., 279 F.2d 1 (2d Cir. 1960), cert. denied, 364 U.S. 893, 81 S.Ct. 224, 5 L.Ed.2d 188; Montana Power Co. v. F. P. C., 87 U.S.App.D.C. 316, 185 F.2d 491 (1950), cert. denied, 340 U. S. 947, 71 S.Ct. 532, 95 L.Ed. 683; and Georgia Power Co. v. F. P. C., 152 F.2d 908 (5th Cir. 1946). These cases are all authority for its findings and determinations being "orders", since the parties may not waive the issue of the court's jurisdiction. Houston Natural Gas Corp. v. S. E. C., 100 F.2d 5 (4th Cir. 1938).
"It must always be remembered that in construing subchapter I of Chapter XII of Title 16 U.S.C.A., we are to take into consideration, not alone the condition of the stream as it is, but that `it is proper to consider the feasibility of interstate use after reasonable improvements which might be made.' United States v. Appalachian Electric Power Company, 311 U.S. 377, 409, 61 S.Ct. 291, 300, 85 L.Ed. 243."
In the Georgia Power case (supra) the Fifth Circuit on petition reviewed an order of the Federal Power Commission ordering petitioner if it decided to erect a hydroelectric power plant on the Oconee River in Georgia to apply for and accept a license in accordance with the terms of the Federal Power Act. In that case the constitutionality of the Act was attacked as applied to a project located on a non-navigable part of a navigable stream. The Commission's order determined that the navigable capacity of the River below the dam would be affected and at times would render impossible any navigation around the city of Milledgeville, the dam being located 4.3 miles upstream. The Court also held that the Commission's findings were supported by substantial evidence and in such circumstances they would not be disturbed. The Court sustained the Commission's finding that navigable waters were involved in the case and that the operation of the proposed project would affect adversely navigation thereon. The Court overruled the question of constitutionality with respect to petitioner's contention that neither Congress nor the Commission had jurisdiction over non-navigable streams by referring to the cases of United States v. Appalachian Electric Power Co. (supra), Oklahoma v. Atkinson Company, 313 U.S. 508, 61 S.Ct. 1050, 85 L.Ed. 1487 and others.
Union strongly urges that the decision in Carolina Aluminum Co. v. F. P. C., 97 F.2d 435, (Cir. 4th 1938) is controlling. The Court there squarely held that the Commission's decision was not a reviewable "order" because it "embodies no decision which is capable of being enforced by anyone" and, while "the statute forbids the construction of any project" after a Commission's jurisdictional determination, "it does not authorize the Commission to enter an order forbidding the construction." The Court's reasoning and decision in the Carolina Aluminum case is diametrically opposed to the Supreme Court's later ruling in Rochester Telephone Corp. v. United States, 307 U.S. 125, 1. c. 132 and 133, 59 S.Ct. 754, 1. c. 758, 83 L.Ed. 1147 (1939) which states:
Justice Frankfurter, in discussing so-called "negative" and "affirmative" orders, said "the concept of `negative orders' has not served to clarify the relations between administrative bodies and the courts but has rather tended to obscure them." (307 U.S. l. c. 142, 59 S.Ct. l. c. 763, 83 L.Ed. 1147) and
"We conclude, therefore, that any distinction, as such, between `negative' and `affirmative' orders, as a touchstone of jurisdiction to review the Commission's orders, serves no useful purpose, and insofar as earlier decisions have been controlled by this distinction, they can no longer be guiding." (307 U.S. 1. c. 143, 59 S.Ct. 1. c. 764, 83 L.Ed. 1147)
A more serious question arises in passing upon the question of whether the Commission's determination or order is supported by substantial evidence. The reviewing power of this Court is limited to determining whether the Federal Power Commission's findings of fact are supported by substantial evidence. § 825l (b) states in part "The finding of the Commission as to facts, if supported by substantial evidence, shall be conclusive."
There is no question that Congress has authority over the non-navigable tributaries of a navigable river. In State of Oklahoma v. Guy F. Atkinson Co., 313 U.S. 508, l. c. 523, 61 S.Ct. 1050, l. c. 1058-1059, 85 L.Ed. 1487:
"* * * And it is clear that Congress may exercise its control over the non-navigable stretches of a river in order to preserve or promote commerce on the navigable portions. United States v. Rio Grande Dam & Irrigation Co., 174 U.S. 690, 703, 706, 708 [19 S.Ct. 770, 775-777, 43 L.Ed. 1136]; United States v. Utah, 283 U.S. 64, 90 [51 S.Ct. 438, 446, 75 L. Ed. 844]. It is obvious that, at least incidentally, Congress has done precisely that in this case. Congress was not unmindful of the effect of this project on the navigable capacity of the river. In authorizing it, Congress exercised all the power it possessed to control navigable waters."
Union cites for its position United States v. Appalachian Electric Power Co., D.C., 23 F.Supp. 83, 105, and 4 Cir., 107 F.2d 769 and 790. The Supreme Court reversed the Court of Appeals' decision dealing with this issue when it ascertained that the damsite was on a navigable stream, but Union contends the principles enumerated in the decision as it pertains to non-navigable streams would stand. United States v. Appalachian Electric Power Co., 311 U.S. 377, 61 S.Ct. 291, 85 L.Ed. 243 (1940).
The Federal Power Act originally enacted on June 10, 1920, as the Federal Water Power Act was a successor to § 18 of the Rivers and Harbors Act of 1899 and succeeding acts. Section 23(b) of the Act (16 U.S.C.A. § 817) was amended in 1935 by adding the first sentence of that Section, which prohibits all unlicensed hydroelectric projects on navigable waters in the United States. The second sentence of that Section does not prohibit unlicensed hydroelectric projects on non-navigable waters but only calls for licensing if the proposed construction would affect the interest of interstate or foreign commerce. Union contends that a proper interpretation of that part of § 23(b) relating to non-navigable waters should be confined to the determination of whether the construction of such project would affect commerce on navigable waters, and contends that the Commission's interpretation or determination broadening the Act to include any projects on nonnavigable waters where the electric energy therefrom is transmitted in interstate transmission lines is contrary to the construction of said Section which had been followed by the Commission itself for many years prior to the issuance of its order and opinion in this case, and further contends that such interpretation conflicts with applicable judicial decisions. Under the Rivers and Harbors Acts, an Act of Congress was necessary before a dam could be constructed in navigable waters or in a non-navigable stream if such project would constitute an obstruction to the navigable capacity of navigable waters. The Federal Water Power Act of 1920 created the Federal Power Commission and empowered it to perform the licensing functions listed in §§ 4 (e) and 23(b) of the Act, theretofore exercised by Congress. The United States Supreme Court in State of Oklahoma v. Guy F. Atkinson Co., 313 U.S. 508, 61 S.Ct. 1050, 85 L.Ed. 1487, held specifically that "Congress may exercise its control over the non-navigable stretches of a river in order to preserve or promote commerce on the navigable portions," and in authorizing such control Congress exercised all the power it possessed to control navigable waters.
Union contends that the Court in United States v. Appalachian Electric Power Co., 311 U.S. 377, 61 S. Ct. 291, 85 L.Ed. 243 delineated the constitutional limit of Congress's power to prohibit and to license water power projects founded upon its authority to regulate commerce on those waters; and, it is the interest of commerce on water and not the interest of commerce conducted by other media which must be affected by the construction of a hydroelectric project on a non-navigable stream in order to bring the licensure provisions of the Act into effect.
That Court was expressly reversed by the Supreme Court on appeal, the latter Court holding, 311 U.S. 377, l. c. 426, 61 S.Ct. 291, l. c. 308, 85 L.Ed. 243;
The Supreme Court in Utah Power and Light Co. v. Pfost, 286 U.S. 165, 52 S.Ct. 548, 76 L.Ed. 1038, in dealing with the issues raised by a state tax on the generation of electrical energy by the state of Idaho and resisted by the Power Company on the basis that its operation was in interstate commerce and hence the tax a burden thereon held that the generation of electricity was intra-state activity regardless of whether the electricity was transmitted interstate. The question there posed by the Court was:
"While conversion and transmission are substantially instantaneous, they are, we are convinced, essentially separable and distinct operations ([286 U.S.] l. c. 179 [52 S.Ct. l. c. 551, 76 L.Ed. 1038]) * * * the generator and the transmission lines perform different functions, with a result comparable, * * * to the manufacture of physical articles of trade and their subsequent shipment and transportation in commerce." (286 U.S. l. c. 180 and 181, 52 S.Ct. l. c. 551 and 552, 76 L.Ed. 1038)
"We are satisfied, upon a consideration of the whole case, that the process of generation is as essentially local as though electrical energy were a physical thing; and to that situation we must apply, as controlling, the general rule that commerce does not begin until manufacture is finished, and hence the commerce clause of the Constitution does not prevent the state from exercising exclusive control over the manufacture. Cornell v. Coyne, 192 U.S. 418, 428-429 [24 S.Ct. 383, 48 L.Ed. 504]. `Commerce succeeds to manufacture, and is not a part of it.' United States v. E. C. Knight Co., 156 U.S. 1, 12 [15 S.Ct. 249, 253, 39 L.Ed. 325]."
This administrative view and construction of the Commission's jurisdiction under 23(b) being limited to navigable waters or on non-navigable waters that would affect the navigability of navigable waters has long been known to Congress and no change having been made therein, "Under the established rule Congress must be taken to have approved the administrative construction and thereby to have given it the force of law". Helevering v. R. J. Reynolds Tobacco Co., 306 U.S. 110, 114-115, 59 S.Ct. 423, 425-426, 83 L.Ed. 536.
/s/ ROBERT M. TARBOX
ROBERT M. TARBOX,
Assistance Director of
Civil Works for Southwestern
"A similar argument was advanced by staff and rejected by the Circuit Court in United States v. Appalachian Power Co., 107 F.2d 769 (4th Cir., 1938), at the same time that that court endorsed a narrow concept of navigability. The Circuit Court was reversed on this latter ground by the United States Supreme Court at 311 U.S. 377 [61 S.Ct. 291, 85 L.Ed. 243] (1940) in a way which made it unnecessary to decide issues presented only in connection with non-navigable streams. This is the first time that the Commission itself has decided the issue, whether an effect on the interests of interstate commerce other than an effect on navigable capacity is sufficient to require the licensing of projects on non-navigable waters under the mandate of Section 23 (b). Although it may be technically unnecessary to the decision in this case, an issue of such importance must not be allowed to go unresolved any longer since there can be little doubt that this country in the years ahead will become overwhelmingly more dependent upon the maximum development of its water resources in all their uses.