Opinion ID: 3048860
Heading Depth: 2
Heading Rank: 1

Heading: The Expiration of the 1956 Act

Text: In 1956, Congress passed an act, in part, stating the following: [T]he Secretary of the Army is hereby authorized to contract with Gwinnett County, Georgia, upon such terms and for such period not to exceed fifty years as he may deem reasonable for the use of storage space in the Buford Reservoir for the purpose of providing said county a regulated water supply in an amount not to exceed eleven thousand two hundred acre-feet of water annually . . . . Pub. L. No. 84-841, 70 Stat. 725. The district court noted in a footnote that Gwinnett had not contracted with the Corps pursuant to this authorization and held under the 1956 Act. 77 that the authorization “expired in 2006.” Tri-State, 639 F. Supp. 2d at 1350 n.24. The district court has misread the plain language of the statute. The fifty-year limitation in the Act refers to the duration of any contract with Gwinnett, not to the expiration of the Act itself. The phrase “not to exceed fifty years” immediately follows the words “contract . . . upon such terms and for such period” and there is no grammatical cue that it should not be read as modifying this phrase. The district court offers no explanation for its unnatural reading of the statute and none is evident to this Court. Moreover, the Act also authorized the Corps to enter into a perpetual easement with Gwinnett, authorizing Gwinnett to build the necessary facilities to withdraw water directly from Lake Lanier on the Corps’ land. 70 Stat. at 725. It would be illogical for Congress to give Gwinnett a perpetual easement to implement an authorization that would expire in fifty years. The district court’s interpretation of the Act, which is espoused by Appellees in this appeal, is inconsistent with the Act’s language and its grant of an easement in perpetuity. To date there has not been a single contract between the Corps and Gwinnett predicated on the authority of the 1956 Act. Such a contract in the future would not be a reallocation of storage under the WSA or the RHA because it is directly authorized by Congress. B. Forty mgd from the 1974 Supplemental Agreement to the Corps’ 78 Contract Gwinnett argues that in 1974 the Corps granted the county the right to 38,100 acre-feet of permanent storage so that it could withdraw roughly 40 mgd directly from Lake Lanier. In 1973, Gwinnett and the Corps entered into an interim water contract for 40 mgd. The following year, the parties revised Article 9 of the contract to provide: Upon expiration of the period of contract . . . the User shall have the right to acquire from the Government . . . the right to utilize storage space in the project containing at least 38,100 acre feet (which is estimated to be adequate to yield approximately 40 MGD of water). Supplemental Agreement No.1 to Contract No. DACW01-9-73-624 Between United States and Gwinnett County, Georgia for Withdrawal of Water from Lake Sidney Lanier (Apr. 29, 1974). The contract stated that this revision was being made “in order to facilitate the sale of bonds to finance [Gwinnett’s] proposed water works facilities.” Id. Subsequent supplemental agreements extended the life of the contract until it was finally allowed to expire in 1990. The contract gave Gwinnett the “right to acquire” the storage space at the time of the expiration of the contract. Thus, Gwinnett possessed an option (an offer) to purchase storage space at the time of the contract’s expiration, which the parties agree occurred in 1990. “If no time is prescribed for accepting an offer, it must be 79 done within a reasonable time.” Wilkins v. Butler, 369 S.E.2d 267, 268 (Ga. Ct. App. 1988) (quotation omitted); see Home Ins. Co. v. Swann, 128 S.E. 70, 72 (Ga. Ct. App. 1925); Restatement (Second) of Contracts § 41 (1981). Gwinnett has not demonstrated that it exercised its acceptance of the option in 1990 or at any time since then. More than twenty years have elapsed since the time that the option became available, and the right to accept the Corps’ offer to acquire the 38,100 acre-feet of storage clearly has lapsed.33 C. Just Compensation for Relocation of the Duluth Intake On appeal, Gwinnett argues that it should have been compensated because the creation of the Buford Project led to contamination of its intake structure at Duluth, which had to be abandoned in the early 1970s. Gwinnett failed to make this argument before the district court. We generally do not consider arguments raised for the first time on appeal and need not do so here. Peek-a-Boo Lounge of Bradenton, Inc. v. Manatee Cnty., 630 F.3d 1346, 1358 (11th Cir. 2011). In any event, this argument is meritless. Gwinnett fails to discuss the rights of the federal government to make alterations to navigable waters. The federal 33 Gwinnett argues that any challenges to its right to storage under the 1974 supplement are barred by the six-year statute of limitations for actions against the United States. 28 U.S.C. § 2401(a). Though the statute has been extended to suits under the APA, it is clearly inapplicable here. Appellees, and/or the Corps, have nothing to challenge here, and consequently nothing that they are barred from challenging, because the Corps merely granted Gwinnett an unexercised option. No permanent storage rights were ever conferred on Gwinnett by the Corps. 80 government possesses what is known as a navigational servitude, “the privilege to appropriate without compensation which attaches to the exercise of the power of the government to control and regulate navigable waters in the interest of commerce.” United States v. Va. Elec. & Power Co., 365 U.S. 624, 627, 81 S. Ct. 784, 787–88 (1961) (internal quotation marks omitted). The navigational servitude is a dominant servitude, trumping all competing and conflicting rights to the waterway. Id. This servitude extends to the entire river and the riverbed lying below the high-water mark. United States v. Rands, 389 U.S. 121, 123, 88 S. Ct. 265, 267 (1967). It is anchored in Congress’ commerce clause power. “The power to regulate commerce comprehends the control for that purpose, and to the extent necessary, of all the navigable waters of the United States. For this purpose they are public property of the nation, and subject to all the requisite legislation by Congress.” Id. at 122–23, 88 S. Ct. at 266–67 (alteration omitted) (internal quotation marks omitted). The federal government does not execute a taking of riparian interests by altering rivers for navigational purposes. The government’s dominant right to make use of these waterways means that its actions do not amount to an appropriation. This premise has been explicitly stated several times in the context of hydropower interests: The federal government is not required to give compensation for water power when it takes riparian lands in accordance with the navigational servitude. 81 E.g., Va. Elec., 365 U.S. at 629, 81 S. Ct. at 788; United States v. Twin City Power Co., 350 U.S. 222, 226–27, 76 S. Ct. 259, 262 (1956); United States v. Appalachian Elec. Power Co., 311 U.S. 377, 424, 61 S. Ct. 291, 307 (1940); United States v. Chandler-Dunbar Water Power Co., 229 U.S. 53, 73–74, 33 S. Ct. 667, 676 (1913). Gwinnett offers no explanation for why this principle should not be applied to the riparian interest in water supply. Because of the federal government’s dominant right to make alterations in the river, the effect on Gwinnett’s riparian interests is not a taking. Thus, even if Gwinnett had not abandoned its claim, the claim would not be compensable. Part V. Remand Instructions to the Corps On remand, the Corps is to reconsider Georgia’s request, as well as its authority with respect to the current provisions for water supply, in light of its authority under the RHA as well as the WSA and the 1956 Act. In particular, it should consider several important factors with respect to the Newman Report (i.e., the RHA). First, the Corps should take into consideration that water supply for the Atlanta metropolitan area was an authorized purpose of the Buford Project as well as hydroelectric power, flood control, and navigation. Second, Congress contemplated that the Corps would be authorized to calibrate operations to balance 82 between the water supply use and the power use. Third, because Congress explicitly provided that the “estimated present needs” of the Atlanta area for water supply be satisfied at the expense of “maximum power value,” Newman Report ¶ 80, we know that the water supply use is not subordinate to the power use. Fourth, from Paragraphs 79 and 80 of the Newman Report, we know that Congress contemplated that water supply may have to be increased over time as the Atlanta area grows. However, the authorizing legislation is ambiguous with respect to the extent of the Corps’ balancing authority—i.e., the extent of the Corps’ authority under the RHA to provide water supply for the Atlanta area. On the one hand, the authorizing legislation recognized that the Chattahoochee River was the source of the water supply for the Atlanta area, and the legislation repeatedly referred to safeguarding or assuring the water supply of the metropolitan area. See Newman Report ¶¶ 79 and 80. It also recognized that the minimum releases initially provided by the legislation to satisfy the present water needs “may have to be increased somewhat as the area develops.” Id. ¶ 80. On the other hand, the legislation also contemplates that assuring such water supply for the Atlanta area can be done with a “slight decrease in system power value.” Id.34 We conclude that the Corps, the agency authorized by 34 Adding to the possible ambiguity, the quoted phrase from Paragraph 80 refers to a “slight decrease in system power value,” but Congress contemplated, in the preceding Paragraph 79, a considerable increase in the river flow at Atlanta during off-peak hours in order to provide 83 Congress to implement and enforce this legislation, should, in the first instance, evaluate precisely what this balance should be.35 Once the Corps has determined the extent of its authority under the RHA, it should then determine its authority pursuant to the WSA. The authority under the WSA will be in addition to the Corps’ authority under the RHA and the 1956 Act. for Atlanta’s water supply needs nineteen years in the future. Paragraph 79 contemplated increasing the river flow at Atlanta from 650 cfs to 800 cfs. 35 The Georgia Parties specifically assert that the Corps has authority under the RHA to increase releases from the dam in order to provide water supply to downstream users, and to reallocate storage for this purpose, an assertion with which we agree today. However, The Georgia Parties do not specifically assert that, in addition to the foregoing authority, the RHA also gives the Corps authority to make direct withdrawals from Lake Lanier for water supply. Although the authorizing legislation recognized that the Chattahoochee River was the source of water supply for the Atlanta area, and although Congress specifically contemplated ensuring and safeguarding the area’s water supply, the only way that the RHA mentions for ensuring the water supply of the Atlanta area is by means of increasing releases from the dam for the purpose of downstream withdrawals. It also appears that the Corps’ position has been more consistent with respect to its lack of authority under the RHA to provide direct withdrawals than it has in other regards. See F. G. Turner, U.S. Army Corps of Eng’rs: Mobile Division, Report on Withdrawal of Domestic Water Supply from Buford Reservoir (1955) (stating that the Corps advised Gwinnett County that it did not have the authority at that time—i.e., before the 1958 WSA—to grant a request for direct withdrawals for water supply and recommending that Congress provide the Corps with the additional authority necessary to grant this request). Finally, because it is unclear at this point precisely how much of the Atlanta area’s water supply the Corps will determine on remand it can provide pursuant to its clear RHA authority to increase releases for downstream water supply, because the 1956 Act clearly gives the Corps authority for a specific amount of direct withdrawals for Gwinnett County, and because the WSA clearly provides the Corps authority for direct withdrawals from the Lake (as long as the cumulative exercise of such Corps authority pursuant solely to the WSA does not constitute a “major operational change” or “seriously affect the purposes for which the project was authorized”), it is not clear that the issue of RHA authority for direct withdrawals is a live issue in this case. For all of the foregoing reasons, we express no opinion on whether the RHA could be construed to provide authorization for the Corps to satisfy the authorized water supply purpose, not only by increasing releases for downstream withdrawal but also by direct withdrawals from the reservoir. 84 It is apparent from the record and the evolving position of the Corps that the Corps has not arrived at a final, definitive determination of the scope of its authority to allocate storage to water supply. For example, it is not clear whether the Corps has arrived at a firm calculation of how many gallons per day can be provided for the Atlanta area’s water supply needs as a mere incident to, or byproduct of, power generation. The Corps’ latest figure, developed in 1986, in this regard has been 327 mgd; however, at oral argument the Corps asserted that the calculation was not definitive and deserved more study. Also, it is apparent that the Corps has not arrived at a definitive, final determination of whether, and to what extent, storage reallocation would be necessary for RHA-authorized releases from the dam primarily for water supply purposes (and how to factor in the fact that these releases will still generate some power, though not of peak value). It is also unclear whether the Corps has arrived at a final determination of the appropriate measure for determining under the RHA what the impact of increased water supply use on power is, or the appropriate measure for determining under the WSA what constitutes a “major operational change.”36 Finally, the Corps has not yet articulated a policy on 36 In this regard, for example, the Corps should consider whether, and to what extent, considerations such as the following are relevant: percentage reallocation of conservation and/or other storage, measurements of decreases in systemwide power, and compensation to power customers. See also supra, note 31. 85 whether to account for return flows, and if so, how to differentiate between flows returned directly to the lake and flows returned downstream from the dam. These are some of the questions that the Corps should answer on remand, although we make no attempt to be exhaustive in that regard. As part of the final, definitive statement of the Corps’ water supply analysis, if the agency ultimately concludes that it does not have the authority to grant the Georgia request, it nevertheless should indicate the scope of the authority it thinks it does have, under the RHA, the WSA, and the 1956 Act. This way, the parties will have some further instruction, based on sophisticated analysis, of what the Corps believes to be the limitations on its power. Part VI. Collateral Esoppel Effects on Remand Instructions To assist the Corps in making these determinations on remand, we address here whether certain statements from this Court’s decision in Alabama or the D.C. Circuit’s decision in Geren carry the force of collateral estoppel. Specifically, we discuss whether either of the two claims found to have preclusive force by the district court in the instant case is binding on the Corps and whether any of Alabama and Florida’s additional collateral estoppel arguments have merit. At the outset, we note that collateral estoppel applies only if (1) the issue at stake is 86 identical to the one involved in the prior proceeding; (2) the issue was actually litigated in the prior proceeding; (3) the determination of the issue was critical and necessary to the earlier judgment; and (4) the party against whom collateral estoppel is asserted had a full and fair opportunity to litigate the issue in the prior proceeding. Christo v. Padgett, 223 F.3d 1324, 1339 (11th Cir. 2000). The district court found collateral estoppel, preclusive effect in the D.C. Circuit’s conclusion that the WSA applied to interim reallocations of storage. TriState, 639 F. Supp. 2d at 1343. We take no issue with this application of collateral estoppel. On remand, the Corps will determine the extent of its authority to supply the current water supply needs of the Atlanta area, combining its authority under the 1956 Act, the RHA, and the WSA. The Corps’ authority under the WSA (as well as the statutory limits thereto) are applicable to the Corps’ determination of its authority to supply current water supply needs, whether by force of collateral estoppel or clear statutory meaning or both. The district court also found preclusive effect in the D.C. Circuit’s holding that the reallocation of 22% of Lake Lanier’s conservation storage is a major operational change on its face. Id. Several aspects of this holding merit discussion. First, and foremost, the Geren court considered only the Corps’ authority under the 87 WSA, not its authority under the RHA.37 Accordingly, a different issue is presented here. At the very least, this difference means that any water the Corps finds it is authorized to supply pursuant to the RHA is separate from the water it is authorized to supply pursuant to the WSA, and that this RHA-authorized water supply would not count against the Geren court’s 22% limit.38 It is also possible that our reading of the authority provided by the RHA fundamentally changes the WSA analysis, given that the RHA congressionally authorizes the Corps to increase water supply in its balancing of hydropower and water supply needs, meaning that such reallocations to water supply arguably do not actually constitute a “change” of operations at all, and that the issue is therefore entirely different than the one presented to the Geren court. In other words, it is possible that the 22% holding has no preclusive force at all. However, because it is not clear that the Geren court’s 22% limit will be reached in this case,39 we 37 The settling parties—the Corps, SeFPC, and the Georgia Parties—did not make an issue of the Corps’ authority under the RHA because they were not in full agreement on whether water supply was an authorized purpose of the Buford Project. As settling parties defending a settlement, they had no incentive to assert issues about which they disagreed. 38 Of course, the authority granted under the 1956 Act for Gwinnett County also would not count against the Geren court’s 22% limit. Likewise, the parties and the courts have consistently assumed, and so do we, that the 10 mgd in compensatory withdrawals by Buford and Gainesville do not affect the amount of water that the Corps is authorized to supply under the various statutory grants. 39 There are two reasons the 22% limit may not be reached. First, the Corps has yet to determine the extent of its authority to allocate water to water supply under the RHA. The 22% 88 expressly decline to address the collateral estoppel effect of the Geren court’s 22% limit.40 Second, it is clear that the question of whether percent reallocation of storage is the correct or sole measure of operational change was not actually litigated. Examination of the parties’ briefs in Geren makes clear that the parties assumed, but did not put at issue, the question of whether percent reallocation of storage is the correct or sole measure of operational change. Similarly, because the parties merely assumed that percent reallocation was the appropriate measure, the Geren court made the same assumption in its opinion, without any discussion of the issue. When an issue is merely assumed, it does not meet the actual litigation requirement for limit would not be reached unless the water allocated under the WSA represented at least a 22% reallocation above whatever allocation is authorized under the RHA. Second, as discussed in the two paragraphs immediately following this paragraph, percent reallocation of conservation storage may not be the correct or sole measure of operational change. 40 We do, however, expressly address the collateral estoppel effect of Geren’s alternative holding—that even a 9% increase in storage for water supply is a major operational change. The district court did not find preclusive effect to this holding. Alabama and Florida do not argue in their briefs that this holding is entitled to collateral estoppel, and Alabama and Florida expressly abandoned any such claim at oral argument. Nonetheless, we consider this issue in order to provide complete remand instructions to the Corps. Because the issue arose in Geren for the first time at oral argument, the Corps and the Georgia Parties had no opportunity to brief the issue. This alternative, and secondary, holding therefore wholly fails the “actually litigated” requirement for collateral estoppel. See Chi. Truck Drivers, Helpers & Warehouse Union (Independent) Pension Fund v. Century Motor Freight, Inc., 125 F.3d 526, 530 (7th Cir. 1997) (expressing doubt that the issue of a regulation’s validity was actually litigated when it emerged only at the reply brief stage and received little discussion in the opinion, notwithstanding the fact that the party against whom collateral estoppel was asserted had raised the application of the regulation in its earlier response to summary judgment). 89 collateral estoppel. See Fields v. Apfel, 234 F.3d 379, 383 (8th Cir. 2000) (finding no issue preclusion with respect to whether a particular method for calculating disability benefits applied, because its applicability had merely been assumed by the court and both parties in a prior case and not placed at issue). The fact that the Geren court ruled “without thoroughly examining” the issue further undermines the preclusive effect of the ruling. A.J. Taft Coal Co. v. Connors, 829 F.2d 1577, 1581 (11th Cir. 1987) (declining to apply collateral estoppel where the issue was not fully litigated, which resulted in the prior court tendering a conclusion “without thoroughly examining” the issue). Moreover, in this case, the district court did not hold that percent reallocation of storage is, as a matter of collateral estoppel, the correct or sole measure, and Appellees do not argue on appeal that we are bound by collateral estoppel to hold that percent reallocation of storage is the only appropriate measure of operational change. We conclude, for the foregoing reasons, that collateral estoppel does not bar the Corps from determining the appropriate measure of operational change on the basis of its own expertise. The Corps is free to consider on remand whether other measures, such as impact on hydropower,41 should be 41 It may be that the percent impact on hydropower is significantly less than the percent of storage reallocated to water supply under a given allocation scheme. For example, the Corps’ brief at 99–100 explained that the “de facto” reallocations of storage to account for current uses causes a systemwide reduction of hydropower of only 1%. Another aspect of the evaluation of detriment to hydropower is whether compensation to 90 considered instead of or in addition to percent reallocation of storage. Third, examination of the briefs in Geren also shows that the parties merely assumed that conservation storage was the appropriate frame of reference against which percent reallocation should be calculated, and the court likewise made this assumption. Accordingly, the actual litigation requirement is not met and the Corps is free to consider on remand whether some other portion of the dam’s capacity should also be considered. For instance, it may be that the flood control storage, which sometimes contains excess water that could be released to satisfy water supply needs, should be factored into the calculation. power users can be considered to mitigate any detriment. Although the Geren court rejected the idea that compensation to hydropower users might be relevant under the WSA, see Geren, 514 F.3d at 1324, Alabama and Florida do not argue that this rejection gives rise to collateral estoppel. We consider the issue nonetheless in order to provide complete remand instructions to the Corps. For the following reasons, we conclude that collateral estoppel does not preclude the Corps from considering compensation to power users as a mitigating factor in its analysis of detriment to hydropower, if the Corps finds it appropriate to consider compensation for this purpose based on the exercise of its expertise. The concept of compensating power customers presents a different issue than the one considered in Geren because the D.C. Circuit failed to recognize the Corps’ authority under the RHA. As we hold today, the RHA authorizes the Corps to increase water supply at the expense of hydropower, and it contemplates that, in balancing the water supply and hydropower interests, the Corps should consider the magnitude of the detriment to hydropower. Because the Geren court failed to recognize this authority, it treated the proposed change in storage, and flow through, as a major operational change without considering the magnitude of the effect on hydropower and without considering whether financial compensation is relevant to that inquiry. Accordingly, the Geren court did not face the same issue with respect to the effect of compensation on the Corps’ authority as this Court. Because the issue is different, collateral estoppel does not apply. See Christo, 223 F.3d at 1339. The Corps on remand may therefore make a fresh determination regarding whether financial compensation to power customers is material for the purpose of evaluating the magnitude of the detriment to hydropower. 91 Alabama and Florida advance two collateral estoppel arguments in addition to those already covered above. First, they argue that the Geren court decided that, for purposes of the WSA analysis, the baseline for storage against which major operational change should be measured is zero. They further argue that the decision has the effect of collateral estoppel. We disagree. As noted above, the Geren court expressly made no decision with respect to the Corps’ authority to allocate storage to water supply under the RHA.42 It addressed the issue of the appropriate baseline for the WSA analysis only in the context of rejecting the settling parties’ argument that the interim reallocation level prior to the settlement was the correct baseline. A wholly different issue is presented in this appeal, in which we are required to assess the Corps’ authority under the RHA to reallocate storage or otherwise provide water supply, and to factor this authority into the WSA analysis. Thus, the Geren court’s decision with respect to the baseline for storage reallocation has no collateral estoppel effect in this case. Second, Appellees argue that this Court’s earlier statement in Alabama, that water supply is not an authorized purpose of the Buford Project, is preclusive. As 42 Accordingly, Alabama and Florida are plainly wrong to the extent they argue that this aspect of Geren establishes collateral estoppel for purposes of finding that the RHA authorizes no storage for water supply. Likewise, Alabama and Florida are wrong to the extent that they argue that Geren establishes estoppel for the proposition that grants of authority under the RHA and WSA are not supplemental. Geren made no such holdings. 92 noted earlier in this opinion, this statement does not give rise to collateral estoppel because it was not actually litigated and it was mere dicta and therefore was not critical or necessary to the judgment. See supra, note 21. In conclusion, the Corps is not bound by collateral estoppel in making the aforementioned determinations and should make its decisions on remand on the basis of its own reasoned analysis. Part VII. One-Year Time Limit on Remand This controversy has lasted a very long time. Since 1990, litigation related to this controversy has taken place in the Northern District of Alabama, the District Court for the District of Columbia, the Northern District of Georgia, the Northern District of Florida, the Middle District of Florida, the District of Columbia Circuit, and now five times in the Eleventh Circuit, and various attempts at compromise have been initiated and abandoned. Progress towards a determination of the Buford Dam’s future operations is of the utmost importance to the millions of power customers and water users that are affected by the operations of the project. The stakes are extremely high, and all parties are entitled to a prompt resolution. Accordingly, the process for arriving at a conclusion of the bounds of the Corps’ authority should be as swift as possible without sacrificing thoroughness and thoughtfulness. Given the importance of this case, the length of time it has been 93 bouncing around the federal courts, and the amount of resources the parties and the courts have already expended, we believe that one year is sufficient for the Corps to complete its analysis of its water supply authority and release its conclusions. This panel will retain limited jurisdiction to monitor compliance with this time frame. At the end of this one-year period, we expect the Corps to have arrived at a wellreasoned, definitive, and final judgment as to its authority under the RHA and the WSA.