Opinion ID: 185323
Heading Depth: 2
Heading Rank: 1

Heading: FPA S 4(e)

Text: 8 This Court reviews FERC's orders--including conditions prescribed by agencies pursuant to FPA S 4(e)--under the Administrative Procedure Act (APA), 5 U.S.C. S 551 et seq. (1994), which obliges us to reverse any agency action that is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. Id. S 706(2)(A); see Sithe/Independence Power Partners v. FERC, 165 F.3d 944, 948 (D.C. Cir. 1998). As pertinent here, the APA's prohibition on arbitrary and capricious agency action requires us to decide whether FERC correctly concluded that the lands flooded by WVIC's reservoir are part of a reservation of the United States within the meaning of the FPA.
9 WVIC argues that FERC cannot impose the conditions submitted by the agencies under S 4(e) as the facts of the present licensing procedure do not come within the rationale of that section. As petitioner views it, the mandatory conditioning authority under that section, giving as it does carte blanche authority to impose conditions on projects located within federal reservations, see Escondido Mut. Water Co. v. La Jolla Band of Mission Indians, 466 U.S. 765 (1984), could not have been intended to provide that sort of authority to otherwise uninvolved agencies over the regulation of license projects no more connected to reservation land than WVIC is to the lands under consideration. WVIC argues that its project cannot be within the relevant reservations because [t]he Agencies have no protectable property interests that conflict with WVIC's prescriptive water rights, and its operation of the Reservoir does not depend on the use or occupancy of any federal property right. Petitioner's brief at 11. That is a non sequitur. 10 The question whether WVIC owns flowage easements over the lands is irrelevant to whether the lands themselves are part of a federal reservation. As we stated above, the FPA defines the term reservation to include national forest, tribal lands embraced within Indian reservations, military reservations, and other lands and interests in lands owned by the United States, and withdrawn, reserved, or withheld from private appropriation and disposal under the public land laws; also lands and interests in lands acquired and held for any public purposes; ... not includ[ing] national monuments or national parks. 16 U.S.C. S 796(2) (emphases added). By the terms of the statute, the United States need not even hold land in fee simple absolute for it to operate a reservation. It is enough that the government own an interest in the land. See Escondido, 466 U.S. at 781 (There is no doubt that 'reservations' include 'interests in lands owned by the United States....' ). And on the record before us, there can be no dispute that the United States owns at least an interest in the lands flooded by WVIC's reservoir, perhaps even the fee simple, whether or not subject to a prescriptive easement by WVIC. 11 Indeed, FERC consistently has affirmed its jurisdiction over land that the federal government owns subject to a citizen's easement. In South Carolina Elec. & Gas Co., 75 FERC p 61,308 n.9 (1996), FERC reasoned that even if we assume that SCE&G holds the easements it describes, that fact does not make the land in questionany less a reservation for purposes of section 4(e) of the FPA, since the term ['reservation'] is not limited to fee title. And in Town of Estes Park, 75 FERC p 61,245 (1996), the Commission concluded that if the federal government holds fee title to certain lands, the lands qualify as lands owned by the United States for FPA purposes, even if someone else has a continuing right to use them pursuant to an easement. 12 But while the question of whether WVIC holds flowage easements is immaterial to the lands' status as federal reservations, it remains quite relevant to the possibility that FERC's licensing order has taken the company's property in violation of the Fifth Amendment. See U.S. Const. amend. V ([N]or shall private property be taken for public use without just compensation.). If WVIC does indeed own easements to flow the agencies' lands, and if FERC's order has prevented it from using its property rights, the government may well have affected an unconstitutional taking. See National Wildlife Federation v. ICC, 850 F.2d 694, 703 (D.C. Cir. 1988) (recognizing that property rights in easements do implicate the takings clause); cf. Nollan v. California Coastal Comm'n, 483 U.S. 825, 831 (1987): 13 Had California simply required the Nollans to make an easement across their beachfront available to the public on a permanent basis in order to increase public access to the beach ... we have no doubt there would have been a taking. To say that the appropriation of a public easement across a landowner's premises does not constitute the taking of a property interest but rather ... a mere restriction on its use, is to use words in a manner that deprives them of all their ordinary meaning. 14 (citation omitted). 15 Both FERC and the agencies deny that WVIC has any cognizable property interest in the flooded lands, and repeatedly insist that the company has not demonstrated that it owns any recorded easements. Quite the contrary, they point out, for the government has introduced evidence that only 7.63% of the total quantified National Forest System land within the Project is burdened with recorded flowage rights. Intervenors' brief at 14 n.5 (emphasis added); see also Respondent's brief at 16. 16 Of course, formal recordation is only one way--not, crucially, the exclusive way--by which a party in Wisconsin or Michigan may establish a flowage easement. Rather, both jurisdictions recognize that one may obtain an easement to flow water over another's land through prescription. See, e.g., Chippewa & Flambeau Improvement Co. v. R.R. Comm'n, 159 N.W. 739, 745 (Wis. 1916); Cook v. Grand River Hydroelectric Power Co., 346 N.W.2d 881, 884 (Mich. Ct. App. 1984). WVIC's inability to point to recorded flowage easements is hardly the fatal flaw FERC takes it to be. Respondent's brief at 20. 17 But while WVIC may be able to advance a colorable Takings-Clause claim, it is not within our jurisdiction to adjudicate it. It is fixed law that, [i]f there is a taking, and a claim for just compensation, then that is a Tucker Act matter to be pursued in the Court of Federal Claims, and not before us. Transmission Access Policy Study Group v. FERC, 225 F.3d 667, 690 (D.C. Cir. 2000). So far as the underlying questions of which property interests are owned by which parties, neither FERC nor this Court have jurisdiction to try title. Either the state courts or the United States District Court of appropriate jurisdiction acting pursuant to the Quiet Title Act, 28 U.S.C. § 2409a (1994), could adjudicate the factual questions such as whether WVIC's operations have been sufficient to give rise to prescriptive easements, and apply the appropriate law. If WVIC proves successful in its title actions, it could potentially pursue a takings claim in the Court of Federal Claims, which has exclusive jurisdiction over such actions. 28 U.S.C. S 1491 (1994). None of this, however, prevents either FERC or this Court on review from applying the conditions sought by the affected agencies. We therefore cannot grant a petition for review on that basis.
18 Slightly more complicated than whether FERC has authority under S 4(e) to impose license conditions, is the extent of that authority. The parties dispute whether the FPA--under which FERC must attach license conditions to projects located within any reservation of the United States, 16 U.S.C. S 797(e) (1994) (emphasis added)--permits FERC to prescribe conditions with respect to the entire Lac Vieux Desert project, or only as to those portions of the project that actually occupy reservation lands. The agencies propose that the government's section 4(e) conditioning authority applies to the license, and therefore to all of the project works covered by that license, so long as ... part of the licensed project is within the reservation. Intervenors' brief at 18 (emphasis added). WVIC responds with what it supposes is a reductio ad absurdum, and points out that the agencies' interpretation would permit FERC to impose project-wide license conditions if any portion of the project touches a reservation (even if the overlap is the size of a postage stamp). 19 We need not, however, decide the precise scope of the government's power to prescribe conditions for projects located within reservations. Rather, we resolve this issue on the narrow ground that on the facts of this case it would be impossible to attach a condition as to the reservation lands without simultaneously imposing it with respect to the entire project. As FERC points out, there simply is no way to require WVIC to reduce the water level of Lac Vieux Desert only over federal lands. A lake can have only one level. See Respondent's brief at 32 n.8 (As the condition imposes maximum water levels on the entire project reservoir, it is unclear how WVIC could be required to limit the maximum water level on only those portions of the project reservoir occupying the reservations, without affecting the water level throughout the project reservoir.). WVIC does not dispute that FERC could not reduce the level of the water that overflows the reservation lands without lowering the entire reservoir, and we therefore find that its order requiring WVIC to do so was not arbitrary and capricious. 20 Besides requiring WVIC to reduce the water level at Lac Vieux Desert, FERC's wild rice enhancement plan further calls for the company to fund the agencies' efforts to plant wild rice. Unlike changes in water level, it is possible to confine rice-planting to the federally owned reservations. Hence the rationale that permits the reduction of the reservoir's water level over non-reservation lands--that the government cannot lower the water over reservation lands without doing so as to the entire reservoir--would not justify a requirement that rice be planted on non-reservation lands. But it appears that the agencies have imposed no such condition. FERC's order calls for rice to be planted, not throughout the Lac Vieux Desert reservoir, but only on reservation lands--for example at Misery Bay and the suitably-named Rice Bay, both of which are on Forest Service or Indian Reservation land. See Final Environmental Impact Statement at 4-76 to 4-77 (June 1996). In any event, FERC explains, it is clear that the planned wild rice seeding is to occur on both the Indian and Forest Service reservations, and FERC has given no indication that it will require the planting of rice on non-reservation lands. Wisconsin Valley Improvement Co., 76 FERC p 61,050, 61,227 (1996).
21 In sum, FERC has the authority to attach conditions to WVIC's license to operate a project at Lac Vieux Desert, because the agencies own at least an interest in the lands flowed by the reservoir. The lands therefore are part of a reservation within the meaning of FPA S 4(e). FERC's S 4(e) authority extends to areas outside the reservation's geographic boundaries, because it is impossible to lower the water level over the federal lands without reducing the entire reservoir. 22