Opinion ID: 433508
Heading Depth: 2
Heading Rank: 2

Heading: FERC's Refusal to Follow the Act's Clear Language

Text: 29 FERC's decision not to send written notice to NCWCD was not the result of any specific determination regarding NCWCD's status under the Act. Instead, FERC asserts that, pursuant to a reasonable and consistently followed interpretation of Section 4(f), it has never given written notice to irrigation district[s], drainage district[s], or similarly specialized political entities. FERC's interpretation of Section 4(f), we are told, has always been that the provision required no more than the procedure described by the Commission's Executive Secretary in 1921, when he appeared as a witness before the House Select Committee on Water Power: 30 We advertise in a newspaper, the newspaper with the largest circulation in every county affected by the project. We notify by letter the governor of the State and the head of every State department that is interested in waterpower development. We notify authorities and the mayor of any municipality in reach of the project. 31 Proposed Amendments to the Federal Water-Power Act: Hearing Before the Select Committee on Water Power of the House of Representatives on H.R. 14469, H.R. 14760, and H.R. 15126, 66th Cong., 3d Sess. 89 (1921) (statement of O.C. Merrill, Executive Secretary, Federal Power Commission). FERC argues that Mr. Merrill's statement should be treated as a contemporaneous agency interpretation of the statute, and FERC asserts that it has consistently followed Mr. Merrill's interpretation. FERC also explains that [i]n referring to mayors, Mr. Merrill thus drew a distinction between governments on the local level which typically have mayors (e.g., towns, cities, and villages) and those which typically do not (e.g., water authorities, drainage districts, irrigation districts). Only the former group received written notice. Brief for respondent at 21. The latter group, in FERC's view, would have to rely on the newspaper notices or the Federal Register notice. 32 FERC supports its position by citing to the general proposition that considerable respect is due the interpretation given [a] statute by the officers or agency charged with its administration. Brief for respondent at 19, quoting Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 566, 100 S.Ct. 790, 797, 63 L.Ed.2d 22 (1980) (internal quotation marks and citations omitted). As FERC argues, a consistent and longstanding interpretation by the agency charged with administration of the Act, while not controlling, is entitled to considerable weight. Brief for respondent at 20, quoting United States v. Nat'l Ass'n of Securities Dealers, 422 U.S. 694, 719, 95 S.Ct. 2427, 2442, 45 L.Ed.2d 486 (1975). For a number of reasons, however, this well established principle of administrative law cannot validate what the Commission has done. 33 We stated in Obremski v. OPM, 699 F.2d 1263, 1269 (D.C.Cir.1983), that the limit placed on the judicial role by an agency's interpretation of a statute assumes an adequately articulated administrative decision interpreting the relevant statutory law within a range of reasonableness. FERC's interpretation of Section 4(f) fails both for its unreasonableness in light of the statutory language and legislative history and for the inadequacy of its articulation by the Commission. 34
35 The Supreme Court has stated: [T]he starting point for interpreting a statute is the language of the statute itself. Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive. Consumer Product Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980). In this case the statute first provides that the Commission shall at once give notice of [a preliminary permit] application in writing to any State or municipality likely to be interested in or affected by such application[.] 16 U.S.C. Sec. 797(f) (1982). Second, it defines municipality as a city, county, irrigation district, drainage district, or other political subdivision or agency of a State competent under the laws thereof to carry on the business of developing, transmitting, utilizing, or distributing power. Id. Sec. 796(7). 36 The statutory definition of municipality thus expressly includes those entities that FERC now contends it can expressly exclude in interpreting the notice provision. Moreover, although a requirement of written notice is generally understood to mean personal notice, see NLRB v. Vapor Recovery Systems Co., 311 F.2d 782, 785 (9th Cir.1962), FERC argues that certain types of municipalities should have to rely on general public newspaper and Federal Register notices, even though the statute specifically states that they are entitled to notice[s]    in writing. In addition, although the statute is unambiguous and, using the word shall, is written in the language of command[,] Ass'n of American Railroads v. Costle, 562 F.2d 1310, 1312 (D.C.Cir.1977), FERC views itself as free to exercise broad flexibility in deciding what meets its obligation to Congress. 37
38 The statute says shall, but FERC argues that two statements from the brief House of Representatives debate on the provision show that great flexibility was intended. FERC first cites to a statement made by Representative Sinnott, the provision's sponsor. Responding to a suggestion that the Commission be required in each permit proceeding to demand proof that proper notices were mailed and published, Representative Sinnott stated that he did not want things to become too complicated, that he preferred that the provision be directory rather than jurisdictional, and that the matter should rest with the Commission. 56 Cong.Rec. 9763 (August 30, 1918). FERC's second citation is to a comment by Representative McLaughlin, who criticized the proposed provision by arguing that to require notice to the counties interested or affected by a project would present problems because [i]t would be difficult for anyone at the beginning of a project to know what counties are affected or may later be affected. Id. 39 For a number of reasons these quotes from legislative floor debate do not persuade us to deviate from the statute's clear language. Neither statement is unambiguous. Representative Sinnott was responding to a suggestion that the Commission, in its proceedings, should, as a jurisdictional prerequisite, have to demand and receive proof that proper notices were sent. The discussion may thus have only concerned the issue of whether proof of the notices should be required; it was not necessarily concerned with whether the sending of the notices should be required. Similarly, Representative McLaughlin's complaint, which was never directly answered or discussed, may have been directed at the newspaper publication requirement as contained in the initial proposal. Indeed, an amendment on that subject was immediately offered and adopted. 9 40 In any case, the significance of such comments from legislative floor debates is limited, not only because of such clear statutory language, but also because [t]he remarks of a single legislator, even the sponsor, are not controlling in analyzing legislative history. [Even the sponsor's] statement must be considered with the Reports of both Houses and the statements of other Congressmen. Chrysler Corp. v. Brown, 441 U.S. 281, 311, 99 S.Ct. 1705, 1722, 60 L.Ed.2d 208 (1979). 41 In this case material from the Conference Report supports the statute's plain meaning. One difference between the Senate and House versions of the Federal Power Bill was over whether public notice and notice to government entities should be provided when there were license applications. The Conference Report spoke in the language of command. It stated that the final bill provides that upon the filing of any application for a license which has not been preceded by a preliminary permit under [16 U.S.C. Sec. 797(f) (1982) ], notice shall be given and published as required by the proviso of said subsection. H.R.Conf.Rep. No. 910, 66th Cong., 2d Sess. 8 (1920) (emphasis added). Statements in a conference report, because commended to the entire Congress, carry greater weight than comments from floor debates by individual legislators. See American Jewish Congress v. Kreps, 574 F.2d 624, 629 n. 36 (D.C.Cir.1978); see also Vitrano v. Marshall, 504 F.Supp. 1381, 1383 (D.D.C.1981) (Perhaps the most useful document illuminating Congressional purpose is a Conference Report which bears on the final draft that is used by the conferees in explaining to the entire Congress why the bill should pass.). 42 Although there are very few comments on the notice provision in the general legislative debate, at least one supports the clear meaning of the language and the interpretation of the Conference Report. Senator Phipps, concerned that the bill gave too much preference to municipalities, made clear that his understanding was that the provision was a mandatory directive to the Commission. See 59 Cong.Rec. 1173 (January 7, 1920) (it is not only the privilege but the duty of the commission in case of a filing to call the attention of a municipality which might be interested therein to that filing). No one disputed this understanding. 43
44 Just as we must reject FERC's reliance on legislative history to justify its practice with respect to the municipal notice provision, we must also reject its assertion that the 1921 comment by the Commission's Executive Secretary while testifying to a House committee amounted to the type of contemporaneously articulated and consistently followed agency interpretation to which we would owe deference. It has long been accepted that an important factor to be considered in giving weight to an agency's interpretation of the statute it enforces is the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all of those factors which give it power to persuade, if lacking power to control. Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 164, 89 L.Ed. 124 (1944). Where the agency has shown little evidence of the reasoning that went into its contemporaneous position, that position has been accorded little deference. See Adamo Wrecking Co. v. United States, 434 U.S. 275, 287 n. 5, 98 S.Ct. 566, 573 n. 5, 54 L.Ed.2d 538 (1978). Here, not only is there no reasoning contained in the statement offered by the agency as its contemporaneous understanding of the statute, there is no clear evidence of the statement's meaning, its completeness, or even its status as an authoritative construction of the statute in the view of the agency or, indeed, in the view of the official who made it. In fact, the Commission has not even been able to show this court any evidence that it has so much as referred to this statement, much less relied on it as policy, at any point in the more than 60 years since the statement was made. 45 The 1921 statement contained no reasoned interpretation, or even a mention, of the statute's notice provision. It was a brief and general, matter-of-fact description of then-current agency practice. The reason for the statement's brevity and generality is clear from the statement's context. The hearing was simply not focused on the Commission's interpretation of the statute's particular parts. It was concerned with the personnel needs of the Commission and with the question of how extensive the Commission's authority to hire personnel should be. Specifically, the hearing was on a bill to authorize the Commission to hire personnel for the first time. The statement cited as authoritative by the Commission was in response to a general question that was directly concerned with neither the notice provision nor the Commission's personnel needs; it was concerned with whether the Commission had sufficient statutory power to conduct permit and license hearings and to open them to all interested parties. The statement was simply a part of a short answer that generally described the Commission's thencurrent practices. 10 Such a statement was not likely to have been intended or understood as an authoritative construction of a statute's meaning, nor could it serve as such. Cf. SEC v. Sloan, 436 U.S. 103, 117-119, 98 S.Ct. 1702, 1711-1712, 56 L.Ed.2d 148 (1978); Adamo Wrecking Co. v. United States, supra, 434 U.S. at 287 n.5, 98 S.Ct. at 574 n. 5; Robzen's Inc. v. U.S. Dep't of Housing, 515 F.Supp. 228, 235 n. 12 (M.D.Pa.1981). 46 Even if we were willing to view the statement by Executive Secretary Merrill as an authoritative statement of the Commission's contemporaneous understanding of its statutory responsibility, the statement would not necessarily help FERC's position. Apart from the fact that FERC seems never to have publicly stated its subsequent adherence to the statement, 11 the statement itself is unclear and easily understood as far more in conformity with the statute's plain meaning than is FERC's present position. Merrill stated that he sent letters to the head of every State department that is interested in water power development, a vague classification that would not obviously exclude specialized municipalities like NCWCD. Whatever the Commission practice may have been, Merrill's statement of that practice revealed nothing approximating the Commission's current cavalier willingness to ignore the statute's terms. 47
48 FERC's other argument that relies on the Merrill statement can similarly be rejected. FERC argues that the statement put Congress on notice of the Commission's interpretation and thus Congress, by not amending the statute, acquiesced in that interpretation. See brief for respondent at 21. This theory is unpersuasive for all the reasons discussed above, and also because there is no reason to believe that Congress was generally aware of the statement. The Supreme Court has said: We are extremely hesitant to presume general congressional awareness of the Commission's construction based only upon a few isolated statements. SEC v. Sloan, supra, 436 U.S. at 121, 98 S.Ct. at 1713. And the Sloan statement was made in a case where the argument for congressional knowledge and approval was somewhat better than it is here. In Sloan a congressional committee had apparently recognized and approved of the commission practice at issue. See id. at 119-120, 98 S.Ct. at 1712-1713. 49 5. The Merrill statement's inadequacy as a reasonable rule of procedure necessitated by practical considerations. 50 FERC's last argument is somewhat different. The Commission argues that practical considerations of limited resources and administrative feasibility require that the agency be given the latitude necessary to pursue the statutory scheme. In effect, it argues that strict adherence to the statute's language would be administratively impossible. 51 [N]otice to municipalities is an area which necessarily requires administrative flexibility. For example, in administering the statute, even with regard to cities and towns, the Commission must define what constitutes a potentially interested or affected municipality, language which on its face may include [a] large number of governmental units.    52 Brief for respondent at 21-22. Given this need for flexibility, FERC contends, its practice of failing to notify specialized municipalities is reasonable: 53 There exist in the United States an estimated 50,000 specialized local governmental units performing a myriad of services. Unlike states, counties and cities, many of these governments, such as water, utility or drainage districts, are not readily identifiable. 54 Id. at 22. 55 Although we sympathize with FERC's practical concerns, we must reject its contention that those concerns can justify the Commission's practices. Any administrative approach developed would have to be adequately articulated and within a range of reasonableness with respect to Congress' instruction. Cf. Obremski v. OPM, supra, 699 F.2d at 1269. We have already discussed the unreasonableness of current FERC practices in relation to Congress' language and goal, and the inadequacy of the Merrill statement as an interpretation of congressional intent. When offered as a rule of administrative practice demanded by practical necessity, the statement suffers from the same flaws as well as an additional deficiency. [I]n such a case the agency must, at a minimum, let the standard be generally known so as to avoid both the reality and the appearance of arbitrar[iness]. Morton v. Ruiz, 415 U.S. 199, 231, 94 S.Ct. 1055, 1072, 39 L.Ed.2d 270 (1974). Those relying on the procedures set out in a statute have a right to know that those procedures are being given less than their clear meaning. Here, FERC seems never to have made a public statement that clearly purports to explain its notice policies. 12 56