Document: 461 U.S. 375 103 S.Ct. 1905 76 L.Ed.2d 1 ARKANSAS ELECTRIC COOPERATIVE CORPORATION, Appellantv.ARKANSAS PUBLIC SERVICE COMMISSION. No. 81-731. Argued Jan. 17, 1983. Decided May 16, Syllabus Appellant is a customer-owned rural power cooperative established with loan funds and technical assistance provided by the federal Rural Electrification Administration (REA), but unlike most such cooperatives, which provide directly to consumers, appellant's sole members primary customers are 17 smaller Arkansas cooperatives in turn serve ultimate consumer. Although tied into an interstate "grid" arrangement other producers, appellant obtains of its energy from plants located Arkansas, it wholly or partially owns, sells what generates member cooperatives. Appellee Public Service Commission entered order asserting jurisdiction over wholesale rates charged concluding that state regulation was neither forbidden Utilities Comm'n v. Attleboro Steam & Electric Co., 273 83, 47 294, 71 L.Ed. 54—which held while consistent Commerce Clause States could regulate retail sales electricity, they not sales—nor pre-empted Federal Power Act 1936. On review, Pulaski County Circuit Court set aside appellee's order, Supreme reversed. Held: 1. Appellee's assertion does offend Supremacy Constitution. Pp. 383-389. (a) Neither nor administrative actions taken thereunder pre-empt regulation. The determined 1967 did have under supervision REA, decision based on Commission's conclusion relevant statutes gave REA exclusive authority among agencies that, as matter policy, engaged for resale should be left unregulated. 383-385. (b) expressly rate financed legislative history establishes although expected assist fledgling setting their structures, would do so within constraints existing regulatory schemes. In addition, REA's present policy inconsistent pre-emption rates. 385-389. 2. Clause. 389-395. If mechanical wholesale/retail test articulated Attleboro, supra, were applied here, require jurisdiction. However, general trend this Court's modern jurisprudence look every case nature involved, State's objective, effect upon national interest commerce jurisprudence, rather than line drawn must govern here. 389-393. "Where [a] statute regulates evenhandedly effectuate legitimate local public interest, effects only incidental, will upheld unless burden imposed clearly excessive relation putative benefits" Pike Bruce Church, Inc., 397 137, 142, 90 844, 847, 25 174. Economic protectionism implicated well scope "legitimate interests," particularly considering grid, basic operation consists supplying generating facilities State all State. incidental commerce, "the benefits." 1393-395. Ark. 170, 618 S.W.2d 151, affirmed. Robert D. Cabe, Little Rock, Ark., appellant. Jeff Broadwater, appellee. Justice BRENNAN delivered opinion Court. This appeal requires us decide whether (PSC) acted contrary Constitution when asserted Cooperative Corporation (AECC) distributors, whom PSC's We affirm. 2 * Maintaining proper balance between electric utilities has long been serious challenge both judicial congressional wisdom. one hand, important functions traditionally associated police States. See Munn Illinois, 94 113, 24 77 (1877). production transmission activity likely affect more State, often significant enough uncontrolled can patently interfere broader interests. FERC Mississippi, 456 742, 755-757, 102 2126, 2135-2136, 72 532 (1982); New England Co. Hampshire, 455 331, 339, 1096, 1100, 188 (1982). 3 dilemma came sharp focus early century series cases construing restrictions sale natural gas. Our solution fashion bright dividing permissible impermissible Missouri Kansas Gas 265 298, 309, 44 544, 546, 68 1027 (1924); Landon, 249 236, 39 268, 63 577 (1919); cf. Pennsylvania Comm'n, 252 23, 40 279, 64 434 (1920). Simply put, doctrine these gas subject regulation, "even though brought another distribution mains; made transporting company independent distributing companies," U.S., at S.Ct., even some being sold produced rationale "[t]ransportation commerce; delivery companies part commerce," id., 307, 545, "[w]ith . movement ends" further "effect if there any, indirect incidental," 308, 546. also, e.g., Witchita 290 561, 563-564, 54 321, 322-323, 78 500 (1934); East Ohio Tax 283 465, 470-471, 51 499, 500-501, 75 1171 (1931). 4 Landon Elec. (1927). involved attempt Rhode Island Narragansett Lighting Company—a utility sell current Massachusetts distributor. struck down holding because transaction wholesale, "direct" "indirect" commerce. doing we immaterial "that business Company appears chiefly local," 90, 296, commission grounded need facilitate company's customers. 5 As direct result predecessor cases, Congress undertook establish transactions created (FPC) (now Energy Regulatory Commission) carry out task. 1935 (Tit. II Utility 1935), 49 Stat. 803, 838-863; Natural 1938, 52 821.1 main purpose legislation "fill gap" predecessors, see 340, 1101; United California, 345 295, 311, 73 706, 715, 97 L.Ed.1020 (1953), nevertheless shifted focus—in determining utilities—from constitutional issues concerned analyses intent.2 For example, Illinois 314 498, 62 384, 86 371 (1942), required determine pipeline corporation distributors Commission. began our analysis describing City, cases. then noted cases—relating issues—in "less find point time space where ends intrastate begins, looked [instead] objective state, commerce." 505, 387. stated: 6 "In absence any controlling act Congress, now faced question transported balanced against control aspect, reliable touchstone ascertaining distinctions appellee relies." Id., 506, 7 concluded, however, "under no necessity making choice here," ibid., partly avoid "drawing precise litigation particular cases," 507, 388, had adopted "mechanical" City statutory jurisdiction.3 8 reaffirmed subsequent extended similar jurisdictional disputes arising Act. See, Panhandle Eastern Pipe Line 332 517, 190, 195, 92 128 (1947) ("The clear complete. It cut sharply cleanly consumptive uses."); 714 ("Congress interpreted [Attleboro] prohibiting resale, armed precisely power.") (footnote omitted); FPC Southern California Edison 376 205, 84 644, 11 638 (1964). last noteworthy purposes held, things, test, received out-of-State electricity municipality resold bulk others. also Florida Light 404 453, 637, 30 600 (1972). 9 AECC large number (REA) bring parts country adequately served commercial companies. generally 1936, 1363, U.S.C. §§ 901 et seq. (1976 ed., Supp. V). Unlike individual consumers. Rather, who governed Board Directors consisting 34 persons, two designated each Among duties board AECC. 10 owns. Moreover, Like utilities, participates variety exchange arrangements buying own excess capacity high, selling opposite case. By virtue arrangements, ultimately multi-company multi-state "grid," and, is, (1972), difficult say confidence provides moment originated entirely AECC's regulated PSC. cooperative, charges would, scheme described I, exclusively § 201(b) Act, 838, amended, 16 824(b) V); Company, (1964); supra. 1967, REA. Dairyland Cooperative, 37 F.P.C. 12, 67 P.U.R.3d 340.4 Thus, until proceedings culminated case, subject, either level, type pervasive almost universally country.5 12 1979, after hearings, PSC same authorize electricity. App. 52-53; Ark.Stat.Ann. 73-201(a), 73-202(a), 73-202.1 (Repl.1979). response objections raised AECC, reversed 151 (1981). probable 457 ----, 2954, 1347 13 brief merits, presses arguments rejected PSC.6 consider argument first. III 14 principles governing law known. Fidelity Savings Loan Assn. de la Cuesta, 458 3014, 664 Jones Rath Packing 430 519, 525-526, 1305, 1309-1310, 604 (1977). possible pre-emptive acts pursuant them: A. 15 discuss 381,382 cooperatives.7 That dispose possibility pre-empts forgo given area may imply authoritative determination best unregulated, event much force regulate. NLRB Nash-Finch 138, 144, 373, 377, 328 (1971); 3022. nothing language, history, suggests conclusion. Congress's fill gap, perpetuate one.8 FPC's refusal assert suggest anything contrary. decision, simply purely matter, F.P.C., 26, P.U.R.3d, 352-354. unregulated.9 Indeed, published concluded specifically urging amend grant least activities utilities. 28, 355. therefore bar itself decision. B Nothing Nevertheless, certain amici, including States, argue interferes involvement management loans funds, frustrate expresses position brief: "The terms conditions generation association [such AECC] borrower's structure approved just inception, throughout term loan. And passing questions, considers, security thus afforded payment loan, suitability Act's underlying facilitating availability cheap America. 18 19 spectre poses threat refuse permit pay agreed issued. behind stake. [T]he always encouraged borrowers affordable suscribers. way, costs shared manner which, run, benefits creation sound, extensive system. insist restructuring association's structure, policies undermined." Brief 12-13. 20 admit, lending agency classic body mold might interesting how define relationship requirements authorities. examine issue level abstraction, quite specific indications intent before us. Cf. 21 First, makes abundantly play role assisting schemes.10 80 Cong.Rec. 5316 (1936) (Rep. Lea); Hearing S. 3483 House Committee Interstate Foreign Commerce, 74th Cong., 2d Sess., 30, 37, 51, (1936). Admittedly, record focuses respect concerns amici pressed support pre-emption, discern difference rates: types implicate Government's securing loans, anything, assuring households receive reasonable price.11 22 Second, dealing obtain agency's approval whenever modify rates,12 document guidelines constitutes states: "Borrowers must, course, submit proposed changes commissions having seek prescribed those commissions." Bulletin 111-4, 1-2 (1972).13 Since 111-4 issued Dairyland, "regulatory jurisdiction" refers PSC.14 worth noting rates, 111-2 112-1, 1, (1979), never contended pre-empted, 111-2, 5; 11.15 23 There come announces policy. happen, rule valid course exercise Ray Atlantic Richfield 435 171-172, 98 988, 1001, 55 179 (1978); 3022; Free Bland, 369 663, 668, 82 1089, 1093, 180 (1962). Similarly, already recognizes, 73-202.3 (Repl.1979), make affecting conflicts regulations promulgated without explicit statement seriously compromise interests, ability repay implicitly 540-543, 1317-1318; Rice Santa Fe Elevator Corp., 331 218, 231-232, 1146, 1152-1153, 91 1447 (1947). not, facial mere jurisdiction, assume hypothetical occur preclude all. Exxon Corp. Governor Maryland, 437 117, 130-131, 2207, 2216, 57 (1978). Merrill Lynch, Pierce, Fenner Smith Ware, 414 136-140, 383, 394-396, 38 348 (1973). IV Even legislation, contains implied limitation impose burdens Western Life Insurance Equalization, 451 648, 652, 101 2070, 2074, 514 (1981) omitted). since like transmitted commerce.16 pointed Gas, 378-380, square supposedly division 174 (1970). usually, always, latitude categorical approach example. But event, "an infinite matters operate [interstate] [and] reconciliation attained appraisal accommodation competing demands interests involved." Pacific Arizona ex rel. Sullivan, 325 761, 768-769, 65 1515, 1519-1520, 89 1915 (1945). Minnesota Clover Leaf Creamery 449 456, 66 659 (1981); 847; Parker Brown, 317 341, 362-363, 319, 87 315 (1943). faced, then, open Gas: Do follow balance-of-interests roughly past 45 years? Of principle stare decisis counsels us, here elsewhere, lightly guidance sort Attleboro. consistency somewhat caution deliberation, interpretation time. recent years, explicitly abandoned formalistic distinctions—akin Attleboro—which once defined controlled various corners doctrine. Commonwealth Montana, 453 609, 2946, 69 884 (abandoning constitutionality severance tax depended goods prior entry commerce); Hughes Oklahoma, 441 322, 99 1727, 60 250 (1979) (rejecting rule, legal fiction ownership, absolute disposition wild animals borders); Washington Revenue Dept. Stevedoring Association, 734, 1388, 682 (1978) stevedoring automatically constituted Michelin Tire Wages, 423 276, 96 535, 46 495 (1976) (overruling "original package" Import-Export doctrine). 26 less anachronistic rules cited occasion, 1930s, apply reject statute. difficulty harmonizing apparent time, expressed skepticism about continuing soundness constitutional, statutory, Gas. review related contexts treated special province insulated jurisprudence. Michigan 341 329, 336-337, 777, 781, 95 L.Ed 993 (1951). Finally, strong reliance threatened rejection today Therefore, few contexts, shifts party defending show why 27 essentially arguments, oral argument, contends import decided 1964. claim wrong. interpret agnosticism spelled length 214, 650. 28 argues "[t]he admittedly power, court arrived careful consideration importance opposed be, therefore, states," Tr. Oral Arg. 11, happened changed implicit balance. contention unpersuasive. assume—as necessarily 390—that substantive motivating strike identical considerations explain different facts n. Bright lines necessary many areas law, law. draws respective jurisdictions agencies. good reason unexercised justifiable negative implications 29 predecessors means atrocities, plainly wrong decided. first place, insignificant, apart III, day spoken breadth Duckworth 390, 400, 316, 294 (1941) (Jackson, J., concurring result). 1927 safeguarding wide range Under circumstances, drawing fairly restrictive considerable sense. drew perfect, undoubtedly lead results present-day mind problematic respects, healthy counterweight otherwise too-easy dilution guarantees contained longer thought standard proceed instead undertake solidly examples now-classic South Carolina Highway Barnwell Bros., 303 177, 58 510, 734 (1938), (1941). One reformulation found supra: 31 benefits. found, becomes degree. extent tolerated depend promoted lesser impact activities." 847 (citation 32 Applying Church relatively simple. concern identified economic protectionism—is Compare Philadelphia Jersey, 617, 2531, 475 (1978), 471-472, 727-728, 473, 728, 17. 33 An representatives customers, effectively self-regulating, supported appreciable interest. Salt River Project Agricultural Improvement District FPC, 129 U.S.App.D.C. 120, 391 F.2d 470, 473 (1968). evidence engage economically inefficient behavior, R. Schmalensee, Control Monopolies 91-93 sources cited, circumstances second-guess judgment degree governmental oversight warranted. 469, 726, 728; 128, 2215.17 recognize convinced Part out-of-State. true fabric seem disturbed leaving largely prices price grid part. But, again, distinguish inconceivable unreasonable disturb appreciably market power. said discussion issue, 389, willing allow 128-129, 2215. V 35 record, offends 36 Affirmed. WHITE, THE CHIEF JUSTICE joins, dissenting. I respectfully dissent. believe preempted occupied field Several years expansion invalidated repugnant attempts demarking "Attleboro declared Commission, 304, 712, 1020 (1953). Had generated across lines, foreclosed interference questioned. Nor sensible cooperative's became later subjected previously Quite true. surely familiar, re Rahrer, 140 865, 572 (1891); Clark Distilling Maryland 242 180, 61 326 (1917)1, authorized chose so. 1101, (1982) ("[n]othing language [16 ] evinces Congressional 'to alter limit Clause,' earlier holdings concerning limits restrain trade"). Instead enacted Parts 824 seq., (and 821, 717 1938) adopting bright-line demarkation, wholesale. 824d. broadly. 824(e).2 Nowhere indication way expanded beyond permitted "What adopt developed [of cases] denied 'sale companies.' " Edison, uses. No exceptions category uses, quantities otherwise." 41 affirmatively entities, giving freeing entities quasi-governmental nature. options leaves room (except arms political subdivisions), gives latter viewed "best un regulated", ante 384. 42 passed petitioner authority, exempted conferred Coop., (1967).3 cooperatives' unregulated reach immediately passage sought adhered wholesale-retail boundary authority. thereby occupying regulation.4 43 claims view (or somehow expected) points statements comply states possessed authorization. opines From premises infers authorized, very expected, barred engaging in. premises, indicate departing embrace regulating second source allows appearing bulletin. basically instructs borrower orders orders. supposed express "policy [that] preemption Ante, misplaced. silence point, isolated reference bulletin persuasive Administration's position. intended depart doubt purport odds advising am persuaded understanding free prices. commissions. situation honor rates.5 Given 48-year period manifested belief furthered negate abide hold, preemption, absent cooperatives.6 (1964), discussions history. cf., trace development statutes, except today. Appeals Columbia reached 470 7, infra. infra, 385-388, note 394, owned managed principal self-regulating. advanced properly pure offer separate ground reversal. Only amicus curiae, relied strongly devote attention merits. enforcement close come, barest margins, "subsidiary question[s] included" appeal. Rule 15.1(a); Brown Socialist Workers '74 Campaign Committee, 459 9, 416, 421, 74 Arnold, Schwinn 388 365, 371, 4, 1856, 1861, 1249 (1967). Vance Terrazas, 444 252, 258, 5, 100 540, (1980). A serious, jurisdictional, problem counsel's PSC, 8. turns out, raised, half-heartedly, petition Court, Record 104, 80-313 (Ark.), pp. 16-17. challenged correctness determination, subject. Were courts ever definitively overrule obviously question. dissent suggests, certainly operating 389-390. To freeze perception accomplishing end workable itself. start premise intend creating Significantly, put forward (1968) initial description self-regulating F.2d, conclusions upholding take fundamentally interagency All officials welcomed idea. March 25-26 (1938). expressions constitute sufficient grounds pre-emption. Contrary suggestion dissent, infer "authorized" "expected" "state in." Post, 400. 15, infra; 8, inquiry, forbid it. Resources Conversation Development 1713, ---- (1983). answering question, naturally How works practice matter. Memorandum Administrator Borrowers, Managers, Presidents (March 18, 1970) (complaining neglected REA). admits brief, associations thoroughly formality Commission." 12. 3-1, (1955) ("It responsibility initiate bodies appropriate certificates convenience necessity, franchises, rate, tariff approvals sought."). faults finding significance 111-4. 400-401. particular, speculates [in 111-4] [only] 401 (emphasis added). understanding, 1972, country, perhaps Texas, grid. true, unlikely used broad unqualified directing light text, indeed 652-653, 2074-2075, Prudential Co Benjamin, 408, 423-426, 1142, 1151-1153, 1342 (1946). balance, seems leave place Lewis BT Investment 447 27, 49, 2009, 2022, 702 facts, customer dismiss especially reading decisions. 504, 508, 386, (1942); 212, 649, 650, Note justified, grounds, members: inquiry reasonableness include depend. (by unreasonable), will, through Directors, vote reduction Regulating rationalize streamline process, information source. Webb-Kenyon 699 (1913), importation liquor received, possessed, violation laws state. About Holding substantially Ashurst-Summers 494 (July 24, unlawful transport convict labor sold, Kentucky Whip Collar Central 299 334, 351, 277, 282, 81 270 (1937) transportation convict-made provisions intoxicating liquors. prohibited traffic different, same.") Cooley Wardens, How. 299, 996 (1851) (dicta). Section 824(e) defines "any person owns operates subchapter." 796(4) corporation." 796(3) corporation, joint-stock company, partnership, association, trust, organized group incorporated not,. ." accepts lacks notes believed proper. concludes lack represent unregulated," ante, filling void. Furthermore, thinks, thought, regulated, regulating. views spate bills introduced around These designed add list instrumentalities exempt H.R. 5348, 90th 1st Sess. (1967); 8426, (1967), reaffirm 1365, (introduced Senators Holland Smathers); 7799, Representative Fascell). Department Justice, Agriculture (of part) took needed protect (which announced hearings bill), Hearings al. Subcommittee Communications (letter Lee C. White, Chairman, Hon. Harley O. Staggers), Orville L. Freeman, Secretary Agriculture, Warren Christopher, Deputy Attorney General, Staggers). reported committee. read mean sales, constitutionally whose unconstitutional. proscribes Arkansas's

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