Court Opinion

ID: 773650
Source: CourtListenerOpinion
Date Created: 2012-04-18 11:33:41+00
Date Added: 2024-06-11T17:56:12.434534
License: Public Domain

253 F.3d 741 (D.C. Cir. 2001)
Fourth Branch Associates (Mechanicville), Petitionerv.Federal Energy Regulatory Commission, RespondentNiagara Mohawk Power Corporation, Intervenor
No. 00-1173
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 8, 2001Decided June 19, 2001

On Petition for Review of Orders of the Federal Energy Regulatory CommissionBen Finkelstein argued the cause for petitioner. With him  on the briefs were Frances E. Francis, William S. Huang  and Andrea G. Lonian.
Monique L. Watson, Attorney, Federal Energy Regulatory  Commission, argued the cause for respondent.  With her on  the brief was Dennis Lane, Solicitor.
William J. Mertens was on the brief for intervenor.
Before:  Edwards, Chief Judge, Sentelle and Randolph,  Circuit Judges.
Opinion for the Court filed by Circuit Judge Sentelle.
Sentelle, Circuit Judge:

1
The Federal Energy Regulatory  Commission ("FERC") issued a joint license to Fourth  Branch Associates (Mechanicville) and Niagara Mohawk Power Corporation to redevelop the Mechanicville Hydroelectric  Plant, owned by Niagara Mohawk.  The relationship between  the co-licensees eroded, and a spate of litigation ensued. Within two years of receiving the license, Fourth Branch filed  a complaint with the Commission alleging that Niagara Mohawk was engaging in anticompetitive conduct in violation of  the Federal Power Act, see 16 U.S.C. § 803(h), in attempting  to limit the power output of the Mechanicville plant by  refusing to purchase power from the plant.

2
After efforts to mediate the dispute failed, the Commission  issued an order dismissing the complaint because Fourth  Branch had not articulated facts sufficient to establish a claim  for anticompetiveness.  See Fourth Branch Assocs. (Mechanicville) v. Niagara Mohawk Power Corp., 89 F.E.R.C.  p 61,194 (1999).  Explaining that the two parties were unable  to continue operating the plant--because one is unwilling  (Niagara Mohawk) and the other unable (Fourth Branch)-the Commission gave notice of its intent to accept the parties'  implied surrender of the Mechanicville license.  See id. at  61,598.  The Commission subsequently denied Fourth  Branch's request for rehearing.  See Fourth Branch Assocs.  (Mechanicville) v. Niagara Mohawk Power Corp., 90  F.E.R.C. p 61,250 (2000).

3
Fourth Branch petitions for review of these orders.  First,  it contends that the finding of implied surrender is unreasonable, arbitrary and capricious, and unsupported by substantial  evidence.  Second, it maintains that the dismissal of its anticompetitiveness complaint was arbitrary and capricious  and not supported by substantial evidence.  Because there  has been no final agency action, we do not have jurisdiction to  consider the implied surrender finding.  Additionally, for  reasons more fully set out below, we hold that the Commission did not err in dismissing Fourth Branch's complaint.

I. BACKGROUND

4
The Mechanicville Hydroelectric Plant, located on the Hudson River in New York, is listed on the National Register of  Historic Places.  In fact, until recently it was the oldest  continuously operating hydroelectric plant in the country. The Mechanicville plant is also at the heart of a protracted  battle between Fourth Branch and Niagara Mohawk.1  At  various times, this battle has been waged before the New  York Public Service Commission, the Albany County Supreme Court, the Third Department of the Appellate Division  of the New York Supreme Court, the U.S. Bankruptcy Court  for the Northern District of New York, the U.S. District  Court for the Northern District of New York, the Federal  Energy Regulatory Commission--and now this Court.

5
The relationship between Fourth Branch and Niagara Mohawk began peacefully in 1987, when they applied jointly to  redevelop the Mechanicville plant under a new FERC license. In August 1989, the two companies entered into several  contracts under which Fourth Branch agreed to operate the  plant and Niagara Mohawk agreed to purchase power from  the plant.  Almost immediately the relationship began to  deteriorate.

6
In 1990, the New York Public Service Commission rejected  the power purchase agreement.  Three years later, when the companies' efforts to renegotiate the purchase agreement  collapsed, Niagara Mohawk terminated the operation agreement.  These actions are the basis of ongoing litigation in  New York's state courts.

7
Meanwhile, in 1993, FERC issued the license to Fourth  Branch and Niagara Mohawk.  The following year, after  Niagara Mohawk stopped paying Fourth Branch for power it  received from the Mechanicville plant, Fourth Branch filed  for Chapter 11 bankruptcy.  Fourth Branch asked the bankruptcy court to require Niagara Mohawk to accept and pay  for power from the plant.  After initially granting the request, the court authorized Niagara Mohawk to "cease accepting electricity" from Fourth Branch.  In re Fourth  Branch Assocs. Mechanicville, No. 94-10972, slip op. at 2  (Bankr. N.D.N.Y. Nov. 22, 1995) (order granting motion in  part and denying motion in part).  By 1996, the bankruptcy  court dismissed Fourth Branch's Chapter 11 claim for lack of  prosecution.

8
In 1995, Fourth Branch filed a complaint with FERC  alleging that Niagara Mohawk was engaging in anticompetitive conduct by attempting to limit the power output of the  Mechanicville plant.  In March 1996, after asking the parties  to apply either for a license transfer or surrender, the  Commission ordered that a settlement judge mediate the two  companies' dispute.  Niagara Mohawk Power Corp., 74  F.E.R.C. p 61,352, 62,081 (1996).  Initially, the mediation  seemed to be successful:  Fourth Branch agreed to purchase  Niagara Mohawk's interest in the Mechanicville project.  Niagara Mohawk Power Corp., 78 F.E.R.C. p 63,004 (1997). Unfortunately, the success was short lived--Fourth Branch  was unable to obtain funding to make the purchase.  See id.  at 65,127.  FERC staff responded by again asking for a plan  to transfer the Mechanicville license or surrender it.  By that  time, Fourth Branch had vacated the Mechanicville plant,  "apparently as the result of an eviction action brought by  Niagara Mohawk in a New York court."  Fourth Branch  Assocs., 89 F.E.R.C. at 61,590.

9
In 1997, Niagara Mohawk moved to dismiss Fourth  Branch's complaint.  In its motion, Niagara Mohawk contended that the complaint was moot in light of the bankruptcy  court's ruling that Niagara Mohawk was not obligated to  purchase power from the Mechanicville project.  Around this  same time, Niagara Mohawk completely stopped producing  power at the plant.

10
The following year, Fourth Branch submitted a unilateral  settlement offer, proposing to pay Niagara Mohawk fair  market value for its interest in the Mechanicville project. (The value was to be determined by a federal district court in a condemnation proceeding initiated by Fourth Branch.) Within five months, Fourth Branch amended its offer, now  proposing that Niagara Mohawk transfer its interest in the  plant to Fourth Branch at no cost and then purchase power  produced there by Fourth Branch.  Not surprisingly, Niagara Mohawk opposed this offer and instead asked the Commission to deem the Mechanicville license impliedly surrendered.

11
On November 9, 1999, the Commission dismissed Fourth  Branch's complaint and unilateral settlement offer.  See id. at  61,589.  In its decision, the Commission found that the Mechanicville license had not been violated and that the plant  was being adequately maintained.  See id. at 61,596-97 &  n.64.  The Commission also concluded that Fourth Branch  had not "set forth any facts that warrant a further investigation of its allegation that Niagara Mohawk has engaged in  anticompetitive behavior under the Mechanicville license." Id. at 61,597.

12
Finally, the Commission determined that the "public interest will be best served if the Mechanicville Project license is  terminated."  Id.  It explained that "the doctrine of implied  surrender" offered an appropriate resolution to the "exceptional circumstances" of this dispute.  Id. at 61,597-98.  Consequently, the November 1999 order gave Niagara Mohawk  and Fourth Branch notice that the Commission "intend[s] to  accept surrender of the license."  Id. at 61,598.  Accordingly,  the Commission instructed its staff to "initiate a proceeding  to prepare an environmental analysis, which will include consultation on the disposition of the historic property, to  determine what restoration measures are appropriate before  an order is issued accepting surrender of the license."  Id. at  61,598 n.73.

13
Fourth Branch requested a rehearing.  On March 16, 2000,  the Commission denied this request.  See Fourth Branch  Assocs. (Mechanicville) v. Niagara Mohawk Power Corp., 90  F.E.R.C. p 61,250 (2000).  In its denial, the Commission reiterated its earlier conclusions.  The Commission also clarified  that it will not make a "final decision on whether to accept the  implied license surrender until" it has conducted analyses and  consultations required under the National Environmental Policy Act, 42 U.S.C. § 4332, and the National Historic Preservation Act, 16 U.S.C. § 470f.  90 F.E.R.C. at 61,840 n.17.  In  addition, the Commission declared that it would examine  "reasonable alternatives to license surrender."  Id. at 61,840.

14
Fourth Branch petitions for review of these orders.  In its  petition, Fourth Branch primarily argues that (1) the finding  that the co-licensees had impliedly surrendered the Mechanicville license is unreasonable, arbitrary and capricious, and  unsupported by substantial evidence;  and (2) the dismissal of  its complaint alleging that Niagara Mohawk had engaged in  anticompetitive behavior is arbitrary and capricious and unsupported by substantial evidence.  In response, the Commission contends that we lack jurisdiction over Fourth Branch's  petition.  We must address this contention first.

II. JURISDICTION

15
Although the Commission maintains both that Fourth  Branch lacks standing and that its petition is not ripe for  review, we "need not identify every ground for holding that a  claim is not justiciable."  Indep. Petroleum Ass'n of Am. v.  Babbit, 235 F.3d 588, 594 (D.C. Cir. 2001).  Indeed, we have  no trouble dismissing a claim "based on one jurisdictional bar  rather than another."  Louisiana Envtl. Action Network v.  Browner, 87 F.3d 1379, 1384 (D.C. Cir. 1996).  Here, Fourth  Branch's challenge to the implied surrender proceeding is not  a challenge to any final agency action.

16
A party may only petition for judicial review of a final  agency action.  See 5 U.S.C. § 704;  16 U.S.C. § 825l(b); Papago Tribal Util. Auth. v. FERC, 628 F.2d 235, 238-39  (D.C. Cir. 1980).  If the agency's action is not final, we cannot  reach the merits of the petition.  See Public Citizen v. Office  of the U. S. Trade Representatives, 970 F.2d 916, 918 (D.C.  Cir. 1992).  When assessing whether an agency action is final,  we consider "whether the agency's position is 'definitive' and  whether it has a 'direct and immediate ... effect on the dayto-day business' of the parties."  Ciba-Geigy Corp. v. U.S.  EPA, 801 F.2d 430, 436 (D.C. Cir. 1986) (quoting FTC v.  Standard Oil Co. of Cal., 449 U.S. 232, 239 (1980) (internal  quotes omitted)).

17
The initiation of an implied surrender proceeding is not a  final agency action.  The Commission has merely "issue[d]  notice of its intent to accept the implied surrender of the  project license."  Fourth Branch Assocs., 89 F.E.R.C. at  61,589.  In its order denying Fourth Branch's rehearing  request, the Commission expressly stated that it has made  "no final decision on whether to accept the implied license  surrender."  Fourth Branch Assocs., 90 F.E.R.C. at 61,840  n.17.  There is nothing definitive in an agency's intending to  do something, and an agency that has made "no final decision" could not possibly have taken a final action.  Pending  completion of the proceeding, the Commission may or may  not accept implied surrender of the Mechanicville license. We do not have jurisdiction to become entangled in "uncertain and contingent future events that may not occur as  anticipated, or indeed may not occur at all."  Metzenbaum v.  FERC, 675 F.2d 1282, 1289 (D.C. Cir. 1982) (internal quotes  omitted).

18
Furthermore, we do not detect what effect the Commission's action has had (or could have) on Fourth Branch's  business.  The Commission's decision to initiate an implied  surrender proceeding has not imposed any obligation, denied  any right, or formalized any legal relationship.  See Alabama  Power Co. v. FERC, 993 F.2d 1557, 1566 (D.C. Cir. 1993).  If  we conclude that the license was impliedly surrendered,  Fourth Branch obviously would remain exactly in the same position it is now--and the Commission still might not accept  the implied surrender.  Likewise, even if we were to conclude  that the license had not been impliedly surrendered, the  Mechanicville plant would continue to sit in the same condition, and Fourth Branch would remain in the same position, a  co-licensee who is unable to enter the plant, let alone produce  power there.  Plainly, our abstention will not "result in  irreparable injury" to Fourth Branch.  Papago Tribal Util.  Auth., 628 F.2d at 238.  Until the Commission reaches a final  decision--either accepting the surrender or coming to some  alternative resolution--Fourth Branch's challenge is not fit  for review.

19
Fourth Branch argues that pursuant to Rule 27(g) of this  Circuit, the Commission should have raised its jurisdictional  objection within 45 days of this case being docketed.  The  Commission first contended that we lack jurisdiction in its  response brief, which it filed 271 days after this case was  docketed.  The Commission's foot-dragging certainly  "leave[s] something to be desired."  Mississippi Valley Gas  Co. v. FERC, 68 F.3d 503, 510 (D.C. Cir. 1995).  Nevertheless, it does not confer jurisdiction on this Court or compel us  to consider a claim based on an agency action that is not final. See Fed. R. App. P. 1(b).

20
In contrast to its initiation of the implied surrender proceeding, the Commission's dismissal of Fourth Branch's complaint against Niagara Mohawk is unquestionably a final  agency action.  In its order denying rehearing, the Commission was clear that its decision was final:  although it will  consider alternatives to implied surrender in the ongoing  proceeding, it unequivocally stated that it would not reconsider Fourth Branch's complaint.  See Fourth Branch Assocs.,  90 F.E.R.C. at 61,840.  The Commission's brief does not  explain why the dismissal of Fourth Branch's complaint is not  ripe for review nor why Fourth Branch lacks standing to  challenge it.  The dismissal of such a complaint is a final  agency action that we are empowered to review, and there is  no reason to refrain from considering the merits of the  remaining claims in Fourth Branch's petition.  See Papago  Tribal Util. Auth., 628 F.2d at 239.

III. THE MERITS OF FOURTH BRANCH'S PETITION

21
Section 10(h)(1) of the Federal Power Act prohibits "[c]ombinations, agreements, arrangements, or understandings, express or implied, to limit the output of electrical energy, to  restrain trade, or to fix, maintain, or increase prices for  electrical energy or service."  16 U.S.C. § 803(h)(1).  Relatedly, under § 10(h)(2), "conduct under the license" that conflicts with "the policies expressed in the antitrust laws" and is  "not otherwise justified by the public interest ... shall be  prevented or adequately minimized."  Id. § 803(h)(2).

22
In its complaint, Fourth Branch alleged that Niagara Mohawk attempted to "coerce [Fourth Branch] into an agreement or arrangement to limit the electrical energy available  from the Mechanicville Project."  The only fact that Fourth  Branch offered to support its allegation is that Niagara  Mohawk "refus[es] to accept Project power" from the Mechanicville plant, knowing that Fourth Branch's "existence  depends" on the revenue from such sales.  The Commission  refused to investigate this complaint, explaining that Fourth  Branch had failed to "set forth any facts that warrant a  further investigation."  Fourth Branch Assocs., 89 F.E.R.C.  at 61,597.  Specifically, the Commission concluded that  Fourth Branch had "not suggested that Niagara Mohawk  engaged in" activities barred by § 10(h)(1) and had not  complained about any conduct under the license as required  by § 10(h)(2).  In its petition, Fourth Branch argues that the  Commission's decision is (1) arbitrary and capricious because  it represents an "unexplained about-face" from a previous  statement in which the Commission noted the seriousness of  Fourth Branch's allegations and (2) unsupported by substantial evidence because the record demonstrates that Niagara  Mohawk violated the license.

23
Our precedent is clear:  the Commission "need not launch a  full investigation just because a party cries 'anticompetitive  behavior.' "  Michigan Pub. Power Agency v. FERC, 963  F.2d 1574, 1583 (D.C. Cir. 1992).  Here, the Commission did  not act arbitrarily or capriciously in concluding that Fourth Branch's vague assertions did not establish adequate grounds  for investigating Niagara Mohawk's conduct.  Although there  is no question "the co-licensees are at loggerheads," Fourth  Branch Assocs., 89 F.E.R.C. at 61,596, Fourth Branch did not  allege any collusive behavior by Niagara Mohawk as required  to establish a claim under § 10(h)(1).  If anything, Niagara  Mohawk's refusal to take power from Fourth Branch might  be a violation of their contracts, not an effort to restrain trade  "under the license."  See 16 U.S.C. § 803(h)(2).  If Fourth  Branch believes that Niagara Mohawk's actions interfere with  its ability to operate the project as they agreed, Fourth  Branch should proceed with contract claims in state court (as  it has done).  Indeed, the Commission came to this conclusion  in the orders now under review.  See Fourth Branch Assocs.,  90 F.E.R.C. at 61,839;  Fourth Branch Assocs., 89 F.E.R.C. at  61,597.  The Commission properly concluded that far from  reflecting anticompetitive conduct, Niagara Mohawk's divestiture of its hydroelectric projects was ordered by the New  York Public Service Commission as part of an industry  restructuring.  See Fourth Branch Assocs., 89 F.E.R.C. at  61,597.  These conclusions represent a reasonable basis for  not investigating Niagara Mohawk's conduct.

24
Fourth Branch's claim that the Commission's orders represent an "unexplained about-face" is based on a statement in  the Commission's order requiring the parties to mediate their  dispute.  In that order, the Commission wrote that it was  "concerned with the seriousness of the antitrust allegations in  the complaint."  Niagara Mohawk Power Corp., 74 F.E.R.C.  at 62,081.  Despite what Fourth Branch now suggests, the  Commission was not endorsing the viability or validity of  Fourth Branch's claims.  Rather, it was explaining that mediation seemed appropriate in light of:  (1) Fourth Branch's  complaint (and subsequent request for mediation) and (2) the  Commission's concern with the "safe operation of the Mechanicville Project over the 47 years remaining in the term of  its license."  Id.  The Commission never ruled that Fourth  Branch actually articulated an anticompetitiveness claim worthy of investigation.  Rather, the claim--in conjunction with  the numerous "ongoing controversies between the two colicensees"--simply justified the Commission's attempt "to  mediate a reasonable and workable solution to the problems  presented by the Mechanicville Project."  Id.  This attempt  is not inconsistent with the Commission's ultimate conclusion  that Fourth Branch had not "set forth any facts that warrant  a further investigation."  Fourth Branch Assocs., 89 F.E.R.C.  at 61,597.  The Commission never held anything different.  It  simply had stated that the Fourth Branch's allegations were  serious enough to merit mediation, but only when considered  in tandem with the myriad other disputes between the parties  and the Commission's concern with the "safe and efficient  performance" of the project.  Niagara Mohawk Power Corp.,  74 F.E.R.C. at 62,081.

25
In its petition, Fourth Branch raises several other ancillary  issues.  We have considered each of these and find them  meritless.  The Commission's orders are supported by substantial evidence and do not represent abuses of discretion.

IV. CONCLUSION

26
For the foregoing reasons, the petition for review is denied.

Notes:

1
  A more complete history of the two companies' troubles is  recounted in Niagara Mohawk Power Corp., 74 F.E.R.C. p 61,352,  62,079-81 (1996);  Fourth Branch Assocs. (Mechanicville) v. Niagara Mohawk Power Corp., 89 F.E.R.C. p 61,194, 61,589-93 (1999),  reh'g denied, 90 F.E.R.C. p 61,250 (2000);  and Fourth Branch  Assocs. (Mechanicville) v. Niagara Mohawk Power Corp., 90  F.E.R.C. p 61,250, 61,837-39 (2000).