107 F.2d 769 (4th Cir. 1939), 4460, United States v. Appalachian Elec. Power Co.

Docket Nº:4460.
Citation:107 F.2d 769
Case Date:November 06, 1939
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit

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107 F.2d 769 (4th Cir. 1939)




No. 4460.

United States Court of Appeals, Fourth Circuit.

November 6, 1939

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John W. Aiken, Sp. Ass't to Atty. Gen., David W. Robinson, Jr., Gen. Counsel, Federal Power Commission, of Columbia, S.C., and Gregory Hankin, Sp. Counsel, Federal Power Commission, of Washington D.C. (Richard J. Connor, Ass't Gen. Counsel, Willard W. Gatchell, Principal Atty., and Howard E. Wahrenbrock, Senior Atty., Federal Power Commission, all of Washington, D.C., on the brief), for appellant.

Raymond T. Jackson, of Cleveland, Ohio, Wendell W. Forbes, of New York City, and John L. Abbot, of Lynchburg, Va. (M. F. Millikan, A. Henry Mosle, Creswell M. Micou, Fraser M. Horn, and M. W. Belcher, Jr., all of New York City, on the brief), for appellee.

Clarence W. Meadows, Atty. Gen. of West Virginia, and Abram P. Staples, Atty. Gen. of Virginia, amici curiae.

Before PARKER and NORTHCOTT, Circuit Judges, and CHESNUT, District judge.

CHESNUT, District Judge.

The question for decision is whether the Appalachian Electric Power Company, a Virginia corporation (the defendant below and the appellee here) should be enjoined from the construction of a hydro-electric power dam in the New River at Radford, Virginia. To obtain this injunction the United States filed its complaint on May 6, 1935, in the District Court of the United States for the Western District of Virginia, in which it charged that the erection of the dam would be in violation of sections 9 and 10 of the Rivers and Harbors Act of 1899, 33 U.S.C. §§ 401, 403, 33 U.S.C.A. §§ 401, 403, and also contrary to the provisions of sections

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4(d) and 23 of the Federal Water Power Act of 1920, 16 U.S.C. §§ 791-823, 16 U.S.C.A. §§ 791-823, which was amended August 26, 1935, 49 Stat. 838, 16 U.S.C.A. § 791a et seq.

Section 9 of the Rivers and Harbors Act provides in part that--

'It shall not be lawful to construct or commence the construction of any bridge, dam, dike, or causeway over or in any port, roadstead, haven, harbor, canal, navigable river, or other navigable water of the United States until the consent of Congress to the building of such structures shall have been obtained and until the plans for the same shall have been submitted to and approved by the Chief of Engineers and by the Secretary of War.'

And Section 10 provides in part that--

'The creation of any obstruction not affirmatively authorized by Congress, to the navigable capacity of any of the waters of the United States is hereby prohibited.'

Under this statute it was necessary to obtain an Act of Congress to authorize the construction of a hydro-electric power dam in a navigable water of the United States, but by the Federal Water Power Act of June 10, 1920, 41 Stat. 1077, 16 U.S.C.Ch. 12, Secs. 791-823, 16 U.S.C.A. §§ 791-823, Congress created an administrative commission with authority to issue licenses to construct, operate and maintain 'dams, water conduits, reservoirs, power houses, transmission lines, or other project works necessary or convenient for the development and improvement of navigation, and for the development, transmission, and utilization of power across, along, from or in any of the navigable waters of the United States', 16 U.S.C.A. § 797(d), such licenses (section 803) to contain certain specified conditions, some relating to matters affecting navigation and others of an economic and financial nature; and with the further proviso that the Commission in its discretion might waive any of the conditions except the license period of 50 years, if the license was 'for a minor part only of a complete project. ' Under the original Act of 1920, 16 U.S.C.A. § 792, the Commission was composed of the Secretaries of War, Interior and Agriculture; but by amendment of June 23, 1930, 46 Stat. 797, the personnel of the Commission was changed to five commissioners appointed by the President by and with the advice and consent of the Senate.

Upon procedure provided for in the Act, the Commission approved the construction of the dam at Radford in accordance with the plans and specifications therefor which had been approved by the Chief of Engineers and by the Secretary of War with respect to navigation, and formally tendered to the Appalachian Electric Power Company, a so-called 'major' license containing all the conditions enumerated in section 10 of the Act, 16 U.S.C. § 803, 16 U.S.C.A. § 803. The Company expressed its willingness to accept the license with all proper regulations affecting navigation but requested the Commission to waive other conditions not affecting navigation, particularly those which related to the regulation of rates to be charged for electric power, the setting aside thereout of amortization reserves, and the so-called 'recapture clause' giving to the United States the right to take over the project at the expiration of the license period of fifty years upon the basis of original cost less amortization reserves. Among its objections to these latter conditions the Company made the point that the Commission was without constitutional authority to prescribe conditions other than those affecting navigation. The Commission refused to waive any of the conditions of the major-part license; and thereupon the Company, having acquired all riparian and overflowage rights and specific and full authority from the State of Virginia, proceeded toward the erection of the dam without obtaining a license from the Commission. The injunction suit followed.

In its complaint the Government took the position that the New River throughout its whole course constituted navigable waters of the United States, and therefore the dam could not be constructed without permission from Congress or a license from the Commission; and further, that the construction and operation of the dam would necessarily be an obstruction to the navigable capacity of waters of the United States; and in any event was prohibited by the Federal Water Power Act unless licensed by the Commission. The answer of the defendant controverted all three of these propositions.

Proceedings before this suit: The proceedings before the Commission ran over a period of several years. Section 23 of the Federal Water Power Act of 1920, 16 U.S.C.A. § 817, provided that persons intending to construct a dam in a stream 'other than those defined in this chapter as navigable

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waters, and over which Congress has jurisdiction under its authority to regulate commerce between foreign nations and among the several States, may in their discretion file declaration of such intention with the commission', and if after investigation the Commission should find that the interests of interstate or foreign commerce would not be affected, permission was granted for the construction; otherwise not without a license granted by the Commission. The original project for the Radford Dam was initiated by a predecessor of the Appalachian Electric Power Company, the New River Development Company, which filed its declaration of intention with the Commission on June 25, 1925, after first obtaining an opinion from Engineers of the War Department that the river was not navigable, and therefore in its view not subject to the jurisdiction of the Commission. The declaration stated among other things that 'the proposed project will be so constructed and operated so as not to impair the navigable capacity of the stream below, nor to affect the interests of interstate or foreign commerce '. Thereupon the Commission requested a report on the declaration from the Chief of Engineers of the War Department, Gen. Harry Taylor. His report of August 20, 1925 was to the effect that no sufficient reason was seen why the Commission should not exercise jurisdiction over the proposed project because while there was no present navigation on the river there had been some on parts of the river in the past and the Government had done work on certain parts of the river to improve navigability; and the water-flow from the dam if not properly regulated could have an adverse effect on navigation during low water stages in the Kanawha River; but that such possible adverse effect was not such as to warrant refusal to permit the construction of the dam if control was maintained by the United States. On October 24, 1925 the declarant wrote to the Commission requesting re-consideration by Gen. Taylor of his report and submitting additional data relating to New River, which he said had not been considered in his original report. Thereafter General Taylor re-considered the matter and rendered a second report to the Commission on December 29, 1925, in which he said:

'A careful study has been made of all the data presented by the declarant and a further study has been made of all available data and records bearing on the question at issue which are available in this office, or which could be obtained from other government bureaus. The following report is the result of the additional studies which have been made and the additional information which has been obtained since the date of my original report.'

In conclusion he stated:

'I therefore, report that in my opinion New River in its present condition is not a navigable stream and that navigation on the Kanawha River will not be adversely affected by the proposed power development.'

On March 2, 1926 the Power Commission held a hearing on the declaration of intention as to the building of the power dam. The only evidence then submitted was the second report of Gen. Taylor, but there was argument by counsel for the Company and by the...

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