First Iowa Hydro-Electric Coop. v. Federal Power Com'n
| Decision Date | 13 August 1945 |
| Docket Number | No. 8752.,8752. |
| Citation | 80 US App. DC 211,151 F.2d 20 |
| Parties | FIRST IOWA HYDRO-ELECTRIC COOPERATIVE v. FEDERAL POWER COMMISSION (STATE OF IOWA, Intervener). |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
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Mr. George B. Porter, of Washington, D. C., with whom Mr. Andrew G. Haley, of Washington, D. C., was on the brief, for petitioner.
Mr. Howard E. Wahrenbrock, Assistant General Counsel, Federal Power Commission, of Washington, D. C., with whom Messrs. Charles V. Shannon, General Counsel, Willard W. Gatchell and L. W. McKernan, Principal Attorneys, Federal Power Commission, all of Washington, D. C., were on the brief, for respondent.
Mr. Neill Garrett, of Des Moines, Iowa, pro hac vice, by special leave of Court, with whom Messrs. John M. Rankin, of Des Moines, Iowa, and Horace L. Lohnes, of Washington, D. C., were on the brief, for intervenor, State of Iowa. Mr. C. Walter Harris, of Washington, D. C., also entered an appearance for State of Iowa.
Before GRONER, Chief Justice, and MILLER and ARNOLD, Associate Justices.
Petitioner applied to the Federal Power Commission for a license to construct a power project on Cedar River in the State of Iowa. The Commission dismissed the application for the reason that, "The applicant has not presented satisfactory evidence, pursuant to Section 9(b) of the Federal Power Act,1 of compliance with the requirements of applicable laws of the State of Iowa requiring a permit from the State Executive Council to effect the purposes of a license under the Federal Power Act * * *."
On this appeal petitioner admits that it failed to secure a permit from Iowa and contends that it would have been futile to apply for one. The general rule is that administrative remedies must be exhausted before judicial review can be availed of.2 3
To escape the operation of this rule, petitioner argues, in the alternative, that: 1 no applicable Iowa law requires one in its position to secure a permit; 2 if the Iowa law4 means what its officials contend, then the law is unconstitutional, and compliance cannot be required. In support of its first proposition, petitioner says that the Iowa Code Sections relied upon by the Commission are not state laws contemplated by Section 9 (b) of the Power Act, because by their very terms the authority of the State Executive Council is limited to waters of the State; and because they do not prohibit diversion of water for power purposes, but only for industrial purposes. Conceivably, Iowa might say that its Legislature intended to speak only of waters navigable according to state classification, although not navigable under Federal classification.5 While this is a possible interpretation and one which the State might adopt concerning the streams here involved — especially if it were necessary to do so in order to avoid the challenge of unconstitutionality — we are unable to adopt it, in the absence of a decision to that effect by the Iowa courts. Each of the disputed Sections speaks in terms of navigable waters. In view of the fact that both State and Federal governments may legislate concerning such waters — each in its own appropriate sphere — we see no reason to give to Chapter 363 the narrow interpretation for which petitioner contends. Again, Section 7771 makes no distinction between power projects and industrial purposes. Its reference to diversion is general rather than special; in fact, it could be just as well argued that the State Legislature was speaking, in this Section, primarily of diversion for power production. Moreover, it can hardly be seriously urged that the State Legislature was concerned over industrial pollution of its streams — because of the probable injurious effect upon public health and destruction of fish and other wild life — while, at the same time, unconcerned over the possible results of complete diversion of water from its streams. The reference to pollution is, in fact, secondary to the primary requirement concerning diversion; and some diversion usually occurs in connection with power projects. Neither is it reasonable to suppose that the State was concerned only with pollution of streams navigable under state classification as distinguished from other navigable streams. We conclude that the Commission properly rejected this contention.
Petitioner's second, alternative contention challenges the Iowa law upon the ground of unconstitutionality. It assumes that the jurisdiction of the Federal government over navigable streams, in so far as the licensing of power projects is concerned must be exclusive in nature, requiring a uniform rule of regulation and excluding, altogether, state regulatory legislation. We conclude that this contention and the assumption upon which it is based are unsound. Where Congress, while regulating related matters, has purposely left untouched a distinctive part of a subject which is peculiarly adapted to local regulation, the state may legislate concerning such local matters which Congress could have covered but did not.6 The fact that particular phases of an interstate activity have long been regulated by states, has been recognized as a strong reason why, in the continued absence of conflicting Congressional action, the state regulatory laws should be declared valid.7 The same reasoning should apply where Congress, having newly decided to enter a particular field of interstate commerce, leaves untouched regulatory state laws concerning part of the area. Where the Federal law authorizes state action, such action is permissible even as to matters which could otherwise be regulated only by uniform national enactments.8
In enacting the Federal Power Act, it was not the intention of Congress that the Federal government should occupy the field completely, or that the states should be excluded. On the contrary, the Act contemplates a dual system of control and the exercise of appropriate powers by the State, as well as by the Federal government.9 This is the plain purpose of Section 9 (b). It is revealed, also, by other sections of the Act.10
Petitioner's contention — upon the ground of unconstitutionality — depends also upon the assumption that the disputed Iowa Code Sections constitute an absolute bar to its project, hence that their effect is to defeat the jurisdiction of the Federal government and the purposes of the Power Act. This contention must be rejected, also. It is the duty of courts to avoid the issue of constitutionality if the statute which is being interpreted is susceptible of any reasonable interpretation consistent with constitutionality.11 All parties agree that Iowa's courts have not, so far, been faced with this issue. We see several possible interpretations of the disputed Sections which would avoid the issue. For example, upon application properly made to it, the Executive Council might find the "nearest practicable place,"12 at which the water which is to be diverted for petitioner's project can be returned, is the point at which petitioner proposes to return it; or, perhaps, it might adopt petitioner's suggested interpretation that Chapter 363 has no application to navigable waters of the United States. Again, it will be noted that Section 7771 is so phrased as to vest large discretion in the Executive Council. The next succeeding Section, 7772,13 is phrased in negative terms: "No permit shall be granted * * *." Evidently the Legislature intended that failure to secure a certificate of the State Department of Health should bar the issuance of a permit. The contrast between the two Sections is striking. While no departure from the requirements of the second is permissible, it is entirely within the range of probability that a court would so interpret the first Section as to allow the issuance of a permit without strict compliance with all its terms; especially if it were necessary to do so in order to avoid unconstitutionality.14 In any event, as the Power Act places upon petitioner the affirmative duty of showing compliance with state laws, it must assume their constitutionality, make its application for a permit and pursue such remedies as may be available in the state, to establish its right to issuance of the permit. Until it has done so, it is in no position to challenge an order of the Commission, which is based upon its failure to do so.
On this appeal the Commission argues that the Iowa statute is invalid.15 It does so, however, not on petitioner's theory that Iowa invaded, or continued to occupy, an area absolutely prohibited to it by the Constitution, but rather that Congress, having elected to exercise, in part, the power delegated by the Commerce Clause, excluded the states from the area, proportionately to its exercise of power. It says, specifically, that the disputed Code Sections conflicted with the Power Act and were superseded by it;16 that to require petitioner's compliance with Chapter 363 of the Iowa Code would oust the United States of jurisdiction and defeat the primary objectives of the Power Act.17
The question thus presented is a difficult one. On the one hand, it is necessary that full scope shall be given to the Power Act in order that its beneficent purposes may be achieved in the expansion of our national economic life.18 On the other hand, the established interests of the states and of their citizens must be protected and preserved so far as is possible,19 in accommodating the one to the other. To answer the question, we are required to enter an area of controversy to which the Supreme Court has referred as "the wide range of possible disagreement between Nation and state in the functioning of the Federal Power Act."20
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