311 U.S. 377 (1940), 12, United States v. Appalachian Electric Power Co.

Docket Nº:No. 12
Citation:311 U.S. 377, 61 S.Ct. 291, 85 L.Ed. 243
Party Name:United States v. Appalachian Electric Power Co.
Case Date:December 16, 1940
Court:United States Supreme Court

Page 377

311 U.S. 377 (1940)

61 S.Ct. 291, 85 L.Ed. 243

United States


Appalachian Electric Power Co.

No. 12

United States Supreme Court

Dec. 16, 1940

Argued October 14, 15, 1940




1. Upon review of a case involving the scope of the federal commerce power in relation to licensing by the Federal Power Commission of a hydroelectric dam, this Court may determine for itself whether a particular waterway is a navigable water of the United States, and it is not precluded by the rule that factual findings concurred in by two courts below will be accepted here unless clear error is shown. P. 403.

2. The ultimate conclusion as to whether a particular waterway is a navigable water of the United States, and the judicial standards to be applied in making the determination, involve questions of law inseparable from the particular facts to which they are applied. P. 404.

3. A waterway which by reasonable improvement can be made available for navigation in interstate commerce is a navigable water of the United States, provided there be a balance between cost and need at a time when the improvement would be useful. P. 407.

4. In such case, it is not necessary that the improvement shall have been already undertaken or completed, nor even that it shall have been authorized. P. 408.

5. A navigable water of the United States does not lose that character because its use for navigation in interstate commerce has lessened or ceased. Pp. 408-409.

6. A waterway may be a navigable water of the United States for a part only of its course. P. 410.

7. Lack of commercial traffic does not preclude the classification of a waterway as a navigable water of the United States where personal or private use by boats demonstrates its availability for the simpler types of commercial navigation. P. 416.

8. Upon the facts of this case, held that the New River, from Allisonia, Virginia, to Hinton, West Virginia, is a navigable water of the United States. Pp. 410, 418-419.

9. It is within the constitutional power of Congress to require that a federal license be obtained for the erection or maintenance of a

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structure in a navigable water of the United States, even though the sole purpose of the structure be the generation of electric power. Pp. 424, 426.

10. The authority of Congress over navigable waters of the United States is not limited to control for the purposes of navigation only, but is as broad as the needs of commerce. P. 426.

11. In the exercise of its power over a navigable water of the United States, Congress may forbid the placing of an obstruction therein, or may grant the privilege on such terms as it chooses, and it is no objection that its exercise of power in this respect is attended by the same incidents which attend the exercise of the police power of the States. P. 427.

12. The Federal Power Act provides that licenses issued by the Federal Power Commission, for projects required by the Act to be licensed, shall contain certain conditions. Section 10(a) requires that the project be best adapted to a comprehensive plan for improving or developing the waterway for the use or benefit of interstate or foreign commerce, for the improvement and utilization of water power development, and for other beneficial public uses, including recreational purposes; § 10(c) requires that the licensee maintain the project adequately for navigation and for efficient power operation, maintain depreciation reserves adequate for renewals and replacements, and conform to the Commission's regulations for the protection of life, health and property; § 10(d) requires that, out of surplus earned after the first 20 years above a specified reasonable rate of return, the licensee maintain amortization reserves to be applied in reduction of net investment; § 10(e) requires the licensee to pay to the United States reasonable annual charges for administering the Act, and authorizes the United States during the first 20 years to expropriate excessive profits unless or until the State prevents such profits; § 14 gives the United States the right, upon expiration of a license, to take over and operate the project by paying the licensee's "net investment," not to exceed the fair value of the property taken. Held, that respondent, a power company which, under license from the State, had undertaken the construction of a hydroelectric dam in New River, could be compelled, in a suit brought by the United States, to obtain from the Commission a license containing conditions authorized by §§ 10(a), (c), (d), (e) and 14 or, in the alternative, to remove its works from the river.

(1) The validity of other provisions of the license, challenged only generally as unrelated to navigation, not decided. P. 420.

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(2) The fact that the provisions of § 14 for acquisition by the United States at the expiration of the license period vitally affect the establishment and financing of respondent's project requires that the question of the validity of the section and of the license provisions based upon it be determined now, and that the determination be not deferred until the right matures and the United States proceeds to exercise it. P. 421.

(3) Assuming, without deciding, that, by compulsion of the method of acquisition provided by § 14 and the required license, riparian rights of the respondent may ultimately pass to the United States for less than their value, this must be regarded as the price which the respondent must pay for the privilege to maintain the dam, and does not involve a violation of the Fifth Amendment. P. 427.

(4) The license conditions here considered have an obvious relationship to the exercise of the commerce power. P. 427.

(5) The provisions for future acquisition of the project by the United States is not an invasion of the sovereignty of the State. P. 428.

13. A valid exercise by Congress of the power delegated to it by the commerce clause call not constitute an encroachment on state sovereignty in violation of the Tenth Amendment. P. 428.

14. The Court confines its decision in this case to the concrete legal issues presented, and does not undertake to determine abstract questions as to the relative rights of the States and the United States in respect to the development and control of water power. P. 423.

107 F.2d 769 reversed.

Certiorari, 309 U.S. 646, to review the affirmance of a decree dismissing a bill brought by the United States against the power company to enjoin the construction of a dam in the New River. Opinion of District Court, 23 F.Supp. 83.

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REED, J., lead opinion

MR. JUSTICE REED delivered the opinion of the Court.

This case involves the scope of the federal commerce power in relation to conditions in licenses, required by the Federal Power Commission, for the construction of hydroelectric dams in navigable rivers of the United States. To reach this issue requires, preliminarily, a decision as to the navigability of the New River, a watercourse flowing through Virginia and West Virginia. The district court and the circuit court of appeals have both held that the New River is not navigable, and that the United States cannot enjoin the respondent from constructing and putting into operation a hydroelectric dam situated in the river just above Radford, Virginia.

Sections 9 and 10 of the Rivers and Harbors Act of 1899 make it unlawful to construct a dam in any navigable water of the United States without the consent of Congress.1 By the Federal Water Power Act of 1920,2

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however, Congress created a Federal Power Commission with authority to license the construction of such dams upon specified conditions. Section 23 of that Act provided that persons intending to construct a dam in a nonnavigable stream may file a declaration of intention with the Commission. If, after investigation, the Commission finds that the interests of interstate or foreign commerce will not be affected, permission shall be granted for the construction. Otherwise construction cannot go forward without a license.

The Radford Dam project was initiated by respondent's predecessor, the New River Development Company, which filed its declaration of intention with the Federal Power Commission on June 25, 1925. The Commission requested a report from General Harry Taylor, then Chief of Engineers of the War Department. He first reported that the river was navigable, and also that, while 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 (of which the New was one of the principal tributaries), such possible adverse effect would not warrant refusing a license to construct the dam if control was maintained by the United States. On review at the Commission's request, however, General Taylor rendered a second report concluding that the New River in its present condition was not navigable, and that navigation on the Kanawha would not be adversely affected by the proposed power development. On March 2, 1926, the Commission held a hearing on the declaration; the only evidence then submitted was General Taylor's second report.

Respondent, the Appalachian Electric Power Company, took an assignment of the declaration of intention on August 30, 1926, and several days later filed an application for a license on the Commission's suggestion that this would expedite matters and could be withdrawn if it later developed that no federal license was required.

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In October, the district engineer of the War Department held a public hearing at Radford. On June 1, 1927, the Commission made a finding that the...

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