328 U.S. 152 (1946), 603, First Iowa Hydro-Electric Cooperative v. Federal Power Commission

Docket NºNo. 603
Citation328 U.S. 152, 66 S.Ct. 906, 90 L.Ed. 1143
Party NameFirst Iowa Hydro-Electric Cooperative v. Federal Power Commission
Case DateApril 29, 1946
CourtUnited States Supreme Court

Page 152

328 U.S. 152 (1946)

66 S.Ct. 906, 90 L.Ed. 1143

First Iowa Hydro-Electric Cooperative

v.

Federal Power Commission

No. 603

United States Supreme Court

April 29, 1946

Argued March 8, 1946

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA

Syllabus

Petitioner applied to the Federal Power Commission for a license for a power project in Iowa involving the construction of a dam on a navigable stream and the diversion of water from two navigable streams into another. Section 9(b) of the Federal Power Act requires an applicant to submit satisfactory evidence of compliance with requirements of state laws

with respect to bed and banks and to the appropriation, diversion, and use of water for power purposes and with respect to the right to engage in the business of developing, transmitting, and distributing power, and in any other business necessary to effect the purposes of a license under this Act.

Petitioner showed no attempt to comply with Iowa Code, 1939, ch. 363, which forbids the construction of dams and the diversion of water for industrial purposes without a permit from the State Executive Council and authorizes the issuance of such a permit upon a finding, inter alia, that "any water taken from the stream . . . is returned thereto at the nearest practicable place." The State intervened and urged that the application be denied because petitioner did not submit evidence of its compliance with the requirements of the Iowa Code for a permit from the State Executive Council. The Commission found that a federal license for the project was required under the Federal Power Act, and that the project called for a practical and reasonably adequate water power development, with certain recreational advantages, all at a cost not appearing to be unreasonable, but it dismissed the application without prejudice, on the ground of petitioner's failure to present satisfactory evidence, pursuant to § 9(b), of compliance with requirements of laws of Iowa requiring a state permit.

Held:

1. Compliance with requirements for a state permit under Iowa Code, 1939, ch. 363, is not a condition precedent to, or an administrative procedure that must be exhausted before, securing a federal license. Pp. 163, 170, 182.

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(a) To require petitioner to secure a state permit as a condition precedent to securing a federal license would vest in the State Executive Council a veto power over the federal project which easily could destroy the effectiveness of the Federal Act and subordinate to state control the "comprehensive" planning which the Federal Power Act entrusts to the judgment of the Commission or other representatives of the Federal Government. P. 164.

(b) The action of the Commission in requiring petitioner to present satisfactory evidence of compliance with the requirements for a state permit, while not requiring it actually to secure a state permit, avoided vesting a veto power in the State Executive Council, but it did not meet the substance of petitioner's objection, because it subjected to state control the very requirements of the project which Congress placed in the discretion of the Commission. P. 165.

(c) The Act leaves to the States their traditional jurisdiction over property rights to the beds and banks of streams and the use of water, subject to the superior right of the Federal Government to regulate interstate and foreign commerce, administer public lands and reservations of the United States, and exercise authority under treaties. Pp. 171-176.

(d) The intention of Congress was to secure a comprehensive development of national resources, and not merely to prevent obstructions to navigation. Pp. 180-181.

(e) The Act establishes a dual system of control by separating those subjects which remain under the jurisdiction of the States from those which the Constitution delegates to the United States and over which Congress vests the Commission with authority to act. P. 167.

(f) Where the Federal Government supersedes the State Government, there is no suggestion that both agencies shall have final authority. P. 168.

(g) A contrary policy is indicated in §§ 4(e), 10(a), (b), and (c) and 23(b), which sections place responsibility squarely upon federal officials, and usually upon the Federal Power Commission. P. 168.

(h) The express provision of § 27 requiring that the Act be not construed as affecting the laws of the States relating to the control, appropriation, use, or distribution of water used in irrigation or for municipal or other uses, or any vested right acquired therein, indicates that § 9(b) should not be given a like effect in the absence of a similar provision. Pp. 175-178.

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(i) Section 27, protecting state laws from supersedure, is limited to laws as to the control, appropriation, use, or distribution of water in irrigation or for municipal or other uses of the same nature, and has primary, if not exclusive, reference to such proprietary rights. Pp. 175-176.

(j) Section 9 is devoted to securing adequate information for the Commission as to pending applications for licenses, and does not itself require compliance with any state laws. Pp. 168, 177-178.

(k) The detailed provisions of the Act providing a comprehensive plan for the development and regulation of the water resources of the Nation leave no room or need for conflicting state controls. P. 181.

(l) It is the Federal Power Commission, rather than the Iowa Executive Council, that, under our constitutional Government, must pass upon issues affecting the use of navigable waters -- on behalf of the people of Iowa as well as on behalf of all others. P. 182.

2. The action of the Commission was erroneous in dismissing the application on the ground of petitioner's failure to present satisfactory evidence, pursuant to § 9(b), of compliance with requirements of laws of Iowa requiring a state permit. Pp. 161-167.

(a) The project is clearly within the jurisdiction of the Commission under the Federal Power Act. P. 163.

(b) Believing the Iowa law to be inapplicable or to have been superseded by the Federal Power Act, the Commission would have been justified in following its own interpretation of the Federal Power Act and proceeding with the merits of the application thereunder without requiring petitioner to submit evidence of compliance with such laws of Iowa. Pp. 160-162.

(c) The Commission's action in dismissing the application without prejudice did not avoid passing on the issue as to the need for evidence of petitioner's compliance with the state law, but constituted a ruling that such evidence was essential. Pp. 161-162.

(d) A state permit not being required, there was no justification for requiring petitioner, as a condition of securing a federal permit, to present evidence of its compliance with the requirements of the state law for that state permit. P. 166.

(e) There is ample opportunity and authority for the Commission to require by regulation the presentation of evidence satisfactory to it of petitioner's compliance with any of the requirements for a state permit that the Commission considers appropriate to effect the purposes of a federal license. P. 167.

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3. Upon the remand of this application to the Commission, it will not act as a substitute for the local authorities having jurisdiction over such questions as the sufficiency of applicant's legal title to riparian rights or the validity of its local franchises relating to proposed intrastate public utility service. P. 178.

(a) The references in § 9(b) to beds and banks of streams, to proprietary rights to divert or use water, or to legal rights to engage locally in the business of developing, transmitting, and distributing power neither add anything to nor detract anything from the force of local laws, if any, on those subjects. P. 178.

(b) Insofar as those laws have not been superseded by the Federal Power Act, they remain as applicable and effective as they were before its passage. P. 178.

151 F.2d 20, reversed.

Petitioner applied to the Federal Power Commission for a license to construct, operate, and maintain a power project on navigable waters in Iowa. The State intervened and urged that the application be denied because petitioner had not presented satisfactory evidence of its compliance with the requirements of Iowa Code, 1939, ch. 363, as to the issuance of a permit by the State Executive Council. The Commission dismissed the application "without prejudice to renewal within one year upon satisfying the requirements of Section 9(b) of the Federal Power Act." 52 P.U.R.(N.S) 82. The Court of Appeals for the District of Columbia affirmed. 151 F.2d 20. This Court granted certiorari. 3265 U.S. 715. Reversed, p. 183.

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BURTON, J., lead opinion

[66 S.Ct. 908] MR. JUSTICE BURTON delivered the opinion of the Court.

This case illustrates the integration of federal and state jurisdictions in licensing water power projects under the Federal Power Act.1 The petitioner is the First Iowa Hydro-Electric Cooperative, a cooperative association organized under the laws of Iowa with power to generate, distribute, and sell electric energy. On January 29, 1940, pursuant to § 23(b)2 of the Federal Power Act, it

Page 157

filed with the Federal Power Commission a declaration of intention to construct and operate a dam, reservoir, and hydroelectric power plant on the Cedar River, near Moscow, Iowa.3

On April 2, 1941, it also filed with the Commission an application for a license, under the Federal Power Act, to construct an enlarged project essentially like the one it now wishes to build. The cost of the enlarged project is estimated at $14,600,000. It calls for an 8,300-foot earthen dam on the Cedar River near Moscow, an 11,000-acre reservoir at that point, and an eight-mile diversion canal to a power plant to be built near Muscatine on the Mississippi. The canal will...

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