354 F.2d 859 (5th Cir. 1966), 22256, Rural Electrification Administration v. Central Louisiana Elec. Co.

Docket Nº22256.
Citation354 F.2d 859
Party NameRURAL ELECTRIFICATION ADMINISTRATION et al., Appellants, v. CENTRAL LOUISIANA ELECTRIC COMPANY, Inc., et al., Appellees.
Case DateJanuary 13, 1966
CourtUnited States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 859

354 F.2d 859 (5th Cir. 1966)

RURAL ELECTRIFICATION ADMINISTRATION et al., Appellants,

v.

CENTRAL LOUISIANA ELECTRIC COMPANY, Inc., et al., Appellees.

No. 22256.

United States Court of Appeals, Fifth Circuit.

January 13, 1966

Rehearing Denied Feb. 7, 1966.

Page 860

[Copyrighted Material Omitted]

Page 861

Harvey L. Zuckman, Alan S. Rosenthal, Attys., Dept. of Justice, Washington, D.C., Paul M. Hebert, Theo F. Cangelosi, John Schwab, Robert L. Cangelosi, Baton Rouge, La., John W. Douglas, Asst. Atty. Gen., Edward L. Shaheen, U.S. Atty., for appellants.

William O. Bonin, New Iberia, La., Andrew P. Carter, Eugene G. Taggart, New Orleans, La., Tom F. Phillips, Baton Rouge, La., Jacob S. Landry and William O. Bonin, Landry, Watkins, Cousin & Bonin, New Iberia, La., for appellee.

Taylor, Porter, Brooks, Fuller & Phillips, Baton Rouge, La., for intervenor Gulf States Utilities Co.

Monroe & Lemann, New Orleans, La., for intervenor, Louisiana Power & Light Co.

Before BROWN and COLEMAN, Circuit Judges, and MORGAN, District Judge.

COLEMAN, Circuit Judge:

On September 12, 1964, the Rural Electrification Administration, acting by and through its Administrator, approved a loan in favor of Louisiana Electric Cooperative, Inc., in the amount of $56,521,000. Of this sum $27,079,200 was to be used in the construction of a 200,000 kilowatt steam generating plant. $28,184,000 of the proposed loan was to be used in the construction of 1611 miles of high voltage transmission lines in Louisiana and 82 miles in Arkansas. $1,257,800 was earmarked to construct other facilities. By this loan the proposed borrower would be enabled to generate, sell, and transmit electric power to various electric cooperatives presently being served by the complaining investor-owned private power companies.

The Central Louisiana Electric Company, Inc., sought injunctions both preliminary and permanent. Louisiana Power and Light Company and Gulf States Utility Company were granted leave to intervene as plaintiffs. Testimony on the part of Central Louisiana Electric Company shows that its investment in plants and facilities dedicated to customers now about to be lost amounts to 5% Of its total. The annual gross income to be lost is less than 4% Of the whole.

Upon due notice, and upon consideration of the verified complaint, affidavits of plaintiff and other witnesses, defendant's motion to dismiss and motion for summary judgment, defendant's response to order to show cause why preliminary injunction should not issue and affidavit in support thereof, and on testimony adduced in support of the application, after receiving briefs and argument of the parties, the district court granted the preliminary injunction. Defendants, pending the further order of the court, were restrained and enjoined from consummating the loan and 'from doing any act in furtherance thereof, including, but not limited to, the execution of any agreement or undertaking in connection therewith, and the disbursement or authorization of any disbursement of any funds in connection therewith'. Defendants' motions to dismiss and for summary judgment were denied.

From the granting of the preliminary injunction, defendants have appealed, contending that appellees did not have 'the requisite standing to maintain the suit * * * the district court lacked jurisdiction over the subject matter of the action'.

For the reasons hereinafter enumerated, we hold that the plaintiffs are without the requisite standing and the courts are without jurisdiction to review, necessitating a reversal of the judgment of the District Court.

Plaintiffs allege that on the day of the loan approval the Administrator certified to Congress than he had caused a power supply survey to be made in accordance with REA Bulletin 111-3; that, based on such survey, the approved loan is needed because existing and proposed contracts to provide facilities or service to be financed were found to be unreasonable, each supplier involved had been so advised, REA attempted to have such contracts made reasonable, and the existing or other proposed suppliers had failed or

Page 862

refused to do so within the time set by the Administrator.

It is further alleged that the Administrator submitted to Congress an accompanying statement of information relative to the loan approval. It is contended that the loan approval is illegal and invalid, that the aforesaid certificate and statement of information are incorrect, and plaintiffs have thus 'suffered a legal wrong and are adversely affected or aggrieved thereby', entitling them to a judicial review under 5 U.S.C.A. § 1009.

In summary, the grounds alleged in behalf of relief were substantially as follows:

(1). The intent of Congress, as reflected by certain 'directives of the House and Senate Appropriations Committees', had been violated;

(2). that on February 24, 1964, the Rural Electrification Administration published certain rules and regulations in the Federal Register (REA Bulletin 111-3) in which REA proposed to obey the directives of the Congressional Committees;

(3). the proposed loan violated the purposes of the REA Act, 7 U.S.C.A. § 904, violated the directives of the Congressional Committees, violated Bulletin 111-3, and violated complainant's constitutional rights;

(4). complainant is a privately owned public utility engaged in the business of generating, transmitting, and distributing electric energy in 25 Louisiana parishes, with a total investment of $112,968,468 in plant and facilities, with 1963 revenues of $20,774,023. It furnished wholesale electric service to six Louisiana electric cooperatives to which it had dedicated an investment of $5,615,561. Annual receipts from this activity for the twelve months expiring August 31, 1964, amounted to $712,134 at an average cost of 6.87 mills per Kilowatt hour, 'which rate is among the lowest in the nation for such service, complainant is ready, willing and able to serve all of the present and foreseeable future requirements of said member cooperatives on an adequate and dependable basis';

(5). the super cooperative, to which it was proposed to make the loan, has no transmission or distribution facilities and does not furnish electricity to anyone. It was created for the sole purpose of selling to its own members who now buy from the complainant or other privately owned power companies:

(6). that under 7 U.S.C.A. § 901 Congress created a duty on the part of the defendants and in favor of complainants not to grant loans when existing central station service was available;

(7). that the loan is proposed in violation of the Congressional directive and the rules adopted by REA for its own governance;

(8). that the administrator took the position that existing and any proposed contract between the private power companies and the existing cooperatives would be considered unreasonable unless the companies agreed to an exclusive territorial monopoly in favor of said cooperatives;

(9). that the lowest rate at which the super cooperative could furnish electricity to its members, pursuant to the loan, would be 7.5 or 8 mills per Kilowatt hour, whereas the companies had offered lower rates;

(10). that the loan would create an unjustifiable subsidy in favor of a direct competitor, in violation of 7 U.S.C.A. § 904, that in this regard the approval of the loan was arbitrary and capricious, amounting to unjust and unwarranted discrimination in favor of a competitor, denying to complainant the equal protection of the laws and depriving it of its property without due process of law in violation of the 5th Amendment.

(11). the proposed loan violates 7 U.S.C.A. § 904 in that the consent of the state authority having jurisdiction had not been obtained;

(12). the super cooperative had not obtained a certificate of public convenience and necessity from either Louisiana and Arkansas, and the REA Administrator had certified that none was necessary,

Page 863

thus subjecting the complainant to illegal competition;

(13). that the consent of the Federal Power Commission had not been obtained, which, again would result in illegal competition;

(14). that the super cooperative will require a thirty-five year contract with its members, which will deny to complainant a substantial portion of its market for wholesale power;

(15). that compliance with the Administrator's requirements would result in combination and conspiracy in restraint of trade; and

(16). that granting the loan would cause a violation of the anti-trust laws of the United States and the State of Louisiana, and amounts to a conspiracy to do such.

Then followed the customary prayer for injunctions, preliminary and permanent.

The district court made findings of fact substantially supporting these allegations. These findings will be set out verbatim in an appendix to this opinion.

I

Under Section 10(a) of the Administrative Procedure Act, 5 U.S.C.A.§ 1009, it seems to be settled in a case of this kind that if Congress has failed to give an appellant standing to sue by express or implied provisions of statute * * * mere economic competition made possible by governmental action (even if allegedly illegal) does not give standing to sue to restrain such action. Pennsylvania Railroad Company v. Dillon, 1964, 118 U.S.App.D.C. 257, 335 F.2d 292, citing Tennessee Electric Power Company v. Tennessee Valley Authority, 306 U.S. 118, 59 S.Ct. 366, 83 L.Ed. 543 (1939); Alabama Power Company v. Ickes, 302 U.S. 464, 58 S.Ct. 300, 82 L.Ed. 374 (1938); Kansas City Power and Light Company v. McKay, 96 U.S.App.D.C. 273, 225 F.2d 924, cert. denied, 350 U.S. 884, 76 S.Ct. 137, 100 L.Ed. 780 (1955); and Texas State AFL-CIO v. Kennedy, 117 U.S.App.D.C. 343, 330 F.2d 217 (1964). On December 14, 1964, the Supreme Court denied certiorari in the Pennsylvania Railroad case sub. nom. American-Hawaiian Steamship Company v. Dillon, 379 U.S. 945,...

To continue reading

Request your trial
25 practice notes
  • 277 F.Supp. 525 (C.D.Cal. 1967), 67-1225, Los Angeles Customs & Freight Brokers Ass'n, Inc. v. Johnson
    • United States
    • Federal Cases United States District Courts 9th Circuit Central District of California
    • 7 de Dezembro de 1967
    ...for judicial review of Government action. Braude v. Wirtz, supra, at 706-707; Rural Electrification Admin. v. Central Louisiana Elec. Co., 354 F.2d 859, 862-863 (5th Cir. 1966); Pennsylvania R.R. Co. v. Dillon, supra, at 294-295; Duba v. Schuetzle, supra, at It is therefore clear that the m......
  • 331 F.Supp. 54 (D.Minn. 1971), 6-69-Civ-139, United States v. Otter Tail Power Co.
    • United States
    • Federal Cases United States District Courts 8th Circuit District of Minnesota
    • 9 de Setembro de 1971
    ...its customers does not have a right to be free of competition. Rural Electrification Administration v. Central Louisiana Electric Company, 354 F.2d 859 (5th Cir. 1966). This has long been the law and extends to competition from municipally owned facilities. Alabama Power Co. v. Ickes, 302 U......
  • 367 F.Supp. 686 (D.S.D. 1973), Civ. 73-4020, Sioux Val. Empire Elec. Ass'n, Inc. v. Butz
    • United States
    • Federal Cases United States District Courts 8th Circuit District of South Dakota
    • 29 de Novembro de 1973
    ...does not have standing to assert rights of the Cooperative, such as Basin. R. E. A. v. Central Louisiana Electric Company, Inc., 354 F.2d 859 (5th Cir. 1966), cert. denied, 385 U.S. 815, 87 S.Ct. 34, 17 L.Ed.2d The parties' cross-motions for summary judgment present two legal issues: (1) wh......
  • 218 So.2d 592 (La. 1969), 49374, Central Louisiana Elec. Co. v. Louisiana Public Service Commission
    • United States
    • Louisiana Supreme Court of Louisiana
    • 20 de Janeiro de 1969
    ...would be necessary under 7 U.S.C.A. § 904. Also, see Rural Electrification Administration v. Central Louisiana Electric Company, Inc., 354 F.2d 859 (5th Cir. 1966)....
  • Request a trial to view additional results
25 cases
  • 277 F.Supp. 525 (C.D.Cal. 1967), 67-1225, Los Angeles Customs & Freight Brokers Ass'n, Inc. v. Johnson
    • United States
    • Federal Cases United States District Courts 9th Circuit Central District of California
    • 7 de Dezembro de 1967
    ...for judicial review of Government action. Braude v. Wirtz, supra, at 706-707; Rural Electrification Admin. v. Central Louisiana Elec. Co., 354 F.2d 859, 862-863 (5th Cir. 1966); Pennsylvania R.R. Co. v. Dillon, supra, at 294-295; Duba v. Schuetzle, supra, at It is therefore clear that the m......
  • 331 F.Supp. 54 (D.Minn. 1971), 6-69-Civ-139, United States v. Otter Tail Power Co.
    • United States
    • Federal Cases United States District Courts 8th Circuit District of Minnesota
    • 9 de Setembro de 1971
    ...its customers does not have a right to be free of competition. Rural Electrification Administration v. Central Louisiana Electric Company, 354 F.2d 859 (5th Cir. 1966). This has long been the law and extends to competition from municipally owned facilities. Alabama Power Co. v. Ickes, 302 U......
  • 367 F.Supp. 686 (D.S.D. 1973), Civ. 73-4020, Sioux Val. Empire Elec. Ass'n, Inc. v. Butz
    • United States
    • Federal Cases United States District Courts 8th Circuit District of South Dakota
    • 29 de Novembro de 1973
    ...does not have standing to assert rights of the Cooperative, such as Basin. R. E. A. v. Central Louisiana Electric Company, Inc., 354 F.2d 859 (5th Cir. 1966), cert. denied, 385 U.S. 815, 87 S.Ct. 34, 17 L.Ed.2d The parties' cross-motions for summary judgment present two legal issues: (1) wh......
  • 218 So.2d 592 (La. 1969), 49374, Central Louisiana Elec. Co. v. Louisiana Public Service Commission
    • United States
    • Louisiana Supreme Court of Louisiana
    • 20 de Janeiro de 1969
    ...would be necessary under 7 U.S.C.A. § 904. Also, see Rural Electrification Administration v. Central Louisiana Electric Company, Inc., 354 F.2d 859 (5th Cir. 1966)....
  • Request a trial to view additional results