Carolina Power & L. Co. v. South Carolina Pub. Serv. Auth.

• Decision Date: 02 September 1937
• Docket Number: No. 860,864.,862,860
• Citation: 20 F. Supp. 854
• Court: U.S. District Court — District of South Carolina
• Parties: CAROLINA POWER & LIGHT CO. v. SOUTH CAROLINA PUBLIC SERVICE AUTHORITY et al. SOUTH CAROLINA POWER CO. v. SAME. BROAD RIVER POWER CO. v. SAME.

20 F. Supp. 854

CAROLINA POWER & LIGHT CO. v. SOUTH CAROLINA PUBLIC SERVICE AUTHORITY et al.

SOUTH CAROLINA POWER CO. v. SAME.

BROAD RIVER POWER CO. v. SAME.

Nos. 860, 862, 864.

District Court, E. D. South Carolina.

September 2, 1937.

R. T. Jackson, of Cleveland, Ohio, W. M. Rogers and Douglas Arant, both of Birmingham, Ala., and W. H. Weatherspoon, of Raleigh, N. C., for plaintiff Carolina Power & Light Co.

Arthur R. Young, of Charleston, S. C., for plaintiff South Carolina Power Co.

W. C. McLain and Elliott, McLain, Wardlaw & Elliott, all of Columbia, S. C., and Bolling Powell, Jr., of Birmingham, Ala., for plaintiff Broad River Power Co.

W. J. McLeod, Jr., and R. M. Jefferies, both of Walterboro, S. C., for defendant South Carolina Public Service Authority and its members.

John W. Scott and F. J. McNamara, Sp. Assts. to Atty. Gen., Department of Justice, Enoch E. Ellison, Department of Justice, Jerome N. Frank, Wm. J. Dempsey and Robt. E. Sher, Asst. Counsel, Power Division PWA, and Oswald Ryan, Gen. Counsel to Federal Power Commission, all of Washington, D. C., for defendants Ickes and Hopkins.

Christie Benet and Benet, Shand & McGowan, all of Columbia, S. C., amicus curiæ for Columbia Ry. & Nav. Co.

GLENN, District Judge.

These three suits were brought separately but were later consolidated for purposes of trial. This consolidation was inevitable and proper as every one seems to have conceded. There were the usual preliminary motions, perhaps more than in any other cases. At first interlocutory injunctions were sought. This necessitated a hearing on the question of whether or not section 380, title 28, U.S.C.A., applied. This motion turned upon the question of whether or not the defendants, South Carolina Public Service Authority and its members, were or were not "state officers" within the meaning of that section. It is needless here to do more than refer to this interesting question. This court was of the opinion that the defendants were state officers and that section 380 did apply. A three-judge court was convened. Then the plaintiffs, seeming to desire a trial before one judge rather than three judges, withdrew their applications for interlocutory injunctions. This withdrawal was allowed by the three-judge court and the case came back to one judge for trial. Of course, no interlocutory injunction was needed, as the very pendency of the suits and the hundred or more other suits of like nature pending in the federal courts of the United States operated as a "de facto" injunction. Such factual injunction was in practical effect just as effective for the plaintiffs as one signed by the judge and bearing the seal of a court.

There were interrogatories submitted under Equity Rule 58, 28 U.S.C.A. following section 723; motions to make more definite and certain were made. Immediately on the eve of trial several motions with respect to pleadings and depositions were made and ruled on. Most surprising of all was the motion made Monday, March 2, by the defendants for a continuance. After this court had been asked to push the cases on for trial and heard matters in season and out of season to get the cases ready for trial, and always at the insistence of the defendants, it was most surprising to be faced with a motion for continuance at the last minute. Long, hard, and important cases are seldom completely ready for trial and the court felt the necessity of going forward with the trial as the questions were important and the public interests of South Carolina were involved. It is useless to rehash here the various contentions on these preliminary motions. The cases came on for trial. Trial was had, lasting from beginning to end over a period of 10 weeks and actually consuming 8½ weeks of time in trial days. Testimony taken is well over 10,000 pages. Exhibits, consisting of maps, charts, and documents, literally fill a truck. Many of the exhibits are themselves books and documents running into the hundreds and thousands of pages. The questions involved were so important and varied that days would be taken in dealing with one phase of the case. To attempt to outline the issues in brief space is impossible.

As has been pointed out elsewhere, these cases involve all of the constitutional issues involved in other suits where federal funds appropriated by the Congress are being used under loan and grant agreements to construct municipally owned power plants competing with existing power companies. The magnitude of this Santee-Cooper project is such that it might be called a little TVA. On the other hand in legal nature it does not bear a close resemblance to the TVA. In the TVA project we have an origin confessedly legal arising out of the war power of the federal government. The commerce clause in its power over navigation also gave the TVA project a confessedly legal origin. Here we are not dealing with the development of an existing power plant, but with the creation of an entirely new one. Here the river involved is technically navigable, but practical navigation has at this time been entirely abandoned. Likewise the navigation features of the project itself are the subject of much contention. One of the main arguments of the complaining power companies is that the navigation features of the project are merely colorable and pretensive; that actually the main reason for the project is the development of water power and that the navigation elements are injected merely to lend legality to the project. We will, of course, in our findings of fact, conclusions of law, and elsewhere in this opinion develop these questions more fully.

In the trial of the case it was also necessary to go fully into the question of cost. The statute provides that such projects, when aided by federal funds, shall be reasonably secured. Likewise it is apparent that the existing or promised appropriation must bear some reasonable relation to the actual cost of the project. The project in the language of the statute must also be feasible. A mere pipe dream, impossible of actual accomplishment, though otherwise legal, is not justifiable under this statute. The attack on the practicality of the project was made from several angles. One of the most interesting angles of attack involved a study of geological formation of the territory involved. In short, it was contended that the country was so full of soluble limestone channels and sinkholes that it would be impossible to impound the large quantities of water necessary to fill the two extensive reservoirs. Again it was contended that the foundations on which the concrete dams, power houses, and spillways were to be placed were of such uncertain composition as to endanger the superstructures. This criticism of the project from a geological standpoint had been made many years ago, and as a result the testimony covered findings which had been made by many different geologists, surveyors, and drillers over a period of 20 years. Three very eminent geologists testified. Dr. Kerr, an eminent geologist from Columbia University, New York City, devoted much time to a study of this area and the evidence submitted to him by many witnesses. The deposition of Dr. Meade, head of the department of geology at Massachusetts Institute of Technology, was taken. On the record his qualifications were shown to be most unusual and he must necessarily be considered as a witness of the highest ability and integrity. Most impressive and interesting, however, was the testimony of Dr. Taber of the department of geology in the University of South Carolina. Dr. Taber has been studying this proposition for 10 years and has spent months in the area involved. He was at all times aided by a number of assistants, and therefore was able to get evidence on every phase of the geological questions involved. Dr. Calhoun, geologist of Clemson College, was also presented as a witness, and, while he had not studied the question as thoroughly and intimately as Dr. Taber, nevertheless his testimony was very definite and helpful to the court.

The question of the cost of the project also brought much expert testimony into the trial. Leading construction engineers and leading accountants, all familiar with hydroelectric plants and their operation, were present as witnesses. The cost elements were analyzed in detail. A great divergence of opinion was found on many elements of the cost, and indeed it is well-nigh a vain hope to believe that a single judge can weigh the testimony on all phases of such a case and be able to say with any accuracy which testimony is more reasonable and creditable. But the method of trial provided for these cases is built upon that theory of the fact finding capacity of one individual judge, and so we must address ourselves to the task of deciding these questions of fact. It matters not how highly technical or how involved are the scientific questions, the judge must decide which of the witnesses is telling the truth about the matter. However, it is fortunate that this court knows the territory involved and has some knowledge of the many questions coming up for decision in this case. One of the most troublesome questions is the cost of the land which is to be purchased for the two reservoirs, and as this element of the cost is the largest single element the findings thereabout will be very important on the whole question of cost.

It is well also at the outset to refer to the characteristics of the Santee river system. The Santee system is made up of three major rivers which rise in the mountains popularly known as the Blue Ridge and flow towards the sea. These rivers are from north to south the Catawba-Wateree, the Broad, and the Saluda. The Saluda and the Broad combine at Columbia, S. C., to make the Congaree. This confluence takes place at the fall line, the divide between the Piedmont and the coastal plains. The Congaree then flows in a south-easterly direction and joins with the Catawba-Wateree...