Appalachian Electric Power Co. v. Smith

• Decision Date: 18 November 1933
• Docket Number: No. 3500.,3500.
• Citation: 67 F.2d 451
• Parties: APPALACHIAN ELECTRIC POWER CO. v. SMITH et al.
• Court: U.S. Court of Appeals — Fourth Circuit

67 F.2d 451 (1933)

APPALACHIAN ELECTRIC POWER CO. v. SMITH et al.

No. 3500.

Circuit Court of Appeals, Fourth Circuit.

October 3, 1933.

Rehearing Denied November 18, 1933.

Raymond T. Jackson and Newton D. Baker, both of Cleveland, Ohio (John L. Abbot, of Lynchburg, Va., John S. Draper, of Pulaski, Va., and A. Henry Mosle, Creswell M. Micou and Fraser M. Horn, all of New York City, on the brief), for appellant.

R. Gray Williams, Sp. Counsel, of Winchester, Va. (John R. Saunders, Atty. Gen. of Virginia, on the brief), for the Commonwealth of Virginia, as amicus curiæ.

Huston Thompson, Sp. Asst. to Atty. Gen., Seth W. Richardson, Asst. Atty. Gen., and Willard W. Gatchell, Atty., Federal Power Commission, of Washington, D. C. (Homer Cummings, Atty. Gen., Oswald Ryan, Gen. Counsel, Federal Power Commission, and James F. Lawson, Asst. Gen. Counsel, Federal Power Commission, both of Washington, D. C., and Joseph C. Shaffer, U. S. Atty., of Wytheville, Va., on the brief), for appellees.

Before PARKER, NORTHCOTT, and SOPER, Circuit Judges.

PARKER, Circuit Judge.

This is an appeal in a suit instituted by the Appalachian Electric Power Company, as plaintiff, against George Otis Smith, Frank R. McNinch, Ralph B. Williamson, Marcel Garsaud, and Claude L. Draper, as defendants, who were at the time members of the Federal Power Commission. They were sued, however, not in their official capacity, but as individuals; and, upon the return of process, they moved to quash the service thereof (D. C.) 4 F. Supp. 3 and also to dismiss the bill of complaint for lack of jurisdiction in the court to entertain the suit as well as for non-joinder of necessary parties. (D. C.) 4 F. Supp. 6. The court overruled these motions and took jurisdiction of the cause, but dismissed the bill on the merits. Defendants in this court again challenge the jurisdiction of the court below in addition to insisting that, if there was jurisdiction, the decision on the merits was correct. As we are of opinion that the position of defendants is correct on the question of jurisdiction, we shall confine our discussion to that question.

Plaintiff is the owner of a large body of land on New river in Pulaski county, Va. This land has been acquired with a view of developing the water power of New river through the erection of a dam, and its chief value consists in its prospective use as a basin for the pond or reservoir which will be thereby created. In June, 1925, the New river Development Company, which at that time held title to the land, filed a "declaration of intention" with the Federal Power Commission pursuant to section 23 of the Federal Water Power Act (16 USCA § 817), describing the dam and power plant which it intended to construct and requesting the commission to cause an investigation thereof to be made pursuant to the provisions of the act. In September, 1926, plaintiff, having acquired title to the lands held by the New River Development Company, and having with the consent of the commission taken an assignment of the "declaration of intention," applied to the commission for a license authorizing the construction of the project. The application for license described the New river as nonnavigable but as a tributary to the Kanawha, which was described as being navigable to Montgomery, W. Va., 155 miles below the project.

The Power Commission caused investigation to be made and on June 1, 1927, found that New river in the part involved was not "navigable waters" within the definition of the Water Power Act, but that "the interests of interstate or foreign commerce" would be affected by the proposed construction. The commission thereupon tendered plaintiff a standard or major form license containing all of the terms and conditions specified by the Water Power Act (16 USCA § 803). Plaintiff promptly notified the commission that it would not accept the license. In February, 1930, it requested the commission to reconsider the finding made on June 1, 1927 and to disclaim jurisdiction over the proposed development or, alternatively, to issue a minor part license pursuant to section 10(i) of the act. In the letter making this request, plaintiff challenged the jurisdiction of the commission over the development, but offered to accept a minor part license containing only such conditions as would be appropriate to prevent any substantial interference with the navigable capacity of the Kanawha river rendered unlawful by the River and Harbor Act of March 3, 1899 (33 USCA § 403).

No further action was taken in the matter until after the defendants became members of the commission in December 1930. A hearing was held in February 1931, and on April 3, 1931, the commission entered an order as follows:

"1. That the motion of the applicant company to reconsider the finding of June 1, 1927, `that the interests of interstate or foreign commerce would be affected by such proposed construction' be and the same is hereby denied;

"2. That the application, dated October 6, 1930, for a minor part license for this project be and the same is hereby denied; and

"3. That the applicant shall be tendered a standard form license under the Act, and it is hereby ordered that it shall not proceed with construction until it shall have received and accepted such license."

In May, 1931, the commission again tendered plaintiff a standard or major form license. Plaintiff again refused to accept such license and in June, 1931, instituted this suit in the Western District of Virginia, not against the commission but against the members of the commission individually. No one of the members of the commission was resident in Virginia, but process was served upon them in the District of Columbia under order entered on the theory that the suit was one to remove a cloud from the title of plaintiff's property. Defendants appeared specially and objected to the court's taking jurisdiction of the cause and moved to quash and set aside the service of process, but their objection was overruled and motion denied. (D. C.) 4 F. Supp. 3.

The bill of complaint set forth the facts hereinabove stated, other than those relating to service of process, and averred that it was beyond the authority of the members of the Power Commission to enter the orders of June 1, 1927, and April 3, 1931, or to require plaintiff to accept the license tendered as a condition of proceeding with the construction of the proposed project; that, if the Water Power Act by its terms conferred such power upon the commission, it was to that extent contrary to the provisions of the federal Constitution and void for that reason; that the orders of the commission were void, either because not authorized by statute, or because the statute authorizing them was unconstitutional; and that these orders constituted a cloud on plaintiff's title to its lands, which prevented it from obtaining funds necessary to develop them so as to realize their value. The prayer of the bill was that the orders of June 1, 1927, and April 3, 1931, be declared null and void, that defendants be required to expunge them from the records of the Power Commission, and that defendants be enjoined from interfering with plaintiff's construction of its contemplated power development, or from instituting any prosecutions against plaintiff or its officers pursuant to the penal or injunctive provisions of the Water Power Act. Paragraph 8 of the prayer as amended, which presents succinctly the contentions of plaintiff, is as follows: "And the plaintiff further prays that the Federal Water Power Act be declared unconstitutional, null and void in so far as it purports to apply to the aforesaid proposed water power development of the plaintiff and that section 23 of the Federal Water Power Act be declared unconstitutional, null and void in so far as it authorizes the said defendants as members of the Federal Power Commission to require this plaintiff to accept any license for the construction, operation and maintenance of said development or, if said Federal Water Power Act should be found constitutionally to confer jurisdiction upon the Federal Power Commission to require some form of license for plaintiff's development, then that said Act be declared unconstitutional, null and void in so far as it may be construed to require this plaintiff to obtain and accept a license for the construction, maintenance and operation of its development containing any conditions other than or in addition to those which are necessary and appropriate to prevent a substantial obstruction to or diminishment of the navigable capacity of the Kanawha River or any other navigable waters of the United States."

The allegations and prayers of the bill which relate to abuse of authority by the commission need not be considered; for it is clear that it is only on the allegations of want of statutory or constitutional authority that the suit against the commissioners as individuals could under any theory be sustained. Philadelphia Co. v. Stimson, 223 U. S. 605, 620, 32 S. Ct. 340, 56 L. Ed. 570; Lane v. Watts, 234 U. S. 525, 540, 34 S. Ct. 965, 58 L. Ed. 1440; Colorado v. Toll, 268 U. S. 228, 230, 45 S. Ct. 505, 69 L. Ed. 927; Ferris v. Wilbur (C. C. A. 4th) 27 F.(2d) 262. The suit is not one against the commission for the purpose of reviewing its action; and it is not contended that jurisdiction to exercise such review has been granted to the courts.

But we do not think that the bill can be sustained even under the allegations of lack of power on the part of the commission and unconstitutionality of the statute and orders; for as a suit for injunction, it is brought against persons who have nothing to do with preventing plaintiff's proceeding with its proposed construction, and, as a suit to remove cloud from title, it could not establish any right against the United States and any relief granted therein would be wholly nugatory. The claim of right to maintain the suit rests, we think, upon a...