Appalachian Electric Power Co. v. Smith

• Decision Date: 29 March 1933
• Docket Number: No. 494.,494.
• Citation: 4 F. Supp. 6
• Parties: APPALACHIAN ELECTRIC POWER CO. v. SMITH et al.
• Court: U.S. District Court — Western District of Virginia

4 F. Supp. 6

APPALACHIAN ELECTRIC POWER CO. v. SMITH et al.^*

No. 494.

District Court, W. D. Virginia.

March 29, 1933.

John L. Abbot, of Lynchburg, Va., Newton D. Baker, and Raymond T. Jackson, both of Columbus, Ohio, John Draper, of Pulaski, Va., and Curtis, Mallet-Prevost, Colt & Mosle, of New York City, for plaintiff.

Huston Thompson, Sp. Asst. to Atty. Gen., Seth Richardson, Asst. Atty. Gen., and Oswald Ryan, Gen. Counsel, Federal Power Commission, Jas. F. Lawson, Asst. Gen. Counsel, Federal Power Commission, and Willard W. Gatchell, Atty., Federal Power Commission, all of Washington, D. C., and Jos. C. Shaffer, U. S. Atty., of Wytheville, Va., for defendant.

WAY, District Judge.

Appalachian Electric Power Company, a public service corporation under the laws of Virginia (hereinafter called plaintiff) filed its bill of complaint against George Otis Smith, Frank R. McNinch, Ralph B. Williamson, Marcel Garsaud, and Claude L. Draper (hereinafter called defendants), seeking injunctive and other relief on account of alleged unlawful and unconstitutional action taken, and orders entered, by defendants and their predecessors in office while purporting to act as the Federal Power Commission (herein called the Commission), with respect to a "declaration of intention" filed by plaintiff's assignor, New River Development Company, and an application made by plaintiff to the Commission for a license or adjudication, pursuant to the provisions of section 23 of the Federal Water Power Act (USC, title 16, § 817 16 USCA § 817).

The bill seeks the removal of the cloud alleged to have been cast by said finding and orders upon plaintiff's title to real estate situate in this judicial district, and, after setting forth the jurisdictional requirements, alleges the following:

That plaintiff owns in fee and is in possession of approximately 2,550 acres of land, together with certain flowage and other rights and interests in lands, situate along and in New river, Pulaski county, Va., the chief value of which consists in their adaptability for water power development and desires to construct thereon a water development project consisting of a dam, appurtenant power station, and other necessary works. The proposed development will comprise a dam across New river above Radford and upstream from the mouth of Little river, which will create a reservoir 19 to 21.5 miles long and absorb the fall of about 116 feet, occurring between Allisonia, Va., and the proposed site. The drainage area at the site is approximately 2,400 square miles, and the reservoir will cover about 4,000 acres to an average depth of approximately 10 feet so that the utilizable storage will be about 40,000 acre feet.

New River Development Company, above referred to as plaintiff's assignor, is a public service corporation organized under the laws of Virginia. In June, 1925, that corporation filed with the Commission (which body was then composed of the Secretaries of War, Interior, and Agriculture) a "declaration of intention" to construct, operate, and maintain said water development project. The declaration stated that there is no navigation in that part of New river except ferries, and no navigation of the stream for about 160 miles below the proposed site.

The original bill alleges that New river at the site of the proposed development is "not navigable in fact and is not a navigable water of the United States." That part of the bill as amended, now reads: "6. New River at the site of the said development is a fresh water, non-tidal stream; the site of said development is located approximately one hundred and fifty-five miles upstream from the head of navigation on the Kanawha River, to which river the said New River is tributary, and said development does not involve the use of any land or other property of the United States."

The bill alleges that it is proposed to provide the dam with ample floodgates and spillways, and to operate the project so as not to impair the navigable capacity of the stream below, nor to affect the interests of interstate or foreign commerce. A writing signed by New River Development Company, attached to the declaration and entitled, "Statement with reference to Application for Permit or License," states that, "if the Commission should find that the project will affect the interests of interstate or foreign commerce," declarant, upon receipt of advice to that effect, "will consider and determine whether the declarant proposes to apply for a permit or for a license."

In September, 1926, plaintiff, having obtained with the consent of the Commission an assignment of said declaration of intention, filed an application with the Commission for a license for the proposed development. The letter transmitting said application requested that action on the declaration of intention filed by New River Development Company be deferred for consideration at the same time as the application for license by Appalachian Electric Power Company. In the application for license, plaintiff stated: "The minimum flow proposed to be released during periods of low water shall be such amount as shall be required for the purposes of power, navigation, flood control and municipal water supply. The proposed ponding of water will tend to equalize seasonal variations, to increase the minimum flow during low water periods and reduce flood peaks below the project;" and that the project proposed is "on the following named stream; New River. Navigable and carrying commerce to the following extent: None, but tributary to the Kanawha River, which is navigable and carrying commerce up to Montgomery, W. Va., 155 miles below the project."

Proceeding by the Commission with Respect to the Declaration and Application for License.

At this point it is desirable to set forth an outline of the action taken by the Commission with respect to the declaration of intention and application, as disclosed by annual reports of the Commission, some of which reports are referred to and quoted in the bill of Complaint.

The declaration was referred to the chief of engineers for investigation and report, and a report thereon unfavorable to plaintiff was made. At plaintiff's request the Commission returned the papers to the chief of engineers for the consideration of additional data furnished by plaintiff. Upon reconsideration, the chief of engineers filed a second report. His first report said:

"This river is one of the principal tributaries of the Kanawha River, which has been improved for about 90 miles by the construction of 10 locks. It is really the Kanawha River under another name, and the flow if not properly regulated could have an adverse effect on navigation during low water stages in the Kanawha River.

"To fully protect the interests of interstate or foreign commerce any license granted should be made subject to the following conditions:

"1. That the licensee shall permit a continuous flow past its dam not less than the low-water flow of the stream as determined by the records of the stream gauging stations required by the preliminary permit, subject to such modifications as the Secretary of War may prescribe in the interests of navigation, and shall not at any time interfere with the natural flow of the river to such an extent as to interfere with or impede navigation.

"2. That the operations of the licensee, in so far as they affect the use, storage, and discharge of the river shall be controlled by such reasonable rules and regulation as the Secretary of War may prescribe in the interests of navigation."

The second report of the chief of engineers concluded as follows: "So far as can be predicted from available data and records it would not be possible to operate the proposed project so as to adversely affect navigation on the Kanawha River under the existing project." 6th Ann. Rep. Fed. Power Com. pp. 135, 136.

It appears that after study of the application by the Commission's staff, and consideration of additional data not before the chief of engineers, plaintiff was informed that it was proposed to recommend that the Commission find the proposed project would affect the interests of interstate and foreign commerce. At the request of plaintiff's counsel, a hearing was held by the Commission in March, 1927, at which no new data was submitted, but arguments were made and briefs filed.

After the second or revised report of the chief of engineers, the Commission's staff appears to have considered the results of tests of the variation in power plant discharges upon certain rivers in California. That data tended to support the conclusion that, if daily fluctuations of considerable magnitude are created in the Kanawha river, they will require at low stages of the river frequent operation of the movable dams, a use for which they are not intended, thereby increasing the difficulty and expense of maintaining conditions suitable for navigation. Continuing, the report of the Commission says: "Experience on the Kanawha River has shown that no depletion of water supply in a dry season can be made without materially increasing the difficulty of maintaining conditions suitable for navigation. The proposed works have ample capacity not only to decrease the flow in the Kanawha River in considerable amount over long periods in the low-water season, but to cause such variation in daily river discharge as seriously to interfere with operation of the navigation facilities. Under such circumstances it is believed to be the duty of the Commission `to take all needed measures to preserve the navigability' of the Kanawha River; and that these measures can be taken only by requiring the dam to be constructed under a license containing such conditions as will avoid the possibility of serious interference with navigation." 6th Ann. Rep. Fed. Power Com. pp. 136-137.

On account of the different conclusions reached by the executive secretary of the Commission and the chief of engineers in...