Cooley v. F.E.R.C., 87-1249
| Decision Date | 12 April 1988 |
| Docket Number | No. 87-1249,87-1249 |
| Citation | 843 F.2d 1464 |
| Parties | Marjorie Linder COOLEY, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
McNeill Watkins, II, with whom Steven J. Riggs, Washington, D.C., were on the brief, for petitioner.
Hanford O'Hara, Atty., F.E.R.C., with whom Catherine C. Cook, Gen. Counsel and Jerome M. Feit, Sol., F.E.R.C., were on the brief, for respondent. Joseph S. Davies, Atty., F.E.R.C., Washington, D.C., also entered an appearance for respondent.
Michael N. McCarthy, Washington, D.C., was on the brief, for intervenor Clifton Power Corp.
Before WALD, Chief Judge, EDWARDS and D.H. GINSBURG, Circuit Judges.
Opinion for the Court filed by Chief Judge WALD.
This is an appeal from a grant by the Federal Energy Regulatory Commission (FERC or the Commission) of a license to Clifton Power Corporation (Clifton) for the operation of a small hydroelectric plant on the Pacolet River, in Spartanburg County, South Carolina. The license is challenged by Marjorie Linder Cooley, the owner of a one-half acre strip of riparian land flooded by the project.
The principal issue in the case is whether the Commission may grant licenses under Sec. 4(e) of the Federal Power Act (FPA or the Act), 16 U.S.C. Sec. 797(e), to voluntary applicants to operate hydroelectric plants constructed prior to 1935 on certain nonnavigable streams, despite its inability to require such licenses under Sec. 23(b) of the Act, 16 U.S.C. Sec. 817. See Farmington River Power Co. v. FPC, 455 F.2d 86 (2d Cir.1972). We affirm the Commission's authority under Sec. 4(e) to grant such licenses. We also reject Cooley's contention that the Commission committed numerous errors in determining that Clifton was a "fit" licensee. Despite some concerns about the Commission's handling of this case, we find its licensing decision neither arbitrary nor capricious.
In May, 1981, Clifton applied for a license from the FERC to operate an idle hydroelectric plant on the Pacolet River. Joint Appendix (J.A.) at 1-37. In July, Clifton began operating the project without a license and selling its electricity to Duke Power Company. Cooley then intervened in the license proceeding, claiming that Clifton's project had flooded 16.4 acres of her land 1 and that Clifton had refused to negotiate a lease with her. J.A. at 38.
The Commission, in November, 1983, issued an order to show cause why Clifton should not stop operating its plant without the license apparently required by Sec. 23(b). 2 J.A. at 175. In response, Clifton claimed, contrary to statements in its initial application, that both of the plant's generators had been installed prior to 1935. If true, this fact would put the project outside the scope of Sec. 23(b)'s requirements. 3
In June, 1985, the Commission terminated the show cause proceeding because of the substantial possibility that it did not have Sec. 23(b) jurisdiction to require a license. 4 The FERC transferred the record of the show cause proceeding to the pending license proceeding. 5
Following a brief, unsuccessful attempt to obtain relief in South Carolina state court, Cooley supplemented her barrage of motions before the Commission with an action in federal district court seeking damages and injunctive relief for the flooding of her land. After an initial adverse ruling by the trial court, the Fourth Circuit held that Clifton had violated South Carolina statutory and common law by causing the water level of the Pacolet to rise six feet at Cooley's lower property line. Cooley v. Clifton Power Corp., 747 F.2d 258 (4th Cir.1984). On remand, the district court awarded damages of $89.50 for the three-year rental value of that flooded land and injunction requiring Clifton to maintain its reservoir at a level below the elevation of Cooley's land. Because of operational difficulties, 6] In the ongoing FERC license proceeding, Cooley suggested that the Commission dismiss Clifton's application for lack of jurisdiction and, in the alternative, requested an evidentiary hearing on several matters regarding Clifton's fitness as a license. 7 J.A. at 50-63. The FERC nonetheless issued the license, finding that it possessed the power under Sec. 4(e) to grant licenses voluntarily sought, though not required under Sec. 23(b); Clifton "may seek, but is not required to obtain, a license for its ... project." J.A. at 67. The Commission also summarily rejected Cooley's several concerns about Clifton's fitness to be a licensee.
Clifton was unable to keep the water level below 588.3 feet above mean sea level, thereby violating the court's order. J.A. at 233-34. In an enforcement proceeding, the district court ordered Clifton to either pay a $5,000 fine or monitor the elevation with whatever device or personnel was necessary to ensure compliance. As a result, Clifton installed monitoring equipment.
Cooley requested a rehearing on a number of grounds. She argued that Sec. 4(e) of the Act does not confer any independent licensing authority on the Commission over and above Sec. 23(b)'s requirements and also that the FERC erred in issuing the license without adequately addressing Clifton's fitness. As an example, she pointed to its refusal to give sufficient weight to Clifton's repeated violations of South Carolina law regarding river banks and beds. See 16 U.S.C. Sec. 802(a)(2) (Supp.1986) ().
Seven months after filing her rehearing request, Cooley submitted additional information alleging that Clifton had failed to meet a number of financial obligations; Clifton had defaulted on a loan agreement and failed to pay both federal and county taxes, and Spartanburg County had issued a tax execution and sold the property. J.A. at 125-38. 8
On May 5, 1987, after examining both her jurisdictional and fitness arguments, the Commission denied Cooley's petition for rehearing. The Commission refused to consider her final post-hearing submission on the technical ground that it constituted a new request for rehearing filed outside the 30-day statute of limitations. See 16 U.S.C. Sec. 825l (a).
Before this court, Cooley seeks review of the Commission's orders granting the license to Clifton and denying her rehearing request. She reasserts her claim that Sec. 4(e) does not give the FERC jurisdiction over voluntary license applicants and raises an amalgam of arguments why, even if the Commission does not have the power to issue a license, Clifton should be considered unfit to receive one.
Cooley argues that the Commission does not have authority under Sec. 4(e) to grant a license voluntarily sought by the operator of a project constructed prior to 1935 on nonnavigable waters. According to her interpretation, the FERC's jurisdiction under Sec. 4(e) is coterminous with that under Sec. 23(b).
Cooley relies on decisions holding that the Commission may not require licenses for projects built entirely before 1935 for the quite different proposition that the Commission may not grant licenses voluntarily The plain language of the two sections does not support Cooley's interpretation. See supra note 3. Section 23(b) requires licenses for any person "intending to construct" a project on nonnavigable waters over which Congress has Commerce Clause jurisdiction. 16 U.S.C. Sec. 817. The language "intending to construct" has been consistently held to limit the scope of Sec. 23(b)'s license requirement to post-1935 construction. Farmington, 455 F.2d 86 (2d Cir.1972). No similar language appears in Sec. 4(e). Section 4(e) states only that the FERC is "authorized and empowered" to issue licenses for any projects "across, along, from or in any of the streams or other bodies of water over which Congress has jurisdiction" under the Commerce Clause, irrespective of the date of construction. Thus, its plain language gives no indication that Congress intended to limit the Commission's power to grant licenses, as opposed to its Sec. 23(b) authority to require them, to post-1935 projects.
sought for projects of such advanced age. See Farmington River Power Co. v. FPC, 455 F.2d 86 (2d Cir.1972); 9 see also Puget Sound Power & Light Co. v. FPC, 557 F.2d 1311 (9th Cir.1977) (no license required even when generators destroyed in 1936 are replaced). These cases, however, do not address the question of first impression raised here: whether Sec. 4(e) gives the Commission authority to grant licenses that it may not require under Sec. 23(b)
The legislative history of the 1935 Act buttresses the plain language of the statute; there is nothing in that history suggesting that Congress meant to confine the Commission's power under Sec. 4(e) to the contours of Sec. 23(b). Under the pre-1935 version of Sec. 23(b), 10 licenses were required only where the applicant voluntarily declared his intention to construct a project, thereby submitting himself to Commission jurisdiction. (Otherwise, a potential hydroelectric plant operator need do no more than meet the requirements of state law.) While Sec. 23 outlined the procedures to be followed by voluntary applicants, the precedessor to Sec. 4(e) empowered the Commission to issue licenses to them. In this sense, the precursors to Secs. 23(b) and 4(e) were similar in their voluntary orientation.
The 1935 amendment adding Sec. 23(b) made licensing a mandatory requirement for all new projects. The purely voluntary scheme had proved inadequate for the development of a comprehensive system of water power regulation. See S.Rep. No. 621, 74th Cong., 1st Sess. (1935); see also First Iowa Hydro-Electric Coop. v. FPC, 328 U.S. 152, 180, 66 S.Ct. 906, 919, 90 L.Ed. 1143 (1946) (1935 Act designed to establish "complete scheme of national regulation which would promote the comprehensive...
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