Duke Power Co. v. Greenwood County

• Decision Date: 06 August 1937
• Docket Number: No. 4209.,4209.
• Citation: 91 F.2d 665
• Parties: DUKE POWER CO. et al. v. GREENWOOD COUNTY et al.
• Court: U.S. Court of Appeals — Fourth Circuit

91 F.2d 665 (1937)

DUKE POWER CO. et al. v. GREENWOOD COUNTY et al.

No. 4209.

Circuit Court of Appeals, Fourth Circuit.

August 6, 1937.

COPYRIGHT MATERIAL OMITTED

W. S. O'B. Robinson, Jr., of Charlotte, N. C., and Raymond T. Jackson, of Cleveland, Ohio (Newton D. Baker, of Cleveland, Ohio, W. R. Perkins, of New York City, H. J. Haynsworth, of Greenville, S. C., and J. H. Marion and W. B. McGuire, Jr., both of Charlotte, N. C., on the brief), for appellants and cross-appellees.

W. H. Nicholson, of Greenwood, S. C., and D. W. Robinson, Jr., of Columbia, S. C. (R. F. Davis, of Greenwood, S. C., and Jas. F. Dreher, of Lexington, S. C., on the brief), for appellees and cross-appellants Greenwood County and its Finance Board.

Jerome N. Frank, Legal Counsel, Federal Emergency Administration of Public Works, of New York City, and Enoch E. Ellison, Atty., Department of Justice, of Washington, D. C. (James W. Morris, Asst. Atty. Gen., Paul Freund, Sp. Asst. to Atty. Gen., E. H. Foley, Jr., Gen. Counsel, Robert E. Sher, Asst. Legal Counsel, and William J. Dempsey, Sp. Counsel, Federal Emergency Administration of Public Works, all of Washington, D. C., on the brief), for appellee and cross-appellant Harold L. Ickes, Federal Emergency Administrator of Public Works.

Before PARKER, NORTHCOTT, and SOPER, Circuit Judges.

PARKER, Circuit Judge.

This is the third time that we have had before us the suit of the Duke Power Company and its subsidiary, the Southern Public Utilities Company, to enjoin the construction by Greenwood County, S. C., of a power dam at Buzzard Roost Falls on the Saluda River and to enjoin Harold L. Ickes, the Federal Administrator of Public Works, from making a loan and grant of $2,852,000 to the county under the provisions of title 2 of the National Industrial Recovery Act, 48 Stat. 200, § 201 et seq., 40 U.S.C.A. § 401 et seq., for the construction of the project. Upon the first appeal we remanded the cause in order that the court below might reconsider its decision in the light of a new contract which had been entered into between the county and the Administrator of Public Works. Greenwood County v. Duke Power Co. (C.C.A.4th) 79 F.(2d) 995.

On the second appeal, we reversed the decree of the District Court granting an injunction, and directed that the bill of complaint be dismissed for want of equity, holding: (1) That the courts were bound by the finding of the Administrator that the project could be constructed within the limits of the loan and grant and would be a self liquidating project within the meaning of the act of Congress and the policy of the Public Works Administration; (2) that we were bound by the decision of the South Carolina Supreme Court in Park v. Greenwood County, 174 S.C. 35, 176 S.E. 870, to the effect that the construction of the power plant and the issuance of revenue bonds to pay for same were within the powers of the county; (3) that the statute under which the Administrator proposed to make the loan was constitutional; (4) that the Administrator was acting within his powers in making same; and (5) that no legal right of plaintiffs was infringed by the making of the loan or the construction of the project, and that plaintiffs for this reason were not entitled to an injunction in any event. Greenwood County v. Duke Power Co. (C. C.A.4th) 81 F.(2d) 986. The Supreme Court granted certiorari and held that we had erred in our order remanding the case on the first appeal, in that we had not vacated the decree appealed from, and that this error on our part had misled the District Judge so that he unduly limited the hearing upon the remand. It declined, therefore, to pass upon any of the questions upon which we had ruled on the second appeal, but remanded the cause to the District Court with direction that the decree entered by that court be vacated, that the parties be permitted to amend their pleadings in the light of the existing facts, and that the cause be retried upon the issues thus presented. Duke Power Co. v. Greenwood County, 299 U.S. 259, 57 S.Ct. 202, 81 L.Ed. 178.

Upon receipt of mandate from the Supreme Court the District Court entered an order setting aside the decrees which it had theretofore rendered, permitted amended pleadings to be filed, and set the case down for hearing de novo over the protest of counsel for plaintiffs, who contended that the hearing should be limited to matters which had occurred subsequent to the first appeal. As we interpret the opinion of the Supreme Court, however, the course adopted by the District Judge was entirely correct. The case was one in which it appeared, to use the language of the Supreme Court, that supervening facts required "a retrial in the light of a changed situation"; and, in passing upon the effect of the new contract and the relief appropriate in the light of the changed situation, there was no reason why the District Judge should have considered himself limited in any way by the evidence introduced or findings made upon prior hearings. The setting aside of the decrees in the District Court left the cause in precisely the position that it would have occupied if no final decree had ever been entered; and we think there can be no doubt as to the power of the court in an equity cause, until final decree has been entered, to hear additional evidence and modify or set aside any finding of fact theretofore made. Fourniquet v. Perkins, 16 How. 82, 14 L.Ed. 854; Glades County v. Detroit Fidelity & Surety Co. (C.C.A. 5th) 65 F.(2d) 252; Wagner v. Meccano (C.C.A.6th) 235 F. 890; Dangerfield v. Caldwell (C.C.A.4th) 151 F. 554. The opinion of the Supreme Court determines none of the issues raised in the cause, but directs that, after the pleadings shall have been amended, it "be retried upon the issues then presented"; and it is well settled that the granting of a new trial by an appellate court reopens every issue in the case, except as to questions definitely and finally determined upon the appeal. American Surety Co. v. Jackson (C.C.A.9th) 26 F. (2d) 248; Shell Petroleum Corp. v. Shore (C.C.A.10th) 80 F.(2d) 785; Glades County v. Detroit Fidelity & Surety Co., supra; Cyclopedia of Federal Procedure, vol. 6, p. 820.

Upon the retrial had in the court below, the evidence theretofore taken in the cause was introduced, including the new contract and the other evidence received following the first remand, as well as the evidence taken prior to the first appeal. Additional evidence was also introduced bearing upon the loss which plaintiffs would sustain from competition resulting from the construction of the project and upon the consideration given by the Administrator and his subordinates to the effect on power rates of other projects for which application for loans and grants had been made. The judge below filed an exhaustive opinion upon all of the questions presented and set forth his findings of fact and conclusions of law fully and completely as required by the equity rules. He held the statute under which the loan and grant were made to be constitutional and the action of the Administrator in making same to be a valid exercise of his authority under the statute. He dismissed the bill, therefore, taxing one-half of the costs, however, against the defendants on the ground that they had prolonged the litigation by opposing the application of plaintiffs to intervene in the case of Park v. Greenwood County, 174 S.C. 35, 176 S.E. 870, when that cause was pending before the Supreme Court of South Carolina. From the decree dismissing the bill, the plaintiffs have appealed, and the defendants have appealed from so much of it as taxes them with costs. The appeals present four questions for our consideration: (1) Whether the statute under which the Administrator has made the loan and grant is a valid exercise of congressional power; (2) whether the making of the loan and grant by the Administrator is within the power granted him by the statute; (3) whether, in any event, any right of plaintiffs is violated by the making of the loan and grant; and (4) whether any costs should have been taxed against defendants.

Statement of Facts

The facts are as follows: The plaintiff power company, which operates in the Piedmont section of the Carolinas, and to which we shall hereafter refer as the plaintiff, is the only large power company doing business in Greenwood County, South Carolina, and surrounding counties. The record shows, however, that it furnishes not exceeding 15 per cent. of the power now used in Greenwood County, the remainder being supplied by steam plants of manufacturing companies. After the passage of the National Industrial Recovery Act in 1933, officials of that county, without solicitation or suggestion from the Public Works Administration, conceived the plan of obtaining authority from the State of South Carolina for the construction by the county of a dam and power plant at Buzzard Roost Falls on the Saluda River and of obtaining a grant and loan from the Public Works Administration for financing the project. Authority from the state was duly obtained (Acts May 8, 1933, March 26, 1934, 38 St. at Large, S.C. pp. 411, 1392), and application for loan and grant in the total sum of $2,800,000 was made by Greenwood County to the Administrator of Public Works in November 1933. Without consulting with the Public Works Administrator, the county prepared and included in its application a schedule of rates to be charged for the sale of electric energy to the various classes of its proposed customers. Notwithstanding the change in the contracts between the county and the Administrator, to which we shall refer hereafter, these rates have never been changed.

After full consideration of the application by the Administrator of Public Works, an allotment was made for this project on June 19, 1934, and was approved by the President of the United States on the following day. Plaintiff having asked to be heard in opposition to the...