LaFlamme v. F.E.R.C.

• Decision Date: 03 June 1991
• Docket Number: No. 90-70448,90-70448
• Citation: 945 F.2d 1124
• Parties: , 22 Envtl. L. Rep. 20,015 Harriet G. LaFLAMME, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION; Department of Agriculture; Sayles Hydro Associates, Respondents.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1124

945 F.2d 1124

34 ERC 1139, 22 Envtl. L. Rep. 20,015

Harriet G. LaFLAMME, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION; Department of Agriculture; Sayles Hydro Associates, Respondents.

No. 90-70448.

United States Court of Appeals Ninth Circuit.

Submitted June 3, 1991. ^*

Decided Sept. 30, 1991.

Glenn Kottcamp, Nevada City, Cal., for petitioner.

Hanford O'Hara, Washington, D.C., for respondent F.E.R.C.

Jeffrey Kehne and Stuart Shelton, U.S. Dept. of Justice, Washington, D.C., for respondent Clayton K. Yeutter, Secretary of Agriculture.

Virginia Cahill, McDonough, Holland & Allen, Sacramento, Cal., for respondent Sayles Hydro Associates.

Petition to Review a Decision of the Federal Energy Regulatory Commission.

Before SCHROEDER, NORRIS and BRUNETTI, Circuit Judges.

BRUNETTI, Circuit Judge:

Petitioner petitions for review of an order of the Federal Energy Regulatory Commission denying a motion for rehearing on the Commission's order reinstating a license to develop a hydroelectric power facility on federal lands. We previously remanded the matter to the Commission to consider the environmental impacts of the project, LaFlamme v. FERC, 852 F.2d 389 (9th Cir.1988). An environmental assessment and finding of no significant impact were prepared on remand; the order reinstating the license relied on those environmental documents. We have jurisdiction over this appeal pursuant to 16 U.S.C. § 825l (b), and we now affirm the Commission's Order Denying Petitioner's Request for Rehearing of the Commission's October 27, 1989, Order Amending and Reinstating a license for a hydroelectric power plant.

I.

This case involves a challenge to a license issued by the Federal Energy Regulatory Commission ("the Commission") under the Federal Power Act ("FPA") to construct a hydroelectric power project known as the Sayles Flat Project ("the Project"). The Commission originally granted the license to Joseph M. Keating ("Keating") on September 26, 1983, and approved a transfer of the license to Sayles Hydro Associates ("Sayles") in 1987.

On a petition filed by Harriet LaFlamme ("Petitioner"), we suspended the license and remanded the matter to the Commission. LaFlamme v. FERC, 852 F.2d 389, amending 842 F.2d 1063 (9th Cir.1988). ¹ Specifically, we remanded because the Commission issued the license without preparing either an environmental assessment ("EA") or an environmental impact statement ("EIS"), and "for further consideration of the issues raised by petitioner LaFlamme concerning the Sayles Flat Project recreational use and visual quality, cumulative impact and need for a comprehensive plan." See LaFlamme, 852 F.2d at 403.

On remand, the Commission issued a draft EA and accepted public comment. The Commission issued a final EA and a finding of no significant impact ("FONSI") on October 10, 1989. On October 27, the Commission issued an order amending and reinstating the license to Sayles.

The United States Forest Service ("Forest Service") submitted comments that criticized the draft EA's conclusion that the Project would not have a significant environmental impact, and requested that an EIS be prepared by the Commission. In October 1989, Sayles and the Forest Service entered into a stipulation settling litigation between them. ² The stipulation provided that the Forest Service would issue a new Special Use Permit ("SUP") to Sayles, and that Sayles would adhere to the terms and conditions of the permit throughout the construction and operation of the Project. The Forest Service thereafter requested that the Commission include the settlement stipulation into the Sayles license, which the Commission did. The Forest Service then retracted its critical comments of the draft EA and its request for preparation of an EIS in an October 25 letter to the Commission, and issued a SUP to Sayles on November 30, 1989.

Petitioner filed an application for stay and rehearing with the Commission on November 13, 1989. The Commission issued an Order Denying Rehearing on September 12, 1990, and petitioner filed the instant petition for review on September 14, 1990.

II.

The FPA, 16 U.S.C. §§ 792 et seq. (1988), gives the Commission authority to regulate the nonfederal development of hydroelectric power on federal lands. The Commission is empowered to issue licenses for the construction and operation of these facilities. 16 U.S.C. § 797(e) (1988) [section 4(e) of the Act]. Prior to issuing a license, the Commission must determine that the project is "best adapted to a comprehensive plan for improving or developing a waterway." 16 U.S.C. § 803(a) (1988) [section 10(a) of the Act].

Licensing decisions are also subject to NEPA, 42 U.S.C. §§ 4321 et seq. (1988). NEPA mandates that for all "major Federal actions significantly affecting the quality of the human environment," a detailed statement must be prepared to analyze the environmental impact of the proposed action, adverse environmental impacts which cannot be avoided, and alternatives to the proposed action. 42 U.S.C. § 4332(2)(C) (1988). If an EIS is not statutorily required, the agency in question must prepare an EA. 40 C.F.R. § 1501.4(b) (1990). Based on the EA, the agency must determine whether to prepare an EIS. 40 C.F.R. § 1501.4(c) (1990). If the agency determines that an EIS is not required, it must prepare a FONSI. 40 C.F.R. § 1501.4(e) (1990). NEPA review of the environmental effects of issuance of a hydroelectric license requires consideration of site-specific environmental impacts of the project, as well as the cumulative environmental effects of the project. See LaFlamme, 852 F.2d at 399-402.

III.

A. Jurisdiction

In our prior opinion, we specifically ordered the Commission to consider the issues of recreational use, visual quality, and cumulative impact under NEPA, and the need for a comprehensive plan under the FPA. LaFlamme, 852 F.2d at 403. The Commission, in its order amending and reinstating the license, did not limit its analysis to these specific issues; rather, "the Commission staff performed a comprehensive resource analysis of the potential impacts of each alternative in order to determine whether, or under what conditions, the license should be reinstated." Order Reinstating License at 2.

We are required by statute to consider only those issues that Petitioner raised in her request for rehearing, or those issues that could not reasonably have been raised at that time. "No objection to the order of the Commission [denying the application for rehearing] shall be considered by the Court unless such objection shall have been urged before the Commission in the application for rehearing unless there is a reasonable ground for failure to do so." 16 U.S.C. § 825l (b) (1988); see also LaFlamme, 852 F.2d at 397 & n. 3. Petitioner's request for rehearing from the Commission raised the following issues:

(1) violation of NEPA by "improperly waiving" an EIS;

(2) lack of a comprehensive plan;

(3) no finding that project power is necessary;

(4) unlawful deferral of issues of public interest to "post-license consideration";

(5) failure to consider Sayles' "lack of fitness for license";

(6) failure to hold an evidentiary hearing before issuance of the license;

(7) improper subordination of the public interest to protection of Sayles' economic interest;

(8) failure to find that issuance of the license was consistent with the federal reservation; and

(9) failure to include the conditions imposed by the Secretary of Agriculture under section 4(e) of the FPA.

In the Order Denying Petitioner's Motion for Rehearing, the Commission addressed each of these arguments, and rejected each as the basis of a meritorious rehearing request.

In the opening appellate brief, Petitioner raises the following arguments:

(1) the Commission violated the law of the case;

(2) the Commission failed to prepare a comprehensive plan;

(3) the Commission and the Forest Service acted unreasonably in failing to prepare an EIS;

(4) the Commission erred in requiring that Petitioner meet a burden of proof that would establish her claims to a scientific certainty;

(5) the Commission erred in deferring consideration of licensing factors to post-licensing studies;

(6) the Commission violated the FPA by subrogating the public interest to Sayles' economic interest based on non-record, ex parte communications; and

(7) the Forest Service's retraction of its comments critical of the EA and its request for preparation of an EIS violated NEPA and the Federal Land Policy and Management Act of 1976 (FLPMA).

Petitioner's contention that the Commission "violated the law of the case" is a vague reiteration of other claims made in the past and made elsewhere in the appellate brief. Therefore, we do not consider this argument separately.

B. Comprehensive Plan

Petitioner contends that the Commission has failed to develop a comprehensive plan for the Project, as required by our remand. As we noted in our prior opinion, the FPA requires that a project "be best adapted to a comprehensive plan for improving or developing a waterway ... for other beneficial public uses, including recreational purposes." 16 U.S.C. § 803(a)(1) (1988).

The Commission argues that a document entitled "comprehensive plan" is not required; it contends that what is required of it is to "consider the comprehensive picture of the water system of which the project is a part, based on the record developed in each particular proceeding." Order Denying Rehearing at 25, citing LaFlamme, 852 F.2d at 402.

In LaFlamme, we held that the Commission must, under the FPA, consider all facts relevant to the public interest in developing a comprehensive plan. LaFlamme, 852 F.2d at 402-03; see also Udall v. F.P.C., 387 U.S. 428, 450, 87 S.Ct. 1712, 1724, 18 L.Ed.2d 869 (1967); National Wildlife Federation v. FERC, 801 F.2d 1505, 1507 (9th Cir.1986). This consideration necessarily includes a comprehensive analysis of the water system of which the...