Metro Hydroelectric Co., LLC v. Metro Parks

• Decision Date: 04 September 2008
• Docket Number: No. 07-3291.,07-3291.
• Parties: METRO HYDROELECTRIC COMPANY, LLC, Plaintiff-Appellee, v. METRO PARKS, Serving Summit County, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

541 F.3d 605

METRO HYDROELECTRIC COMPANY, LLC, Plaintiff-Appellee, v. METRO PARKS, Serving Summit County, Defendant-Appellant.

No. 07-3291.

United States Court of Appeals, Sixth Circuit.

Argued: February 6, 2008.

Decided and Filed: September 4, 2008.

ARGUED: Robert M. Gippin, Goldman & Rosen, Akron, Ohio, for Appellant. Michael T. McMenamin, Walter & Haverfield, Cleveland, Ohio, for Appellee. ON BRIEF: Robert M. Gippin, Goldman & Rosen, Akron, Ohio, for Appellant. Michael T. McMenamin, Leslie G. Wolfe, Walter & Haverfield, Cleveland, Ohio, for Appellee.

Before: SUHRHEINRICH, COLE, and GIBBONS, Circuit Judges.

OPINION

JULIA SMITH GIBBONS, Circuit Judge.

Defendant-appellant Metro Parks appeals the district court's grant of a preliminary injunction to plaintiff-appellee Metro Hydroelectric Company, LLC. Metro Parks argues that the district court erred in finding that subject matter jurisdiction existed in this case and that the district court abused its discretion in issuing the preliminary injunction. Because we find that no federal subject matter jurisdiction exists in this case, we reverse the decision of the district court.

I.

The instant dispute revolves around the parties' various property rights to an area of land in Akron, Ohio, now called Gorge Metro Park. Metro Hydroelectric ("MHC") claims a property right to this area of land through the purchase of an easement from Ohio Edison on September 9, 2004. Metro Parks disputes whether Ohio Edison, in fact, owned the property rights it purported to transfer to MHC. The district court, in its denial of MHC's second motion to dismiss, presented the facts underlying this dispute as follows:

In 1929, Ohio Edison's predecessor in interest, the Northern Ohio Power and Light Company ("NOPLC" or the "Grantor") transferred by Deed, duly recorded, 144.47 acres of land to the Akron Metropolitan Park District, with its reservation of rights. This property, along with approximately ten (10) additional contiguous acres is now The Gorge Metropark. The Deed expressly reserved to NOPLC a broad set of rights allowing it to use and enjoy the property, the waters of the river, and the embankments for the purpose of generating hydroelectric power. The reservation of rights states in pertinent part:

This conveyance is made subject to the following exceptions, restrictions, reservations and limitations:

1. Said grantor, ... reserves the right to forever maintain its present dam, pen stock and appurtenances thereto now located upon said premises, and the right to repair, rebuild, remodel, change or enlarge said dam, pen stock and appurtenances, and the right to use so much of the adjacent premises as may be necessary in the maintenance or reconstruction of said dam, pen stock and appurtenances.

2. Said grantor, ... reserves the full right to use so much of the premises herein before described as may be necessary as a means of furnishing egress to or egress from any of grantor's property located adjacent to or surrounded by any of the premises herein conveyed; also the right to deliver water from said dam described in paragraph "1." hereof to its hydraulic plant located adjacent to the land herein conveyed.

* * *

4. The grantor, ... reserves all the rights which it now possesses to the use and flow of the waters in the Cuyahoga River, running through and along the premises herein described, and this conveyance shall not be considered or construed as a conveyance of any of grantor's rights to use or flow of said water in said river, or the conveyance of any property right upon which its said right to the use and flow of said waters is based; and said grantor reserves the right and easement to use so much of the banks along said river as may be necessary for the full enjoyment by it of the use and flow of said waters in said river.

* * *

7. The above reservations and conditions are made not only for the benefit of the grantor, ..., but for its successors and assigns.

Ex. U (Doc. 1-22) at 2-4 (emphasis added).

On September 9, 2004, Ohio Edison, as Grantor, and [MHC], as Grantee, entered into an Agreement entitled "Non-Exclusive Easement for the Investigation and Potential Development of Property to Produce Hydroelectric Power." Ex. V (Doc. 1-23). As stated therein, the "Purpose" of the Agreement was "to permit [MHC] to investigate the physical, economic and environmental feasibility of, and if feasible, then subsequently to develop, construct, operate and maintain a hydroelectric power facility using the waterway, the land on or near the waterway, and/or the existing dam located on the Property." Id. at 1. After reciting the various rights reserved to the Grantor in the 1929 Deed, the Agreement goes on to grant "a limited, non-exclusive easement ... to go through, over and across and to use any and all of the foregoing Reserved Property Rights reasonably necessary for the Purpose stated above...." Id. at 2 (emphasis added).

Metro Hydroelectric Co. v. Metro Parks, 2007 WL 582311, at *2-3, 2007 U.S. Dist. LEXIS 11580, at *7-8 (N.D.Ohio Feb. 20, 2007).

On December 29, 2003, MHC submitted its application for a preliminary permit to the Federal Energy Regulatory Commission ("FERC"). The purpose of securing a preliminary permit is

for the sole purpose of maintaining priority of application for a license under the terms of this Chapter [16 U.S.C. § 791a et seq.] for such period or periods, not exceeding a total of three years, as in the discretion of the Commission may be necessary for making examinations and surveys, for preparing maps, plans, specifications, and estimates, and for making financial arrangements.

16 U.S.C. § 798.¹ As part of its application for a preliminary permit, MHC decided that, upon acceptance of its application for a preliminary permit, it would pursue a license via the Integrated Licensing Process ("ILP").²

On March 15, 2005, FERC issued a preliminary permit to MHC. On October 13, 2005, MHC, pursuant to 18 C.F.R. § 5.11, submitted its Initial Study Plan, and then, pursuant to 18 C.F.R. § 5.13 and in response to comments on the part of various interested parties, submitted a Revised Study Plan on February 8, 2006. On March 9, 2006, in accordance with 18 C.F.R. § 5.13(c), FERC issued its Study Plan Determination ("SPD"), outlining the studies MHC had to conduct as part of the ILP. If MHC were to "fail[] to obtain or conduct a study as required by Study Plan Determination, its license application [might] be considered deficient." See 18 C.F.R. § 5.13(d). Among the studies deemed necessary by FERC for MHC to complete its license application were: (1) an aesthetic (visual, noise and odor) impact study; (2) a recreation and socioeconomic study, which included a park user survey, a recreational boating study, and a socioeconomic study; (3) a protected plant and wetland study; (4) a grading, geotechnical, slope stability and erosion evaluation study; (5) a cultural resources survey; (6) an Indiana Bat and Bald Eagle study; (7) an aquatic life/use attainment and minimum flow study, which included a minimum flow study, a water quality study, and an aquatic habitat/biota study; and (8) a combined sewer overflow impact evaluation work. Conducting many of these studies would require MHC to enter Gorge Metro Park.

On May 1, 2006, the Board of Park Commissioners of the Metro Parks, Serving Summit County, adopted Resolution 47.2006 (the "Resolution"), which states:

Whereas, [MHC] ... has proposed to construct a hydroelectric power generating facility in the Gorge Metro Park ("the Project"); and Whereas, [MHC] claims a right to proceed with the Project pursuant to an easement granted by Ohio Edison Company on September 9, 2004; and

Whereas, the Project would be detrimental to the purpose and interests of Metro Parks, Serving Summit County; and

Whereas, pursuant to the advice of legal counsel, the Board has concluded that Metro Hydroelectric Company LLC has no right to proceed with the Project and that Metro Parks, Serving Summit County should not permit the project to go forward;

Now, therefore, be it resolved that following discussion, it was moved by Mrs. Buchholzer and seconded by Mrs. Curtis that the Director-Secretary and legal counsel shall do all things necessary and proper to assert the rights of Metro Parks, Serving Summit County in Gorge Metro Park and to resist the Project.

On May 31, 2006, the Director-Secretary wrote to MHC that it was the position of Metro Parks that MHC did not have the authority to enter into Gorge Metro Park for the purpose of conducting the studies necessary for the ILP. In addition, the Director-Secretary stated that "If you attempt to violate [the Resolution], that will be prevented by me and park staff, acting pursuant to the police powers granted by law to protect [Metro Parks] property."

On July 23, 2006, MHC filed a verified complaint with the United States District Court for the Northern District of Ohio, requesting a temporary restraining order ("TRO") and preliminary injunction against Metro Parks from enforcing the "Resolution and exercising its police power in furtherance of its Resolution." In addition, MHC requested a declaratory judgment stating: (1) that the Resolution "is null and void [] and further that [Metro Parks] is federally preempted from taking any actions to prevent MHC's access to the property or otherwise prevent or hinder the FERC licensing process for the Metro Hydroelectric project"; and (2) that "the reservation of rights and assignment of those rights through easement from Ohio Edison is fully enforceable by MHC against [Metro Parks]." On August 2-3, 2006, the district court held a hearing on MHC's motion for a TRO. During the hearing, the district court noted that the parties disputed the existence of subject matter jurisdiction. After asking the parties to show cause for why the motion before the court should or should not be dismissed for lack of jurisdiction, the district court...