Overton Power Dist. No. 5 v. O'Leary, 93-17233

• Decision Date: 04 January 1996
• Docket Number: No. 93-17233,93-17233
• Citation: 73 F.3d 253
• Parties: Util. L. Rep. P 14,081, 96 Cal. Daily Op. Serv. 129, 96 Daily Journal D.A.R. 201 OVERTON POWER DISTRICT NO. 5, Valley Electric Association, Inc., Plaintiffs-Appellants, v. Hazel R. O'LEARY, William H. White, Christine Ervin, Federal Energy Regulatory Commission, Defendants-Appellees, Arizona Power Authority, Defendant-Intervenor-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 253

73 F.3d 253

Util. L. Rep. P 14,081, 96 Cal. Daily Op. Serv. 129,

96 Daily Journal D.A.R. 201

OVERTON POWER DISTRICT NO. 5, Valley Electric Association Inc., Plaintiffs-Appellants, v.Hazel R. O'LEARY, William H. White, Christine Ervin, Federal Energy Regulatory Commission, Defendants-AppelleesArizona Power Authority, Defendant-Intervenor-Appellee.

No. 93-17233.

United States Court of Appeals Ninth Circuit.

Argued Feb. 13, 1995.

Submission Deferred Feb. 15, 1995.

Resubmitted Dec. 11, 1995.

Decided Jan. 4, 1996.

James T. McManus and Arnold B. Podgorsky, Wright & Talisman, Washington, DC, for plaintiffs-appellants.

Frank W. Hunger, Assistant Attorney General, and Dennis D. Linder, Robert B. Greenspan and C. Max Vassanelli, Department of Justice, Washington, DC, for defendants-appellees.

Donald R. Allen, Duncan & Allen, Washington, DC, for amicus curiaeColorado River Energy Distributors Association.

Bryant C. Danner and Christa Piantadosi, Rosemead, California, for amicus curiaeSouthern California Edison Company.

Northcutt Ely, Redlands, California, for amici curiae Los Angeles Department of Water and Power and Southern California Edison Company.

James P. Bartlett, Phoenix, Arizona, and Michael McCarty, Brickfield, Burchette & Ritts, Washington, DC, for defendant-intervenor-appellee.

Appeal from the United States District Court for the District of Nevada.

Before: REINHARDT, THOMPSON and KLEINFELD, Circuit Judges.

DAVID R. THOMPSON, Circuit Judge:

Overton Power DistrictNo. 5 and Valley Electric Association(collectively "Overton/Valley"), two Nevada power suppliers, challenge the rate charged for power generated at Hoover Dam.The district court granted summary judgment rejecting most of Overton/Valley's claims.Overton Power Dist No. 5 v. Watkins, 829 F.Supp. 1523(D.Nev.1993).Because we conclude Overton/Valley lack standing, we remand with an order for the district court to vacate its opinion and dismiss Overton/Valley's action.

FACTS

The Western Area Power Administration (Western) sets power rates for the Boulder Canyon Project--popularly known as Hoover Dam--under 43 U.S.C. Sec. 617, et seq.(the BCP statute).Western sells power generated at Hoover Dam to contractors designated by the BCP statute; in Nevada the Colorado River Commission(CRC) is the only designated contractor.See43 U.S.C. Sec. 619a.Overton/Valley purchase energy from the CRC at the same price the CRC paid for it, and they resell it to their customers.

On October 25, 1990, Western proposed a rate increase for Hoover Dam power and initiated the public comment process.On June 10, the Department of Energy(DOE) approved the new rate on an interim basis.This new rate, known as WAPA-49, became effective on July 1, 1991 on an interim basis pending approval by the Federal Energy Regulatory Commission(FERC).

The Contractors and their customers were unhappy with the methodology used to calculate WAPA-49.On June 26, 1991, Western and the Contractors requested that the FERC defer review so they could negotiate a new rate.The Contractors agreed to continue to pay the WAPA-49 rate until a new rate was negotiated, and not to challenge the WAPA-49 rate in the meantime.Overton/Valley, not parties to the agreement and believing that negotiations were fruitless, filed a formal complaint with the FERC.

The Contractors and Western reached an agreement on September 15, 1992; the rate calculated according to the agreed upon methods is called WAPA-58.Overton/Valley filed this suit in Nevada district court on October 15, 1992 seeking review of the WAPA-49 rate under the Administrative Procedures Act, 5 U.S.C. Sec. 701, et seq.(APA).On November 10, 1992, the FERC issued an order simultaneously granting Overton/Valley's motion to intervene in the rate-approval process and issuing final approval of the WAPA-49 rate.Overton/Valley amended their complaint to reflect the FERC's action and sought a preliminary injunction seeking to block implementation of the WAPA-58 rate so their challenge to the WAPA-49 rate would not be moot.The district court denied the injunction; Western placed the WAPA-58 rate into effect on January 1, 1993.

The district court decided the merits on cross-motions for summary judgment.The district court granted summary judgment to Western on all issues, except Overton/Valley's claim that Western's auditing procedures violated DOE regulations, which claim the district court remanded to the FERC.Overton/Valley timely appealed to this court.

DISCUSSION

Following oral argument in this case, we asked for supplemental briefs from the parties on the questions of mootness and standing.We assume, without deciding, that Overton/Valley's case is not moot.

There are a number of components to the question whether a plaintiff has standing to seek judicial review of agency action under the APA.Our opinion in National Wildlife Federation v. Burford, 871 F.2d 849, 851-52(9th Cir.1989), describes these components.Here, we are concerned with whether Congress intended to allow only a specific class of plaintiffs to challenge the agency's action.As we summarized this particular requirement in National Wildlife Federation:

[T]he statute at issue will preclude standing if it expresses a fairly discernible congressional intent to forestall a suit at the plaintiff's behest.Although the plaintiff may fall within a statute's zone of interest, judicial review will not occur if the statute suggests that Congress intended to allow only a specific class of plaintiff to challenge an agency's action.

Id. at 852(internal quotation marks and citations omitted).

This requirement for parties seeking judicial review under the APA originated in the Supreme Court's decision in Block v. Community Nutrition Institute, 467 U.S. 340, 104 S.Ct. 2450, 81 L.Ed.2d 270(1984).In Block, the Court held that consumers of dairy products had no standing to obtain judicial review of milk market orders issued by the Secretary of Agriculture under the Agricultural Marketing Agreement Act (AMAA).

The Court noted that "[t]he APA confers a general cause of action upon persons adversely affected or aggrieved by agency action ... but withdraws that cause of action to the extent the relevant statute precludes judicial review."Id. at 345, 104 S.Ct. at 2453(internal quotations and citations omitted).The Court then held that a relevant statute will be found to preclude standing for particular plaintiffs whenever a congressional intent to preclude is "fairly discernible in the statutory scheme."Id. at 351, 104 S.Ct. at 2456(quotations omitted).

The Block Court found a fairly discernible congressional intent to preclude consumers from challenging milk market orders in the AMAA and emphasized that the preclusion would "not threaten realization of the fundamental objectives of the statute."Id. at 352, 104 S.Ct. at 2457.Not only would the interests of consumers be adequately protected by others enjoying standing under the law, but "consumer suits might themselves frustrate achievement of the statutory purposes" by disrupting the "cooperative venture among the Secretary, producers, and handlers" contemplated by Congress and "undermin[ing] the congressional preference for administrative remedies."Id.

The Court has subsequently explained that the Block rule for standing supplements the traditional zone of interest test.

The inquiry into reviewability does not end with the 'zone of interest' test.In Community Nutrition Institute, the interests of the consumers were arguably in the zone of the interests meant to be protected by the Act, see467 U.S., at 347, 104 S.Ct. at 2454, but the Court found that point not dispositive because at bottom the reviewability question turns on congressional intent ....

Clarke v. Securities Industry Assn., 479 U.S. 388, 400, 107 S.Ct. 750, 757, 93 L.Ed.2d 757(1987)(emphasis added).

In the present case, we hold the BCP statute expresses a "fairly discernible" congressional intent to preclude standing from plaintiffs such as Overton/Valley.

The BCP statute contains no particular provision granting or limiting who may sue under it, nor is there any helpful legislative history on this point.¹The statutory scheme as a whole, however, suggests that Congress intended only the Contractors named in the statute to have standing to challenge ratesetting decisions.Overton/Valley are not among those named in the BCP statute.Moreover, the fundamental objectives of the BCP statute are best achieved by denying Overton/Valley standing.

When Congress reauthorized the BCP in 1984 it required:

That in the case of Arizona and Nevada, such contracts shall be offered to the Arizona Power Authority and the Colorado River Commission of Nevada, respectively, as the agency specified by State law as the agent of such State for purchasing power from the Boulder Canyon Project[ ].

43 U.S.C. Sec. 619a(a)(1)(B).Congress then required that contracts entered into between the Contractors and Western

shall contain provisions by which any dispute or disagreement as to interpretation or performance of the provisions of this subchapter or of applicable regulations or of the contract may be determined by arbitration or court proceedings.

43 U.S.C. Sec. 619a(h)(2)(emphasis added).

The above language indicates Congress intended only the Contractors to be able to challenge ratesetting regulations.By requiring the Contractors and Western to establish by contract the procedures for review over "any dispute," and then listing by name the authorized Contractors, Congress fairly discernibly specified who would have standing to challenge ratesetting while enabling the parties themselves to determine the appropriate forum.

The BCP statute allows the Contractors and Western to agree to settle any dispute by arbitration, and thus empowers them to keep the federal courts out of the dispute resolution process regarding rates and contract...