Decision Date27 February 1990
Docket NumberNo. 89-CV-442.,89-CV-442.
PartiesRIVERS ELECTRIC CO., INC., Plaintiff, v. 4.6 ACRES OF LAND LOCATED IN the TOWN OF CATSKILL, COUNTY OF GREENE, et al. and Unknown Owners, Defendants.
CourtU.S. District Court — Northern District of New York

Read and Laniado (Sam Laniado, of counsel), Albany, N.Y., for plaintiff.

Walsh Maroney & Ponzini (John St. Onge, of counsel), Tarrytown, N.Y., for defendants John N. Fallon, Grace C. Fallon and Ruth V. Schmidt.

Hiscock and Barclay (Taylor H. Obold, of counsel), Syracuse, N.Y., for defendants.


McCURN, Chief Judge.


Plaintiff Rivers Electric Co. moves for partial summary judgment on the issue of its right to condemn certain lands located in Greene County, New York, for construction of a hydroelectric project. Plaintiff also moves for severance of the trial on compensation, and proposes to post a deposit to serve as interim compensation to affected landowners while the trial on compensation is conducted.


On April 28, 1986, the plaintiff filed with the Federal Energy Regulatory Commission ("FERC") an application for a license to construct and operate a hydroelectric project in the Town of Catskill, Greene County, New York, known as the "Mill Pond Project." The proposed project, to be located on the Catskill Creek, would consist of, among other things, the reconstruction of a previously existing concrete dam four feet high and 200 feet long, the creation of a small reservoir, and construction of a powerhouse containing electrical generating units. The purpose of the project is to produce hydroelectric power to be sold by the plaintiff to Central Hudson Gas & Electric Corp., pursuant to a contract entered into between plaintiff and Central Hudson and approved by the New York Public Service Commission, on March 2, 1989.

As part of the licensing application procedure, plaintiff was required to provide copies of its application to the FERC for service on parties which might or were likely to have an interest in or be affected by the application. 18 C.F.R. § 4.32. Notices of the application were served by the FERC and the New York State Department of Environmental Conservation ("DEC"). According to a mailing list provided by the FERC, among those parties to receive notice of plaintiff's application were the chairman of the Greene County Board of Legislators; William Hagan, the Greene County administrator; the town supervisors of the towns of Coxackie, Catskill, and Hudson; and the village supervisor of the Village of Saugerties. The DEC notified, among others, the New York State Department of Transportation, the New York State Office of Parks and Recreation, and the U.S. Fish and Wildlife Service. These agencies reviewed plaintiff's application along with the DEC, which issued a report on December 8, 1986, stating that the Mill Pond Project would not have a significant effect on the environment. Notices of plaintiff's application were also published in the Catskill Daily Mail, a newspaper with circulation in Catskill, New York, once a week for four consecutive weeks from June 30 to July 21, 1986.

Objections to plaintiff's licensing application were raised by Ruth V. Schmidt, and John N. and Grace C. Fallon, who claimed to be property owners affected by the project. Schmidt and the Fallons were permitted to intervene in the licensing proceedings, pursuant to 16 U.S.C. § 825g(a).1 Neither Greene County, nor its county administrator, attempted to intervene in the proceedings, and they did not participate.

On April 23, 1987, the FERC issued a license to the plaintiff to construct and operate the hydroelectric project. In order to comply with the terms of the license, the plaintiff is required to acquire a fee simple interest in or the right to use in perpetuity the lands needed to build, maintain, and operate the project. Plaintiff has now commenced a condemnation proceeding to acquire its interest in the land. Defendants oppose the condemnation, contending that FERC's issuance of the license was "flawed" because it did not consult with or notify Greene County; that plaintiff could enter into the project area for testing and surveys before its right to condemn the property is decided; and summary judgment is not warranted because the public benefits of the project have not yet been determined.


The plaintiff has instituted its condemnation proceeding pursuant to Section 21 of the Federal Power Act, 16 U.S.C. 814, which states:

When any licensee cannot acquire by contract or pledges an unimproved dam site or the right to use or damage the lands or property of others necessary to the construction, maintenance, or operation of any dam, reservoir, diversion structure, or the works appurtenant or accessory thereto, in conjunction with an improvement which in the judgment of the commission is desirable and justified in the public interest for the purpose of improving or developing a waterway or waterways for the use or benefit of interstate or foreign commerce, it may acquire the same by the exercise of the right of eminent domain in the district court of the United States for the district in which such land or other property may be located, or in the State courts. The practice and procedure in any action or proceeding for that purpose in the district court of the United States shall conform as nearly as may be with the practice and procedure in similar action or proceeding in the courts of the State where the property is situated: Provided, That United States district courts shall only have jurisdiction of cases when the amount claimed by the owner of the property to be condemned exceeds $3,000.

The scope of judicial review over the exercise of condemnation power pursuant to federal statute is "decidedly limited." United States v. New York, 160 F.2d 479, 481 (2d Cir.), cert. denied, 331 U.S. 832, 67 S.Ct. 1512, 91 L.Ed. 1846 (1947). Specifically, the only proper subject for this court's inquiry is whether the acquisition of the property is for a congressionally authorized purpose. Berman v. Parker, 348 U.S. 26, 32-33, 75 S.Ct. 98, 102-03, 99 L.Ed. 27 (1954); United States v. .16 of an Acre of Land, 517 F.Supp. 1115, 1120 (E.D.N.Y. 1981). Some courts have held that the taking or property may be barred if the taking results from bad faith or arbitrary or capricious motives. See, e.g., United States v. 101.88 Acres of Land, 616 F.2d 762 (5th Cir.1980). The Second Circuit, however, has not yet allowed such a defense in a condemnation action. See United States v. .35 of an Acre of Land, 706 F.Supp. 1064, 1073 (S.D.N.Y.1988).

The FERC is authorized by Congress, pursuant to 16 U.S.C. § 797, to:

issue licenses to citizens of the United States, or to any association of such citizens, or to any corporation organized under the laws of the United States or any State thereof, or to any State or municipality for the purpose of constructing, operating, and maintaining dams, water conduits, reservoirs, power houses, transmission lines, or other project works necessary or convenient for the development, transmission, and utilization of power across, along, from, or in any of the streams or other bodies of water over which Congress has jurisdiction under its authority to regulate commerce with foreign nations and among the several States....

A party may condemn land pursuant to the authority vested by Congress for a project "which in the judgment of the commission is desirable and justified in the public interest for the purpose of improving or developing a waterway or waterways for the use or benefit of interstate or foreign commerce." 16 U.S.C. § 814. The FERC determined that:

The proposed Project would generate electrical energy from a renewable resource without significantly affecting existing environmental conditions at the Project area....

Affidavit of Charles Pepe, Exhibit I, p. 9.

The FERC also determined that:

The power from the project would be useful in meeting a small portion of the need for power projected for the New York Power Pool (NYPP) area of the Northeast Power Coordinating Council (NPCC) region. From the time the project goes on line (i.e., into commercial operation) it would be available to displace fossil-fueled electric power generation in the NPCC region and adjacent areas, and thereby, conserving non-renewable fossil fuels and reducing the emission of noxious by-products caused by the combustion of fossil fuels.

Pepe affidavit, Exhibit I, p. 6.

This condemnation is being made for a congressionally authorized purpose, i.e., it is an improvement or development of a waterway, which in the judgment of the FERC, is desirable and justified in the public interest for the benefit of interstate commerce. The scope of this court's review ends there.

Even if the court were to...

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