State of Oregon v. Federal Power Commission

• Decision Date: 28 April 1954
• Docket Number: No. 13345.,13345.
• Citation: 211 F.2d 347
• Parties: STATE OF OREGON et al. v. FEDERAL POWER COMMISSION et al.
• Court: U.S. Court of Appeals — Ninth Circuit

211 F.2d 347 (1954)

STATE OF OREGON et al. v. FEDERAL POWER COMMISSION et al.

No. 13345.

United States Court of Appeals Ninth Circuit.

February 18, 1954.

Rehearing Denied April 28, 1954.

Robert Y. Thornton, Atty. Gen., State of Ore., E. G. Foxley, Deputy Atty. Gen., Arthur G. Higgs, Asst. Atty. Gen., for appellant.

Willard W. Gatchell, General Counsel, Howard E. Wahrenbrock, Asst. Gen. Counsel, John C. Mason, Attorney, Federal Power Commission, Washington, D. C., for appellee.

Phillips, Coughlin, Buell & Phillips, Clarence D. Phillips, Portland, Ore., for intervenor.

Rollin E. Bowles, Carl D. Etling, Portland, Ore., amici curiæ.

Before STEPHENS, HEALY and ORR, Circuit Judges.

STEPHENS, Circuit Judge.

The Portland General Electric Company, an Oregon non-governmental public utility corporation, applied for and has been granted a license¹ by the Federal Power Commission to construct, operate and maintain a hydro-electric plant known as the Pelton Project, numbered 2030, on the Deschutes River² in Oregon. The Project is to be located downstream from where Crooked River and Metolius River, two principal tributaries to the Deschutes, flow into the latter. The Project is designed to consist of a concrete dam approximately two hundred five feet high in connection with a powerhouse containing three 36,000 kilowatt generators and is to be built across the river on United States land. Included in the Project, and three miles below the power dam, a "re-regulating" dam is to be constructed which is designed to equate the flow of water as it is released from the upper dam. It is not claimed that the lower dam will be located upon federal land or federally controlled land. Without it the flow below the power dam would be subject to extremes as the water would be released from the power dam in much greater quantity when peak loads of electric energy were required. There will be no diversion of water from the stream, as it will flow, undiminished, through or over the dams and continue down the natural bed. The impounding of water above the upper dam will create a relatively narrow lake in mountainous terrain of five or six miles in length.

We quote from respondent Federal Power Commission's brief (at pages 1 and 2):

"The project, if constructed, would occupy lands of the United States set aside on the west side of the Deschutes River by treaty in 1855 as the Warm Springs Indian Reservation, and additional lands of the United States on the east side of the river. All of the lands of the United States on both sides of the river which would be occupied by the project have been withdrawn from entry, location or other disposal under the public land laws and reserved for power purposes. In addition to these lands, some private lands would be affected by the project.

"The high power dam, and the powerhouse immediately below, will be located entirely upon lands of the United States set aside and reserved for power purposes. * * *."

The State of Oregon, The Fish Commission of Oregon, and The Oregon State Game Commission appeared before the Federal Power Commission hearing and registered objections to the granting of the license on the grounds that the dams would prevent the ascent of anadromous fish to their spawning grounds above the dam sites, and would result in the serious curtailment of the fish population and prevent its increase, and would impair the productivity and usefulness of the extensive State Fish Hatchery on the Metolius River. They further contended that the Commission was without authority to grant the license applied for since the applicant had failed to obtain a permit from the Hydro-Electric Commission of Oregon³ and had not complied with the Oregon law as to fish in the river,⁴ as required by § 9(b) of the Federal Power Act.⁵

Having been unsuccessful in their contentions before the Commission, as aggrieved persons, the objectors have petitioned this court for review of the order issued⁶ and upon such review to set aside the order granting the license.

The Izaak Walton League of America (Oregon Division) filed a brief with us as amicus curiae in support of the objectors' plea that the license granted should be set aside.

There is conflict in the evidence as to the probable effect of the proposed Project upon the fish population of the streams affected as well as to the need for the power which the Project is designed to produce. However, there is substantial evidence in support of the Commission's findings as to the need for power, but in our opinion the evidence practically demonstrates that the Project would seriously affect the normal population of the fish in the river and the usefulness of the State Fish Hatchery. Whether the jurisdiction of the Federal Power Commission was broad enough to authorize such findings as binding against the State of Oregon, if supported by the evidence, will presently be considered.

The Commission, in its consideration of the application for the license, based its jurisdiction to entertain and grant the application solely upon the fact that the principal or upper dam is to be built upon and affects land reservations⁷ of the United States,⁸ inclusive of the lands of the Warm Springs Indian Reservation.⁹ The Indians of the Reservation have given their consent to the construction of the Project.

Since Congress has delegated to the Federal Power Commission the authority to license power producing dams which will occupy or affect United States land and land reservations, it is incontrovertible that a Federal Power Commission license is necessary to the construction of the proposed Project by the applicant. The extent of the right which the federal license which has been granted carries or purports to carry, is in issue here.

The aggrieved parties argue that the Commission has no legal power to grant a license unless and until the applicant has shown the Commission that it has complied with all applicable state laws, and they cite instances of conflict between the Project as it is contemplated, and Oregon state law. In support of their contention they cite § 9(b) of the Federal Power Act which reads as follows:

"Satisfactory evidence that the applicant has complied with the requirements of the laws of the State or States within which the proposed project is to be located with respect to bed and banks and to the appropriation, diversion, and use of water for power purposes and with respect to the right to engage in the business of developing, transmitting, and distributing power, and in any other business necessary to effect the purposes of a license under this Act." 41 Stat. 1068.

The application of the quoted section of the Federal Power Act, § 9(b), to the point has been negatived by the Supreme Court in the case of First Iowa Hydro-Electric Coop. v. Federal Power Comm., 1946, 328 U.S. 152, 177, 178, 66 S.Ct. 906, 918, 90 L.Ed. 1143, wherein the court said: "It § 9(b) does not itself require compliance with any state laws. Its reference to state laws is by way of suggestion to the Federal Power Commission of subjects as to which the Commission may wish some proof submitted to it of the applicant's progress. * * The need for compliance with applicable state laws, if any, arises not from this federal statute but from the effectiveness of the state statutes themselves."

We hold that § 9(b) neither enlarges nor limits the Federal Power Commission so far as the authority to grant the application for license is concerned. It specifically gives the Commission the right to ascertain needed information which would affect the Commission's discretion in granting or withholding the license and as to details concerning the Project, its construction, capacity, and desirability.

Our conclusion as to the meaning and effect of § 9(b) does not, however, destroy the objectors' case, for they rely upon the more fundamental claim that the Deschutes River is a state stream and that the State of Oregon has sovereign power over it and its waters.

On the other hand, the applicant for the license and the Commission claim, under the facts of this case, that the Commission's jurisdiction fully includes the power to authorize the construction and operation of the Project and that the Oregon State laws pertaining to dams on the Deschutes River and to the accommodation of anadromous fish in the river and the fact that the Project would greatly damage or ruin the effectiveness of an extensive state fish hatchery, constitute no bar thereto.¹⁰ It is undisputed that the United States owns the site of the upper or power dam. It does not, however, own the site of the lower dam or all of the land to be flooded by impounded water.

The claimed authority for issuance of the Commission's license is derived from the Federal Power Act and Article IV, § 3, Cl. 2, of the United States Constitution, the latter of which reads as follows:

"The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States; * * *."¹¹

The Constitutional provision has been given a very broad interpretation by the courts,¹² see United States v. City and County of San Francisco, 1940, 310 U.S. 16, 29, 60 S.Ct. 749, 84 L.Ed. 1050. However, it has limitations. The Supreme Court in Ashwander v. Tennessee Valley Authority, 1936, 297 U.S. 288, 338, 56 S. Ct. 466, 479, 80 L.Ed. 688, in referring to the right of the United States to its own property, said, "The constitutional provision is silent as to the method of disposing of property belonging to the United States. That method, of course, must be an appropriate means of disposition according to the nature of the property, it must be one adopted in the public interest as distinguished from private or personal ends, and we may assume that it must be consistent with the foundation principles of our dual system of government and must not be contrived to govern the concerns reserved to the...