United States Tennessee Valley Authority v. Welch

• Decision Date: 21 July 1945
• Docket Number: No. 5373-5378.,5373-5378.
• Citation: 150 F.2d 613
• Parties: UNITED STATES ex rel. TENNESSEE VALLEY AUTHORITY v. WELCH and five other cases.
• Court: U.S. Court of Appeals — Fourth Circuit

150 F.2d 613 (1945)

UNITED STATES ex rel. TENNESSEE VALLEY AUTHORITY v. WELCH and five other cases.

Nos. 5373-5378.

Circuit Court of Appeals, Fourth Circuit.

July 21, 1945.

William C. Fitts, Jr., Sp. Counsel, Tennessee Valley Authority, of Knoxville, Tenn. (Thomas J. Griffin, Sol., and Charles J. McCarthy, Asst. General Counsel, Tennessee Valley Authority, both of Knoxville, Tenn., on the brief), for appellant.

George H. Ward, of Asheville, N. C., and McKinley Edwards, of Bryson City, N. C. (G. Lyle Jones, of Asheville, N. C., on the brief), for appellees.

Before PARKER, SOPER and DOBIE, Circuit Judges.

PARKER, Circuit Judge.

These are appeals from judgments dismissing petitions of the Tennessee Valley Authority for the condemnation of certain tracts of land. The TVA seeks to acquire the lands in order that it may convey them to the Department of the Interior to be incorporated in the Great Smoky Mountains National Park, pursuant to a contract by which its liability for flooding a highway of the State of North Carolina is to be thus extinguished. The District Judge, being of opinion that the power of condemnation vested by Congress in the TVA did not authorize condemnation for such purpose, dismissed the proceedings, and the TVA has appealed.

There is no dispute about the facts. The TVA was created by Congress for the purpose of maintaining and operating the Muscle Shoals properties, improving navigation in the Tennessee River and controlling destructive flood waters in the basins of the Tennessee and Mississippi Rivers. 16 U.S.C.A. § 831. Under the powers granted it by the act, it constructed a large dam and reservoir on the Little Tennessee River in Western North Carolina known as the Fontana Dam and Reservoir. The filling of this reservoir flooded throughout most of its length North Carolina State Highway No. 288, which was the only highway serving the land lying between the Little Tennessee River and the Great Smoky Mountains National Park. There were 44,400 acres of this land and 216 families were living on it at the time.

None of the 44,400 acre boundary, except two or three acres, as to which there is no contest, was needed by the TVA for the purpose of constructing the dam or reservoir. All lay above the high-water level of the reservoir; and it was not proposed to take stone or timber from it or use it in any other way for any of the purposes for which the TVA had been created. It was admittedly being taken to be conveyed to the Department of the Interior to be incorporated in the Great Smoky Mountains National Park, under a contract with the State of North Carolina and Swain County, as a means of extinguishing the liability of the TVA for flooding the highway.

The contract referred to arose out of the following circumstances: The territory served by Highway No. 288 was rough mountain land, and the construction of another highway in lieu of the one flooded would have been very expensive and priorities necessary to obtain the man power and materials for its construction would not have been available in war time. There was evidence that such highway would have cost $1,400,000, which was more than it would have cost to acquire the 44,400 acres and satisfy the State of North Carolina for closing the road, and probably a great deal more than any damages recoverable for the closing of the old highway. The 44,400 acres were lands that North Carolina had agreed to convey to the Great Smoky Mountains National Park but had not conveyed because funds for the purchase of park lands had been exhausted before these lands could be acquired. Officials of the state felt, however, that some obligation rested on the state with respect to the matter; and they proceeded to avail themselves of this opportunity to discharge the obligation and entered into a contract which would result in the deeding of the lands to the Park. That contract, to which the TVA, the State of North Carolina, Swain County and the Department of the Interior were parties, set forth its purpose fully in eleven "whereas" clauses, the last of which is as follows:

"Whereas, the parties hereto desire to provide for and agree upon the extension of the Park boundaries as aforesaid, the closing and ultimate replacement of Highway 288, and the immediate and final settlement and disposition of all claims which the State and the County may at any time have against the Authority or the United States of America by reason of the flooding, taking, or closing of said Highway 288 and the other roads hereinafter described or referred to, all in the manner and upon the terms and conditions hereinafter specified, and all to the end and purpose of avoiding unwise and inefficient expenditures of public funds and of capturing certain benefits for the region affected and the public generally."

The contract contained the following provisions: (1) That the TVA would acquire the 44,400 acres and deed it to the Department of the Interior to be included in the park, would save the state and county harmless from any claims for damages for the flooding of the highway, and would pay $400,000 to the State of North Carolina in trust for Swain County to be used in retiring bonds issued to finance the construction of the highway which had been flooded; (2) that the Department of the Interior would accept the 44,400 acres of land, include it within the boundaries of the Great Smoky Mountains National Park, and, after the war, and as soon as Congress should make the funds available, would construct a high grade parkway from a point near Fontana Dam to a point near Bryson City, N. C.; and (3) that the State of North Carolina would pay $100,000 to the TVA to aid in the purchase of the lands and would build certain roads to connect with the parkway when it should be constructed.

Pursuant to this contract, the TVA proceeded to acquire by purchase more than 38,000 acres of the land — all of the 44,400 acres, except the six tracts involved in these condemnation proceedings and certain lands, belonging to mining companies, which were excepted from the contract. One of the tracts not acquired but involved in these condemnation proceedings is a fishing and hunting preserve containing 4,500 acres lying at the eastern extremity of the 44,400 acres and adjoining the Great Smoky Mountains National Park. The others, with the exception of the 163 acre tract of the defendant Welch, also lie near the eastern boundary of the 44,400 acres. Welch and one Burns, another of the owners, have renounced all claims on account of the flooding of the road and ask nothing but that they be left alone in the enjoyment of their property.

The Board of Directors of the TVA passed resolutions to the effect that the condemnation of the property involved in these cases is necessary to carry out the purposes of the TVA Act. The position of its counsel in this court is that the courts are bound by the resolutions of the Directors; that the TVA Act imposes upon them the duty of determining what lands are necessary to carry out the provisions of the Act; and that they have determined that the lands here involved are necessary to the completion of the Fontana project "because their removal from private ownership is essential to the settlement of the Authority's legal liability to the State of North Carolina." Defendants, on the other hand, point out that it is conceded that all of the lands in question are far removed from the high-water mark of the reservoir; that no part of the lands and no material located thereon will be used in the construction, operation or maintenance of the Fontana Dam project, and that immediately upon their acquisition the lands are to be conveyed to the Department of the Interior for incorporation in the Great Smoky Mountains National Park. Defendants accordingly argue that the lands are not being acquired for a public use for which the TVA is authorized to condemn private property, but to be used in making settlement of liability for flooding the state highway; that this is not a taking for the statutory project, but a taking in excess of what is needed for that purpose; and that such taking cannot be held a taking for a public use within the authority granted. We think, as did the judge below, that this position is well taken.

As pointed out above, the purpose of the creation of the TVA, so far as its relation to the Tennessee River is concerned, was the improvement of navigation and flood control in that river. Any condemnation of lands by it must have relation to this purpose; and we think that the power of condemnation is expressly so limited by the statute. The TVA seeks to spell out an almost unlimited power of condemnation from certain general powers granted it, such as the general power to purchase, lease and hold such real and personal property as it deems necessary or convenient in the transaction of its business, 16 U.S.C.A. § 831c (f), the general power to institute condemnation proceedings for the acquisition of land, easements and rights of way necessary to carry out the provisions of the Act, 16 U.S.C.A. § 831x, the power to cooperate with federal, state and local agencies in the readjustment of displaced populations, 16 U.S.C.A. § 831c (l), the power to negotiate and conclude contracts for the relocation of properties, enterprises and...