United States v. Southern States Power Co.

• Decision Date: 15 May 1940
• Citation: 33 F. Supp. 519
• Court: U.S. District Court — Western District of North Carolina
• Parties: UNITED STATES ex rel. TENNESSEE VALLEY AUTHORITY v. SOUTHERN STATES POWER CO. et al.

33 F. Supp. 519

UNITED STATES ex rel. TENNESSEE VALLEY AUTHORITY v. SOUTHERN STATES POWER CO. et al.

District Court, W. D. North Carolina, Asheville Division.

May 15, 1940.

Wm. C. Fitts, Jr., General Counsel, of Knoxville, Tenn., and Melvin H. Siegel Attorney, of Washington, D. C. (Henry H. Fowler and S. Frank Fowler, both of Knoxville, Tenn., of counsel), for petitioner.

Isidor J. Kresel of New York City, and G. L. Jones, of Asheville, N.C., for respondents.

Before WATKINS, WEBB, and PAUL, District Judges.

PER CURIAM.

Pursuant to the provisions of the "Tennessee Valley Authority Act", passed by Congress May 18, 1933, 16 U.S.C.A. § 831 et seq., the United States of America, upon the relation and for the use of the Tennessee Valley Authority, filed its petition in the District Court of the United States for the Western District of North Carolina on January 28, 1936, to condemn the lands and property of the respondents therein described.

After the docketing of this action, and before hearing was had thereon, the Court, pursuant to section 25 of said act, appointed a Commission, composed of O. M. Mull, A. R. Bauman, and J. K. Cowan, to personally inspect the property, take testimony, and, pursuant to law, find the value of the property condemned and ascertain the damage, if any, that resulted from the taking, to the remainder of the respondents' property not taken, and make report to the Court of its award and findings.

The Commission met on October 3, 1938, and personally visited and inspected all the properties and the various tracts of land that constitute the subject matter of this suit. After making a personal inspection, the Commission convened in Asheville and for approximately three months heard testimony and argument by and in behalf of the petitioner and the respondents.

Approximately 500 exhibits were filed by the several parties to the action, and 6,000 pages of testimony were taken. The Commission, on May 12, 1939, made and filed its final report, together with all exhibits and copies of testimony.

In the hearing before us it was agreed by both sides that we should receive in evidence, subject to objection duly made, all the testimony taken before the Commissioners.

We have, subject to the exceptions, given most careful consideration to this report of the Commissioners, and have checked their findings in every particular. In order to understand and appreciate this report it was necessary carefully to study the evidence presented to the Commissioners in every detail, and it is but fair to state that we regard the report as a most admirable one in every respect. While there was a large amount of additional evidence taken before us, it related almost entirely to facts and issues which had already been elaborately developed before the Commissioners. In two respects in particular the Commissioners enjoyed a definite advantage over this Court in the consideration of the evidence. In the first place, before they began the taking of testimony they carefully went over and personally inspected all the properties involved in this controversy, and, in the second place, the witnesses, whose testimony was taken during the continuous three months of that hearing, gave their testimony in person. It is no small tribute to the Commissioners' accuracy, fairness and ability that the values placed by them upon the rights of way, mineral rights, reversions, and the fees in approximately 80 tracts of land have been accepted and approved by both condemnor and condemnees, and also that the valuation placed by the Commissioners upon the Murphy Power Plant of the Southern States Power Company has been agreed to by the parties.

Notwithstanding our respect for the judgment of the Commissioners, based upon what appeared to us to be a thorough consideration of the whole matter, yet, in deciding the matters remaining in controversy, we have arrived at our award without regard to the amounts of the awards made by the Commissioners.

The Commission found:

1. The value of all the land condemned was $1,437,000.

2. The value of the small Murphy Hydroelectric Plant was $110,000.

3. The damage resulting to the remainder of respondents' property, from the taking of a part thereof, was $253,000.

The Commission also found the individual value of a large number of small tracts of land.

Both the petitioner and the respondents filed exceptions to the awards and report of the Commissioners. A trial was had before us as a three-judge court, composed of Judges WATKINS, WEBB and PAUL, in Asheville, N. C., beginning on September 10, 1939, and extending through September 19. At said hearing before us approximately 800 pages of additional oral testimony were taken, and numerous additional exhibits were filed by both parties, and lengthy oral arguments were heard for two days, the record of which embraces 250 pages. Also, elaborate written briefs were filed with us by both sides, with citation of numerous authorities; all of which we have carefully examined, with such additional legal investigation as we considered necessary. The review of the testimony and consideration of the briefs necessarily consumed a great deal of time and delayed the filing of this judgment.

Both the petitioner and the respondents withdrew their exceptions to the award of the Commissioners of $110,000 for the small Murphy Hydroelectric Plant, and to the value of the small individual tracts of land as found and reported on pages 14 and 15 of the Commissioners' Report, and said parts of the Report of the Commissioners are hereby adopted as the judgment of this Court.

The property which the petitioner seeks to condemn consists of approximately 12,679.94 acres of land located in Cherokee county. It is situated on both sides of the Hiwassee river, beginning at a point about twelve miles upstream from the Tennessee-North Carolina state line, and extending up the Hiwassee river about 23 miles to the town of Murphy. This land is either contiguous or adjacent.

About 8,208.94 acres of this land is very rough and rocky mountain lands. A large variety of timber is growing on same, but the majority of it has been cut over. This 8,208.94 acres is not adapted to use as farm lands. A large per cent of the surface is rocky and very rough mountain peaks and gorges. Of the remaining 4,471 acres, 2,000 acres are cleared and are now, or have been, cultivated as farm lands. The balance of approximately 2,471 acres is located adjoining the cleared lands and included the low edges of the mountains. This 4,471 acres is located immediately along and on the Hiwassee river or its tributaries, and all of said 4,471 acres is now or will be inundated by the waters impounded by the dam erected or being erected by the Tennessee Valley Authority on the Hiwassee river at the Powelson dam site; but we are considering only the status of the property at the time the petition was filed, January, 28, 1936.

The petitioner contends that the property it seeks to condemn possesses only such value as is incident to it as farm lands, with minor enhancement from the timber and other appurtenances and visible improvements thereon, and that the same constitutes the most valuable use to which it is adaptable; and that it is worth only from $97,000 to $146,000. The respondent, Southern States Power Company, contends that its property is adapted to, and is usable as, a site for a large hydroelectric power development consisting of an integrated system with three dams or units on the Hiwassee river, and one on the Nottely river, which is a tributary of the Hiwassee. It contends that its property is so constituted and so situated that it can be used for the site for four dams — a dam 110 feet high on the Hiwassee river at a point in North Carolina near the Tennessee line, which it designates Appalachia dam; a second dam 245 feet high about twelve miles up the Hiwassee river from the first, which it designates as Powelson dam (the site being used for the location of the TVA dam now under construction); a third dam 200 feet high on the Hiwassee river near the town of Murphy; and a fourth dam 200 feet high on Nottely river, a tributary of Hiwassee river.

The Southern States Power Company contends that, in such an integrated system of four dams, each would be of valuable assistance to the other, since the upstream dams could store the water during rainy seasons and release same during dry seasons, and that the adaptability of its property to such a use greatly enhances its value. The Southern States Power Company contends that the use of its property as the site of such an integrated hydroelectric power system would be very profitable, and that its property has a value of $7,500,000 for said use. It presented much evidence of electrical engineers, and many charts, logs and tabulations, to establish the quantity of hydroelectric power that the water in said rivers is capable of producing under plans it formulated and presented. It likewise offered the testimony of contractors of extensive training and experience relative to the cost of such dams and equipment, and alleged same to be approximately $30,000,000.

This testimony relates to the adaptability of the property in question for use as the site of an integrated hydroelectric power system, and its effect is limited to said question.

The petitioner contends that, while admitting that said property could be used as the site for an integrated hydroelectric power system, (1) the cost of constructing such a system would be from $42,000,000 to $56,000,000; (2) that such a system, when constructed, would produce far less electrical energy than that claimed by the respondent; (3) that said property is located in a territory in which there is but little demand for electrical power, and in a section in which a large amount of other sites is available; (4) that no sale could be made of the power generated unless it was transmitted many miles to the industrial...