Richard Pressl v. Appalachian Power Company
2016 U.S. App. LEXIS 20790
| 4th Cir. | 2016Background
- Richard and Theresa Pressl own lakefront land subject to a 1960 flowage easement granted to Appalachian Power Company (APCO) that limits impoundment to 800 feet and permits APCO to overflow, affect, and remove structures below that contour.
- The Pressls sought to build a dock below the 800-foot contour; APCO demanded they execute an Occupancy and Use Permit and comply with its restrictions.
- The Pressls sued in Virginia state court for a declaratory judgment that the easement does not authorize APCO to regulate or prevent construction of the dock.
- APCO removed to federal court, asserting federal-question jurisdiction under 28 U.S.C. § 1331 and exclusive jurisdiction under the Federal Power Act, 16 U.S.C. § 825p, because the property lies inside the FERC project boundary for Smith Mountain.
- The district court denied remand, found federal jurisdiction, and dismissed the complaint on the merits, holding the easement allowed APCO to remove docks; the Pressls appealed.
- The Fourth Circuit vacated and remanded, holding the district court lacked subject-matter jurisdiction because the dispute implicated state-law property rights and did not necessarily or substantially raise federal issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal-question jurisdiction under 28 U.S.C. § 1331 exists | Pressl: dispute is state-law interpretation of the flowage easement; no federal question on complaint face | APCO: resolving easement scope implicates APCO's FERC license and duties, so federal law is necessarily raised | No — complaint does not necessarily raise a federal issue; state-law easement interpretation controls |
| Whether the coercive-action doctrine supplies jurisdiction for a declaratory suit | Pressl: coercive doctrine does not apply because APCO’s hypothetical suit would not require federal-law construction | APCO: a coercive suit to enforce rights would depend on federal license obligations | No — coercive-action test fails; federal issues are not necessarily raised or actually disputed |
| Whether the federal issue is substantial and appropriate for federal forum under Gunn/Grable | Pressl: any federal interest is incidental; state courts can resolve property conveyances | APCO: FERC’s regulatory interest over project boundary makes the federal question substantial | No — federal interest is not substantial here and asserting jurisdiction would upset federal-state balance |
| Whether exclusive jurisdiction under 16 U.S.C. § 825p applies | Pressl: suit is not to enforce the Federal Power Act or FERC orders but to interpret a state conveyance | APCO: suits to declare/enforce property rights necessary to meet FERC duties fall under § 825p | No — following Merrill Lynch, § 825p’s “brought to enforce” test parallels § 1331; the case does not turn on federal requirements |
Key Cases Cited
- Caterpillar Inc. v. Williams, 482 U.S. 386 (federal-question jurisdiction follows the well-pleaded complaint rule)
- Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308 (federal jurisdiction for state-law claims that necessarily raise substantial federal issues)
- Gunn v. Minton, 133 S. Ct. 1059 (four-factor test for federal-question jurisdiction in state-law claims)
- Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning, 136 S. Ct. 1562 (exclusive-jurisdiction "brought to enforce" language parallels federal-question test)
- Columbia Gas Transmission Corp. v. Drain, 237 F.3d 366 (coercive-action doctrine; easement interpretation need not raise federal issues)
- Dixon v. Coburg Dairy, Inc., 369 F.3d 811 (removal burden and requirement to remand if federal jurisdiction is doubtful)