Cities of Anaheim and Riverside, California v. Federal Energy Regulatory Commission, Southern California Edison Company, Intervenor

аdded.) (emphasis maintained.... BORK, Before MIKVA and Circuit part: reads in U.S.C. § JAMESON,* Judges, and United States under this Licenses Part shall issued Judge District District Senior fifty exceeding years. period Montana. shall be conditioned such license Each Opinion Court Senior of all the licensee upon acceptance Judge District JAMESON. of this Act and such terms and conditions conditions, any, as Judge further Concurring opinion filed Circuit conformity with prescribe MIKVA. sion shall * Sitting by designation pursuant 294(d).

this Act which said terms conditions ment to its existing license for the adjacent acceptance ex- thereof shall bе Big (No. 67). Creek SCE requested pressed may in said license. Licenses refrain from any deci- the reasons and in only revoked the two per- prescribed the provisions manner under applications until February 29, 1980, mit may of this Act or surren- altered proposed when SCE submit agreement mutual only upon dered be- to its application amendment recast- tween the licensee and the Commission application it as an ing for preliminary per- notice, public thirty days’ (empha- after study mit to an to Project amendment No. added.) sis 67, (2) an application and for аmendment to 7(a), 800(a), U.S.C. in Project reads § No. license. part: 3, 1980, January requested On (a) Preference. issuing preliminary deny request Commission to SCE’s and to permits hereunder or licenses where no proceed expeditiously to issue the permit to has been preliminary permit issued and in 7(a). of Cities on the basis Commis- § issuing to licenses new licensees under respond. February 29, On did SCE hereof § [16 808] to amend the license for give preference shall ap- to No. 67 Project to include the Balsam Mead- plications therefor States and munici- development ow and for a preliminary per-

palities, provided plans for the same development add to mit to the Project deemed Commission equally amending SCE’s-origi- No. 67 thus a adapted, well or shall within reasonable application nal for the Balsam Meadow time to be fixed Commission be 24, 1980, Project. April On Cities filed mo- equally adapted made to conserve reject filings tions to these and to expedite the public and utilize in interest in of a their favor. issuance (em- water .. region; resources . 12, 1980, June On the Director phasis added.) Regulation Office Electric Power (Di- Background rector) notified SCE its appli- II. Procedural amended accepted 29, cation was as of February September 14,1978, On Southern Califor- 1980. Public notice the Commission’s nia application Edison filed an Company acceptance application of SCE’s for amend- preliminary permit study proposed 22, August ment was issued on power hydroelectric at the in County, Balsam Meadow site Fresno Cal- meantime In the Cities had renewed their Project ifornia. The Balsam Meadow rejection request a motion to expedite located еxisting between two reservoirs— July 10, 1980. filed on By letter dated Project (No. 67) the Big Creek and the 11, 1980, September the Director informed Project. Shaver Lake is the SCE licensee SCE, Cities, copy with counsel for 16, for both of projects. January these On reject Cities’ motion to the SCE 1979, competing permit Cities filed a treated as motion dismiss and cation Balsam Meadow Project. Commission, referred and that his would continue By August 20, 1979, letter dated staff to process clarified 22, 1979, application. September 16,1980, on On order issued October “Protest, Dismiss, gave Motion to oppor- Citiеs filed Intervene, tunity Appeal offer as their comments to how Petition to projects adapted their develop, “Application filed an con- Staff Action.” Cities serve, utilize, interest, the public Rehearing” 14, 1980, November con- water region. resources of a letter tending Commission had failed response dated November carry SCE act time and to within reasonable its prelimi- obligations informed the Commission that under the out its really was nary permit proposal amend- Act. to which were entitled under ceeding III. Orders inter- 7(a); challenged the Commission’s

A. Order Nо. had arguing that SCE pretation the Commission issued April On necessary; already given consent (Order 1), on review No. the first order rejection challenged alia, (1) inter the Balsam holding, action as unreason- from staff appeal SCE, Project, if licensed to could Meadow able, arbitrary capricious. No. as an addition be considered ‍‌‌‌​​‌‌‌‌​​‌‌‌‌‌‌‌​​​‌‌‌‌‌​​‌‌‌‌‌‌‌‌​​‌​​​‌‌​‌​​‍September On included; (2) properly was therefore (Order on review the second order issued supersede SCE could 2), denying No. filing of an rehearing. This order clarified Order No. 1 of an for amendment respect to standard liсense; exer- properly the Director comparative proceed- apply to a sion would (a) accepting authority cised his pre- for license and applicants ing between Project No. to SCE’s amendment permit. The Commission held that liminary (b) referring to the Commission and in application at the file a license Cities must reject application Cities’ to SCE’s motion and could stage proceedings of the current Project No. 67. for amendment until after application not defer granted petition The order Cities’ to in- application had been non-municipal license application respect tervene with to SCE’s adapted. to be best processed and found license No. 67 denied for amendment of and holding reaffirmed its that The Commission reject” to Cities on the “motions to accept was authorized the Director SCE’s protest, motion to April July 24 and processing, amendment for for application dismiss, from staff action filed appeal and ruled that the license condi- expressly and 16, 1980, September and for in No. 67 did not consti- tions by Cities on November rehearing filed the Commission deemed tute the consent however, provided, further The order applicant another 6§ give Cities “an opportunity that in order objected. propose SCE compete equal footing,” a more Cities 10,1981, the Commission also September On days file a “notice of intent could within 30 day filing deadline for Cities’ tolled to file an for license application. proposed development,” Balsam Meadow filed, timely and if notice were file could (after petition March On days. within 150 was SCE petitioners’ opening review and brief had filing apрlica- of an given days filed), the Commission issued an order been to rebut the Cities’ statement Cities part part Cities’ granting denying equally adapt- that had well or better declaratory petition and motion provide a plans ed and to counter-statement Noting reason for clarification. plans adapted of how its are better to con- tolling of the dead- the Commission’s interest public serve and utilize in the line, Cities had the benefit of five region. of the water resources original beyond day months dead- line, day the order reinstated the 150 dead- No. 2 B. Order line, tо file their com- requiring the Cities 26,1981, (1) May Cities filed On 17 days within of the peting application order; rehearing of the April cation for the order. issuance of order, (2) declaratory motion petition clarification, extention and motion for IV. Contentions of Parties in which to file a applica- of time tion; (1) contend that (3) of intent to file a Petitioners notice contrary 7(a) are competing application. sion’s orders contended, alia, effectively invali- rehearing Cities inter Power Act and Federal comparative pro- denied a intеnt Congressional date the (2) preference municipalities; irreparable injury Com- on the party seeking interpretation erroneous, review; mission’s 6 is and third judicial whether re- deprives rights, of their and is detri- stage view at this of the administrative interest; (3) public mental to the even if process province would invade the correct, interpretation served the discretion of agency.1 has consented to processing The court noted in Papago “The applications; (4) long have held courts ... that review un- Commission, Director, and staff have actеd 313(b) is limited to der orders of in an arbitrary capricious manner and impact, judicial where definitive abstention violated the Administrative Procedure irreparable result injury par- to a right to due process. Act ty.” Supreme 238.2 Court in Respondent and Intervenor contend that Metropolitan Co., FPC v. Edison (1) the appeal should be dismissed because 82 L.Ed. 1408 it upon yet ripe based issues not provision held “The for review review, i.e., upon Commission deci- thus relates to orders of a definitive charac- sions which interlocutory and not yet ter the merits of a dealing proсeeding final, involving questions fundamental before and resulting from a definitely which yet have not been resolved hearing upon evidence and supported by Commission; alternatively, findings appropriate to the case.”3 Commission’s orders should be affirmed. Finality A. Ripeness V. for Review “The test finality purposes of questions We address first the of whether is ... whether imposes [the order] the Commission’s orders are ripe for review. obligation right an or denies a with conse 313(b) of the Federal Power 16 quences sufficient to warrant review.” En (b), part: 8251 “Any par states Fund v. Ruckelshaus, vironmentаl Defense ty to a proceeding under this aggrieved Act 589, n. 8 (D.C.Cir.1971). 439 F.2d “An an order issued the Commission in procedural agency’s ... rulings do con not proceeding may such obtain review of such a final justifying judicial stitute order re order the United States Court of Appeals ” except view in extreme instances where the ... the District Columbia .... is held action to constitute an effective dep requirements for review under this sec appellant’s rivation of rights .... The de tion were summarized this court in Pa interlocutory goes appeals nial of pago Utility Authority FERC, Tribal v. 628 assumption apрeals from final orders (D.C.Cir.), denied, F.2d 239 cert. 449 are realistic effective.” Thermal Ecol 1061, 101 S.Ct. 66 U.S. L.Ed.2d 604 Be ogy Must Preserved Energy v. Atomic (1980): Commission, (D.C.Cir. 433 F.2d 526 reviewability an must order ... [T]he 1970). be determined reference to its practi- consequences cal function ánd in the argue rele- Cities the orders here meet vant statutory scheme. We must ask finality test of and are reviewable be- final; first whether the order is second (1) cause has effectively whether, unreviewed, if it would inflict Cities denied a preliminary proeeed- FERC, Light 1. See also Delmarva Power Corp. & v. 2. See also General Motors v. (D.C.Cir.1982). Papago (10 Cir.1979); F.2d 587 Niagara and Del- F.2d 330 Mohawk Pow- FPC, challenge Corp. (2 marva Cir.1976). both a involved a er 538 F.2d Commis- accepting filing by rate an elec- power Gardner, tric “patently In Abbott Laboratories wholesaler claimed to 1507, 1515, invalid”. The S.Ct. L.Ed.2d 681 court concluded in each case (1967), the acceptance by Court held that a must “evalu- the Commission of the ate both the fitness of the issues was nonreviewable. hardship parties withholding court consideration.” availability .... of relief from upon an imposed obligation Cities ing and [T]he competing is application granting an a certificate suffi- to file unable to file project; ruling denying Cities preclude license ad- cient by the date license being of evidence from con- mission effect (3) the Commission in required; order. a final sidered position comparative that no a final taken here, Similarly, at 525-526. mere F.2d held; (4) the Com- proceeding such error does not justify possibility pursuant mission’s determination judicial review. immediate before consent is Cities SCE’s if decision that The Commission’s substantially alter may SCE’s compete against license SCE’s wish projects is intended be conclusive license their cation order. is a final now, own, such must be with the Commission that agree We review. could yet is procedural and did not deter- orders were application for timely to file choose i.e., rights, substantive did mine “[im- rely upon to continue license or [deny] right obligation pose] permit application in the com- sufficient to warrant re- consequences project. with SCE for the In ei- petition acceptance of amended view.” The event, the must still close- ther initiated the in- application merely submissions, weigh all of the ly examine whiсh the vestigative process by Commis- each, and make the award which benefits ultimately if and to sion will determine Again, the public interest. “the best serves the Balsam Meadow whom a availability of relief from final order Project should be awarded. ruling preclude sufficient to ... ... required to sion is still determine being a final considered order.” Ther- or can equally adapted well Ecology, supra. mal equally a reasonable time within made pub- utilize in the adapted “to conserve and express The Commission’s reserva lic interest the water resources any questiоn decision on tion of wheth ...”,§ 800(a). gion 7(a), 16 U.S.C. § to the licensing er Even if the Commission should de alteration of require substantial would issue a cide to license for the Balsam Mead No. 67 requiring the Project to SCE the that ow decision “agreement” immediately re could be project licensed as an amendment nothing because final has viewable been error, legal to an license is in fact Gas ‍‌‌‌​​‌‌‌‌​​‌‌‌‌‌‌‌​​​‌‌‌‌‌​​‌‌‌‌‌‌‌‌​​‌​​​‌‌​‌​​‍Transmis See Midwestern decided.4 opportunity will full seek (D.C.Cir. sion Co. F.2d review of that final judicial administrative 1978).5 Thermal action. As this court said in Ecol ogy, supra: Irreparable Injury B. If the Cоmmission should argue that and it is determined that later upon Cities an legal erroneously imposed obli

this reflected error ... would application which ground vacating be the order and gation to file remanding for novo consideration “inordinate risks de them to would notes, ty its statement has not 4. As re- this time because FERC made a at requirement garding import applica- of of Section 6 on Northwest’s decision final supra, simply tions, possibility tracks the has it nor foreclosed of language competition the Act does not constitute of hearing on the issue future аny applica- course, of the effect of exclusivity.... present determination our Of mutual might be Cities. tion which judicial preclude review if a will not should fore- future Midwestern, supra this court at held: hearing.” competitive an effective close not reach issue of mutual “We do exclusivi- costs,”6 failure to review at this time As recognized this court Papago, accordingly supra, would “create serious when “Only parties hard- face the prospect ship.” irreparable injury, Neither the claim practical the adminis- with no effective possible prоcuring orders are erroneous nor the means of relief after trative the proceeding, might the close of they be from monetary applica- loss a license entitled to immediate a nonfinal irreparable tion constitute harm sufficient 240. Here 628 F.2d at order.” inject court to interrupt for this itself and the same will able raise issues follow proceedings. Myers administrative of a final ing entry order on the license Shipbuilding v. Bethlehem Corp., 303 U.S. application. 41, 51-52, 82 L.Ed. 638 Supreme Court stated: C. Invasion the Province of the Admin- Obviously, rule requiring the exhaus- istrative Agency the administrative remedy cannot prudential judicial doctrine of circumvented asserting straint was enunciated in Abbott Laborato- charge on which the complaint rests is Gardner, supra, 148-149, ries v. U.S. at groundless and that the mere holding of 87 S.Ct. at 1515: prescribed administrative undertaking survey Without the intri- result in irreparable damage. ripeness cacies of doctrine it is fair to prove also often Lawsuits to have been say prevent its basic rationale groundless; way but no has been discov- courts, through prema- avoidance of relieving ered of defendant from the adjudication, ture from them- entangling fact, necessity of trial to establish the disagreements selves in abstract over ad- [footnote omitted]7 policies, protect ministrative and also to is prospective monetary loss, Nor while it agencies interference may injurious, in an irreparable itself decision has until administrative been require harm sufficient review of the felt and its effects in a con- formalized at orders this time. The money that Cities way by crete the challenging parties, lose, will if in fact money, do lose [footnote omitted.] be due to the costs of cоmpeting with SCE Papago, As noted in “a nonfinal ad the Balsam Meadow Project. Such may ministrative be unreviewable— expenses competition are analogous to liti- result in though might irrep even it serious gation expenses. Supreme Court has injury party judi to a immediate arable —if litigation expense, held that “Mere even cial review would undermine the authority and unrecoupable cost, substantial does not agency acting within the scope irreparable injury.” constitute FTC v. at discretion.” F.2d 243. Both Papago, California, Co. of Standard Oil Delmarva, 671 F.2d at 66 L.Ed.2d 416 emрhasize importance the avoiding judi of (1980), quoting Renegotiation Board Ban- “piecemeal cial review of proceedings” and Co., Clothing nercraft 94 having comprehensive judicial “one 1028, 1040, 39 (1974). 5.Ct. L.Ed.2d 123 proceeding, based on full record.”8 argue right pref- municipal 6. that their enjoin hearing. rejected to to the The Court this upon permit erence the of vested argument. competing and their failure file a way should in no affect 8. While immediate determination of the issues preliminary permit. their entitlement to a time, by might we can- raised save some say dilatоry the Commission has been not Myers, petitioner 7. contended that a complicated procedural resolving rather by the National Labor Relations Board which questions. procedural questions by raised The the Board was to hold not authorized have, course, delaying resulted of subject petitioner irreparable injury, on determination the merits. guaranteed rights by the Constitution would be jurisdiction denied court had unless the district just pre- “agreement” denying issue as Commission decisions Nor reviewable, must interpretation liminary permits of been fi- are so spect § рreempt It is decisions that nally true resolved. argument by that certain review the rejected to immediate stage of the license consti- result provisions ultimate I concur with courts. license; in the tute a to alterations because the Com- majority consent reached question here, dispose of ripe but this does not while actions at issue mission’s in fact a license applica- “arbitrary, capricious, whether review, were not proposed plan requiring- discretion, substantial not in or otherwise abuse piecemeal A 706(2)(A) in SCE’s license. altеration 5 U.S.C. § law.” accordance required. of this issue is not resolution (1976). procedur-

The decisions are a final on al and not constitute do Reviewability I. controversy between merits regulate hydroe- To Whatever the outcome of Cities and SCE. power, Congress the Com- lectric directed proceedings, any licensing aggrieved issue licenses construction mission the right party seek necessary and maintenance of facilities. Review the review on the entire record. 797(e) (1976). appli- Because U.S.C. § province of the court would invade now рrovide must the Commission with cant agency. administrative before a license will information plethora of that the orders are ripe We conclude 802, Congress also al- issued, see id. § petition.9 and dismiss the for review issue preliminary lowed permits purpose enabling appli- “for MIKVA, Judge, Circuit concurring: for a license ... to secure the data cants the acts agree perform I with the majority por- that those and to ‍‌‌‌​​‌‌‌‌​​‌‌‌‌‌‌‌​​​‌‌‌‌‌​​‌‌‌‌‌‌‌‌​​‌​​​‌‌​‌​​‍per- 802,” 797(f). tions orders id. Such discussing of the Commission’s § duration, mits, years three not to exceed section 6 of the Power Federal permit holder with а statu- provide also are for review. § discussions, in its tory “priority” those Commission ex- sub- license. pressly reserved decision whether licenses presently stantial alterations statutory purposes by pre- These served Compa- held California Edison by Southern insignificant. are far from liminary permits SCE, ny (SCE), thus consent permit, of a preliminary accom- by any appli- would be necessitated even- priority for the panied by statutory might submitted by cation that ensures tual award Anaheim (Cities). Cities of and Riverside holder will be awarded the license in permit review potential should nеither Commission deter- any in which the case nor decisions comment holder’s license mines by the

upon discussions Commission that adapted” is “at least as as those cation dicta. plainly competitors. its 18 C.F.R. submitted agree But portions I cannot that those de- (1981). If 4.33(h)(1) allowing Commission’s orders are bet- cides that other for a preliminary withdraw holder will be so adapted, ter informed, are also nonreviewable. given Prelimi- and will be a reasonable nary integral stage permits applica- an its license time in which amend by equal licensing process Congress; quality envisioned as to render it of tion so Having ripe that the orders concluded that this decision is for the Com- we had concluded review, review, Judge agree for Mikva that mission are we do not we would allowing arbitrary, capricious, or abuse of reach the merits the it is not preliminary permit application its withhold discretion. existing re-apply If to amend its license.

781 4.33(h)(2). (3d 1982). Id. F.2d competitors. question those its 16 Cir. raised is permit subsequently by somewhat, If the holder suc- present case is but not application, its upgrading substantially, cessful in it will different —whether a Com- Moreover, allowing be awarded the license. private mission order a utility to priority unilaterally for license attaches to the stage, a preempt permit by permit also overcomes preliminary withdrawing other its prelimi- Congress preferences included in the seeking nary permit and instead to amend although example, license, statute. For Congress subject should be municipalities states and mandated that by similar review the courts. Because such given preference when the must Com- directly affects a Commission permits licenses, issues mission 16 statutory preferenсes U.S.C. pri- existence 800(a) (1976), preference does not license proceeding, orities at the eventual issuing is hold when the Commission the risks by and therefore affects assumed license in a case in which preliminary I applicants, believe this competing question already has been awarded. In this in the affirmative. must be answered holder, situation, latter even if a Review of Commission orders is governed utility private competing with state or 313(b) by section statutory municipality, priority. retains its 8257(b) (1976), allowing 16 ag U.S.C. § Id.; Washington see Public Power Supply obtain review grieved parties to of those FPC, 840, (D.C.Cir. System v. 358 F.2d 847 in the various appeals. decisions courts of 1966), grounds rev’d and vacated on other clearly for provision That allows review of 428, FPC, sub nom. 387 87 Udall v. U.S. agency final actions. Papago See Tribal (1967). 869 S.Ct. L.Ed.2d 18 FERC, v. 628 Utility Authority F.2d Thus, obtaining a preliminary permit en- denied, (D.C.Cir.), cert. 238-40 U.S. applicant’s sures eventual 66 L.Ed.2d (1980). by will favored the Commis- Although “quintessential reviewable or This, turn, applicant sion. allows under statute is a der” final expenditures by undertake foreseen those by determination after a merits, on the full “the reviewabili see, regulations, e.g., 4.40-.41, 18 C.F.R. §§ ty of an order must be determined ... knowledge 4.50-.51 with the that its practical reference function and con resulting receive a sequences statutory relevant 239; priority during scheme,” consideration. Those id. at see also Delmarva competing applicants prelimi- Light FERC, awarded Power & Co. 671 F.2d permits nary may make expendi- the same (D.C.Cir.1982). situation tures, obviously but must so do with a petition review, presented by Cities’ greater risk that their investments will be requires pragmatic approach such a that the naught. Commission order dis pute. is presumably

It for these reasons that preliminary permit aof to one Specifically, a decision applicant, and its denial to one or more bypass granting-of preliminary competing applicants, consistently has been ‍‌‌‌​​‌‌‌‌​​‌‌‌‌‌‌‌​​​‌‌‌‌‌​​‌‌‌‌‌‌‌‌​​‌​​​‌‌​‌​​‍stage has been com- permit, once the to immediate review the courts per- menced and See, appeals. e.g., City filed, of Dothan have been is mits little different from FERC, (D.C.Cir.1982); 684 F.2d 159 Dela- granting or denying a Commission River ware Basin Commission v. permit.1 Like latter deci- applicant apply only 1. The statute also accept allows in such a mission case decides directly 797(e), filing, §§ see thе license a decision that 800(a) (1976), ignoring prelimi- completely Papago, clearly 628 F.2d is nonreviewable. Cf. nary permit stage. proce- acceptance (Commission The use of such a rate dure, however, easily distinguishable nonreviewable). process followed in case. The Com- Challenge II. sion, circumventing the permit an order to the presented here stage in the circumstances Orders priori- statutory preferences affects that the decision argue licensing stage. applied at ties to be to withdraw its allowing preliminary cаses, by most re-apply amend to either preliminary award is contrary not to to section effectively deny petitioning Act, 7(a) the Federal Power party pref- 800(a) (1976). grants that it That otherwise statutory priority party municipalities when erence to states this has the practice, receive. would against parties other either they compete outright effect as the denial of same permits or licenses preliminary permit, a denial that immedi- preliminary been is- preliminary permit where no action. agency as final ately is reviewable Cities, provi- this by interpreted sued. As majority exalting form sub- over municipalities allow states sion would stance, therefore, it when decides that at statutory preference to lock-in their yet non-final this case are orders in posi- that stage. But preliminary permit for review. goals of public interest ignores the review that ac- Nor does should be require which plainly this draw into corded in case always select best province properly within disputes applications. statutory preference for agency. served to discretion municipalities is nо more than a states and issues purely legal Presented for tie-breaker, applied to be by the Commis- involve statutory no construction competing plans are only when deemed disputes i.e., the issues will not be factual — Id.; adapted.” see Ala- “equally to be full on the resolved or clarified 685 F.2d 1311 at Co. bama Power Thus, the merits before the Commission. Cir.1982). Therefore, (11th proper it is fit at this early stage issues are for review favor either to more for the Commission Abbott proceedings. See Laborato- developed applications over fully Gardner, ries S.Ct. or, here, as preliminary permit Indeed, (1967). waiting 18 L.Ed.2d or municipality a state to com- require compet- a decision from the stage pete competitor at the license when a reversing and then ing applications, stage, that level. At each has reached legal at the preliminary errors because which statutory preference to Cities are stage, merely waste adminis- still will win entitled is effective: Cities equal to, resources. It is true that than, trative the Com- or better decision, licensing Thus, if it submitted mission’s ultimate SCE. Cities, the Commission was in the license to moot ac- granted might statutory requirements, cordance with now presented the issues review. But be affirmed.2 mootness, should potential say, needless is hot ripeness. as lack of the same

Thus, the Commission orders at issue

here, to the extent allowed SCE withdraw its initial permit, and preempt- therefore competing application a pre-

ed Cities’ imme-

liminary permit, should court.

diate review might presented clearly 2. A different case if the rational reasons for its deci- articulated Commission, acting statutory 23-31, 97-104, see though sions, Appendix ‍‌‌‌​​‌‌‌‌​​‌‌‌‌‌‌‌​​​‌‌‌‌‌​​‌‌‌‌‌‌‌‌​​‌​​​‌‌​‌​​‍within its Joint arbitrary authority, any capricious thereby negating in an claim acted the decisions arbitrarily capriciously manner. But the Commission in this case made.

Case Details

Case Name: Cities of Anaheim and Riverside, California v. Federal Energy Regulatory Commission, Southern California Edison Company, Intervenor

Court Name: Court of Appeals for the D.C. Circuit

Date Published: Nov 5, 1982

Citation: 692 F.2d 773

Docket Number: 81-2141

Court Abbreviation: D.C. Cir.