*2 BRYAN, FOSTER, and SIB- Before LEY, Judges. Circuit BRYAN, Judge. Circuit 4, 1934, January By contract dated corporation Company, Power Alabama transmission, manufacture, in the engaged electricity, agreed to and distribution ex- lines as sell such of its transmission tend from Dam at the Muscle Al- plant into seven Shoals Alabama counties, Tennessee Val- abama ley Authority corporate agency (TVA), a States, by the Act created the United May 18, Stat. seq. 831 et The TVA 16 USCA § purchase $1,- agreed price pay 150,000 delivery. Pow- The Alabama Company systems its distribution offer named to the re- territory above for sale sys- spective municipalities such in which prices it was tems are located co- willing accept; it would operate the Electric Home & Farm with Authority (EHFA), cor- porate finance agency created to sales appliances, in the sale of electrical appliances. after wait- such negotiation months ing three dis- of sales of the urban consummation systems, was have the tribution electric' and all furnish systems regardless of whether Company had sold them Alabama Power 21, 1934, May municipalities. to the On in- Alabama Power entered also, See, Supp. 9 F. agreement EHFA to act as an agent of in- Sol., Fly, the latter’s collection Lawrence Gen. No. 7764:. James price the purchase due on Valley Authority, stallments Tennessee William appliances Knoxville, Tenn., sold retailers Fitts, electrical Jr., both C. 9, 1934, O’Brian, August Buffalo, Y., customers. On individual N. Lord John Mitchell, Ala., Alabama Power not hav- Florence, H. and Wm. systems any of its ing sold distribution appellants. municipalities, to TVA an Johnston, Forney F. Jos. Johnston them; option but on Janu- Ala., Birmingham, appellees. both filed, ary after suit was Forney Johnston, gave notice elected not Birming- had No. 7812: option. ham, Ala., cross-appellants. to exercise construction, September this suit to On like of the Wilson are high-dam are, enjoin performance type, the above-men- upstream, the Nor- Wheeler; mi- brought and, downstream, ris and the tioned contracts was nority preferred stockholders Pickwick. The release of waters from *3 they Company, Norris Dam the Alabama Power after will increase the continuous formally unsuccessfully capacity 40,000 by had demand- but Wilson Dam kilo- watts, company itself, ed that the itself institute suit generators Norris Dam installed, 73,- capable contracts. rescind those of producing If kilowatts. the Wheeler and the Court, en- The decree of the District Pickwick Dams only are used as reser- 'hearing, adjudged final tered after (cid:127) voirs, according present plans, the to- May 21 January 4 and contracts of tal capacity continuous of Wilson and proprietary illegal furtherance of ' combination, Norris Dams without TVA, operations by and ordered them aid of the plant, 202,000 steam will be enjoined seventeen munic- annulled. ipal kilowatts. The construction of Wilson 'defendants, were under con- also depth of 9 feet of power tract to receive electric from TVA slack water over rapids, the Muscle Shoals by in the area served the Ala- thereby eliminating a serious obstruction accepting bama Power from navigation. Navigation will be fur- for the expending federal funds construc- improved by ther completion city light plants, holding tion of electric Wheeler and Storage Pickwick Dams. entered that these contracts were "into in by of water means of reservoirs is es- illegal proprietary opera- aid of TVA’s tions; adequate sential to flood control on the enjoined and further them and Tennessee river. Wilson Dam was com- defendant, remaining municipal pleted in 1925 $50,000,000. at a cost of Athens, city of owns its distribu- probably capable producing system, purchasing pow- tion from electric power more "water than would be need- TVA, ground er from on the that TVA ed for the national defense in time of illegal competition engaged with war, peace time of power Company. TVA, the Alabama Power The makes available is so much in excess of EHFA, city appeal of Florence from government’s the al needs for it for nation- plaintiffs The the decree. below have tak- that, defense and for navigation with- cross-appeal, contending en a out dam, installation of other decree should have included a declara- tory judgment there is a even supplying after prevent in order to TVA the transmission lines which TVA attempting option to renew the con- from the Alabama Power August tract of which it is said was Company. There has been no sale or con- pendency not exercised because of the tract for sale of the remaining surplus. suit, engaging of this or from in divers The sale of energy electric generated at operations illegal specifically other en- Muscle Shoals in required excess of that joined. operating the locks and' servicing gov- made the follow- properties ernment can be pro- made to other, among ing, findings of fact: The profits duce applied which could be toward acquired United States the Muscle Shoals the reimbursement of the cost of Wil- property on the Tennessee river and built son expended in the construc- auxiliary thereon Wilson an steam tion of new dams. pur- is not plant, plants, and two nitrate for war pose of production limit the purposes. The existence of these facil- power electric to that by needed gov- ities for manufacture of war mate- ernment in manufacturing war materials rials constitutes a valuable national as- providing and clared but its de- by set. Dam unaided pow- policy is to utilize to the fullest development, with eight hydro-elec- its possible extent all the electric energy generators by installed tric the War De- which the Wilson and other dams are 50,000 partment, capable producing capable of producing, by supplying first continuously, except kilowatts during needs, low governmental then selling water; stages plant and the steam has to users of electricity, in com- 60,000 capacity a continuous petition kilowatts. utility corporations en- cent, per In gen- manufacture, gaged transmission, erated at Wilson Dam was gov- used for electricity. distribution of and ing dispos- In purposes. ernmental Other surplus power dams under TVA intends to ob- capacity operated son Dam to its un- full revenue, time to the same tain produce. can be made to in order competitors private dersell its dem- “power yardstick” establish a property of the Wilson Dam is the public over advantages of onstrate United States. It was constructed plants. light ownership private authority Nation section fact, which Upon findings these Defense al 39 Stat. Act safely correct be assumed to be (50 79), for the USCA § the district challenged, none of them is supplying produc water of law judge concluded as a matter improv tion of munitions Congress has no constitutional ing navigation on the Tennessee river. agen- any federal it, maintain to erect and *4 a contract cy, right the to enter into such by Congress exercise com 4, that the con- January that of and as powers upon by the merce conferred 4, January of it was void as tract Constitution, that it is conced is so clear TVA, Alabama Pow- to was void to the as government by its law ed. virtue of Company. judge, having er The district also ownership of Dam owns ful Wilson conclusion, consistently reached this held inevitably power created . the water dependent May that the of 21 contract the that dam Kaukauna construction of plaintiff was also void. The stockholders Co., etc., Bay, Co. Green 142 U. S. v. may be dismissed from further considera- 173, 1004; 254, 12 S. Green Ct. tion, they as entitled inasmuch are to as- etc., Co., Paper Bay, Patten Co. v. only rights the sert of the Alabama Pow- 58, 364; 97, 43 Ed. U. S. 19 S. Ct. L. Company; er and need to so we consider Co., States United v. Chandler-Dunbar only principal the effect of the contract 53, 667, 57 Ed. 1063. U. S. 33 S. Ct. L. January upon rights of of the con- Congress, power, in the exercise of its tracting parties. judge, hav- 4, 3, 2, under article cl. of the Con § ing assuming held that TVA to exer- was stitution, property belonging dispose to of authority cise which no act of States, may dispose to the of wa United it, constitutionally upon could did free power ter Dam as created at Wilson pass upon the contention made on be- ly any may as it of half of the Alabama Power been property. never heretofore has that the TVA Act of 1933 was on invalid only held that exists right ground purports delegate accidentally pro part as legislative authority. was' view strictly duced excess of the amount TVA, the district while necessary purposes national de for implied right dispose it had the always navigation; fense or of but any surplus power electric unintentional- supposed right has to extend to all been ly created in the of a exercise bona fide surplus. the excess or Water power only effort to make such as was generis; oth sui unlike most for the needed manufacture of war ma- put property it cannot be forms of for serving terials and the necessities of sale, away kept and for future navigation, had and could have no con- it must be either converted elec but authority intentionally stitutional to cre- tricity up it is and used as released any sell surplus. ate and additional He go storage or to waste. If allowed enjoined therefore performance per the water stored at 4, January the contract of any for in- through pass penstocks, mitted infirmity, fraud, herent duress, such as language of counsel “there inadequate consideration, solely be- it,” gold in allowed to flow he cause program convinced that 'dam, unhindered over “it is forever the manufacture and dis- matter, practical As gone.” posal of electric bore no no incidental be market or ac any substantial govern- relation to lawful surplus created cidental honest ef mental function. is the contention of only enough produce electricity fort agency TVA that as an of the United governmental strictly requirements; supply it has the States constitutional user, private, statutory authority public or dispose elec all the power, tricity excess of such would become a customer unless of it given be as needed from time be firm assurance could time production supply. for the dependable war That materials go it need not be allowed Wil- may right theory waste, that it and all lack of bat power. ap proceeds fully disposed of and cost plied reimbursement toward The inquiry remains whether the nec- settled. is well publicly-owned of a dam essary statutory power been conferred has Co., etc., Bay, Co. v. Green Kaukauna supra; on the TVA. The Valley Tennessee Au- Chandler-Dunbar States United thority Act of passed 1933 was for the Co., v. Califor Arizona supra; State of purposes, among others, maintaining “of 522, L. nia, Ct. 51 S. 283 U. S. and operating the properties now owned case in 283 In the last-cited Ed. 1154. by the 'United States vicinity in the 51 S. Ct. page U. S. Shoals, Muscle Alabama, in the interest ** * navigable river-is “As the it is said: of the national defense to im- act are means prove and the navigation in the Tennessee River naviga to the control not unrelated and to control the destructive flood waters * * * tion, and main erection in the Tennessee River Mississippi dam and reservoir tenance of such River Basins.” Section 16 USCA § conferred powers clearly within purports The act separate sec- here, opin And our Congress.” so tions to confer on TVA the to con- successfully be maintained ion it cannot dams, struct lines, reservoirs, and transmission *5 or ‘is no reasonable substan that to furnish nitrogen products for production and tial between the military relation purposes; to allot to the War surplus hydro-electric pow the Department of the water power necessary to operate locks, Dam and the ex lifts, available at Wilson or other facilities in powers the aid of ercise war and commerce of and to produce, dis- tribute, upon Congress. It is within conferred and sell power, “as here- adopt any to province Congress the of in particularly specified.” “particu- The means, specifications” lar of lease or reasonable sale, whether are to sell the surplus. The disposing of the not operation used in the of locks and nicipalities, states, other counties, works to lines to facilitate sales mu- transmission fairly partnerships, the by be said courts to or cannot individuals. The provides act further course, the inappropriate. con- or Of unreasonable struction of Norris and that the government that the the is true may President from time to time rec- engage in at will cannot United States private ommend Congress to legislation such as business, by means fol he deems proper control, for flood naviga- property it cannot sell that lows it tion purposes, generation pow- of electric doing owns, though may in so it even er consistent with flood control and nav- competition pub other enter igation, proper lands, the marginal use of property. private owners It lic or proper the method of reforestation in the that each the several is not doubted basin, drainage and the economic and so- perpetual in do holds trust states well-being cial people living the in waterways navigable the with minion over the Tennessee right Basin. The River borders; equally true in its but it is that government, was reserved to the in case navigable rights the the states wa of war or national emergency declared supreme subject to ters are the. by Congress, possession to take of all powers general govern commerce the any part described government live under dual ment. of a We or pose pur- referred to the act “for the powers, sepa not divided under two manufacturing explosives or for (cid:127) conflicting powers. governments of rate 20, other purposes.” war Section 16 navigable over waters The' USCA 831s. The the act sections of § government is not in con to the federal separable, declared to be to the end that with, necessarily superior is flict to unconstitutionality any one section over the dominion such waters which the may validity ány affect other. states reserved to themselves. Gibbons 1, Ogden, 9 unobjectionable v. Wheat. 23. is act from say to gov standpoint federal leads nowhere in so far as it n - exercising its ernment constitutional undertakes to on domain,” powers within “state charge operate since to take of and acts acting time the same it is at own its and to distribute and sell domain as well. electricity municipalities We conclude that to well as as to the decree cannot be utility companies. below sustained on “And fact na- navigation Power purposes other than the Alabama [and Company. Besides, could Power be served Alabama will also tional defense] object author- has no standing even invalidate the exercise conferred, though purposes these ity additional dams have not even those been properly justified by Congress. an exer- not alone have authorized Frothingham Mellon, Congressional State of v. power.” cise of 262 U. S. California, supra. does not S. Ct. Ed. v. L. is not Arizona owner, op- riparian respect its appear or the owner of a dam that TVA site doing pro- which the assuming at Wilson erations take; any special nor has poses anything do more than au- in such so, being terest as object pro act. its would entitle it thorized This posed improvements The section of na motives are immaterial. aid 831v) (section 16 USCA navigation. act tional defense United § Co., supra, the President shall States Chandler-Dunbar Congress page make recommendations to U. S. Ct. 33 S. policy developing the Ten- future L. Ed. 1063. Valley unobjectionable, nessee as case, the whole On our conclusion is President make event the decree of the district thinks as he recommendations erroneous. We have no occa- therefore subject proper. The is not act sion to the Alabama consider whether Congress has all criticism that abandoned had been Power if that decree de- navigation and national affirmed, been entitled would have fense, being im- navigation is now declaratory judgment. proved, and in the event of war prop- is reserved use Muscle Shoals Appellees take their cross- nothing erty exclusively for national defense. appeal. appeal decree On direct *6 reversed, is remanded for the cause Act of and Harbors The Rivers with proceedings inconsistent project for the 46 Stat. authorized opinion. main permanent improvement river a nav stream of the Tennessee SIBLEY, Judge (concurring). Circuit with depth in accordance igable of 9 feet found that judge also of En of the the recommendation Chief plans far-reaching very board had No. gineers in House Document he experimentation which social Seventy-first Congress, Second Ses limits of beyond thought no recommenda sion. Because power. This case the federal high- tion in that House document plans purposes and by the location, be decided dams, type their validity board, of what by the Valley Au the Tennessee contended' the attacked under be done delegate legisla about thority Act undertakes only with deal The contracts the loca contracts. reference to tive arising at the Norris, Wheeler, type tion hold, disposed we seen, may, as just As Dams. we have Pickwick The manner Congress. the location itself the act extent to which specifically Norris whether private busi- affect may be allowed enough type as we think im Con- discretion of alone, material; ness Wilson Dam without legislative discre- An exercise Norris, Wheeler, gress. assistance rather ballot box is reviewable tion has a after serv Pickwick the courts. than in ing transmission lines
Tennessee Valley Authority v. Ashwander
78 F.2d 578
5th Cir.1935Check TreatmentAI-generated responses must be verified and are not legal advice.