National Association of Regulatory Utility Commissioners v. Federal Energy Regulatory Commission, Tenaska, Inc., Intervenors

SENTELLE, Circuit Judge,

dissenting in part.

I concur in most of the majority’s opinion, but I cannot join that part of the opinion that upholds the eminent domain provisions of Order No.2003. See Maj. Op. 1282-83. FERC is a “creature of statute,” and the agency has “only those authorities conferred upon it by Congress.” Cal. Indep. Sys. Operator Corp. v. FERC, 372 F.3d 395, 398 (D.C.Cir.2004) (internal quotation marks omitted). “[A]n agency literally has no power to act ... unless and until Congress confers power upon it.” Id. (quoting La. Pub. Serv. Comm’n v. FCC, 476 U.S. 355, 374 , 106 S.Ct. 1890 , 90 L.Ed.2d 369 (1986)). I do not believe that Congress has authorized FERC to regulate the use of state-granted eminent domain power, and thus I respectfully dissent from that portion of the majority’s opinion.

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Under FERC’s new Standard Large Generator Interconnection Agreement, transmission providers are required to take certain steps to help generators obtain necessary land for interconnection facilities. Transmission providers “shall at Interconnection Customer’s expense use efforts, similar in nature and extent to those that it typically undertakes on its own behalf or on behalf of its Affiliates, including use of its eminent domain authority.” Order No.2003-A, 69 Fed.Reg. 15,932, 15,953-54, 16,033 (2004). In other words, to the extent that transmission providers use eminent domain to interconnect with their own generation facilities, they must now use eminent domain on behalf of unaffiliated generators as well. The issue before us is whether FERC has statutory authority to regulate transmission providers’ use of state-granted eminent domain power, and — if FERC does have such authority — whether the provisions of Order *1287 No.2003 that address eminent domain are constitutional.

Courts may not presume that Congress has intended to regulate the “substantial sovereign powers” of states unless the federal statute in question is unmistakably clear. The Supreme Court has held that “if Congress intends to alter the usual constitutional balance between the States and the Federal Government, it must make its intention to do so unmistakably clear in the language of the statute.” Gregory v. Ashcroft, 501 U.S. 452, 460-61 , 111 S.Ct. 2395 , 115 L.Ed.2d 410 (1991) (quoting Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 242 , 105 S.Ct. 3142 , 87 L.Ed.2d 171 (1985)) (internal quotation marks omitted). “This plain statement rule is nothing more than an acknowledgment that the States retain substantial sovereign powers under our constitutional scheme, powers with which Congress does not readily interfere.” Gregory, 501 U.S. at 461 , 111 S.Ct. 2395 . Courts have applied this clear statement rule in a variety of cases involving federal regulation of the “substantial sovereign powers” of the states. See, e.g., Raygor v. Regents of Univ. of Minn., 534 U.S. 533, 543-44 , 122 S.Ct. 999 , 152 L.Ed.2d 27 (2002) (whether the federal supplemental jurisdiction statute tolls the statutes of limitation for state law claims in state court); Kimel v. Fla. Bd. of Regents, 528 U.S. 62, 73-74 , 120 S.Ct. 631 , 145 L.Ed.2d 522 (2000) (whether a federal statute abrogates state sovereign immunity); Gregory, 501 U.S. at 461-67 , 111 S.Ct. 2395 (whether the federal Age Discrimination in Employment Act applies to state judges); Will v. Mich. Dep’t of State Police, 491 U.S. 58, 65 , 109 S.Ct. 2304 , 105 L.Ed.2d 45 (1989) (whether states are “persons” that may be sued under 42 U.S.C. § 1983 ); Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 , 67 S.Ct. 1146 , 91 L.Ed. 1447 (1947) (whether a federal statute preempts state law); Am. Bar Ass’n v. FTC, 430 F.3d 457, 471-72 (D.C.Cir.2005) (whether a federal statute should be interpreted to regulate the practice of law, which has long been regulated at the state level).

I believe that eminent domain is easily classified as a “substantial sovereign power” of the states, and thus the clear statement rule applies to federal regulation of this power. Courts have long recognized that eminent domain is at the very core of state sovereignty. As the Supreme Court has stated:

The power of eminent domain is an attribute of sovereignty, and inheres in every independent state.... The taking of private property for public use upon just compensation is so often necessary for the proper performance of governmental functions that the power is deemed to be essential to the life of the state. It cannot be surrendered, and if attempted to be contracted away, it may be resumed at will.

Georgia v. City of Chattanooga, 264 U.S. 472, 480 , 44 S.Ct. 369 , 68 L.Ed. 796 (1924). See also Jackson v. Metro. Edison Co., 419 U.S. 345, 353 , 95 S.Ct. 449 , 42 L.Ed.2d 477 (1974) (noting that eminent domain “is traditionally associated with [state] sovereignty”). Courts have also emphasized that even if eminent domain authority has been delegated to a public utility or a privately-owned corporation, it is still the state that is acting whenever the eminent domain power is used:

The right of eminent domain is an attribute of sovereignty. ... It is none the less a public right, because the state sometimes consents that it may be exercised by a quasi public corporation like a common carrier. Such license or permission is granted because its exertion in that form is thought to be for the public interest.... It permits them to *1288 proceed in their own names, but really on behalf of the state ....

Louisville & N.R. Co. v. W. Union Tel. Co., 268 F. 4, 8 (6th Cir.1920). See also Baldwin v. Appalachian Power Co., 556 F.2d 241 (4th Cir.1977) (“By exercising the delegated power of eminent domain, a public service corporation acts as an agent of the state ...”); Louisiana v. Chambers Inv. Co., 595 So.2d 598, 601 (La.1992) (“[Eminent domain] always involves the taking or damaging of property interests by the state or some alter ego of the state, such as a public utility, that has been delegated the power to condemn.”); Wissler v. Yadkin River Power Co., 158 N.C. 465 , 74 S.E. 460, 460 (1912) (“This power of eminent domain is conferred upon corporations affected with public use, not so much for the benefit of the corporations themselves, but for the use and benefit of the people at large.”). Thus, eminent domain is properly categorized as a “substantial sovereign power” of the states, even when that power has been delegated to a public utility. Accordingly, we should not presume that Congress intended to regulate the use of state eminent domain authority unless the federal statute in question is “unmistakably clear.”

Turning to the instant case, Order No.2003 will require transmission providers either to forego the use of their state-granted eminent domain power altogether, or to use this power to condemn property on behalf of unaffiliated generators. These provisions of Order No.2003 cannot possibly be lawful unless Congress has “unmistakably” authorized FERC to regulate the use of state-granted eminent domain power. FERC has not identified' — ■ and I have not found — any such clear statement of congressional intent in the relevant statutes. The federal statutes pertaining to the “regulation and development of power” are codified in title 16 of the U.S.Code. See 16 U.S.C. §§ 791-839 . Noticeably absent from these sections of the Code is any provision granting FERC authority to dictate the manner in which state eminent domain power may be used.

Congress’s treatment of eminent domain in other provisions of the energy statutes confirms that we should not infer from FERC’s general grant of jurisdiction that the agency also has the power to regulate state eminent domain. When Congress addresses issues involving eminent domain, it tends to do so in a clear, detailed, and specific manner. See 16 U.S.C. § 824a-4(a) (granting the Secretary of Energy limited authority to use eminent domain to acquire rights-of-way “through North Dakota, South Dakota, and Nebraska for transmission facilities for the seasonal diversity exchange of electric power to and from Canada”); id. § 824p(e) (granting eminent domain authority to certain licensees to build transmission facilities in “national interest electric transmission corridor[s]”); id. § 814 (granting eminent domain authority to certain licensees to acquire land “necessary to the construction, maintenance, or operation of any dam, reservoir, diversion structure, or the works appurtenant thereto”); id. § 831c(h)-(i) ' (authorizing the TVA to use eminent domain to “acquire real estate for the construction of dams, reservoirs, transmission lines, power houses, and other structures, and navigation projects at any point along the Tennessee River”). Although these provisions address federal eminent domain authority— rather than FERC’s power to regulate state eminent domain — they nonetheless show the specificity that Congress uses when it addresses eminent domain. These provisions reinforce my conclusion that FERC’s jurisdiction over interstate transmission and wholesale sales of electric energy does not include — -sub silen- *1289 tio — the authority to regulate state eminent domain.

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Under well-established principles of statutory interpretation, courts should not presume that Congress has intruded upon a core area of state sovereignty unless the relevant federal statute is clear and unambiguous. Here, FERC has not identified any federal statute that clearly authorizes the Commission to regulate the use of state eminent domain power. Thus, I would hold that the provisions of Order No.2003 that impose restrictions on transmission providers’ use of state-granted eminent domain power are beyond the scope of FERC’s statutory authority. Because I would resolve this issue on statutory grounds, I do not need to address the constitutional issue of “commandeering.” Of course, in the future, Congress might pass a statute that specifically authorizes FERC to regulate how transmission providers use their eminent domain power. Such a statute may raise constitutional issues under New York v. United States, 505 U.S. 144 , 112 S.Ct. 2408 , 120 L.Ed.2d 120 (1992), and Printz v. United States, 521 U.S. 898, 117 S.Ct. 2365 , 138 L.Ed.2d 914 (1997), but those issues are not before us at this time.

For the aforementioned reasons, I respectfully dissent from the portions of the majority opinion that address the eminent domain provisions of Order No.2003. I join the remainder of the majority’s opinion.