Amicus Brief — Federal Energy Regulatory Commission v. Mississippi

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Office - Supreme Court, U.S.

No. 80-1749

gn the

Supreme Court of the Wnited

;

ALEXANDER L. STEVAS.

CLERK

October Term, 1980

FEDERAL ENERGY REGULATORY

COMMISSION and

JAMES B. EDWARDS, SECRETARY OF ENERGY,

Appellants,

THE STATE OF MISSISSIPPI, ET AL.,

Appellees.

On APPEAL FROM THE UNITED States District Court

FOR THE SOUTHERN DISTRICT OF MISSISSIPPI

Brief of Amici Curiae,

Duke Power Company and

Carolina Power & Light Company

In Support of Appellees

HAROLD R. SCHMIDT,

Counsel of Record

WILLIAM F, CockreL, Jr.

KARL ALEXANDER

ROSE, SCHMIDT, DIXON & HASLEY

900 Oliver Building

Pittsburgh, Pennsylvania 15222

(412) 434-8600

and

1575 Eye Street, N.W.

Washington, D.C. 20005

(202) 289-8300

Counsel for Amici Curiae

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TABLE OF CONTENTS

_Page

THE INTEREST Or THE AMICI CURIAE ......-0eeeeeeeees l

SUMMARY OF ARGUMENT .......0secceeeeeeeceeeeeees 1

ARGRIMENT oc ccccccccccccccccccccccccoccccesecsceses 3

I. CONTROLLING LEGAL PRINCIPLES.......... 3

Il. TITLES I AND III AND SECTION 210 OF

TITLE Il OF PURPA ARE UNCONSTITU-

TIONAL IN THAT THEY IMPERMISSIBLY

REGULATE THE STATES AS STATES......... 4

Ill. PURPA ADDRESSES MATTERS WHICH

ARE INDISPUTABLY ATTRIBUTES OF

STATE SOVEREIGNTY... .cccccccccccccccccces 13

A. Enacting Leyislation Is An Integral Opera-

thom OF Tike States occ cccccccccecccccccccscce 16

B. Establishing The Procedural Rules Of

Their Administrative Agencies Is An Inte-

gral Operation Of The States............00005 16

C. Exercising The Police Power So As To

Regulate Retail Rates And Service Prac-

tices Of Public Utilities Is A Traditional

Function Of The States..........ceseeeeeeees 17

IV. COMPLIANCE WITH PURPA WOULD

DIRECTLY IMPAIR THE STATES’ ABIL-

ITY TO STRUCTURE INTEGRAL OPERA-

TIONS IN AREAS OF TRADITIONAL

FUNCTIONS ..cccccccccccccccccccccccccccccccs 22

V. THERE ARE NO EXTRAORDINARY

CIRCUMSTANCES HERE WHICH

JUSTIFY THE FEDERAL GOVERN-

MENT IN DEVOURING ESSENTIALS

OF STATE SOVEREIGNTY ...........0eeeeeee 23

te Gre et cap adacvoeadbe 30

TABLE OF AUTHORITIES

CASES

Page

Alewine v. City Council of Augusta, 505 F. Supp.

880 (S.D. Ga. 1981). ..cccscccccccscccccvvecs 19, 21

Amersbach v. City of Cleveland, 598 F.2d 1033

CIE GAR FOTEP he cccccecccccchiodsccsivce 20, 21, 22

Arizona v. EPA, 521 F.2d 825 (9th Cir. 1975) .......... ll

Ashton v. Cameron County Water Improvement

District No. 1, 298 U.S. 513 (1936).......0eeeeeees 15

Brown v. EPA, 521 F.2d 827 (9th Cir. 1975),

vacated and remanded, 431 U.S. 99 (1977) ......... 11

Coyle v. Oklahoma, 221 U.S. 559 (1911) .......00eeeee 14

Consumers Union v. Sawhill, 393 F. Supp. 639

(D.D.C. 1975), aff'd per curiam, 523 F.2d

HODETERGA 197 icissiccccvcscaccewcsiccivessces 27

Davids v. Akers, 549 F.2d 120 (9th Cir. 1977) ...... 16, 17

District of Columbia v. Train, 521 F.2d 971

(D.C. Cir. 1975), vacated and remanded sub nom.,

EPA v. Brown, 431 U.S. 99, reinstated in part

and remanded in part sub nom., District

of Columbia v. Costle, 567 F.2d 1091

CER Rats ROT ED cokdscc peaseseidnavghece 8,9, 10, 11

EPA v. Brown, 431 U.S. 99 (1977) 2... cece eeeeeeee 8, 12

Gulf Oil Corporation v. Simon, 502 F.2d 1154

CR e PRP Lbkb ocbas ccccnceccsbecnbacebinnaen 26

Great Northern R. Co. v. Washington,

BOO Ws B58 CIBIGD kde cciccccccdddepsevessavcces 20

Hodel v. Virginia Surface Mining & Reclamation

Association, U.S. ,69L. Ed. 2d 1 (1981) .. passim

Independent Gasoline Marketers Council v. Duncan,

492 F. Supp. 614 (D.D.C. 1980) ........... cece 28

Kentucky Power & Light Co. v. City of Maysville,

36 F.2d 816 (E.D. Ky. 1929) .......ccccececeeeees 20

Page

Maryland v. EPA, 530 F.2d 215 (4th Cir. 1975)......... ll

Mandel v. Simon, 493 F.2d 1239 (TECA 1974) ......... 27

Maryland v. Wirtz, 392 U.S. 183 (1968) ......... 3 n.2, 19

Mobili Oil Corp. v. DOE, 610 F.2d 796 (TECA 1979)....27

Montana- Dakota Utilities Co. v. Johanneson,

153 N.W. 2d 414 (N.D. 1967) ......ccccccccceeees 20

Munn v. Illinois, 94 U.S. 113 (1876)........0eeeeeeeees 20

Nader v. Sawhill, 514 F.2d 1064 (TECA 1974).......... 27

National League of Cities v. Usery,

ee BI. BED CITED oo ce cease ccccccccessvccese passim

Pierce v. New Hampshire, 5 How. 554,

VBR Re: Ti oy) Peery r ery rr rrr rrr yy rr 19

Standard Oil Co. v. DOE, 596 F.2d 1029 (TECA 1978) ..27

United States v. Bekins, 304 U.S. 27 (1938) ........005: 15

United States v. Best, 573 F.2d 1095 (9th Cir. 1978)..... 19

United Transportation Union v. Long Island R. Co.,

634 F.2d 19 (2d Cir. 1980) .....cccccccccccecs 21, 22

CONSTITUTION, STATUTES AND REGULATIONS

United States Constitution

Article I, Section 8 (Commerce Clause)............ 4

TOMER AMIGMGUIORE 65 cc cccccccccccccccscevess passim

Clean Air Act Amendments of 1970, 42 U.S.C.

BOUT OF MU TENTED s caccvcccccccccccccescceses 9,11

Federal Highway—Aid Amendments of 1974,

Be A EP EAOTO) casccccccccccvcccccccace 8 n.5

Federal Water Power Act of 1920,

41 Stat. 1063 (current version at 16 U.S.C.

GE OF MOL ABUOEE 6 cb wecbcccccccccbcccscecocceoe 17

Powerplant and Industrial Fuel Use Act of 1978

Pub. L. No. 95-620, 92 Stat. 3289.........eeeeeees 28

Public Utility Regulatory Policies Act of 1978,

Pub. L. No. 95-617, 92 Stat. 3117 ............ passim

_Page

Title 1, 16 U.S.C. §2601 et seq.

GRD. EEE ISTE) ccc ccccccccscccccccccces passim

Section I11(a), 16 U.S.C. §2621(a)

GME EUUED cc cenccegcdcencéteccsees 16

Section 123(c), 16 U.S.C. §2633(c)

SE GEE OUTED ccccesccccccsccecccscese 6

Section 133, 16 U.S.C. §2643

TA SEe MOOD ccccesccccsseseseccecs 3

Section 210, 16 U.S.C. Section 824a-3

SC MEE xe ccesscecesdceseses passim

Section 210(h)(2)A), 16 U.S.C.

§824a-3(hX2)A) (Supp. Il 1979) ......... 6

Title II, 15 U.S.C. §3201 et seq.

GE EEE SUED) Sonccccccccovcctcespedes passim

Surface Mining Control and Reclamation Act

of 1977, 30 U.S.C. §1201 et seq.

MNO 6.4. un060000600s0b0s00csenensoses 7

Miss. CODE ANN. §77-3-87 (1973) ........cceeeeceevees 29

CONGRESSIONAL AND ADMINISTRATIVE MATERIALS

Cong. Rec. S. 17528 (October 7, 1978) ............008. 18

S. Rep. No. 95-361, 95th Cong., 2d Sess. 35,

reprinted in [1978] U.S. Cope Conc. & Ap.

SE MOMPIEDE Swéconsccecccedacescsessoocsooes 29

SE FOG, ROG, FFG. CIDTD). occ ccccccccscccctesecececces 1

U.S. COMPTROLLER GENERAL, BURDENSOME AND

UNNECESSARY REPORTING REQUIREMENTS

Or Tue Pusiic Utitity REGULATORY POLICIES

Act Neep To Be CHANGED (Rep. to U.S.

Congress, Doc. No. EMD 81-105, 1981) ........... I

Dep*t Or ENERGY, THE NATIONAL ENERGY

DLT hse bhbe 66 cdesccessecetabeocaane eee 28

Federal Energy Regulatory Commission, Notice

of Finding of No Significant Impact, etc.,

Docket Nos. RM79-54 and RM79-55

GN 20 ROUSE wun sdb sdoccdcccceeevacecscocion 28

Hearings on Oversight Pertaining to the Implemen-

tation of the Public Utilities Regulatory

Policies Act of 1978 Before the Subcomm. on

Energy and Powers of the House Comm. on

Interstate and Foreign Commerce, 96th Cong.,

SOR Ts COG s a bods 6c knccce decdccedeaseecas 18

OTHER AUTHORITIES

PRIEST, PRINCIPLES OF PuBLic UTILITY

es a eer 18

Brief for the Appellants ......ccccccccccccceee 14, 17, 25

Plaintiffs’ Memorandum in Support of Motion for

Summary Judgment in Civ. Act. JM-01212(C)

TE belie i deleécc sndkd odeebesvenne aces 29

THE INTEREST OF THE AMICI CURIAE

Amici Curiae, Duke Power Company and Carolina

Power & Light Company, are electric utilities subject to regula-

tion of their retail rates and service practices by the North

Carolina Utilities Commission and the South Carolina Public

Service Commission. The Amici are included on the final list,

44 Fed. Reg. 17448 (1979), of electric utilities which are

covered by the Public Utilities Regulatory Policies Act of 1978,

Pub. L. No. 95-617, 92 Stat. 3117 (“PURPA”). Under the

provisions of PURPA the Amici are subject to substantial

costs to which they would otherwise not be subject. For exam-

ple, the Amici must incur substantial costs in developing and

reporting cost-of-service data to satisfy requirements imposed

by Section 133 of PURPA, 16 U.S.C. §2643 (Supp. III 1979),

which requirements have been characterized recently by the

Comptroller General of the United States as “burdensome and

costly to utilities, and of little current use to States and interve-

nors.” U.S. COMPTROLLER GENERAL, BURDENSOME AND UN-

NECESSARY REPORTING REQUIREMENTS OF THE PuBLIC UTILITY

REGULATORY PoLicigs ACT NEED TO BE CHANGED (Rep. to

U.S. Congress, Doc. No. EMD 81-105, 1981).

The Amici file this brief in order to support the Appellees’

effort to obtain a declaration of invalidity of the provisions of

PURPA creating these unnecessary bu: dens imposed on utili-

ties and unconstitutionally interfering with the role of the

states in regulating retail rate structures and service practices of

electric utilities.

SUMMARY OF ARGUMENT

The United States Constitution and the Tenth Amend-

ment thereto provide for and guarantee a federal system of

government wherein the states retain those powers and attrib-

utes of sovereignty not specifically delegated to the federal

government. Titles I and III and Section 210 of PURPA, !

under the guise of regulating interstate commerce, do irrepara-

ble violence to this federal system and render the federal con-

cept all but meaningless. Under the principles recently

enunciated by this Court in Hodel v. Virginia Surface Mining

& Keclamation Association, U.S. , 69 L. Ed. 2d 1

(1981), and in previous cases, such portions of PURPA are

plainly unconstitutional. PURPA not only candidly provides

that it “supplements” state law, it commandeers state utility

regulatory agencies and compels them to consider and some-

times adopt federal policies and standards on retail utility rates

and service practices, under procedures and schedules also

dictated by PURPA. Instead of regulating the utilities,

PURPA regulates the states as states with respect to matters

which are clearly attributes of state sovereignty and thus

impairs the ability of the states to structure their integral

governmental operations. Although Congress might have

acted in alternative, permissible ways to implement the stan-

dards set forth in PURPA, it did not do so. Instead, Congress

elected to enact legislation by which essentials of state sover-

eignty are “devoured.”? Neither Appellants nor any amici

curiae have been able to point to anything in the Commerce

Clause or any other constitutional provision, the decisions of

this Court, or any extraordinary or overriding federal interest

or other circumstance authorizing or justifying Congress in

such action. It is therefore respectfully submitted that the

portions of PURPA here involved are unconstitutional and

that the lower court should be affirmed in so holding.

'Title | of PURPA is codified at 16 U.S.C. §2601 e1 seg. (Supp. 111 1979),

Title I11 is codified at 15 U.S.C. §3201 et seq. (Supp. 111 1979); Section 210 is

codified at 16 U.S.C. §824a-3 (Supp. I11 1979). For purposes of brevity, these

code citations are not repeated for every reference to Title 1, Title II or

Section 210.

2By enacting PURPA, Congress ignored the stated concern of this Court

in National League of Cities v. Usery, 426 U.S. 833 (1976), that “such

assertions of power, if unchecked, would indeed, as Mr. Justice Douglas

(continued)

ARGUMENT

I. CONTROLLING LEGAL PRINCIPLES

This Court recently stated the legal principles controlling

challenges to federal legislation which is asserted to contravene

the requirements of the Tenth Amendment to the United States

Constitution.’ On June 15, 1981, in Hodel v. Virginia Surface

Mining & Reclamation Association, U.S. ,69L.Ed.2d

1 (1981), the Court characterized its decision in an earlier

landmark case, National League of Cities v. Usery, 426 U.S.

833 (1976), as establishing the analytical principles to apply in

such Tenth Amendment challenges. The test set forth in Hodel

requires the challenger to satisfy each of three requirements.

First, there must be a showing that the challenged statute

regulates the “States as States” [Usery supra] at 854, 49 L

Ed 2d 245, 96 S Ct 2465. Second, the federal regulation

must address matters that are indisputably “attributes of

state sovereignty.” /d., at 845, 49 L Ed 2d 245, 96 S Ct

2465. And third, it must be apparent that the States’

compliance with the federal law would directly impair

their ability “to structure integral operations in areas of

traditional functions.” /d., at 852, 49 L Ed 2d 245,96SCt

2465.

69 L. Ed. 2d at 23.

Once these requirements are met, it must then be deter-

mined whether an extraordinary situation exists in which “the

nature of the federal interest advanced may be such that it

justifies State submission.” /d. at n.29.

cautioned in his dissent in Wirtz, allow ‘the National Government [to] devour

the essentials of state sovereignty,’ [392 U.S. 183, 205 (1968)] and would

therefore transgress the bounds of the authority granted Congress under the

Commerce Clause.” 426 U.S. at 855.

‘The Tenth Amendment provides: “The powers not delegated to the

United States by the Constitution, nor prohibited by it to the States, are

reserved to the States respectively, or to the people.”

This brief now applies those principles and demonstrates

that the provisions of PURPA at issue violate the Tenth

Amendment.

Il. TITLES 1 AND III AND SECTION 210 OF TITLE

Il OF PURPA ARE UNCONSTITUTIONAL IN

THAT THEY IMPERMISSIBLY REGULATE

THE STATES AS STATES

The portions of PURPA properly declared unconstitu-

tional by the lower court represent an unprecedented and

impermissible attempt by Congress, on the pretext that it is

regulating interstate commerce, to take direct control of an

important aspect of state government. Although Appellants

attempt to cast the issue in terms of Congress’ power under the

Commerce Clause, U.S. Const. art. 1 §8, cl. 3, the question is

not whether Congress has power to regulate interstate com-

merce but whether in regulating or purporting to regulate

interstate commerce it may regulate the states as states. Even

assuming arguendo that the intrastate generation and retail

sale of electricity by state-regulated utilities either is in, or

substantially affects, interstate commerce (although there is no

finding in PURPA to that effect), so that such intrastate gener-

ation and retail sales are a proper subject matter for the exer-

cise of Congress’ commerce power, the inquiry is not ended. It

is also necessary to examine the manner in which Congress

exercised its power, including the nature of the entities sought

to be regulated.

In that regard, Usery established beyond question that

“the States as States stand on a quite different footing from an

individual or a corporation when challenging the exercise of

Congress’ power to regulate commerce.” 426 U.S. at 854. The

Court also said:

It is one thing to recognize the authority of Congress to

enact laws regulating individual businesses necessarily

subject to the dual sovereignty of the government of the

Nation and of the State in which they reside. It is quite

another to uphold a similar exercise of congressional

authority directed, not to private citizens, but to the States

as States. We have repeatedly recognized that there are

attributes of sovereignty attaching to every state govern-

ment which may not be impaired by Congress, not

because Congress may lack an affirmative grant of legisla-

tive authority to reach the matter, but because the Consti-

tution prohibits it from exercising the authority in that

manner.

426 U.S. at 845.

In accordance with the principles just quoted, it is neces-

sary to determine whether PURPA attempts to regulate the

“States as States.” It is respectfully submitted that the portions

of PURPA involved here could hardly be a more obvious

attempt to regulate the states as states. It is necessary only to

examine Subtitle B of Title 1, which contains the substantive

federal standards sought to be imposed, to reach that conclu-

sion. That subtitle contains mandates addressed to only two

kinds of entities—non-regulated utilities and state utility regu-

latory agencies. There is no directive addressed to any state-

regulated electric utility. Such utilities account for the vast

majority of retail sales of electricity, and state regulatory agen-

cies generate and sell no electricity at all. If the activity of

generating electricity intrastate and selling it at retail triggers

the applicability and exercise of Congress’ commerce power,

and if PURPA is indeed intended to regulate commerce, then

PURPA's regulatory provisions should be directed to the enti-

ties primarily engaged in such activity, i.e., regulated utilities.

Instead, Titles I and III and Section 210 of PURPA seek

to regulate the states’ regulatory agencies. The mandates to

such agencies are numerous and have been discussed in the

Motions to Affirm filed by Appellees and in amicus curiae

“Subtitle D, Section 133, referred to supra at page |, appears to contain

the only mandate directed to regulated utilities.

briefs filed in support of Appellees. /nter alia, the agencies are

required to consider federal standards, required to hold hear-

ings to do so, required to honor a request by virtually anyone

that such consideration be made, required to apply federal

rules and definitions set forth in the Act in making such consid-

eration and required to reach certain dictated conclusions.

Section 210 is a particularly blatant regulation of the states as

states in that it flatly requires all state utility regulatory agen-

cies to implement rules promulgated by the Federal Energy

Regulatory Commission (“FERC”). Moreover, FERC is em-

pliance with this provision by the state regulatory commissions

subject to the rule. 16 U.S.C. §824a-3(h) (2) (A) (Supp. Ill

1979).

With respect to Titles I and III, Appellants attempt to

avoid the impact of the obvious regulation of the states as

states by reliance on the so-called “freedom” of the states to

decline to adopt the federal standards. Apart from the fact that

the congressionally-forced consideration of federal standards

is itself an improper regulation of the states as states, the

freedom argued for by Appellants is really not freedom at all. If

a state regulatory agency exercises this “freedom of choice”

against adopting the federal standards, it must set forth its

reasons for such determination, after which the determination

is subject to review in “the appropriate State court.” Section

123(c) of PURPA, 16 U.S.C. §2633(c) (Supp. III 1979). It is an

illusory freedom of choice which is subject to review and

reversal by a higher and final authority. In fact, if Congress had

intended to give the states freedom of choice regarding adop-

tion of the federal standards, the provision for court review of

state agency determinations would have been unnecessary and

would not have been included in the Act.

Furthermore, the narrow focus urged by the Appellants

ignores mandatory revision of the procedural rules of state

agencies required by Titles | and III. As is discussed infra, the

unfettered discretion of states to adopt their own procedural

rules is an integral operation of government.

Appellants’ reliance on Hodel is misplaced. Indeed, that

case supports Appellees, as is demonstrated by the following

description by this Court of the effect on the states of the

statute construed in that case, the Surface Mining Control and

Reclamation Act of 1977, 30 U.S.C. §1201 et seq. (Supp. III

1979) (“Surface Mining Act”):

Moreover, the States are not compelled to enforce the

steep-slope standards, to expend any state funds, or to

participate in the federai regulatory program in any

mianner whatsoever. If a State does not wish to submit a

proposed permanent program that complies with the Act

and implementing regulations, the full regulatory burden

will be borne by the Federal Government. Thus, there can

be no suggestion that the Act commandeers the legislative

processes of the States by directly compelling them to

enact and enforce a federal regulatory program.

69 L. Ed. 2d at 23-24.

It is even clearer on closer examination that the effects of

the Surface Mining Act under consideration in Hodel and of

the portions of PURPA involved here are in no way analogous

and in fact are entirely different with respect to the role of the

states. Under the Surface Mining Act, the Secretary of the

Interior promulgates regulations establishing an interim regu-

latory program for surface mining operations in each state.

The Secretary is responsible for enforcing the interim program;

the states are not required to do so. The interim program

remains in effect in a state until a permanent program is

implemented. The Secretary is also required to promulgate

regulations establishing a permanent program and standards.

Any state wishing to assume permanent regulatory control

over surface mining operations within its borders may, but is

not required to, submit a plan for approval by the Secretary. If

such plan is approved, the state thereafter implements and

enforces it. As to any state whose plan is not approved or which

fails to submit a plan, the permanent federal program, imple-

mented and enforced completely by the federal government

and with no state government involvement whatever, is in

effect.

These factors demonstrate that the Surface Mining Act

does not compel state agencies to take any action, for which

reason this Court held in Hodel that there was no violation of

the Tenth Amendment. PURPA, however, is undisguised

compulsion of state government agencies to take various regu-

latory actions, and the Hodel case thus in no way supports the

validity of PURPA.

PURPA is also in sharp contrast to other types of legisla-

tion by which Congress, without preempting an area com-

pletely, seeks to have the states adopt or abide by federal

policies and standards. In such cases, federal funds are typi-

cally used as the incentive for states voluntarily to comply with

the federal policies and standards, i.e., federal funds are

granted to states which elect to comply with federal standards

and withheld from those which do not.5 Congress employed no

such approach in PURPA, however, but rather opted for sheer

coercion.

The circumstances and legal issues most similar to those

involved in PURPA and in this appeal were present in District

of Columbia v. Train, 521 F.2d 971 (D.C. Cir. 1975), vacated

and remanded sub nom., EPA v. Brown, 431 U.S. 99, rein-

stated in part and remanded in part sub nom., District of

Columbia v. Costle, 567 F.2d 1091 (D.C. Cir. 1977), in which

‘For example, the Secretary of Transportation is directed not to

approve any highway project submitted by a state (and therefore not to

disburse federal highway funds to such state), unless the state is enforcing a

maximum speed limit of 55 miles per hour on all public highways within its

borders. Federal Highway-Aid Amendments of 1974, 23 U.S.C. §154 (1976).

the United States Court of Appeals for the District of Colum-

bia Circuit had before it various regulations of the Environ-

mental Protection Agency (“EPA”) applicable to Maryland,

Virginia and the District of Columbia and relating to air

pollution caused by motor vehicles. With regard to some of the

regulations, the Court found that it could determine, on the

basis of statutory construction of the Clean Air Act Amend-

ments of 1970, 42 U.S.C. §1857 et seg. (1976) (“Clean Air

Act”), whether such regulations were within the authority of

the EPA, thereby making it unnecessary to reach constitu-

tional issues. For example, the Court held: “By ordering the

states to enact and submit regulations after their initial plans

were found to be inadequate, rather than promulgating his

own regulations directly controlling sources of air pollution,

the Administrator has thus exceeded the authority conferred

upon him by Section 110(c) of the Clean Air Act.” 521 F.2d

986.

With regard to the power of the federal government to

force the states to administer EPA-promulgated transporta-

tion control programs, the Court held that the Clean Air Act

itself does not specifically preclude such power, so that the

Court was required to consider plaintiffs’ constitutional chal-

lenge to the regulations. The Administrator's regulations con-

cerning the inspection, maintenance and retrofit of motor

vehicles each contained a provision prohibiting all persons

from operating nonconforming vehicles, which the Court

found to be prope’ However, such regulations also included

“provisions ordering the states to enact statutes and to estab-

lish and administer programs to force their citizens to comply

with this federal directive.” 521 F.2d at 990.

The Court held:

[T]he Administrator, in the exercise of federal power

based solely on the commerce clause, cannot against a

State’s wishes compel it to become involved in administer-

ing the details of the regulatory scheme promulgated by

the Administrator. For example, the attempt to require

the state to “establish” each of the retrofit programs, and

to “evaluate and approve devices for use in this program,”

. ..is an impermissible encroachment on state sovereignty

and goes beyond “regulation” by the Congress. It seeks,

under the guise of the commerce power, to substitute

compelled state regulation for permissible federal regula-

tion. If the federal government wants to impose a program

under federal authority, it is limited by the restrictions

applicable thereto.

In essence, the Administrator is here attempting to

commandeer the regulatory powers of the states, along

with their personnel and resources, for use in administer-

ing and enforcing a federal regulatory program against the

owners of motor vehicles... . Under the regulations here,

the states are to function merely as departments of the

EPA, following EPA guidelines and subject to federal

penalties if they refuse to comply or if their regulation of

vehicles is ineffective. We are aware of no decisions of the

Supreme Court which hold that the federal government

may validly exercise its commerce power by directing

unconsenting states to regulate activities affecting inter-

state commerce, and we doubt that any exist.

521 F.2d at 992.

The Court also discussed the Tenth Amendment, stating

that “the extent of federal intrusion into state sovereignty is of

some relevance even where the federal regulations are an exer-

cise of the commerce power.” 521 F.2d at 994. The Court held

that the regulations in question violated the Tenth Amend-

ment:

[W]e have no doubt that the inspection and retrofit regu-

lations involve “drastic” intrusions on state sovereignty. A

federal regulation which compels the states to enforce

federal regulatory programs clearly “impairs the States’

integrity” and “their ability to function in a federal sys-

tem.” The Tenth Amendment thus provides an additional

ground for striking down these particular regulations.

521 F.2d at 994 (footnote omitted).

In Brown v. EPA, 521 F.2d 827 (9th Cir. 1975), similar

regulations were before the United States Court of Appeals for

the Ninth Circuit, some of which included “the power to direct

that a state either enact such laws to control air pollution as the

Administrator might require, or administer and enforce such

regulations as the Administration [sic] might properly promul-

gate.” 521 F.2d at 838. The Court decided that, as a matter of

statutory construction, the Clean Air Act did not authorize the

Administrator to promulgate such regulations. The Court also

stated that it was reluctant to adopt the contrary interpretation

because of the serious constitutional issues which would be

involved under the Tenth Admendment. The Court discussed

the distinction between commerce and the governmental

power to regulate commerce. The Court said:

To treat the governance of commerce by the states as

within the plenary reach of the Commerce Power would in

our opinion represent such an abrupt departure from

previous constitutional practice as to make us reluctant to

adopt an interpretation of the Clean Air Act which would

force us to confront the issue. Such treatment, for exam-

ple, would authorize Congress to direct the states to regu-

late any economic activity that affects interstate

commerce in any manner Congress sees fit.... A Com-

merce Power so expanded would reduce the states to

puppets of a ventriloquist Congress.

521 F.2d at 839.

This Court granted certiorari to review the Brown case,

the Train case, supra, Arizona v. EPA, 521 F.2d 825 (9th Cir.

1975) and Maryland v. EPA, 530 F.2d 215 (4th Cir. 1975), the

latter two of which had also held invalid various regulations of

12 ’

the EPA. In its per curiam opinion, EPA v. Brown, 431 U.S. 99

(1977), this Court said that the federal parties appeared to"

admit that the only regulations remaining before the Court

were invalid unless modified in certain respects. In the brief

filed by the Solicitor General on behalf of the federal parties, it

was stated: “‘The Administrator. ..concedes the necessity of

removing from the regulations all requirements that the States

submit legally adopted regulations. .. ."" 431 U.S. at 103. The

Court thus declined “to pass upon the EPA regulations, when

the only ones before us are admitted to be in need of certain

essential modifications,” /d., and the cases were remanded for

consideration of mootness. However, such admission by the

Solicitor General in EPA v. Brown is highly persuasive and

relevant here with respect to the validity of those portions of

PURPA which purport to direct the states, through their

utility regulatory agencies, to take certain actions to regulate

the utilities under their jurisdiction.

Appellants and various amici curiae have stated that,

under the commerce power, Congress could have preempted

completely the field of utility regulation. Such a statement

reflects the view, characterized with implicit disapproval by

Justice Rehnquist, that “the federal system exists only at the

sufferanee of Congress,” Model, supra at 36 (concurring opin-

ion). However, the issue of complete federal preemption of

utility regulation need not be considered here because Con-

gress in PURPA has not preempted anything.

What Congress has attempted to do in PURPA is quite a

different thing from federal preemption. When the federal

government acts to preempt an area affecting interstate com-

merce, it not only enacts legislation and promulgates regula-

tions and standards but also establishes the regulatory

machinery to effectuate and enforce its programs. In such

cases, there is no doubt that, if otherwise justified, Congress

may displace the authority of the states in the arca preempted.

In PURPA, however, Congress has attempted to compel the

states to displace their own authority. Stated another way,

Congress has sought to utilize the benefit of federal supremacy

without accepting the concomitant burden of administering

and enforcing the federal policies and standards it wishes to be

supreme. Instead, Congress has attempted to impose that

burden on the states which, it is respectfully submitted, Con-

gress may not constitutionally do.

Ill. PURPA ADDRESSES MATTERS WHICH ARE

INDISPUTABLY ATTRIBUTES OF STATE

SOVEREIGNTY

The second requirement to apply in a Tenth Amendment

challenge to a federal statute is whether the statute addresses

“matters which are indisputably attributes of state sover-

eignty.”

The Court in Hodel and in Usery did not clearly define the

phrases “attributes of state sovereignty,” “integral operations,”

“areas of traditional functions” (69 L. Ed. 2d at 23) or “integral

governmental functions” (426 U.S. at 855). It can reasonably

be concluded from an examination of the phrase “integral

operations in areas of traditional functions” that the Court

intended to differentiate “integral operations” from “tradi-

tional functions.” What is not clear is whether or not the phrase

“attributes of state sovereignty” (which is the crucial phrase of

the second requirement specified in Hode/) corresponds to the

phrase “integral operations” or “traditional functions” or

“integral operations in areas of traditional functions” or does

not precisely conform to any of these phrases. In this brief, the

phrase “attributes of state sovereignty” is considered to encom-

pass those “integral operations in areas of traditional state

functions” (which phrase forms the essence of Hodel’s third

* requirement), as it seems reasonable to do so from the context

of Hodel and Usery.

Having established that frame of reference, the “attributes

of state sovereignty” requirement is then applied to the provi-

sions of PURPAat issue. As the Appellants themselves charac-

terize the impact of those provisions on the states:

To be sure, the statute in suit places certain regulatory

responsibilities upon the states. Some of the provisions at

issue do more than “allow” state regulation. Portions of

Titles I and III require state regulatory authorities to “con-

sider” whether or not to adopt and implement certain regu-

latory standards; the state commissions must adhere to

certain procedural requirements in considering these stan-

dards, must permit the Secretary of Energy to participate in

the procecdings, and must report to the Secretary their

progress in the consideration process. Section 210(f) (1)

requires the state authorities to implement the Federal

Energy Regulatory Commission's rules concerning transac-

tions between cogenerators and electric utilities; the Com-

mission is empowered under Section 210(h) (2) to enforce

this statutory responsibility in federal court.

Brief for the Appellants at 28-29 (footnote omitted) (emphasis

added).

On the basis of the Tenth Amendment and the decisions of

this Court, it is clear that there are certain essential powers

which a state must exercise in order to preserve its constitution-

ally retained sovereign status and, pursuant thereto and in the

exercise of its police powers, effectively to provide such tradi-

tional services to its citizens as fire prevention, police protec-

tion, regulation of monopolies, sanitation, public health and

parks and recreation. These essential powers include unfet-

tered latitude of the state to locate its own seat of government,

Coyle v. Oklahoma, 221 U.S. 559, 565 (1911), and to make

fundamental employment decisions with respect to the person-

nel upon whom exercise of traditional state activities must rest,

Usery, supra.

Also illustrative of the type of power considered by this

Court to be essential to state sovereignty (and of the concomit-

ant obligation of Congress to refrain from interfering there-

with) are Ashton v. Cameron County Water Improvement

District No. 1, 298 U.S. 513 (1936), and United States v.

Bekins, 304 U.S. 27 (1938), which involved the power of the

states to control the fiscal affairs of their political subdivisions.

In the Ashton case, the Court considered a 1934 amendment to

the Bankruptcy Act of 1898, which provided for the adjust-

ment of the debts of insolvent public bodies upon the filing of a

petition in federal Bankruptcy Court. In holding that the legis-

lation violated the Tenth Amendment, the Court stated:

[The statute before us] undertakes to extend the supposed

power of the Federal Government incident to bankruptcy

over any embarrassed district which may apply to the court.

If obligations of States or their political subdivisions

may be subjected to the interference here attempted, they are

no longer free to manage their own affairs; the will of

Congress prevails over them... . And really the sovereignty

of the State, so often declared necessary to the federal

system, does not exist.

298 U.S. at 530-531 (citations omitted).

Asa result of the Ashton case, Congress enacted a second

amendment to the Bankruptcy Act which contained additional

restrictions on the ability of the Bankruptcy Court to interfere

with state fiscal affairs and which was held to be constitution-

ally sound in United States v. Bekins, supra, in which the Court

said: “The statute is carefully drawn so as not to impinge upon

the sovereignty of the State. The State retains control of its

fiscal affairs.” 304 U.S. at 51.

In this same category of powers or integral operations

essential to state sovereignty must unquestionably be included,

Amici submit, the power to enact legislation without having it

supplemented by the federal government and the power to

promulgate its own rules of procedure for the administrative

agencies to which it delegates responsibility for exercising

traditional state activities.

A. Enacting Legislation Is An Integral Operation

Of The States

It should be obvious that, of all integral operations of state

government, the power to enact legislation is the most funda-

mental. However, Section I11(a) of PURPA, 16 U.S.C. §2621

(Supp. III 1979), forthrightly states that it “supplements” state

law. State law may be enacted only by state legislators elected

by the citizens of their states, and it is difficult to imagine a

clearer or more improper interference with state sovereignty

than Congress purporting to add to provisions of existing state

law.

B. Establishing The Procedural Rules Of Its Admi-

nistrative Agencies Is An Integral Operation Of

The States

It is equally obvious that the freedom of the state to

choose the procedural rules of the agencies it establishes to

execute state activities is also an integral operation of a state.

That promulgation of its own rules of procedure is an

integral operation of state government is made clear by Davids

v. Akers, 549 F.2d 120 (9th Cir. 1977), where the Court stated

as follows:

If fixing the wages of state employees is an essential deci-

sion regarding the conduct of integral governmental func-

tions, so, too, is the exercise by the Arizona House of

Representatives of its power to adopt rules for its proce-

dures....

Id. at 127. A state utility regulatory agency is a creation of and

an arm of the state legislature, as well as a part of the executive

branch of government, and, on the basis of the Akers case, the

conclusion is inescapable that such a regulatory agency's

power to adopt procedural rules for the conduct of its own

functions is an integral operation of state government and thus

an attribute of state sovereignty.

Under PURPA, as acknowledged by the Appellants, state

commissions “must adhere to certain procedural require-

ments” including requirements that the commissions consider

whether to adopt and implement certain federal standards and

that they allow the Secretary of Energy to participate in the

State proceedings. Clearly, these mandatory federal require-

ments substantially interfere with one of the states’ integral

operations—formulation of its own rules of operation in an

area which, as will be hereinafter demonstrated, is a traditional

state function, i.e., regulation of retail utility rates and service

practices within the state.

C. Exercising The Police Power So As To Regulate

Retail Rates And Service Practices Of Public

Utilities Is A Traditional Function Of The

States

The Appellants have themselves acknowledged that the

states have traditionally regulated retail rates and service prac-

tices of electric utilities by noting that federal involvement in

electric ratemaking was initiated with the passage of the Fed-

eral Water Power Act of 1920, 41 Stat. 1063 (current version at

16 U.S.C. §791 et seq. (1976)), “to fill gaps in state regulatory

systems that were interpreted by this Court as beyond the

Constitutional reach of state authorities” (Brief for the Appel-

lants, supra at 30-31) and that Congress refrained from enact-

ing a more radical statute than PURPA so as to avoid “undue

interference with the traditional authority of state regulatory

commissions over retail utility ratemaking.” Id. at 32 (empha-

sis added).

Certainly the legislative history of PURPA supports the

conclusions stated in the Appellants’ brief. For example, the

Administrator of the Economic Regulatory Administration of

the Department of Energy, an important federal official

involved in the implementation of PURPA, gave testimony to

the Congress as it reviewed the implementation of PURPA in

which he admitted “the fact that regulation of retail utility

transactions has traditionally been the exclusive province of

state and local governments.” Hearings on Oversight Pertain-

ing to the Implementation of the Public Utilities Regulatory

Policies Act of 1978 Before the Subcomm. on Energy and

Powers of the House Comm. on Interstate and Foreign Com-

merce, 96th Cong., Ist Sess. 526 (1979) (statement of David J.

Bardin) (emphasis added).

Also, Senator Henry Jackson (D. Wash.), who introduced

the PURPA bill to the Senate, acknowledged during the

Senate's deliberations on PURPA that the utility retail rate-

making process “has been traditionally wholly within the pro-

vince of the States.” Con. Rec. S. 17528 (October 7, 1978).

These acknowledgements that regulation of retail utility

rates and service practices has been a traditional state function

are well founded. A review of the relevant history indicates that

substantial involvement of the states in the regulation of utili-

ties dates back to the beginning of this century. As one expert

characterizes that history:

{ U]tilities first were dealt with vigorously and comprehen-

sively when New York and Wisconsin created, in 1906, the

first commissions capable of demonstrating that quality

of “expertise” called for by the first Justice Harlan in

Smyth v, Ames. Every state has since established a regula-

tory agency.

Priest, | PRINCIPLES OF PusLIC UTILITY REGULATION 25

(1969).

Just as conceded by the Appellants, by the sponsors of

PURPA in Congress and by experts on the history of state

regulation of utilities, so have the courts indicated that utility

regulation is a traditional function of the states. This Court in

Usery unequivocally recognized that “such functions as” fire

prevention, police protection, sanitation, public health, and

parks and recreation are services “which the states have tradi-

tionally afforded their citizens.” 426 U.S. at 851. (Also, in

overruling Maryland v. Wirtz, 392 U.S. 183 (1968), this Court

implicitly ruled that traditional state functions also include

state operation of schools and hospitals. Accord, Alewine v.

City Council of Augusta, 505 F. Supp. 880, 888 (S.D. Ga.

1981). Moreover, this Court stated with respect to the activities

it identified: “{t}hese examples are obviously not an exhaustive

catalogue of the numerous line and support activities which are

well within the area of traditional operations of state and local

governments.” 426 U.S. at 851 n.16.

The inclusion by the Court of police protection as a tradi-

tional state function is significant. Police protection is but one

form of the exercise of a state's police power. The courts have

long observed that a traditional activity of the states is exercise

of the police power. See, e.g., Pierce v. New Hampshire, 5

How. 554, 12 L. Ed. 279 (1847). Given this uncontroverted

holding of the courts, it is not significant that the courts have

not directly held that the specific exercise of the police power in

the form of utility regulation is a traditional state function.

When this and other specific exercises of the police power other

than police protection come before the courts, it can be

expected that the courts will declare them to constitute tradi-

tional state functions. For example, applying Usery, the Unit-

ed States Court of Appeals for the Ninth Circuit indicated that

exercise of the police power in the licensing of drivers consti-

tutes a traditional function of state government. See United

States v. Best, 573 F.2d 1095, 1103 (9th Cir. 1978).

Although the courts have not yet direct/y ruled that regu-

lation of retail utility rates and service practices is a traditional

state function, the courts have long observed that regulation of

utilities is a valid exercise of the state's police power. See, e.g.,

Great Northern R. Co. v. Washington, 300 U.S. 154, 159-160

(1936); Munn v. Jilinois, 94 U.S. 113 (1876); Montana- Dakota

Utilities Co. v. Johanneson, 153 N.W. 2d 414,470(N.D. 1967);

Kentucky Power & Light Co. v. City of Maysville, 36 F.2d 816,

819 (E.D. Ky. 1929).

It follows, then, that state exercise of the police power in

the form of regulation of retail utility rates and service prac-

tices should also be classified as a traditional function of the

states.

Also supporting the conclusion that state regulation of

utilities should be classified as a traditional state function are

the analytical tests which several federal courts have advanced

as a methodology to apply in supplementing the specific listing

by this Court in Hodel of traditional functions of state govern-

ment. For example, in Amersbach v. City of Cleveland, 598

F.2d 1033 (6th Cir. 1979), the United States Court of Appeals

for the Sixth Circuit set forth an analytical test which is de-

scribed in the following statement from that case:

By analyzing the services and activities which the

Court [in Usery] characterized as typical of those per-

formed by governments, we note certain elements com-

mon to each which serve to clarify and define a method by

which a protected government function may be identified.

Among these elements are: (1) the government service or

activity benefits the community as a whole and is available

to the public at little or no direct expense; (2) the service or

activity is undertaken for the purpose of public service

rather than for pecuniary gain; (3) government is the

principal provider of the service or activity; and (4)

government is particularly suited to provide the service or

perform the activity because of a communitywide need for

the service or activity.

598 F.2d at 1037.

Application of the Amersbach principles here requires the

conclusion that state regulation of retail utility rates and ser-

vice practices is a traditional function of state government.

First, it is clear that virtually every person utilizes electricity, in

some fashion, as an essential service. It appears that regulation

by state government is particularly well-suited to benefit the

community as a whole by ensuring that electricity rates are not

excessive yet are sufficient to assure an adequate power

supply—necessary for the operation of commerce and industry

affecting jobs, the operation of hospitals, police stations and

other necessary and emergency organizations and for the

health and welfare of the public in general. Additionally, the

state government service in regulating retail utility rates and

service practices is provided to the citizens of the state at no

direct cost. Second, the service of regulating utilities is under-

taken for the purpose of public service rather than for pecun-

iary gain. Third, state government is the only body able to

exercise the police power of regulating retail utility rates and

service practices. Fourth, government is particularly suited to

the regulation of utilities because the entire community argua-

bly benefits from that regulation.

Other federal courts have borrowed from the analytical

method applied in Amersbach, but have applied less stringent

tests. For example, in United Transportation Union v. Long

Island R. Co., 634 F.2d 19, 27 (2d Cir. 1980), the Court

determined that the second of the Amersbach tests was invalid

because it is not necessary for a state activity to be in the nature

of “public service” to qualify as a traditional governmental

activity. In Alewine v. City Council of Augusta, supra at 889,

the Court held that the requirement of “little or no direct

expense” to the public was misplaced.

Under the less stringent tests applied in United Transpor-

tation and Alewine, it is even more clear that state reguiation of

retail utility rates and service practices qualifies as a traditional

activity of state government.

The Amersbach court also construed Usery as establish-

ing the proposition that “the terms ‘traditional’ or ‘integral’ are

to be given a meaning permitting expansion to meet changing

times.” 598 F.2d at 1037. The Second Circuit Court in United

Transporation agreed with that conclusion noting that:

Obviously, the catalog of essential state-provided services

is not and cannot be static. As Mr. Justice Douglas

observed in New York v. United States, 326 U.S. 572,591,

66 S. Ct. 310, 318, 90 L. Ed. 326 (1946) (Douglas J.,

dissenting), “[w]hat might have been viewed in an earlier

day as an improvident or even dangerous extension of

state activities may today be deemed indispensable.”

634 F.2d at 26. Applying this flexible analysis, it is equally clear

that state regulation of retail utility rates and service practices

qualifies as a traditional state function.

IV. COMPLIANCE WITH PURPA WOULD

DIRECTLY IMPAIR THE STATES’ ABILITY

TO STRUCTURE INTEGRAL OPERATIONS IN

AREAS OF TRADITIONAL FUNCTIONS

Having defined “attributes of state sovereignty” to corres-

pond essentially to “integral operations in areas of traditional

functions”, the discussion above (of the second requirement of

Hodel) lays the predicate for demonstrating that compliance

by the states with PURPA would impair their ability to struc-

ture integral operations in areas of traditional functions.

If, as demonstrated above, a state’s power to regulate

retail utility rates and service practices is an integral operation

in an area of traditional state functions, and is thus an essential

attribute of state sovereignty, then there is no doubt that

PURPA impairs the states’ ability to structure such opera-

tions.

Where a state agency is compelled to consider a myriad of

factors concerning retail utility regulation, which it would not

otherwise consider, and is compelled to hold hearings and take

evidence on such matters and to issue written determinations

thereon and to take part in appellate review proceedings there-

after, all of which must be done within a dictated time frame, it

cannot be said that such agency's ability to perform its func-

tions in a manner and on the schedule it deems appropriate,

and to otherwise structure its own operations, is not impaired.

This is particularly true where, as in Mississippi and numerous

other states, utility regulatory agencies are required by statute

to act on certain rate matters within a fixed time period.

If an agency is compelled to consider and hold hearings on

the federal standards set forth in PURPA, it must necessarily

either increase its workload, staff and expenditures or relegate

to secondary status, and delay or forego considering, matters

which it may, in the exercise of its judgment and expertise,

deem more important and worthy of action than the federal

standards set forth in PURPA. This forced administrative

process, together with the requirement that anyone may inter-

vene in the proceeding at will, can only create certain chaos and

incalculable delay and detriment with respect to the perfor-

mance of a state agency’s own functions, all of which certainly

constitutes an “impairment” of the state’s ability to structure its

integral operations.

Vv. THERE ARE NO EXTRAORDINARY CIRCUM-

STANCES PRESENT HERE WHICH JUSTIFY

THE FEDERAL GOVERNMENT IN DEVOUR-

ING ESSENTIALS OF STATE SOVEREIGNTY

Having established that the three requirements set forth in

Hodel are satisfied, it is next demonstrated that the extraordi-

nary circumstances required to uphold the constitutionality of

the portions of PURPA involved here are not present.

It is important to stress that, where the three requirements

of Hodel are satisfied, the Court intends a federal statute to be

upheld only in the most extraordinary of situations. A review

of the Court's analysis in Hodel supports this conclusion;® a

review of the Court's analysis in Usery confirms it. In its

analysis in Usery, the Court defended its decision in Fry v.

United States, 421 U.S. 542 (1975), to uphold the constitution-

ality of temporarily freezing the wages of state and local

government employees because the legislation providing for

that freeze was an “‘emergency measure to counter severe

inflation that threatened the national economy,’” 426 U.S. at

853, and was “an extremely serious problem which endangered

the well-being of all the component parts of our federal system

and which only collective action by the National Government

might forestall.” /d.

In addition, the Court found that the nature of the federal

intrusion upon the states was minimal:

The effect of the across-the-board freeze authorized by

that Act, moreover, displaced no state choices as to how

governmental operations should be structured, nor did it

force the states to remake such choices themselves.

Instead, it merely required that the wage scales and

employment relationships which the States themselves

had chosen be maintained during the period of the emer-

gency. Finally, the Economic Stabilization Act operated

to reduce the pressures upon state budgets rather than

Demonstrating that these three requirements are met does

not, however, guarantee that a Tenth Amendment challenge to congres-

sional commerce power action will succeed. There are situations in

which the nature of the federal interest advanced may be such that it

justifies State submission. See Fry v United States, 421 US 542, 44 L Ed

2d 363, 95 S Ct 1792 (1975), reaffirmed in National League of Cities v

Usery, supra, at 852-853, 49 L Ed 2d 245, 96 S Ct 2465 (1977). See also

id., at 856, 49 L Ed 2d 245, 96 S Ct 2465 (Blackmun, J, concurring).”

69 L. Ed. 2d at 23 n.29 (emphasis added).

increase them... . The limits imposed upon the commerce

power when Congress seeks to apply it to the States are

not so inflexible as to preclude temporary enactments

tailored to combat a national emergency.

426 U.S. at 853 (emphasis added).

Summarizing the Court’s controlling principles to be ap-

plied in determining whether a situation exists where a federal

statute may be upheld although the three requirements of

Hodel are satisfied:

1. There is a national emergency endangering the well-

being of all the component parts of our federal sys-

tem.

2. Only collective action by the federal government may

forestall the emergency.

3. No state choices as to how governmental operations’

should be structured are displaced by the federal

action.

4. The federal action reduces, not increases, pressures

upon state budgets.

5. The federal intrusion is a temporary one tailored to

combat a national emergency.

Application of these principles to the facts of this case

indicates that extraordinary circumstances permitting valida-

tion of PURPA do not exist.

First, there is not now and was not at the date of PURPA’s

enactment a national emergency endangering the well-being of

ali the component parts of our federal system. Appellants have

characterized PURPA as “part of a package of legislation

designed to combat the energy crisis.” Brief for the Appellants

at 2. However, at the time of PURPA’s enactment, although

the energy situation was serious, it was not of crisis propor-

tions. Indeed, oil imports at that time had actually declined

from prior periods.’

In this connection, the courts found that, in the initial

period of pervasive federal regulation of energy, 1973-1974,

there was an oil emergency justifying extraordinary federal

action. It is instructive to review cases where federal courts

repeatedly cited the existence of an oil emergency permitting

the federal government extraordinary latitude during the

initial phase of its regulation of the pricing and allocation of

petroleum. Of particular relevance are the decisions of the

United States Court of Appeals with exclusive jurisdiction of

emergency government regulation of petroleum allocation and

pricing—the Temporary Emergency Court of Appeals

(“TECA"). For example, Gulf Oil Corporation v. Simon, 502

F.2d 1154 (TECA 1974), contained the following statements:

At a time [December 27, 1973 and January 14, 1974, the

dates upon which the Federal Energy Office (“FEO”)

promulgated petroleum allocation regulations} when this

country was deprived of crude oil from important foreign

sources and our total supply was substantially less than

the immediate needs of refiners as well as consumers, it

was not unreasonable for FEO to impose a scheme of

allocation....

The allocation of all available supplies of crude oil

was ordered by FEO pursuant to a determination by

Congress in the Emergency Petroleum Allocation Act

that immediate emergency action was necessary to avoid

"Ir, 1977, crude cil imports averaged 6,594 thousand barrels per day; in

1978, 6,195 thousand barrels per day. Adding further confirmation that the

nation was not at the time PURPA was adopted and is not today cxperienc-

ing an energy supply crisis is the fact that in 1981 crude oi! imporis have

averaged only 4,217 thousand barrels per day. See ENERGY INFORMATION

ADMINISTRATION, Dep't of Eneroy, (Sept. 1981] Montuty ENerGy

Review 32.

foreseen catastrophic nationwide consequences of a criti-

cal shortage of crude oil, residual fuel oil and petroleum

products essential! for domestic heating, transportation

and industrial production.

502 F.2d at 1155-1156 (emphasis added). In this connection,

see also Mandel v. Simon, 493 F.2d 1239 (TECA 1974).

However, by November 27, 1974, the same Court was

already observing that the extraordinary oil emergency of

1973-1974 had passed. For example, in Reeves v. Simon, 507

F.2d 455, 459 (TECA 1974), the Court spoke of the gasoline

shortage in the past tense. In Nader v. Sawhill, 514 F.2d 1064

(TECA 1975), the Court found an oil emergency to have

existed on December 19, 1973 which justified action by the

Cost of Living Council in adopting an oil pricing regulation

without providing notice and opportunity for comment but

cautioned the federal government that under “less calamitous

circumstances” government invocation of emergency powers

to dispense with such opportunity for notice and comment

“will not be tolerated.” /d. at 1069. Indeed, the Court found

that the oil emergency had passed by April 30, 1974, as the

Court failed to find an emergency justifying failure by the FEO

to provide notice and opportunity to comment for an April 30,

1974 energy regulation. Consumers Union v, Sawhill, 393 F.

Supp. 639 (D.D.C. 1975), affd per curiam, 523 F.2d 1404

(TECA 1975).

Implicit in later decisions which did not find “good cause”

justifying failure of the government to provide notice and

opportunity to comment upon post mid-1974 energy regula-

tions is the conclusion that by mid-1974 a national oil emer-

gency no longer existed. See Standard Oil Co. v. DOE, 596

F.2d 1029 (TECA 1978) (which construed a December, 1974,

rulemaking action); Mobil Oil Corp. v. DOE, 610 F.2d 796

(TECA 1979) (which construed an April 30, 1974, rulemaking

action).

This Court should find, then, that the oil imports statistics

previously cited and these decisions by the fedeal appeals court

with expertise as to the nature of government regulation

imposed in response to oil emergencies indicate that, by the

date PURPA was enacted, i.e., November, 1978, the oil emer-

gency had passed. Consequently, application of the first princi-

ple enumerated above demonstrates that there did not (and

does not) exist an extraordinary situation permitting intrusion

upon protected activities of the states.

Applying the second principle, even if there were a

national emergency at the time PURPA was enacted, clearly it

was not and is not the case that only collective action by the

federal government could forestall it. The Department of

Energy itself at the time of PURPA's enactment indicated the

possibility that PURPA would not result in the saving of a

single barrel of imported oil. See Dep’t oF ENERGY, THE

NATIONAL ENerGY Act at III (1978). Even the government's

more optimistic estimates projected that under PURPA only

40,000 barrels of imported oil a day would be saved by 1995.

See Federal Energy Regulatory Commission, Notice of Find-

ing of No Significant Impact, etc., docket Nos. RM 79-54 and

RM 79-55 (March 31, 1979).

Assuming arguendo that PURPA could save the nation

40,000 barrels per day (and there are to date no indications that

it is saving the nation any imported oil), an oil savings of that

level still must be considered slight. See, e.g., Independent

Gasoline Marketers Council v. Duncan, 492 F. Supp. 614

(D.D.C. 1980) where the Court found a reduction of 56,000 to

100,000 barrels per day, 492 F. Supp. at 617 n.4, to be “slight,”

Id. at 618. Also, Congress itself modified another energy sta-

tute, the Powerplant and Industrial Fuel Use Act of 1978, Pub.

L. 95-620, 92 Stat. 3289, enacted at the same time as PURPA,

so as to reduce oil and gas savings by as much as 160,000

barrels per day, which reduction was characterized in the

legislative history as “slight.” See S. Rep. No. 95-361, 95th

Cong. 2d Sess. 35, reprinted in{1978] U.S. Cope Cona. & Ap.

News 8180-8181.

In view of the at-best slight oil savings which PURPA

would accomplish, it is clear that collective action by the

federal government in the form of enactment and enforcement

of PURPA could not and cannot forestall any energy emer-

gency.

With regard to the third principle, it has been demon-

strated hereinabove that state choices as to how governmental

operations should be structured are clearly displaced by

PURPA. For example, PURPA requires the states to amend

the operating rules of their utility regulatory commissions.

With regard to the fourth principle, PURPA increases the

pressure upon state budgets. For example, the Appellees have

indicated that:

PURPA will cause the cost of operations of the [state

utility regulatory] Commission to increase substantially.

For example, it is estimated that compliance with

PURPA would necessitate an increase of at least five

executive employees and three secretaries. Moreover, the

cost of even submitting a proposal to DOE to comply with

PURPA would exceed $360,000.

Plaintiffs’ Memorandum In Support of Motion for Summary

Judgement in Civ. Act. JM-01212(C) at 11 (S.D. Miss. 1979).

For the Mississippi Public Service Commission, the level of

expenses described above is extraordinarily high, as the com-

mission is supported only by a “tax raising $700,000 per year.”

Id., citing Miss. Code Ann. §77-3-87 (1972).

Finally, applying the fifth principle, it is clear that

PURPA is not a temporary statute; to the contrary, Congress

provided no termination date for it.

CONCLUSION

The foregoing demonstrates that the requirements of a

Tenth Amendment challenge to a federal statute have been

satisfied: (i) PURPA regulates the states as states, (ii) the

statute addresses matters that are indisputably attributes of

state sovereignty and (iii) the states’ compliance with PURPA

would directly impair their ability to structure the integral

operations of promulgating the operating rules of their agen-

cies engaged in an area of traditional functions, utility regula-

tion. In addition, it has been demonstrated that there are no

extraordinary circumstances present which justify upholding

PURPA despite satisfaction of these requirements. If the pro-

visions of PURPA involved here are permitted to stand, the

result will be, as was well-stated in Brown v. EPA, supra, to

“reduce the states to puppets of a ventriloquist Congress.” /d.

at 839. Amici Curiae, Duke Power Company and Carolina

Power & Light, thus respectfully urge that the lower court’s

judgment striking down portions of PURPA as unconstitu-

tional be affirmed.

Respectfully submitted,