Amicus Brief — Federal Energy Regulatory Commission v. Mississippi

Office - Supreme Court, U.S.

FILED

NOV. 2 1981

No, 80-1749 . | ALEXANDER L. srevas

IN THE i

Supreme Court of the Rnited States

OCTOBER TERM, 1980

FEDERAL ENERGY REGULATORY COMMISSION and

JAMES B. EDWARDS, SECRETARY OF ENERGY,

Appellants,

u

THE STATE OF MISSISSIPPI, et al,

Appellees.

On Appeal From the United States District Court

for the Southern District of Mississippi

BRIEF OF AMICUS CURIAE

FLORIDA POWER & LIGHT COMPANY

IN SUPPORT OF APPELLEES

WILLIAM B. KILLIAN

Counsel of Record

Tuos. E. CAPPS

JOSE I. ASTIGARRAGA

SHEILA A. HALPERN

STEEL HECTOR & Davis

1400 Southeast First National

Bank Building

Miami, Florida 33131

Telephone: (305) 577-2800

Attorneys for Amicus Curiae,

Florida Power & Light Company

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES s iii

INTEREST OF AMICUS cas. 1

EEE ET CORE 3

THE STATUTE

Title I and Title III of PURPA .............. 7

Title II, Section 210 of PURPA ............. 1

SUMMARY OF ARGUMENT rt 12

Pe. AES Se a SRT 13

I. THE POWER OF THE STATES TO GOVERN

COMMERCE IS NOT “COMMERCE”

SUBJECT TO CONGRESSIONAL

REGULATION UNDER THE COMMERCE

D svg evsccsssctnens aber 13

II. PURPA VIOLATES THE 10TH AMEND-

MENT AND CONSTITUTIONAL

„„ aie 0's sc vsisccucnnedibbmess 18

A. PURPA Regulates the States as States. 19

B. PURPA Addresses Matters that Are

Indisputably Attributes of State

eee eee 20

TABLE OF CONTENTS (Continued)

Page

C. PURPA Directly Impairs the States’

Ability to Structure Integral Operations

D. The National Interest in Energy

Conservation Does Not Justify PURPA’s

Intrusion on State Sovereignty ...... 25

CONGLUGION „„ „„ 28

TABLE OF AUTHORITIES

CASES Page

Brown u EPA,

§21 F.2d 827 (9th Cir. 1975), vacated and

‘remanded for mootness, 431 U.S.99(1977).... 17

Burford u Sun Oil Co.,

EL Ds bids d.d.c'b kn hia h eee Omee 4

Coyle v. Oklahoma,

— ss cic kodeeuesehaNene 6

EPA u Brown, |

. 22

Fitzpatrick u Bitzer,

. 3

Fox Film Corp. u Muller,

F 5

Fry u United States,

. sca ds ccccccestsvgccees 18, 19,

25, 26, 27

Gibbons v. Ogden,

22 U.S. (9 Wheat.) 1 (1824) ................. 13, 14

Henry v. Mississippi,

ED Sas e 5

TABLE OF AUTHORITIES (Continued)

CASES Page

Hodel v. Virginia Surface & Mining Reclamation

Assoc., Inc.,

49 U.S.L.W. 4654 (No. 79-1538)

e passim

Katzenbach v. McClung,

. 14

Lehman Bros. u Schein,

. 9-0 0-2084oossecresa 5

Maryland v. Wirtz,

.. e een 18

Mayor of Philadelphia u Education

Equality League,

e 3

M Culloch u Maryland,

17 U.S. (4 Wheat.) 316 (181999. 13

Moore u Sims,

. ee 4

Murdock u Memphis,

87 U.S. (20 Wall.) 590 (1875) 5

National League of Cities u Usery,

e. . passim

New York u United States,

$26 U.S. 572 (190 h eee eee ees 6,17

TABLE OF AUTHORITIES (Continued)

CASES Page

O'Shea u Littleton,

Woh e 4

Perez u United States,

. 14

Railroad Commission of Texas u Pullman,

. 4

Rizzo u Goode,

. 4

Santa Cruz Fruit Packing Co. u NLRB,

.. . ae 13

Shevin u Exxon Corp.,

526 F.2d 266 (Sth Cir. 1976))))) 5

Stone u Powell,

. 4

Texas u White,

74 U.S. (7 Wall.) 700 (18690 , 19

United Transp. Union u Long Island

Railroad Co.,

634 F.2d 19 (2d. Cir. 1980))))ů 5

Wickard u Filburn,

.es 14

TABLE OF AUTHORITIES (Continued)

CASES Page

Younger v. Harris,

ME REOEED bp ccc rcccvivsadesescevins 3,4

UNITED STATES CONSTITUTION

ie COM: ORG, TOD ccc cscccsvcccvens passim

U.S. Const. amend. X K..... passim

STATUTES

Clean Air Act, 42 U.S.C. §§7401 et seq. (1975) ..... 7

Education for Handicapped Children Act,

20 U.S.C. §§1401 et seq. (19760))))) 7

Public Utility Regulatory Policies Act of 1978

Pub. L. No. 95-617, 92 Stat. 3117 et seg. ...... 2

Title I; 16 U.S.C. §§2601-2645

D 2

16 U.S.C. 62021 ᷣ i j) . 9

16 U.S.C. 6262 1(b1Uilʒ ) 8

16 U.S.C. 0 1⸗0e¶ 0e ecco 9

16 U.S.C. 62621 / h ũ 7ꝗ . 8

16 U.S.C. 0 10 dbp))ꝶ7ʒ .. 8

vi

TABLE OF AUTHORITIES (Continued)

STATUTES Page

16 UB.C. % ccc ccccccceeee: 8, 10

16 U.B.C. S ęi¾]. . eves: 8

16 U.S.C. $2622(c) ..........ccecee eee. 8

16 U.S.C. $2623(b) )) eee ee ee 9

16 U.S.C. §2628(bN4) ... 2.2.0... ee. 9

„ 9

16 UBC. % secccccceeee: 9

16 UBL. . 9

„ 9

e 8. 10

„bbb 10

16 U.S.C. 526880b0( li) 10

16 U.S.C. §2633(bX2) ... 22... ee cece 10

16 U.S.C. §2688(cM1) ) eee 10

Title II. §210; 16 U.S.C. §824a-8

e 2. 8

vii

TABLE OF AUTHORITIES (Continued)

STATUTES Page

16 U.S.C. 5824a- 90. ᷣ 0... eee eee 11

16 U.S.C. 8824a-30f00ũo0i eee eee 23

16 U.S.C. §824a-3(hN2NXA) )) 11

16 U.S.C. §824a-3(hX2MB) ............. 11

Title III: 15 U.S.C. §§3201-3211

CER „„ 3

„„ 9

eee... 9

r cdkinieebuidia ena's 10

15 U.S.C. §8207(bX1) ... 6. 10

reer 9

Surface Mining Control and Reclamation Act of

1977, 30 U.S.C. §§1201, et seg. (Supp. III 1979) 7

Pia. Stat. $906.01 9 ſ 2

Fla. Stat. §366.04 (Supp. 1980)))))))0j·ð 2

viii

TABLE OF AUTHORITIES (Continued)

LEGISLATIVE HISTORY Page

No-Fault Automobile Insurance Act: Hearings On

S. 354 Before The Sen. Comm. On Commerce,

94th Cong. Ist Sess. Ser. 94.20. 24

S. Rep. No. 95-442, 95th Cong.

eee. dl 26

8. Conf. Rep. No. 95-1292, 95th Cong.

r 8, 26

OTHER AUTHORITY

Diamond, Commentaries on the Federalist,

86 Yale L.J.1273 (1977)... i 5

Friendly, Federalism: A Foreword,

86 Yale L. J. 1019 (1977) ..............00005. 3,6

Hart, The Relations Between State and Federal

Law, 54 Colum. L. Rev. 489 (1954) 3

Matsumoto, National League of Cities—From

Footnote to Holding State Immunity From

Commerce Clause Regulation, 1977 Ariz. St.

yy ͤ01wW-Wͥ aon 0 6scks 5

Salmon, The Federalist Principle: The Interactions

of the Commerce Clause and the Tenth

Amendment in the Clean Air Act, 2 Colum. J.

een 24

.

TABLE OF AUTHORITIES (Continued)

OTHER AUTHORITY Page

Tribe, American Constitutional Law (1978) .......

Tribe, Unraveling National League of Cities: The

New Federalism and Affirmative Rights to

Essential Government Services, 90 Harv. L.

„„

Tushnet, Constitutional and Statutory Analysis in

the Law of Federal Jurisdiction, 25 U. C. L. A.

L. Rev. 1901 (1978) ) f) reece eee

No. 80-1749

IN THE

Supreme Court of the United States

OCTOBER TERM, 1980

FEDERAL ENERGY REGULATORY COMMISSION and

JAMES B. EDWARDS, SECRETARY OF ENERGY,

Appellants,

u.

THE STATE OF MISSISSIPPI, et al,

Appellees.

On Appeal From the United States

District Court for the Southern

District of Mississippi

BRIEF OF AMICUS CURIAE

FLORIDA POWER & LIGHT COMPANY

IN SUPPORT OF APPELLEES

INTEREST OF AMICUS CURIAE

Florida Power & Light Company (“the Company”)

was incorporated under the laws of Florida in 1925 and

is, and has been since that time, engaged in the electric

utility business. It operates in 35 counties in the State

of Florida, serving an area of about 27,650 square miles

with an estimated population of 5,000,000. The Company

as of June 30, 1981 served approximately 2,266,000

customers with electricity. FPL is the fifth largest

investor owned utility in the United States.

Regulation of public utilities has been declared by

the Florida Legislature to be in the public interest and

an exercise of the police power of the State for protection

of the public welfare. As an exercise of this power, the

Legislature created the Public Service Commission which

body regulates the Company with respect to its rates

and services.

The Public Utility Regulatory Policies Act of 1978,

Pub. L. No. 95-617, 92 Stat. 3117 et seq. (“PURPA”?

directly impacts upon the system established by the

State for the welfare of its citizens and affects the

decision making process of the Company as well as its

rate structure.

Florida Power & Light Company has a strong

interest as a concerned citizen of the State of Florida in

the issues involved in this case. It will explore the

recent trend in Congressional legislation of using the

States to enforce federal policies and will show that

PURPA is the proverbial “straw” that breaks the back of

Federalism as it has been known in this country for

more than 200 years.

Consent has been given by all parties to the filing

of this brief.

Fla. Stat. 6866.01 (1979).

Fla. Stat. 6866.04 (Supp. 1980).

Roſerenes to PURPA in this brief includes only Title I, (codified

at 16 U.S.C. §§2601-2645 (Supp. III 1979) * Title II. Section 210,

(codified at 16 U.S.C. §824a-3 (Supp. III 1979)); and Title III,

(codified at 15 U.S.C. §§8201-8211 (Supp. III 1979)) (hereinafter

cited by Code section only).

STATEMENT

This challenge to PURPA presents one of the most

“delicate issues of federal—state relationships“ this

Court has faced: may the Federal government, pursuant

to its Commerce Power, compel an unwilling State

government to participate in or implement a federal

regulatory program?”

The subtle and highly complex relationship that

exists between State and Federal authority in the

federalistic structure established by the Constitution‘

has been termed “Our Federalism” by judges and scholars

alike.’ The principles of Federalism have served as a

restraint on Federal power in multiple spheres.

Federalism precludes Federal courts from enjoining

pending State proceedings unless extraordinary

‘Mayor of Philadelphia u Educational Equality League, 415

U.S. 605, 615 (1974).

The Court should note that PURPA is founded solely upon

Congress's Commerce Power. There is no issue here of whether

Congress could take the actions challenged under any of its other

delegated powers such as the Spending Power, the War Power or

its power under the Fourteenth Amendment. See Fitzpatrick u

Bitzer, 427 U.S. 446 (1976).

"See Hart, The Relations Between State and Federal Law, 54

Colum. L. Rev. 489 (1964).

“It should never be forgotten that this slogan, ‘Our Federalism,’

born in the early struggling days of our Union of States, occupies a

highly important place in our Nation's history and its future.”

Younger u Harris, 401 U.S. 37, 44-45 (1971) (Black, J.). See also

Friendly, Federalism: A Foreword, 86 Yale L.J. 1019 (1977).

circumstances exist.“ Not to abstain would weaken the

institutional autonomy of State governments.’ Two other

forms of abstention allow the States to determine

unsettled questions of their own law,” and to promote

coherent policies in areas of particularly important

public interest to the States." All of these decisions

are aimed at elithinating unnecessary friction between

the State and Federal systems.

Intergovernmental comity is also promoted when

the principles of Federalism are invoked to prevent

imposition of Federal standards on State judicial

institutions,” and administrative agencies.” Even when

valuable constitutional rights are implicated, if the States

provide an adequate opportunity for full and fair litigation

of the constitutional claim, Federal courts will not

interfere.”

The Supreme Court in exercising its appellate

jurisdiction over State court cases will decline to review

"See Younger u Harris, 401 U.S. 37 (1971). The Younger

principles now apply to civil as well as criminal proceedings. See

¢.g., Moore u Sima, 442 U.S. 415 (1979) (temporary removal of

child in child abuse context).

"See Tribe, American Constitutional Law 152 (1978).

“Pullman abstention, derived from the landmark case of Railroad

Commission of Texas v. Pullman, 312 U.S. 496 (1941).

"See Burford u Sun Oil Co., 319 U.S. 315 (1943).

"See O'Shea wu Littleton, 414 U.S. 488 (1974).

"Rizzo u Goode, 423 U.S, 362 (1976) (police department).

“Stone u Powell, 428 U.S. 465 (1976) (habeas corpus).

Federal questions, constitutional or otherwise, if the

decision rests on independent and adequate State

grounds.” The certification process in Federal courts

of State law questions also “helps build a cooperative

judicial federalism.””

If States are to have a viable existence, Congress,

as well as the courts, must be prevented from acting in

ways that leave their form intact but remove all functional

substance.” Congress should not forget that Federalism

is the relation of independent, equal bodies politic that

operates by the obligation of good faith, rather than

coercive authority.”

Regardless of whether it's a question of balancing

interests,” or a question of absolute immunity,” this

"See e.g. Henry u Mississippi, 379 U.S. 498 (1965); Fox Film

Corp. u Muller, 296 U.S. 207 (1935); Murdock u Memphis, 87 U.S.

(20 Wall.) 590 (1875).

“Lehman Bros. u Schein, 416 U.S. 386, 391 (1974); Shevin u

Exxon Corp., 526 F.2d 266, 274 (5th Cir. 1976).

"Tribe, Unraveling National League of Cities: The New

Federalism and Affirmative Rights to Essential Government Services,

90 Harv. L. Rev. 1066, 1071 (1977).

“Diamond, Commentaries on the Federalist, 86 Yale L. J. 1273,

1279-80 (1977).

"See United Transp. Union v. Long Island R.R., 634 F.2d 19,

24 (2d Cir. 1980), and cases cited therein.

"See Matsumoto, National League of Cities— From Footnote

to Holding State Immunity from Commerce Clause Regulation,

1977 Ariz. St. L. J. 36, 71 n. 193; Tushnet, Constitutional and

Statutory Analyses in the Law of Federal Jurisdiction, 26 U. C. L. A.

L. Rev. 1801. 1838. 1340 (1978).

Court has long recognized that Congress cannot take

from the States those powers which are “essentially

and peculiarly state powers.“ Our Constitutional

Federalism has barred the imposition of even a non-

discriminatory tax upon the States.“ And Congress

cannot tell a State where to locate its capital.”

With the growing complexity of life in this country,

national power has expanded.“ and Congress has utilized

the commerce power to enact “a whole rash of statutes”

regulating every phase of life” historically within the

State sphere—from promotion of safety to protection

of borrowers and consumers and protection of the

environment.”

A thorough though not exhaustive review of United

States statutes during the early constitutional, civil

war, and even new deal eras reveals no statutes which

prescribed Federal standards or purposes for

consideration, adoption, or mandatory implementation

by State governments or their agencies. In recent years,

Congress has initiated an approach to legislation which

"Coyle u Oklahoma, 221 U.S. 559, 564 (1911).

"New York u United States, 326 U.S. 572 (1946).

"Coyle u Oklahoma, supra.

“Friendly, supra n. 7, at 1023-30.

"Id. at 1025.

"Id. (Footnotes omitted.)

attempts to use the States to implement and to enforce

Federal standards or policies.”

THE STATUTE

Title I and Title III of PURPA

Titles I and III of PURPA impose substantive and

procedural burdens on the States.” Congress dictates

not only the matters to be decided upon by the States,”

but also the manner and time in which these decisions

must be made. The titles impose a decision making

process upon the States for establishing rates for electric

utilities and for determining the terms and conditions

to govern electric and natural gas service.

"See e.g., Surface Mining Control and Reclamation Act of

1977, 30 U.S.C. §1201 et seg. (Supp. III 1979); Education for

Handicapped Children Act, 20 U.S.C. §1401 et seg. (1976); Clean

Air Act, 42 U.S.C. §7401 et seg. (1975) (replacing 42 U.S.C. §1857

et seq. (1973)).

The provisions of PURPA which were invalidated by the

United States District Court for the Southern District of

J 79-0212 (C), include those which regulate certain utilities within

the States not otherwise regulated by State commissions. This

brief addresses only those provisions which mandate State action.

"Public Service Commissions are uniquely State entities created

by State legislatures to enforce and implement State law within

their jurisdictions. Action by such « regulatory authority is action

by the State.

The Procedure: The State is forced, by a stated

time,” after public notice, to conduct a public heariny,”

admit certain intervenors“ and “consider” ratemaking

standards established by Congress in PURPA.” Congress

mandates that the State must issue a “determination”

concerning the appropriateness of implementing these

standards. That determination must: (1) be made in

writing, (2) include findings, and (3) be based upon

evidence heard.“ If the State declines to implement a

standard it finds appropriate, it must publicize its

reasons.”

A second group of Federal standards which a State

must address concerns the terms and conditions of

electric and natural gas service which may indirectly

"16 U.S.C. §2622(b), (el. S. Conf. Rep. No. 95-1292, 95th. Cong.,

2d Sess. 74 (1978) states: “[TJhe purpose of the time limits in this

section [is] to ensure expeditious consideration once with the

obligations being on the state regulatory authority, or non-regulated

utility, without any other action by any person to initiate such

consideration.” (Emphasis added).

"16 U.S.C. §2621(bX1).

"16 U.S.C. 62681. 2622.

"Section 111(d) of PURPA, codified at 16 U.S.C. §2621(d),

establishes six Federal standards to be considered in

the rate structure of a particular utility. These standards are: (1)

cost of service, (2) declining block rates, (3) time-of-day rates, (4)

seasonal rates, (5) interruptible rates, and (6) load management

techniques.

“16 U.S.C. §2621(bX1).

16 U.S.C. §2621(cX2).

affect the rate structure of the utility.” Congress, and

not the States, determines under what conditions the

State must adopt the standards. As with the rate-making

standards, each State must after public notice, conduct

a hearing respecting these standards, but in this case,

the State must adopt the standards or state in writing

and publicize its determination and reasons for not

adopting such standards.”

The Substance: PURPA mandates the outcome

of the State’s evaluation of the standards it considers.

For example, cost of service must be determined by

PURPA’s rules.“ PURPA also dictates that the State

must prescribe Federal procedures for termination of

service if they comport with State law.” Congress

effectively determines what the State must enact through

legislation or regulation.

The State is never given the choice of

nonparticipation or inaction. In order to maintain the

status quo it must act in a prescribed way and explain

“The standards established for electric utility regulation are

(1) mastermetering, (2) automatic adjustment clauses (3) information

to consumers (4) procedures for termination of electric service (5)

advertising. 16 U.S.C. §2623(b). Those standards established for

natural gas utilities are (1) procedures for termination of natural

gas service and (2) advertising. 15 U.S.C. §3203(b).

116 U.S.C. §2621(a), (e). Under 16 U.S.C. §2626 and 15 U.S.C.

§3209, the States must report to the Federal government concerning

their progress.

"16 U.S.C. §2625(a). See also §2625(byh) directing State decisions

defining standards.

"16 U.S.C. 5820280 04), 2625(g); 15 U.S.C. $3204(a).

its actions in writing.” The Act creates a Federal agenda

for the State, establishes its priorities and creates

standing for individual and Government intervenors in

its courts and administrative proceedings.”

Intervention rights are protected by enforcement

provisions under Titles I and III.“ “Any person” is

granted standing in State court to bring an action to

enforce the requirements of these titles,“ and an electric

utility or consumer may bring an action in the appropriate

United States District Court to secure the intervention

right if it is denied in State court.“ In addition, the

Secretary of Energy may bring an action directly in

Federal court to enforce his right to intervene.“ The

Federal court in both cases is given jurisdiction to

grant appropriate relief.

State courts are required to review for persons

who have intervened or otherwise participated in the

original proceeding, any determination made by the

State authority with respect to any electric utility.“

“Under 52021 . if a State declines to implement an appropriate

standard, it must file a statement of its reasons which shall be

available to the public.

“16 U.S.C. 682622. 2681.

“See 16 U.S.C. $2633; 15 U.S.C. 68207.

“No such action may be brought in a State court with respect

to a utility which is a Federal agency. 16 U.S.C. §2633(cX1); 15

U.S.C. §8207(bX1).

“16 U.S.C. 8288800 U

“16 U.S.C. §2633(bX1).

“16 U.S.C. Sa,.

10

The review and enforcemeni provisions allow not only

Congress to intrude upon the functioning of the State

administrative body and its courts, but also allow a

Federal court to interject its rulings into the activities

of the State, contrary to the principles of Federalism.“

Title II, Section 210 of PURPA

Section 210 of Title II.“ concerns cogeneration

and small power production. Instead of a guideline

approach, which had been adopted by the Senate,“ the

final bill requires that States implement, within one

year, rules which FERC prescribes as necessary to

encourage cogeneration and small power production.”

FERC is authorized to enforce the requirements

of this subsection by an action against the State or by

enforcement as a rule under the Federal Power Act."

Enforcement may be initiated by FERC, by a qualifying

cogenerator or small power producer.” If FERC does

not act within 60 days of a request for enforcement, the

petitioner may bring an action in Federal court and

subject a State authority to injunctive action or other

relief.”

“See notes 4-27, supra, and accompanying text.

“16 U.S.C. §824a-3.

“See Reports cited in Government's Brief at 32.

"16 U.S.C. §824a-3if). As used herein, FERC means the Federal

Energy Regulatory Commission.

"16 U.S.C. §824a-R(hX2KA).

"16 U.S. C. §824a-HhX2\B).

"Id.

11

SUMMARY OF ARGUMENT

Federal legislation is invalid unless founded upon

one of the powers delegated to Congress in the

Constitution. PURPA, allegedly based upon Congress's

power over interstate commerce, does not regulate

commerce of any type. PURPA regulates the power of

the States to govern commerce, and consequently, not

being supported by a delegated power, is unconstitutional.

PURPA is also invalid because it violates the

constitutional limitations imposed by the Tenth

Amendment and the doctrine of Constitutional

Federalism. PURPA regulates the States as States by

compelling them to implement and enforce Federal

regulations, to consider Federal standards, to hold public

hearings and to report annually to the Federal

Government. It displaces the attribute of sovereignty

the States’ power to govern. And it impairs the States’

ability to structure their integral operations in areas of

traditional functions. The most traditional State function

of all is governing. By telling the States when, how and

what to govern, PURPA doesn’t just impair, it eviscerates

the States’ ability to structure their governments, and

thus, cannot stand.

12

ARGUMENT

I. THE POWER OF THE STATES TO GOVERN

COMMERCE IS NOT “COMMERCE” SUBJECT

TO CONGRESSIONAL REGULATION UNDER

THE COMMERCE CLAUSE.

Though Congress is “supreme within its sphere of

action,” its acts are valid only when supported by one

of the delegated powers granted to the Federal

government in our Constitution.” This Court has

repeatedly reminded Congress that the Constitution's

grant of power to the Federal government was carefully

tailored and means what it says. Mr. Chief Justice

Hughes said of the power:

The subject of the Federal power is still

“commerce” and not all commerce but commerce

with foreign nations and among the several

states. The expansion of enterprise has vastly

increased the interests of interstate commerce

but the constitutional differentiation still

obtains.”

Accordingly, as this Court pointed out in Gibbons

u Ogden, “our constitution being. . . one of enumeration,

and not of definition, to ascertain the extent of the

power it becomes necessary to settle the meaning of

the word.“

“M'Culloch u Maryland, 17 U.S. (4 Wheat.) 316, 405 (1819).

Ad. Gibbons u Ogden, 22 U.S. (9 Wheat.) 1 (1824).

e Cruz Fruit W Co. u NLRB, 308 U.S. 453, 466

"22 U.S. at 189-90.

13

Examining the commerce power, this Court explained

in Gibbons:

The subject to be regulated is commerce... .

Commerce, undoubtedly is traffic, but it is

something more; it is intercourse. It describes

the commercial intercourse between nations,

and parts of nations, in all its branches, and is

regulated by prescribing rules for carrying on

that intercourse.”

In recent years, the Court has delineated the scope

of Congressional power over interstate commerce. In

cases such as Wickard u Filburn,” Perez u United

States,” and Katzenbach v. McClung," this Court has

held that Congress has power to reach commercial

activities which, while wholly intrastate, substantially

affect interstate commerce. But in each such instance,

Congress is regulating “commerce,” local though it

may be. In Wickard, it was held constitutionally

permissible for Congress to regulate an individual farmer's

production of wheat. In Perez, it was Congress's

“Consumer Credit Protection Act” which was » held,

regulating extortionate credit transactions. In McClung,

the commerce power permitted Congress to regulate a

restaurant, small in size and local in nature, but a

commercial enterprise nevertheless.

“Id. (emphasis added).

817 U.S. 111 (1942).

"402 U.S. 146 (1971),

"879 U.S. 294 (1964).

14

It is, then, commercial activities, nationwide or

local, over which Congress has power. Herein lies the

rub. In PURPA, Congress flexes power not over commerce

but over States, not over commercial activity but over

the acts of governments. In this case, Congress's far-

reaching power reaches too far.”

In National League of Cities,“ the Court was

concerned with an attempt by Congress to regulate

certain commercial activities of the States, namely, the

minimum wages, overtime hours and pay for State

employees. The question presented in that case was

whether the given constitutional authority of Congress

over “interstate commerce” justified the congressional

law. The Court ruled that the commercial activities of

the States were so “integral” to State government that

the congressional laws were tantamount to regulation

of the “states qua states,” and thus forbidden by the

Tenth Amendment. The dissenting justices felt that

the “interstate commerce” power of Congress embraced

these economic activities of the States, as it did the

same economic activities of private employers. But as

stated by Justice Brennan in his dissenting opinion:

“Of course, regulations that this Court can say are not

regulations of ‘commerce’ cannot stand . . . .” We think

the majority opinion of the Court implicitly acknowledges

this statement; and therein lies a fundamental distinction

between this case and National League of Cities.

“The Court should note that PURPA is founded solely upon

Congress's Commerce Power. There is no issue here of whether

Congress could take the actions challenged under any of its other

delegated powers.

“National League of Cities u Usery, 426 U.S. 883 (1976).

15

In PURPA, there is no commercial activity of the

States which Congress seeks to regulate. Rather, it

seeks, in certain ways, to direct and fashion the very

process by which the States govern the commercial

activities of others. Congress is trying to regulate the

governmental process of the States by requiring certain

things to be done by the various State public service

commissions, commissions created by State legislatures

and empowered by them to regulate those within their

jurisdictions.

Since there is no commercial activity of the States

which Congress seeks to sway, Congress cannot look to

its power over “interstate commerce” to support this

particular legislation. Absent some State economic

activity, we submit that Congress has no constitutional

basis from which to arguably justify the law. Absent a

constitutional basis of authority, the legislation runs

smack into the dictates of the Tenth Amendment, and

it cannot stand.

In its brief, the Government acknowledges that,

as it euphemistically puts it, PURPA places “certain

regulatory responsibilities upon 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 “consider”

whether or not to adopt and implement certain

regulatory standards; the state commissions

must adhere to certain procedural requirements

in considering these standards, must permit

the Secretary of Energy to participate in the

16

proceedings, and must report to the Secretary

their progress in the consideration process.

Section 210(fX1) requires the state authorities

to implement the Federal Energy Regulatory

Commission's rules concerning transactions

between cogenerators and electric utilities;

the Commission is empowered under Section

210(hX2) to enforce this statutory responsibility

in Federal court.“

The entire State governmental process, and with it,

the States’ power to govern, is regulated.

That a State's power to govern is not commerce is

self-evident. Governing is not a commercial activity —

it is the attribute of sovereignty. A sovereign, by

definition, governs. Governing is uniquely capable of

being done only by a State. It is one of those activities

which “partake{s] of uniqueness from the point of view

of intergovernmental relations.“

This factor, above all, distinguishes this case from

all others faced by this Court. In Brown u Environmental

Protection Agency the United States Court of Appeals

for the Ninth Circuit concluded that it is one thing for

“Government's Brief at 28-29 (emphasis added).

“New York u United States, $26 U.S. 572, 582 (1946) (Frankfurter,

J.).

“621 F.2d 827 (9th Cir. 1975), vacated and remanded for

consideration of mootness, 431 U.S. 166 (1977).

17

Congress to regulate commerce and quite another for

it to regulate the State's power to regulate commerce:

Neither [Fry nor Wirtz] holds or even suggests

that a state’s exercise of its police power with

respect to an economic activity which affects

interstate commerce is itself an economic activity

or “species of commercial intercourse” subject

to regulation by Congress.

The power of states over commerce has no

more been recognized as commerce than has

the power of Congress which is derived from

the Commerce Clause."

As Justice Brennan has declared, “regulations that

this Court can say are not regulations of ‘commerce’

cannot stand... ."“ PURPA is not a regulation of

commerce and thus cannot stand.

II. PURPA VIOLATES THE 10TH AMENDMENT

AND CONSTITUTIONAL FEDERALISM.

Were the Court to employ the rationale of the

National League of Cities/Virginia Mining cases, this

Federal law cannot stand. PURPA violates the Tenth

Amendment and the fundamental structure of our Federal

form of government, the integral “concept of constitutional

"Td. at 838-39 (emphasis in original). Wirtz, inserted in quote

refers to Maryland u Wirtz, 392 U.S. 193 (1968), overruled in

National League of Cities.

“National League of Cities, supra at 860 (citations omitted).

+

18

federalism.”” Under that principle, the States and the

Federal government are equals, joined together in “an

indestructible Union, composed of indestructible States.

Recently this Court announced a three-prong test

for determining issues arising under the National League

of Cities doctrine. In Virginia Mining, this Court declared:

[In order to succeed, a claim that congressional

commerce power legislation is invalid under

the reasoning of National League of Cities

must satisfy each of three requirements. First,

there must be a showing that the challenged

statute regulates the “States as States.” . . .

Second, the Federal regulation must address

matters that are indisputably “attributes of

state sovereignty.” . . . 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.“

When examined in light of these three principles,

PURPA fails.

A. PURPA Regulates the States as States.

As discussed extensively in Part I of this Brief,

there can be no question that PURPA regulates the

“Fry u United States, 421 U.S. 542, 554 (1975XRehnquist, J.,

dissenting).

"Texas u White, 74 U.S. (7 Wall.) 700, 726 (1869).

"Virginia Mining, supra, at 4660.

19

“States as States. Congress did not address only the

activities of private individuals and businesses. Its

demands are directed to “each State

The States through their agencies must participate in

the Federal program in derogation of their until-now

independent will and discretion.

B. PURPA Addresses Matters That Are Indisputably

“Attributes of State Sovereignty.”

The Government centends that ſthhe regulation

of intrastate activities of elect vie and gas utilities is

not an essential attribute of state sovereignty.“ and

goes on to discuss concurrent jurisdiction over utilities.”

The Government's emphasis on the object of regulation

is misplaced. The “essential attribute of state

at issue in this case is regulation itself. Regulation is

nothing more and nothing less than governance by a

state through its regulatory authorities.

Governing is the attribute of State sovereignty

which attaches to every State government. As Justice

Brennan declared in his dissent in National League of

Cities, “[cjertainly the paradigm of sovereign action —

action qua state is in the enactment and enforcement

"Some pro-Government amici candidly concede this point.

See, ¢.g., Briefs of: County of Onandaga, New York at 8; National

Alliance for Hydroelectric Energy, et al at 23, 24. Although the

Government does not address it directly, it does admit that PURPA

“places certain regulatory responsibilities upon the States.”

Government's Brief at 28.

"Government's Brief at 30.

d at 30-31.

of state laws. PURPA clearly addresses attributes of

State sovereignty. Titles I and III of PURPA interfere

with the discretion inherent in the enactment and

enforcement of state laws. The States are told when,

what and how they are to regulate. They are not given

a choice of non-participation in the Federal program.

Section 210 mandates implementation and enforcement

of rules on cogeneration. Implementation necessitates

enactment and enforcement.

This is not “cooperative federalism” which allows

States “to enact and administer their own regulatory

programs, structured to meet their own particular needs.

If substantive and procedural decision making is dictated

to the States, nothing remains of their sovereignty.

The power to consider, enact and implement, or not

consider, not enact or not implement, in its discretion,

whatever constitutional laws and rules it chooses, is a

sacrosanct and essential attribute of sovereignty

possessed by every State. A sovereign without that

power is not a sovereign.

C. PURPA Directly Impairs the States’ Ability to

Structure Integral Operations in Areas of Traditional

Functions.

The Government claims that PURPA does not

directly impair the States’ ability to structure their

integral operations because nothing in PURPA “requires

the states to establish a public service commission or

"426 U.S. at 875.

"Virgina Mining, supra, at 4660.

21

to extend state jurisdiction to utilities that are not

subject to state regulation [, but rather] PURPA merely

obligates the states to perform certain regulatory

functions with respect to the utilities they are already

regulating. Further, the Government claims that nothing

in PURPA “displace{s] the states’ basic authority to

design a public utility rate structure that is responsive

to state needs.

Again, this is not the issue. The most “traditional”

of all of a State’s functions is governing. Nothing could

more directly displace a State’s ability to structure its

integral operations of governing than a Federal law

commandeering the State’s governing process itself.

This is the critical distinction between this case and

Virginia Mining.

This Court faced but did not reach this issue once

before. In EPA u Brown,” this Court reviewed a series

of cases arising under the Clean Air Act under which

the States were obligated to enact certain Federal

regulations as State laws. All the lower courts noted

that “serious constitutional questions might be raised”

if the statute were read to authorize the Administrator

to require States to submit legally adopted regulations.”

The Government attempts to distinguish this line

of cases by urging that PURPA does not require the

"Government's Brief at 35.

"Id. at 36.

431 U.S. 99 (1977).

"Id. at 101-102.

States “to enact legislation, promulgate regulations, or

expend state funds.“ Yet, the record shows that to

comply with PURPA a State must “expend state funds.

And, the statute itself requires that ſafter] any rule is

prescribed by the Commission . . , each State

authority shall. . . implement such rule... . II

the Government is claiming that “implementing” rules

is different from “promulgating” or “enacting” rules, it

makes a distinction without substance. No matter what

label is used, the point is the same: the State governing

process is being commandeered to enforce a Federal

program.

If Congress cannot regulate hours and wages of

State employees because it would “directly impair the

States’ ability to structure integral operations in areas

of traditional functions,” surely Congress cannot tell

State Public Service Commissions how to discharge

their legislative duties and authority.

The Government attempts to justify its displacement

of the States’ governmental processes by claiming that

“Congress could constitutionally have achieved the same

results it sought to reach in PURPA by enacting legislation

that completely preempted the states in this area. . . . It

is difficult to appreciate why the statute should be

more vulnerable because Congress chose a less radical

"Government's Brief at 41.

“Joint Appendix, p. 60, affidavit of Keith Howle, Director of

Utilities, Mississippi Public Service Commission. The cost to

Mississippi alone exceeds two million dollars during the coming

years. Id

"16 U.S.C. 68244. 6001).

course out of concern that preemptive Federal regulation

would constitute undue interference with the traditional

authority of state regulatory commissions over retail

utility ratemaking. But there is a constitutional basis

for Congress to take over the regulation of utilities

should it so choose, te., the interstate commerce power.

Choosing not to exercise a given power does not create

a constitutional power which does not otherwise exist.

As former United States Attorney General Edward

Levi told Congress, “ijt is an insidious point to say

that there is more federalism by compelling a State

instrumentality to work for the Federal

Government. . That is a very enticing argument, it

makes it easier for the Federal Government to encroach,

it makes it easier to wipe out the sovereignty of the

separate states“.

By commandeering the States’ governing processes

to implement and enforce an otherwise unpopular Federal

law, Congress could thwart the political process, since

the blame and political pressure will fall upon the State

officials forced by Congress to the forefront of the

controversy. It is this characteristic which so distinguishes

this case from any which present questions of preemption.

When Congress preempts a field of law, the political

benefits and costs fall upon Washingtou. The political

process is focused on Congress where it belongs. Those

“Government's Brief at 31-32.

“Hearings on 8.354 [The Federal NoFault Automobile Insurance

Act] Before the Senate Committee on Commerce, 94th Cong., Ist

Sess., Ser. 94-20, 496 at 503 cited in Salmon, The Federalist Principle:

The Interaction of the Commerce Clause and the Tenth Amendment

in the Clean Air Act. 2 Colum. J. Envt’l L. 290, 341 n. 83.

who argue for a new Federal scheme, exemplified by

PURPA, would divert the process and diffuse its impact

by compelling unwilling State authorities to implement

the Federal will and then shoulder any possible blame.

D. The National Interest in Energy Conservation Does

Not Justify PURPA’s Intrusion on State Sovereignty.

In National League of Cities, this Court reserved

a very narrow exception based on Fry u United States™

for upholding certain Congressional legislation that

would otherwise meet what is now the three-prong

test of Virginia Mining.”

In Fry the issue presented to this Court was whether

stemming rampant inflation warranted a very brief,

cost-saving and minimal intrusion upon the attributes

of State sovereignty. Without the legislation, the salaries

of the vast number of State employees nationwide

could not have been reached, and would have increased,

thwarting Congressional aims.

This case does not present a choice between State

and imperative Federal regulation. Congress

has multiple alternatives for implementing its energy

standards and policies without infringing at all on the

independence of the States. It need not forego important

national decisions if PURPA is invalidated, and, therefore,

this “emergency doctrine” does not apply.

"421 U.S..542 (1975).

This exception was reiterated in Virginia Mining, supra, at

4660 n. 29.

If it does, its strict requirements are not fulfilled. In

National League of Cities, the Court found that ESA

“was occasioned by an extremely serious problem which

endangered the well-being of all component parts of

our Federal system and which only collective action by

the National Government might forestall.””

There was an energy problem in this country. But,

no such problem existed with regard to State regulation

of utilities. The Senate Committee on Energy and Natural

Resources noted that the States were making considerable

progress in the area of ratemaking reform, stating:

{It is probable that ratemaking reform will

progress without new Federal policies and it

is certain that the experience gained with

innovative methods will provide a better basis

for the formulation of Federal policy than is

presently available.”

Congress decided that preemption was not necessary,”

and left ultimate responsibility and costs of utility

regulation upon the States. Any claim that “only collective

action by the National Government” could forestall

energy problems is specious.

The second distinction of Fry found that ESA was

“carefully drafted so as not to interfere with the States’

"426 U.S. at 863. ESA is the Economic Stabilization Act of

1970, upheld in Fry.

8. Rep. 95-442, 96th Cong. 1st Sess. 13 (1977) (emphasis added).

8. Reps. Nos. 95-442, 95-1292, supra.

freedom beyond a very limited, specific period of time.

PURPA requires at least 10 years of reporting and

unlimited implementation of FERC’s rules. Moreover,

as stated above, PURPA could have been carefully

drafted to fulfill Federal energy policies without

interfering with the States’ freedom at all. It could

have preempted utility regulation, or given the States

a choice of regulating or ceding the area to Federal

authority.

Third, ESA “displaced no state choices as to how

governmental operations should be structured, nor did

it force the States to remake such choices thernselves.

The very fiber of PURPA is to displace the State

policy choices for consideration and action. State

regulatory authorities have been stripped of the discretion

to determine policy and priorities within their

jurisdictions, the procedure for their proceedings and

the timing for their agendas.

Finally, ESA “operated to reduce the pressures

upon State budgets rather than increase them.“ PURPA

has the opposite effect.

"426 U.S. at 853. In fact, the time had passed before the

Court revinwed the Act. See Justice Douglas's dissent in Fry.

"426 U.S. at 853.

"Id.

CONCLUSION

Preferring not to undertake the direct responsibility

of governing the utility businesses, Congress cannot

govern them by governing the sovereign States. Under

the Constitution, State governments cannot be required

to be conduits for the national government. This Court

must affirm the District Court’s decision.

Respectfully submitted,

1

WILLIAM B. KILLIAN,

Counsel of Record

THOS. E. CAPPS

JOSE I. ASTIGARRAGA

SHEILA A. HALPERN

STEEL HECTOR & DAVIS

1400 Southeast First National

Bank Building

Miami, Florida 33131

Telephone: (305) 577-2800

Attorneys for Florida Power &

Light Company, Amicus Curiae.

October 20, 1981.