# Amicus Brief — Federal Energy Regulatory Commission v. Mississippi

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_2019%3A21

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Brief
- **Published:** January 1, 1982
- **Citation:** 456 U.S. 742

## Text

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.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_2019%3A21. Public record. Not legal advice.