Appendix — Alabama ex rel. Graddick v. Tennessee Valley Authority

—

Office Supreme Court, U.S.

80 “2197 FILED

No, JUN .29 1981

DER L. STEVAS,

IN THE SUPREME COURT OF THE UNITED $TXPES crc

-—--

OCTOBER TERM, 1980

STATE OF ALABAMA, Ex Rel. Charles

A. Graddick, as Attorney General

of the State of Alabama,

Petitioner

Vv.

TENNESSEE VALLEY AUTHORITY, et al.,

Respondents

APPENDIX

(Volume I)

TO PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

CHARLES A. GRADDICK

ATTORNEY GENERAL OF

THE STATE OF ALABAMA

EDWARD E. CARNES

ASSISTANT ATTORNEY

GENERAL OF THE STATE

OF ALABAMA

Counsel of Record

Office of Attorney

General

250 Administrative Bldg.

64 N. Union Street

Montgomery, Alabama

36130

(205) 834-5150

TABLE OF APPENDICES

App. No. Pg. No. Description

(Volume I)

A la District Court

Opinion

B 39a District Court

Order

Cc 42a Court of Appeals

Opinion

D 75a Court of Appeals

Judgment Entry

E 77a Court of Appeals

Order Denying

Rehearing

APPENDIX A

STATE OF ALABAMA ex rel. William

J. BAXLEY, as Attorney General of

the State of Alabama, Plaintiff,

Vv.

TENNESSEE VALLEY AUTHORITY,

Aubrey J. Wagner as Chairman of the

Board of Directors of the TVA, et al.,

Defendants.

Civ. A. No. 77-M-0377.

United States District Court,

N. D. Alabama, Northwestern Division.

Jan. 25, 1979.

MEMORANDUM OPINION

McFADDEN, Chief Judge.

The State of Alabama, on the relation of

its Attorney General, in this action against

the Tennessee Valley Authority, and its

board of directors (TVA), seeks a declara-

tion that Section 8(a) of the Tennessee

Valley Authority Act, 16 U.S.C. § 83lg(a)

requires TVA to locate its administrative

and executive offices at Muscle Shoals,

Alabama, and an injunction restraining TVA

la

from maintaining such offices at a place

other than Muscle Shoals. Jurisdiction

exists under 28 U.S.C. § 1331.

Pending before the court are cross-

motions for summary judgment. The issues

raised by these motions are whether

Alabama has standing to bring this action,

whether the suit is barred by the

doctrine of res judicata, and finally,

whether section 8(a) of the Act requires

TVA to locate its main offices at Muscle

Shoals, Alabama.

I. STANDING

Alabama alleges that it has standing to

bring this action in both its proprietary

capacity, and in its representative

capacity as parens patriae for its

citizens.

A. The State as Parens Patriae.

TVA first contends that Massachusetts v.

Mellon, 262 U.S. 447, 43 S. Ct. 597, 67

2a

L. Ed. 1078 (1923), denies Alabama

standing, in its parens patriae capacity,

to sue a federal agency:

While the state, under some circum-

stances, may sue for the protection of

its citizens, . .. it is no part of

its duty or power to enforce their

rights in respect of their relations

with the Federal Government. In that

field it is the United States, and not

the State, which represents them as

parens patriae.

Id. at 485-86, 43 S. Ct. at 600. Accord

South Carolina v. Katzenbach, 383 U.S.

301, 324, 86 S. Ct. 803, 15 L. Ed. 2d 769

(1966); Com. of Pa. by Shapp v. Kleppe,

174 U.S. App. D.C. 441, 533 F. 2d 668

(1976), cert. denied 429 U.S. 977, 97 S.

Ct. 485, 50 L. Ed. 2d 584 (1976).

In both Mellon and Katzenbach, the

plaintiff states challenged the constitu-

tionality of federal statutes. Standing

3a

in those circumstances would be "clearly

and obviously a fundamental threat to

the federal sovereign power." Com. of Pa.

by Shapp v. Kleppe, supra, 174 U.S. App.

D.C. at 455, 533 F. 2d at 682 (Lumbard,

J., dissenting). Alabama, however, "seeks

only to vindicate the will of the people

as it has been expressed by their duly

elected representatives in the national

legislature." Id. Therefore, the

federalism considerations present in those

actions are absent here. Compare Georgia

v. Pennsylvania R.R., 324 U.S. 439, 445,

65 S. Ct. 716, 89 L. Ed. 1051 (1945).

In Washington Utilities & Transp.

Com'r. v. F. C. C., 513 F. 2d 1142 (9th

Cir. 1975), cert. denied 423 U.S. 836,

96 S. Ct. 62, 46 L. Ed. 2d 54 (1975), the

court found this distinction to be dis-

positive and held that a state, through

one of its agencies, had parens patriae

standing to challenge federal agency action:

ha

WUTC does not attack the constitu-

tionality of the Communications Act

on any ground; rather, it relies upon

the federal statute and seeks to vindi-

cate the congressional will by

presenting what it asserts to be a

violation of that statute by the ad-

ministrative agency charged with its

enforcement.

Id. at 1153.

Other cases support parens patriae

standing in this case. In State of

Florida v. Weinberger, 492 F. 2d 488 (5th

Cir. 1974), the court held that Florida,

on behalf of its citizens, had standing

to challenge the Secretary of HEW's

power to enact certain regulations under

the Medicaid Act, 42 U.S.C. §1396A. In

State of New York v. United States, 65 F.

Supp. 856 (S.D.N.Y. 1946) (three-judge

court), affirmed 331 U.S. 284, 67 S. Ct.

1207, 91 L. Ed. 1492 (1947), the court

5a

found that the state had standing as parens

patriae to challenge an alleged misappli-

cation of a federal statute by the Inter-

state Commerce Commission.

In the court's view the rationale of

Massachusetts v. Mellon, supra, is not

applicable to the facts in the present

case cand there is no constitutional

barrier to Alabama acting as parens

patriae for its citizens.

There is, however, an inherent limita-

tion on the legitimacy of any action

brought by a state as parens patriae. In

Pennsylvania v. New Jersey, 426 U.S. 660,

96 S. Ct. 2333, 49 L. Ed. 2d 124 (1976),

the court noted that:

It has, however, become settled doctrine

that a State has standing to sue [as

parens patriae] only when its sovereign

or quasi-sovereign interests are im-

plicated and it is not merely litigating

6a

as a volunteer the personal claims of

its citizens.

Id. at 665, 96 S. Ct. at 2336.

Quasi-sovereign interests are impli-

cated where the injury for which redress

is sought affects the general welfare of

the state, or its citizens at large.

Kansas v. Colorado, 206 U.S. 46, 99, 27

S. Ct. 655, 51 L. Ed. 956 (1907);

Louisiana v. Texas, 176 U.S. 1, 19, 20

S. Ct. 251, 44 L. Ed. 347 (1900).

Alabama alleges that the location of TVA

at Muscle Shoals would benefit the general

welfare of its citizens and promote the

economic well-being of the state by the

creation of thousands of jobs in the

Muscle Shoals area, and the injection of

millions of dollars into the state

economy. The court is of the opinion

that these allegations are sufficient to

support a finding of injury to the quasi-

sovereign interests of Alabama.

7a

B. The Proprietary Interests of the

State.

Alabama's proprietary interests are

alleged to have been harmed by the loss of

tax revenues, the denial of a statutory

right conferred by section 8(a), and the

loss of honor and prestige resulting from

the failure of TVA to locate its head-

quarters at Muscle Shoals.

A state has at least the same right of

access to the court as any other institu-

tion to seek redress for injuries sustained

in its proprietary capacity. Com. of Pa.,

by Shapp v. Kleppe, supra. See also

Hawaii v. Standard Oil Company of Califor-

nia, 405 U.S. 251, 92 S. Ct. 885, 31 L. Ed.

2d 84 (1972).

The court agrees with the statement in

Com. of Pa., by Shapp v. Kleppe, supra,

174 U.S. App. D.C. at 445, 533 F. 2d at

672, that an "allegation that tax revenues

were reduced embodies a comprehensible

8a

harm to the economic interests of the

state government,” and therefore is of

the opinion that Alabama, in its

proprietary capacity, has alleged a

judicially cognizable claim for relief.

Compare, Massachusetts v. Mellon, supra,

at 485. Since only injunctive and de-

claratory relief is sought, the court need

not decide whether the alleged denial of

a statutory right or loss of honor and

prestige are redressable injuries.

C. Constitutional and Prudential Limi-

tations on Standing.

Having determined that the identity of

the parties is no bar to the adjudication

of the claims set forth in the complaint,

consideration must now be given to those

standing questions applicable to any suit

brought in a federal court.

Under article III of the Constitution of

the United States, the federal judicial

power extends only to "cases" or "contro-

versies". Muskrat v. United States, sts

a

U.S. 346, 356, 31 S. Ct. 250, 55 L. Ed.

246 (1911).

In terms of Article III limitations

on federal court jurisdiction, the

question of standing is related only

to whether the dispute sought to be

adjudicated will be presented in an

adversary context and in a form

historically viewed as capable of

judicial resolution.

Flast v. Cohen, 392 U.S. 83, 101, 88 S.

Ct. 1942, 1953, 20 L. Ed. 2d 947 (1968).

A recent exposition of the Supreme Court

concerning the Article III requisites of

standing is found in Duke Power Co. v.

Carolina Environmental Study Group, Inc.,

438 U.S. 59, 98 S. Ct. 2620, 57 L. Ed. 2d

595 (1978):

The essence of the standing inquiry

is whether the parties seeking to invoke

the court's jurisdiction have "alleged

such a personal stake in the outcome of

10a

the controversy as to assure that con-

crete adverseness which sharpens the

presentation of issues upon which the

court so largely depends for illumina-

tion of difficult constitutional

questions." Baker v. Carr, 369 U.S.

186, 204, 82 S. Ct. 691, 703, 7 L. Ed.

2d 663 (1962). As refined by subse-

quent reformulation, this requirement

of a "personal stake" has come to be

understood to require not only a

“distinct and palpable injury," to the

plaintiff, Warth v. Seldin, 422 U.S.

490, 501, 95 S. Ct. 2197, 45 L. Ed. 2d

343, but also a "fairly traceable"

casual connection between the claimed

injury and the challenged conduct.

Arlington Heights v. Metropolitan

Housing Corp., 429 U.S. 252, 261, 97 S.

Ct. 555, 50 L. Ed. 2d 450 (1977). See

also Simon v. Eastern Ky. Welfare Rights

Org., 426 U.S. 26, 41-42, 96 S. Ct. 1917,

lla

48 L. Ed. 2d 450 (1976); Linda R. S. v.

Richard D., 410 U.S. 614, 617, 93 S. Ct.

1146, 35 L. Ed. 2d 536 (1973).

Id. at 2630.

Prior to the submission of the pending

motions, the court granted TVA's request

for a protective order against answering

interrogatories seeking to discover the

number of persons employed by TVA and the

dollar amount of the payroll allocable to

them. TVA, however, has not disputed the

factual allegations of the complaint, and

properly recognizes that it is the nature

of the claimed injury, and not the amount

thereof which is relevant to the standing

inquiry. United States v. SCRAP, 412 U.S.

669, 689, n. 14, 93 S. Ct. 2405, 37 L. Ed.

2d 254 (1973).

It is common knowledge that the presence

of the headquarters of an organization

the size of TVA would generate tax reve-

nues directly and indirectly to the state

12a

and have a significant economic impact

on the state. Clearly, the absence of

the jobs the headquarters would provide

and money thereby generated from

Alabama's economic system is a "direct

and palpable injury" to its quasi-

sovereign interest in the general welfare

of its citizens.

The court finds, therefore, that Ala-

bama, as parens patriae for its citizens,

and in its own right as an entity

possessing proprietary interest, has

satisfied the "direct injury" test for

standing under article III.

The other article III requirement for

standing is a showing that there is "a

"substantial likelihood’ that the relief

requested will redress the injury claimed.”

Duke Power Co. v. Carolina Environmental

Study Group, Inc., supra, 98 S. Ct. at

2631 n. 20. See also, Regents of the

University of California v. Bakke, 438

13a

U.S. 265, 98 S. Ct. 2733, 2743 n. 14, 57

L. Ed. 2d 750 (1978). There is no doubt

that a judicial decree requiring TVA to

locate its headquarters at Muscle Shoals

will result in the influx of jobs and

dollars into the state economy, and will

result in increased tax revenues for the

state. The court is of the opinion that

the "redressability" requirement has been

met.

TVA has steadfastly asserted that Ala-

bama must also #emonstrate that its inter-

ests which have been injured are within

the "zone of interests" meant to be pro-

tected by the TVA Act, citing Data Pro-

cessing Service v. Camp, 397 U.S. 150,

90 S. Ct. 827, 25 L. Ed. 2d 184 (1970),

and Flast v. Cohen, 392 U.S. 83, 88 S. Ct.

1942, 20 L. Ed. 2d 947 (1968).

Some commentators have questioned the

continued validity of the "zone of

interests" test. See, e.g., K. Davis,

l4a

Administrative Law of the Seventies,

.§22.02-11, at 184-187 (1978 Supp.);

Sedler, Standing Justiciability, and All

That: A Behavioral Analysis, 25 Vand.

L. Rev. 479, 486 (1972). An analysis of

the opinion in Duke Power Co. v. Carolina

Environmental Study Group, Inc., supra,

strongly suggests that that test has been

abandoned. In Duke, the defendants

argued that in order to have standing, the

plaintiffs should have been required to

demonstrate a connection Between the rights

being asserted and the injuries suffered.

The court declined to apply a Flast-type

nexus test and held:

We . . . cannot accept the contention

that, outside the context of taxpayers'

suits, a litigant must demonstrate any-

thing more than injury in fact and a

substantial likelihood that the judicial

relief requested will prevent or redress

the claimed injury to satisfy the "case

15a

or controversy" requirement of Art.

IIl.

98 S. Ct. at 2634.

In the court's opinion, Alabama has

satisfied the article III requirements

for standing.

TVA's final objection to Alabama's

standing to bring this action is that the

injuries it complains of are no more than

generalized grievances which are equally

shared by all citizens of the United

States, and therefore fall within the pru-

dential limitations on the exercise of

federal jurisdiction. See Warth v. Seldin,

422 U.S. 490, 95 S. Ct. 2197, 45 L. Ed.

2d 343 (1975); Schlesinger v. Reservists

to Stop the War, 418 U.S. 208, 94S. Ct.

2925, 41 L. Ed. 2d 706 (1974); United

States v. Richardson, 418 U.S. 166, 94

S. Ct. 2940, 41 L. Ed. 2d 678 (1974).

The Supreme Court, however, has recently

de-emphasized the prudential limitations

l6a

on the classes of persons who may

properly challenge governmental action:

Where a party champions his own rights,

and where the injury alleged is a

concrete and particularized one which

will be prevented or redressed by the

relief requested, the basic practical

and prudential concerns underlying the

standing doctrine are generally

satisfied when the constitutional requi-

sites are met. (Citations omitted)

Duke Power Co. v. Carolina Environmental

Study Group, Inc., supra, 98 S. Ct. at

2634.

Regardless of the weight to be given to

general prudential concerns, it appears

to the court that TVA has perhaps mis-

construed the nature of the grievance

asserted by Alabama. The fact that all

national citizens have an idealogical

interest in a federal agency's compliance

with the law, First National Bank v.

17a

Missouri, 263 U.S. 640, 666-67, 44S. Ct.

212, 68 L. Ed. 486 (1924) (Van Devanter,

J. dissenting), does not preclude a

readily identifiable portion of that

citizenry from asserting a distinct and

particularized harm. Alabama has shown

interests which are sufficiently apart

from a generalized interest in good govern-

ment to overcome any duty on the part of

this court to stay its hand on prudential

grounds.

II. RES JUDICATA

TVA has interposed the judgment of the

court in Frahn v. Tennessee Valley Au-

thority, 41 F. Supp. 83 (N.D. Ala. 1941),

as a bar to the present suit. In that

case, an action was brought against TVA

by citizens and taxpayers of the Muscle

Shoals area, on behalf of themselves and

others similarly situated, seeking a

declaration that TVA was violating section

18a

8(a) of the TVA Act by not locating its

- general headquarters at Muscle Shoal;.

Alabama maintains that Frahn does not

preclude this action fortwo reasons: (1)

the section 8(a) issue was not decided

there, and (2) the State of Alabama was not

a party to that case.

The court in Frahn held that it lacked

jurisdiction to interpret section 8(a)

because the complaint failed "to present

a justiciable controversy."" 41 F. Supp.

at 86. In reaching this conclusion the

court found that the plaintiffs lacked

standing to bring the action, and that the

interpretation placed on section 8(a) by

TVA was not so unreasonable as to require

judicial interference. Alabama argues

that the holding of non-justiciability

encompasses only the lack of standing,

and the finding that the interpretation

of section 8(a) was committed to adminis-

trative discretion is dictum.

19a

The court is of the opinion that this is

true and that Judge Murphree's finding of

lack of a justiciable controversy was based

on the lack of standing. If plaintiffs

lacked the standing to bring the action,

the court's comments with respect to the

statutory interpretation question were dic-

tum. However, even if, as TVA contends,

the decision was based on two grounds—

standing and the lack of power to contest

the discretion of the executive officers of

the government in respect to the interpre-

tation of the statutes—this action is not

necessarily precluded by Frahn. Alabama

could not be bound by that judgment under

res judicata principles unless it was a

party to the proceeding. Zenith Radio Corp.

v. Hazeltine Research, Inc., 395 U.S. 100,

89 S. Ct. 1562, 23 L. Ed. 2d 129 (1969);

State of Texas v. Chuoke, 154 F. 2d 1 (5th

Cir. 1946), cert. denied 329 U.S. 714, 67

S. Ct. 45, 91 L. Ed. 620 (1946).

20a

TVA does not pretend that Alabama was

. a named plaintiff in Frahn, but maintains

that it should be bound by the judgment

there because Frahn was a class action on

behalf of all Alabama citizens. The

court cannot accept this contention. Be-

sides the absence of any indication that

a plaintiff class was ever certified by

the Frahn court, in the present action

Alabama has sued on its own right,

asserting injury to its proprietary and

quasi-sovereign interests. The court is

of the opinion that these interests are

not so identical to those of the putative

class of plaintiffs in Frahn as to make

the judgment in that case a bar to the

present proceedings even if the question

was there decided. Compare Dufee v. Duke,

375 U.S. 106, 84S. Ct. 242, 11 L. Ed. 2d

186 (1963).

2la

III. THE "PRINCIPAL OFFICE" PRO-

VISION OF SECTION 8(a)

Section 8(a) of the Tennessee Valley Au-

thority Act of 1933, 16 U.S.C. § 83lg(a),

provides:

The Corporation shall maintain its

principal office in the immediate vi-

cinity of Muscle Shoals, Alabama. The

Corporation shall be held to be an in-

habitant and resident of the northern

judicial district of Alabama within the

meaning of the laws of the United States

relating to the venue of civil suits.

Alabama contends that this provision

requires TVA to locate its administrative

and operatioi.11 headquarters at Muscle

Shoals. TVA submits that section 8(a)

only requires that it maintain an office

to accept service of process at Muscle

Shoals. This is essentially what TVA does,

with its administrative and operational

22a

headquarters being maintained elsewhere,

_ principally in Knoxville, Tennessee.

As a threshold matter, the court must

deal with TVA's assertion that it has

discretion tointerpret the meaning of

the principal office provision. The

asserted TVA grant of discretion to choose

the location of its headquarters is

based on Section 3 of the Act, which au-

thorizes the Board to:

appoint such managers, assistant mana-

gers, officers, employees, attorneys,

and agents as are necessary for the

transaction of business .. . and pro-

vide a system of organization to fix

responsibility and promote efficiency.

16 U.S.C. § 831b.

The court is not persuaded by this argu-

ment. In Morton v. Ruiz, 415 U.S. 199,

94S. Ct. 1055, 39 L. Ed. 2d 270 (1974),

the court noted that the Secretary of the

Interior had by statute, been granted

23a

broad managerial authority over Indian

affairs. Id. at 231 n. 26, 94S. Ct.

1055. However, the court rejected the

administrative interpretation of the

statute in question, holding that in order

for an agency interpretation to be granted

deference it must be consistent with the

congressional purpose. Id. at 237, 94

S. Ct. 1055.

The principle of judicial deference to

the interpretation given a statute by

those charged with its enforcement has

long been recognized. See, e.g., Red

Lion Broadcasting Co. v. F. C. C., 395

U.S. 367, 89 S. Ct. 1794, 23 L. Ed. 2d 371

(1969); Zemel v. Rush, 381 U.S. 1, 85 S.

Ct. 1271, 14 L. Ed. 2d 179 (1965);

Houghton v. Payne, 194 U.S. 88, 24S. Ct.

590, 48 L. Ed. 888 (1904). However, a

court will not defer to the administrative

construction where it is shown that such

construction is not in accordance with

24a

the Congressional intent behind the

statute. Morton v. Ruiz, supra;

Espinoza v. Farah Manufacturing Co., Inc.,

414 U.S. 86, 94S. Ct. 334, 38 L. Ed. 2d

287 (1973); Houghton v. Payne, supra. And

where the dispute concerns the meaning of

a statutory term as opposed to a policy

decision requiring exercise of an agency's

expertise, the courts will not abdicate

their primary function of interpreting

the law. Barlow v. Collins, 397 U.S.

159, 90 S. Ct. 832, 25 L. Ed. 2d 192

(1970); Texas Gas Transmission Corp. v.

Shell Oil Co., 363 U.S. 263, 80S. Ct.

1122, 4 L. Ed. 2d 1208 (1960).

The phrase “principal office" is a

legal term of art, and its correct in-

terpretation is a matter for judicial

determination. Congress is presumed to

know the judicially established meaning

of the words it uses in statutory pro-

visions. United States v. Merriam, 263

25a

U.S. 179, 44 S. Ct. 69, 68 L. Ed. 240

(1923).

The primary rule of statutory construc-

tion is to ascertain and effectuate the

legislative intent. 2A Sands, Sutherland

Statutory Construction, § 45.05, at 16

(4th ed. 1973). And where a statute is

unambiguous, this can be accomplished by

examination of the language adopted by

the legislature. Caminetti v. United

States, 242 U.S. 470, 37 S. Ct. 192,

61 L. Ed. 442 (1917).

Alabama asserts that no ambiguity exists

in the language of section 8(a), and that

the term "principal office" clearly

means the main headquarters of a corpora-

‘ tion. See, e.g., Peters v. Detroit &

Cleveland Nav. Co., 24 F. 2d 454 (W.D.

N.Y. 1927); Caceres v. United States

Shipping Bd. Emergency Fleet Co., 299 F.

968 (E.D.N.Y. 1924); Mason & Hanger Co.

v. Sharon, 231 F. 861 (2d Cir. 1916),

26a

cert. denied 241 U.S. 670, 36 S. Ct.

‘554, 60 L. Ed. 1230 (1916); Oleck,

Modern Corporation Law, § 461, at 705

(1958). TVA, however, argues that the

term "principal office," when used in the

corporate context, refers to an address

for service of process. There is some

authority for this position. See, e.g.,

40 Op. Atty. Gen. 115 (1941); 18 C.J.S.

Corporations § 177 (1939); 8 W. Fletcher,

Cyclopedia of the Law of Private Corpora-

tions 14046, at 483-84 (1966); Oleck,

Modern Corporation Law, supra, § 3, at 13.

The court, nevertheless, is of the view

that the language of the statute is plain

and unambiguous and that it clearly means

the main headquarters of the corporation,

particularly when read in conjunction

with section 2(e) of the TVA Act, 16

U.S.C. § 83la(e), which provides:

Each of the members of the board shall

be a citizen of the United States, and

27a

shall receive a salary at the rate of

$10,000 a year, to be paid by the

Corporation as current expenses. Each

member of the board, in addition to his

salary, shall be permitted to occupy

as his residence one of the dwelling

houses owned by the Government in the

vicinity of Muscle Shoals, Alabama, the

same to be designated by the President

of the United States. Members of the

board shall be reimbursed by the Cor-

poration for actual expenses (including

traveling and subsistence expenses)

incurred by them in the performance of

the duties vested in the board by this

Act [16 USCS § 831 et seq.]. No member

of said board shall, during his continu-

ance in office, be engaged in any other

business, but each member shall devote

himself to the work of the Corporation.

82 C.J.S. Statutes, § 345, at 699-700

(1953), states:

28a

In construing a statute, the inten-

tion or purpose of the legislature, or

the meaning of a statute is to be

determined, not from any single part,

portion or section. . . or from

particular or specific expressions or

terms .. . but from a general con-

sideration or view of the act as a

whole or in its entirety. (Footnotes

omitted)

And wherever reasonable, the court will

adopt that construction which gives

effect to all provisions of the statute.

Meltzer v. Board of Public Instruction of

Orange County, Fla., 548 F. 2d 559 (Sth

Cir. 1977); 2A Sands, Sutherland

Statutory Construction, supra, § 46.06.

It is apparent to the court that the

free residence provision of section 2(e)

would be meaningless if section 8(a)

were construed to allow TVA to locate its

main headquarters at a place distant from

Muscle Shoals.

29a

Assuming, however, that the language is

ambiguous, the legislative history pre-

ceding the enactment of the TVA Act of

1933 also points to the conclusion that

Congress intended the headquarters of

TVA to be located at Muscle Shoals.

The pre-enactment remarks of Senator

Norris, the co-author of the TVA Act,

clearly indicate that the free residence

was intended to be a salary supplement for

TVA directors:

I realize that there is very much dis-

agreement as to whether we could get a

man for $9,000 or $10,000 who could

fill this place. I am of the opinion

that we could. I do not believe there

would be any difficulty. If a member

of the board desires to live in Muscle

Shoals—and I think it is a beautiful

place to live—he would have his house

rent free, in addition to his salary.

77 Cong. Rec. 2687 (1933).

30a

Although never enacted into law be-

cause of Presidential veto, the Muscle

Shoals Act of 1928, H.R. 7744, 70th

Cong., lst Sess. (1927), and the Muscle

Shoals Act of 1931, S.J. Res. No. 49,

71st Cong., 3d Sess. (1931), both sought

to establish the Muscle Shoals Corpora-

tion of the United States to oversee the

federal government's investment in

nitrate and electrical plants located at

Muscle Shoals. Section 7(a) of both

acts contained language identical to that

which was eventually enacted as section

8(a) of the TVA Act of 1933.

Lister Hill was a member of the House

Committee on Military Affairs which

drafted the 1928 Act. H.R. Rep. No. 1095,

70th Cong., lst Sess. (1928). He later

testified concerning the purpose of the

principal office provision:

The idea and the purpose of the

committee in putting that language in

3la

the bill was that the actual head-

quarters, that those whose business

it was to carry on the permanent work,

to set the policies, to be the chiefs

and the heads, should have their office

at Muscle Shoals, Ala.

And in that connection, let me say

that back in 1928 the Committee on

Military Affairs of the House had a

full picture of the situation, in many

ways, just about as full as we have

today, for this reason; that the

engineers, the Army Engineers, at that

time had completed the finest and most

detailed survey of the Tennessee River

that has ever been made of any river

in the whole world, and we had that

survey of the engineers before us at

the time we put this langauge in the

bill.

We knew what we were doing; we knew

what we wanted to do. We had the facts

32a

that Senator Bankhead has given us

this morning about the geographical

importance; the fact that after all is

said and done, Muscle Shoals is, so to

speak, the center of gravity of any

activity in that whole great valley.

All of the facts showed that Muscle

Shoals was a logical place, that it was

a feasible place, and that economy and

efficiency dictated that the head-

quarters be placed there.

I was a member of the Committee on

Military Affairs when that language was

written into the bill. .. . Hearings

Before the Joint Committee on the Inves-

tigation of the Tennessee Valley Au-

thority, 75th Cong., at 5224 (1938).

Although the Muscle Shoals Act of 1928

was never enacted into law, given the

identity of the language of its princi-

pal office provision to that of section

33a

8(a) of the TVA Act, it is fair to infer

that the comments of Representative Hill

are equally applicable to both pro-

visions. Compare FEA v. Algonquin Sng.,

Inc., 426 U.S. 548, 652-64, 96 S. Ct.

2295, 49 L. Ed. 2d 49 (1976). And since

Senator Norris and Representative Hill

were co-sponsors of the TVA Act, their

statements are entitled to great weight,

even though Alabama, represented by

Representative Hill, stood to benefit

from their reading of the statute. Id.

at 564 n. 17, 96 S. Ct. 2295.

TVA places great reliance on the conclu-

sion reached in the Report of che Joint

Committee on the Investigation of the

Tennessee Valley Authority, 76th Cong.,

lst Sess. 9 (1939):

The committee finds that the Authority

has legally complied with that part of

subsection (a) of section 8 of the

act, as amended, which requires that

34a

the principal office of the Authority

be maintained in the immediate vicinity

of Muscle Shoals, Ala. However, on

account of the substantial difference

of opinion on the question, the

committee recommends that, in view of

the approaching completion of the dams,

Congress give immediate consideration

to clarifying the issue.

Three members of tie nine-man committee

disagreed with the majority report on

this issue and concluded that TVA's

maintenance of its headquarters in

Knoxville was "a palpable violation of

this mandatory provision of the TVA Act."

Id. at 331.

The result reached by this committee,

along with the fact that Congress has never

amended section 8(a), argues TVA, con-

stitutes express approval of its inter-

pretation of the principal office

provisions. The Supreme Court has noted,

35a

however, that "[t]he views of a subse-

quent Congress form a hazardous basis for

inferring the intent of an earlier one."

United States v. Philadelphia Nat'l Bank,

374 U.S. 321, 348-49, 83 S. Ct. 1715,

1733, 10 L. Ed. 2d 915 (1963), quoting

United States v. Price, 361 U.S. 304, 313,

80 S. Ct. 326, 4 L. Ed. 334 (1960). See

also, Teamsters v. United States, 431 U.S.

324, 97 S. Ct. 1843, 52 L. Ed. 2d 396

(1977).

TVA further supports its argument that

the administrative interpretation is in

accordance with the Congressional intent

by pointing out that Congress has con-

tinued to appropriate funds to maintain

TVA offices not located in Muscle Shoals,

and in fact has specifically refused to

appropriate funds for the purpose of re-

locating TVA offices. Act of July 27,

1953, Ch. 241, 67 Stat. 190.

The Supreme Court, however, has recently

36a

cautioned against reliance on subsequent

appropriation acts in determining the

intent of the legislature which enacted

the underlying statute. Tennessee Valley

Authority v. Hill, 437 U.S. 153, 98 S. Ct.

2279, 2299-2300, 57 L. Ed. 2d 117 (1978).

Moreover, the probative value of appro-

priation measures here diminishes in view

of the fact that Congress has refused to

pass proposed permanent amendments to

section 8(a) which would have eliminated

Muscle Shoals as the situs of the princi-

pal office. See S. 1207, 79th Cong.,

lst Sess. (1945), and H.R. 4146, 83d

Cong., lst Sess. (1953).

As was noted earlier in this opinion,

the long-standing administrative inter-

pretation of section 8(a) is to be

accorded great weight in seeking to

determine the proper construction of the

Act. But is equally clear that it is not

the controlling consideration:

37a

Contemporaneous and practical inter-

pretation serve as another aid of

statutory construction, and therefore

must be weighed against the other

factors pertinent to the determination

of legislative intent.

2A Sands, Sutherland Statutory Construc-

tion, supra, § 49.04, at 235.

The court is of the view that the plain

reading of the statute requires a finding

that Congress fully intended the primary

administrative and operational head-

quarters of TVA to be located in the

Muscle Shoals area. The court is further

of the view that even if the language

were to be considered ambiguous, the em-

ployment of other means of statutory

interpretation dictates the same result.

Accordingly, TVA's motion for summary

judgment is due to be denied and that of

the plaintiff granted.

38a

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

NORTHWESTERN DIVISION

STATE OF ALABAMA, EX

REL. WILLIAM J.

BAXLEY

Plaintiff

TENNESSEE VALLEY

)

3

-v- ‘ C.A. 77-M-0377

AUTHORITY et al.

)

Defendants

ORDER

This cause came to the court on the

following motions:

(1) The motion of defendants to

dismiss the original complaint or, in thé

alternative, for summary judgment;

(2) The motion of defendants to dis-

miss the amended complaint or, in the

alternative, for summary judgment; and

(3) The motion of plaintiff for

summary judgment.

39a

Defendants’ second motion renders

moot their first motion. Accordingly,

it is hereby ORDERED that defendants’

motion to dismiss the original complaint

or, in the alternative, for summary

judgment is overruled.

In accordance with the memorandum

opinion entered contemporaneous ly:

It is hereby

ORDERED, ADJUDGED and DECREED that

the motion of defendants to dismiss the

amended complaint or, in the alternative,

for summary judgment is overruled;

It is further ORDERED that the

motion of plaintiff for summary judgment

is granted;

It is further ORDERED, ADJUDGED and

DECLARED that defendants are required by

law to locate and maintain the head-

quarters of the Tennessee Valley Authority

in the immediate vicinity of Muscle

Shoals, Alabama, and that defendants have

40a

failed to do so;

It is further ORDERED that defendants

are enjoined from locating or maintaining

the headquarters of the Tennessee Valley

Authority in any place other than in the

immediate vicinity of Muscle Shoals,

Alabama.

Costs are hereby taxed to defendants.

Done this 25th day of January, 1979.

/s/ Frank H. McFadden

ef Judge

4la

APPENDIX C

STATE OF ALABAMA ex rel. Charles

A. GRADDICK, as Attorney General

of the State of Alabama, Plaintiff-

Appellee,

v.

TENNESSEE VALLEY AUTHORITY

et al., Defendants-Appellants.

No. 79-1283.

United States Court of Appeals,

Fifth Circuit.

Feb. 13, 1981.

Appeal from the United States

District Court for the Northern District

of Alabama.

Before GEE, FAY and RANDALL, Circuit

Judges.

GEE, Circuit Judge:

The Tennessee Valley Authority (''TVA"

or “Authority") appeals from an order of

the United States District Court for the

Northern District of Alabama requiring

that its "headquarters" in Knoxville,

Tennessee, be packed up and moved to Muscle

Shoals, Alabama. The district judge found

42a

this relocation necessary to bring TVA

into compliance with section 8(a) of the

Tennessee Valley Authority Act of 19335,

16 U.S.C. § 83lg(a), which reads in

pertinent part: "The corporation shall

maintain its principal office in the

immediate vicinity of Muscle Shoals,

Alabama."1

Since its creation by act of Congress

in 1933, the TVA has maintained offices in

a number of locations, including Knoxville,

Chattanooga, Muscle Shoals, and Washington,

D.C., in order to facilitate performance

of its statutory purposes. It is undis-

puted that the central administration of

the corporation has been located from its

earliest days in Knoxville. Members of

lthe full text of the section runs:

"The corporation shall maintain its princi-

pal office in the immediate vicinity of

Muscle Shoals, Alabama. The corporation

shall be held to be an inhabitant and resi-

dent of the Northern Judicial District of

Alabama within the meaning of the laws of

the United States relating to the venue of

civil suits."

43a

the board of directors maintain their

offices in Knoxville; most of their

meetings are conducted there; the

central offices and directors of a number

of the corporation's major divisions are

located there. A smaller office is main-

tained in Muscle Shoals; the administra-

tive staffs of several divisions are

located there. The TVA makes no pretense

that these Alabama activities comprise

those that would be carried on at the

administrative headquarters of a corpora-

tion.

Dissatisfied with this arrangement,

the State of Alabama filed suit in 19772

to force the TVA to relocate its central

administration in Muscle Shoals. In lieu

2The TVA did not assert the equitable

defense of laches to Alabama's suit for

injunctive relief, and thus that affirma-

tive defense is unavailable as a possible

ground of decision here. Beyond noting

tue passage of 44 years between the

establishment of the headquarters in Knox-

ville and the filing of this lawsuit, this

court will not further consider that delay.

44a

of an answer to this complaint, the TVA

. filed a motion for summary Jodment.”

Alabama filed a cross motion for summary

judgment, which was granted by the court.

In a January 25, 1979, order the judge en-

joined the TVA “from locating or main-

taining the headquarters of the Tennessee

Valley Authority in any place other than

in the immediate vicinity of Muscle Shoals,

Alabama."" It is from this order of the

district court that TVA now appeals.

Two of the grounds for reversal urged

by TVA need delay us only slightly, for we

3The TVA proposed several grounds for

summary judgment in its motion, arguments

raised — on appeal as grounds for re-

versal of the adverse trial court judgment:

(1) that Alabama lacked standing to assert

TVA's alleged non-compliance with the

statutory provision on location of its

“principal office"; (2) that Frahn v. TVA,

41 F. Supp. 83 (N.D. Ala. 1941), an un-

successful challenge. to the Knoxville loca-

tion earlier lodged by Alabama citizens,

was res judicata of this pon by the

state; an that the term "principal

office" referred solely to a formal corpo-

rate office, denominated in the Act simply

as a place for receipt of service of

process, a location where the elusive cor-

porate entity could always be found.

45a

find that the court below correctly dis-

posed of TVA's arguments on these points.

That finding is slim confort to appellee,

for the judgment falls anyway on the

third ground, discussed in detail below.

The Authority's assertions that

Alabama lacked standing and that the

state's claim was barred by the earlier

decision in Frahn v. TVA, 41 F. Supp. 83

(N.D. Ala. 1941), were sufficiently dealt

with below. The amicus brief filed with

this court by the State of Tennessee

urging reversal is itself an eloquent

evocation of Alabama's alleged injury in

fact; the injury is certainly sufficient

to insure that there exists the concrete

adverseness of positions necessary to

proper clarification of the issues.

Alabama has standing to challenge the TVA's

actions here. In Frahn a group of Alabama

residents filed suit to remedy what they

considered the TVA's intransigent refusal

46a

to obey the law. The district judge

‘ granted the Authority's Rule 12(b) (6)

motion on the ground that these private

individuals lacked standing to complain

of TVA's behavior. The court additionally

remarked that the determination of place-

ment of its corporate headquarters was

properly left to the TVA. The Authority's

attempt to skewer Alabama on language in

Frahn, even if this court were to find

the substantive issue involved in this

case there to have been resolved, must

fail. Alabama was neither a party to the

earlier lawsuit, nor is there an identity

of interest with those individuals who

were plaintiffs. In addition to its parens

patriae interest, which arguably can be no

different substantively from that of its

citizens, the state asserts a proprietary

interest distinct from that of any individ-

ual or group of its citizens.

47a

Our findings that the district judge

sufficiently resolved difficult questions

of standing and res judicata can give

Alabama only brief solace; fully entitled

to bring this lawsuit, the state is not,

however, entitled to prevail. The sole

question for decision here, correctly

recognized by the district court, is the

meaning of the "principal office" pro-

vision of 16 U.S.C. § 83lg(a). Summary

judgment was thus the appropriate reso-

lution of this matter; the victory simply

went to the wrong contestant. This court

must now consider the legal effect of the

statutory requirement that the TVA main-

tain its "principal office in the immediate

vicinity of Muscle Shoals, Alabama."

Contrary to Alabama's assertions,

this court finds the "plain meaning" of

the statutory language not to be all that

plain. That application of a dictionary

to the phrase necessarily results in the

48a

conclusion that certain (but not all)

' administrative functions of the Authority

should properly exist only in Muscle

Shoals is not ineluctably clear. As a

legal term of art (if such it be),

“principal cffice" lacks a certain

definiteness in its connotation; courts

and commentators confuse and differently

distinguish phrases such as "principal

office," "registered office," and

“principal place of business."

Confronted with a provision the

reading of which we find ambiguous, this

court must turn to familiar but neverthe-

less slippery tools of statutory construc-

tion. Before doing so, however, it is

4vhe comment to the revised Model

Business Corporations Act indicates that

confusion between the various terms typi-

cally used in state corporation laws

prompted the drafters to settle on

‘registered office" as the favored term

for the office named in the corporate

pros fa as a place where the corporation

could always be found.

49a

important to clarify what this exercise

must entail. The TVA asserts that what-

ever the phrase actually means, the Au-

thority's consistent forty-year reading

of it is a reasonable one and that proper

judicial deference to agency expertise

would prompt this court to leave the

reasonable interpretation undisturbed.

That deferential solution would spare

this court much of the following exercise

and for that reason, among others, is a

facially attractive one. That conclusion

is, however: fundamentally flawed. The

proposition the TVA here urges is appro-

priate in situations where the agency's

challenged action in some way implicates

its special expertise. Cf. Young v. TVA,

606 F. 2d 143, 145 (6th Cir. 1979)

(question of TVA authority to construct

power plant outside watershed of Tennessee

River; agency construction of statutory

provision upheld in part because "[t]he

50a

construction and operation of power plants

‘and the distribution of electric energy

generated therefrom requires expertise

which should be accorded deference by

the courts"). This court is hard pressed

to arrive at reasons why the TVA's inter-

pretation of a purely legal point here

should be accorded any weight at all, much

less rendered the deference suggested.

Cf£. Coca-Cola Co. v. Atchison, Topeka &

Santa Fe Railway Co., 608 F. 2d 213, 222

(5th Cir. 1979) ("[nJevertheless, even

where the issue is one of pure law, such

as interpretation of contracts, tariffs,

regulations and statutes, room still is

present for deference to the views of ad-

ministrative agencies, particularly where

the understanding of the problem is en-

hanced by the agency's expert understanding

of the industry" (emphasis added)).

Congress did not commit to the TVA's judg-

ment the location of its principal office;

5la

that decision is chiseled in stone at

16 U.S.C. § 83lg(a). If this court were

to arrive at the legal determination that

"principal office" meant administrative

headquarters, then, absent congressional

amendment of that provision,” the reason-

ableness of TVA'’s error could not save it

from Muscle Shoals. The question is

properly one for the court to decide, and

so we turn to it. We conclude that TVA's

interpretation of the "principal office"

provision is not only reasonable, it is

correct.

5A number of proposed amendments to

§ 8(a) have surfaced over the years, only

to slip quietly back beneath the waves of

congressional indifference. The most recent

proposal was apparently in direct response

to the district court opinion in this case.

See S. 757, 96th Cong., lst Sess. 125 Cong.

Rec. S. 3347 (1979), and H.R. 1595, 96th

Cong., lst Sess. 125 Cong. Rec. 339 (1979).

This Court has been made aware of no favor-

able action on this amendment that perhaps

would render the dispute moot.

52a

As suggested above, courts and com-

‘mentators can be found falling on both

sides of this definitional dispute; no

attempt will here be made to cast these

into respective measures and to determine

the "weight" of authority. The sources

that, however, helped lead us to our

reading of the term in its context will

be briefly noted and qualified.

The major corporate law treatises do

not offer a united front. Compare 1 H.

Oleck, Modern Corporate Law § 3 at 13

(1958) ("'Principal office' means the

place stated in the articles or certificate

of incorporation as the address of the

corporation."), with 8 W. Fletcher,

Cyclopedia of the Law of Private Corpora-

tions § 4035 at 458 (1966) ("The words

"principal office’ have a definite meaning,

especially when applied to a corporation,

in which case they mean the head office,

the place where the principal officers

53a

generally transact business and the place

to which reports are made and from which

orders emanate."'). The above formulations

need not be mutually exclusive. A cor-

poration's central headquarters, "from

which orders emanate," could well be the

office listed, in the charter as the formal

address of the entity. But it need not

be; and as pointed out by the TVA, in

common practice it frequently is not the

same location. The Delaware corporation

law statute for many years required

businesses incorporating under its pro-

visions to maintain a "principal office or

place of business" within the state.°

This popular incorporating state was never

inundated with actual corporate head-

quarters because of this statutory require-

ment. No independent tabulation of now-

6The Delaware statute, following the

suggestion of the revised MBCA, see note

4, supra, now speaks of a "registered

office.

54a

outdated state corporation laws was

‘attempted by this court, but as computed

by the TVA (and undisputed by Alabama), 27

states' statutes in that period required the

listing of a "principal office" in corporate

charters. Neither legislators nor

certainly corporate officers considered

the statute further to require the location

of any particular corporate activity, ad-

ministrative or otherwise, at that address.

In the pursuit of some insight into

understandings of the elusive term

“principal office," a survey of case law

prior to and contemporary with the passage

of the TVA Act produces mixed results.

Much of the case law on the meaning of

"principal office" is concerned with dis-

tinguishing it in the particular context

from the “principal place of business" of

the subject corporation. That exercise is

not particularly helpful here, as the

district court order does not require, nor

55a

does Alabama seek, the shifting of the

majority of the dam construction, flood

control, and electrical generating activi-

ties of the TVA to the "immediate vicinity

of Muscle Shoals"; rather, the relocation

of the administrative headquarters, which

can be and often is distinct from the

corporation's principal place of business,

has been ordered.

When a word has a judicially settled

meaning, it is presumed that Congress,

by using that word in a statute, used it

in that accepted sense. United States v.

Merriam, 263 U.S. 179, 187, 44S. Ct. 69,

71, 68 L. Ed. 240 (1923). The meanings

here urged by the respective parties are

not, however, judicially settled. In

Caceres v. United States Shipping Board

Emergency Fleet Corp., 299 F. 968, 970

(E.D.N.Y. 1924), the court distinguished

“principal office" and "principal place

of business" with the definition now

56a

immortalized in Fletcher's: "The words

‘principal office’ have a definite

meaning, especially when applied to a

corporation, in which case they mean the

head office, the place where the principal

officers generally transact business, and

the place to which reports are made and

from which orders emanate." Unsurprisingly,

Alabama fastens on this and similar formu-

lations as the correct judicial settlement

of meaning. Dicta in a bankruptcy case

decided by this court, however, offer

support to TVA's position. In Dryden v.

Ranger Refining & Pipe Line Co., 280 F.

257 (5th Cir. 1922), the court had to

determine the "principal place of business"

of the bankrupt for jurisdictional pur-

poses. Most of the corporate activity was

centered in and around Ranger, Texas. The

“general offices" of the company (described

in the opinion as the administrative

headquarters of the corporation) were in

57a

Kansas City, Missouri. Ranger Refining

was a Delaware corporation with its

"principal office in Wilmington, Delaware."

Id. at 257-58. The case was found

properly to belong in the Northern

District of Texas, which included the

town of Ranger, and not in the locations

of either the general offices or the

"principal office."

The central question in statutory

interpretation is, of course, what meaning

Congress intended the term to bear when

it passed the TVA Act. Neither party nor

this court has uncovered any legislative

history specifically on section 83lg(a).

This controversy that occupies us over

forty years later merited no particular

attention at the time of the Act's passage.

A consideration of the Act as a

whole, however, supports our conclusion

that the TVA is in full compliance with

the statute by maintenance of an office

58a

in Muscle Shoals for receipt of service of

process.’

The TVA Act functions as the corporate

charter of the Authority. 2A C. Sands,

Sutherland Statutory Construction § 49.03

at 233 (4th ed. 1973), indicates that the

practical interpretation of a statute must

be weighed in determining legislative i-tent.

There is no reason to suppose that Congress

intended so to confine the workings of the

rva.® The House committee that studied the

7other TVA business is conducted at

Muscle Shoals, including that of the ad-

ministrative offices and staffs of the

divisions of agricultural development, chem-

ical development, and chemical operations.

Over 2,000 employees function there. But

TVA does not argue that this activity

satisfies Alabama's and the district court's

reading of the statute; the activities at

Muscle Shoals beyond the maintenance of

the "principal office" are not required by

statute to be in any particular location.

8such confinement ped well have been

the intention of such Alabama representatives

as Senators Lister and Hugo Black, as sug-

gested in their subsequent statements; but

the intentions, expressed or hidden, of any

single representative do not create con-

gressional intent.

59a

TVA proposal reported: "We have sought to

set up a legislative framework, but not

to encase it in a legislative straight-

jacket. We intend that the corporation

shall have much of the essential freedom

and elasticity of a private business cor-

poration."’ H.R. No. 130, 73d Cong., lst

Sess. 19 (1933). The general thrust of

the Act argues against a localization of

its activities. The work of the TVA was

expected to be broad and far ranging. The

orientation was regional, even national,

in scope, not limited to a single state

or location. The argument of Alabama that

use in the TVA Act of language identical

to that of the principal office provisions

of two earlier, presidentially vetoed

Muscle Shoals corporation acts is unper-

suasive. The expected work of the TVA was

to range far beyond the existing operations

at Muscle Shoals. As President Franklin

Roosevelt stated in his message to Congress

60a

proposing passage of a Tennessee Valley

‘Authority Act:

It is clear that the Muscle Shoals

development is but a small part of

the potential public usefulness

of the entire Tennessee River.

Such use, if envisionedinits en-

tirety, transcends mere power

development: it enters the wide

fields of flood control, soil

erosion, afforestation, elimination

from agricultural use of marginal

lands, and distribution and di-

versification of industry. In

short, this power development of

war days leads logically to na-

tional planning for a complete

watershed involving many states

and the future lives and welfare

of millions. It touches and gives

life to all forms of human con-

cerns.

6la

I, therefore, suggest to the Con-

gress legislation to create a

Tennessee Valley Authority—a corpo-

ration clothed with the power of

government but possessed with the

flexibility and initiative of a pri-

vate enterprise. It should be charged

with the broadest duty of planning for

the proper use, conservation, and

development of the natural resources

of the Tennessee River drainage

basin and its adjoining territory

for the general social and economic

welfare of the Nation.”

%The President's interpretation of the

principal office provision coincided with

that of the TVA—an hee ba om development

since, as even the Tennessee Valley Au-

thority admits, it was drafted by the TVA.

President Roosevelt responded to Sen.

Black's immediate complaints that the TVA

was not complying with the principal office

provision by letter of September 6, 1934,

that read in pertinent part: "It therefore

seems to me to be clear that the Congress

meant by the provision as to the location

of the principal office of the Authority

only to fix a legal domicile—not to re-

strict or localize its business operations

in any way." 62a

H.R. Doc. No. 15, 73d Cong., lst Sess.

» (1933).

In finding that the general thrust

and outlook of the TVA Act militates

against a reading that the principal of-

fice provision ordained anything more

exacting than the maintenance of what, in

more current terms, we refer to as a

“registered office," this court must re-

spond to a textual argument raised by

Alabama that enjoys some surface appeal.

Section 2(e) of the Act, 16 U.S.C.

§ 83la(e), provides in part: "Each member

of the Board, in addition to his salary,

shall be permitted to occupy as his resi-

dence one of the dwelling houses owned by

the government in the vicinity of Muscle

Shoals, Alabama, the same to be desig-

nated by the President of the United States."

This salary supplement, Alabama argues, is

senseless unless the members of the Board,

and thus the administrative apparatus of

63a

the Authority, were to be living and

working at the "principal office in Muscle

Shoals." While Muscle Shoals is un-

doubtedly a lovely area, nothing in the

record indicates that it is particularly

suitable for vacation homes.

The free-residence provision is

couched in permissive terms; the initial

House version of the Act (sponsored by

Lister Hill of Alabama) read: "All

members of the Board shall reside in the

vicinity of Muscle Shoals." The adoption

by the full Congress of the permissive

language in the Senate version was seen

by the Joint Congressional Committee on

the Investigation of the Tennessee Valley

Authority in this manner: "Thus Congress

provided for the possibility that the

Authority might locate its administrative

headquarters at Muscle Shoals, but

64a

refrained from requiring that it do so "10

S. Doc. No. 56, 75th Cong., 3d Sess. 22

(1939). At the passage of the Act, the

only readily identifiable property to be

immediately transferred to TVA control was

at Muscle Shoals. Congress undoubtedly

contemplated significant activity there,

perhaps even assumed the location of head-

quarters there. But as this court has

written, "[a]n assumption is not a law."

Rogers v. Frito Lay, Inc., 611 F. 2d 1074,

1082 (5th Cir. 1980). This provision is

not a sufficient indication that Congress,

by fixing the location of the TVA's

principal office and allowing the directors

free housing there, required the

10; can be argued, however, that all

that was permissively granted was the right

to live in a government residence as oF:

posed to some other residence accessible to

the principal office in Muscle Shoals; that

is, while directors could live where they

wished, their working location remained at

the principal office (in the immediate

vicinity of Muscle Shoals).

65a

establishment of the corporate head-

quarters at that same location.

While there exists a paucity of con-

gressional discussion of this provision at

the time of the Act's passage, arguments

to this court of both parties are replete

with after-the-fact commentary by con-

gressmen and committee. The majority

report of the above-mentioned joint

congressional committee found in answer to

the specific question of TVA's alleged

noncompliance with section 83lg(a) that

"[t]he committee finds that the Authority

has legally complied with that part of

subsection (a) of section 8 of the act,

as amended, which requires that the princi-

pal office of the Authority be maintained

in the immediate vicinity of Muscle Shoals,

Ala." S. Doc. No. 56, 75th Cong., 3d

Sess. 9 (1939). In arriving at this con-

clusion, the committee majority reported:

"The term 'principal office’ has a definite

66a

legal meaning, as a fixed location where

the corporation may always be served with

legal papers. It is not synonymous with

operating or administrative headquarters,

which are often located in an entirely

different jurisdiction." S. Doc. No. 56,

75th Cong., 3d Sess. 21 (1939). The

majority report recommended "that Congress

give immediate consideration to clarifying

the question about which substantial

difference of opinion has existed." S.

Doc. No. 56, 75th Cong., 3d Sess. 22 (1939).

This invitation to full congressional at-

tention has been met only by silence.

For its part, Alabama advances the

vigorously dissenting minority report of

the joint committee, the testimony before

that committee of Alabama Senators Bankhead

and Hill and Representative Sparkman, and

the immediate objections voiced by Senator

Black in letters to Chairman Morgan of the

TVA and President Roosevelt. The gist of

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these statements was that the maintenance

of the actual administrative headquarters

of the TVA in Knoxville rather than

Muscle Shoals was "a plain, palpable and

wil Neither

open violation of the statute.

party's arguments from subsequent state-

ments are particularly helpful in divining

the congressional intent. This court dis-

posed of similar arguments in Rogers v.

Frito Lay, Inc., supra, with this observa-

tion:

The retroactive wisdom provided by

the subsequent speech of a member

of Congress stating that yesterday

we meant something that we did not

say is an ephemeral guide to

history.... What happened after a

Statute was enacted may be history

and it may come from members of the

Congress, but it is not part of the

1h etter of Senator Black to A.E.

Morgan, July 11, 1934.

68a

legislative history of the original

enactment.

611 F. 2d at 1080. With particular rele-

vance to the 1939 report of the joint

congressional committee, the Rogers court

wrote:

Had this statement [of a subsequent

committee] been made in the report

of the committee that recommended

the legislation, it would indeed

be part of the statutory history.

When uttered five years later [in

this case, six years], it is mere

commentary. Moreover, a committee

is not Congress. It cannot create

a congressional intent that did

not exist, or amend a statute by a

report.

Id. at 1082.

The Supreme Court, however, reminds

us that such subsequent expressions are

not without their usefulness. "And while

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the views of subsequent Congresses cannot

override the unmistakable intent of the

enacting one, ... such views are entitled

to significant weight ... and particularly

so when the precise intent of the enacting

Congress is obscure."' Seatrain Ship-

building Corp. v. Shell Oil Co., 444 U.S.

572, 596, 100 S. Ct. 800, 814, 63 L. Ed.

2d 36 (1980). The "precise intent of the

enacting Congress" is here certainly

“obscure," but it is doubtful that the

statements offered here can be said to

approach nich tile so grand as the view of

a subsequent Congress. Strong statements

fully supportive of their respective

positions are offered by each party. But

the only thing approaching a "view of

Congress" is its silence in the face of

this controversy. The chief force of

these subsequent declarations, then, lies

in their indication of congressional aware-

ness, at a very early date, of the TVA's

70a

alleged noncompliance with the statutory

provision. The silence of Congress did

not result from ignorance of the dispute.

Congress was directed to the problem;

simply no action was taken. }? Con-

gressional inaction is, of course, a

jumbled text from which to extract much

meaning. But continued congressional

funding of allegedly improper agency

action can be viewed in appropriate cir-

cumstances as a ratification of that

agency practice. Young v. TVA, 606 F. 2d

143, 147 (6th Cir. 1979); Swan Lake

Hunting Club v. United States, 381 F. 2d

12,1 abama attempts to draw signifi-

cance from the failure of passage of two

bills introduced 4 Tennessee representa-

tives to amend § 83lg(a) by substituting

Knoxville for Muscle Shoals as the location

of TVA's principal office. The Supreme

Court has remarked that "unsuccessful

attempts at legislation are not the best

of guides to legislative intent." Red

Lion Broadcasting Co. v. FCC, 395 U.S.

2 n. CE -1794, 1802 n.

11, 23 L. Ed. 2d 371 (1969).

7la

238, 241 n. 3 (Sth Cir. 1967).13 Aware of

the challenge to TVA's construction of the

principal office provision, Congress con-

tinues, as it has since 1934, to appro-

priate funds for the maintenance of the

central headquarters in Knoxville, not

Muscle Shoals. During a period in which

the TVA directors, in the exercise of their

business judgment, felt that efficiency

(and not the terms of section 83lg(a))

dictated a removal of the administrative

headquarters to Muscle Shoals, congres-

sional riders restricted the use of

appropriated funds in aid of that move.

And while the Act has been amended several

137va vy. Hill, 437 U.S. 153, 98 S. Ct.

2279, 57 L. Ed. 2d 117 (1978), suggests a

wary application of such principles of im-

lied statutory alteration. This situation

s not that of Hill; there are here no

competing statutory policies, no confusion

about purposes or goals. The argument is

not one of repeal by implication, the

disfavor of which Hill ably expresses. See

Young v. TVA, 606 F.2d at 148.

72a

times over the ensuing years, '4 Congress

has expressed no dissatisfaction with the

Authority's construction of the principal

office provision.

To be sure, it may not always be

realistic to infer approval of a

judicial or administrative inter-

pretation from congressional silence

alone. [citations omitted] But once

an agency's statutory construction

has been "fully brought to the

attention of the public and the

Congress," and the latter has not

sought to alter that interpretation

although it has amended the statute

in other respects, then presumably

the legislative intent has been

correctly discerned.

M4tncluding an amendment in 1935 making

ar ese the intention that the Act "be

liberally construed to carry out the pur-

poses of Congress." 16 U.S.C. § 83ldd(b).

73a

United States v. Rutherford, 442 U.S. 544,

99 S. Ct. 2470, 2476 n. 10, 61 L. Ed. 2d

68 (1979).

A lengthy consideration of the ambig-

uous meaning of the statutory term, gen-

eral principals of corporate practice, the

broad and flexible powers and purposes

conferred by the statute, and the echoing

silence of Congress in the face of the con-

troversy leads this court to conclude

that the district court's judgment must

be reversed and this case remanded for

further proceedings consistent with this

opinion.

REVERSED AND REMANDED.

74a

APPENDIX D

UNITED STATES COURT OF APPEALS

For The Fifth Circuit

No. 79-1283

D. C. Docket No. CA 77-M0377NW

STATE OF ALABAMA, Ex Rel. CHARLES A.

GRADDICK, As Attorney General of the

State of Alabama,

Plaintiff-Appellee,

versus

TENNESSEE VALLEY AUTHORITY, ET AL.,

Defendants-Appellants.

Appeal from the United States

District Court for the

Northern District of Alabama

Before GEE, FAY and RANDALL, Circuit

Judges.

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JUDGMENT

This cause came on to be heard on

the transcript of the record from the

United States District Court for the

Northern District of Alabama, and was

argued by counsel;

ON CONSIDERATION WHEREOF, It is now

here ordered and adjudged by this Court

that the judgment of the said District

Court in this cause be, and the same is

hereby, reversed; and that this cause be,

and the same is hereby remanded to the

said District Court in accordance with

the opinion of this Court;

IT IS FURTHER ORDERED that the

' plaintiff-appellee pay to the defendants-

appellants the costs on appeal, to be

taxed by the Clerk of this Court.

February 13, 1981

ISSUED AS MANDATE: APR 27 1981

76a

APPENDIX E

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

NO. 79-1283

STATE OF ALABAMA, Ex Rel.,

CHARLES A. GRADDICK, As Attorney

General of the State of Alabama,

Plaintiff-Appellee,

versus

TENNESSEE VALLEY AUTHORITY, ET AL.,

Defendants-Appellants.

Appeal from the United States

District Court for the

Northern District of Alabama

77a

ON PETITION FOR REHEARING

(April 2, 1981)

Before GEE, FAY and RANDALL, Circuit Judges.

PER CURIAM:

IT IS ORDERED that the petition for

rehearing filed in the above entitled and

numbered cause be and the same is hereby

denied.

ENTERED FOR THE COURT:

s/ Thomas Gibbs, Jr.

e ates reu udge

78a