Reply Brief — Metropolitan Transportation Authority v. Federal Energy Regulatory Commission

FILED

| No. 86-736 FEB 4 3087

JOSEPH F. SrA. .i0L, JR

CLERK

—~ Gupreme Court, U.S.

N)

IN THE

Supreme Court of the United States

OCTOBER TERM, 1986

>

METROPOLITAN TRANSPORTATION AUTHORITY,

Petitioner,

oV.

Feper at ENERGY REGULATORY COMMISSION, et al.

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

REPLY BRIEF IN SUPPORT OF CERTIORARI

RENEE SCHWARTZ

Counsel of Record

E710 SCALDAFERRI

BOTEIN Hays & SKLAR

200 Park Avenue

New York, New York 10166

(212) 867-5500

Attorneys for Petitioner

ARGUMENT ..

CONCLUSION

TABLE OF CONTENTS

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TABLE OF AUTHORITIES

Cases

Aluminum Co. v. Central Lincoln Peoples’ Util. Dist.,

467 U.S. 300 (1984). <cccccsssciscnsnasneenean

FPC v. Texaco Inc., 417 U.S. 380 (1974) ................

FPC v. Transcontinental Gas Pipe Line Corp., 423

U.S. 326 (2976) ncccrcscssescosisacscniusedasenene

Grindstone Butte Project v. Kleppe, 638 F.2d 100 (9th

Clap. UDBE) ..ccccccensscsensnssnnanmnniaeeinaielninnnannnnnnnnnIn an

Hyrup v. Kleppe, 406 F. Supp. 214 (D. Colo. 1976),

aff'd, Nos. 76-1452, 76-1767 (10th Cir. Nov. 7,

PTT) .uncocesecccsessedsnnsscncushiainnsnssesilleseinninnnnannnnaa nnn

Regulatory Agency Opinions

MEUA v. PASNY, 23 FERC 9 61,031 (1983) .........

State of Vermont Public Service Board v. PASNY, 55

F.P.C. 1109 (1976) «.....csescccsemneeaeenane

Statutes

Bonneville Project Act, 16 U.S.C. § 832(b) ..0..00000..

N.Y. Pub. Auth. L. $9009 ...cccccccacseeeeee

PAGE

IN THE

a Court of the United States

OCTOBER TERM, 1986

co

METROPOLITAN TRANSPORTATION AUTHOR ae

Petitioner,

-\-

FEDERAL ENERGY REGULATORY COMMISSION, et al.

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

REPLY BRIEF IN SUPPORT OF CERTIORARI

ARGUMENT

Four customer groups and FERC have filed briefs in opposition

to the MTA’s Petition for Certiorari.' Vitally interested in

retaining the preference power themselves, these groups attempt

to have this Court deny the petition by suggesting that this case

involves nothing more than “a single disappointed litigant.” See,

MEUA Br. p. 3; see also MMWEC/CMECC Br. p. 4. But there

is more at stake than the entrenched preference customers would

have one believe. This is the first interpretation of the phrase

“public bodies” under the NRA. The final determination will

affect not only in-state and out-of-state governmental agencies

otherwise eligible to receive Niagara Power, but also the distribu-

tion of hydropower under other federal preference legislation.

1. The customer groups are the Municipal Electric Utilities Associ-

ation of New York State (“MEUA”), Massachusetts Municipal Whole-

sale Electric Company and Connecticut Municipal Electric Energy

Cooperative (“MMWEC/CMEEC”), and New Jersey Preference Bor-

oughs (“NJ”).

2

The far-reaching impact of this determination requires a decision

by this Court. Absent such direction, uncorrectible misalloca-

tions of a most valuable asset will continue, and a demonstrably

erroneous decision with vast economic and negative environmen-

tal impact will be used as a guideline for allocations.

We will first respond to the “procedural” arguments the parties

rely upon in opposing MTA’s Petition, and then very briefly

address only a few of the most egregious statements in connection

with the merits of the Second Circuit’s determination.

(1) The amounts involved. MEUA argues that since the

“loss” to the MTA may be only $6 million annually, the stakes

involved in this case are not sufficiently large to justify the inter-

vention of this Court. MEUA Br. p. 4.*. But the Niagara project

produces over 14.6 billion kilowatt hours of energy; and the sav-

ings, by reason of the cost differential between hydropower and

conventional power, amount to over a quarter of a billion dollars

annually. MTA Pet. p.8.° No party in opposition has cited any

support for the claim that certiorari should be granted only if the

petitioner by itself has a large enough stake to support the review.

Rather, the overall economic impact is what should be consid-

ered, and the effect here is more than enough to make this a

significant case for review.

(2) The number of agencies involved. Three of the opposing

parties claim that there is no other governmental agency which

would be affected by this Court’s review of the Second Circuit’s

determinatio. MMWEC/CMEEC Br. pp. 4-5; MEUA Br. pp.

2-4. They are not only mistaken, but also less than candid.

2. MMWEC and CMEEC admit that this case involves the alloca-

tion of a valuable resource (MMWEC/CMEEC Br. p. 5, n. 4), but go

on te attempt to distinguish other cases in which “economic impact” was

an element considered in granting certiorari, by saying that in those

cases there were other elements which, in part, motivated the Court to

grant the writ. There are always multiple elements which together

make a case worthwhile for review. Those elements exist here, too; and

the economic impact of the decision is one such element.

3. No question has been raised as to the amount of power or total

savings involved.

3

While this very case was before FERC with all these parties

actively participating, the Niagara Frontier Transportation

Authority (“NFTA”), which operates a mass transportation sys-

tem in Erie and Niagara counties, moved to intervene out-of-

time.‘ FERC denied NFTA’s motion because it believed that

NFTA’s interest was already represented by the MTA in this

proceeding.” More importantly, in New York State alone, some

of the public agencies which the Power Authority is permitted to

serve (for just one example, the New York City Housing Author-

ity) also may be adversely affected by the determination below.

See, N.Y. Pub. Auth. L. § 1005. MTA does not have the infor-

mation as to government agencies in Massachusetts, Connecticut,

New Jersey, and elsewhere that may qualify as public bodies and

receive Niagara hydropower, but governmental agencies like the

MTA and NFTA surely exist in those States and throughout the

country. In sum, the number of governmental agencies affected is

much greater than the opposing parties would have the Court

believe.

(3) The lack of conflict among the circuits. Both

MMWEC/CMEEC and MEUA also argue that certiorari

should be denied because there is currently no conflict among the

circuits, and because no conflict will arise since only the energy

distributed under the NRA and not energy distributed under any

other federal preference statutes will be affected by review in this

case. MMWEC/CMEEC Br. p. 4; MEUA Br. p. 5, n.3. Neither

contention is correct.

A conflict between circuits is not a prerequisite to certiorari

review. Indeed, in the absence of such a conflict, this Court has

in the past granted certiorari because of the “potential impor-

tance of a resolution on the merits” of an issue. See, FPC v.

Transcontinental Gas Pipe Line Corp., 423 U.S. 326, 334-35

(1976). ;

It is completely disingenuous to suggest that the determination

of what is a “public body” under the NRA will not impact the

4. Motion to Intervene on Behalf of NFTA, September 22, 1982.

5. Order Denying Motion to Intervene, October 4, 1982, p. 2.

4

determination of what is a “public body” under other federal

power acts. Perhaps the issue can best be put to rest by noting

that in this case MMWEC, CMEEC, and MEUA relied exten-

sively on decisions involving other federal preference statutes to

support their argument that the term “public bodies” should be

restrictively interpreted.” Ironically, in its Brief in Opposition to

the Cross Petition, MEUA relies on a case interpreting the

Bonneville Project Act to support its reading of the term “public

bodies” under the NRA. MEUA Br. in Opp., No. 86-942, p. 4.’

[he intervenors have urged that the authorities in respect of other

federal power acts may be relevant in interpreting the NRA;

applying the same test, this Court's review of the NRA language

should have an effect on the determination of what is a “public

body” under other federal power acts.

(4) This is a case of first impression. Concerned that the

MTA is correct in noting that important cases of first impression

can, and often do, warrant review, MMWEC and CMEEC now

claim that this is mot a case of “first impression.”

MMWEC/CMEEC Br. p. 4. They claim, instead, that this issue

was considered by FERC in Opinion 151A and by the Second

Circuit in PASNY v. FERC, 743 F.2d 93 (2d Cir. 1984)

(“PASNY~). This position is completely untenable because, as

MMWEC and CMEEC know, and as has been pointed out

6. See, e.g., Supplemental Brief of Intervenors in Support of FERC

on the “Public Bodies” Issue, pp. 31-40, MTA v. FERC, 796 F.2d 584

(2d Cir. 1986); MEUA Brief Opposing Exceptions, June 9, 1983, pp.

30-39 (FERC Nos. EL80-19, EL80-24); Reply Brief of MEUA,

November 17, 1982, pp. 22-23 (FERC Nos. EL80-19, EL80-24).

7. The citation by MEUA of Aluminum Co. v. Central Lincoln

Peoples’ Util. Dist., 467 U.S. 380 (1984) is helpful to the MTA for a j

second reason. As that case notes (/d. at 384), the definition of “public

bodies” under the Bonneville Project Act included “states, public power |

districts, counties, and municipalities, including agencies or subdivisions

of any thereof.” 16 U.S.C. § 832(b). Under that definition the MTA,

as a state agency, would be a “public body.” Moreover, the Court in

Aluminum Co. drew the distinction between public utilities, which are

to be given preference, and private utilities (investor-owned utilities )

which are not to be given preference. /d. at 398-99. In this pub-

lic/private dichotomy the MTA surely falls on the public, i.e. “prefer-

ence”, side.

———————————

5

before, the question of what is a “public body” under the NRA

was expre «ly eliminated from consideration in Opinion 151A on

due process grounds for failure to give adequate notice to the

MTA. MEUA v. PASNY (Opinion 151A), 23 FERC 1 61,031

(1983). In addition, MMWEC, CMEEC, and MEUVA were

parties to a stipulation in PASNY which expressly eliminated the

public body issue from consideration in that case.” There is no

basis for any honest suggestion that this is not a case of first

impression.

In order to further de-emphasize the novelty of this case and

the astonishing about-face by FERC on the “public body” issue,

MMWEC ‘and CMEEC also say that the MTA has “mis-

characterized” the Commission’s earlier decision in State of Ver-

mont Public Service Board v. PASNY, 55 F.P.C. 1109 (1976),

and that the term “public bodies” was not interpreted “simply in

accordance with its plain meaning” in that case.

MMWEC/CMEEC Br. p. 4. The earlier decision speaks for

itself and we believe our characterization is accurate, but it 1s

worth pointing out that FERC itself admits that in reaching its

decision in the case before this Court, it “overruled, in relevant

part, its prior decision in [Vermont]”. FERC Br. p.3, n.2.

MTA\’s Petition already discussed the question of whether the

decision below is in error, and, of course, that issue will be

addressed in greater detail if this petition is granted. However,

in the Briefs in Opposition, there are two points which address the

substance of the decision which require some immediate, albeit

short, response.

MTA has argued that in interpreting the NRA, the Courts are

required to consider the National Environmental Policy Act, the

Urban Mass Transportation Assistance Act of 1970, and the

Public Utilities Regulatory Policies Act of 1978. MTA Pet. pp.

20-24. MEUA’s response that these later statutes cannot be

considered to have “repealed by implication” any portion of the

NRA (MEUA Br. pp. 6-7) completely misses the point. MTA

8. See Letter Agreement, October 24, 1983, “So Ordered” and filed

October 28, 1983, PASNY v. FERC, 743 F.2d 93 (2d Cir. 1984).

6

has not and does not urge “repeai by implication;” on the con-

trary, it urges that the NRA and the subsequent environmental

acts referred to above be read together, and that the Congres-

sional purpose behind each of the acts be harmonized. See, e.g.,

Grindstone Butte Project v. Kleppe, 638 F.2d 100 (9th Cir.

1981) (Avoiding conflict between two prior acts and NEPA, and

holding that the Secretary of Interior is not only permitted but is

required to consider environmental issues in carrying out regula-

tory functions under pre-NEPA acts); Hyrup v. Kleppe, 406 F.

Supp. 214 (D. Colo. 1976), aff'd, Nos. 76-1452, 76-1767 (10th

Cir. Nov. 7, 1977) (Recognizing and implementing the court’s

plain duty to read two acts to avoid a conflict between them, and

expressly finding that the “public interest” requirement in an

earlier statute included such restrictions as might be necessary for

the protection of the environment as outlined in the later acts).

As their ultimate answer, the parties to this case have and

continue to argue that the MTA is not in the correct forum and

that it should petition Congress, not the Courts, to achieve its

desired result. See MMWEC/CMEEC Br. p. 6; N.J. Br. pp. 3-

4. Wedo not agree that we are not entitled to judicial relief from

administrative and judicial error. In their most recent repetition

of the “go to the Congress” suggestion, MMWEC/CMEEC rely

on FPC v. Texaco Inc., 417 U.S. 380 (1974), a case that is clearly

distinguishable. In the Texaco case, Congress had attempted

after the passage of the Natural Gas Act to exempt small produc-

ers from that Ac , but that exempting legislation had been vetoed

and Congress had failed to override the veto. Given that legisla-

tive history, this Court was understandably reluctant to “insert

itself into the debate.” 417 U.S. at 400-401. That is not at all the

case here. There is no reason why this Court should not apply the

principles underlying the NRA and subsequent legislation, along

with the plain meaning of the NRA, to obtain a sensible reading

of “public bodies.”

J

CONCLUSION

For the foregoing reasons, as well as those which have been

urged in the petition for certiorari, the petitioner’s request should

be granted.

Dated: February 3, 1987

Respectfully submitted,

RENEE SCHWARTZ

Counsel of Record

EZ1IO0 SCALDAFERRI

BOTEIN HAYS & SKLAR

200 Park Avenue

New York, New York 10166

(212) 867-5500