# Brief on be half of petition for a writ of certiorari — Ashwander v. TVA > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_0296%3A08 ## Record - **Collection:** Supreme Court brief - **Document type:** Brief on be half of petition for a writ of certiorari - **Published:** January 1, 1936 - **Citation:** 297 U.S. 288 ## Text FILE COPY ~ Supreme Court of the United States. --— f OCTOBER TERM, 1935, no 4.03, ° 404 GEORGE ASHWANDER. et al., P Petitioners, VS. TENNESSEE VALLEY AUTHORITY et al., Respondents. BRIEF IN SUPPORT OF PETITION FOR WRITS OF CERTIORARI. — —--— 2 ~_— * FORNEY JOHNSTON, Attorney for Petitioners. St. Lovis Law PaintinG Co., 415 North Eighth Street. CE ntral 4477. 3 FR SUBJECT, INDEX. Page Opinions Below ........... ans erence as piiuaun poebendedee 1 I, ke ee aweceeveniess ieee eunue , PAE ee oo eee as oa 2 Censtitutidn and Statutes.......... Peete... 8 FR ey OT AGE ess 2 I aS a de cuivewkuedo us ven waeecunwae Pree re Pore ‘ahiseeuune 3 Propositions and Principal Authorities: : (1) Operation of proprietary business in competition with citizens ‘not a legitimate function of the federal government......... 3 (2) Regulation of local utilities and promotion of local social ob- jectives not functions of the federal government............. 5 (3) Principle of state-business tax cases applies................. ¥ | (4) Distinction between private agencies used by government and direct federal operation MMS aaa st RRO ERR a A ee’ one bee aes 9 (5) The desire for revenue does not authorize, federal business.. 10 (6) Manufacture and sale of electricity not a federal function.... 10 (7) The Property Clause of the Constitution does not authorize rr re ee ee ee 11 (8) Dominant objective beyond fe power renders Act uncon- SURCRIORE 6 oioi6 ois os cecnccvme ieee Gp ec ccecccesccccces 14 .(9) Circuit Court of Appeals misapplied Supreme Court decisions with respect to dams on navigable waters................... 17 (10) TVA Act and program unconstitutional in fundamental re- hak ow ace oct a wae woo 6 aru bled e'6 ko bie mca wo a eae oe « wee 20 (11) TVA Act delegates arbitrary discretion to destroy private ve utilities by competition....... ceekisewendudséaceu teen bunnies 23 (12) Declaratory Relief ............ CPP E TIT C TT ETE Eee TCC eer Tere «25 CASES CITED. American Trust & Savings Bank v. Federal Reserve Bank, 256 U. S. ; ei a cag ln er a aaah ra a FS 24. Gripes Vv, Calitarmin, SES U. G. GBB... 5 cc ccccccccccccecccvccccceces 19 ' Arkansag-Missouri Power Co. v. City of Kennett (U. S. C. C. A, 8th, a Pn cctueeee ise nee re eee bodice oé eave oh daheocaen 25, 26 Ashwander .v. Tennessee Valley Authority, 8 Fed. Supp. 893, 9 Fed. EE URS ade Ne nee ces deueauekeeneresus bvens bees vuaveves ves Bed, 4 Bailey v. Drexel Furniture Co., 259 U. S. 20 (1922). RO er re 15 Chastleton Corp. v. Sinclair, 264 U. S. 543 (1924)................... 15 Child Labor Tax Case, 259 U. thinset Ree ee lead vitineess wand cakes 4 City of Campbell v. Ark.-Miss. Pow. Co., 55 F. “e 560; Et saeeien. 26 Clallam County v. Spruce Corporation, 263 ee Ws oeedeckenanece 4, 5,8 | Detroit International Bridge Co, v. Appeal Board, 79 Adv. Op. 337... 13 Se I, UD le Me Wl oo ie one tnc ere ceedersecrterececcens eo 16 Employers Liability Cases, 207 U. S. 463 (1908)................. ose 4 ' First National Bank v. Fellows, 244 U. S. 415.....¢........ savanaeierats 9 Frost v. Corp. Comm. of Ohio, 278 U. S. 615....... ccc cc cece ccc eee 26 . Green v. Frazier, 253 U. S. 233................005- FES 7 Hammer v. Dagenhart, 247-U. S. 251........... Re oe 4 ras W. rer, Se Be, OL BP, Gm. BOE... ow ccc cicecenccss 7 Henderson Bridge Co. v. Kentucky, 166 U.-S. 150................... 13 ee PO nn os cu cas cere e cies d awicwice _ —19— . The State of West Virginia has asserted like rights. United States v. West Virginia, 79 L. ed. 84%. The rights of the State of Arizona to its equitable share of those waters at Boulder Dam not necessary to be dis- patched for navigation and flood-control have been rec- ognized. They have not, as erroneously assumed by the Cireuit Court of Appeals, been foreclosed in favor of the corsmercial manufacture of power by the United States or its assigns. The Boulder Dam Case (Arizona v. Cali- fornia, 283 U. S. 423) suggested no such result ; nor did United States v. Arizona, 79 1. ed, Adv. 681, 55 Sup. Ct. 666. The State- of New York has from the outset asserted proprietorship in surplus waters not required to be manip- ‘ulated for improvemént of navigation; and the rights of that State have been tacitly recognized by the Administra- tion and the House of Representatives.t This is not a case where one citizen is relying upon unauthorized diversion of anofher’s property or right. It so happens that the Alabama Power Company owns the Wheeler Dam site (Decree, Section 3, 1-383), but that point is not material or decisive. Whether the govern- ment owns a proprietary right or not, in coal or water, that right can not be made the basis of a permanent manufacturing business to produce a commodity for com- ‘mercial sale by the government throughout state domain. +(H. J. Res. 157, 73rd Cong., Ist Sess., passed without amendment « April 26, 1933, Cong. Rec., p. 2441; Report No. 49, April 20, 1933; Joint Memorandum, U. 8. Engineers and New York Power Authority, Feb- ruary 7, 1933.) : AL a . (10) .. The TV A program is in ‘derogation of Neiman characteristics of the federal government: and limitations | upon, the power of Congress. . . “ os cececiniltins - ¢ Ld ¢ ‘The — Valley Authority’ Act is unconstitutional | ‘in relation to the power program and; by reason of inter: — dependence of its arts, in its entirety. € dar veentens of the Tennessee Valley Authority Act (August, 1935) emphasizes the invalidity of the program and transactions involved on this record and the invaligity’ of the Act as amended. ( These captions for brevity may be ‘discussed jointly. The Act and program constitute a phenomenon without ~ parallel in the history of the government. The Message of the President requesting. the creation of the “Tennessee Valley-- huthesity* § akes plain that the conception was to give a board oft hree men‘discretion to commit the government permanently and irretrievably to a region- wide collectivist enterprise, legislative. both in ‘the con- ~ ception delegated and in detail. The necessity for condensing this statement makes it possible merely to schedule the result. a ; _ The functions proposed are essentially non-govern- mental and inconsistent with the theory of the Constitu- tion and the characteristics of the federal government *Exhibit 2 to Bill of Compaint, I-106. — )po A cqntinuing utility servitude, subjecting the federal gov- ernment to the continuing duty to supply without inter- tuption servicecto every citizen, whether wholesale or re- tail, enforced ‘by contract, involving the reading of meters, ( . selling applianees,- repairing service, engaging in promo- > tion, and cluttering the processes’ of federal legislation and administration with the details, is alien to the theory of the Americap/ government. There is no express power _ to support it. Any implication of authority ‘to so remark- .” _ . able an end is opposed by the nature haves functions of the government. | | Any such servitude constitutes on ite ens an interfor- ence with the functions of the national government. The theory .on Which. immunity to suit is based, subject to suspension in the interest of justice where governmenta | functions unavoidably result in injury, is ‘directly opposgd to the exposure of the gov ernment to roytine commercial litigation. i The permanent commitment of the government to any ¢ such program is in derogation of the legislative power, of the power And duty to be free to dispose of government property, of the duty to raise revenue under the tax powers where the citizen is protected by the provisions and restraints of the Constitution, rather than by com- ‘mercial monopoly and unregulated engrossing of utility. service, directed by three ‘arbitrary directors whose statu- tory test of fealty to the plan (Act, See. 2- h) is itself vio- lative of Art. IV, Cl. 2 of the Constitution. 9) The Act delegates to TVA unlimited discretion as to: (1) The determination of the power program, its loca- tion, conduct, the selection of the areas in which and the Sa) soe a > - a bi a Rane fem Oo et orem me sm Tene oe oN cecum 99 rd | extent ta which its utility operation, domination and con- trol, its regulation of rates, its promotion of publigown- * ership, may . be exercised; the utilities it may single ont funds shall be invested inj extension of the program out of United Sfates bonds and ogt of net revenue or exist-: ing.appropriations; the detetmination of the question of utility relationship between the government and the States and municipalities, and. like questions of grave legislative ich all being determined at will by TVA. “ (2) The extent to which TVA shall (as in the case pro- _ for competitive exclusion; the extent to which federal © posed as to the seventeen* municipal defendants) finance... distributing systems without pecuniary liability on the municipality, supply with power, dominate and control rates, accounts, service regulations and revenue, and .Te- / f | | _ (3) The discretion’ ta commit the government to 20-30_ and 50 year actionable upply contracts, thus effectively freezing: the policy, the property and the-plants of the government against withdrawal or repeal,.except on mak- ing compensation. | ) (4) The discretion to depart from the recommendations of the Corps of. Engineers as to depth of navigation, loca- tion;and type of navigation dams, and of storage dams; whether and to what extent hydro-electric emplacements should be provided and, if provided, whether to equip them with commercial units and put them in business in ~ competition with existing utilities; whether and to what ent steani-electric units shall be built or electricity purchased in the market for resale. quire the resulting systems to be operated ‘for account of | the government. “Sr % —23— . The Tennessee Valley Authority Act is invalid in respect to its provisions authorizing competitive manufacture and distribution of electricity i in that, as construed and applied by TVA, it purports to delegate arbitrary discretion to so” ~\ TVA to single out‘tue Alabama Power Company or any other utility for competitive destructiof, for arbitrary and oppressive action. - ~ As construed and apelin’ by TVA, the Act ponstitutes a letter of marque authorizy VA to meke war on utili- ties serving the public wi transmission distance of any source of electricity. Althotigh the rate schedules in force with the Alabama Power Company were ‘shown on this record to have been acknowledged to be reasonable by - Tennessee Valley Authority and by it stipulated for ex- tension into the State of Tennessee by Tennessee Electric Power Company, the record shows systematic abuse and incitation. of the public in the area by TVA against utili- ties. Representative illustrations proven on this record . are: (II-639; 1-165; Fng. No. 117, II-1078). The Act vests TVA with exclusive contréi ovet the power plants at Muscle Shoals and Wilson Dam and at all ~ future plants and properties (See. 7-a). Section 10 author- izes distribution of this power at the sole discretion of TVA. Section 11 declares a policy of equitable distribu- tion in the area within transmission distance; -but the ree- ord shows that TVA follows no plan or program except an. arbitrary determination to entrench as comprehensively as _ possible this permanent network. In ‘the course of that. ° procedure it has singled out the Alabama Power Com- pany for competitive attrition of its seventeen municipal distribution systems, after taking ani option upon them at 60% of the replacement value stipulated in the agreement of January 4, 1934. Be. ae ‘The power program as announced ‘and as administered is conspicuously arbitrary and inequitable. Pravisions urged by. the House requiring judicial con- | | demnation of systems marked out for destruction, both in the original Act and in the Amendment, were eliminated and the principle of TVA discretion left without condition.. The inatguration and regulation of utility service is a legislative function. The death sentence upon utilities in- herent in the Act-as construed and administered by TVA brings the Act and its administration within the principle of Uo Wo v. Hopkins, 118 U. S. 356.” The Fifth Amend- ment is plainly violated by the prscedure disclosed by this record. That procedure faces all utilities in the area. y This is not a case where the government is offering ” commodities for sale’ at the point of possession or man- ‘ ufacture on public domain, viz., ‘at the steam plant or dam. This is a case where TVA is given arbitrary power to erect a transmission line into any utility area it selects, with no standard or instruction: in short, the full power of Con- gress and’ the discretion of private enterprise as to a per-. ‘manent policy from which there is no practicable retreat. TVA is accountable not even to the remote political ‘con- ’ trol of the people. ‘The determination of policy by TVA is final. That means arbitrary three-man, ‘corporate domi- nation, as fatal when it concentrates on seventeen munici- pal areas as the concentration of checks in American Trust & Savings Bank v. Federal Reserve Bank, 256 U. 8. 359. No such arbitrary power and discretion can be justified by an administrative agency of the federal government. - The circumstances of unfair advantage, use of federal ‘resources, and of public incitation to force a non-federal result are tantamount not merely to competition but to a taking without. compensation in violation of the Fifth Amendment, as plainly as was involved in International — ‘Paper Co. v. Wnitea States, 282 U. S. 399, or attempted '. jn violation of the Fourteenth Amendment, in Penna. ae ing Co. v. Mahon, supra. It is respectfully submitted that analvéls of this record will disclose systematic administrative procedure’ without precedent for arbitrary conduct in suppost of the. most ‘ ominous départure of the federal government undertaken in its history. If these powers exist, it is increditite that they could lie dormant and unsuspected from 1787 until ‘> Muscle Shoals Acts of 1928 and -1930, which failed of executive approval, ripened into the program of federal government by corporation, with unlimited power and discretion, ac- complished by the Tennessee Valley Authority Act of.1933.’ _ (12) Declaratory Relief. The. scope of this brief will not permit expianation of petitioners’ ‘right to declaratory decree in this controversy . (deferred or pretermitted by the District Court, IT-1191, No. 27) to protect. the corporation against the obvious al- ternatives confrontimg it in‘the shifting by TVA of the | . means of making’: effective its utility competition, either .. directly or through active and continuing employment and . control of federal funds, agencies’ and investments, which, . by reason of their controlled and continuing impact = aj * them justiciable and distinguishable from Massachusetts, _ Mellon, 262 U. S. 447, and Arkansas-Missouri Power Co. City of Kennett (U. 8. C. C. A.-8th, August 15, 1935). ’ However debatable may be considered the power of Con- -gress to appropriate moneys for non-federal ‘ends, no one " supposes that under appropriate challenge the federal gov- ernment can itself continue to execute and administer the . anh t’ o ‘ing static or accomplished in that situation. It is working ‘and continuing, in aid and furtherance of illegal, competi- ‘tive, proprietary operations by thé federal government, in privity with and controlled by TVA and ae actionable “under the principle of : ‘ > got er ee . ») f ; non-federal objective (such as a no- -recourse municipal distributing plant, financed, dominated, ‘controlled and op- erated for the benefit of the Government). There i is noth- (a), Frost v. Corp. Comm. of Okla., 278 U.S. 515; ArkansasMissouri° Power Co. v. City of Ken- nett, supra; City of Campbell v. Ark. Miss: Poss. Co., & P. (2d) 560; Et passim; (b) Marbury v. Madison, 4 Wheat. 423; _, Texas ¢ N. O. R. Co. v. Brotherhood, 281 U. s, 548, 569. , "Respee fully submitted, Pa y \ _. .FORNEY JOHNSTON, Counsel for Petitioners. a ‘8 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_0296%3A08. Public record. Not legal advice.