Petition for a Writ of Certiorari and Brief in Support Thereof — Grand River Dam Authority v. Grand-Hydro

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SUPREME COURT OF THE UNITED STATES -

OCTOBER TERM, 1947

a

GRAND RIVER DAM AUTHORITY, A PUBLIC COR-

PORATION,

Petitioner, :

vs.

=

“GRAND. HYDRO, A Private Convonation,

Poe

a

PETITION FOR A WRIT OF CERTIORARI TO THE

SUPREME COURT OF THE STATE OF a :

AND BRIEF be SUPPORT THEREOF.

Quince B. Boypstuy,

Detmas E. Martin,”

Rosert Leander Davipson,

‘y Counsel for Petitioner.

ge .

Respondent

INDEX :

cee SuBseEct Inpex’.

, ® a) , ;

- Petition for writ of cattiocart

Summary statement of the eibbar invelved

A Statement of points relied upon by petitioner. .

_ Grounds for believing that the questions pre-

sented are stibstantial and that the writ ap-

plied for.should be granted.

~ «Br ief in support of petition

Opinion below... 2...

Jurisdiction——... 2... . wes

"Specification ‘of errors eae eee sea droae

Argument _.... x a he ye

Arid States doctrine of water rights pre-.

’ vails in Oklahoma. ..... ptt ine arth rel ores

Applicable Federal.laws..00.4 0000.00... eS

Adaptability for dam site use cee be con-

sidered in fixing just compensation. .

Section 27—Federal Power Act......°....

* > Seetion 10(¢)—Federal Power Act...

i Appandix A—Opinion of Supremé Court of Oklahoma,

NO Fey ee ee te eee

Appendix B—Opinion of Supr eme Cour t of Oklahoma,

case N 0. reel

OB MD Hi te SO ee) a eee SA ee eg a PSR Cee be ors Cae We

Tap OF Cases Hives

606.

3 Alabama ‘Power Co. v. Smith, 299 Ala, 105, 155 So.

601

ie i a ek a 7 oe ar Oh ae ee a ey cae me ie

Avian v. S Caliacdia: 283 U, 8. 423, 76 L. Ed.-1154

Belden vy. Chase, 150 U. S..674.*

Bellows. Falls Hydro-ele etric "Corp. | petition of, 47

Atl. (2d) 409.

‘Alabama Power Co. v. Gulf Power Co., 283 Ped. :

esa oe . ay INDEX

| : : ai

Page»

a Board of Counts Comsiees. v. Smith, 47 Okla, 184, 14%

-. Pac. 11) ..; 26.

Ceirtral Pacific Railroad Co 0. V. , Pearson, 35 ( ‘al. 247 «6-14, 34

Claflin v. Houseman, 93 U;S. 130, 23 L. Ed. 833 26

Continental Land v. United States, 88 I. (2d) 104 17, 34°

Corrigan Transit Co. v. Sanitary District of ¢ ‘hicago,

137 Fed. 851... .. aie - 15, 28,37

Creswill v.. Grand Lodge, 295 U. S. 246; 56 L. Kad. aa

ON ee ee a te 32

First Iowa Hydro-Electric Cooperative v. Federal ©

Power viata 328 U. S. .152, ad L. Ed. 1143,

13, 14, 15, 16, 17, 19, 20

‘Garvet Moore- Mevoied Co., 317 U. 8.239. -..- 19°

Georgia Power Co. v. Federal Powe rCommn., 152 F. |

Pe fs es ks dey 20s 32

~-.Grand- Hydro v. Grand River Dam’ Authority, 192

Okla. 693, 139 Pv (2d) 798 |. 3,8, 14, 17, 34

Grand River Dam Aainory: v: oe 29 Fed. Supp. :

a ALE Runt area cat crt he a re os 4G, 20,20, 33

‘Great Northern v. Washington, 300 U.S. 154, 81 L. :

Kd. ‘HT3 - Sse ay a Rawat as een tape aes Aree. ee acd oie! 31

‘Hines v. Lowrey, 305 U.S. 85, 83 L. Ed. 56 re - - 26

Humpieh’ s Trustees v. Louisville Gas and Electric

- Co., 269 WO se eee | S.-i

( Ninos Steel Co,v. B.&: O. R. Co. , 320 U. §..508 19

Kansas City Southern y. VAC. HH, Albers Commn. :

Co., 223 U. S. 573,56. Ed.556 ea

Lae Rapid. Transit R.. R. Co. v. City of- Law-

ton, 31 Okla, 458,122 P.212 | 3, 14, 34

_ Leo Feist, In¢., v. Young, 138 F. (2d) 972 26:

Lousville Hydroelectric Co. v. Coburn, ‘ 270 Ky. 631, |

110 S. W, (2d). 445 15, 36

’ Niagara Falls Power Co. v. Fede ral Powe yr Commn.;

137 F:, (2d) 787 : \ 13, 14, 15, 33, 35

Norris v. Alabama, 294 U.S. 587, 79 L. Ed: 1074 — .. 31

- Northern Pac. Ry. vy. North Dakota, 236 U, S.565.1.: - 22

Oklahoma, ex rel. Phillips y. Guy F. Atkinson €o.,

313 U.S. 508, 85.L. Ed. 1487 13, 15, 16, 32

Olson v. United States, 292 U. 8.246, 78 L. Ea. |

7 ain eemect. eee 14,17

e ‘

. nm ¥

<

‘INDEX ae

Sea are j te : Pass\.

Olson v. United States, 67 F. (2d) 24. 14, 17, 34 ‘

Pennsylv ~— Water ind Power Co.n. Federal Power

*Commn.,.123 F. (2d) 155) ~-** 4BBRS

Radio medica WOW; Ine., v. Johnson, 326 U.S. 120 19

| Santtary District. of Chicago v. United States, 266

~U.S.. 405, 69 L: Ed. 352 13, 16, 19,32

Sola Electric Co. v. Jefferson Electric Co., 317 UL S ees

_ 173,87 L. Ed. 165 | amie

State v . Nolegs, 40 Okla. 479, 139 Pace. 943° ree 26

United States v..Appalachian Electric Power Co., ay

107 F. (2d) 769 os: RIO

United States v. Appalachian Electric Power (Co., 311. :

, U.S. 377, 85 L. Ed.243 | | 13, 16, 19, 26, 32 |

U nited States v. Boston C. Oe BP Fa Canal Co., 271: -° =>.

Fed. 877 ... ».' 14; 34 . ;

United States v. Bre we ver-Elliot! Oil Gus Co., 249 |

~ Fed. 609 | rs a

United States v.C handler- Dunbar W ‘ate r Power Co...

229 U.S. 53, 57 L. Ed. 1063... . ..... ar - 14,17, 34

United States v. Mackey; 214 Fed. 137 eee 16, 26

United “gigs v. Miller, 317 U. S. 369, a4 L. Ed. 336,

47 ALR. 56 .::... 37

d'nited States v. Pink. 315 U.S 5. 203, 86 L. Ka. 796 31

United. States vRio Grande Dem ‘and Irrigation Co.,

174 U.S. 690, 43.L. Ed. 1136 ~ 13, 1619, 26, 32 "

‘Wisconsin v. Illinois, 278 U. S. 867, 73 i Ed. 423,

13, 16, 19, 32°

Wisconsin Public Service Corp. \ . Federal Power

Commn.; 147 F. (2d) 743 : 1:3, 15, 33, 35

\ i ° -

SraTuTEs Cirep

_ Act of March 3; 1899 (30 Siat, ees. Se

Act of August 18, 1941 (55 Stat. 638, 645) 2. 27, 30

Act of Oklahoma Legislature (S. L. 19335, Art IV, Ch. |

70; 82 O. S.A. $$ 861-881) ~~ | ’ ere

Acts.of Regular Session of Eleventh Legislature of °

Oklahoma, Cap. 70, asamended = 11:

a

7

» . ‘a e

iv | . | INDEX’. im

| ei Orne i ais |

Constitution ofthe United States: ” Page

Article I, See. & Clause 30. .. # WN,.12,-13, 5

“Article I, Sec. 8, Clause 18. | - 1P, 12, 13, e

Article V1, Clause 2 ne -. 35,14

Federal Water Power Act.of June. 10, 1920,-41 Stat.

1063, as amended by Act of August 26, 1935, 49 Stat.

t. we me Te Meee et 13, lo, 16,17, 24

Flood Control. Act of June 22, 1936 (49 Stat. 1570, ©

A RE oe ES ce 30

Flood Control Act of June 28, 1938, 32 Stat. 12 15,

Eads ‘ Fenrir

Judicial Code, See. 237, as sumendea. a 18, 19, 22.

Revised—hLaws of Oklahoma 1910, Chap... 40, as ,

amended ........-— |

' Rivers and Harbors Act- ge: January 2, 1927 (44

Stat. 1010, 1015) ..... eee . 16, 30

Rivers and Harbors Act.of deceit 3, 1935 (49 Stat. A, Ook

_> 40) SS ni SORT 30

Riv ers and athens Act of August 18,. 1941 (55 Stat.

en Gee bas see 16

Water Code of State of Oklahoma (8. + 1905, p.

275), as amended SO See pits Pe aaa giiss eee 3

Orner AvutrHority Crrep

- House Decnment No. 107, ‘76th Congress First Ses- Pe egbe

sion SD) Se eran shee TR ~ 10, hg 27 , 30°

5 ag “

ee]

SUPREME COURT OF THE: UNITED: statis |

OCTOBER: TERM, 1947

oa,

| oe Rages No. 379°

| GRAND RIV ER DAM ‘AUTHORITY, : PUBLIC COR-

PORATION, ae |

aed : : Petitioner,

spas aad HYDRO, A PRIVATE. Conrozanion,

Respondent

- PETITION Hon a: were OF CERTIORARI 1 REQUIR.

ING THE SUPREME COURT OF THE STATE OF

OKLAHOMA TO CERTIFY TO THE SUPREME

COURT OF THE UNITED STATES FOR ITS REVIEW

AND DETERMINATION THE CASE OF GRAND

RIVER DAM AUTHORITY, A PUBLIC CORPORA-

. TION, PLAINTIFF IN ERROR, v. GRAND-HYDRO,———

A PRIVATE CORPORATION, . DEFENDANT: IN |

ERROR, No. 32,399, ON THE DOCKET OF THE STATE

———— couRT.

~ To the Wenbrable Fred M. Vinson, Chief Justice of the ;

—~< United. States, and Associate Justices of the Supreme

Court of the U nited States: .

‘Your petitioner respectfully seta.

pas

Summary Statement of the Matter Involved

This is ‘a condemnation proceeding instituted by peti-

tioner on February 17, 1939, in the District Court of Mayes:

1)

County, Oklahoma, to atquire from the respondent the fee

simple title to 1462.48 acres of land for use in. connection

with the construction, maintenance and operation of a flood

control and hydroelectric project on Grand River in Okla-

homa, known as the Pensacola Project-—362 acres for use

as a dam site, 55 acres as a'site for. an auxiliary spillway,

and the remainder for use as part of the reservoir for said

project. pee ee

The case involves the measure of compensation ton the

taking of respondent’s dam site lands. Ordinarily, the

measure of compensation ‘in: a dondemnation- proceeding

does not involve a Federal question. “In this case, however,

it-dees;-because the: Supreme. Court. of Oklahoma, on the

first appeal—reaflirmed on the second appeal as ‘‘the law

of the case’’—held that the rule for the measure of compen-

fA e

sation established by that Court ‘‘applies only to those’ .:

adaptable uses to which the condemnee or his ordinary

grantee may lawfully place ihe lands.’’ The respondent

could acquire the right to use its lands as a dam site for a

hydroelectric project on Grand River only’ through com- -

' pliance with the Federal Power Act, because the Grand

River is ‘such a stream as, Congress ee jurisdiction o over.

under the Interstate Commerce Clause. -° |

_ Itis not claimed.that the State Supreme Court could not

“have. eliminated’ the Federal question “by -holding that .

respondent was entitled to ‘have its compensation determined

_ on the basis of the adaptability of its dam site lands for dam

site use without liaving the right to place the lands to such. 3

use. The Court did not so rule, but specifi¢ally made the:

existence of: such right a. condition precedent to the con-

sideration of such. actos eth in fixing compensation.

The immediate question. inv< olved: is therefore whether |

the respondent, Grand-Hydro, was entitled. ‘to have the

adaptability of a part of its lands ‘ay a dam and auxiliary

\

ee he OY,

| aH

: spillway site’ for a proposed hydro- electric project con.

‘ sidered in fixing just compensatidn for the taking thereof

_ by petitioner’on January 19, 1940, but the ultimate qués-

- tions upon which the answer to t 1e- immediate question de.

\’ pends are: (1).Did the State of Oklahoma, through its

‘Water Code, or the United States, through the Federal

3 Power Act, have control ovér the use_of—the ‘waters of

» Grand River for the produetion of electric power and

_ energy on the date of taking, and (2) if the United States .

had/ such control, does‘ the Federal Power Act recognize

and preserve the rights of respondent acquired under state °

, laws - and impose upon petitioner the obligation to pay:

a ’ compensation for the taking based. on the sa oobi of

——

= the lands for such purpose. —

e ' Under local law, as declared by the State Supreme Court,

Ye ‘such | adaptability can not be. considered ‘unless Ye’ re-

-—spondent had the lawful right on the date of taking to use |

its ands for such purpose. Grand- Hydro v. Grand River

Dam Authority; 192 Okla. 693, 139 P. (2d). 798; Lawton

Rapid Transit Railmpad Co. v. City ¥ of Law rem 31 Okla. 458,

«122, P) 212; 3 ?

7 Respondent: ‘claimed and asserted (1) that it had such

- lawfui right by virtue of a permit issued to it on August 29,

1931 by competent state authorities under and in accord-

ance with.the Water Code of the State of Oklahoma (S. L.

1905, p. 275, as amended to date ; 82 O,S.A,, sees. 1-104,

and S. L.-1927,.p. 91, as amended ri date; 82 0.S.A.; sees.

'. 481, 482), without complying with the provisions of -the ©

Federal Water Power Act of Juné 10, 1920 (41 Stat. 1063), -

/ as amended by the Federal Power Act of August 26, 1935

(49 Stat. 836), and (2) that. if the Federal Power -Act

* applied, Seétion 27 of the Act recognized and preserv ed the

respondent’s rights. acquired under its state permit, -and

‘Section 10(c) of the Act imposed on petitioner the obliga-

4 Sola ame

tion. to pay oe for the taking bas d ‘Mpon sushi

adaptability.

The petitioner dained and asserted (1) that the state

permit was invalid and conferred. no such right of use be-

cause the state statutes under which it was issued, as ap-

‘plied to’ the. ‘Grand River, are repugnant to the Commerce

Clause of the Federal Constitution (art. I, sec. 8, el. 3), and ;

the Federal -Power Aet enacted by Congress pursuant

thereto, and (2) that it possessed the exclusive right on ~

the date of taking to utilize the waters of-the river at the

Pensacola location by virtue of a license: issued to it by

the Federal Power Comniission on ‘July 26, 1939, effective

as of: January 1, 1939, and (3) that Section. 27. of, dhe Act

does not. recognize or. preserve any rights of the respondent

under its state permit to utilize the waters of the river

for the generation of electric power and energy, and that

Section 10(c) of-the Act does not impose on the petitiotier

_any obligation to pay compensation based upon the adapt-

ability of said lands as a dam and auxiliary spillway site. |

The State Supreme Court, in the judgment sou¥ht to be

-reviewed, has (1) sustained the claim of the respondent

urider State law and denied the claim of the petitioner under

Federal law to use the lancs involved for dain site pur-.

poses; (2) sustained the construction placed by respond-

ent and denied the construction placed by petitioner. upon

Sections 10(c) and 27 of the Federal Power Act, and (3)

allowed the fixing .of just compensation for the taking of

the dam site lands ox the basis of their adaptability for dam

site use. =. ;

The petitioner is a public corporation,, ace by an pet

- of the Oklahoma Legislature (S. L. 1935, Art. IV, Ch. 70;

. 82 0. S. A., Sees. 861-881), as a-consérvation and reclama-

tion district for the purpose of conserving and developing

the forests, water, and hydroelectric power of the State of. ~

<

- a

‘ a 5 .

= a -

Oklahonia, imeluding the control, storage, preservation, and

distribution of the waters of Grand River and its tributaries

for irrigation, power, and other useful purposes. The act

went into effect on July 29, 1935, and granted to the peti-.

tioner, the exclusive right to appropriate the waters. of

Grand River for hydroelectric purposes. _ a

The respondent is a private corporation, iiittorporated on

November 6, 1929, under the laws of the State of Oklahoma

for the purpose of generating and distributing electrie

power and energy (R. 113).

The Commissioners appointed by the court assessed tlie

damages at $281,802.74 (R. 65), and both the petitioner and _

respondent in due time filed demands for jury.trial (R. 72, -

73). <A Jury trial foHowed in November, 1940, which re-

sulted in a verdict for respondént in the sum of $136,250.00,

and a judgment* in accordance. therewith (R. 74). The

respondent prosecuted an appeal to the Supreme Court of

‘Oklahoma and ‘secured a reversal and new trial on the

ground that the trial court had erroneously excluded the

testimony of four. expert witnesses offered by respondent

as to the value of the dam site lands based on their adapt-

ability for dam site purposes (R. 88), 192 Dida: 69: 3, 139 P.-

(2d) 798. |

The second trial came on in April, 1945 And resulted i in a

verdict of $800,000.00 in favort-of-resfondent (R. 629),

‘on which the trial court rendered judgment, including inter-

est on $518,197.26 from January 19, 1940,. at. the rate of.

six per cent per annum. From this jedement the petitioner

prosecuted an appeal to the Supreme Court of Oklahoma.

The cause was affirmed by that Court on May 20, 1947 (R.

670)* and petitioner in due time, on June 17, 1947, applied

- to the Supreme Court for a reconsideration and rehearing .

a : career gg hee

' Appendix “A.” ‘." | Se

- 2 Appendix “B.”

2) aN ees am

3)

(R. 678), whie li was’ @enied by that Court on Jaly 1, 1987,

(R. 707)..

‘The promoters of respondent, ‘in February, 1929, em-

ployed the Fargo Engineering Company of J ackson, Michi: —

" gan, to investigate and make a report on the feasibility of

developing the Grand River for the production of elec-

a

tric power and energy (R. 242, 272, 254). Prior to that time .—

‘they held a permit, of some kind from the State of Okla-

homa for 4 hydro development on Grand River, which

included’ “ee at the Pensacola site (R. 273), but this =

permit hadfapsed and was abandoned (Re 144). The Fargo

“Engineering Company made 4 report of its investigations.

on May 28,° 1929, ineluding its recommerflations *(R: 391,

et seq.). It had previously received, on April 29, 1929, a

geological report on the Pensacola dam site made by Charles

T. Kirk, a geologist of Tulsa, Oklahoma, on April 23, 1929.

(R. 294). These reports were submitted to Mead and

Seastone, consulting engineers of Madison, Wisconsin, ep

_made,a report -to the promoters of respoadent on July 3,

1929 (R. 254). Following receipt of these reports by its —

promoters, the respondent was incorported under the laws

of Oklahoma on Nov ember 6, 1929, and proceeded in the

latter part of 1929 ‘and during 1930 to acquire the lands

involved herein (R. 125).. The depression began in the

latter part of 1929 and lasted several years. The resporid-

ent then directed its engineers to locate another site for its

Dam-No. 1 where a less expensive project could be built’

(R. 282, 283, 288). They located the Tynon. Bluff site, some -

seven miles up-the river from thé Pensacola site, twelve-

miles acoriling to the engineer's testimony (R. 281), and

proc ‘eeded to-drill some thirty odd.test holes on-that site

(R.'308, 312), to see if the fault found-in the vicinity-of ‘the

“Pensacola site extended up to the Tynon Bluff site. The

respondent | then, on July 14, 1931, filed its application with

the state authorities for a a permit to build its pom No. 1 at

¢

as ; 7 , ‘ : : 7 e | |

the Tynon Bluff location, and the application was approved

-*by the Conservation Commission on the 29th. day of | August yee

1931-¢R, 129). ‘This. permit authorized the respondent to

build a fifty foot power dam at the Tynon Bluff site ‘and a

fourteen foot equalizing dam at one of two locations below -

the dam, one of which: locations is above and the other below 3

the'land involved in the Pensacola site (R. 131, 491, et seq.,

-and original Exhibit No. 11), hut provided that ‘the’ re-

‘spondent must complete one-fifth of the construction work |

‘within two ‘years and all of it within four years from

August 29, 1931, and actually apply the waters of the river _

to benefical use within four years from the completion date

- (R. 133). It neverscommericed or completed any part of

the proposed construction work (R. 179), and never engaged

in the business of generating or distributing, power and

energy (R. 178). The Tynon Bluff lands are not involved

in this proceeding. They are included in a parate con-

demnation proceeding in the District Court of Delaware

County, Oklahoma, which has ben he'd in ‘abeyance until

the final determination of this procevding.

"The respondent never complied with any of the prov isions.

_ of the F ederal Power Act. It never filed with the Federal

Power Commission a Declaration of Intention to. construct

its proposed project, or: obtained from the Commijssien a

’ determination that its proposed project: would not affect.

the interests of interstate commerce, It never applied to

. the Commission ‘for a license: to. construct, maintain, and ,

operate its proposed project, or any other project, on Grand

River, and_ never. obtained from the, Commission such a

license (R. 111). | ‘

The petitioner filed, on December 15, 1937, with the Fed-

eral Power Commission, its Declaration of Intentién .to

-construct, maintain, and-operate its hydroelectric project —

on Grand River at the’ Pensacola site. Upon the hearing.

of said declaration, the Commission, on February 11, 1938,

.

8 rs

found and determined that the construction and operation

of said ‘project, as proposed would affect nav igable stage’

of the Arkansas River, a navigable water, of the United

‘States, to whie 1 said Grand River is tribut: ry, and would -

affect the interests of interstate eommeree (R. 485). On

May 3, 1938, the petitioner filed with the ‘Féderal Power

Solamaaaln its application. for a‘license to’ construct its

proposed project at the Pensacola site (R. 104). The Com-

“mission entered an order. on January 27, 1939, finding “and

aS determining that the petitioner’s proposed project was de-. *

sirable and justified in the public interest for the purpose

of ¢ improving or developing the Grand. River, and the Ar-

kansas River, to which it is tributary, for the use or benefit

of interstaté commerce, and authorized’ the issuance of

license therefor (R. 476), and on™ July 26, 1939, the Conr

“niission issued the License to the petitioner, effective front

January 1, 1939, reciting i in the License its determination

that the Grand River is a stream over whicly Congress has

jurisdiction under its authority to regulate Commerce with’

foreign nations and among tlre several states (R. 462).

The petitioner and respondent stipulated on the trial

(R. 2:28) and the Court found under the law (R. 62 I) that

the date of taking was January 19, 1940. ~~

The State Supreme Court, on the first appeal, held. that

adaptability of Jand.for any particul: ar use can not be eon.

sidered in fixing just. compensation in a condemnation.

proceeding, unless the owner, or. his ordinary grantee, has

the lawful righi io*use the land for such purpose and will

do so within a reasonable time, Grand- Hydro v. Grand River |

Dam A uthority, 192 Okla. 693,139 (2d) 798, and adhered to.

und reafiirmed this ruling on the second appeal as ‘‘the law

of the ease’? It held, however, on the first. appeal that

respondent ’s state permit of August 29, 1931, was a per-

petuak franchise which had not been ‘abandoned, had’ not

expired by its own limitation, and had not been terminated

ae .

by judicial decree, ‘and that respondent on the date of

taking had the right under said permit to appropriate the

waters of Grand River for the production of electric power

_ and energy, and to use the dam site lands involved herein

for that purpose, and that hayinge such right under said

permit, the respondent was entitled to have included in

cand as a part of just compensation for the taking of said

lands any special valive. due to their adaptability for dam

site purposes, and that the trial court erred in excluding the

testimony of respondent’s expert witnesses as to value of

_the dam site lands based on their adaptability for dam site .’

use, — | |

» On the second trial of the case, new evidencé was intro-

duced on behalf of the petitioner, including (1) the stipu-

lation that the respondent had never ‘complied with the

‘provisions of the Federal Power Act, and that the re-

spondent did not. hold and had never held @ permit or.

license of any kind. issued by ‘the, Federal Power C ommis-

sion for the construction, maintenance, or operation of a

hydroelectric project on Grand River (R.°111): @) the |

petitioner’s ‘Declaration of Intention to construct, main-

. tain, and operate its proposed project on Grand -River. at

the Pensacola location, the record of thé Federal Power

‘Commission showing the filing of the petitioner’s Declara-

_ tion of Intention, the Order of the Federal Power Commis-

-. sion made thereon, the application of the petitioner for a

license to construct its hydroelectric project at the Pensa-

“cola location, the Order of the Federal Power Commission

entered thereon; and the License issued by the Federal

- Power Commission to the petitioner pursuant to its appli-

cation (R. 456-491), and. (3) the Fargo Engineering Com.

2 pany’s report of May, 28, 1929, used by respondent's ex. }

pert.witnesses as to dam site value as a basis for their testi.

mony, showing’ that respondent's proposed project at: the.

Pensacola site under consideration beforé respondent ap-

c*s

10

plied for its state permit to construct its project at the

Tynon Bluff site, was to. all intentions and purposes the ~

same size as the petitioner’s project licensed by the Federal

Power Commiission under the Federal Power Act (R. 392),

-. although its permit did not cover the Pensacola site, and

. (4) excerpts from. the report of the Army Engineers, known

as House Document No. 107, 76th C ongress, First Session’ ~

(R. 162-177, 445- 455).

The petitioner asserted in the trial court on the prone

trial and in the Supreme Court on the second appeal of this...

case, that thé-Congress of the United States had jurisdic- —

tion over the Grand River in‘Oklahoma under the Commerce

Clatise of the Federal Constitution; that the Congress as-

sumed such jurisdiction upon the passage of the Federal

_ Water Power Act of June 10, 1920; that under said act, as

amended. by the Federal Power Act of August 26, 1935, the

| Federal Power Commission was authorized and empowered

to issue licenses to citizens of the United States, or to any

association of such citizens, or to‘any corporation organized .

under the laws of the United States or any State thereof,

or to any ‘State or municipality for the purpose of

constructing, operating, and_ maintaining @hydroelectric

projects o oh Geass River; that Section 23(b) of the Federal |

Power Act of August 26, 1935, makes it unlawful for the

respondent, for the purpose of developing electric power,

-to eonstruct, maintain, or operate any: project® works on.

Grand River without: complying with the: provisions of the

Federal Power Act, and: that respondent had no’ lawful

right to construct a hydroelectric project on Grand River,

or use its dam site lands for that purpose; without filing

_ with. the Federal Power Commission its Declaration of In-

tention, to construct such project and obtaining from the

Federal Power. Commission (a) a determination that its

propased, project would not affect the interests of interstate

or for eign commerce, or (b) a license for such project under

=f.

1]

and in accordance with.the provisions.of the Federal Power

Act; that under Section 10 of the Act of Congress of March

“3, 1899 (30 Stat. 1151), the respondent is prohibited from

creating any obstruction, not affirmatively authorized hy.

. Congress, to the nav igable capacity of the Arkansas River;

that under Federal law the re’pondent would not have the

lawful right to use its dam site lands for dam site purposes

at the Pensacola site for-a hydroelectric project, and was

prohibited from making such use of said lands, without

affirmative. authorization from the Congress obtained

through compliance with the FederaP Power Act; that the ,

use. of such lands for such purpose without compliance with

the Federal Power Act is specifically declared. under Sec- |

tion 23(b) of said Act to be unlawful ; that respondent’s state .

permit issued.under and pursuant to Chapter 40, Revised’

_ .Laws of Oklahoma 1910, as amended, and Chapter 70 of the .- |

_ Acts passed by the Regular Session of the Eleventh Legis-

lature of Oklahoma, as amended, was invalid and conferred

no rights upon .respondent to construct a ‘hydroelectric

- project on Grand River and use its lands as a dam site for

such preject because said stafe laws were inoperative so

far as the Grand River is concerned and are repugnant to

‘Clauses 3 and 18 of Section 8, Article I, and Clause 2 2 of

Article VI of the Constitution of the United States, and

Section 10 of the Act of Congress of March 3, 1899, 30 Stat. .

1151, and the Federal Water Power Act of June 10, 1920,

41 Stat. 1063, as amended by the Federal Power Act of”

August 26, 1935, 49 Stat. 836; that the. petitioner had the

exclusive right to construct a hydroelectric project on the

Grand River at the Pensacola:site and to appropriate the

waters of said river for the ‘purpose of: producing electric

- power and energy under its license issued by the Federal -

. Power Commission pursuant go the Federal Power Act,

_and that the respondent, not having the lawful right under

Federal law to ‘use its dam site lands for a hy droelectric

me ries oe we

project, was not entitled to have the adaptability of said

lands for such purpose considered in fixing just compensa-

tion for the taking thereof, and that the testimony of its

four expert witnesses as to the value of the dam site lands

based upon their adaptability: for dam site purposes was

_ incompetent and should be excluded from consideration by °

‘the jury. a. |

The applicability of these Federal laws and the inopera-

tiveness of the State laws, and the invalidity of respond-

ent’s State permit, were raised during the proceedings in.

this case.(1) by objection to the valuation testimony of each

“© of the four expert witnesses offered by respondent, and |

exception to the admission thereof in.evidence (R. 321, 345,

361, 379); and (2) by*motion to strike out all the valua-_

tion testimony of each of said four expert witnesses based -

on the adaptability of the dam site lands for dath site use

interposed (a) at the close of respondent’s evidence in chief

(R. 387, et seq.), and (b), at the close of all the evidence

(R. 591), and exception to the ov erruling thereof ; (3) by

request, for. instructions: to.the jury (R. 592-615), and

“exception to the refusal thereof; (4) by objection to the

trial court’ s Instruétion No. 10 (R. 623), and exe eption to

- the - giving thereof ; (5) by motion for new trial .(R. 629)

and exception to the overruting thereof (R. 642): (6) by

assignment of errors in Are Supreme. Court of Oklahoma

~ (R.2), and brief and} oral argument in said Court; (7)

and by -petition for reconsideration and rehearing in ‘the

ne Court m, 678). :

1

mens Points Relied Upon. by Petitioner

1. The Suprem\ Court of ‘Oklahoma has failed, and re-

“fused to apply to the facts estabished in. the evidence appli-.

cable Federal laws, to-wit: Clauses 3 and 18 of Section 8,

%°

\

Sorte" Fore Son.

Article I, and Clause 2 gt Artie le. Vv [ of the ¢ ‘onstitution: of

‘the United States; the hel of Cangress of Marel 3, 1899 (30.

Stat. 1151), and the Fede ral Water Power Act of June 18,

1920°(41 Stat. 1063), as amended by. the Federal Power Net

of August 26; 1935 (49 Stat. 836), and erroneously held that

the respondent had the right under its State permit on the.

date of taking to appropriate the waters of Grand River

for the production of hydroelectric energy, and to use its

dam site lands at the Pensacola site for that purpose with-

out complying with the applicable provisions of the Federal -

Power Act by filing a Declaration of Intention: with the |

Federal’ Power Commission to construct, maintain, and

operate a hydroelectric project on said river, and obtaining

from the Federal Power Commission (a) a ‘determination

that its proposed project would not affect the interests of |

interstate or foreign commerce, or (b) a license for such’

project under and in-‘aecordance with the prov isions of the

Federal Power Act. -U..S. Constitution, Art i Seé. 8, Cls. 3

~ and 18, Art. VI, Cl. 2; Act of Congress of March 3, 1899 (30°.

Stat. 1151); Act of Congress of June 10, 1920 (41 Stat.

-1063); Act of Congress of August 26, 1935 (49 Stat. 836) ;

First Iowa Hydro-Electric Cooperative v.:Federal -Power

Commission; 328 U.S. 152, 90 L. Ed. 1143; Oklahoma, ex

rel. Phillips v. Guy F. Atkinson Co., 313 U: S. 508, 85 L. Ed. .

1487; United States v. Appalachian Electric Power C 0., 311 °

U.S. 877, 85 L. Ed. 243; United States v. Rio Grande ee

and Irrigation Co., 174 U. S. 690 43 L. Ed. 1136; Sanitary.

District of Chicago v. United States, 266 U.S. 405, 69 L; Ed.

352; Wisconsin v. Illinois, 278 U. S. 367, 73 L. Kid. 425;

United States v. Appalachian Electric Power Co., 107 F.,

(2d) 769 (including ‘dissenting opinion of Judge Parker,

p. 798); Georgia Power Co, v. Fedéral Power Commission,

152 F. (2d) 908; Wisconsin Public Service Corp. v. Federal

Power Commission, 147 F. (2d) 743 (certiorari denied June

18, 1945, 89. L. Ed. 1996) ; Niagara Falls Power Co. v. Fed-

3)

i4

~ eral Power C ommission, 137 F. (2d) 787 (certiorari denied

November 22, 1943, 88.L. Ed. 477; rehearing denied Decem-

ber 6, 1943; 88 L. Kd. 478); Pennsylvania Water and Power

‘Co. v. Federal Power Commission, 123 F. (2d) 155 (eertio-

rari denied February 16, 1942, 86 L. Ed. 1205); Petition of —

Bellows Falls Hydroelectric Corp. (Vt.), 47 Atl. (2d) 409.

2. Having: held that-adaptability for dam site use can not

be considered unless respondent had the lawful right to use

its lands for. dam site purposes, the Supreme Court of

Oklahoma erroneously held in its opinion that the re-

'‘spondent is entifled to have the adaptability of its Pensa-

cola dam site lands for use asa dam site'for a hydroelectric

. project considered in fixing the just compensation for the.

taking of said lands without acquiring the right ‘under.

Federal law to construct, maintain, aud operate thereon a

dam, for impoundage of water for nse in-the production of

electric power and energy and to use said‘lands for that

‘purpose. Grand-Hydro v. Grand Rwer Dam: Authority,

_ 192 Okla. 693, 139 P. (2d) 798; Lawton Rapid Transit Rail-

road Co. v. City of Lawton, 31 Okla 458, 122 Pace. 212;

United States v. Chandler-DunbBar W aler Power Co., 229

U. S. 53, 57.L. Ed. 1063; Olson.v. United States; 292. U. 8.

246, 78 L. Ed. 1236: Olson v. United States, 67 F. (2d) 24;

‘Continental Laped Co. v. United States, 88°F. (2d) 104 (cers:

tiorari denied October 11, 1937, 82 L, ed. 552); United

States v. Boston C. C.& N. ¥. Canal Co., 271 Fed. S77:

Central Pacific Railroad Co. v. Pearson, 35 Cat. 247.

3. .The Supreme Court of Oklahoma has erroneously éon-.

_ strued Section 27 of the Federal Power Act (16 U.S. CLA.

- 821) and erroneously held in effect that said section recog-

nizes and preserves the rights of. the respondent under its

‘State permit to appropriate the waters of Grand River for »_

the production of electric power and. energy, and to use

its. dam site lands for that purpose. “First Jowa H ydro-

ee erroneously held tha

eh eee eo oe

Electric Cooperative v. Federat Power Commission, 328

U.S. 152, 90 L. Ed. 1143; Alabama Power €o. ¥. Gulf Power —

Co., 283 Fed. 606; Wisconsin Public Service Corp. v. Fed- —

eral Power Commission, t47 F. (2d) 743 (certiorari denied |

June 18, 1945, 89 L. Ed. 1996); Niagara Falls Power Co. v.

Federal Power Commission, 137 F.. (2d). 787 (certiorari

denied November 22, 1943, 88 L. Ed. 477; rehearing denied

December 6, 1943, 88 L. Ed. 478); Pennsylvania W ater &

Power Co. v. Federal Power Commission, 123 F. “(2d). 155

(certiorari denied February 16, 1942, 86 L. Ed.. 1205). ;

4. The Supreme Court of Oklahoma has erroneously con-.-

strued S-etion 10(c) of the Federal Power Act (16 U.

C. A. 805), and - Pie gi 17 of petitioner’s License, a

said section and article -i - la-—

bility on the _petitioner- to pay th the respondent for its’

Pensacola dam site lands compensation based upon their

adaptability for dam site use. Corrigan. Transit Co. v.

Sanitary District of C hicago, 137 Fed..851; Alabama Power

Co. ¥. Smith, 229 Ala. 105, 155. So: 601, 606; Louisville

_ Hydroelectric Co. v. Coburn, 270 Ky.°631, 110 8. W. (2dy

445, 448; ; Humpich’ s. Trustees v. Louisville Gas and Electric

C'o., 269 Ky. 558, 108 S. W. (2d) 509, D1.

do. The Supreme Court of Oklahoma has erroneously con-

strued Clause 3 of Section 8 of Article I of the Federal

Constitution, and misapplied Clause 18 of said section, and

Clause 2? of Article VI of the Federal Cotistitution, and Acts,

of Congress passed in pursuance thereof, namely, the Act

of Congress of March 3, 1899 (30 Stat. 1151); the Federal

Water Power Act of June 10, 1920 (41 Stat. 1063), and the -

Federal Power Act of August 26, 1935 (49 Stat, 836), and.

erroneously held that the Grand River in Oklahoma i is not

such a stream as Congress has jurisdiction over under its

authority to’ regulate commeree with foreign nations and

among the several States. Oklahoma, ex -rel. Phillips ¥.

A ; ‘.

ee

.

a

16

Guy FP. Atkinzon © b., 313: U.S. 508, 85 L. Ku. 1487: Unite d

States v. Rio Grande Dam and Irrigation C o., 174 U.S. 690,

48-L. Kd. 1136; United: States v. Appalachian Etectrie-

Power Co.. SHES. 377, 85 L. Ed. 243; Grand River Dam —

Authority v. Going, 29 F. Supp. 316;.Sanitary Distrigt of

Chicago v. United States, - U.S. 405, 69 L. Bd. 352; Wis-

—consin v, Illinois, 278 U.S. 367, 73.L. Had. 423; First lowa

Hydro-Electric C oo pe Sa v. Federal Power Commission,

328 U.S. 152, 90 L. Ed. 1143; Georgia Power C OWN. Federal

Power Commission, 152 F. (2d) 908; © nited States v . Appa-

lachian Electric Power Co., W7 F. (2d). 769 (dissenting? -

opinion of Judge Parker, p. 798); Arizona v. California,

__283 U. S_423, 76-L. Ed. “1154; United States v. Brewer-

~ Elliott Oi & Gas Co., 249 Fed, 609; United States v. Mackey,

214 Fed. 137; Satan Document No. 107, 76th Congress,

First’ Session ; Food Control Act of June 28, 1938, 52 Stat.

1215, 1218; Rivers and Harbors Act of August. 18, 1941, 55

- Stat. 638, 645; Federal Water Power Act of June 10, 1920

(41 Stat. 1063), as amended by the Federal Power Act of ‘

August 26, 1935 (49 Stat. 836) ; Findings of Federal Power

Commission. in the matter. of Declaration of Intention of

Grand River Dam Authority, Docket No. DI-141 of date |

February 11, 1938; Order/of Federal Power Commission in

the niatter of Applicat n of Grand. River Dam Authority:

for a License for Preject No. 1494 of date January 27, 1939;

Livense issued to Grand River Dam Authority by Federal

Power Commission for Project No, 1494, under date of

«July 26, 1939, effective January 1, 1939. :

6. The Supreme Court of Oklahoma: has, by its deci jsion,

; wrongfully deprived the petitioner of the benefits of its.

exclusive right granted under Federal law: in its Federal

Power License issued July 26, 1939, effective January 1,

1939, to construct, maintain, and operate’ u hydroelectric

project on ‘Grand River at the Pensacola location, and

erroneously permitted the assessment. of just compensatiog

for the taking of the Pensacola dam site on the theory that.

respondent had the right under its State permit to con-

struct, maiitain, and operate a hydroe lectrie project at said

location, and to use its lands as a dam site for such project

without complying with the provisions of the Federal:

Power ‘Act by filing with the Federal Power Vommis-

“- sion its Declaration of Intention and obtainin from

. said Commission either (a) a “determination Dy the

Federal Power Commission that its ‘proposed, ‘project -

- would: not affect the interests of interstate. or-foreign com-

merece, or (b) a license for -such :project under and in ae-

cordance with the provisions of the Fedofal Power’ Act.

_ Federal, Water Power Act of June 10, 1920-(41 Stat. 1063),

as amended by the Fedefal Power Act of ‘August 26, 1935

(49 Stat. 836); First lowa Hydro-Electric Cooperative v.

Fede ral Power Commission, 328 U.S. 152, 90 L. Ed. 1143;

- United States v. Chandle ¢-Dunbar Water Power Co., 229

7S. 53, 57 L. Bd. 1063; Olsdn v. United a U.S.

24¢, 78 L. Ed. 1236; Olson v. United States, 67 F. (2d) 24; »

Continental Land Co. v. United. States, 88 F, (2d) 104 (eerti-

rari denied October 11, 1937, $2 L. Ed. 552). ,

Grounds for Believing That the Questions Presented Are.

Substantial and That the Writ Applied for Should Be

U nder the. decision of the Supremie Court of Oklahoma

on the. first appeal of this case, reaffirmed } in the judgment _

sought fo be—reviewed, the adaptability of respondent.’s

lands as a dam site for-a hy droelectric project could not

be considered. in fixing’ just compensation: for the taking

thereof unless the respondent -had the lawful right on the

date of taking to use its lands for that purpose. Grand

River” Dam sata v. Grand- Hydro, 192 Okla. 693, 139

—T¥

18

ii

P. (2a) TOR. The respondent axsertod-the right to use its

lands at the Pensacola location for that’ purpose tinder and.

by virtue of its permit issued pursuant to the Water Code.

of the State of Oklahonia | for the Tynon Bluff dain. site,

_ and’ by. reason n thegpof, the right. to.have tlie adaptability. of .

“its lands for dam site use considered in fixing just compen-

sation for their taking by the petitioner. | The petitioner

asserted the exclusive. right under its ligense issued pur- —

_ suant to the Federal Power Act to construct, maintain, and

“operate its hydroelectric power project at the Pensacola

- location on Grand: ‘River.

The Supteme Court of Oklahoma, in the judginent sonst

to be reviewed, holds that the State laws under w hich re-:

‘spondent’s permit was issued are applicable; sustained

the validity of the permit issued | thereunder and allow ed )

compensation for the taking of the dam site lands to be

fixed on the theory that the State laws were applicable ; that.

the permit issued thereunder was valid, and vested in re-

spondent the rightto use its dam site lands for that purpose ,

'.0n the date of taking. It reftised to recognize and denied

the applicability of Federal laws and the petitioner’ $ ex-

: clusive_rights-granted thereunder to construct, maintain, —

and operate its hydroelectric project at the Pensacola loca- .

‘tion on Grand River and held that if the Federal laws were ~

applicable, Section 27 of the. Federal: Power Act (16. —

US.C.A.. 821) recognized and preserved the right of re-,

spondent under, its State permit to appropriate the waters

of Grand. River for the production of electric power and

. energy, and to use its dam site Jands for that purpose, and

that Section 10(c) of that Actand Article 17 of petitioner's

_Litense imposed on petitioner the liability to pay respond-

- ent for its Pensacola dam site lands compensation based

upon their adaptability for dam site use.

The jurisdiction of the. Court is invoked under Section

38t. of. the Judicial Code, as amended (28 U.S.C “A. 344), | |

19.

particularly Section 357 (b) of the Code (28. U.S.C.A.

344(b)). . Under authority oféthis Section of the Judicial,

Code this Court’has granted certiorar! and taken jurisdic-

tion in cases decided by the highest Court of tlie State in-

volving (a) the inter pretation of navigation rules pre- ~

scribed by Federal statute (Belden +. Chase, 150 U.S. 674,

791); (b) the protection of all of the substantial rights of :

the partie® in an action ina State Court for damages under

Section 33 of the Merchant Marine Act and for maintenance ~

and cure (Garrett v: Moore-Mc(" ormick Company, 317 U.S.

239) ; (c) -the construction of clauses of a- bill/of ifine’|

adopted by the Interstate Commerce Commission and’ pre «

« scribed by Congréss for interstate rail shipments (ltinois

Steel Company v.:B. & O. R. Co:, 320.U.S. 508); and (d)

the effect of a license for a radio station issued by fhe Fed-_

eral Communications Commission (Radio Station\W ow,

“'Ine., v. Johnson, 326 U.S. 120). } : . \

It is believed that the wobeisns involved, in this case are

_ substantial Federal questions and ‘justify the granting of

the writ of certiorari applied for under Section 237 of the

a udicial Code, as amended, because (a) the Supreme Court

~of Oklahoma actually and necessarily passed on the Federal —

questions involved sustaining asserted rights of the re-

spondent under State laws and denying asserted rights of

the, petitioner under F ederal laws; (b) the Supreme Court

of /Oklahoma -has misapplied and misconstrued applicable

Féderal laws; (¢) the rulings of the Supreme Court of Okla-—

homa are in conflict with and contrary to the following deci-

sions of this Cotirt: United States v. Rid: Grande Dam and

Irrigation Co., 174 U. S. 690, 43 L. ed. 1136; Sanitary Dis-

trict of Chicago v. United States, 266 U.S. 405, 69 L. ed. 352;

‘Wisconsin v. Illinois, 278 U. S. 367, 73 L. ed. 4239 United ~

States vy. Appalachian Electric Power Co., 311 U. S. 377,

85 L. ed. 243; Oklahoma, ex rel. Phillips v. Guy F. Atkinson -

Co., 313 U.S. 08, 85 L. ed. 1487; and First lowa Hydro-

20

Electric Cooperative vy. Federal Power Commission, 327

U.S. 152,90 L. ed. 1143; (d) its ruling on the effect of Sec-

tion 10(c) of the Federal Power Act is contrary to the hold-

ing of the Supreme‘Court of Alabama in the case of Ald-

~ bama Power Company v. Smith, 229 Ala. 105, 155 S.. 601,

-and of the Court of Appeals of Kentticky in the cast of —

Humpich’s Trustees vy. Loitisville Gas and Electric Co., 269

Ky. 558, 108 $. W. (2d) 509, 511, and Louisville Hydro-

Electric Comptny v. Coburn, 270 Ky. 631, 110 S.QW. (2a).

445, and of the United States Gircait Court of Appeals for -

the Seventh Cireuit in the case of Corrigan Transit Com-

pany v. Sanitary District of Chicago, 137 Fed.. 851, and --

probably contrary to. the view. of this: Court; and (e) the *

“ - decision of the Supreme Court of Oklahoma, if allowed to

stand, might seriously affect .river developments by public

~ and private bodies under licenses from flie Federal Power

Commission _ not only in Oklahoma but threughout thie

United States, and would create a shadow land of difference —

between Federal and State laws in which.a developer, not-

withstanding his license from the Federal Power Commis- ,

sion, W ould ‘proceed at his peril.

WuereroreE, your. petitioner respectfully prays that a

writ of: certiorari issue to the Supreme Court of the State ;

of Oklahoma charging said Court to certify and send this:

Court a full and complete transcript of the record and all \

proceedings of said Supreme Court of (he State of Oklahoma

- had in the case numbered and entitled on its docket ‘‘Grand

River Dam Authority, a public corporation, v. Grand-Hydro,

‘ ‘a private eérporation, No. 32,399’, to the end that this ease:

may be reviewed and determined by this Court as provided

for by the statutes of the United States, and that the judg-

ment of said Supreme Court ‘of. the State‘of Oklahoma be |

_ rev ersed by this Court, and for such relief as to.this Court ”

may seem ee eX pore

\

\

ot

_A certified copy, of the trangript of record in. this ase ,

in the Supreme’ Court of-the State‘of Oklahoma is filed here

with i in egnformity witht Rule No. gi of this C ourt.

Quixce B. Boypstun,. _

. eZ inita, Gituhoua:

DELMAS E. MakrTIN, ;

' Tulsa, Glide.

Ropert LeanveR Davipson,

Tulsa, Oklahoma,

Attorneys for Petitioner...

° ; es 22 : . ie

_ BRIEF IN SUPPORT OF PETITION FOR weit OF

SUIS ae paceraee Rac CERTIORARI

-

- -

.. Opinion of the Court Below

The opinion of the Supreme Court of Oklahoma sotaatit

--to be reviewed has not been officially reported. It was filed

- May 20, 1947 (R2670): A. Petition for Rehe daring was fled

on June 17, 1947 ‘(R. 678), and i by the C ware denied on July

1, 1947 (R. serie a

’ a

Jurisdiction #

The snauid on which the jurisdiction ‘ of the Supreme

Court of the United States is invoked i is that provided by

. Section 237 of the Judicial Code; as amended by the Act of —

’ February 13, 1925, 43 Stat. 936, and the Act of January 31,

1928, 45 Stat. -54e 28 U.S.C.A “344, providing for the issu- .

ance of writ of certiorari by the Supremé Court of the

United States to review a final judgment rendered by the %

. highest court of the State in which a decision could be-had. -

\

, III. . (38 e °

The. natare of the case, the manner in which the Federal ©.

questions were raised, and the pertinent facts, are set forth |

in the «Summary Statement of the Matter Involved”’ ap-

| pearing in thé’ Petition for Writ of Certiorari, and. are a

? adopted by reference as a part of this brief. .

/ ae < : ~> > IV.

Wah ag ; ‘Specification of Errors

. The errors of the Supreme Court of Oklahoma relied upon .—

for reversal of its judgment in this case are set forth in the

93°

Petition for W rit of Cc ixtionéat under “Statement of Points

Relied Upon by Petitione r’? and are adopted by reference

asa a part of this brief. ; . ‘

| aes

_ ARGUMENT

Arid States Bn 2 Water Rights Prevails in Oklahoma

' Under’ the statute law of Oklahoma, water flowing in a

definite stream belongs to the public and a riparian owner

-ean not prevent the natural flow fhereof (60 O.S.A., sec. 60),

and tlre right to put such watér to a beneficial use can be

acquired only through’ compliance with the Water Code.of

the State (82 0.8.A., See: 1, et.seqg.), as amended by pections

2 and 3 of the Act of the Oklahoma Legislature, approved

* Janus ary 27, 1927 (S.L. 1927, p. 91). The respondent applied

for and obteinda its water set to construct, maintain,

and operate its proposed hydroelectric project on’ Grand |

River in Okinhows under” and purauant to these State

statutes.

"Applicable Federal’ Laws ‘

Under -Clause 3 of Section 8, Article I, of the Federal

“‘tnstitution, it is provided that the Congress shall have

_ Power to Regulate Commerce with foreign nations, and

among the several states, and with the Indian tribés, Un-.

der Glause 18 of said section and article of the C onstitu-

tion, the Congress is authorized to make all laws which shall :

be necessary and proper for carrying into execution such ,

pawns, = ens

Under Clause 2 of Article VI of the Federal Constitution

it is provided:

«This Constitution, and the laws of the United States

which shall ‘be made in pursuance thereof, * * * shall

be the supreme law of the land; and the- judges i in ev ery.

“4

: state shall be bountl thereby ainfthing in the: constitu-:

tion or ‘laws of any state to the contrary notwithstand-

ae o

ine, a : a,

+

_ Under authority of Clauses'3 and 18 of Section 8 of.

Article I of the Federal Constitution, the Congress enacted,

the Federal Water Power Act of June 10, 1920 (41 Stat.

1063), and the EF ederal Power Act of Augast ~~ 1935" (49_

Stat 836).

Under Section -£(e) of the Federal Power Act (16

U.S.C.A- 797), the Federal Power ( ommission is authorized

and empowered to issue licenses to citizens of the United

‘ States, or to any association of such citizens, or to any

' corporation organized under the laws of the U nited States

or any state thereof, or to any’state or “municipality for. the

purpose of constructing, operating, and maintaining hydro- °°

. electric projects in any stream or other body of water over

which Congr ess has. jurisdiction under its author ity to reg-

ulate commerce with foreign nations and’ among the several

states, and under Section 23(b) of the Federal Power, Act.

(16 ULS.C.A. 817) it is madeé“unlawful for any such person,

| eorporation, state or mupiicipality, for the purpose-of devel:

‘oping electric power, to construct, operate, or maintain any

project works i in any such stream without applying for and

receiving from the Federal Power tegration license

therefor. k

Sertign?25(b) of the Federal Powe er Act (16 U.S,C.A. 817)

we provides that:

fe: tarp “Tt shall be: unlawful for any, person, state, or munic-

ipality,, for the purpose. of deve loping electric power,

to construct, operate-or maintain any dam, water con-

duit, reservoir, power house, or other works incidental —

thereto-across, alony, or in any_of the navigable waters

of the U nited States, or upon any part of the public

lands or reservations of the United -States (including

the territories), or utilize the surplus water -or water

‘

i ae

o

25

power fromfany Government dam, except under and in

accordance with the terms of a permit or valid existing

right-of-way granted prior to June 10, £920, or a license

granted pursuant to this chapter. Any.‘ person, associa-

tion, corporation). stafe,.or municipality intending to

‘ construct a dam or other project works across, along,

over, or In any stream or part thereof, other than those

defined in this chapter as navigable waters, and pv eB

which Congress. has jurisdiction under.its author ity to

regulate commerce with foreign nations and among the

several states'shall before such construction file declara-

® tion of such intention with the Commission, whereupon.

‘the Commission shall cause immediate investigation of

- such proposed construction to be made, and: if’upon in-

vestigation it shall find that the interests of interstate or

foreign commerce would be affected by such proposed

construction, such person, association, corporation,

state, or municipality shall not construct, maintain, or

operate such dam or other project works until it shall

have applied for and shall have received a license under

the provisions of this chapter. . If the Commission shall

not so find, and if nd-publie lands or reservations are

_ affected, permission is hereby granted to construct such

dam or other project works in such stream upon com.

pliance with state laws.’’

“ : % ; ;

The Congress, in the Federal Power Act, set up and con-

stituted the Federal Power Commission as an administra-

tive agency to determine, as oceasion therefor arose,

whether a particular stream sought to be utilized for power

_ purposes, is such a stream as Congress has. jurisdiction over .

under. the Commerce Clanse, laid down a‘formula to guide

‘the Federal Power ‘omission i in making such determina-

. tion, that is, whetlier or not such use of the stream would

affect the navigable capacity of any navigable waters of the

United States and thereby affect the interests af interstate

‘or foreign commerce, and prohibited the use of such waters

‘for power purposes except in compliance with said act.

ff . ae ae re} Ke

26 | |

The laws of .the United States are laws of the several

states, and just as much binding on citizens and courts

thereof as the state laws are. ( ‘laflia v. Houseman, 93 U.S.

130, 23 L. ed. 833; 838 ; Hines v. Lowrey, 305 U.S: 85,°83 Le

ed. 56. cu |

- When-a Federal statute condemns an act as unlawful, the

extent and nature of the legal consequences of the condem-

nation are Federal questions, the answers to which are con-

_ trolled by Federal law and Federal policy. To the Federal

statute and poliey, conflicting state law and policy must

_ yield. Sola Electric Co. v. Jefferson Electric Co., 317 U.S.

173, 87 L. Ed. 165;.Leo Feist, Inc., v. Young, 138 F (2d) 972.

~ Grand River is Subject to Federal Control

The Grand River in Oklahoma is such a stream as Con:

cress has control over under the Commerce Clause of the

Federal Constitution. It isa non- navigable stream, except

for two miles up the rive# from its mouth; although it might

well be considered navizable under the ruling of the United

States Supreme Court in United States v./ Appalachian

Electric Power Co., 311 U. 8. 377, 85 L. Ed. 243. It is,

however, a principal and immediate tributary to the Arkan-

sas River, which is a navigable water of the United States

all the way up to the mouth of the Grand River. The Court

will take judicial: knowledge. of the fact that the Arkansas

‘River is a navigable water of the United. States up to the |

mouth of Grand River, and that Grand River.is an impor-

- tant ‘as well as the principal tributary of the Arkansas.

Arizona v. California, 283 U.S. 423, 76.L. Ed. 1154; United

States v. Rio Grande Dam and Irrigation Co., 174 U.S. 690,

43 L. Ed. 1136; Grand River Dam Authority.v. Going, 29 me

Supp. 316; United States v. Brewer-Elliott Oil &:Gas ¢

. 249 Fed. 609; U 'nited States v. Mackey, 214 Fed. 137; per

df County Commissioners v. Smith, 47 Okla. 184, 148 Pac.

’

6

07

; sar os

114; State v. Nolegs, 40) Okla. 479, 139 Pace, 945. The ree,

ord in this case is repte te with evidence as to the characte “-

istics of the Grand River, including its drainage urea, the

volume of ‘its flow, both during ordina ry and flood periods,

for many years, which established beyond controversy that —

_ the Grand River in Oklahoma is such a streym as Congress

has jurisdiction over ander the Commerce Clause of the’

Constitution. Army Engineers-Report House Document

No. 107,.76th Congress; First Session (R.'445-455).. Fargo

Engineering Company: 's Report Gh Mos. we

The Pensacola reservoir is one of the reservoirs included

in the general comprehensive plan for flood control and

power development ‘in the Arkansas River. Basin approved

by the 1938 Fload Control Act (R. 452), (52 Stat. 1215,

1218). In addition, the Court will take judicial knowledge

of the fact that Cohgress has approved the construefion by

the Army Engineers of the Markham Ferry and Fort Gib-

son Dams: on ‘Grand River for the dua! purpose of

flood control and power produe tion (50 Stat. 638, 645), and

that the Corps of Kngineers made a survey of Grand River

‘for flood control and power development under authoyity

of Section 1 of the Rivers and Harbors Act of January 21,.

1927, and Section’6 of the Rivers and Harbors Act of ka

gust 30, 19: 35, and made a report to the Secretary of. + ar

on January 4, 19: 39, which in turn was ‘transmitted to Con-

gress by the Seeretary of War on January 12, 1939, which

report-is known as House. Document Ne. 107, 76th Congress,

‘First Session, in which the Army Engineers said:

‘*The Neosho River, known as the Grand River in its

lower reaches, is not generally considered navigable

with the exception of its lower 2 miles. The stream’

‘rises in the roliing hill area in east central Kansas, near

Parkerville (Mile 452), flows southeasterly 297 miles

in Kansas, thence in a southerly direction across the

‘northeast rertion of the State of Oklahoma, a distance

Fg

?

aa 28

of 163 miles, to its junction with the Saunas River

near Fort. Gibson, Oklahoma-(Mile 2). It has i total

length of 460° miles and drains /a’ total area of 12,640

square miles, of whiclhi. 6,285 are in Kansas, 2999 in

- Missouri, 415 in Arkansas, and 2,965 in Oklahomir.*?

(R. 453) : |

and:

.> With the. exception of, its lower 9 rhiles, the Grand -

(Neosho) River is not generally considered a navigable |

stream, nor is there any demand for such development.

* While the opération of the desired power plants could |

. not be expected to’ greatly benefit the present open-’

river navigation conditions on the Arkansas River, the

resulting addition to low-water flows ‘would unques-

tionably improve the year-around navigation condi- —

tions and, in the event that works for a canalized:

Arkansas River should be constructed for navigation

in the future, the regulated flow from a power plant

would be of material: value in providing a necessary

water supply for lockage, -leakage, and evaporation

losses in the eanalized system.’’ (R. 404)

and:

: ‘Valuable benefits from the control of floods of the—

Grand River would acerue along the Arkansas River.

Reduction in the flood flows-of the Arkansas River also —

would be of benefit on the lower Mississippi River.

The proposed Pensacola reservoir is one of the reser-

voirs included in the general comprehensive plan {or

flood control in the Arkansas River Basin approved by

the 1958 i Control Act.’’ - 452)

and:. :

“The Grand (N Jeosho) Rives i is a main contr ibutor: to

- flood flows in the Arkansas River and hence in the lower

. Mississippi River. Phe reduction of its flood flows

would benefit the four States of Oklahoma, Arkansas,

Mississippi, and Louisiana.” (R. 45% 3) :

a

29

ana: portent | es :

“While the plan profiosed by the district engineer |

anakes. no allocation of capacity at any of the three

* sites to the necds of navigation, the regulation of flow

- which the plant insures in time of flood, due to the flood:

control alloc ations, and in time of: low- water, flow, due

to the power allocations, can-be anticipated to insprove .

navigation conditions in the Arkansas River. below.

Such improvement would benefit Oklahoma and Ar-

kansas)since. portions of the river are considered navi-,

gable yu both states; and to a lesser degree’ Mississippi

and Louisiana, on-the navigable Mississippi River be=.

low the mouth of the Arkansas’ *(R. 459).

&

and that: ae

- +s Tne Grand (Neosho) River is one. of the most im-

£X por tant streams in the Arkatisas River Basin, owing to

‘its Targe flood flows, potential power possibilities, and

coritribution to low-water flow in‘the Arkansas River

at the head of the portion generally considered navi-

gable, Since it is interstate in all three’ respects, inter- .

-. est in its development transcends State boundaries and

therefore becomes of national importance. Liaaes ¢ | 2 454)

After linvestigating the Declaration of Intention filed by

Seared 9 the Federal Power Commission determined that

the construction and operation of the Pensacola * project

woukl” affect navigable states of the Arkansas River, a>

navigable water of the United States, to whieh the Grand

River is tributary, and wonld affect the interests of inter-

“tate commerce (Ro486). In its order authorizing the issu-

ance-of petitioner's license, the Commission found: and de-

termined on January 27, 1939 that. the Pensacola project

‘is desirable and: justified in thé public interest for the pur-

© pose of improving or developing the Grand Rivér and the —

Arkansas River, to which it is tributary, for the use or

benefit of interstate commerce.’? (R. 477). In, the license

ae

issued to the petitioner, the Commission recited its deter

mination that the Grand River is a stream over which Con

ogress ‘has jurisdiction under. its authority to. regulate*com.

merce “with foreign nations and among the several states: :

(R. 462)... eee

The U nited States District € ‘ourt for the, Northern Dis.

trict of Oklahoma, in the case of Grand River Dam Author-

ity Vv. Going, 29 Fed. Supp. 316, took judicial knowledge of

‘the fact that the Arkansas River is navigable to the mouth )

of the Grand River; that the Grand River is an important

and principal immediate tributary of the Arkansas Riwer

and held that-the Grand River is such a stream as Con-.

‘gress has jurisdiction over under the Commerce Clause of

the C onstitution. ; . ps

After studies and surveys, ‘authorized by C ongress under

Séction I of the Rivers and. Harbors Act of January 21,,

1927 (44. Stat. 1010, 1015) ; Section 6 of the Rivers and iHar- .

hors Act of August 30, 1935 (49 ‘Stat. 1028,-1048), and Sec--.

tions 6 and 7 of the Flood Control Act of June 22, 1936 (49

Stat. 1570, 1596), Major Genéral J.L. Schley, Chief of En-

gineers, recommended’ that the Peasacola, Matkham Ferry,

and Fort Gibson reservoirs should be constr ucted and oper:

ated by the Federal government as’ one coordinated unit

in the combined interests of flood control and, power devel-

opment ‘(House Document No. 107, 76th Congress, First:

Session, p. 6), and the Congress, thereafter, in the Act, of

August 18, 1941 {55 Stat. 638, 645), authorized” one ap-

proved the construction of said projec ts.

The. Army Engineers have considered, and the C ONLTESS -°

lias enacted legislation on the theory,;that the Grand River

_in Oklahoma is such a stream as Congress has cout rol over:

under the Commerce Clause of the ‘Constitution, and the .

Federal Power (¢ ‘onimission—the administrative agency set

up by Congress to determine whether any :particular stréam

wae wy Sa

sought to he-utitized for power purposes is such a stream

lias d@frmined in’ an appropriate proceeding that the

(Grand River is such a stream and has issued to the peti

tioner, on July 2601939, effective. January 1, Es 9, a license,

“granting the’ petitioner the exclusive right. to _constraet,

maintain, and operate its hydroclect rie prejoct at the Pen-

sacela’ location on Grand River. for a period of fiftys (50)

years,

The right of the respondent. to have: the adaptability. of

its lands as a dam site for a hydroelectric. project consid-

ered in fixing just compensation for their taking depends

upon whether respondent had the1 ‘ight on the date of taking

- to utilize the waters of the triv er and said lands for that

purpose. Such right depends upon the applicability of the

Federal Power, Act*to the Grand Riyer. In- order for re-

spondent’s State permit to have any force‘and effeet, with

respect. to the ¢ rand Riv er, it is necessary for the respond-

ent to file with the Feder at Power Cormission its Declara-

tion of Intention to construct its proposed project and to

obtain from the Commission a determination that its

proposed. project would not affect the interests of inter-

state commerce. If, on the other hand, the Commission .—

should find on its investigation of the Declaration of In- +

tention that the interests of interstate commerce would be -

affected, it ‘would be nécessa ry. for the respondent to make

application to the Commission for a license and to receive

‘from the Commission ‘the license apphed for in order to

acquire any ritht to utilize the waters of the river and its

~ dam site lands for such a project.

This ¢ ‘ourt will review the ey idence which is incorporated

“in the record to determine for itsélf, independently of the

findings of the State Court, the facts on which the Federal

"question involved depends. United States v. Pink, 93 U.S.

~ 203, 86 L. Ed. 796; Great Northern Railway Co. v. W ash-

ington, 300 U.S. 154, 81 L. Ed. 57 3; Norris v. Alabama, 294

32

UL S. O87, 79 L. Kad. iv6; Aner at Kayptian hviti Order

Vv. Michaux, 279°U. S. ODT, e 48 L.. "Bide ag Northirir Prairie ~

i

a :

ied

Rahway Cow: Nwith Dakota, : 2: 65 -E. ASD, 5O LL. dead, ic3ed:

Kansas City Southern Raiiw ay ty ED ¢€: HW. Albers €om-

MISSION ('o, cn 203 U ° S, a3 oer D6 L. Kd. 3 he is Crese - 7; (rrand:

_ Lode Knights of Pythias of Georgia, 225 U. » 246;, nO

L. Ed. to74. Eee . ~ . ;

It ix now settled by decisions of the Supreme Court. of

the United States that Congréss has jurisdiction under the

Conmerce Clause of the Federal Constitution over non-

navigable waters which affect the navigable waters of the

United States for the purpose of protecting fand iimproving —

the navigable capacity of such navigable waters. United

States v. Rio Grande Dam and Irrigation Co. 174 U.S. 690,

43 L. Ed sas Sanitary District. of Olina Vv: United

States. 266 U.S. 405, 69. L. Ed. 352; Wisconsin v. Minnis,

978 U.S. 367,.73 L. Ed. 423; United States v. Appalac lian

_ Electric Pow er Co., 81 -CS--377, 85 bed. 243: Oklahoma,

ex rel, Phillips v. Guy F, Atkinsow Co,, 313.U S. 508, SD LL.

Kd. 1487 ; First Towa Hydro-k ‘lectric Corporation v. Fed-

« ‘ral Power Commeéssion, 328 U. S. 152, 90 4,. Hd. 11433.

Inferior Federal courts, following these deel isions ‘of the °

Supreme Court, hove: held that tha jur isdiction of thie Con-

gress under the Comineree Clause and the jurisdiction of

the Fede ri Power Commision under the Federal Power

Act extends to non-navigable. tributaries ‘of navigable:

witters ‘of the United States. Grand. Ricer Dam “Authority

*, Going, 29 ¥F. Supp, 316; Georgia Power Co, v. Fede ral:

Power Commission, 152 F. (2d) 908; 0 nited States v. “Ap- |

palachian Electr Power Co., 107 Fy (2d) :769, 795,-and

dissenting opinion of Judge Parker, 798,

It has been held by the United States -Cireuit Court of

Appeals in three different circuits that the Federal Pow er

Act applies to Projects. located i in streams ov er which Con-

. o, : Bat

SS vross hos. _jirisdiction under the (' omme ree ‘lause “ hich

were Gonstrneted unde authority of State TAW Ss tefore the.

Federal Power Act was enacted, and that such projects can

het be maintained or operated without a license trom the

Federal Power. Comission, Wisconsin Publié Servic

| Corp. \ a Fede ral Power C CARIMESSTON, 147 FF. (2d) 745 (cer:

tiprari on June 18, 1945, 89 L. Bd. 1996) ; ; Niagara Falls

Power Co. v. Federal Power Commission, 137 KF. (2d) 787

(certiorari pet November 22, 1943, 88 L. Kd. 477, rehear-

ing denied Deceniber. 6,.1943, 88 LL. Ed. 478: Pennsylvania

. ater d Power C 0. Ve Federal Power Commission, 123 F,

(2d) 155 (certiorari ‘denied February 16, 1942, 86 LL. Ed.

1205). = :

It is indisputable under the record in this case that Con-

Sgress has assumed cand preempted jurisdiction | éver the -

Grand River through the passage of ‘the Federal Water

Power Act of June 10, 1920, as amended by the Federal

‘Power Act of August 26, 1935, enacted under its authority

to rezulate interstate cou. merce; that no riparian owner

‘could‘acquire the right to utilize the waters of the river or

lands riparian thereon forthe ‘production of electric power

and energy without complying with’ the provisions of the

Federal Power Act. The respondent never complied with |

> “the provisions of said Act or acquired under Federal law

such -right of: use. - On the othe } hand, the petitioner did

comply with the provisions of the Federal Power Act and

‘obtained from the Commission a’ Neense to construct, ilin-

tain, and operate its project, at the Pensacola location on

Grand River, effective January 1, 1959. The date of taking

~was January 19, 1940, At. that time, the responde nt vould

not possibly hive ‘acquired such right of use because. the

pe titione r had been granted by the Federal Power: Com. *‘—

mission. the exclusive right to build.and operate its project

, at the Pensacola location, The resporident. not only had not:

ee ‘ s ”

; 34

and eould not acquire suc ‘ht right of use; but was prohibited

hy the Federal Power Act from making such use of ‘ts lands |

and the waters of the river, Respondent's claim to such -

right of use by virtue of its State permit fades and disap-

pears in the face of this prohibition,

Adaptability for Dam Site Use Can Not Be Considered in |

oF Fixing Just Compensation

Without a lawful right to utilize the waters of ‘the 1 river

and the lands riparian thereon for the production of e leetrie

power and energy, the respondent was not entitled to have

the adaptability of ‘ts lands as a dam site for such use con- |

"sidered in fixing-just compensation for their taking.. Grand- _

Hydro v. Grand River Dam Authority, 192 Okla. 693, 139, P.

(3d) 798; Lawton- Rapid Transit; Railroad C 0. ie of

Lawton, 31 Okla. 458, 122 Pace. 212; U wited’ Syites v.

Chandler-Dunbar W.ater Power C 0., 229 U.S. 53, 57. L. Ed. |

1063 ; Olson v. United States, 67 F. (2d) 24; Continental

Land Co. v. United States, 88 F. (2d) 104 (ceftiorari denied

Gaiener 11, 1937, 82 L. Fd. 552); U nited States v. Boston

C.CL& N.Y, Canal Co., 271, F. 877; Central Pac ific Railroad ©

Co. v. Pe arson, 39 Cal. 247,

; Section’ 27—Federal Power Act

: Section 97 of the Federal: Power Act, 41 Stat. 1077 (16

US. CA. 821) provides:

“That nothing: heviele contained shail -be construed

as affecting or intending to affeet or in any way to inter-

fere with the laws of ‘the respective States relating to

the-control, appropriation, use; or distribution of water

used in irrigation or for municipal or other uses, or

any vested right acquired therein.’’ 3

‘The teriu “other uses’ ' doos not ine clude the generation

of eleetrie power and energy. This Court has definitely so

Sars Bea Sie i.

/ 35

held in the case of First Iowa Hydro-Ele« my Cooperative

V. Fede ral Power. Commission, B28 U, S. 152,-90 L. Bd. 1143,

in which the Court cites and appreves Pirie Power Co.

v. Gulf Power Co., 283 I. 606. This Section recounizes and -

preserves the continued operation of the local laws of the

respective states relating to the control, appropriation, use

and distribution of water used for irrigation or municipal

purposes, and uses of a similar nature, but does not for

power purposes, and’ respects and preserves any vested.

right acquired thereunder for irrigation, municipal, or

other similar uses, but not for power purposes. |

| if Wisconsin: Public Servi ice Corp. v. Federal. Power

Commission, 147 F. (2d) 743, decided February 26, 1945,

the Wi isconsin Public Service C orp. had constructed a dam’

and power, project on the Wisconsin River, under and in -

-accordance with the laws of the State of Wisconsin .before

thé Federal Power Act was enacted and relied upon Section

27 of the Federal Power Act to protect its project from

control of the Federal Power Commission under the Federal

Power Act. The court held thaf the Federal Power Act

applied and the Wiseonsin Publie Service Corporation was

required to comply with the. provisions of the Federal

Power Act and accept a license from the Federal Power

Commission’ in order to lawfully continue the operation

of its project, The court cited in support of its. holding

the case of Pe nnsyly ania Water-Power Co. ¥. Federal Power

Commission, 123 KF. ( (2d) 155, and. Niagara Falls Power Co,

v..Fede ral Power C ommission, (137 F. (2d) 787.

The decision of the Supreme Court in the Firs? low a

Hydro-Electric Coope rative case, supra, was followed by

the Supreme Court of Vermont in the case of Bellows Falls

Hydroelectric ( orporation, 47 Atl. (2d) 409. In that case

the Publie Serv ice ‘ormmission of Vermont; under authority

of a State statute, had granted to the Bellows Falls Hydro-

. eleetrie Corporation authority to redevelop its: water power er

36

| facilities on the Connecticut.River by the erection of a dam

in that stream. An appeal was taken’ from the order of

the Commission to the Supreme Court of the State where

the order of the Commission was reversed on the ground *

that the Commissidn did not have the right to exercise the

- jurisdiction conferred upon it by the Vegmont statute for

the reason that the Federal Power Commission had - ex-

clusive ‘jurisdiction over the Connecticut Riv: er-under the

Federal Power Act. nest

“In the Appalachian Electric Power C ompany case, the

Supreme Court held that the Federal Power, Commission

could require a Fedeffl license from an applicant who had

complied fully with the loeal laws of West Virginia under

which it held a completely valid license to construct and

operate its project on the New River, and in the First lowa

Hydro-Electric Cooperative case the Supreme Court held

that the Federal Power Conimission had jurisdiction to

isstie a Federal license without the applicant’s compliance

with the local.laws of the State of Iowa, and without ob-.

tairing 2 State license thereunder to construct and operate

a project on Cedar River. .

,

‘Section 10 (c)—Federal Power Act ‘

It j is provided under Section 10(¢) of the Federal Power e

Act (16 UL S.C. A. 803), and Article 17 of the petitioner’s —

Federal License, that the: Licensee “shall be’ liable for all

_ damages oéeasioned to the property of others by ‘the con:

struction, maintenance, or operation”’ of ‘the licensed

.projeet. This-provision of the Federal Power Act and of

_the petitioner’ s License does not create a new liability | not

otherwise ‘existing. Tt merely requires the assumption by

the Licensee of such liability as may legally arise ‘inde-

&,, ndently of the provision, Alabama Power Co. v. Smith,

229 Ala. 105, 155.So0: 601, 604; Louisville Hydroele etrie C 0.

v. Coburn, 270 Ky. 631, 110 S. W. (2d) 445, 448; Humpich’ Py

\

37

Trustecs ve. Lowsrilli Gas and Eli tric C'o., P69 Ky. as,

TUS S. W... (2d) 509, oft, pe Corrigan Transit Cp. ¥. Sani-

lary District of Chie “qo, 4 F662:

The liability of- the advert legally arising, independ-

ently of this provision is te pay just compensation. But

what is ‘just compensation, and what are the damages which

the petitioner j is required to pay? What is the measure of

“compensation or damages? ‘The measure of compensation -

+)

.- ina condemnation proceeding is a substahtive right. United

Statés v. Miller, 317 U.S. 369, 87 L. Ed. 336, 147 A. L. R: 55.

The petitioner. is. obligated to pay Grand- Hydro for ‘the:

lands taken the fair market value thereof, which includes Es

any” special value inberent in said, lands, because of their

adaptability. or suitability for any particular use to which

the respondent could: lawfully apply sajd lands. The re-

spondent did not have the right under Federal law to use

its lands for a dain site-for a hydrocleetrie project, but was

by Federal law prohibited from using them’ for such pur-

spose, and it is not entitled to compensation based upon a

right of use which never existed in fact and which it could

not on the date of taking lawfully acquire. The measure

_- of compensation in this cike is a Federal question because

_ it depends on a right of use controlled bay paramount Fed-

eral law.

It is therefore reSpeet fully submitted that the writ of

. ‘certiorari applied for shouldbe granted by this. ¢ ‘ourt and

thereafter the decision of the Nupresie-€ourt of Oklahoma

review ed and reverséd.-

Qu INe EB. ae: N,

rs Se Mieant Vinita, Onrehens;

beaten _Devmas E. “Martin,

Tulsa Oklahoma ;

2, Rages LEANDER Davinscs,

Tulsa, hme, Wie

. Attorneys for Petitioner.

X

wit a ,

i - 4

“ — “7

dd

38

APPEN DIX “A”

IN THE SUPREME COURT OF THE STATE OF

OKLAHOMA ;

No. 30447 / :

/

- ‘ |

Granv-Hypro, a Corporation, Plaintiff in Error,

ni o.: : . Vv. ; ]

| Granp River Dam AvtHority, a Corporation, Celesdant 1 in

_ Error } ,

2 De

In determining the marketi value of real property taken _

by power of eminent domain, it is not merely the value of

the property for the use to which it has been employed by

the owner fhat should be considered, but its adaptability to

all purposes, present and prospectiv e, to which it may rea-

‘sonably be applied by the condemnee must, be considered

and taken into account in fixing such value. :

Appeal From District Court of Mayes Counity

“Hon. N. B. Johnson, Judge. :

Proceedings i in condemnation by Grand River ae: Au-

thority against Grand-Hydro, a corporation. - From. an

alleged insufficient award of .compensation, the condemnee-.

appeals. > -

- REVERSED AND Remaxbep Wirth Directions

Harve N. Langley, R. A. Wilkerson, both of Pryor, Okla- —

- homa; 8S. F. Fowler, Knoxville, Tenn. ; R. D, Hudson, Tulsa, -

“Oklahoma, for Plaintiff in ‘Error. Pp

_. Edw. P. Marshall, Tulsa, Oklahoma ; J.B. Dudley, Okla-

homa C ity; R. L. Dav idson, Tulsa, for Defendant im Error.

‘Gussos,,V. C.J.:

This is an appeal by: the condegnnee from the judgment

ofthe district court of Mayes County rendered on a verdict

in condemnati6n ane eedings. —

wo 390

The proceedings were instituted by Grand River Dime.

Authority, a-corporate.instr umentality of the State, against

Girand-Hydro, a corporation, to condemn some 1400 acres

_ of land located in the Grand River. valley. The commis-

-sjoners, appointed by the court awarded. Grand- Hydro the

sum of $281,842.74, whereupon said corporation filed its

objections thereto and demanded a jury trial. Thereafter —

said Authority algo filed its objections-and demanded a jury.

‘The trial resulted in a verdict fixing the damages at. $136,-

200, and Grand-Hydro appeals from the ensuring judgment..

Grand River. Dam Authority was created by S. B. No.

395, S. L. 1985 (now 82.0. S. 1941, °861- 881, as later —

amended), aid was the corporate name applied to a con-

servation and reclamation district thereby created, and

comprising certain,désignated counties, including the county

of Mayes. - Said Authority, as ‘‘a governmental agency,

body politic and corporate,’’ wis endowed with the power,

among numerous others, to develop water power ‘and élec.

tric energy within dhe houndaries of said district and on

the Grand River , including the power of eminent domain.

Grand-Hydro was incorporated ip 1929 under the laws

of this State for the purpose of developing and selling hydro-

eleetric energy and water for irrigation on.Grand River.

Pursuant to its corporate powers it acquired title to the

lands here involved and which include the land selected by

the. Authority as a.dam site for the erection of its power

project. In 1931 said corporation applied for and obtained

from the State Conservation Commission a license and per-

mit to appropriate the waters of Grand River for beneficial

_use including the construction of a dam and the dev elop-

ment of hydro-electric power for sale, pursuant. to chapter

40, S. 1. 1910 ($82 0. S. 1941, 1-83), and: chapter 70, S. L.

1927 (82 O. 8S. 1941, 451-510, as subsequently amended). |

The Authority claims tlie right to use the strean? in the

development of electric power, ete., under article 4, chapter _

70, S. L. 1935, as amended by aviieles 1 and 2, chapter 70,

S. L. 1937 (82 O. S. 1941; 861-881). btce

+ The*principal controversy on appeal involves the action

of the trial court in striking the testimony of certain expert

witnesses relating to the value ofa portion of fhe } premises,

a tract of 417 acres, from the standpoint of its-special ater

4

a ae

in ascertaining the market value when they enter into and

siee. _ 40° co

ability to dam-cite purposes, The trial court withdrew the

evidence from the jury en the ground that the adaptability

of the tract to such purpose was not a proper clement for.

consideration Hi estimating the market value thereof, |

Grandvdro says the trial court erred in striking the a

‘testimony, and erred in its admonition to the, jury not to

consider the same, and erred in refusing certain requested

instructions pertaining to'the right to have.such testimony |

considered. And it is ihsisted that this action of the court

rysulted in depriving the condemnee.of.its property without

due process‘of law,.and without just compensation.

*The measure of compensation in such case is the-fair

‘market or cash value ef the land condemned. City of Tulsa

. Creekmore, 167 Okle. 298, 29 Pac. (2d) 10% In that

case the court, speaking of the elements to be considered in

determining market ralue;.said : ‘It is the market, value

that-is the test and not its vidue for some particular use to

which it might be subjected, ‘although its adaptability to

this partiqular use may be considered las one of the factors

7

‘affect the cash market value of the\property. Revell v. /

City of Muskogee, 36 Okla, 529, 129 Paeos33; Public Service -

Co. r. Leatherbee (TIT), 143 N. FE. 97.’?) Atiin the syllabus

by the court the fair eash or market value bf land taken —

in eminent domain is defined as follows: ate

: ~

_.. “By fair market value is meant the amount of nieney

which a purchaser willing: but not obliged to buy tlm

property would pay to an owner willing but not obliged

« . to sell it, taking’ 1 into consideration all-uses to whieh

~— the land was aie | d and might | in reason be applies Re

.

With referene ¢ to the question of adaptability or davailabil-

itv fora par ticular use as an ‘element in determining market

value , the court held.as follows:

‘In determining the:market value of a piece of real

estate for the purposes of a taking by eminent domain,

it ix not merely the value of the property for the use

to whie +h it has heen applied by the owner that should.

he taken. into consideration, but the possibility of ‘its

use for all purposes, present - prospective, for which

41.

it is adi ipted and to whiclrit might in reason be applic “dl,

must be considered, and its value for the use to wig!

men of prudence and wisdom and having dl:

means would devote the proper ty if owned by them must

he t tuken as the ultimate test.’ .

TRe above cause Contains a reasonably clear statement of

the law ebtaining in this State and which must be applied

_ here. The condemneé is ordinarily entitked to compensation

“measured not only by the value of the land for the use to

‘which he has applied it, but the Value thereof for all possible

owt ee

purposes, present.and prospective, to which he or his ordi-

nary grantee might legally apply the same.

‘Howey er, it is et that ‘the law announced in the above -

case does not entirely cover the situation here presented.

li is said that the rule may apply generally to all uses to,

which the éondemnee or his grantee ata free sale may law-

fully employ the land, but does not apply in thase instances

where, as here, the condemnee or his ordinary grantee would

have no legat right to use the land-for the purpose for which

the condemnee now urges ds an element of compensation.

. We agree that the rule for the measure of compensation

as announced in the Creekmore case applies’ only to those

adaptable. uses to which the condemnee or his. ordinary

grintee may lawfuily place the land.’ United States. v.

Boston, (". C2:& N.Y. Canal Co., 271 Fed. 877. In the opin-

ion in that ¢ase the court said: “We are of the opinion

_ that, in ascertaining -the ‘market value of property taken

“toa condemnation. proceeding the utility or availability

of ‘theproperty for the special purpose of the taker cannot

be shown, if:the taker is the only party who ean use the

property for that purpose, “If, however, the property has a .

special utility or availability, not only to the taker, but: to.

other parties who could use the property for‘the particular

-purposes. intended by the taker, then this utility or avail-

ability may be shown.’ See also United States v. Chand-

ler-Dunbar Water Power €o., 229 U.S. 53, 33S. Ct. 667,

“57 L. ed. 1068, wherein it was said. that the question in

‘cases of, this character. ‘is what has the owner lost, and

snot what has the taker gained.’ : :

The Authority urges that as a governmental instrumen-

*

% -

,

.

tality cof the. State it had exclusive authority jo use, the

waters of Grand River for commercial purposes, and that

Grand-Hydro possessed neither that right nor the right to

construct a dam and to impound the waters for any Purpose,

and could not sell to any one possessing those rights other.

than to the Authority, and was therefore not entitled to urge

the adaptability of the land in that respeet as an clement of

compensation. — . fs

The above eontention forms the mats of. the principal

question in this case. . |

The owner of land 1 may use the water of a natural stream

flowing across the same, but he may not prevent the natural

How thereof. 60 O. S. 1941, 60.

The statute, supra, creating the Grand River Dam Au-

thority and defining its functions purports to be an express

appropriation -by the State of the waters in Grand River .

to be applied to the uses th-rein stated, and to place in its

said agency exclusivé authority to-develop the stream in

the manner therein provided.. The State may control ihe

- flow of'all non-navigable streams such as the Grand River.

And it may reserve to itself or grant to private parties _

the right to utilize stich stre eams for power and other pur-, |

_ poses. 67 ©. J. 683, see. 10. :

_ As a basis for its argument that Grand- Hydro nieiely

owned the land and was without right 'to use the waters for

‘developing power, the ‘Authority says that Grand-Iydro’s

purported license and -permit issued by the Conservation

Commission was void, or‘at least had expired hy ats own

.terms, and was no longer in force aid effect.

First, it was urged that said permit was void for the’

reason that no judicial decree by any court had been entered -

determining all rights of all parties along the stream to

use the waters thereof as provided -by 82 O. S. 1941, 12,

13, 14 (sees. 3640, 3641, 3642, R. 1. 1910), and which deeree,

“says the » Authority, was a condition precedent to the author-

: a fo-tiape: commission to issue the permit. (Owens v. Snider,

Ikla at

. 772, 153 Pae. 833.). ;

Under 82 0. S. 1941 11 (see. 3639, R.tL. 1910) the state

‘engineer was required’ to njake hydrographic surveys of

ktreatn systems and to deliyer the same to the Attorney

General whose duty it’ was to enter suit in court to obtain

-

43

judicial determination ‘of all rights of parties within the

stream systim to the use of the waters of the stream.

~~ Under &2 OLS. 1941, 21 (see. 3640, R. Le 1910) the state

engineer was authorized to issue pertaits to applicants to

appropriate the water ‘for beneficial use.’’ At the time

Grand-Hydro received its permit to utilize the water for

‘power purposes, August 29; 1931, the’ Conservation. Com-

mission had succeeded to. all the powers of -the state -en-

gineer, with many more powers added. Ch, 70 S. L2 1927

(now contained, as ee amended, in 82 O. S. 1941,

451-510).

82 QO. 8.1941, 12, supra, is a part of an Act passed in

1905 relating to be ‘neficial use of the waters in streams, and

particularly to its use for irrigation. ‘The Act now appears

in 82 O. S. 1941, 1-83. A similar Act was passed in 1924

pertaining to drainage and irrigation (éh. 139, S. L. 1923

j 24). Section 3,of the latter Act’ authorized the district

courts, by certain procedure, to-organize conservancy dis-

tricts for the preve ntion of floods, for irrigation and other

designated purposes.. W ater power was not mentioned

therein, According to the title of the Act, the whole pur-

pose was State control of drainage and irrigation. The

latter Act was amended in. certain particulars by Chapter

148, 8. L. 1925. In 1927 the Legislature passed a compre-

hensive’ Act pertaining . to drainage and irrigation and

making specific provision for the development, of water

power and the granting of permits for the development of

such’ power. Ch. 70, S. L.. 1927. This Act created the Con-

servation Commission and vested it with the authority

"'theretofore held by the state engineer, and) additional

9

‘powers, The Act does not -purport to alter former acts to

‘any appreciable degree with reference to organization of

drainage > and irrigation distriets, so far as this case is

concerned, But it gives to said commission’ specific author-

ity to grant permits for water power development. That ~

authority is found. in paragraph (7); section 3’, of the Act,

and re ids | as follows ; co, .

“To stipervise, conserve and develop the water power

of the State of Oklahoma, granting permission for the

- development of such power, making such reasonable

44

rules and regulations J overning the development and

operation and distrilution of such power -except as

may be 6therwise provided by law, and to take suet

. stepS as-may be necessary to encourage: the “de velop

. ment of water power within said’ State, and to wWder-

“take. by, and-on behalf of the State the developmicut of

water power when private devel6pme nt may he in

adequate or unsatisfactory om such terms as maly be

hereinafter provided. by the Legislatire, and to exer-

cise sueh further powers and duties astmay be directed

hereafter by the Degislatare of this State.’’

That section iS now 82 O. Ss. 1941, 482. Section 16.0f the

1927 Act repealed all Acts and parts of Acts in coaflict

therewith. |

Under the Act of 1905 (82.0.8. 1941, 1-83) a court decree

determining water rights for irrigation was a condttion

precedent to the issuance of a permit to irrigate. Owens rv.

Snider, supra. But we fail to find any statute enacted

prior to 1927 giving the courts any specific authority t6

determine water rights asa preliminary requirement to

: permit to devélop water power. Par ragraph (7), section

3, above, gives full power to the commission to grant per-

aiks for water power, free ‘and independent of other agen-

cies, and without regard to the boundary lines of. improve-

ment districts. This law was in full force and effect at the

/ time Grand-Hydro procured its permit. The permit was

therefore valid in its inception.

The Authority says further that even if the permit. be.

considered as valid at the time of issuance; it nevertheless |

became invalid prior to the condemnation proceedings’ by

reason of the fact that it had ¢xpired by its own terms, and

as a result thereof Grand-Hydro oveupied the same position

with referenee to condemnation as that of the cording ry.

landowners along the river, . ‘ |

Fhe permit was issued 7” Gr: and-Hydro on. Auignst 28,

193 . It provided that the works, the di mn

within four years from date, and one-fi

/

to beneficial use within four years’ after the period for

& ‘ ‘ é

45

‘completion of the works. There was no provision in tlie

permit declaring a forfeiture on failure to comply. ’

The Act creating the Authority came*into full force

and effeet on July 29, 1935, or one month before -the

expiration of four vears froin the date the license was

issued... Assuming that one-fifth of- the works had not: been

completed, Grand-H¥dro still had one month and four vears

under its license to commence appropriating the waters to

benefigial use. Ther: was nothing in the license to indicate

that it should terminate within two years, four years or

eight vears. There was no term fixed, The most that can

be said of the time: periods mentioned is ‘that they were

inserted in‘ the license as a means of. nieasuring the good

faith of the licenses. .The purpose of the licensé was ta

provide for.a public service within eight, years. Lt was -

nothing less than /a franchise for that purpose, and it had

not been abandoned, nor had it expired by its own limita-

tion. And it had not been terminated by judicial decree.

As said in 26 C. J. 1040, see. 98, «The grant of a franchise

is atgrant in perpetuity unless limited in duration by the’

grant itself, or-as a consequence of some:limitation imposed

- by general law, or by a limitation on the power of the au-

thority making the grant.’’ And it is further said: ‘*The’

ownership of a franchise will not be divested by mere im-

plication.’’ 26 C. J. 1042, see. 107.

‘We do not say tliat the State may not have ¢ iadialieas the .-

license by appropriate legal-action on the ground of aban-

donment or of bad faith if sueh were the facts. This was.

not .done, however, and.so far as this case is céncerned

the license or permit remained in fyll force until. the parties

agreed to terminate it as h hereinafter mentioned, |

The State: may engage in any occupation or business for

publie perpeses: such as supplying hydro-electric power.

See. 31, art. 2, ¢ ‘onst. And it exercised that power when the

Legislature ¢ reated the Grand River Dam Authority. -

“Pp rior to the creation of said Authority, and in February

1934, the City of Tulsa filéd an action. in, the distriet court

of Mayes county putsuant to 82 0. S: "1941, 1-83, suypera,

against Grand. Hydro and others, seeking an adjudication

of the water rights of the parties to the waters of Spavinaw

F

ee

> Ses

: 46.

Creek and to citable the city: ‘'s prior right thereto, and a

like ¢ adjudication as to the waters of the Grand River stream.

system and the priority ‘right thereto of Grand-Hydro éver

other parties to said action. The Authority was ercated

While that action was: pending, and on application of the

City of Tulsa and Grand. Hydro the Authority was made a

—par ty.

Thereupon the Authority filed i its answer and cross. peti.

tion seeking. an adjudication of the rights of all parties to

. appropriate the waters of Grand River and its tributaries.

After the Authority was made a party to said action, and |

prior to’ filing its answer and cross- “petition ‘aforesaid,

Grand-Ilydro and the Authority, as parties to the litigation,

entered into an agreement in writing whereby Grand-Hydro,

claiming under its permit and the work done” pursuant

thereto the prior right to appropriate the waters of said

river to‘the uses aforesaid, granted: and assigned’ to the

Authority. Stall: of its rights, claims. interests ant privileges .

in, to or concerning the waters of fhe Grand River and its”

tributaries, cr the appropriation thereof arising out of

or by virtue of said approved application and the work done

_ under authority thereef, or otherwise, including, but without

o

limitation, all of its rights of priority.in the appropriation

of the waters of Said River and its tributaries existing

hy virtue of its having filed with the proper authorities the

first application.to appropriate such waters to a beneficial

use;’’.« But said agreement ‘also contained the following

provision:

‘Tt is understood, however, that, this assignme nt and

conveyance. shall not in any way affeet or impair the

title of Grand-Hydroe, to any: Jands owned by it or any:

interests therein, and if any lands or interests therein

owned by the-‘said Grand- Hydro are acquired by the

Grand River Dam Authority by purchase or condem

nation, the value thereof or damage thereto, shall he

asce tained and determined as though this assignment

: and conveyance had - ney “been made.” ;

.

The Authority, then filed -its answer and cross petition

in said action as “above related, oa. up the permit. ef

47

2

Girand-Hydro and alleging that by virtue of the assigmmuent

above mentioned the Authority had become. possessed of all

the rights, élaims, interest anil privileges i in and to or con-

cerning the waters of Grand River theretofore held by -

Grand-Hydro by virtue of its permit issued. by the Conserya-

tion Commission, And the trial court held-in that case that —

the Authority had-succeeded by virtue of said assignment to

all rights Grand- Hidro may have held under its permit te

_appropriate the waters of the. river. And the court.

rendered judgment giving the Authority prior right to con-

trol] and appropriate said waters, and that Grand- Hydro

had no right therein. That judgment became final.

Counsel for the Authority take the position that the judg-

ment in the former case foreclosed any and all claims Grand-

Hydro- may have had to compensation other_than for the

value of the land for ordinary purposes, not including any

value growing out of its special adaptability for damsite

purposes. ;

But, by the saravneit aforesaid, Grand:Hydro and the

Authority specifically excluded from the issues in that case

any’ question pertaining to the rights and claims of Grand-

Hy dro ‘growing out of its permit, except in so far as‘the

agreement. released or renouneed ‘or transferred those

rights to the Authority. The question of compensation

for every claim, whether, by purchase or by condemnation,

was specifically reserved hy that portion of the agreement

quoted above. -

The court's decree in the C ity of Tulsa case contaims

the following:

ss 8 *

me ‘Thereupon, the curt .... finds and-adjudges:

“2. That on the 14th day of Sale 1931, the defendant,

Grand- ILydre,-a domestic corporation, ‘filed with the Con

servation Commission of Oklahoma its application in due

form for a permit to appropriate 4,000 cubic feet per second

of the. flow of Grand River for the purpose ‘of* generaBnyg .

-cleetric energy and power; that the Commission fixed a day

certain for the hearing of said applization, and diree ted that

netice of said hearing be. given as provided by law; that

said notice was duly given,and on the 29th day ‘of August:

1931, the said ‘Commission issued to the Grand- Hydro a.

o

> ] z

438

aE on Ce toa beneficial use (the eeteration at

electric energy and power) 4,000 éubie feet per second ot

the flow of Grand River; that, under the atthority of said

approved application, Grand Hydro proceeded with ili

—genee to acquire are more dam ‘sites: for the purpose of

constracting a danto impound the waters ‘ef Grand River

for use in the generation of electric power and energy, and

in making extensive engineering itv estigations and stirves

‘and in the acquisition of lands in the hasin areacof the reser

voir which would be inundated by the’ Impounded waters,

but the court finds and adjudges that the Grand: livdro did

not construct any works or facilities through which to utilize

the waters of said river for the purpose of gene rating elec

tric energy or for any other -beneficial use, and did not

actually apply and has never actually applied er appro

-priated any of the waters of said river to a beneficial use,

and does not now have any right to apply or appropriate

any of the waters of said river fo-any beneticial ase, dnt

that if Grand-Hydro acquired any rights under its approves

_ application, it has transferred and conve ‘ved the Same to

the Grand River Dam Authority by virtue of its assigninent

of January -10,,1988."" :

It is true that the Authority alleged’ in tHhit case that

Grand-Hydro's permit was issued prematurety by the com.

‘mission for the reason that no adjudication of priority

rights of interested parties had theretofore been made by

the proper court, and was therefore invalid. But ax we

have said above, such adjudication ot priority rights was -

“hot essential toa permit to develop: hydre-e Heetric power

The Authority, also alles od:

‘This answering defendant further aliens that, the she

-fendant, Grand- livdro, an Oklahoma corporation, chartered

and organized for the purpose of engawine”in the business

- of generating. hydro-electric. power and energy and the dis.

tribution thereof in Oklahoma, filed in the office of the Con

servation Commission of the State of. (klahoma (now the

“Planning & Resources Board: of the State of Oklahoma) on

July 14; 1931, its application in.dne. form to construct on

Grand River in, Oklahoma, a dam and hydro- elee trie power

*-

?

£

SF ee or

plant and t to appropriate all of the waters of Grand River’

for the beneficial purpose of generating hydro-electric

_ power and energy; that pursuant to said application, due:

and proper hydrographic survey was made and rotice®was

issued and given in the manner prescribed by statute, and

on the 2oth day of Augtst 1981, upon due consideration of

said application, the hydrographic survey and the evidence

introtluced; the said: Conservation Commi tission approved

said application and endorsed: its approval on the back

thereof; that on the 10th day of May 1934, the said Grand.

Hydro filed in this cause its answer and eross- petition’ ser

fing up these t fac ts, and claimed a prior right to appropriate

the waters of Grand River to a beneficial use by virtue of

having filed the first application, under the statutes of Okla

homid;that onthe loth day of Januar ¥ 1998, the said de fend.

ait Grand. Hydro, exee uted and_delive red.to this answering

defendant all of its rights, claims, interests and privileges

in, to, or concerning’ the waters of Grand River and’ ‘its

tributaries or the appropriation, thereof arising ont of or

by virtue of said approved application and the work done

under authority thereof, incliding, but without limitation,

all of its right of priority in the appropriation of the. waters

of said’ river and its tributaries, existing hy virtue of its’

having filed with the proper authorities the first applieation ’ °

to appropriate such waters to a beneficial use. A true and

‘correet copy of said assignmefit is attached hereto and wade.

a paert.hereof and marked for identifie: ation, “GRD A Exhibit

No, ce re. } a |

‘This:answering defendant further alleges that the Con

servation Cominission of the State of Oklahoma, on the 29th

day of August 1981, in approving the upplieation of Grand

Hydro for the appropriation of 4,000 eubie feet per seeond

of the average annual flow of (irand River, for the purpose

of eenerating electric energy, adjudged and declared that:

‘Graiid-Iydre is prior in time and is the first applicant and

appropriator of the waters of (irand Rive? for beneficial

‘purposes’; that under the authority of said approved appli.

eration, the- Grand-Hydro’ made exterisive exgineering in-

vestigations and surveys on said river, including churn and

core drilling, for the purposes of testing tlam site’ founda.

tions, and that the Conservation Commission of the State

“Ge

.

oa

of Oklahoma on the hearing of the @rand-Hydro application,

found and adjudged that the Grand-Hydro was finaneially

able te construct the work proposed in its application. and

had acted diligently and in good faith, and that there had

-been no prior*appropriation ef the waters of said river to

any beneficial use, and that the application of Grand. Hvelro

was priar in point of time to all others; and this answering.

‘defendant further alleges that by virtue of said assignment -

from Grand-Hydro to the Grand River Dam Authority, of

January 10, 938, the Grand River.Dam Authority is now

possessed with all the rights, claims, interests and privileges

of Grand-Hydro in and to or concerning the weters of Grand

River and its tributaries. and the appropriation: thereof

_ arising out of: or by virtue of said approved applic ation and—

the work done under authority thereof, including, but with-

out limitation, all of its: rights of sngpiiy of in the appro-

priation of the waters of said river and its tributaries,

existing by virtue of it having filed with the proper author-

ities’ the first: application to appropriate such waters to a

beneficial use.’

It is apparent. from a reading of the Grand River Dam

Authority’s answer and cross-petition and the court's de-

cree in the, € ity of Tulsa case that the Authority sought

and obtained an adjudication that it was the holder and

owner, by assignment, of ‘all the rig&ts and privileges

Grand- Hydro had.obtained under its permit.

The Authority was bound by the agreement which was-

entered into.in furtherance of the. settlement, or of defining

issues involved in litigation. For, as said in Grand River

Dam Authority r. Grand- Iiwdro, 188 Okla. 506, 111. Pae.

(2d) 488, ‘‘its transactions are akin to those of private en-

terprises, and the mere fact that it isan ageney of the

* government does not extend to it the immunity of the sev. _

_eveign.”’ And further, ‘The Authority cannot exercise the -

powers as conferred upon it, avail itself of judicial process -

‘and, in the absence 6f legislation relieving it, escape the .

usual incidents .of litigation that fall upon private. liti-

vanis.” Id. - a |

a hen the preeent proceedings i in condemnation were com

>

ol. *

menced Grand. Hydre stood in the samé position with refer

ence. to compensation as it occupied at the time the. formes rT

action was filed. At that time it held a valia and subsist

ing franchise from the State to erect dams for the purpose

of generating hydyo-electric power for public consumption,

It released that vie tothe State by the aforesaid agree

ment, but reserved the Weht- to full compensation for all

privileges it was releasing: Those privileges werdcom:

pensable as usés ‘to which its lands were reasonably adapta

_ ble, A portion of those lands was sdaptable to dam site.

_ purposes for the generation of hydro-electric power.

-We are aware of but one. statute touching upon the >

measure of damages where the State takes over the projects

of licensees such as the Grani- Hydro. That is the. Act of :

1927, supra, section 12 therebdf: (82 OS. 1941, AS4), That

section. provides that the Legislature ‘by enactment may

revoke a license such as that held by Grand- Hydro and take

over and operate the project after reimbursing the licensee

as therein provided. But no such action may be taken by

~ thesLevislature until at least ten years after completion of.

the works. Here, there had been no such competition, and —

therefore the statute, with reference to reimbursement or’

compensation, does not apply. bs

Grand-Hydro pursued the proper course for determining ‘

the market value of the land. It produced witnesses quali-

fied to give their opinion as to that value from the stand-

point of the adaptability of the land to every use to which

Grand -Tydto might re: asonably employ the same, -Among

those uses Wax that of dam construction for the de velop-

ment of hydro-clectrie power for publie use. Grand-Hydro

produced qualified. witnesses who.gave thei opinion ‘as to

the market value of the land for the latter purpose, but their

tegtiinony: was withdrawn by the court and the ynry ad.

monished not to consider the same. The ground assigned

for sneh procedure was that the adaptability, of the land

to dam site purposes was not an clemer ‘ of nrarket value.

In this the court erred.

The judgment is reversed and the cause remanded with

directions to set-aside the verdict and to allow the parties

the ‘renpon to renew their motions for jury trial, and to take

Me

oe ee

‘such other ,action .as will conform to the *views herein

expressed. | ’

Corn, C. M., and Osborn, Bayless, Welch, and Davidson,

JJ., concur; Arnold, J:, coneurs in conclusion; Riley and

Hurst, J.J., dissent. Sere ~ |

APPEN DIX “B”

mo THE SUP REME COU RT OF THE ST ATE OF

| OKLAHOMA ;

No. 32,399

Granp River Dam: Avutuorrty, a Public Corporation,

Plaintiff in Error,

v. |

Granp-Hypro, a Private Corporation, Defendant in Error.

ee a em te vaio

SYLLABUS | - "@

1. Ordinarily, all questions open to dispute and: either ex-

. pressly or by necessary implication decided on appeal to

this court will not be open for review on the s¢cond appeal, -

but such decision-becomes the settled law of the casé as to

all such questions, and is not subject to re-examination.

2. The passage-of the’ act creating the Grand River Dam

Authority did not destroy the dam site valuevof land con--

demned, if properly an element to be considered in fixing

the amount which condenmee is entitled to reeover. Art. 4,._

Chapt? 7, S. L. 1935, 82 0. S. 1941, Sees. 861-881.

3. That condemnee had not’ applied for, nor secured,

license from Federal Power Commission for construction

of dam on non- navigable stream was not material in 1 fixing

value of land taken for dain site.

4.-In jury trial, argument of counsel should be limited to

those: questions submitted to jury and should not extend to -

yoyeren: of law determinable by the court. -

Where, in a condemnation proceeding, ‘the jury fixes —

the value of t pepperty taken as of the date of taking, ‘interest

/%

>

from such date is allowable on halane ‘e not neid into court

at that time by condemmnor. :

Avrrat. From THe District Cover of Mayes County.

? r 2

e

Ilon. N. B. Jan, Judge

i } Affirmed

(). B. Boydstun, R. .. Davidson, Tulsa, Okla, for Plaintiff

in Error. =,

HarveeN, Langley, R. A. W ilkerson, a Okla: . §. F.

Fowler, Knoxville, Tenn. ; R. D. Hudson, Tulsa, Okla., for

Defendant i in Error. am |

J. Edward W illiams, Roger P. Marquis, USS. Dept. of

Justice, Amicus curiae. ’ -

Mae Q. Williamson, Attorney. General of Okla., Fred

Hansen, Attorney General, Amicus curiae.

aes

Davi ISON, V.C.J.: ? .

~

This is an appeal from a judgment rendered upon a jury

_verdict‘in an action in condemnation brought by the Grand — -

River Dam Atthority, herein referred to.as. the Authority,

as plaintiff, agafnst. Grand: Hydro, as defendant. :

After commissioners Were appointed and had fixed the

value of defendant’s property, both parties demanded a

jury trial, resulting in a-verdict for defendant: of $136,250. .

(On appeal to this court the catse was reversed and re-

manded. , Grand-Hydro v. Grand River Dam Authority,

192 Okla. 693, 139 P. 2d 798.)

‘The ese was retried and judgment rendered upon the -

verdict of the jury from which plaintiff brings the canse

here on appeal. | Briefs amicus curiae, have been filed by

the State of Oklahoma and by the United States.

There is little dispute about the facts. The Grand- Hydro

is i private corporation organized in 1929 and incorporated

for the purpose of generating and distributing electrie

power. It acquired title to mimerous. tracts of land along

the Grand River, including that involved-in this litigation

which consists of some’T,400 aeres. Included in this acreage

is one 417 aere tract known as the Pensacola «ite, which

ix the site of the dam later built by the Aittthority. —

> ,

aos

On August 29, 1931; after a proper applieation therefor

was filed, the Conservation Commission of Oklahoma issued |

to Grand-Hydro, a permit to appropriate to a beneficial -

use 4,000 cubic feet per second of the flow of Grand River

and to construct one fifty foot storage and power dam and «

~\ one 14 foot equalizing dam, pursuant to which, exter nsive en-

\gineering investigations and surveys were made by at

Grand- Hydro, ‘As pointed out in our former opinion, this

permit was in effect at the time of its sengamnent to the |

Authority. |

In February, 1934, the City iz Tulsa, after having ob-

tained. a permit to appropriate the waters of Spavinaw

Creek, a tributary of Grand River, filed suit in the District

Court of Mayes County to adjudicate the appropriated ant

unappropriated waters of both streams. In that suit the

Grand- Hydro was made defendant along with sev eral cities \

and towns.

The State Legislature in 1935 created the Gril Siver

Dam Authority as\a governmental corporate agency, to.

\

develop and sell water power arid electric energy in the ~

Grand River Basin, and endowed: it with the power of

eminent domain. __ *

After being made.a paxty to the City of Tulsa suit and

before filing answer, the Authority aequired ‘on January

10, 1938, by assignment and deéd, all of the title and interest

of the-Grand- Hydro ina 45 acre trict of land and in the

permit and license . to appropriate the waters of Grand

‘River to a benéficial use. The Authority then, on January,

18, 1938, filed its’'answer and cross petition, alleging among

other -things the assignment and: the ownership by the

Authority of all the interest of Grand-Hydro in the perinit —

and license. About a month later judgment was rendered

adjudging that the several municipalities: had a prior right °

to divert and appropriate for municipal purposes very small

-amounts of the flow of Grand River and that the Aiithority

had a prier.right to the.remainder of said flow.

In Mareh; 1938, Grand-Hydro conveyed another 10 acres.

to the Authority and in. July conveyed to Ait the right of

entry on all lands at the Pensacola dam site and south —

thereof. The convevanees of the jand were made on condi-

tion that thre énusidevution would later be determined =

- agreement or condemnation and the assigiment was on the

“gondition provided for therein:

o*.:

—“*It is understood, howevet, that this assignment and

~ conveyance shall not, ineany. w ay, affect or impair.the

‘title of Grand-Hydro to- any nds owned by, ity or any

interests therein, and if any lands or interest therein

owned by the! said Grang@ Iydro, are acquired: by the

Grand River Dam Authority by purchase or eondemna-

_ tion, the value thereof or- damage thereto shall be ascer-

“tained and determined as though this assignment and

conveyance had never been mants. $3 Pps

oa

The parties being unable to agree on the value of the

property, the Authority filed this actian in condemnation

February 17,1939. It was stipulated by the parties that the |

takin date was January 19, 1940.

In July, 1939, aft’ proper application by the Authority

and-after a finding that the construction proposed would |

. affect interstate commerce because of its effect on the

Arkansas River, the Federal Power Commission issued a

license to the Authority to construct, maintain and operate

the dam which. it later built. The spillway was built on the

49 acre traét acquired by deed and the dam was built on

adjacent land still owned by Grand-Hydro but covered by

the right of entry... GramlHydro - had no sueh Federal

hicense nor, had it taken any steps toward’ procuring one.

bn the second trial the witnesses, on behalf of the Grand-

Hydro testified that the 417 acre tract had a value of $750,-

000 te $1,000,000 for dam site purpose and the balance of

the land had a value of $78,375. to $83,600, T4 Authority

intredueed no testimony as to the value of the land for dam

site purposes’ but their witnesses testified the entire 1,400

acres had a value of $34,500 to $56,656.50. ee

The. numerons assignments of error urged by appellant —

will be considered in the order presented, first and foremost

heing whether or not the former opinion of this court con-

stitutes the law of the case on this appeal. The conclusions

otherein expr ‘essed were arrived at after extensive arguments

by counsel, the filing of various petitions | for rehearing and

7 eee ee | : 56 |

=< > f ° \ a. :

Sue aie consideration ofvevery question presented. Many

cases pre cited by each party stating the rule of law:

a she All questions open to dispute nk ‘either

expressly or by hecessary implies ition decided on appeal

to this court will not be open for review on the second:

vappeal, but such decision becomes the settled lay 6f

“the case as to/all Such questions, and is not subject

‘to re- examination. ” St. Louis & S. F. Ry. v. Hardy,

49.Qkla. 423,146 ms 38 ‘

at \ ’

And the sone ‘to thé rule: : =D eer, ner

e-'e 8 Mhe Courts uniformiy hold that an appel-

“jate bait. may review and reverse its former decision

‘in the same case where it is satisfied that gross or-mani-.

-, fest injustice has been done by its former decision, or

y~ + where the mischief to be: cured far outWeighs any injury:

~ that may be done in the particular case by overruling a

_ prior decision.’’ = ade 2 ee & Killingsworth, 89

- ORla. 64, 213 P. 54

: \ pie Pee Ntlioueh’ a tae courts hold thet there i is-no aeietstlon to the

i; | general rule, We have consisteutly held that, ifthe: facts, of —

a ~ the particular case warrant, the exception should apply.

. But, as heretofore stated, the opinion on the first appeal

wes: oQVas rendered only after exhaustive study amd is the law ae

~ \e “this ease of all questions therein decided.

ne a the first appeal we held thiat the permit of the Grand-

Hydre was_not invalid ab-initio, nor had it expired by its

own terms, nor had it been abandoned, nor r did the City

of Tulsa ‘ese so hold. : |

, The doctrine-ef. “the law-of the case’? is not contr ing

«where the facts and issues are different in a. subsequent

appeal from what they were in the former appeal.’’? M. K.

&T! Ry,Co. v.: Tulsa, 113 Okla: 21,-238 P: 452 at 456. In-

this appeal the new or different facts and issues presented

ae _ consist of the competency of the testimony, as presented in:

\ 7). the last trial, of the expert-witnesses as to’ the market valne

ry of the.dam site; the submission of such testimony to the .

jury under-proper instructions; the effect of Grand- Hydro’ s

jack ofa. hen rmuit trom the Feder ‘al Power C ‘omission; the

57

trial court's refusal to allow ‘connsel to argue to the: jury

that the condemned land bad no dam <ité Value Because of

such facet; and the allowance. of interests.

When the very able arguinent of the plaintiff in error,

on all points except that relating te inte iat is summarized .

ancl fonde sed, if can be stated as one Proposition:. that,

by 1 reason -of the legislative act creatine the- Authority, and

thé issuance of a permit to it by the Federal Power Com-.

mission, the value of fhe Jand as a dam site was’ forthe

special purpose of the taker, the onty party who can use it

for that purpose. Maniy ‘authorities are cited to the effect

that if the taker is the ‘only one who can use the land for a

particular purpose, its value therefor is net an‘element in

fixing the market-value. Paramount amonye the authorities

cited are Kichman v. The City of Oklahoma ( ity, 84 Okia.

20, 202 P. 184‘and United States r. Boston C. C. & N.Y.

Canal Co., 271 Fed. 877. In-all of the cases relied upon,

* the taker, - inherently; was the only one who could use the

property ‘for the specific purpose, usually a governmental

function, oy the condemnee did not have the power -of emi- .

nent domaitt necessary to acquire suleee lands needed tu use

the tract -for such purpose. | : ane

In the.ease ‘at bar-the condemnor was, , by. legislative act,

; exclusively ‘authorized to use the Grand Riv er for hydro.

électrte power, but the use was in the nature of a business

euterprise and the condemnee was: also posse; ‘ssed of the

power of eminent domain.

Appellant contends that the passage > of the ‘act ereating ;

the Authority was, in effect, a forfeiture of the Grand- Hydro

permit and therefore it was ot entitled to recover the dam -

- site value of the lands condemned: “If such was the intent

_ of the legislature in passing the act, it was in Violation of

the Constitution, article 2, section * 24. The state cannot,

through its law making body, remove the principal value of .

private property and through its established agency, acquire

the property by condemnation, basing the reimbuitsetent

to the owner: on the: reduced value. If it were otherwise it”

would be possible to cireumivent the above section of our

Constitution. The value of the right to appropriate water

which constitutes one element in fixing the value of land as a.

dam site” was discussed in our former opinion.

"i .

@

.

ns

The parties themselves realized that the suit, ability of the.

Jandas adam site was the principalelement of value. Other

wise, there would have been no reason.tar the nbore queted

Proviso in the assignment of the license atid permit. This

is further borne out by the stand taken by the Authority in

the City of Tulsa casein whitel: the Authority.’ s answer and

CYOSs petitions ‘set up the assignment as a basis, Ob ower

_ ship of all of the Grand-Hydro's right to appropriate the

river flow. The judgment. in that case sustained that posi

tion. | °

The testimony of the e epert Witnesses as introduce od Wils,

| therefore, competent to prove the dam site vwaluesef fhe

property and was in accord with our opinion on the former

appeal... "Fo-the same effeet is the California case of Metro-

politan Water Dist. of Southern. ( ‘alifornia v. Adaws, et al.

(Cal.) 116 P. 2d 7, wherein there is an extensfve discussion

of many of the points herein involved and a. collectioni .of

many authorities on /the subject.

Although the Authority had .been granted a license by

the Federal Power Commission granting it the exe Husive

right to use the 417 acre tract as a dam. site, it could not

thereby take private property without just, compensation.

Nor was the-issuance%of such license intended to have that

effect because the plain’ provision requires the licensee to

‘pay all damages to. the property of others caused by the

construction, operation and maintenance of the project. - In

addition, the Federal Power Commission based its authority

jo take jurisdiction upon a finding of fact that the condtrue-

‘tion and operation of the project ‘‘as proposed by the dedtar-

ant will affect navigable stages of the: Arkansas River a

navigable water of the United States, to which said Grand

River is tributary.’’» The Commission would have no, an\

thority whatever if the dam site were used for the construe-

tion of such a dam. that the navigability of the Arkansas

River would not be affected. a

~The trial court, therefore, was correct in refusing to

sllow counsel to argue to the. jury the proposition Hat the

lands had no dam site value because of the provisions of

the legislative act creating the Authority and the issuance

to it of the lie ‘nse by the F ederal Power Commission. The

jnstructions‘to the jury. fully cover alli issues “submitted and

«

are-in harmony with our of pinion herein and-in the first

appeal, Ee

(on January: hu 1940, the date of the take, the Antliority

Jai inte court the’ ameunt found®hy the, coniunissioners to

“be the Value of the property, S281, S02.74. The jury fined —

the value at $800,000 and the judvinent of the eaurt allowed

Interest on ROPS TTL, the: difference Getween these two

amounts, from said date of taking, The qitestian of interest

ir this typ of case mist be reserved: by the court, as in St.

Louis, BE. Ro& WR: ('e., Niver, 17 Okla. O89, 87.P. 423, or

it must be wpparent that the Jury omitted it, mn order for thie

court to allow the Same. « Blackwell, Eo & S. W. R. Co,

Bebowt, | 9 Okla. 6.5, tp. STi. Herein, the trial court. |

- structed the jury to tix the market value of the lands.as of

the date of taking. Theretore it wassproper to allow: inter.

est from that date, JO ees — ee.

Finding no @rror, the judynient is affirmed?

a.

* Osborn, ge MSs, We leh, Gibson & Arno} l, JJ3.. Coneur

Hurst, (. J. & Riley. J, Dissent.

& «6

(2790).