FEDERAL POWER COMMISSION V. TUSCARORA INDIAN NATION 362 U.S. 99

NO. 63. ARGUED DECEMBER 7, 1959 - DECIDED MARCH 7, 1960* - 105 U.S. APP. D.C. 146, 265 F.2D 338, REVERSED.

*TOGETHER WITH NO. 66, POWER AUTHORITY OF THE STATE OF NEW YORK V. TUSCARORA INDIAN NATION, ALSO ON CERTIORARI TO THE SAME COURT.

UNDER SEC. 21 OF THE FEDERAL POWER ACT, CERTAIN LANDS PURCHASED AND OWNED IN FEE SIMPLE BY THE TUSCARORA INDIAN NATION AND LYING ADJACENT TO A NATURAL POWER SITE ON THE NIAGARA RIVER MAY BE TAKEN FOR THE STORAGE RESERVOIR OF A HYDROELECTRIC POWER PROJECT, UPON PAYMENT OF JUST COMPENSATION, BY THE POWER AUTHORITY OF THE STATE OF NEW YORK UNDER A LICENSE ISSUED TO IT BY THE FEDERAL POWER COMMISSION AS DIRECTED BY CONGRESS IN THE ACT OF AUGUST 21, 1957, 71 STAT. 401. PP. 100-124.

(1) INASMUCH AS THE LANDS HERE INVOLVED ARE OWNED IN FEE SIMPLE BY THE TUSCARORA INDIAN NATION AND NO "INTEREST" IN THEM IS "OWNED BY THE UNITED STATES," THEY ARE NOT WITHIN A "RESERVATION," AS THAT TERM IS DEFINED IN SEC. 3(2) OF THE FEDERAL POWER ACT, AND, THEREFORE, A COMMISSION FINDING UNDER SEC. 4(E) "THAT THE LICENSE WILL NOT INTERFERE OR BE INCONSISTENT WITH THE PURPOSE FOR WHICH SUCH RESERVATION WAS CREATED OR ACQUIRED" IS NOT NECESSARY TO THE ISSUANCE OF A LICENSE EMBRACING THE LANDS IN QUESTION. PP. 110-115.

(2) BY THE BROAD GENERAL TERMS OF SEC. 21 OF THE FEDERAL POWER ACT, CONGRESS HAS AUTHORIZED THE FEDERAL POWER COMMISSION'S LICENSEES TO TAKE LANDS OWNED BY INDIANS, AS WELL AS THOSE OF ALL OTHER CITIZENS, WHEN NEEDED FOR A LICENSED PROJECT, UPON PAYMENT OF JUST COMPENSATION; THE LANDS IN QUESTION ARE NOT SUBJECT TO ANY TREATY BETWEEN THE UNITED STATES AND THE TUSCARORA INDIAN NATION; AND 25 U.S.C. SEC. 177, FORBIDDING A TRANSFER OF LANDS FROM INDIANS UNLESS MADE BY A TREATY OR CONVENTION ENTERED INTO PURSUANT TO THE CONSTITUTION, DOES NOT APPLY TO THE UNITED STATES ITSELF NOR PROHIBIT IT OR ITS LICENSEES UNDER THE FEDERAL POWER ACT FROM TAKING SUCH LANDS IN THE MANNER PROVIDED BY SEC. 21, UPON PAYMENT OF JUST COMPENSATION. PP. 115-124.

FEDERAL POWER COMMISSION V. TUSCARORA INDIAN NATION.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT.

MR. JUSTICE WHITTAKER DELIVERED THE OPINION OF THE COURT.

THE ULTIMATE QUESTION PRESENTED BY THESE CASES IS WHETHER CERTAIN LANDS, PURCHASED AND OWNED IN FEE SIMPLE BY THE TUSCARORA INDIAN NATION AND LYING ADJACENT TO A NATURAL POWER SITE ON THE NIAGARA RIVER NEAR THE TOWN OF LEWISTON, NEW YORK, MAY BE TAKEN FOR THE STORAGE RESERVOIR OF A HYDROELECTRIC POWER PROJECT, UPON THE PAYMENT OF JUST COMPENSATION, BY THE POWER AUTHORITY OF THE STATE OF NEW YORK UNDER A LICENSE ISSUED TO IT BY THE FEDERAL POWER COMMISSION AS DIRECTED BY CONGRESS IN PUBLIC LAW 85-159, APPROVED AUGUST 21, 1957, 71 STAT. 401.

THE NIAGARA RIVER, AN INTERNATIONAL BOUNDARY STREAM AND A NAVIGABLE WATERWAY OF THE UNITED STATES, FLOWS FROM LAKE ERIE TO LAKE ONTARIO, A DISTANCE OF 36 MILES. ITS MEAN FLOW IS ABOUT 200,000 CUBIC FEET PER SECOND. THE RIVER DROPS ABOUT 165 FEET AT NIAGARA FALLS AND AN ADDITIONAL 140 FEET IN THE RAPIDS IMMEDIATELY ABOVE AND BELOW THE FALLS. THE "HEAD" CREATED BY THESE GREAT FALLS, COMBINED WITH THE LARGE AND STEADY FLOW OF THE RIVER, MAKES THE LEWISTON POWER SITE, LOCATED BELOW THE RAPIDS, AN EXTREMELY FAVORABLE ONE FOR HYDROELECTRIC DEVELOPMENT.

FOR THE PURPOSE OF AVOIDING "CONTINUING WASTE OF A GREAT NATURAL RESOURCE AND TO MAKE IT POSSIBLE FOR THE UNITED STATES OF AMERICA AND CANADA TO DEVELOP, FOR THE BENEFIT OF THEIR RESPECTIVE PEOPLES, EQUAL SHARES OF THE WATERS OF THE NIAGARA RIVER AVAILABLE FOR POWER PURPOSES," THE UNITED STATES AND CANADA ENTERED INTO THE TREATY OF FEBRUARY 27, 1950, (FN1) PROVIDING FOR A FLOW OF 100,000 CUBIC FEET PER SECOND OVER NIAGARA FALLS DURING CERTAIN SPECIFIED DAYTIME AND EVENING HOURS OF THE TOURIST SEASON (APRIL 1 TO OCTOBER 31) AND OF 50,000 CUBIC FEET PER SECOND AT OTHER TIMES, AND AUTHORIZING THE EQUAL DIVISION BY THE UNITED STATES AND CANADA OF ALL EXCESS WATERS FOR POWER PURPOSES. (FN2)

IN CONSENTING TO THE 1950 TREATY, THE SENATE IMPOSED THE CONDITION THAT "NO PROJECT FOR REDEVELOPMENT OF THE UNITES STATES' SHARE OF SUCH WATERS SHALL BE UNDERTAKEN UNTIL IT BE SPECIFICALLY AUTHORIZED BY ACT OF CONGRESS." 1 U.S.T. 694, 699. TO THAT END, A STUDY WAS MADE AND REPORTED TO CONGRESS IN 1951 BY THE UNITED STATES ARMY CORPS OF ENGINEERS RESPECTING THE MOST FEASIBLE PLANS FOR UTILIZING ALL OF THE WATERS AVAILABLE TO THE UNITED STATES UNDER THE 1950 TREATY, AND DETAILED PLANS EMBODYING OTHER STUDIES WERE PREPARED AND SUBMITTED TO CONGRESS PRIOR TO JUNE 7, 1956, BY THE BUREAU OF POWER OF THE FEDERAL POWER COMMISSION, THE POWER AUTHORITY OF NEW YORK, AND THE NIAGARA MOHAWK POWER CORPORATION. (FN3) TO ENABLE UTILIZATION OF ALL OF THE UNITED STATES' SHARE OF THE NIAGARA WATERS BY AVOIDING WASTE OF THE NIGHTTIME AND WEEK-END FLOW THAT WOULD NOT BE NEEDED AT THOSE TIMES FOR THE GENERATION OF POWER, ALL OF THE STUDIES AND PLANS PROVIDED FOR A PUMPING-GENERATING PLANT TO LIFT THOSE WATERS AT THOSE TIMES INTO A RESERVOIR, AND FOR A STORAGE RESERVOIR TO CONTAIN THEM UNTIL RELEASED FOR USE - THROUGH THE PUMPING-GENERATING PLANT, WHEN ITS MOTORS (OPERATING IN REVERSE) WOULD SERVE AS GENERATORS - DURING THE DAYTIME HOURS WHEN THE DEMAND FOR POWER WOULD BE HIGHEST AND THE DIVERSION OF WATERS FROM THE RIVER WOULD BE MOST RESTRICTED BY THE TREATY. ESTIMATES OF DEPENDABLE CAPACITY OF THE SEVERAL RECOMMENDED PROJECTS VARIED FROM 1,240,000 TO 1,723,000 KILOWATTS, AND ESTIMATES OF THE NEEDED RESERVOIR CAPACITY VARIED FROM 22,000 ACRE-FEET COVERING 850 ACRES TO 41,000 ACRE-FEET COVERING 1,700 ACRES. THE VARIATIONS IN THESE ESTIMATES WERE LARGELY DUE TO DIFFERING ASSUMPTIONS AS TO THE LENGTH OF THE DAILY PERIOD OF PEAK DEMAND.

ALTHOUGH THERE WAS "NO CONTROVERSY AS TO THE MOST DESIRABLE ENGINEERING PLAN OF DEVELOPMENT," (FN4) THERE WAS SERIOUS DISAGREEMENT IN CONGRESS OVER WHETHER THE PROJECT SHOULD BE PUBLICLY OR PRIVATELY DEVELOPED AND OVER MARKETING PREFERENCES AND OTHER MATTERS OF POLICY. THAT DISAGREEMENT CONTINUED THROUGH EIGHT SESSIONS OF COMMITTEE HEARINGS, DURING WHICH MORE THAN 30 PROPOSED BILLS WERE CONSIDERED, IN THE EIGHTY-FIRST TO EIGHTY-FIFTH CONGRESSES, (FN5) AND DELAYED CONGRESSIONAL AUTHORIZATION OF THE PROJECT FOR SEVEN YEARS.

ON JUNE 7, 1956, A ROCK SLIDE DESTROYED THE SCHOELLKOPF PLANT. (FN6) THIS CREATED A CRITICAL SHORTAGE OF ELECTRIC POWER IN THE NIAGARA COMMUNITY. IT ALSO REQUIRED EXPANSION OF THE PLANS FOR THE NIAGARA PROJECT IF THE 20,000 CUBIC FEET PER SECOND OF WATER THAT HAD BEEN RESERVED FOR THE SCHOELLKOPF PLANT WAS TO BE UTILIZED. ACCORDINGLY, THE POWER AUTHORITY OF NEW YORK PREPARED AND SUBMITTED TO CONGRESS A MAJOR REVISION OF THE PROJECT PLANS. THOSE REVISED PLANS, DESIGNED TO UTILIZE ALL OF THE NIAGARA WATERS AVAILABLE TO THE UNITED STATES UNDER THE 1950 TREATY, PROVIDED FOR AN INSTALLED CAPACITY OF 2,190,000 KILOWATTS, OF WHICH 1,800,000 KILOWATTS WOULD BE DEPENDABLE POWER FOR 17 HOURS PER DAY, NECESSITATING A STORAGE RESERVOIR OF 60,000 ACRE-FEET CAPACITY COVERING ABOUT 2,800 ACRES. (FN7)

CONFRONTED WITH THE DESTRUCTION OF THE SCHOELLKOPF PLANT AND THE CONSEQUENT CRITICAL NEED FOR ELECTRIC POWER IN THE NIAGARA COMMUNITY, CONGRESS SPEEDILY COMPOSED ITS DIFFERENCES IN THE MANNER AND TERMS PRESCRIBED IN PUBLIC LAW 85-159, APPROVED AUGUST 21, 1957. 71 STAT. 401. BY SEC. 1(A) OF THAT ACT, CONGRESS "EXPRESSLY AUTHORIZED AND DIRECTED" THE FEDERAL POWER COMMISSION "TO ISSUE A LICENSE TO THE POWER AUTHORITY OF THE STATE OF NEW YORK FOR THE CONSTRUCTION AND OPERATION OF A POWER PROJECT WITH CAPACITY TO UTILIZE ALL OF THE UNITED STATES SHARE OF THE WATER OF THE NIAGARA RIVER PERMITTED TO BE USED BY INTERNATIONAL AGREEMENT." BY SEC. 1(B) OF THE ACT, THE FEDERAL POWER COMMISSION WAS DIRECTED TO "INCLUDE AMONG THE LICENSING CONDITIONS, IN ADDITION TO THOSE DEEMED NECESSARY AND REQUIRED UNDER THE TERMS OF THE FEDERAL POWER ACT," SEVEN CONDITIONS WHICH ARE OF ONLY COLLATERAL IMPORTANCE HERE. (FN8) THE CONCLUDING SECTION OF THE ACT, SEC. 2, PROVIDES: "THE LICENSE ISSUED UNDER THE TERMS OF THIS ACT SHALL BE GRANTED IN CONFORMANCE WITH RULES OF PRACTICE AND PROCEDURE OF THE FEDERAL POWER COMMISSION, BUT IN THE EVENT OF ANY CONFLICT, THE PROVISIONS OF THIS ACT SHALL GOVERN IN RESPECT OF THE PROJECT HEREIN AUTHORIZED."

THEREAFTER, THE POWER AUTHORITY OF THE STATE OF NEW YORK, A MUNICIPAL CORPORATION CREATED UNDER THE LAWS OF THAT STATE TO DEVELOP THE ST. LAWRENCE AND NIAGARA POWER PROJECTS, APPLIED TO THE FEDERAL POWER COMMISSION FOR THE PROJECT LICENSE WHICH CONGRESS HAD THUS DIRECTED THE COMMISSION TO ISSUE TO IT. ITS APPLICATION EMBRACED THE PROJECT PLANS THAT IT HAD SUBMITTED TO THE EIGHTY-FIFTH CONGRESS SHORTLY BEFORE ITS APPROVAL OF PUBLIC LAW 85-159. (FN9) THE PROJECT WAS SCHEDULED TO BE COMPLETED IN 1963 AT AN ESTIMATED COST OF $720,000,000.

HEARINGS WERE SCHEDULED BY THE COMMISSION, OF WHICH DUE NOTICE WAS GIVEN TO ALL INTERESTED PARTIES, INCLUDING THE TUSCARORA INDIAN NATION, INASMUCH AS THE APPLICATION CONTEMPLATED THE TAKING OF SOME OF ITS LANDS FOR THE RESERVOIR. THE TUSCARORA INDIAN NATION INTERVENED AND OBJECTED TO THE TAKING OF ANY OF ITS LANDS UPON THE GROUND "THAT THE APPLICANT LACKS AUTHORITY TO ACQUIRE THEM." AT THE HEARINGS, IT WAS SHOWN THAT THE TUSCARORA LANDS NEEDED FOR THE RESERVOIR - THEN THOUGHT TO BE ABOUT 1,000 ACRES - ARE PART OF A SEPARATE TRACT OF 4,329 ACRES PURCHASED IN FEE SIMPLE BY THE TUSCARORA INDIAN NATION, WITH THE ASSISTANCE OF HENRY DEARBORN, THEN SECRETARY OF WAR, FROM THE HOLLAND LAND COMPANY ON NOVEMBER 21, 1804, WITH THE PROCEEDS DERIVED FROM THE CONTEMPORANEOUS SALE OF THEIR LANDS IN NORTH CAROLINA - FROM WHICH THEY HAD REMOVED IN ABOUT THE YEAR 1775 TO RESIDE WITH THE ONEIDAS IN CENTRAL NEW YORK. (FN10)

AFTER CONCLUDING THE HEARINGS, THE COMMISSION, ON JANUARY 30, 1958, ISSUED ITS ORDER GRANTING THE LICENSE. IT FOUND THAT A RESERVOIR HAVING A USABLE STORAGE CAPACITY OF 60,000 ACRE-FEET "IS REQUIRED TO PROPERLY UTILIZE THE WATER RESOURCES INVOLVED." ALTHOUGH THE COMMISSION FOUND THAT THE INDIAN LANDS "ARE ALMOST ENTIRELY UNDEVELOPED EXCEPT FOR AGRICULTURAL USE," IT DID NOT PASS UPON THE TUSCARORAS' OBJECTION TO THE TAKING OF THEIR LANDS BECAUSE IT THEN ASSUMED THAT "OTHER LANDS ARE AVAILABLE FOR RESERVOIR USE IF THE APPLICANT IS UNABLE TO ACQUIRE THE INDIAN LANDS." BUT THE COMMISSION DID DIRECT THE LICENSEE TO REVISE ITS EXHIBIT COVERING THE RESERVOIR, TO MORE DEFINITELY SHOW THE AREA AND ACREAGE INVOLVED, AND TO RESUBMIT IT TO THE COMMISSION FOR APPROVAL WITHIN A STATED TIME.

IN ITS APPLICATION FOR REHEARING, THE TUSCARORA INDIAN NATION CONTENDED, AMONG OTHER THINGS, THAT THE PORTION OF ITS LANDS SOUGHT TO BE TAKEN FOR THE RESERVOIR WAS PART OF A "RESERVATION," AS DEFINED IN SEC. 3(2), AND AS USED IN SEC. 4(E), OF THE FEDERAL POWER ACT, (FN11) AND THEREFORE COULD NOT LAWFULLY BE TAKEN FOR RESERVOIR PURPOSES IN THE ABSENCE OF A FINDING BY THE COMMISSION "THAT THE LICENSE WILL NOT INTERFERE OR BE INCONSISTENT WITH THE PURPOSE FOR WHICH SUCH RESERVATION WAS CREATED OR ACQUIRED." BY ITS ORDER OF MARCH 21, 1958, DENYING THAT APPLICATION FOR REHEARING, THE COMMISSION FOUND THAT "THE BEST LOCATION OF THE RESERVOIR WOULD REQUIRE APPROXIMATELY 1,000 ACRES OF LAND OWNED BY INTERVENER," AND IT HELD THAT THE INDIAN LANDS INVOLVED "ARE NOT PART OF A 'RESERVATION' REFERRED TO IN SECTION 4(E) AS DEFINED IN SECTION 3(2) OF THE FEDERAL POWER ACT AND THE FINDING SUGGESTED BY INTERVENER IS NOT REQUIRED." ON MAY 5, 1958, THE COMMISSION ISSUED ITS ORDER APPROVING THE LICENSEE'S REVISED EXHIBIT WHICH PRECISELY DELINEATED THE LOCATION, AREA, AND ACREAGE TO BE EMBRACED BY THE RESERVOIR - WHICH INCLUDED 1,383 ACRES OF THE TUSCARORAS' LANDS.

ON MAY 16, 1958, THE TUSCARORA INDIAN NATION FILED A PETITION FOR REVIEW IN THE COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT CHALLENGING THE LICENSE ISSUED BY THE COMMISSION ON JANUARY 30, 1958, INSOFAR AS IT WOULD AUTHORIZE THE TAKING OF TUSCARORA LANDS. (FN12) BY ITS OPINION AND INTERIM JUDGMENT OF NOVEMBER 14, 1958, THE COURT OF APPEALS HELD THAT THE TUSCARORA LANDS SOUGHT TO BE TAKEN FOR THE RESERVOIR CONSTITUTE A PART OF A "RESERVATION" WITHIN THE MEANING OF SECS. 3(2) AND 4(E) OF THE FEDERAL POWER ACT, AND THAT THE COMMISSION MAY NOT INCLUDE THOSE LANDS IN THE LICENSE IN THE ABSENCE OF A SEC. 4(E) FINDING THAT THEIR TAKING "WILL NOT INTERFERE OR BE INCONSISTENT WITH THE PURPOSE FOR WHICH SUCH RESERVATION WAS CREATED OR ACQUIRED," AND THE COURT REMANDED THE CASE TO THE COMMISSION THAT IT MIGHT "EXPLORE THE POSSIBILITY OF MAKING THAT FINDING." 105 U.S. APP. D.C. 146, 265 F.2D 338.

UPON REMAND, THE COMMISSION HELD EXTENSIVE HEARINGS, EXPLORING NOT ONLY THE MATTER OF THE MAKING OF THE FINDING HELD NECESSARY BY THE COURT OF APPEALS BUT ALSO THE POSSIBILITY OF LOCATING THE RESERVOIR ON OTHER LANDS. IN ITS ORDER OF FEBRUARY 2, 1959, THE COMMISSION FOUND THAT THE USE OF OTHER LANDS FOR THE RESERVOIR WOULD RESULT IN GREAT DELAY, SEVERE COMMUNITY DISRUPTION, AND UNREASONABLE EXPENSE; THAT A RESERVOIR WITH USABLE STORAGE CAPACITY OF 60,000 ACRE-FEET IS REQUIRED TO UTILIZE ALL OF THE UNITED STATES' SHARE OF THE WATER OF THE NIAGARA RIVER, AS REQUIRED BY PUBLIC LAW 85-159; THAT REMOVAL OF THE RESERVOIR FROM THE TUSCARORA LANDS BY REDUCING THE AREA OF THE RESERVOIR WOULD REDUCE THE USABLE STORAGE CAPACITY FROM 60,000 ACRE-FEET TO 30,000 ACRE FEET AND RESULT IN A LOSS OF ABOUT 300,000 KILOWATTS OF DEPENDABLE CAPACITY. BUT IT CONCLUDED THAT, ALTHOUGH OTHER LANDS CONTIGUOUS TO THEIR RESERVATION MIGHT BE ACQUIRED BY THE TUSCARORAS, (FN13) THE TAKING OF THE 1,383 ACRES OF TUSCARORA LANDS FOR THE RESERVOIR "WOULD INTERFERE AND WOULD BE INCONSISTENT WITH THE PURPOSE FOR WHICH THE RESERVATION WAS CREATED OR ACQUIRED." THAT ORDER WAS TRANSMITTED TO THE COURT OF APPEALS WHICH, ON MARCH 24, 1959, AFTER CONSIDERING VARIOUS MOTIONS OF THE PARTIES, ENTERED ITS FINAL JUDGMENT APPROVING THE LICENSE EXCEPT INSOFAR AS IT WOULD AUTHORIZE THE TAKING OF TUSCARORA LANDS FOR THE RESERVOIR, AND REMANDED THE CASE TO THE COMMISSION WITH INSTRUCTIONS TO AMEND THE LICENSE "TO EXCLUDE SPECIFICALLY THE POWER OF THE SAID POWER AUTHORITY TO CONDEMN THE SAID LANDS OF THE TUSCARORA INDIANS FOR RESERVOIR PURPOSES." 105 U.S. APP. D.C., AT 152, 265 F.2D, AT 344.

BECAUSE OF CONFLICT BETWEEN THE VIEWS OF THE COURT BELOW AND THOSE OF THE SECOND CIRCUIT, AND OF THE GENERAL IMPORTANCE OF THE QUESTIONS INVOLVED, WE GRANTED CERTIORARI. 360 U.S. 915.

THE PARTIES HAVE URGED UPON US A NUMBER OF CONTENTIONS, BUT WE THINK THESE CASES TURN UPON THE ANSWERS TO TWO QUESTIONS, NAMELY, (1) WHETHER THE TUSCARORA LANDS COVERED BY THE COMMISSION'S LICENSE ARE PART OF A "RESERVATION" AS DEFINED AND USED IN THE FEDERAL POWER ACT, 16 U.S.C. SEC. 791A ET SEQ., AND, IF NOT, (2) WHETHER THOSE LANDS MAY BE CONDEMNED BY THE LICENSEE, UNDER THE EMINENT DOMAIN POWERS CONFERRED BY SEC. 21 OF THE FEDERAL POWER ACT, 16 U.S.C. SEC. 814. WE NOW TURN TO A CONSIDERATION OF THOSE QUESTIONS IN THE ORDER STATED.