Greene County Planning Board v. Federal Power Commission

No. 76-4151 (2d Cir. June 30, 1977)

Reversing a panel decision, 7 ELR 20101, the Second Circuit Court of Appeals, sitting en banc, denies a petition for review of a Federal Power Commission (FPC) order denying an award of attorney fees to intervenors in a proceeding concerning the construction of an electrical transmission line. The court's conclusion that the Federal Power Act does not authorize the Commission to pay the legal expenses of intervenors must have control over the Comptroller General's opinion that the statute does give the agency such power. Authorization for the FPC to reimburse intervenors for their legal expenses must therefore await congressional action.

A dissent contends that the panel decision to remand for further FPC consideration of the funding request should be affirmed. The Comptroller General's opinion is entitled to the same judicial deference accorded an agency's statutory interpretation. Moreover, Alyeska Pipeline Service Co. v. Wilderness Society, 5 ELR 20286, is not controlling because it involved the compulsory shifting of intervenors' fees onto a private party rather than discretionary fee reimbursement by a federal agency.

Counsel for Petitioners
Robert J. Kafin
8 Pine St., Glens Falls NY 12801
(518) 793-6631

Barry H. Garfinkel
Skadden, Arps, Slate, Meagher & Flom
918 Third Ave., New York NY 10022
(212) 371-6000

Counsel for Respondent
Philip R. Telleen, Drexel D. Journey, Robert W. Perdue, Allan Tuttle
Federal Power Commission, Washington DC 20426
(202) 275-4346

Counsel for Intervenor Power Authority of the State of New York
Scott B. Lilly, John C. Mason, Vito J. Cassan
Power Authority of the State of New York
10 Columbus Circle, New York NY 10019
(212) 265-6510

Counsel for Amicus Curiae Pacific Legal Foundation
Ronald A. Zumbrun, Robert K. Best, Raymond M. Momboisse
455 Capitol Mall, Suite 465, Sacramento CA 95814
(916) 444-0154

Albert Ferri, Jr., Glenn E. Davis, Lawrence P. Jones
1990 M St., NW, Washington DC 20036
(202) 466-2686

Joined by Gurfein, Meskill & Mulligan, JJ.; Kaufman, C.J., concurs; Lumbard, Mansfield & Oakes, JJ., dissent.^*

[7 ELR 20552]

Van Graafeiland, J.:

After six years of litigation over the construction of a power line in Greene County, New York, the dispute between the parties has resolved itself into the issue of whether the Federal Power Commission is authorized to award counsel fees to petitioners who opposed the construction.

In 1972, when this case was before us on a prior appeal, we held that the Federal Power Act did not authorize the making of such an award. Greene County Planning Board v. Federal Power Commission, 455 F.2d 412, 426 (2d Cir.), cert. denied, 409 U.S. 849 (1972).Following that decision, further hearings were held before the Commission, at the conclusion of which it denied petitioners' requests for counsel fees and expenses. Relying upon our ruling and upon the Supreme Court's decision in Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975), the Commission found that it was not empowered to grant petitioners' requests. It also said in its opinion (No. 751, January 21, 1976):

These intervenors are protecting their own interests, and we see no reason to grant them fees and expenses. If they were generally allowed, a large financial burden would be imposed on this Commission and the taxpayer or upon the utility involved and inevitably on its rate payers. In the absence of a mandate in the statute we are loath to attempt such an expensive departure from past practice.

Upon appeal, a panel of this Court, with one judge dissenting, reversed that portion of the order disallowing the applications for fees and remanded to the Commission for further consideration of petitioners' requests.¹ Petitions for en banc consideration were granted solely as to this issue and a majority of the Court, sitting en banc, hold that the petition for review of that portion of the Commission's order denying an award of attorneys' fees should be denied.

In arguing for remand, petitioners rely upon an interpretation of the Federal Power Act by the Comptroller General of the United States which is contrary to our own. In Matter of Costs of Intervention — Nuclear Regulatory Commission, B-92288 (Feb. 19, 1976), the Comptroller General held that the NRC had statutory authority to pay the legal expenses of intervenors. In a subsequent letter addressed to the Oversight and Investigations Subcommittee of the House of Representatives' Committee on Interstate and Foreign Commerce, the Comptroller General stated that this opinion was applicable to nine other agencies, in cluding the Federal Power Commission. We are thus met squarely with the issue of whether this Court's interpretation of the Federal Power Act or that of the Comptroller General shall control the disposition of this appeal. We hold that our interpretation must control.

Congress has specifically provided that "[t]o the extent necessary to decision . . . the reviewing court shall decide all relevant questions of law," and "interpret constitutional and statutory provisions" and shall "hold unlawful and set aside agency action . . . in excess of statutory jurisdiction, authority or limitations. . . ." 5 U.S.C. § 706; see Mulry v. Driver, 366 F.2d 544, 549 (9th Cir. 1966). We are not prepared to abdicate the responsibility thus conferred by holding that the authority of the Federal Power Commission is to be determined by the Comptroller General's interpretation of the law rather than our own.

31 U.S.C. § 74 permits the head of an executive department, in his discretion, to apply to the Comptroller General for a commitment in advance that the General Accounting Office will not question the validity of a specific disbursement in passing upon the account of that department.² A commitment given in response to such a request [7 ELR 20553] operates as a form of estoppel against subsequent challenge by the GAO. It is not, however, a binding legal opinion, but one which may be contested in the courts. United States ex rel. Brookfield Construction Co. v. Stewart, 234 F. Supp. 94, 100 (D.D.C.), aff'd, 339 F.2d 753 (D.C. Cir. 1964).It is for the courts to determine the intent of Congress as expressed in its legislative enactments. In making this determination, as we do in this case, we interfere in no way with the authority of the Comptroller General to approve or disapprove disbursements made by executive agencies. We simply hold that the Federal Power Commission has no statutory authority to make the disbursements in question. Cf. Miguel v. McCarl, 291 U.S. 442 (1934).

We note that in Matter of Costs of Intervention — Nuclear Regulatory Commission, supra, the Comptroller General did not merely hold that the NRC had authority to pay legal expenses of intervenors; he specified the conditions under which payment could be made. He said: (1) NRC must believe that participation by the intervenor is required by statute or necessary to represent adequately opposing points of view; (2) the intervenor must be indigent or otherwise unable to bear the financial cost of participation. Subsequently, although there were no statutory changes, the Comptroller General modified these conditions, holding that payment is authorized if an agency determines that an expenditure for participation "can reasonably be expected to contribute substantially to a full and fair determination" of the issues even though the expenditure might not be essential. See Matter of Costs of Intervention — Food and Drug Administration, B-139703 (Dec. 3, 1976). The Comptroller General also perceived no legal objection to the making of awards "solely to ensure that a potentially affected interest is represented" or to giving the "representational role of the participant special weight in deciding whether to provide financial assistance." Id.

The authority of a Commission to disburse funds must come from Congress, Turner v. FCC, 514 F.2d 1354, 1356 (D.C. Cir. 1975); and it is for Congress, not the Comptroller General, to set the conditions under which payments, if any, should be made. No officer or agent of the United States may disburse public money unless authorized by Congress to do so. Royal Indemnity Co. v. United States, 313 U.S. 289, 294 (1941); Heidt v. United States, 56 F.2d 559, 560 (5th Cir. 1932); Fansteel Metalurgical Corp. v. United States, 172 F. Supp. 268,270 (Ct.Cl. 1959). Sums appropriated for the various branches of expenditure in the public service must be applied solely to the objects for which appropriations were made and for no others. 31 U.S.C. § 628. Congress has shown a lively interest in the matter of financial assistance for intervening parties, and legislation dealing with this subject has been introduced in both the 94th and 95th Sessions of Congress.³ In light of the Supreme Court's very broad language in Alyeska Pipeline Service Co. v. Wilderness Society, supra, 421 U.S. at 257, that "absent statute or enforceable contract, litigants pay their own attorneys' fees", a finding that the Federal Power Commission is empowered to reimburse intervenors for their legal expenses must await appropriate Congressional action.

The petitions for review are denied.

* Judges FEINBERG and TIMBERS did not participate in the consideration or determination of this rehearing.

1. The panel opinion left intact the orders of the Federal Power Commission which authorized construction of an electrical transmission line by the Power Authority of the State of New York.

2. The Federal Power Commission has never deemed itself authorized to pay the legal fees of private litigants and has sought no commitment from the Comptroller General as to the validity of such payments. This interpretation of the Federal Power Act by the agency charged with its administration is entitled to great deference from this Court. Udall v. Tallman, 380 U.S. 1, 16 (1965).

3. Congress is presently deliberating three bills dealing with the subject of intervenors' costs. They are collectively identified as "Public Participation in Federal Agency Procedures Act of 1977", S.270, H.R. 3361 and H.R. 3362.

[7 ELR 20553]

KAUFMAN, Chief Judge (concurring):

I would add only one brief comment to my brother Van Graafeiland's reasoned opinion. The decision whether to expend public funds to advance an essentially private point of view by its very nature is political and, in a democracy, more appropriately made by the elected representatives of the people. All interested individuals can claim, with utmost sincerity, to represent the "public". Some selection among potential intervenors becomes necessary, therefore, to assure a fair and balanced presentation of the various viewpoints while insuring, at the same time, that the agency does not exceed its financial constraints. Such choices are particularly unamenable to judicial structuring. Indeed, the Supreme Court, in the Alyeska Pipeline case, refused to give the courts the right to determine, in the absence of legislative guidelines, which public policies are sufficiently important to warrant exceptions from the general prohibition of fee shifting. And the Comptroller General himself in Matter of Costs — NRC, at 8, stated:

. . . [W]e believe it would be advisable for the parameters of such financial assistance, and the scope and limitations on the use of appropriated funds for this purpose to be fully set forth by the Congress in legislation, as was done in the case in the FTC by the "Magnuson-Moss" Act.

Our three prior decisions in this seemingly interminable case demonstrate the critical and important role that intervenors can play in agency decision-making. I believe that expanded participation by advocates of a variety of public interests before agencies would tend to decrease the number of appeals taken to the federal courts and also the number of cases remanded to agencies because the record failed to reflect adequate consideration of the concerns of all affected parties. Nevertheless, if Congress is of the view, as I am, that a reliable source of funding is a sine qua non to effective public participation in agency proceedings, it should appropriate money to that end. At the same time it should establish a comprehensive and flexible framework that will assure vigorous and independent representation of the public interest and avoid potential abuses.

Thus, while I agree with my dissenting brethren that public funding has become necessary to the optimal functioning of the administrative process, I do not agree that the decision of the en banc majority is an "unfortunate step backward." I would rather characterize it as an eschewal of the inevitable pitfalls of "judicial lawmaking" in the face of congressional inability to resolve the dilemmas posed by these sensitive issues.

[7 ELR 20553]

LUMBARD, Circuit Judge, with whom MANSFIELD and OAKES, Circuit Judges, join (dissenting):

I respectfully dissent from the en banc court's decision. In view of the Comptroller General's recent decision on [7 ELR 20554] agency reimbursement of intervenors' expenses, I believe we should remand to the FPC for further consideration of the intervenors' request in this case. I do not think the Commission's authority to pay intervenors' litigation expenses has been precluded by our decision in Greene County Planning Board v. FPC, 455 F.2d 412 (2d Cir.), cert. denied, 409 U.S. 849 (1972), or by the Supreme Court's decision in Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975).

The question raised in Greene County I was whether the court should order the Commission to pay for intervenors' expenses. On this issue, the panel concluded:

[W]e find ourselves in agreement with the Commission's position that at this posture of the proceedings and under current circumstances, without a clearer congressional mandate we should not order the Commission . . . to pay the expenses and fees of petitioners . . . .

Without a showing of compelling need, it would be premature for us to inject the federal courts into this area of administrative discretion, perhaps foreclosing more flexible approaches through agency action or rules.

455 F.2d at 426, 427.

In deciding whether the FPC could be required by court order to pay intervenors' expenses the Greenc County I panel considered two statutes, § 309 of the Federal Power Act, 16 U.S.C. § 825h, which deals with the FPC's rulemaking powers, and § 314(c) of that Act, 16 U.S.C. § 825m(c), which authorizes the Commission to employ attorneys for its own use. Finding no such requirement in these statutes, the panel understandably reasoned that a court should not order an agency to disburse funds "without a far clearer congressional mandate," 455 F.2d at 426.

Such caution was appropriate: since the power of the purse belongs to Congress, a court is not free to disburse agency funds whenever it thinks this would be fair. Not only would such judicial freelancing impinge on Congress' constitutional prerogatives, it would also tend to place administrators in the embarrassing position of trying to follow a court's order without any assurance that the funds would be available. For this reason, courts have declined to order agency disbursements over the opposition of Congress' auditing agent, the Comptroller General, except where the duty to pay is "free from doubt." Compare Brunswick v. Elliot, 103 F.2d 746, 750-51 (D.C. Cir. 1939), with Miguel v. McCarl, 291 U.S. 442, 454 (1934).¹

We are now dealing with a different issue, which is whether the Commission has discretionary authority to pay for intervenors' expenses if it considers such reimbursement to be necessary or desirable. That federal agencies possess such discretionary authority has been recognized by the Comptroller General since the Greene County I panel decision, and in the case of the FPC would be based on two statutes that were not considered by that panel, § 308 of the Federal Power Act, 16 U.S.C. § 825g,² which deals with Commission hearings, and the statute enacted by Congress which provides a general appropriation to pay for "expenses necessary for the work of the Commission," 90 Stat. 889, 898.³ As head of the General Accounting Office, the Comptroller General has the power to pass in advance on the legality of administrative expenditures. See 31 U.S.C. § 74.⁴ Approval by the Comptroller General assures the agency making the disbursement that the necessary funding will not later be withheld by Congress. By his decision in Matter of Costs of Intervention — Nuclear Regulatory Commission, Dec. B-92288 (Feb. 19, 1976), and Matter of Costs of Intervention — Food & Drug Administration, Dec. B-139703 (Dec. 3, 1976), and by his May 10, 1976 letter to the Oversight and Investigations Subcommittee of the House Committee on Interstate and Foreign Commerce, the Comptroller General has categorically held that the FPC has discretionary authority to reimburse expenses of impecunious intervenors who "'contribute substantially to a full and fair determination of' the issues before it." Costs of Intervention — FDA, supra at 5.

Since the Comptroller General is Congress' chief agent for guarding the public fisc, his opinions on expenditure issues are comparable to those of any agency in its area of special responsibility, and they are entitled to at least as much deference from courts as is given to an enforcing agency's statutory interpretations, see, e.g., Volkswagenwerk Aktiengesellschaft v. FMC, 390 U.S. 261, 272 (1968); Udall v. Tallman, 380 U.S. 1, 16 (1965); Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944). Judicial deference is particularly appropriate here where the Comptroller's General's interpretation is one which limits rather than expands his power over the purse strings. Compare FMC v. Seatrain Lines, Inc., 411 U.S. 726, 745-46 (1973).

The Comptroller General based his decision on the proposition that:

where an appropriation is made for a particular object, purpose, or program, it is available for expenses which are reasonably necessary and proper or incidental to the execution of the object, purpose or program for which the appropriation was made, except as to [7 ELR 20555] expenditures in contravention of law or for some purpose for which other appropriations are made specifically available.

Costs of Intervention — NRC, supra at 3. Since public hearings are integral to the functioning of an agency such as the FPC, authorization for reimbursement of indigent intervenors who make important contributions in these hearings can reasonably be found in the agency's general statutory mandate, see 16 U.S.C. § 793, as well as § 825g. See also Note, Federal Agency Assistance to Impecunious Intervenors, 88 Harv. L. Rev. 1815, 1828-29 (1975).

Although express statutory authorization is required before either a court or a regulatory commission can order one litigant to pay a prevailing litigant's expenses on the ground that the prevailing litigant represents the public interest, Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240 (1975); Turner v. FCC, 514 F.2d 1354 (D.C. Cir. 1975), fee reimbursement is distinguishable from fee shifting because it involves no direct exercise of compulsion against a private party.⁵ Alyeska was decided in the context of a long history of cases upholding the "American Rule" against taxing attorneys' fees to the losing party, see 421 U.S. at 247-54; a general statute for taxing costs, 28 U.S.C. § 1920, which was intended to be comprehensive and which omitted attorneys' fees from the list of allowable costs, see 421 U.S. at 255-56; and a number of statutes explicitly authorizing attorneys' fees assessments in certain specific types of cases, see 421 U.S. at 260-62. None of these factors is present here. Because "public interest" intervention is largely a recent development, there is no longestablished rule against agency funding for intervenors. Congress has legislated on the subject only twice, see Toxic Substance Control Act, 15 U.S.C. § 2620(4)(c); Clean Air Act § 304(d); Moreover, in declining to enact provisions for attorneys' fees payments in proceedings before the Nuclear Regulatory Commission, Congress declared that its intention was to let the NRC decide for itself whether parties should be given reimbursement for attorneys' fees. See House Conference Rep. No. 93-1445, 1974 U.S. Code Cong. & Adm. News at 5550-51. Accordingly, I conclude that it was altogether reasonable for the Comptroller General to find that agency reimbursement of intervenors' attorneys' fees need not await further legislation from Congress.⁶

The decision of the en banc majority seems an unfortunate step backwards. Public funding for public interest intervenors has become necessary to the optimal functioning of the administrative process. Involvement in administrative proceedings is time-consuming and expensive, and where individual interests are diffuse and noneconomic these costs are a substantial barrier to effective participation.⁷ When good citizens are willing to give their time and money to voice a broader public interest and thus to make useful contributions to government decisionmaking, there should be some means for reimbursing their reasonable attorneys' fees, expert witness costs, and other expenses. Otherwise, many good causes will be crippled because of financial limitations on presentation, and many others will go unpled. Intervenors who represent public interests in addition to their own interests have important contributions to make to the regulatory process.⁸ Where such intervenors aid an agency in performing its statutory duties, it is only fair that the costs of intervention should be treated as part of the cost of agency administration.

1. An adverse Comptroller General's ruling does not prevent a claimant from pursuing a suit for money damages against the United States in the Court of Claims. United States ex rel. Brookfield Construction Co. v. Stewart, 234 F. Supp, 94, 100 (D.D.C.), aff'd 339 F.2d 753 (D.C. Cir. 1964); see, e.g., Iran Nat'l Airlines Corp. v. United States, 360 F.2d 640, 641-42 (Ct. Cl. 1966).

2. 16 U.S.C. § 925g(a) provides:

(a) Hearings under this chapter may be held before the Commission, any member or members thereof or any representative of the Commission designated by it . . . In any proceeding before it, the Commission, in accordance with such rules and regulations as it may prescribe, may admit as a party any interested State, State commission, municipality, or any representative of interested consumers or security holders, or any competitor of a party to such proceeding, or any other person whose participation in the proceeding may be in the public interest.

3. The FPC's appropriation was for the fiscal year here in question over $41 million. The Commission is authorized by 16 U.S.C. § 798 to make "such expenditures . . . as are necessary to execute its functions." Moreover, under section 6 of the Federal Power Act, 16 U.S.C. § 799, licenses issued by the Commission include the condition of section 10(e) that the licensee pay a share of the Commission's administrative costs. Thus the license is in the nature of a contract under which the licensee expressly agrees to share administrative costs, including fees required to be paid.

4. In passing on the legality of expenditures, the Comptroller General has a "judicial duty" to "determine finally the construction of statutes." See Joint Commission Report, 26 Cong. Rec. at 7483-84 (1894); 21 Op. [Att'y Gen.] 178, 181 [1895].

5. Here, indeed, there is not the fee-shifting that was prescribed in Alyeska; at least to the extent of the Commission's own general appropriation, note 3 supra and accompanying text, any fees paid to intervenors can properly be said to come from the Commission's own funds, not those of the licensee. To the limited extent that this might not be true, moreover, by virtue of the licensee's statutory duty under section 10(e) of the Federal Power Act, 16 U.S.C. § 803(e), to pay a share of the Commission's administrative costs included as a condition of the license which is agreed to by the licensee under section 6, 16 U.S.C. § 799, any "shifting" of fees involved would be done by the contract — the license itself. This is perfectly proper under Alyeska, 412 U.S. at 257 ("the general rule that, absent statute or enforceable contract, litigants pay their own attorneys' fees") (emphasis added).

6. Despite the fears expressed by my brother Kaufman about "judicial structuring" and "judicial lawmaking," I see no cause for concern here. It would be the administrative agency, and not the court, which in the first instance would determine whether intervenors make a substantial enough contribution to the administrative process to merit a fee award.

7. See 88 Harv. L. Rev. at 1819 & n.23.

8. See Leventhal, Attorneys' Fees for Public Interest Representation, 62 A.B.A.J. 1134 (1976).