Escondido Mut. Water Co. v. La Jolla Band of Mission Indians, 466 U.S. 765 (1984)

The term “Commission” refers to the Federal Power Commission prior to October 1, 1977, and to the Federal Energy Regulatory Commission thereafter. See 42 U. S. C. §§ 7172(a), 7295(b).

The Yuima tracts of land are under the jurisdiction of the Pauma Band. Thus, while there are six Mission Indian Reservations involved in the present dispute, only five Indian Bands are represented.

Various agreements, dating back to 1894, among the Secretary, the Bands whose land the canal traverses, and Mutual and its predecessor purportedly grant Mutual rights-of-way for the canal in exchange for supplying certain amounts of water to the Bands. The validity of these agreements is the subject of separate, pending litigation instituted by the Bands in 1969. Rincon Band of Mission Indians v. Escondido Mutual Water Co., Nos. 69-217S, 72-276-S, and 72-271-S (SD Cal.). In addition, the Bands have sued the United States pursuant to the Indian Claims Commission Act, ch. 959, 60 Stat. 1049, 25 U. S. C. §70 et seq. (1976 ed.), for failure to protect their water rights. Long v. United States, No. 80-A1 (Cl. Ct.). That proceeding is also pending.

Section 14(b), 16 U. S. C. § 807(b), of the FPA authorizes the Commission to recommend to Congress that the Federal Government take over a project following expiration of the license. If Congress enacts legislation to that effect, the project is operated by the Government upon payment to the original licensee of its net investment in the project and certain severance damages.

Section 15(b), 16 U. S. C. § 808(b), authorizes the Commission to grant a license for use of a project as a “nonpower” facility if it finds the project no longer is adapted to power production. In that event, the new licensee must make the same payments to the original licensee that are required of the United States pursuant to § 14(b). See n. 4, supra.

Earlier, the Secretary and the La Jolla, Rincon, and San Pasqual Bands filed complaints with the Commission, alleging that Mutual violated the provisions of the 1924 license by permitting the Vista Irrigation District to use the project facilities and by using the canal to divert water pumped from a lake created by Vista nine miles above Mutual’s diversion dam. They sought, among other things, an increase in the annual charges paid to the Bands under the license. These complaints were considered in conjunction with the competing applications, and the Commission awarded readjusted annual charges to the three Bands. The Commission’s resolution of that issue is not before us.

The Bear Valley powerhouse has a generating capacity of only 520 kilowatts. The Rincon powerhouse is capable of producing only 240 kilowatts. The Administrative Law Judge noted that “[t]he horsepower generated by the entire project is not even the equivalent to that produced by a half dozen modern automobiles.” 6 FERC, at 65,093.

The Commission concluded that § 4(e) required it “to give great weight to the judgments and proposals of the Secretaries of the Interior and Agriculture” but that under § 10(a) it retained ultimate authority for determining “the extent to which such conditions will in fact be included in particular licenses.” 6 FERC, at 61,414.

Groundwater is water beneath the surface of the earth. The condition suggested by the Secretary applied to water which Vista pumped from the Warner groundwater basin underlying Lake Henshaw and its headwaters in order to augment the natural flows into the lake.

For example, the Commission required the licensees to permit the three Bands to use certain quantities of water under certain circumstances. See id., at 61,424-61,432.

Judge Anderson dissented from the order entered on petition for rehearing, 701 F. 2d, at 827-831, concluding that neither § 8 of the MIRA nor § 16 of the Indian Reorganization Act, 25 U. S. C. § 476, requires that tribal consent be obtained before the Bands’ lands can be used for a hydroelectric project licensed under the FPA. He also concluded that the Secretary’s §4(e) conditions have to be included in the license only to the extent they are reasonable and that the reasonableness determination is to be made initially by the Commission.

The Court of Appeals affirmed the Commission’s conclusion that it had jurisdiction over the project, and the parties have not sought review of that ruling.

The Commission did not petition for review of the Court of Appeals’ decision but filed a brief and appeared at oral argument urging reversal. Since the Commission’s arguments largely parallel those presented by Mutual, Escondido, and Vista, our use of the term petitioners includes the Commission.

In 1930, the Commission was reorganized as a five-person body, independent from the Secretaries. Act of June 23,1930, ch. 572, 46 Stat. 797.

Between 1914 and 1917, four bills dealing with the licensing of hydroelectric projects were introduced into Congress, none successfully. In 1918, a bill prepared by the Secretaries of War, the Interior, and Agriculture, at the direction of President Wilson, was introduced. H. R. 8716, 65th Cong., 2d Sess. (1918). It contained the language of the §4(e) proviso basically as it is now framed. Because of the press of World War I and other concerns, the legislation was not enacted until 1920. See J. Kerwin, Federal Water-Power Legislation 217-263 (1926).

Petitioners note that in 1930, when the structure of the Commission was changed, see n. 14, supra, James Lawson, then Acting Chief Counsel of the Commission, stated that under the structure then in existence, “[t]he Commission now has power to override the head of a department as to the consistency of a license with the purpose of any reservation.” Investigation of Federal Regulation of Power: Hearings pursuant to S. Res. 80 and S. 3619 before the Senate Committee on Interstate Commerce, 71st Cong., 2d Sess., 358 (1930). This snippet of postenactment history does not help petitioners’ cause at all. All parties agree that the Commission has the authority to make a finding that “the license will not interfere or be inconsistent with the purpose for which such reservation was created or acquired.” 16 U. S. C. § 797(e) (emphasis added). This is separate from *776the Secretary’s authority to condition the license for the adequate protection and utilization of the reservation. Lawson’s statement was clearly concerned with the former. Indeed, a contemporaneous memorandum by the Commission’s legal staff (of which Lawson was the head), stated that the Secretary of the Interior had authority under what is now § 4(e) “ ‘to prescribe conditions to be inserted in the license for the protection and utilization of the reservation.’” Brief for Secretary of the Interior 33, quoting Memorandum of Sept. 20, 1929, p. 23. It may well be that in a particular case the conditions suggested by the Secretary will unduly undermine the Commission’s licensing judgment. However, as noted infra, at 777, and n. 19, that is a determination the court of appeals is to make. Similarly misplaced is petitioners’ reliance on the fact that once the bill was passed, President Wilson, at the request of the Secretary, withheld his signature until Congress agreed that it would pass legislation in its next session removing national parks and monuments from the scope of the Act. Contrary to petitioners’ assertion, this does not show that the Secretary knew that § 4(e) did not grant him enough authority to protect these lands, which were within his “conditioning” jurisdiction. Rather, the Secretary objected to the inclusion of national parks and monuments in the legislation because he believed that Congress, not the Commission, should decide on a case-by-case basis whether any hydroelectric development should occur in these areas. H. R. Rep. No. 1299, 66th Cong., 3d Sess., 2 (1921).

Even the Secretary concedes that the conditions must be “reasonable and supported by evidence in the record.” Brief for Secretary of the Interior 37. See also Tr. of Oral Arg. 20.

By its terms, §4(e) requires that the conditions must be “necessary for the adequate protection and utilization of such reservations.” At oral argument, the Secretary agreed that the conditions should ultimately be sustained only if they “are reasonably related to the purpose of ensuring that the purposes of the reservation are adequately protected, and that the reservation is adequately utilized.” Id., at 22.

Section 313(b) of the FPA provides that the Commission’s orders, including licenses, can be reviewed “in the United States court of appeals for any circuit wherein the licensee ... is located or has its principal place of business, or in the United States Court of Appeals for the District of Columbia.” 16 U. S. C. § 825i(b).

Of course, the Commission is not required to argue in support of the conditions if it objects to them. Indeed, it is free to express its disagreement with them, not only in connection with the issuance of the license but also on review. Similarly, the Commission can refuse to issue a license if it concludes that, as conditioned, the license should not issue. In either event, the license applicant can seek review of the conditions in the court of appeals, but the court is to sustain the conditions if they are consistent with law and supported by the evidence presented to the Commission, either by the Secretary or other interested parties. 16 U. S. C. § *8251(b).* We note that in the unlikely event that none of the parties to the licensing proceeding seeks review, the conditions will go into effect notwithstanding the Commission’s objection to them since the Commission is not authorized to seek review of its own decisions. The possibility that this might occur does not, however, dissuade us from interpreting the statute in accordance with its plain meaning. Congress apparently decided that if no party was interested in the differences between the Commission and the Secretary, the dispute would best be resolved in a nonjudicial forum.

Petitioners also contend that the Secretary’s authority to impose conditions on the license is inconsistent with the Commission’s authority and responsibility under § 10(a) to determine that “the project adopted . . . will be best adapted to a comprehensive plan ... for the improvement and utilization of water-power development, and for other beneficial public uses.” 16 U. S. C. § 803(a). Our discussion of the alleged conflict between the Commission’s authority to make its “no interference or inconsistency” determination and the Secretary’s conditioning authority applies with equal force to this contention. The ultimate decision whether to issue *779the license belongs to the Commission, hut the Secretary’s proposed conditions must be included if the license issues. Any conflict between the Commission and the Secretary with respect to whether the conditions are consistent with the statute must be resolved initially by the courts of appeals, not the Commission. Petitioners’ assertion that the conditions proposed by the Secretary in this case were outside the Commission’s authority to adopt goes to the validity of the conditions, an issue not before this Court. It may well be that the conditions imposed by the Secretary are inconsistent with the provisions of the FPA and that they are therefore invalid (something we do not decide), but that issue is not for the Commission to decide in the first instance but is reserved for the court of appeals at the instance of the licensees and with the participation of the Commission if it is inclined to present its views.

Petitioners also contend that the Commission’s longstanding interpretation of § 4(e) is entitled to deference, citing language from its early decisions. E. g., Pigeon River Lumber Co., 1 F. P. C. 206, 209 (1935); Southern California Edison Co., 8 F. P. C. 364, 386 (1949). Petitioners concede, however, that the Commission never actually rejected any of the Secretary’s conditions until 1975. Pacific Gas & Electric Co., 53 F. P. C. 523, 526 (1975). Even then, the issue was not squarely presented because there was some question whether § 4(e) even applied in that proceeding. Ibid. It is therefore far from clear that the Commission’s interpretation is a longstanding one. More importantly, an agency’s interpretation, even if well established, cannot be sustained if, as in this case, it conflicts with the clear language and legislative history of the statute.

Mutual, Escondido, and Vista assert that § 4(e) is not at issue in this case because this is a relicensing procedure governed by § 15(a). The Commission was of a different view and dealt with the case as an original *780licensing procedure since the new license included facilities not covered by the 1924 license and since the project being relicensed was “so materially different from the [pjroject . . . which was initially licensed in 1924 that little more than the project number remains the same.” 6 FERC ¶ 61,189, p. 61,411 (1979). The licensees did not object to this conclusion in their petition for rehearing to the Commission, and they may not challenge it now. 16 U. S. C. § 825Z(b). Accordingly, we have no reason to decide whether § 4(e) applies to relicensing proceedings.

Section 3(2) of the FPA provides:

Indeed, in another provision of the Act, Congress provided that the term “project” includes “all water-rights . . . lands, or interests in lands the use and occupancy of which are necessary or appropriate in the maintenance” of a “unit of improvement or development.” 16 U. S. C. § 796(11). Had Congress thought that water rights were always covered by the term “interests in land,” it would not have felt it necessary to refer to water rights.

The statute authorizes the construction of project works without a license on nonnavigable waters over which Congress has Commerce Clause jurisdiction if the Commission finds that “the interests of interstate or foreign commerce would [not] be affected by such proposed construction . . . and if no public lands or reservations are affected.” 16 U. S. C. § 817.

The Bands’ situation was somewhat different since it was necessary to secure the approval of the Secretary for any such contracts.

The FPA requires that when licenses involve tribal lands within a reservation, “the Commission shall ... fix a reasonable annual charge for the use thereof.” 16 U. S. C. § 803(e). When a licensed facility is on private land, the licensee must acquire the appropriate right-of-way from the landowner either by private negotiation or through eminent domain. 16 U. S. C. §814.

The Bands suggest that even in the absence of § 8 of the MIRA, their consent would be necessary before the license could issue because of their sovereign power to prevent the use of their lands without their consent. Brief for Respondents La Jolla Band of Mission Indians et al. 37-39. However, it is highly questionable whether the Bands have inherent authority *788to prevent a federal agency from carrying out its statutory responsibility since such authority would seem to be inconsistent with their status. See Oliphant v. Suquamish Indian Tribe, 435 U. S. 191, 208-209 (1978). In any event, it is clear that all aspects of Indian sovereignty are subject to defeasance by Congress, United States v. Wheeler, 435 U. S. 313, 323 (1978), and, from the legislative history of the FPA, supra, at 787, that Congress intended to permit the Commission to issue licenses without the consent of the tribes involved.

Briefs of amici curiae urging reversal were filed for the American Public Power Association et al. by Robert L. McCarty, George H. Williams, Jr., Donald H. Hamburg, Christopher D. Williams, Frances E. Francis, and Robert C. McDiarmid; for the Edison Electric Institute by William J. Madden, Jr., Frederick T. Searls, Peter B. Kelsey, and WilliamL. Fang; and for the Joint Board of Control of the Flathead, Mission and Jocko Valley Irrigation Districts of the Flathead Irrigation Project, Montana, by Frank J. Martin, Jr., and John D. Sharer. Patrick A. Parenteau filed a brief for the National Wildlife Federation et al. as amici curiae.

27 Trust patents were issued on September 13, 1892, for the La Jolla and Rincon Reservations, and on July 10, 1910, for the San Pasqual Reservation.