Salt Lake City v. Western Area Power Administration

TACHA, Circuit Judge,

dissenting.

I respectfully dissent from the majority on whether this court must defer to the determination of Western Area Power Administration (WAPA) that the approximately 155 Utah and Wyoming cities, counties, and towns represented by Utah Power and Light (UP & L) are not preferred entities under the Colorado River Storage Project Act (CRSP Act), 43 U.S.C. §§ 620-20a, and section 9(c) of the Reclamation Project Act of 1939 (Reclamation Act), 43 U.S.C. § 485h(c). Deferential review of an agency’s statutory construction under Chevron, USA, Inc. v. Natural Resources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), does not apply to this case because Congress expressed in section 9(c) a clear intent about whether municipalities are preferred entities in the distribution of power from federal sources. I find Congress’s intent about a preference for municipalities clearly expressed in the words of the statute and am convinced we must reject WAPA’s requirement that municipalities have utility responsibility in order to receive preference under the statute. Although I agree with the majority’s holding in Part II that the CRSP Act does not prohibit WAPA from purchasing nonfederal power, I would reverse the district court’s finding that the Utah and Wyoming cities, counties, and towns represented by UP & L are not preferred entities under the Reclamation Act.

The Supreme Court in Chevron explained the approach federal courts must follow in construing statutory language:

When a court reviews an agency’s construction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency must give effect to the unambiguously expressed intent of Congress.

*984 Id. at 842-43, 104 S.Ct. at 2781. Based on Chevron, a reviewing court defers to a reasonable agency interpretation only on issues Congress did not address — “gap[s] left, implicitly or explicitly, by Congress.” Id. at 843, 104 S.Ct. at 2781. As the Court pointed out, gaps may indicate Congress’s implicit or explicit delegation of authority to the agency to regulate that specific issue. Id.

In a series of cases following Chevron, the Court has reiterated that deferential review does not replace the federal courts’ continuing duty to interpret statutes using the traditional tools of statutory construction. See Dole v. United Steelworkers, 494 U.S. 26, 110 S.Ct. 929, 934, 108 L.Ed.2d 23 (1990); NLRB v. United Food & Commercial Workers Union, 484 U.S. 112, 123, 108 S.Ct. 413, 420-21, 98 L.Ed.2d 429 (1987); see also INS v. Cardoza-Fonseca, 480 U.S. 421, 430-46, 107 S.Ct. 1207, 1212-21, 94 L.Ed.2d 434 (1987) (applying traditional tools of statutory construction to statutory requirements to determine whether two standards are identical). Deferential review is only appropriate when a court is unable to discern congressional intent. See Chevron, 467 U.S. at 842-43, 104 S.Ct. at 2781; National Grain & Feed Ass’n v. OSHA, 866 F.2d 717, 733 (5th Cir.1989). A court does not defer to an agency interpretation — even a longstanding interpretation — that is clearly at odds with the plain language of the statute. See Public Employees Retirement Sys. v. Betts, 492 U.S. 158, 109 S.Ct. 2854, 2863, 106 L.Ed.2d 134 (1989).

We review de novo a district court’s finding about statutory intent. Stissi v. Interstate & Ocean Transp. Co., 765 F.2d 370, 374 (2d Cir.1985); United States v. Horowitz, 756 F.2d 1400, 1403 (9th Cir.), cert. denied, 474 U.S. 822, 106 S.Ct. 74, 88 L.Ed.2d 60 (1985). In determining whether Congress expressed an intent regarding the preferred status of municipalities, we begin with the statute’s language. Mead Corp. v. Tilley, 490 U.S. 714, 109 S.Ct. 2156, 2162, 104 L.Ed.2d 796 (1989); see Glenpool Util. Servs. Auth. v. Creek County Rural Water Dist., No. 2, 861 F.2d 1211,1214 (10th Cir.1988), cert. denied, 490 U.S. 1067, 109 S.Ct. 2068, 104 L.Ed.2d 633 (1989). As the Supreme Court has noted, the legislative purpose generally is expressed in the ordinary meaning of the words Congress has used. United States v. Locke, 471 U.S. 84, 95, 105 S.Ct. 1785, 1792-93, 85 L.Ed.2d 64 (1985); see Burlington N. R.R. v. Oklahoma Tax Comm’n, 481 U.S. 454, 461, 107 S.Ct. 1855, 1859-60, 95 L.Ed.2d 404 (1987). The most fundamental guide to statutory construction is common sense. First Methodist Church v. United States Gypsum Co., 882 F.2d 862, 869 (4th Cir.1989), cert. denied, — U.S. -, 110 S.Ct. 1113, 107 L.Ed.2d 1020 (1990).

Section 9(c) of the Reclamation Act, incorporated into the CRSP Act, states that in “sales [of power] preference shall be given to municipalities.” 43 U.S.C. § 485h(c). In my view, there is no inherent ambiguity in this provision. Congress used the word “shall” not “may” in the statute, thereby clearly indicating its intent that municipalities receive preference. See United States v. Rodgers, 461 U.S. 677, 705-06, 103 S.Ct. 2132, 2148-49, 76 L.Ed.2d 236 (1983); United States v. White, 887 F.2d 705, 710 (6th Cir.1989). Further, I fail to perceive any ambiguity in Congress’s use of the term “municipalities.” When Congress enacts legislation using other common terms for political or administrative subdivisions such as “state” or “circuit”, we simply interpret the plain language of the statute without concluding these terms are ambiguous and require extraneous definition. Likewise, I am convinced we do not need to refer to extraneous definitions to understand what Congress meant by using the common term “municipalities” in section 9(e).

WAPA’s position — that “municipalities” must mean “entities with utility responsibility” when read in the context of the legislative history and administrative interpretation — leaves me baffled. According *985 to traditional rules of statutory construction, we look first to the statutory language and then, if necessary, to the legislative history and statutory construction by an administering agency. See Brock v. Writer’s Guild, West, Inc., 762 F.2d 1349, 1353 (9th Cir.1985); Baltimore Gas & Elec. Co. v. Heintz, 760 F.2d 1408, 1413 (4th Cir.1985). It is settled law that when statutory language is unambiguous and free from irrational result, the plain language of the statute controls. See, e.g., Glenpool Util. Servs., 861 F.2d at 1214 (citing Edwards v. Valdes, 789 F.2d 1477, 1481 (10th Cir.1986)).

WAPA’s argument subverts these well-established rules by relying on an agency construction to introduce ambiguity into the statutory language. I agree with the district court that the legislative history of section 9(c) is not “particularly helpful or conclusive” regarding a municipality’s utility responsibility. See Reclamation Project Act of 1939: Hearings on H.R. 6773 and H.R. 6984 Before the House Comm, on Irrigation and Reclamation, 76th Cong., 1st Sess. (1939). Further, I am convinced the reference to municipalities in the statute is unambiguous apart from the controversy created by the agency’s extraneous requirement of utility responsibility. See Request of City of Needles for Reinstatement of Sales of Federal Power for Benefit of its Citizens, Department of Energy General Counsel Opinion (November 1978); see also Disposition of Surplus Power Generated at Clark Hill Reservoir Project, 41 Op. Att’y Gen. 236 (1955). In my view, bootstrapping a regulation dealing with a statute to justify an agency construction of that statute is improper— especially when the compatibility of the regulation with legislative intent is at issue.

The majority assumes a principal distinction Congress may have intended to make in enacting section 9(c) was between municipalities purchasing power directly and those receiving it indirectly. This assumption is not supported by either the language of the statute or its legislative history. For purposes of interpreting the statute to ascertain Congress’s intent, I can see no difference between the power request of a single municipality and the request of a group of municipalities represented by another entity that distributes power to them at cost. In my view, the congressional intent expressed in the plain language of section 9(c) is to provide preference to municipalities simply based on their status as political subdivisions, not on their capacity to distribute power.

In asking if Congress addressed the “precise issue” whether municipalities with utility responsibility and those without should receive equal treatment, the majority overlooks the real issue in this case: Whether section 9(c) requires WAPA to give preference to municipalities. On this question, the statute is clear — “preference shall be given to municipalities.” 43 U.S.C. § 485h(e). The WAPA regulations at issue here prevent municipalities from receiving preference when they do not satisfy an agency prerequisite of utility responsibility. Because I find Congress’s language in section 9(c) unambiguous about a preference for municipalities, I conclude we cannot defer to a contrary agency construction. I would hold as a matter of law the agency requirement of utility responsibility, which precludes some municipalities from receiving preference, contradicts the clear congressional mandate that WAPA give municipalities preference.