United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 14, 2010 Decided May 28, 2010
No. 08-1373
JAMES LICHOULAS, JR.,
PETITIONER
v.
FEDERAL ENERGY REGULATORY COMMISSION,
RESPONDENT
On Petition for Review of Orders
of the Federal Energy Regulatory Commission
Brian A. Davis argued the cause for the petitioners.
Kenneth L. Wiseman, Mark F. Sundback, Gia V. Cribbs and
Jennifer L. Spina were on brief.
Jennifer S. Amerkhail, Attorney, Federal Energy Regulatory
Commission, argued the cause for the respondent. Thomas R.
Sheets, General Counsel, Robert H. Solomon, Solicitor, and
Carol J. Banta, Attorney, were on brief.
Before: HENDERSON, ROGERS and GARLAND, Circuit
Judges.
Opinion for the Court filed by Circuit Judge HENDERSON.
KAREN LECRAFT HENDERSON, Circuit Judge: James
Lichoulas, Jr. petitions for review of Federal Energy Regulatory
Commission (FERC or Commission) orders that terminate his
2
license to operate a hydropower project attached to a historic
six-story mill building in Lowell, Massachusetts. Lichoulas
argues that FERC’s use of the implied surrender doctrine to
terminate his license was arbitrary and capricious. He also
argues that FERC engaged in impermissible ex parte contacts
and abused its discretion in denying him an evidentiary hearing.
Unpersuaded, we deny the petition.
I.
In 1986 FERC issued Lichoulas a license “to construct,
operate and maintain the Appleton Trust Project” (Project) under
Part I of the Federal Power Act (FPA), 16 U.S.C. §§ 791a et seq.
James Lichoulas, Order Issuing License (Minor Project), 36
F.E.R.C. ¶ 62,047, 63,133 (July 18, 1986). The Project was
designed to generate up to 346 kilowatts of electricity when
water from the Hamilton Canal passes through two turbine-
generators on its way to the Lower Pawtucket Canal.
In a letter to Lichoulas dated March 6, 19971 FERC noted
that the Project had been inactive since January 6, 1996. It
requested that he submit plans for future operation by May 15,
1997. In June 1997, before Lichoulas responded, a fire damaged
the property on which the Project is located. Despite the
damage, on September 22, 1997 Lichoulas told FERC the
Project would be “up and running” near the end of March 1998.
Letter from James T. Lichoulas, Jr., Appleton Trust, to Victoria
Kaye, FERC. In a March 24, 1998 letter to FERC, however,
Lichoulas pushed back the target date to Summer 1998.
FERC followed up on March 2, 1999, writing to Lichoulas
that he had failed to keep the Commission updated and
requesting that he do so before April 16, 1999. Receiving no
1
While the letter was addressed to the “Appleton Trust,” the
entity through which Lichoulas obtained the Project license, we do not
hereinafter distinguish between Lichoulas and Appleton Trust.
3
response, FERC sent Lichoulas a letter on July 8, 1999
expressing “uncertainty” that he would ever resume operation.
Letter from Hossein Ildari, Chief, Engineering Compliance
Branch, FERC, to James Lichoulas at 1. It requested that
Lichoulas submit within forty-five days either a plan for
resuming operation or “a petition for the voluntary surrender” of
his license. Id. Fifty-seven days later, on September 3, 1999,
Lichoulas responded with an itemized repair plan and an
estimated completion date of February or March 2000. FERC
approved his plan on October 27, 1999.
In October 2000, approximately seven months after
Lichoulas’s estimated date of resumed operation, he arranged
with the city of Lowell (City) to demolish several buildings on
or adjacent to the Project property that posed a potential fire
hazard. The demolition exposed asbestos, of which remediation
began in August 2001.
FERC staff visited the Project on July 24, 2002 and saw its
roof caved in and debris littering its works. They also learned
that, while the Project had recently generated power “for a short
time,” it “had to be shut down due to vibrations.” Letter from
Anton J. Sidoti, Regional Engineer, FERC New York Regional
Office, to James Lichoulas, Jr. at 1 (July 31, 2002). In a letter
dated July 31, 2002 FERC requested that Lichoulas provide a
repair schedule within ten days. Lichoulas made a progress
report forty-seven days later, on September 16, 2002, stating that
the Project would be operable by March 2003. But he soon
revised his estimate to May 2003. In a March 17, 2003 letter
FERC responded, “As you have been previously advised, failure
to operate the project is a violation of the terms and conditions
of your license.” Letter from Anton J. Sidoti, Regional
Engineer, FERC New York Regional Office, to James
Lichoulas, Jr., Appleton Trust. It told him to resume operation
by May 30, 2003 and provide a status report to FERC by June
15, 2003.
4
In a letter dated September 5, 2003 FERC told Lichoulas he
had failed to comply with its March mandates. It said he was in
violation of section 10(c) of the FPA. See 16 U.S.C. § 803(c)
(“licensee shall maintain the project works in a condition of
repair adequate . . . for the efficient operation of said works in
the development and transmission of power”). Accordingly, it
said, “the Commission may revoke your license or take other
enforcement actions.” Letter from Hossein Ildari, Division of
Hydropower Administration and Compliance, to James
Lichoulas, Jr. at 2 (Sept. 5, 2003). It told Lichoulas he could
stave off such action by filing “a plan and schedule for the
resumption of project operation” within twenty-one days. Id. at
1. Lichoulas responded approximately six months later, telling
FERC staff by telephone that he would submit a plan to resume
operation by March 26, 2004. But FERC received no such plan
and its subsequent telephone calls went unanswered and
unreturned. Thus, on September 23, 2004, FERC told
Lichoulas:
Since you have not made the necessary repairs to your
project to resume operations and the project has not
operated regularly since November 1994, pursuant to
standard article 16 of your license and section 6.4 of
the Commission’s regulations, we consider the project
to be abandoned and that it is your intent to surrender
your license. Thus, the Commission may terminate
your license under an implied surrender proceeding.
Letter from John Estep, Division of Hydropower Administration
and Compliance, to James Lichoulas, Jr. at 1.
Lichoulas responded in a letter dated December 1, 2004.
He apologized for the “lack of proper response regarding the
status” of the Project. Letter from James T. Lichoulas, Jr. to
Secretary, FERC (Dec. 1, 2004). He said “[t]he primary
problem was that the [Project property] ha[d] been undergoing
a major selective demolition . . . . During that process, asbestos
5
was discovered. The asbestos removal and clean up process
went on and on for the last several years.” Id. He said it was his
“plan to understand [sic] and develop a full scope of work by
early March 2005.” Id. According to FERC, however,
“Lichoulas never submitted this information.” James Lichoulas
Jr., Order Terminating License by Implied Surrender, 124
F.E.R.C. ¶ 61,255, ¶ 12 (Sept. 18, 2008) (Termination Order).
In July 2006 FERC received notice that in April 2006 the
City had obtained the Project property by eminent domain as
part of an “Urban Revitalization and Development Plan.” See
Letter from Stephen Crane, Urban Renewal Project Manager, to
Magalie Roman Salas, Secretary, FERC (July 20, 2006).
According to the City, at the time of the taking the Project was
not functioning; “in fact,” it said, “the entire property [wa]s in
a significant state of disrepair.” Id.
On March 23, 2007 FERC issued Lichoulas a “Notice of
Termination of License by Implied Surrender and Soliciting
Comments, Protests, and Motions to Intervene.” Docket No. P-
9300-017 (Mar. 23, 2007). Lichoulas protested on April 19,
2007, arguing that the Project’s dormancy did not reflect an
intent to abandon or surrender it but instead resulted
unavoidably from the demolition, the asbestos remediation and
the City’s exercise of eminent domain. To establish his intent
to restore the Project to operation, Lichoulas submitted a letter
of intent between him and an engineering firm providing for the
rehabilitation of the Project if he retained his FERC license and
regained the property from the City. He also represented that he
had a bank line of credit ready to finance the rehabilitation. He
asked FERC to hold an evidentiary hearing to explore these and
other facts.
At the same time, Lichoulas fought the City’s taking of the
Project property. In April 2007 he filed a lawsuit in the United
States District Court for the District of Massachusetts alleging
the taking violated the FPA because the property contained a
6
FERC-licensed hydropower project. Lichoulas v. City of Lowell,
Mem. of Decision and Order, C.A. No. 07-10725-RWZ, at 1 (D.
Mass. Mar. 31, 2008) (D. Mass. Order). The district court
dismissed the claim “without prejudice to plaintiff refiling th[e]
action after the conclusion of the FERC proceedings.” Id. at 5-6
(capitalization omitted). The First Circuit affirmed. Lichoulas
v. City of Lowell, 555 F.3d 10, 14 (1st Cir. 2009). Lichoulas
filed a similar suit, including a lis pendens motion, in
Massachusetts state court in March 2009. Lichoulas v. City of
Lowell, Order Den. Pl.’s Mot. for Lis Pendens and Allowing
Def.’s Mot. to Dismiss, No. 09-MISC-396099-KFS, 2009 WL
1639726, at *1 (Mass. Land Ct. June 11, 2009) (Mass. Land Ct.
Order). The state court dismissed the case for lack of subject
matter jurisdiction. Id. at *3.
Meanwhile, over the course of 2008, while working through
the implied surrender process, FERC received communications
from the office of U.S. Congresswoman Niki Tsongas, in whose
district the Project lies. Tsongas sent letters in March and July
requesting procedural updates, which FERC provided. Also, on
August 6, Tsongas herself telephoned FERC’s Acting Director
of External Affairs. Later on August 6, Tsongas’s office sent
the Acting Director an email with a memorandum attached. The
memorandum was addressed to Tsongas from one of her staff.
It recommended that the Congresswoman call FERC to “put
pressure on the Commission to either (a) provide an update on
the timetable for issuing the Order which terminates
[Lichoulas’s] License, or (b) promptly issue an Order which
terminates the license.” Mem. from Kate to NT at 1 (attached
to email from Brian Martin, District Director, Office of
Congresswoman Niki Tsongas, to Patricia Schaub, FERC (Aug.
6, 2008)) (Tsongas Memo). According to FERC, the email with
attachment was placed in its “non-decisional record” of this
matter. James Lichoulas, Jr., Order Den. Reh’g, 125 F.E.R.C.
¶ 61,195, ¶ 21 (Nov. 20, 2008) (Order Den. Reh’g). The Office
of External Affairs received another email from Tsongas’s office
7
on August 18, which, according to FERC, merely “ask[ed] about
the status of the case” and it responded accordingly. Id.
On September 18, 2008 FERC terminated Lichoulas’s
license. Termination Order, 124 F.E.R.C. ¶ 61,255. It
concluded that he had impliedly surrendered the license pursuant
to 18 C.F.R. § 6.4 and standard license article 16. Id. ¶¶ 18-26;
see Form L-15, Terms and Conditions of License for
Unconstructed Minor Project Affecting the Interests of Interstate
or Foreign Commerce, 54 F.P.C. 1792, 1888 (1975) (Article 16).
The order also denied his request for an evidentiary hearing.
Termination Order, 124 F.E.R.C. ¶ 61,255, ¶ 24. Lichoulas then
requested rehearing and FERC denied that request on November
20, 2008. Order Den. Reh’g, 125 F.E.R.C. ¶ 61,195. It repeated
its conclusions that he had impliedly surrendered his license and
that an evidentiary hearing was unnecessary. Id. ¶¶ 12-17. It
also rejected his argument that FERC’s contacts with Tsongas’s
office were prohibited communications, stating that they were
“[p]rocedural inquiries.” Id. ¶ 21 (alteration in original).
Lichoulas timely petitioned this court for review. See 16 U.S.C.
§ 825l(b).
II.
Lichoulas argues that we should vacate the Termination
Order and the Order Denying Rehearing because (1) FERC’s
implied surrender determination was arbitrary and capricious,
(2) FERC engaged in prohibited “off-the-record
communications” while adjudicating the matter and (3) FERC
abused its discretion by denying him an evidentiary hearing.
FERC contests all three arguments and also maintains we are
without jurisdiction to review its action because Lichoulas lacks
Article III standing. We address standing first and then reach,
seriatim, Lichoulas’s three arguments.
8
A. Standing
To have standing Lichoulas must show injury in fact,
causation and redressability. See Lujan v. Defenders of Wildlife,
504 U.S. 555, 560-61 (1992); Ass’n of Flight Attendants-CWA
v. U.S. Dep’t of Transp., 564 F.3d 462, 464 (D.C. Cir. 2009);
Sierra Club v. EPA, 292 F.3d 895, 898-900 (D.C. Cir. 2002).
FERC argues Lichoulas cannot show redressability because “he
has already, separately, lost ownership of and access to the
Project.” Resp’t’s Br. 23. It asserts that “Lichoulas has offered
no reason to believe that reversal of the license termination
would cause the City to return the Project property to him or
otherwise to allow him access to repair and operate the Project.”
Id. at 24. Because the City obtained the Project property by
eminent domain, it argues, reversal of FERC’s orders will not
yield the redress Lichoulas seeks.
FERC’s argument fails because it addresses the wrong
injury. The injury of which Lichoulas complains here is the
termination of his license to operate the Project. FERC directly
caused this injury and we can redress it by vacating its orders.
Lichoulas does not challenge his “lost ownership of and access
to the Project” here; he challenged that injury in separate suits
regarding the City’s exercise of eminent domain. See Lichoulas
v. City of Lowell, C.A. No. 07-10725-RWZ (D. Mass.);
Lichoulas v. City of Lowell, No. 09-MISC-396099-KFS (Mass.
Land Ct.). The crucial question here is whether granting his
petition would redress the injury caused by FERC—namely, the
termination of Lichoulas’s license. Plainly it would. Indeed, “if
the complainant is ‘an object of the action (or foregone action)
at issue’—as is the case . . . nearly always in review of an
adjudication—there should be ‘little question that the action or
inaction has caused him injury, and that a judgment preventing
or requiring the action will redress it.’” Sierra Club, 292 F.3d
at 900 (quoting Defenders of Wildlife, 504 U.S. at 561-62).
9
Moreover, that FERC’s license termination has caused
Lichoulas injury is clear because of its effect on his prospects
for regaining ownership of and access to the Project. “‘A
significant increase in the likelihood that the [litigant] would
obtain relief that directly redresses the injury suffered’ will
suffice for standing.” Nat’l Parks Conservation Ass’n v.
Manson, 414 F.3d 1, 7 (D.C. Cir. 2005) (quoting Utah v. Evans,
536 U.S. 452, 464 (2002)). In his eminent domain litigation,
Lichoulas argued the City’s taking violated the FPA because he
holds a valid FERC license. See Lichoulas, 555 F.3d at 12; D.
Mass. Order at 1; Mass. Land Ct. Order, 2009 WL 1639726, at
*3. Accordingly, both the federal and state courts in
Massachusetts have noted that the resolution of Lichoulas’s
petition to us will have a significant impact on his eminent
domain challenges. D. Mass. Order at 4 (“[T]he validity of
[Lichoulas’s] license lies at the heart of this case.”); Mass. Land
Ct. Order, 2009 WL 1639726, at *2 (“[T]he issue at the heart of
this dispute is whether Plaintiff’s FERC license was valid at the
time of [the] taking . . . . If Plaintiff is successful before the DC
Circuit, then his challenge to Defendant’s taking will lie under
the FPA.”). Thus, should Lichoulas succeed here, he will
significantly increase the likelihood of prevailing in his eminent
domain challenges and therefore make it more likely that he will
regain “ownership of and access to the Property.” This suffices
for redressability and ultimately, because injury in fact and
causation are not in question, for standing.2
2
FERC’s invocation of Klamath Water Users Ass’n v. FERC, 534
F.3d 735 (D.C. Cir. 2008), does not affect our conclusion. In that
case, an electricity customer challenged FERC’s decision that a
utility’s license did not restrict its rates. Id. at 737. We held that the
customer lacked standing because California’s and Oregon’s utility
commissions, not FERC, controlled the rates and thus a favorable
ruling by us would not provide redress. Id. at 740. Thus, that was not
a case where “an order directed to [FERC would] significantly
10
B. Implied Surrender
We turn to Lichoulas’s challenge to FERC’s termination of
his license via the implied surrender doctrine. We review a
FERC order under the familiar “arbitrary and capricious”
standard. Wis. Pub. Power, Inc. v. FERC, 493 F.3d 239, 256
(D.C. Cir. 2007); see 5 U.S.C. § 706(2)(A). “Under this
deferential standard, we must affirm the Commission’s orders as
long as it has ‘examine[d] the relevant data and articulate[d] a
satisfactory explanation for its action including a rational
connection between the facts found and the choice made.’” Wis.
Pub. Power, 493 F.3d at 256 (quoting Motor Vehicle Mfrs. Ass’n
of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
(1983)) (alterations in original) (internal quotations omitted). In
applying this standard, we defer to the Commission’s reasonable
application of its precedent but will not approve an unreasoned
departure therefrom. Williams Gas Processing - Gulf Coast Co.
v. FERC, 373 F.3d 1335, 1341 (D.C. Cir. 2004).
FERC regulations and the standard articles of Lichoulas’s
license provide for implied surrender. Specifically, 18 C.F.R.
§ 6.43 provides that if a licensee
shall cause or suffer essential project property to be
removed or destroyed, or become unfit for use, without
replacement, or shall abandon, or shall discontinue
good faith operation of the project for a period of three
increase the chances of favorable action by a non-party” because there
was no reason to think that FERC’s decision would affect either state’s
decision. Id.
3
18 C.F.R. § 6.4 applies to projects, like Lichoulas’s, “of not
more than two thousand horsepower installed capacity.” 16 U.S.C.
§ 803(i); see 18 C.F.R. § 6.4; Order Issuing License, 36 F.E.R.C.
¶ 62,047.
11
years, the Commission will deem it to be the intent of
the licensee to surrender the license.
Article 16 of the license contains language virtually identical to
section 6.4 and, in addition, provides for implied surrender if the
licensee “shall . . . refuse or neglect to comply with the terms of
the license and the lawful orders of the Commission.” 54 F.P.C.
at 1888; see Order Issuing License, 36 F.E.R.C. ¶ 62,047,
63,134 (license “subject to the articles set forth in Form L-15
(October 1975) . . . except Article 15”).
FERC’s application of implied surrender has evolved over
time. In 1993 it noted that it had “only rarely had to resort to the
implied-surrender procedure to address a licensee’s failure to
live up to the obligations of its license.” Mont. Power Co., 62
F.E.R.C. ¶ 61,166, 62,143 (1993). In a footnote, it elaborated
that “[s]uch cases have included situations where licensees had
abandoned project operation a number of years earlier, had sold
the project without prior Commission approval and then been
dissolved as a corporate entity, or had otherwise abandoned the
project facilities and could not be located.” Id. at 62,143 &
n.41. Those examples proved to be less than comprehensive,
however, when in 1999 the Commission applied the doctrine in
Fourth Branch Assocs. (Mechanicville) v. Niagara Mohawk
Power Corp., 89 F.E.R.C. ¶ 61,194, 61,597-98 (1999), reh’g
denied, 90 F.E.R.C. ¶ 61,250 (2000), pet. for rev. denied, 253
F.3d 741 (D.C. Cir. 2001). In that case, two FERC licensees
were “at loggerheads” after the collapse of several agreements
regarding their joint hydropower project. Id. at 61,596. Niagara
Mohawk Power Corporation (Niagara Mohawk) wanted to
transfer or surrender the license. Id. Fourth Branch Associates
(Fourth Branch) wanted to continue as a licensee and “restore
the project to full operation.” Id. at 61,592. FERC found
implied surrender. Id. at 61,598. It first noted that “[t]he
doctrine has typically been invoked when the licensee, by action
or inaction, has clearly indicated its intent to abandon the
12
project, but has not filed a surrender petition.” Id. at 61,597.
But it also made clear that “the key element is the licensee’s
failure to live up to the obligations of its license.” Id. at 61,597-
98. It noted that Fourth Branch lacked financing, did not own
the project property and had been evicted from the site. Id. at
61,593. Thus, FERC concluded that, because “Niagara Mohawk
d[id] not want to operate the project, and [Fourth Branch’s]
desire to continue as a licensee [wa]s evidently not matched by
an ability to carry out the license terms,” implied surrender
applied. Id. at 61,598. FERC recently reaffirmed this expanded
application of the doctrine, stating “the key element [of implied
surrender] is the licensee’s failure to live up to the obligations
of its license, and we have implied surrender even where the
licensee has expressed an interest in continuing to operate the
project.” John C. Jones, 123 F.E.R.C. ¶ 61,053, ¶ 13 (Jan. 23,
2008).
Here, FERC determined that Lichoulas’s actions and—more
important—inaction manifested that he had “abandoned good
faith operation of his project” and thus impliedly surrendered his
license. Termination Order, 124 F.E.R.C. ¶ 61,255, ¶ 25; see 18
C.F.R. § 6.4; Article 16, 54 F.P.C. at 1888; Order Den. Reh’g,
125 F.E.R.C. ¶ 61,195, ¶14. It cited over a decade of project
dormancy as well as Lichoulas’s consistent failure to meet his
repair schedules or even timely respond to the Commission’s
inquiries. Termination Order, 124 F.E.R.C. ¶ 61,255, ¶ 20;
Order Den. Reh’g, 125 F.E.R.C. ¶ 61,195, ¶ 14 n.19. It also
noted that the City’s taking of the Project property “makes any
possibility of repairing the project and resuming operations even
less likely.” Termination Order, 124 F.E.R.C. ¶ 61,255, ¶ 21.
Lichoulas counters that his inchoate efforts to repair the Project
do not reveal intent to abandon it but instead reflect a series of
obstacles beyond his control, including fire, demolition, asbestos
abatement and the City’s exercise of eminent domain.
According to him, “the vast weight of the record evidence is that
[he] very much wishes to retain the Project, and is fully capable
13
of returning it to operation (as he has done in the past) if
permitted to do so.” Pet’r’s Br. 37. In response, FERC
maintains that it considered the obstacles Lichoulas identified
but they “fail to negate the conclusion that [his] inaction
demonstrated a clear intent to abandon the project.” Order Den.
Reh’g, 125 F.E.R.C. ¶ 61,195, ¶15.
In light of the foregoing, we conclude that FERC’s
application of the implied surrender doctrine here was not
arbitrary and capricious; the Commission “examine[d] the
relevant data and articulate[d] a satisfactory explanation for its
action including a ‘rational connection between the facts found
and the choice made.’” State Farm, 463 U.S. at 43 (quoting
Burlington Truck Lines v. United States, 371 U.S. 156, 168
(1962)). The orders reflect reasoned application of FERC’s
precedent, which makes clear that “the key element” for implied
surrender “is the licensee’s failure to live up to the obligations
of its license,” Fourth Branch, 89 F.E.R.C. ¶ 61,194, 61,597-
98,4 and that the implied surrender doctrine may be applied
“even where the licensee has expressed an interest in continuing
to operate the project,” John C. Jones, 123 F.E.R.C. ¶ 61,053,
¶ 13. Given Lichoulas’s consistent unwillingness or inability to
meet his own repair schedules or timely respond to FERC, it
4
Lichoulas attempts to distinguish Fourth Branch by noting that
the licensee in that case had been unable to “obtain the financing
necessary to refurbish, expand, and operate the project.” Pet’r’s Br.
42-43 n.114 (quoting Fourth Branch, 89 F.E.R.C. ¶ 61,194, 61,593).
He insists that he has financing to complete his repairs and has
executed a letter of intent with an engineering firm to carry them out.
Id. This distinction, however, does not make Fourth Branch
inapposite. Here, as in Fourth Branch, FERC found implied surrender
from the licensee’s inability or unwillingness to follow through on his
commitments to the Commission as a licensee. Conditional
agreements with banks and engineers do little to affect that analysis,
given Lichoulas’s history.
14
reasonably concluded that he had “abandoned good faith
operation of his project.” Termination Order, 124 F.E.R.C.
¶ 61,255, ¶ 25; see 18 C.F.R. § 6.4; Article 16, 54 F.P.C. at
1888; Order Den. Reh’g, 125 F.E.R.C. ¶ 61,195, ¶14. And
while it is true that the Project suffered unforeseen setbacks, the
correspondence between Lichoulas and FERC reveals that it was
not those setbacks as much as Lichoulas’s repeated failure to
follow through on his commitments that led to the termination.
See supra Part I. Thus, on these admittedly unusual facts, we do
not believe that FERC’s application of the implied surrender
doctrine was arbitrary and capricious.
C. Ex Parte Communications
FERC regulations provide that, generally, “no person
outside the Commission shall make or knowingly cause to be
made to any decisional employee . . . any off-the-record
communication.”5 18 C.F.R. § 385.2201(b). The prohibition
does not apply, however, to “[p]rocedural inquiries, such as a
request for information relating solely to the status of a
proceeding, unless the inquiry states or implies a preference for
a particular party or position, or is otherwise intended, directly
or indirectly, to address the merits or influence the outcome of
a proceeding.” Id. § 385.2201(c)(5)(i); see also Elec. Power
Supply Ass’n v. FERC, 391 F.3d 1255, 1259 (D.C. Cir. 2004)
(ostensibly procedural inquiry “‘may in effect amount to an
5
As defined by 18 C.F.R. § 385.2201(c)(4),
Off-the-record communication means any communication
relevant to the merits of a contested on-the-record
proceeding that, if written, is not filed with the Secretary
and not served on the parties to the proceeding in
accordance with Rule 2010, or if oral, is made without
reasonable prior notice to the parties to the proceeding and
without the opportunity for such parties to be present when
the communication is made.
15
indirect or subtle effort to influence the substantive outcome of
the proceedings’” (quoting H.R. Rep. No. 94-880, pt. 2, at 20
(1976), reprinted in 1976 U.S.C.C.A.N. 2212, 2229)). If a
decisional employee receives an off-the-record communication,
FERC must “place the communication [(if written)] or [a]
summary [(if oral)] in the public file associated with, but not
part of, the decisional record of the proceeding.” 18 C.F.R.
§ 385.2201(f)(2). FERC must also instruct the source of a
written off-the-record communication to serve it on all record
parties. Id. § 385.2201(f)(4). An “off-the-record written
communication from a non-party elected official” is not
prohibited under the regulations but FERC must place a copy of
any such communication in the “decisional record.” Id.
§ 385.2201(e)(1)(iv), (g)(1).
Even if FERC receives an ex parte communication that
violates 18 C.F.R. § 385.2201, the court will not undo FERC’s
action unless “‘the agency’s decisionmaking process was
irrevocably tainted so as to make the ultimate judgment of the
agency unfair.’” Press Broad. Co. v. FCC, 59 F.3d 1365, 1369
(D.C. Cir. 1995) (quoting Prof’l Air Traffic Controllers Org. v.
FLRA, 685 F.2d 547, 564 (D.C. Cir. 1982) (footnote omitted));
see Freeman Eng’g Assocs., Inc. v. FCC, 103 F.3d 169, 184
(D.C. Cir. 1997). Press Broadcasting is particularly instructive.
In that case, the FCC reversed its decision to cancel a
broadcasting permit after receiving ex parte communications
from Senate staff and representatives of the permit holder, which
“discussed the substance of the cancellation” and sought advice
from FCC officials on how to obtain reversal. Press Broad., 59
F.3d at 1368. A competing broadcasting company protested,
arguing that the ex parte contacts had tainted the adjudication.
Id. Although it was undisputed that the permit holder had
violated the FCC’s ex parte rules, we held that the contacts were
not fatal to the agency’s decision because the “contacts extended
only to persons who played no role in the Commission’s
ultimate decision.” Id. at 1369. The contacts had not
16
“impermissibly ‘intruded into the calculus of consideration of
the individual decisionmaker’” and had not irrevocably tainted
the adjudication. Id. at 1370 (quoting Peter Kiewit Sons’ Co. v.
U.S. Army Corps of Eng’rs, 714 F.2d 163, 170-71 (D.C. Cir.
1983) (internal quotation marks omitted)). We emphasized that
“an improper attempt to influence an adjudication is not a
concern if it does not reach the ultimate decision maker” and
that “‘judicial evaluation of [ex parte] pressure must focus on
the nexus between the pressure and the actual decision maker.’”
Id. (quoting ATX, Inc. v. U.S. Dep’t of Transp., 41 F.3d 1522,
1527 (D.C. Cir. 1994) (emphasis in original)).
Lichoulas argues that FERC received prohibited off-the-
record, ex parte communications from Congresswoman Tsongas
and members of her staff.6 Specifically, he points to an August
6
FERC contends that Lichoulas waived this argument because he
did not seek rehearing after the Commission rejected it for the first
time in the Order Denying Rehearing. Resp’t’s Br. 40; see 16 U.S.C.
§ 825l(b) (“No objection to the order of the Commission shall be
considered by the court unless such objection shall have been urged
before the Commission in the application for rehearing unless there is
reasonable ground for failure so to do.”); Cal. Dep’t of Water Res. v.
FERC, 306 F.3d 1121, 1125 (D.C. Cir. 2002) (“[I]f an order on
rehearing modifies the results of the earlier order in a significant way
adverse to a party, that party must seek a rehearing of the order before
filing a petition for judicial review.”). FERC is wrong. Lichoulas
objected to the alleged off-the-record communications in a filing
captioned “Response to Off-the-Record Communications and Request
for Disclosure of Oral Off-the-Record Communications,” dated
September 5, 2008, which predated the Termination Order. He
repeated his objection in his rehearing request. The Order Denying
Rehearing did not “modif[y] the results” of the Termination Order,
Cal. Dep’t of Water Res., 306 F.3d at 1125; it merely addressed an
argument the Termination Order had rejected sub silentio. The fact
that FERC failed to address his argument in the first instance does not
mean he must press it yet again at the agency level.
17
6, 2008 telephone conversation and an August 18, 2008 email
from Tsongas’s office. FERC counters that those contacts were
“procedural” and thus not “off-the-record communications”
under Commission regulations. Order Den. Reh’g, 125 F.E.R.C.
¶ 61,195, ¶ 21. But Lichoulas claims FERC’s position is belied
by an August 6 email with attachment from Tsongas’s office,
which references a telephone call, “the purpose [of which]
would be to put pressure on the Commission to either (a)
provide an update on the timetable for issuing the Order which
terminates [Lichoulas’s] License, or (b) promptly issue an Order
which terminates the license.” Tsongas Memo. Lichoulas says
this is strong evidence that the August 6 phone call and August
18 email were not procedural but were instead prohibited off-
the-record communications under 18 C.F.R. § 385.2201.7
According to him, “it is clear that the primary purpose of those
communications . . . was to put political pressure on FERC to
terminate [his] license, which FERC promptly did.” Pet’r’s Br.
30.
Lichoulas’s argument fails because even assuming
arguendo the challenged contacts violated FERC regulations,
there is no indication that they influenced the ultimate decision
makers. FERC has stated that “none of the members of the
Commission” reviewed the email with attachment before
approving the order terminating Lichoulas’s license and
therefore no member was influenced by it. Order Den. Reh’g,
125 F.E.R.C. ¶ 61,195, ¶ 21 & n.26. And although the
Commissioners may have been aware of Tsongas’s other
contacts, Oral Arg. Recording at 39:14-39:35, without having
reviewed the email with attachment they had no reason to
7
Lichoulas does not object to FERC’s handling of the email with
attachment itself; he concedes that the Commission properly processed
them under section 385.2201(f)(2).
18
conclude that her inquiries were anything but procedural.8
Moreover, Lichoulas’s charge of improper influence is
undermined by the fact that the first identified contact from
Tsongas’s office came in March 2008, while FERC first told
Lichoulas that he had impliedly surrendered his license over
three years earlier, in September 2004. In sum, there is no
indication here of a “nexus” between alleged pressure from
Tsongas’s office and the Commission’s ultimate decision; nor
is there any indication that Tsongas’s contacts “impermissibly
intruded into the [Commission’s] calculus of consideration.”
Press Broad., 59 F.3d at 1370 (internal quotations and emphasis
omitted). We conclude, therefore, that Tsongas’s ex parte
contacts did not irrevocably taint FERC’s decision to terminate
Lichoulas’s license.
D. Evidentiary Hearing
“In general, FERC must hold an evidentiary hearing only
when a genuine issue of material fact exists, and even then,
FERC need not conduct such a hearing if [the disputed issues]
may be adequately resolved on the written record.” Cajun Elec.
8
To the extent Lichoulas suggests the Commissioners were in fact
aware of pressure from Tsongas’s office and FERC has prevaricated
or misled the Court, see Reply Br. 25-26, we note that
[i]t would take considerably more than the unsupported
allegation in a brief to show that the Commission or any one
of its members failed to act impartially. Under the
well-settled presumption of administrative regularity, courts
assume administrative officials “to be men [and women] of
conscience and intellectual discipline, capable of judging a
particular controversy fairly on the basis of its own
circumstances.”
La. Ass’n of Indep. Producers & Royalty Owners v. FERC, 958 F.2d
1101, 1119 (D.C. Cir. 1992) (quoting Withrow v. Larkin, 421 U.S. 35
(1975)) (first alteration added).
19
Power Co-op, Inc. v. FERC, 28 F.3d 173, 177 (D.C. Cir. 1994)
(internal citations and quotations omitted) (modification in
original). “We review FERC’s decision to deny an evidentiary
hearing for an abuse of discretion.” Id.
Lichoulas has not identified any issue he could explore at an
evidentiary hearing that could not be adequately addressed on
the papers. He argues that a hearing would yield evidence of his
subjective intent to restore the Project. But this case involves
implied surrender, which the Commission decides objectively.
See 18 C.F.R. § 6.4 (“the Commission will deem it to be the
intent of the licensee to surrender the license”) (emphasis
added). At bottom, Lichoulas’s complaint is with the legal
conclusion FERC has drawn from the facts. An evidentiary
hearing is not warranted simply because he disagrees with that
conclusion and FERC did not abuse its discretion in declining to
provide one.
For the foregoing reasons, we deny Lichoulas’s petition.
So ordered.