United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 8, 2001 Decided June 19, 2001
No. 00-1173
Fourth Branch Associates (Mechanicville),
Petitioner
v.
Federal Energy Regulatory Commission,
Respondent
Niagara Mohawk Power Corporation,
Intervenor
On Petition for Review of Orders of the
Federal Energy Regulatory Commission
Ben Finkelstein argued the cause for petitioner. With him
on the briefs were Frances E. Francis, William S. Huang
and Andrea G. Lonian.
Monique L. Watson, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With her on
the brief was Dennis Lane, Solicitor.
William J. Mertens was on the brief for intervenor.
Before: Edwards, Chief Judge, Sentelle and Randolph,
Circuit Judges.
Opinion for the Court filed by Circuit Judge Sentelle.
Sentelle, Circuit Judge: The Federal Energy Regulatory
Commission ("FERC") issued a joint license to Fourth
Branch Associates (Mechanicville) and Niagara Mohawk Pow-
er Corporation to redevelop the Mechanicville Hydroelectric
Plant, owned by Niagara Mohawk. The relationship between
the co-licensees eroded, and a spate of litigation ensued.
Within two years of receiving the license, Fourth Branch filed
a complaint with the Commission alleging that Niagara Mo-
hawk was engaging in anticompetitive conduct in violation of
the Federal Power Act, see 16 U.S.C. s 803(h), in attempting
to limit the power output of the Mechanicville plant by
refusing to purchase power from the plant.
After efforts to mediate the dispute failed, the Commission
issued an order dismissing the complaint because Fourth
Branch had not articulated facts sufficient to establish a claim
for anticompetiveness. See Fourth Branch Assocs. (Mechan-
icville) v. Niagara Mohawk Power Corp., 89 F.E.R.C.
p 61,194 (1999). Explaining that the two parties were unable
to continue operating the plant--because one is unwilling
(Niagara Mohawk) and the other unable (Fourth Branch)--
the Commission gave notice of its intent to accept the parties'
implied surrender of the Mechanicville license. See id. at
61,598. The Commission subsequently denied Fourth
Branch's request for rehearing. See Fourth Branch Assocs.
(Mechanicville) v. Niagara Mohawk Power Corp., 90
F.E.R.C. p 61,250 (2000).
Fourth Branch petitions for review of these orders. First,
it contends that the finding of implied surrender is unreason-
able, arbitrary and capricious, and unsupported by substantial
evidence. Second, it maintains that the dismissal of its
anticompetitiveness complaint was arbitrary and capricious
and not supported by substantial evidence. Because there
has been no final agency action, we do not have jurisdiction to
consider the implied surrender finding. Additionally, for
reasons more fully set out below, we hold that the Commis-
sion did not err in dismissing Fourth Branch's complaint.
I. BACKGROUND
The Mechanicville Hydroelectric Plant, located on the Hud-
son River in New York, is listed on the National Register of
Historic Places. In fact, until recently it was the oldest
continuously operating hydroelectric plant in the country.
The Mechanicville plant is also at the heart of a protracted
battle between Fourth Branch and Niagara Mohawk.1 At
various times, this battle has been waged before the New
York Public Service Commission, the Albany County Su-
preme Court, the Third Department of the Appellate Division
of the New York Supreme Court, the U.S. Bankruptcy Court
for the Northern District of New York, the U.S. District
Court for the Northern District of New York, the Federal
Energy Regulatory Commission--and now this Court.
The relationship between Fourth Branch and Niagara Mo-
hawk began peacefully in 1987, when they applied jointly to
redevelop the Mechanicville plant under a new FERC license.
In August 1989, the two companies entered into several
contracts under which Fourth Branch agreed to operate the
plant and Niagara Mohawk agreed to purchase power from
the plant. Almost immediately the relationship began to
deteriorate.
In 1990, the New York Public Service Commission rejected
the power purchase agreement. Three years later, when the
__________
1 A more complete history of the two companies' troubles is
recounted in Niagara Mohawk Power Corp., 74 F.E.R.C. p 61,352,
62,079-81 (1996); Fourth Branch Assocs. (Mechanicville) v. Niaga-
ra Mohawk Power Corp., 89 F.E.R.C. p 61,194, 61,589-93 (1999),
reh'g denied, 90 F.E.R.C. p 61,250 (2000); and Fourth Branch
Assocs. (Mechanicville) v. Niagara Mohawk Power Corp., 90
F.E.R.C. p 61,250, 61,837-39 (2000).
companies' efforts to renegotiate the purchase agreement
collapsed, Niagara Mohawk terminated the operation agree-
ment. These actions are the basis of ongoing litigation in
New York's state courts.
Meanwhile, in 1993, FERC issued the license to Fourth
Branch and Niagara Mohawk. The following year, after
Niagara Mohawk stopped paying Fourth Branch for power it
received from the Mechanicville plant, Fourth Branch filed
for Chapter 11 bankruptcy. Fourth Branch asked the bank-
ruptcy court to require Niagara Mohawk to accept and pay
for power from the plant. After initially granting the re-
quest, the court authorized Niagara Mohawk to "cease ac-
cepting electricity" from Fourth Branch. In re Fourth
Branch Assocs. Mechanicville, No. 94-10972, slip op. at 2
(Bankr. N.D.N.Y. Nov. 22, 1995) (order granting motion in
part and denying motion in part). By 1996, the bankruptcy
court dismissed Fourth Branch's Chapter 11 claim for lack of
prosecution.
In 1995, Fourth Branch filed a complaint with FERC
alleging that Niagara Mohawk was engaging in anticompeti-
tive conduct by attempting to limit the power output of the
Mechanicville plant. In March 1996, after asking the parties
to apply either for a license transfer or surrender, the
Commission ordered that a settlement judge mediate the two
companies' dispute. Niagara Mohawk Power Corp., 74
F.E.R.C. p 61,352, 62,081 (1996). Initially, the mediation
seemed to be successful: Fourth Branch agreed to purchase
Niagara Mohawk's interest in the Mechanicville project. Ni-
agara Mohawk Power Corp., 78 F.E.R.C. p 63,004 (1997).
Unfortunately, the success was short lived--Fourth Branch
was unable to obtain funding to make the purchase. See id.
at 65,127. FERC staff responded by again asking for a plan
to transfer the Mechanicville license or surrender it. By that
time, Fourth Branch had vacated the Mechanicville plant,
"apparently as the result of an eviction action brought by
Niagara Mohawk in a New York court." Fourth Branch
Assocs., 89 F.E.R.C. at 61,590.
In 1997, Niagara Mohawk moved to dismiss Fourth
Branch's complaint. In its motion, Niagara Mohawk contend-
ed that the complaint was moot in light of the bankruptcy
court's ruling that Niagara Mohawk was not obligated to
purchase power from the Mechanicville project. Around this
same time, Niagara Mohawk completely stopped producing
power at the plant.
The following year, Fourth Branch submitted a unilateral
settlement offer, proposing to pay Niagara Mohawk fair
market value for its interest in the Mechanicville project.
(The value was to be determined by a federal district court in
a condemnation proceeding initiated by Fourth Branch.)
Within five months, Fourth Branch amended its offer, now
proposing that Niagara Mohawk transfer its interest in the
plant to Fourth Branch at no cost and then purchase power
produced there by Fourth Branch. Not surprisingly, Niaga-
ra Mohawk opposed this offer and instead asked the Commis-
sion to deem the Mechanicville license impliedly surrendered.
On November 9, 1999, the Commission dismissed Fourth
Branch's complaint and unilateral settlement offer. See id. at
61,589. In its decision, the Commission found that the Me-
chanicville license had not been violated and that the plant
was being adequately maintained. See id. at 61,596-97 &
n.64. The Commission also concluded that Fourth Branch
had not "set forth any facts that warrant a further investiga-
tion of its allegation that Niagara Mohawk has engaged in
anticompetitive behavior under the Mechanicville license."
Id. at 61,597.
Finally, the Commission determined that the "public inter-
est will be best served if the Mechanicville Project license is
terminated." Id. It explained that "the doctrine of implied
surrender" offered an appropriate resolution to the "excep-
tional circumstances" of this dispute. Id. at 61,597-98. Con-
sequently, the November 1999 order gave Niagara Mohawk
and Fourth Branch notice that the Commission "intend[s] to
accept surrender of the license." Id. at 61,598. Accordingly,
the Commission instructed its staff to "initiate a proceeding
to prepare an environmental analysis, which will include
consultation on the disposition of the historic property, to
determine what restoration measures are appropriate before
an order is issued accepting surrender of the license." Id. at
61,598 n.73.
Fourth Branch requested a rehearing. On March 16, 2000,
the Commission denied this request. See Fourth Branch
Assocs. (Mechanicville) v. Niagara Mohawk Power Corp., 90
F.E.R.C. p 61,250 (2000). In its denial, the Commission reit-
erated its earlier conclusions. The Commission also clarified
that it will not make a "final decision on whether to accept the
implied license surrender until" it has conducted analyses and
consultations required under the National Environmental Pol-
icy Act, 42 U.S.C. s 4332, and the National Historic Preserva-
tion Act, 16 U.S.C. s 470f. 90 F.E.R.C. at 61,840 n.17. In
addition, the Commission declared that it would examine
"reasonable alternatives to license surrender." Id. at 61,840.
Fourth Branch petitions for review of these orders. In its
petition, Fourth Branch primarily argues that (1) the finding
that the co-licensees had impliedly surrendered the Mechanic-
ville license is unreasonable, arbitrary and capricious, and
unsupported by substantial evidence; and (2) the dismissal of
its complaint alleging that Niagara Mohawk had engaged in
anticompetitive behavior is arbitrary and capricious and un-
supported by substantial evidence. In response, the Commis-
sion contends that we lack jurisdiction over Fourth Branch's
petition. We must address this contention first.
II. JURISDICTION
Although the Commission maintains both that Fourth
Branch lacks standing and that its petition is not ripe for
review, we "need not identify every ground for holding that a
claim is not justiciable." Indep. Petroleum Ass'n of Am. v.
Babbit, 235 F.3d 588, 594 (D.C. Cir. 2001). Indeed, we have
no trouble dismissing a claim "based on one jurisdictional bar
rather than another." Louisiana Envtl. Action Network v.
Browner, 87 F.3d 1379, 1384 (D.C. Cir. 1996). Here, Fourth
Branch's challenge to the implied surrender proceeding is not
a challenge to any final agency action.
A party may only petition for judicial review of a final
agency action. See 5 U.S.C. s 704; 16 U.S.C. s 825l(b);
Papago Tribal Util. Auth. v. FERC, 628 F.2d 235, 238-39
(D.C. Cir. 1980). If the agency's action is not final, we cannot
reach the merits of the petition. See Public Citizen v. Office
of the U. S. Trade Representatives, 970 F.2d 916, 918 (D.C.
Cir. 1992). When assessing whether an agency action is final,
we consider "whether the agency's position is 'definitive' and
whether it has a 'direct and immediate ... effect on the day-
to-day business' of the parties." Ciba-Geigy Corp. v. U.S.
EPA, 801 F.2d 430, 436 (D.C. Cir. 1986) (quoting FTC v.
Standard Oil Co. of Cal., 449 U.S. 232, 239 (1980) (internal
quotes omitted)).
The initiation of an implied surrender proceeding is not a
final agency action. The Commission has merely "issue[d]
notice of its intent to accept the implied surrender of the
project license." Fourth Branch Assocs., 89 F.E.R.C. at
61,589. In its order denying Fourth Branch's rehearing
request, the Commission expressly stated that it has made
"no final decision on whether to accept the implied license
surrender." Fourth Branch Assocs., 90 F.E.R.C. at 61,840
n.17. There is nothing definitive in an agency's intending to
do something, and an agency that has made "no final deci-
sion" could not possibly have taken a final action. Pending
completion of the proceeding, the Commission may or may
not accept implied surrender of the Mechanicville license.
We do not have jurisdiction to become entangled in "uncer-
tain and contingent future events that may not occur as
anticipated, or indeed may not occur at all." Metzenbaum v.
FERC, 675 F.2d 1282, 1289 (D.C. Cir. 1982) (internal quotes
omitted).
Furthermore, we do not detect what effect the Commis-
sion's action has had (or could have) on Fourth Branch's
business. The Commission's decision to initiate an implied
surrender proceeding has not imposed any obligation, denied
any right, or formalized any legal relationship. See Alabama
Power Co. v. FERC, 993 F.2d 1557, 1566 (D.C. Cir. 1993). If
we conclude that the license was impliedly surrendered,
Fourth Branch obviously would remain exactly in the same
position it is now--and the Commission still might not accept
the implied surrender. Likewise, even if we were to conclude
that the license had not been impliedly surrendered, the
Mechanicville plant would continue to sit in the same condi-
tion, and Fourth Branch would remain in the same position, a
co-licensee who is unable to enter the plant, let alone produce
power there. Plainly, our abstention will not "result in
irreparable injury" to Fourth Branch. Papago Tribal Util.
Auth., 628 F.2d at 238. Until the Commission reaches a final
decision--either accepting the surrender or coming to some
alternative resolution--Fourth Branch's challenge is not fit
for review.
Fourth Branch argues that pursuant to Rule 27(g) of this
Circuit, the Commission should have raised its jurisdictional
objection within 45 days of this case being docketed. The
Commission first contended that we lack jurisdiction in its
response brief, which it filed 271 days after this case was
docketed. The Commission's foot-dragging certainly
"leave[s] something to be desired." Mississippi Valley Gas
Co. v. FERC, 68 F.3d 503, 510 (D.C. Cir. 1995). Neverthe-
less, it does not confer jurisdiction on this Court or compel us
to consider a claim based on an agency action that is not final.
See Fed. R. App. P. 1(b).
In contrast to its initiation of the implied surrender pro-
ceeding, the Commission's dismissal of Fourth Branch's com-
plaint against Niagara Mohawk is unquestionably a final
agency action. In its order denying rehearing, the Commis-
sion was clear that its decision was final: although it will
consider alternatives to implied surrender in the ongoing
proceeding, it unequivocally stated that it would not reconsid-
er Fourth Branch's complaint. See Fourth Branch Assocs.,
90 F.E.R.C. at 61,840. The Commission's brief does not
explain why the dismissal of Fourth Branch's complaint is not
ripe for review nor why Fourth Branch lacks standing to
challenge it. The dismissal of such a complaint is a final
agency action that we are empowered to review, and there is
no reason to refrain from considering the merits of the
remaining claims in Fourth Branch's petition. See Papago
Tribal Util. Auth., 628 F.2d at 239.
III. THE MERITS OF FOURTH
BRANCH'S PETITION
Section 10(h)(1) of the Federal Power Act prohibits "[c]om-
binations, agreements, arrangements, or understandings, ex-
press or implied, to limit the output of electrical energy, to
restrain trade, or to fix, maintain, or increase prices for
electrical energy or service." 16 U.S.C. s 803(h)(1). Relat-
edly, under s 10(h)(2), "conduct under the license" that con-
flicts with "the policies expressed in the antitrust laws" and is
"not otherwise justified by the public interest ... shall be
prevented or adequately minimized." Id. s 803(h)(2).
In its complaint, Fourth Branch alleged that Niagara Mo-
hawk attempted to "coerce [Fourth Branch] into an agree-
ment or arrangement to limit the electrical energy available
from the Mechanicville Project." The only fact that Fourth
Branch offered to support its allegation is that Niagara
Mohawk "refus[es] to accept Project power" from the Me-
chanicville plant, knowing that Fourth Branch's "existence
depends" on the revenue from such sales. The Commission
refused to investigate this complaint, explaining that Fourth
Branch had failed to "set forth any facts that warrant a
further investigation." Fourth Branch Assocs., 89 F.E.R.C.
at 61,597. Specifically, the Commission concluded that
Fourth Branch had "not suggested that Niagara Mohawk
engaged in" activities barred by s 10(h)(1) and had not
complained about any conduct under the license as required
by s 10(h)(2). In its petition, Fourth Branch argues that the
Commission's decision is (1) arbitrary and capricious because
it represents an "unexplained about-face" from a previous
statement in which the Commission noted the seriousness of
Fourth Branch's allegations and (2) unsupported by substan-
tial evidence because the record demonstrates that Niagara
Mohawk violated the license.
Our precedent is clear: the Commission "need not launch a
full investigation just because a party cries 'anticompetitive
behavior.' " Michigan Pub. Power Agency v. FERC, 963
F.2d 1574, 1583 (D.C. Cir. 1992). Here, the Commission did
not act arbitrarily or capriciously in concluding that Fourth
Branch's vague assertions did not establish adequate grounds
for investigating Niagara Mohawk's conduct. Although there
is no question "the co-licensees are at loggerheads," Fourth
Branch Assocs., 89 F.E.R.C. at 61,596, Fourth Branch did not
allege any collusive behavior by Niagara Mohawk as required
to establish a claim under s 10(h)(1). If anything, Niagara
Mohawk's refusal to take power from Fourth Branch might
be a violation of their contracts, not an effort to restrain trade
"under the license." See 16 U.S.C. s 803(h)(2). If Fourth
Branch believes that Niagara Mohawk's actions interfere with
its ability to operate the project as they agreed, Fourth
Branch should proceed with contract claims in state court (as
it has done). Indeed, the Commission came to this conclusion
in the orders now under review. See Fourth Branch Assocs.,
90 F.E.R.C. at 61,839; Fourth Branch Assocs., 89 F.E.R.C. at
61,597. The Commission properly concluded that far from
reflecting anticompetitive conduct, Niagara Mohawk's divesti-
ture of its hydroelectric projects was ordered by the New
York Public Service Commission as part of an industry
restructuring. See Fourth Branch Assocs., 89 F.E.R.C. at
61,597. These conclusions represent a reasonable basis for
not investigating Niagara Mohawk's conduct.
Fourth Branch's claim that the Commission's orders repre-
sent an "unexplained about-face" is based on a statement in
the Commission's order requiring the parties to mediate their
dispute. In that order, the Commission wrote that it was
"concerned with the seriousness of the antitrust allegations in
the complaint." Niagara Mohawk Power Corp., 74 F.E.R.C.
at 62,081. Despite what Fourth Branch now suggests, the
Commission was not endorsing the viability or validity of
Fourth Branch's claims. Rather, it was explaining that medi-
ation seemed appropriate in light of: (1) Fourth Branch's
complaint (and subsequent request for mediation) and (2) the
Commission's concern with the "safe operation of the Me-
chanicville Project over the 47 years remaining in the term of
its license." Id. The Commission never ruled that Fourth
Branch actually articulated an anticompetitiveness claim wor-
thy of investigation. Rather, the claim--in conjunction with
the numerous "ongoing controversies between the two co-
licensees"--simply justified the Commission's attempt "to
mediate a reasonable and workable solution to the problems
presented by the Mechanicville Project." Id. This attempt
is not inconsistent with the Commission's ultimate conclusion
that Fourth Branch had not "set forth any facts that warrant
a further investigation." Fourth Branch Assocs., 89 F.E.R.C.
at 61,597. The Commission never held anything different. It
simply had stated that the Fourth Branch's allegations were
serious enough to merit mediation, but only when considered
in tandem with the myriad other disputes between the parties
and the Commission's concern with the "safe and efficient
performance" of the project. Niagara Mohawk Power Corp.,
74 F.E.R.C. at 62,081.
In its petition, Fourth Branch raises several other ancillary
issues. We have considered each of these and find them
meritless. The Commission's orders are supported by sub-
stantial evidence and do not represent abuses of discretion.
IV. CONCLUSION
For the foregoing reasons, the petition for review is denied.