Granholm, Jennifer M v. FERC

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 4, 1999 Decided June 11, 1999

No. 98-1276

Jennifer M. Granholm ex rel.
Michigan Department of Natural Resources,
Petitioner

v.

Federal Energy Regulatory Commission,
Respondent

Upper Peninsula Power Company,
Intervenor

On Petition for Review of Orders of the
Federal Energy Regulatory Commission

Pamela J. Stevenson, Assistant Attorney General, State of
Michigan, argued the cause for petitioner. With her on the
briefs were Thomas L. Casey, Solicitor General, and Alan F.

Hoffman, Assistant Attorney General. John C. Scherbarth,
Assistant Attorney General, entered an appearance.

David H. Coffman, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With him on
the brief was Jay L. Witkin, Solicitor.

Amy S. Koch and Linda C. Ray were on the brief for
intervenor Upper Peninsula Power Company.

Before: Ginsburg, Sentelle, and Randolph, Circuit
Judges.

Opinion for the Court filed by Circuit Judge Randolph.

Randolph, Circuit Judge: Michigan's Attorney General, on
behalf of the state's Department of Natural Resources, filed a
petition for judicial review of three Federal Energy Regulato-
ry Commission orders issued in connection with an applica-
tion by the Mead Corporation for a hydroelectric power
license. We hold that Michigan's failure to seek rehearing of
the Commission's "Order on Remand" deprives the court of
jurisdiction.

This proceeding has its genesis in orders the Commission
issued in 1995 and 1996. In Mead Corp., 72 F.E.R.C.
p 61,027 (1995), the Commission granted Mead's application
for a new license to continue operation and maintenance of a
hydroelectric power project in Michigan under Part I of the
Federal Power Act, 16 U.S.C. ss 791a-823b, without imple-
menting certain recommendations of the Michigan Depart-
ment of Natural Resources. Among the rejected recommen-
dations were license conditions requiring additional studies
designed to reduce the number of fish trapped in the project's
turbines and to compensate Michigan for the fish killed. The
Commission determined that the proposed conditions did not
fall within s 10(j) of the Federal Power Act, 16 U.S.C.
s 803(j), which requires the Commission to afford significant
deference to fish protection recommendations of state and
federal fish and wildlife agencies. The Commission consid-
ered the Michigan recommendations pursuant to s 4(e) and
s 10(a) of the Federal Power Act, 16 U.S.C. ss 797(e), 803(a),
which give the Commission broader latitude to balance envi-

ronmental interests against development interests in promot-
ing the best comprehensive use of a waterway. The Commis-
sion rejected the Michigan recommendations after finding
that Mead's study method was a reasonable means of assess-
ing the project's impact on fishery resources.

Michigan sought rehearing, asserting that the Commission
should have considered the Michigan recommendations under
s 10(j). In Mead Corp., 76 F.E.R.C. p 61,352 (1996), the
Commission denied rehearing after reiterating that Michi-
gan's recommendations were not subject to s 10(j), and that
the public interest did not require performance of those
studies.

Michigan then sought judicial review of the 1995 and 1996
orders in this court. The case was docketed as No. 96-1453,
but on August 5, 1997, after Michigan submitted its initial
brief, the Commission filed an unopposed motion for volun-
tary remand so that the Commission could reconsider wheth-
er it should have reviewed Michigan's recommendations un-
der s 10(j). The Commission's motion was prompted, in part,
by this court's intervening decision in Kelley v. FERC, 96
F.3d 1482, 1487 (D.C. Cir. 1996), which viewed as "weighty"
the question whether the Commission may legitimately treat
fish and wildlife recommendations as outside s 10(j). This
court granted the motion on August 8, 1997, and remanded
the case to the Commission.

On April 22, 1998, the Commission issued its "Order on
Remand," Upper Peninsula Power Co., 83 F.E.R.C. p 61,071,
at 61,362 (1998) ("remand order")1, further elucidating, but
adhering to, its prior ruling. Without seeking rehearing of
the remand order, Michigan petitioned for judicial review of
the 1995, 1996, and 1998 orders, contending once again that
the Commission erred in considering Michigan's recommen-

__________
1 By order dated February 19, 1997, not under review here, the
Commission also approved the transfer of the license from Mead to
Upper Peninsula Power Company. See Mead Corp., 78 F.E.R.C.
p 62,121 (1997). For simplicity, this opinion refers to the licensee as
"Mead."

dations under s 10(a) rather than the more deferential
s 10(j).

On July 30, 1998, the Commission moved to dismiss for lack
of jurisdiction on the ground that Michigan failed to seek
rehearing of the remand order as required by s 313(a) of the
Federal Power Act, 16 U.S.C. s 825l(a). By order dated
October 15, 1998, the court directed the motion to dismiss to
be referred to the merits panel. Upper Peninsula Power
Company intervened in support of the Commission's position.

Section 313(a) of the Federal Power Act provides that "[n]o
proceeding to review any order of the Commission shall be
brought by any person unless such person shall have made
application to the Commission for rehearing thereon." 16
U.S.C. s 825l(a). This petition-for-rehearing requirement is
mandatory. See ASARCO, Inc. v. FERC, 777 F.2d 764, 774
(D.C. Cir. 1985).2 Neither the court nor the Commission
retains "any form of jurisdictional discretion" to ignore it.
ASARCO, 777 F.2d at 775 (quoting Boston Gas Co. v. FERC,
575 F.2d 975, 979 (1st Cir. 1978)); see also Bluestone Energy
Design, Inc. v. FERC, 74 F.3d 1288, 1293 (D.C. Cir. 1996);
Platte River Whooping Crane Critical Habitat Maintenance
Trust v. FERC, 962 F.2d 27, 34-35 (D.C. Cir.), reh'g en banc
denied, 972 F.2d 1362 (1992); Town of Norwood, Mass. v.
FERC, 906 F.2d 772, 774 (D.C. Cir. 1990). Such a mandatory
petition-for-rehearing requirement exists in each of the three
major statutes the Commission administers. See ASARCO,
777 F.2d at 774 (citations omitted).

As the court explained in Northwest Pipeline Corp. v.
FERC, 863 F.2d 73, 77-78 (D.C. Cir. 1988), the "obvious (and
salutary) purpose" of the petition-for-rehearing requirement
is to afford the Commission "an opportunity to bring its
knowledge and expertise to bear on an issue before it is

__________
2 The court in ASARCO interpreted s 19(a) of the Natural Gas
Act, the counterpart to s 313(a) of the Federal Power Act. See 777
F.2d at 772-75. Substantially identical provisions of the Natural
Gas Act and the Federal Power Act are to be interpreted consis-
tently with each other. See Arkansas La. Gas Co. v. Hall, 453 U.S.
571, 577 n.7 (1981).

presented to a generalist court." The requirement also per-
mits the agency an initial opportunity to correct its errors.
See ECEE, Inc. v. FERC, 611 F.2d 554, 565 (5th Cir. 1980).

Michigan acknowledges s 313(a)'s petition-for-rehearing re-
quirement and the line of authorities just cited, but tries to
avoid the consequences by analogizing its situation to that in
Southern Natural Gas Co. v. FERC, 877 F.2d 1066 (D.C. Cir.
1989), a case arising under the Natural Gas Act s 19(b), 15
U.S.C. s 717r(b). The petitioner in Southern Natural Gas
had failed to seek rehearing of a Commission order denying
rehearing. See 877 F.2d at 1068-73. The court held that the
petitioner did not need to seek further rehearing of the
Commission order denying rehearing because the original
outcome had not been changed although the Commission had
"supplie[d] a new improved rationale." Id. at 1073. The
court reasoned that if the statute were read as making a
request for rehearing a predicate to judicial review of each
order denying rehearing, the process might never end. See
id. Such an interpretation would have permitted "an endless
cycle of applications for rehearing and denials," limited, the
court stated, "only by FERC's ability to think up new ratio-
nales--which, since none of them would be put to a test in
court, would not be much of a limitation." Id. (citations
omitted).

Michigan's theory is that since the Commission, in its order
on remand, did nothing more than attempt to improve the
rationale supporting its earlier decisions, Southern Natural
Gas excused the State from having to seek rehearing under
s 313(a). Michigan misses the point that Southern Natural
Gas, given its reasoning, is confined to the question whether
this court has jurisdiction if the petitioner failed to seek
rehearing of a Commission order on rehearing, a question not
entirely resolved by the statute. The situation here is not
comparable. Michigan stands on no different footing than
any other petitioner who has failed to seek rehearing from a
Commission order rendered in an initial proceeding. That
the proceeding here was on remand from this court is of no
moment. As far as s 313(a) is concerned, the case before the

agency was in the same posture as if it had begun anew.3
Nothing in s 313(a) exempts Commission orders issued on
remand from the rehearing requirement. In such circum-
stances, requiring parties to seek rehearing before petitioning
for judicial review--requiring, that is, parties to comply with
the terms of s 313(a)--will not entail a cycle of agency
orders, the key concern in Southern Natural Gas. The
rehearing requirement is triggered anew only if the court
orders the case remanded and the agency issues a fresh
decision.

Michigan also thinks it did not have to seek rehearing
because this would have done no good and, at all events, the
arguments it would have raised before the Commission on
rehearing are the same as those the Commission is now
opposing in this court.4 A party's belief that nothing would
change on rehearing is irrelevant. Section 313(a) speaks in
absolutes. It brooks no exceptions. Our precedents are as
firm as can be on this point: an application for rehearing
must be filed before the litigant seeks judicial review "even if
the point sought to be appealed was raised, considered, and
rejected in the original proceeding." ASARCO, 777 F.2d at
773. As the saying goes, "rules is rules." Bartlett J.
Whiting, Modern Proverbs and Proverbial Sayings 541 (1989).

Dismissed.

__________
3 Because the court here remanded the "case"--instead of merely
remanding the record and holding the case in abeyance--the court
did not retain jurisdiction. See D.C. Cir. R. 41(b).

4 The remand order did not, as Michigan supposes, simply reach
the same conclusion as the 1995 licensing and 1996 rehearing
orders--that the Michigan studies did not constitute s 10(j) recom-
mendations--and address only the points raised in Michigan's prior
brief, submitted in case No. 96-1453. The remand order also held
that even if some of Michigan's requests were considered under the
more deferential s 10(j), instead of s 10(a), the record provided
substantial evidence for the Commission's conclusion that the stud-
ies and protective devices suggested by Michigan need not be
included as license conditions.