UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
decided: June 27, 1977.
THE CONNECTICUT LIGHT AND POWER CO., PETITIONER,
FEDERAL POWER COMMISSION, RESPONDENT
Petition to review orders of the Federal Power Commission, holding that the petitioner's four hydroelectric projects on the Housatonic River are subject to the Commission licensing jurisdiction under the Federal Power Act. Orders affirmed.
Oakes, Circuit Judge, Wyzanski*fn* and Holden,*fn** District Judges.
HOLDEN, District Judge:
This petition to review orders of the Federal Power Commission was brought by Connecticut Light and Power Company (CL & P). The petitioner challenges the authority of the Commission to license four hydroelectric projects on the Housatonic River as it flows through the State of Connecticut. The petitioner is joined in this effort by the Candlewood Lake Authority as an intervenor.*fn1 The Commission, by its orders of May 24, 1976, affirmed the initial decision of the administrative law judge that the projects are located on navigable waters of the United States within the meaning of Section 3(8) of the Federal Power Act, 16 U.S.C. § 796(8)*fn2 and that all projects affect the interest of interstate commerce within the meaning of Section 23(b) of the Act, 16 U.S.C. § 817.*fn3 Application for rehearing was denied by the Commission on July 23, 1976.
The source and headwaters of the Housatonic River are in western Massachusetts. The river flows a total distance of 132 miles and enters Connecticut 83 miles above the mouth where it enters Long Island Sound at Stratford, Connecticut. From the Massachusetts-Connecticut state line the river flows southerly to Bulls Bridge, 52.9 miles upstream from Stratford, thence southeasterly to the tidewater at the twin cities of Shelton and Derby, 13.5 miles upstream, where the tidal reach of the river extends southerly to the mouth at Stratford.*fn4
The four projects under review are owned and operated by the CL & P: Bulls Bridge, original construction in 1903; Rocky River, 44.3 miles upstream, erected in 1929; Shepaug, 30 miles upstream and constructed in 1955; and Stevenson, 19.3 miles upstream, constructed originally in 1919, but enlarged in 1936. Rocky River is a seasonal pumped-storage hydroelectric facility; the other three projects are run-of-river hydroelectric facilities.
After inquiry by the Commission concerning whether CL & P proposed to file applications to license the project, and a subsequent communication proposing a shortened license term unless applications were promptly filed, CL & P applied under protest for licenses for Bulls Bridge, Rocky River and Shepaug in 1966 and for Stevenson in 1967. On December 27, 1973,*fn5 following this court's decision in Farmington River Power Co. v. F.P.C., 455 F.2d 86 (2d Cir., 1972), CL & P filed notice of withdrawal of the applications, contending that the Commission lacked licensing jurisdiction over the projects. The proceedings now under review were ordered to be conducted by the Presiding Administrative Law Judge to determine disputed questions of fact on the issue of Commission's licensing jurisdiction over the four projects. After extended hearings and a detailed report of the facts, the law judge concluded that Housatonic River constituted navigable waters as defined in the Federal Power Act and all projects are subject to the licensing jurisdiction of the Federal Power Commission. The correctness of that decision is the question for review.
Res Judicata and Estoppel
At the outset we are called upon to consider the petitioner's claim that the Commission is barred by the operation of res judicata and collateral estoppel from finding the Housatonic navigable. The claim is based on a 1952 order of the FPC in Electric Power Inc., 11 F.P.C. 1548, following the declaration of intention to construct the Shepaug project, filed by the CL & P's predecessor.
The first sentence of Section 23(b) makes it unlawful for any person, state or municipality to construct a dam to develop electric power in any of the navigable waters of the United States except by a license granted under the Federal Power Act. This proscription is followed by the provision that any person, state or municipality intending to construct a dam or other project in any stream "other than those defined in this chapter as navigable waters, and over which Congress has jurisdiction under its authority to regulate commerce - shall before such construction file declaration of such intention with the Commission. . . ." If upon investigation the Commission finds the interest of commerce would be affected, a license is required. The third sentence of Section 23(b) provides:
If the Commission shall not so find, and if no public lands or reservations are affected, permission is granted to construct such dam or other project works in such stream upon compliance with State laws.
The Commission issued its findings on December 24, 1952. After describing the project proposed by the petitioner's predecessor, the Commission determined:
The interest of interstate or foreign commerce would not be affected by the construction and operation of the proposed Shepaug development: Provided, however, that these findings shall not be construed as relating to any effects upon the interests of interstate or foreign commerce which might be caused by any existing hydroelectric developments located on the Housatonic River.
It is significant that CL & P's predecessor, Electric Power, Inc., did not apply for a license to construct the Shepaug Project on a navigable stream under Section 23(b). The power company made its own determination that the Housatonic was not navigable within the meaning of the Act. Acting on this independent judgment, the company proceeded as a declarant to state its intention to construct the project, thereby invoking the Commission's authority to decide the narrow issue of whether the proposed project would affect the interests of interstate or foreign commerce.*fn6 This was the single issue presented by Electric Power's declaration of intention. The issue of navigability of the Housatonic was not engaged nor decided.
The conclusive effect of an administrative determination is limited to the purpose for which it was made. Since the issues on the declaration of intention presented in 1952 are not the same as those presented in the pending application for a license, the law of res judicata does not apply. Cf. Federal Trade Commission v. Motion Picture Advertising Service Co., Inc., 344 U.S. 392, 398, 97 L. Ed. 426, 73 S. Ct. 361 (1953) (issue of unfair competition not controlled by prior administrative determination as to conspiracy to restrain trade).
CL & P advances the further argument that the 1952 declaration of intention to construct the Shepaug project afforded the opportunity to litigate the issue of navigability. Hence, it is urged that we are precluded from consideration of the issue in the context of the licensing applications for all projects on the river, by operation of collateral estoppel. The argument is not persuasive. The doctrine is operative only as to facts that were actually litigated and decided. Facts which might have been decided, but were not, are not precluded. Last Chance Mining Co. v. Tyler Mining Co., 157 U.S. 683, 687, 39 L. Ed. 859, 15 S. Ct. 733 (1895); Restatement, Judgments § 68.
Nor are we convinced that the findings issued in consequence of the declaration of intention by Electric Power, Inc., to construct the Shepaug project, bar the Commission's reconsideration of the effect of the post-1935 construction on interstate commerce. At the time of the 1952 determination of the Commission did not have the benefit of the enlightenment on the expanded jurisdictional base that was subsequently provided by the Supreme Court in Federal Power Commission v. Union Electric Co. (Taum Sauk), 381 U.S. 90, 85 S. Ct. 1253, 14 L. Ed. 2d 239 (1965).*fn7
The Commission's determination of lack of interstate effect as to Shepaug did not reach the question of navigability. Its conclusion, that commerce was not affected, did not constitute permission to maintain the project license-free in perpetuity. It is contrary to the purpose of the Act, that "a determination of lack of effect on commerce would forever oust the Commission of jurisdiction. . . ." Nantahala Power and Light Co. v. Federal Power Commission, 384 F.2d 200, 210 (4th Cir. 1967) (Sobeloff, J.).
Since the question of the navigability of the Housatonic River is not precluded by the Commission's prior findings on the 1952 declaration of Electric Power, Inc., we turn to the record to determine whether the Commission's decision on the prime issue is supported by substantial evidence. Such is the standard of review prescribed in Section 313 of the Act. (16 U.S.C. § 825 l(b)). E.g. Gainesville Utilities Department v. Florida Power Corp., 402 U.S. 515, 29 L. Ed. 2d 74, 91 S. Ct. 1592 (1971); Scenic Hudson Preservation Conference v. Federal Power Commission, 453 F.2d 463 (2d Cir.), cert. denied 407 U.S. 926, 32 L. Ed. 2d 813, 92 S. Ct. 2453 (1972).
The report of the administrative law judge attributes the navigability of the Housatonic to several factors: its past and present suitability for use as a boatable water and the history of the river in the transport of logs from upstream logging operations to downstream markets. The appellant does not challenge the navigability of the river from Shelton Dam, 13.5 miles upstream, to Long Island Sound. The question is the substantiality of the evidence concerning the navigability of the Housatonic from Bulls Bridge, some 53 miles upstream from the mouth, to Otter Rock, 35 miles to the south.
The evidence is replete with historical material which records transportation on the Ousatonnic (since 1840 the Housatonic) by rafts, canoes and small boats from colonial days to recent times.*fn8 And there is historical data of use of the river from as far north as Pittsfield, Massachusetts, to Long Island Sound.*fn9 The record contains historical documentation of the fact that the river was used for the navigation of boats, rafts and other "stout" craft for access to the Indian trading post established at Goodyear Island below New Milford.*fn10 There are other historical writings that report that the Indians in the Housatonic Valley "used the river as a highway to the shores of the Sound."*fn11 The administrative judge further reported evidence of boating by small craft on the Housatonic. Some of such testimony was elicited from witnesses presented by CL & P and the intervenor.*fn12
The Commission's affirmative determination of navigability does not rest entirely on the evidence of boatable navigation. The resolution of the issue is also founded on evidence of flotation of logs incident to logging operations along the Housatonic.
There is a persuasive historical account written by a reputable historian, contemporary to the events recorded, which states:
At the commencement of the rise of the waters in the spring, thousands of logs of pine and hemlock have been thrown into this river, and floated down its current from Great Barrington and Sheffield [Massachusetts] for years, over the falls at Canaan, to New Milford and Derby, where they have been converted into boards, plank, shingles, etc., for market in Connecticut and New York. The rise of the water has commonly carried them safely over the rocks in the stream. Their passage over the Falls has often been witnessed with amazement. This trade has carried a very great portion of the pine timber from the south part of the County. (Emphasis in original).*fn13
The Commission found this historical account to be confirmed by various historical records and state papers, including two enactments by the Connecticut General Assembly in the late eighteenth and early nineteenth centuries. The earliest of these authorized the clearing of rocks and other obstructions in a stretch of the river from New Town (mile 20) to a point above the Great Falls at New Milford to aid navigation and to construct locks at some points, - " Provided nevertheless that nothing in this Act be construed in the least Degree to effect the rafting of Timber and Lumber down the present Bed or Channel of said River and the Fishing thereof."*fn14 The subsequent enactment of May 1807 extended prior legislation "regulating the floating of logs and other timber, shingles and staves down the Connecticut river . . . to the floating of logs, lumber, shingles and staves down the Ousatonnick river." Statute Laws of the State of Connecticut, Book 1, 1808.
The Commission's reliance on historical data and ancient documents is legally justified. Such reference is commonly made in proceedings where navigability is in issue. The objection that the evidence accepted by the administrative judge is impermissible hearsay is unavailing. Evidence contained in public records and reports, recorded deeds affecting interest in real property and learned historical treatises are exceptions to the hearsay rule. Federal Rules of Evidence 803 (8)(14)(18)(20); 5 Wigmore, Evidence §§ 1597-1598. The importance of such evidence in proceedings under the Federal Power Act was observed by Judge Bazelon in Montana Power Co. v. Federal Power Commission, 87 U.S. App. D.C. 316, 185 F.2d 491, 498 (1950):
It is settled that historical works generally considered authentic are admissible in evidence, especially in cases such as this one which must delve into the relatively ancient and obscure origins of commerce on the nation's rivers. (footnote omitted). At any rate, we do not think the hearsay rule is applicable to administrative proceedings so long as the evidence upon which an order is ultimately based is both substantial and has probative value.
It is so here; the instant proceedings are well within the pattern of Montana Power.*fn15
The Commission recognized that the evidence of navigability was "not overwhelming." This does not drain it of substance. Despite the petitioner's efforts to discredit the reliability of its sources, the evidence is persuasive against the negative approach adopted by petitioner's experts.
The main effort of the petitioner's resistance to the Commission's decision on navigability of the Housatonic is based on the physical characteristics and topography of the river bed. We are referred to the steep gradient of the flow of the river in Connecticut and the numerous rapids, waterfalls and boulders which interdict any significant commerce on regular travel. And it is said that its irregular flow from spring floods to low water is inadequate to support commercial use.
To appraise the evidence of navigability on the natural condition only of the waterway is erroneous. Its availability for navigation must also be considered. "Natural and ordinary conditions" refers to volume of water, the gradients and the regularity of the flow. A waterway otherwise suitable for navigation is not barred from that classification merely because artificial aids must make the highway suitable for use before commercial navigation may be undertaken. (Footnote omitted).
United States v. Appalachian Electric Power Co., 311 U.S. 377, 407, 85 L. Ed. 243, 61 S. Ct. 291 (1940). Navigability may be established despite natural obstructions. Id. at 409. Capability for public use for purposes of river transportation is the true criterion. Economy Light Co. v. United States, 256 U.S. 113, 122, 41 S. Ct. 409, 65 L. Ed. 847 (1921).
It is abundantly clear that the Housatonic comes within the observation made by the Court in The Montello, 87 U.S. 430, 443, 22 L. Ed. 391 (1874):
Indeed, there are but few of our fresh-water rivers which did not originally present serious obstructions to an uninterrupted navigation. In some cases, like the Fox River, they may be so great while they last as to prevent the use of the best instrumentalities for carrying on commerce, but the vital and essential point is whether the natural navigation of the river is such that it affords a channel for useful commerce. If this be so the river is navigable in fact, although its navigation may be encompassed with difficulties by reason of natural barriers such as rapids and sandbars.
That the Housatonic is hazardous to navigation in certain areas of its flow from Bulls Bridge to Long Island Sound is demonstrated in the record. Indeed, the findings adopted by the Commission determined that the river was not amenable to extensive improvement in this regard, at least at reasonable cost. The record demonstrates that the law judge considered other evidence by way of official government documents, including reports of the United States Corps of Engineers which indicate directly or by implication that open navigation is restricted for a relatively short distance upstream from its mouth. He concluded, however, that the reference to navigability in these reports was undefined and not made in the sense of the definition provided in Section 3(8) of the Act.
Against this, the Commission concluded the substantial evidence of use of the Housatonic for boating and the flotation of logs was more convincing. "(The) uses to which the streams may be put vary from the carriage of ocean liners to the floating out of logs. . . ." Appalachian Power Co., supra 311 U.S. at 405. And the lack of commercial traffic does not preclude "a conclusion of navigability where personal or private use by boats demonstrates the availability of the stream for the simpler types of commercial navigation." Id. at 416, citing United States v. Utah, 283 U.S. 64, 82, 75 L. Ed. 844, 51 S. Ct. 438 (1931).
The Commission's findings cannot be overturned because the river was navigated primarily at early stages in the economic development of western Connecticut. Nor is its determination undermined because extensive improvement for purposes of river traffic became impracticable by reason of the availability of more efficient means of interstate transport. Rochester Gas and Electric Corp. v. Federal Power Commission, 344 F.2d 594, 597 (2 Cir. 1965). "When once found to be navigable, a waterway remains so." United States v. Appalachian Power Co., supra, 311 U.S. at 408.
As we have seen from that which is written above, substantial evidence was presented of the historic use of the Housatonic from its headwaters to Long Island Sound. The Commission's reliance on this proof is sound in fact and well founded in law. The logging factor on the issue of navigability was recognized by the Supreme Court in Appalachian Power Co., supra at 411 and in St. Anthony Falls Water Power Co. v. St. Paul Water Commissioners, 168 U.S. 349, 359, 18 S. Ct. 157, 42 L. Ed. 497 (1897). More recently it has had dominant effect. See State of Wisconsin v. Federal Power Commission, 214 F.2d 334, 337 (7th Cir. 1954); Wisconsin Public Service Corp. v. Federal Power Commission (Tomahawk) 147 F.2d 743, 747 (7th Cir.), cert. denied 325 U.S. 880, 65 S. Ct. 1574, 89 L. Ed. 1996 (1945).*fn16
The total record presented in this review revisits the scenes and struggles of the early settlers along the historic Housatonic Valley, the river's part in the economic development of the region it serves and the complex physical characteristics, including gradient, the nature of its flow and physical obstruction. The fabric of the proof sustains the ultimate finding of the Commission that the Housatonic River from the site of the Bulls Bridge project to Long Island Sound was used and is suitable for transporting property in interstate and foreign commerce within the meaning of the Federal Power Act.
Since we affirm the Commission's jurisdiction on the primary issue of navigability, it is not essential to reach the secondary and independent jurisdictional base of its authority on the effect of the Shepaug and Stevenson projects on interstate commerce under Section 23(b) of the Act.
The order of the Commission is affirmed.
The order of the Commission is affirmed.