L.S. STARRETT CO. v. F.E.R.C.
650 F.3d 19 (2011)
United States Court of Appeals, First Circuit.
Heard January 3, 2011.
Starrett II, 129 FERC ¶ 62,053, at 64,160; see also 16 U.S.C. § 817(1). The Commission concluded that Starrett's dam was subject to licensing under the fourth criterion. We lay out the governing standard of review, and then address each of the three prongs of the fourth criterion.
A. Standard of Review
Reviewing the Commission's orders under the Administrative Procedures Act, we "must reverse an agency action that is `arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.'" Knott v. FERC, 386 F.3d 368, 372 (1st Cir.2004) (quoting Wis. Valley Improvement Co. v. FERC, 236 F.3d 738, 742 (D.C.Cir.2001)); see also 5 U.S.C. § 706. "We review FERC's findings of fact for `substantial evidence,' and if so supported, such findings are conclusive." Knott, 386 F.3d at 371 (quoting Thomas Hodgson & Sons v. FERC, 49 F.3d 822, 825 (1st Cir. 1995)) (internal quotation marks omitted). "We `defer to the agency's expertise . . . so long as its decision is supported by "substantial evidence" in the record and reached by "reasoned decisionmaking," including an examination of the relevant data and a reasoned explanation supported by a stated connection between the facts found and the choice made.'" Id. (quoting Ne. Utils. Serv. Co. v. FERC, 993 F.2d 937, 944 (1st Cir.1993) (citation omitted)). "`Pure' legal errors require no deference to agency expertise, and are reviewed de novo." Id. at 372 (quoting Ne. Utils. Serv. Co., 993 F.2d at 944) (internal quotation marks omitted). "Questions involving an interpretation of the FPA involve a de novo determination by the court of congressional intent; if that intent is ambiguous, FERC's conclusion will only be rejected
if it is unreasonable." Id. (quoting Ne. Utils. Serv. Co., 993 F.2d at 944) (internal quotation marks omitted). When determining congressional intent, courts must first ask whether Congress has "directly addressed the precise question at issue." Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984); see also Massachusetts v. Sebelius, 638 F.3d 24, 30 (1st Cir.2011). If Congress has indeed addressed the "precise question at issue" and "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." Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778.
B. A "Commerce Clause Stream"
Section 23(b) requires us to ask whether L.S. Starrett's dam is on "a stream over which Congress has Commerce Clause jurisdiction," see 16 U.S.C. § 817(1), i.e., a "Commerce Clause stream." The Commission concluded, and L.S. Starrett does not dispute on appeal, that the Millers River is a "Commerce Clause stream." See Starrett III, 130 FERC ¶ 61,112, at 61,521 n. 6. We agree with the Commission's assessment because "the headwaters and tributaries of navigable waters are [C]ommerce [C]lause streams," id. (citing Fed. Power Comm'n v. Union Elec. Co., 381 U.S. 90, 94-96, 85 S.Ct. 1253, 14 L.Ed.2d 239 (1965)), and the Millers River is a tributary of the Connecticut River, which is navigable, see Starrett II, 129 FERC ¶ 62,053, at 64,161 n. 6.