RANDALL, Circuit Judge:
These condemnation cases present the issue whether compensation should be determined under federal law or under the law of the state where the condemned property is located when a licensee of the Federal Energy Regulatory Commission (the Commission)
Parts I and II of the panel opinion in Larman, denominated "Right to a Jury Trial" and "Discretion to Appoint a Commission," (up to Part III, "Applicability of Federal Law," 596 F.2d at 648), are unaffected by our present decision on the choice of law issue and are, accordingly, approved and adopted by the court en banc. In Part IV of Larman, under the heading "Alleged Errors in the Commission's Final Report," the panel first set forth general principles relevant
In both Dodson and Larman, Georgia Power Company, a privately owned Georgia utility, instituted condemnation proceedings against Georgia landowners in federal court to acquire land for the Lake Wallace hydroelectric power generating project in Georgia. These proceedings were instituted pursuant to Section 21 of the Federal Power Act, authorizing persons or entities licensed by the Commission under Section 4(e) of the Federal Power Act, 16 U.S.C. § 797(e),
The district judge appointed a three-member commission to determine the amount of compensation due the landowners. See Fed.R.Civ.P. 71A(h). The judge's instructions to the commission embodied federal rules for determining just compensation. The landowners' requests to substitute
We think it clear that the source of the eminent domain power at issue here is federal. Since Section 21 licensees derive their authority to exercise the power of eminent domain from the Federal Power Act, which was passed in the exercise of a "`constitutional function or power,'" see United States v. Kimbell Foods, Inc., 440 U.S. 715, 726, 99 S.Ct. 1448, 1457, 59 L.Ed.2d 711 (1979) (quoting Clearfield Trust Co. v. United States, 318 U.S. 363, 366, 63 S.Ct. 573, 574, 87 L.Ed. 838 (1943)), their rights, as well, should derive from a federal source. 440 U.S. at 726, 99 S.Ct. at 1457. We think that, in this context, federal interests are "sufficiently implicated to warrant the protection of federal law." Kimbell Foods, 440 U.S. at 727, 99 S.Ct. at 1457-1458. Since the statute does not specify the appropriate rule of decision, the task of interstitial federal lawmaking falls upon the federal judiciary in this case "`to declare the governing law in an area comprising issues substantially related to an established program of government operation.'" United States v. Little Lake Misere Land Co., 412 U.S. 580, 593, 93 S.Ct. 2389, 2397, 37 L.Ed.2d 187 (1973) (quoting Mishkin, The Variousness of "Federal Law": Competence and Discretion in the Choice of National and State Rules for Decision, 105 U.Pa.L.Rev. 797, 800 (1957)). Thus, the question which remains is whether the court should choose federal common law or state law as the applicable federal rule. See, e. g., Kimbell Foods, 440 U.S. 715, 99 S.Ct. 1448, 59 L.Ed.2d 711; Clearfield Trust, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838.
The answer to this question is largely dependent upon whether one begins with the position that state law should be adopted unless it is shown that legislative intent or other sufficient reasons exist to displace state law with federal common law or with the position that federal common law should be utilized unless it is shown that legislative intent or other sufficient reasons exist to warrant adoption of state law. Basic considerations of federalism, as embodied
Our reading of Supreme Court decisions convinces us of the correctness of our approach.
Id. at 367, 63 S.Ct. at 575 (citation omitted).
The choice of state law as the federal rule was thought to be similarly inappropriate in determining whether the United States could recover for damages suffered when a serviceman is injured by a third party tortfeasor. United States v. Standard Oil Co., 332 U.S. 301, 67 S.Ct. 1604, 91 L.Ed. 2067 (1947). Uniform national treatment, rather
In Bank of America National Trust & Savings Ass'n v. Parnell, 352 U.S. 29, 77 S.Ct. 119, 1 L.Ed.2d 93 (1956), the Supreme Court held state law applicable, refusing to extend the Clearfield Trust rationale to litigation between private parties even though the suit involved federal commercial paper. The Court reasoned as follows:
352 U.S. at 33-34, 77 S.Ct. at 121.
In Wallis v. Pan American Petroleum Corp., the Court held that state law governed the dealings of private parties in an oil and gas lease issued under the Mineral Leasing Act of 1920. 384 U.S. 63, 86 S.Ct. 1301, 16 L.Ed.2d 369. The Court there enunciated the following test:
Id. at 68, 86 S.Ct. at 1304.
In Miree v. DeKalb County, Georgia, 433 U.S. 25, 97 S.Ct. 2490, 53 L.Ed.2d 557 (1977), the Court held state law applicable in an action against the county by survivors of deceased airline passengers who attempted to recover as third party beneficiaries of a contract between the county and the Federal Aviation Administration. The Clearfield Trust approach was inapplicable because the rights of private litigants alone were at issue. 433 U.S. at 30, 97 S.Ct. at 2494. Although the United States has a substantial interest in regulation of air travel and promotion of air travel safety, id. at 31, 97 S.Ct. at 2494, as was the case in Parnell and Wallis, any federal interest in the outcome of the specific question before the Court was "`far too speculative, far too remote a possibility to justify the application of federal law to transactions essentially of local concern.'" Id. at 32-33, 97 S.Ct. at 2495-2496 (quoting Parnell, 352 U.S. at 33-34, 77 S.Ct. at 121-122).
Finally, in Kimbell Foods, decided after Dodson, the Court held that state law should be adopted as the appropriate federal rule for establishing priorities of competing federal (SBA and FHA) and private liens since a national rule was unnecessary to protect the federal interests involved. 440 U.S. 718, 99 S.Ct. at 1453. The Court rejected what it considered "generalized pleas for uniformity as substitutes for concrete evidence that adopting state law would adversely affect administration of the federal programs." Id. at 730, 99 S.Ct. at 1459. The government's argument that the special priority accorded federal tax liens was required here as well, since application of state law would undermine its ability to recover funds disbursed under the lending programs and thus would conflict with program objectives, was also rejected. Id. at 733-38, 99 S.Ct. at 1461-1464. The special priority the government commands in its tax collecting capacity was not warranted in this context where it was in substantially
The foregoing review of Supreme Court decisions leads us to the conclusion that they do indeed evidence "a growing desire to minimize displacement of state law," Dodson, 563 F.2d at 1189, and that conclusion strongly supports our position that state law should be adopted as the federal rule of compensation unless it is shown that legislative intent or other sufficient reasons exist to displace state law with federal common law.
Our review of the relevant legislative history reveals no express congressional intent that federal common law and not state law should supply the federal rule in determining the measure of compensation in condemnation cases brought under Section 21. Therefore, we turn to an examination of the considerations relevant to the "nature of the specific governmental interests and to the effects upon them of applying state law." Standard Oil, 332 U.S. at 310, 67 S.Ct. at 1609. If the effect of applying state law is virtually to nullify the federal objectives, then there is a conflict that precludes application of state law. See, e. g., Little Lake, 412 U.S. 580, 93 S.Ct. 2389, 37 L.Ed.2d 187. If application of state law would arguably interfere with an identifiable federal policy or interest, but not amount to a conflict which would preclude application of state law, we must proceed to an examination of the relative strength of the state's interests in having its rules applied. See United States v. Yazell, 382 U.S. 341, 351-53, 86 S.Ct. 500, 506-07, 15 L.Ed.2d 404 (1966); cf. Little Lake, 412 U.S. at 599, 93 S.Ct. at 2400 (although adoption of state law was precluded because it conflicted with the federal program regarding federal land acquisitions under the Migratory Bird Act, the Court stated that its conclusion might conceivably be influenced if the retroactive state statute sought to be applied served "legitimate and important state interests the fulfillment of which Congress might have contemplated through application of state law"); Wallis, 384 U.S. at 68, 86 S.Ct. at 1304 (not reaching the issue since no significant threat was found). See generally Comment, Adopting State Law as the Federal Rule of Decision: A Proposed Test, 43 U.Chi.L.Rev. 799 (1976).
While we do not deny the existence of important federal interests in issues arising under the Federal Power Act (indeed, that is the basis for our decision that federal law governs in the first place), we are of the opinion that the interests of the United States in the determination of the amount of compensation a private licensee must pay a landowner in a condemnation proceeding under Section 21 are not sufficient to warrant displacement of state law on that issue. Before a license may be issued under the Federal Power Act, there must be a determination by the Commission that the project does not affect the "development of any water resources for public purposes [that] should be undertaken by the United States itself." 16 U.S.C. § 800(b). Thus, by definition, a licensed project does not implicate the interests of the United States to the degree that it is thought desirable that the project be undertaken by the United States itself. We find persuasive and relevant to determining the nature of federal and state interests in this case the distinction observed by the Ninth Circuit in Public Utility District No. 1 v. City of Seattle, 382 F.2d 666, 669-70 (9th Cir.), cert. dismissed, 396 U.S. 803, 90 S.Ct. 22, 24 L.Ed.2d 59 (1969) (even though it was made in support of its finding, which we deem erroneous, that Section 21 does not delegate full eminent domain power):
Although federal rules have been applied to the determination of just compensation in federal condemnation cases where the United States is the party condemning and paying for the land,
The overriding federal interest at stake in a case such as this one is in implementing or effectuating the federal program. Thus, if state law is so hostile that its application would actually frustrate this objective, a conflict exists which precludes adoption of state law as the federal rule. See Little Lake, 412 U.S. 580, 93 S.Ct. 2389, 37 L.Ed.2d 187. The specific federal interests or policies which may be identified under the Federal Power Act are 1) maximization of hydroelectric development, 2) reduced energy costs and 3) minimization of cost to the government should it decide to exercise its option to acquire a project at the expiration of the license term, upon payment of "net investment," not exceeding the "fair value" of the property taken, under Section 14(a) of the Federal Power Act, 16 U.S.C. § 807(a) (1976).
It is clear to us that application of state law to the narrow question of the determination of the amount of compensation a licensee must pay a landowner does not nullify federal objectives and does not result in a conflict which would preclude application of state law. In Little Lake, application of a state statute retroactively making mineral rights imprescriptible would have deprived the federal government of its previously bargained for contractual interests in mineral rights and would have created uncertainty in the land acquisition program embodied in the Migratory Bird Conservation Act, 16 U.S.C. § 715 et seq. The Court held that "borrowing" state law in this case would be inappropriate since "specific aberrant or hostile state rules do not provide appropriate standards for federal law." Little Lake, 412 U.S. at 595-96, 93 S.Ct. at 2398. Georgia Power Company argues that it would likewise be inappropriate to apply Georgia law to the computation of just compensation in condemnation actions in federal court under Section 21 since, especially in its allowance of enhanced value resulting from knowledge of the project, as to which it is admittedly in the minority,
Id. at 352, 86 S.Ct. at 507.
Although application of state law resulting in higher condemnation costs to the licensee is not precluded, nevertheless, since application of the state law arguably burdens or interferes with the three federal interests or policies enumerated above, we must weigh the federal interest in avoiding this interference against the state interest in having its law applied.
In any case involving the issue of choice of federal or state law, the desirability of uniformity achieved by application of federal common law may be advanced. Where, however, as here, uniformity bears little relation to the federal program at issue,
In analyzing the state's interests in having its laws of compensation apply when a licensee exercises the power of eminent domain under Section 21 of the Federal Power Act, we begin with the state's interest in avoiding displacement of its laws in the area of property rights, traditionally an area of local concern. Since property has been viewed as a bundle of valuable rights and since the question of what constitutes property is usually determined with reference to state law,
Georgia Power Company asserts that the application of Georgia law as the federal rule of compensation in these cases will result in higher land acquisition costs than those which would have obtained if the law applicable to cases in which the federal government is the condemnor were applied.
As is demonstrated by the persuasiveness of the well-reasoned positions advanced by both the majority and the dissent in Dodson, the choice of law question in this case is a close one. A majority of this court, however, is of the opinion that absent a showing of legislative intent to the contrary, considerations of federalism warrant a preference for adoption of state law as the federal rule. We do not find the showing of federal interests and the effects thereon of applying state law sufficient to overcome that preference in this case. Thus, we are led to the conclusion that the law of the state where the condemned property is located is to be adopted as the appropriate federal rule for determining the measure of compensation when a licensee exercises the power of eminent domain pursuant to Section 21 of the Federal Power Act.
The judgments of the district court are VACATED and the cases are REMANDED for further proceedings consistent with this opinion.
VACATED and REMANDED.
FAY, Circuit Judge, concurring:
In this era of ever-groping federal tentacles, perhaps it is quixotic to brandish one small sword in a crusade against further invasion of the powers of states. With the hope that this battle cry will not be a last gasp, I will charge forward with the apparently anachronistic views that states are sovereigns, that states do control property and property rights. A significant conflict between federal and state interests must exist to preempt state control. Trimmed to the bone, the facts of this case are that a private, Georgia utility company desires privately-owned Georgia land from Georgia citizens for a private hydroelectric power and recreation project in Georgia to supply power to Georgia citizens and to provide profit to private investors. In looking to define "just compensation" when such a private, state-controlled utility company exerts the eminent domain power to acquire private land, federal law should not control the inquiry. I therefore concur in the majority result, although I would have reached that holding by a different route.
Despite the danger of appearing to have surrendered this battle, I will also suggest an additional basis for preferring state laws as federal rules of decision.
A. States Control Property
A helpful, if overly-simplified, starting point may be to sketch out several types of state-federal relationships. In some instances, the Constitution forbids states to act, or grants the federal government exclusive power to act. In these subject areas, state action is precluded. At the opposite end of the spectrum are the powers the Constitution reserves to the states.
Essentially four situations exist, therefore, in which state law may apply: when Congress expressly adopts state law, when Congress has not exercised its powers, when Congress has acted leaving some areas open, and when the tenth amendment
My objection to the current framework for determining choice of law is that it stands on its head the proper order of questions, losing sight of the inquiry into constitutional allocations of power. The path to choice between a federal or state rule has acquired many steps. First, the court decides whether the source of the right is state or federal. If the source is federal, the court inquires whether Congress has provided that either federal or state law should govern. In the absence of congressional statement, the court considers whether the federal rule should be to adopt state law, or to apply or fashion a uniform federal rule. In answering this question, the court initially determines whether use of state law will truly conflict with effectuation of federal policies or programs. If the answer is "no," the court balances federal interests in uniformity against the state's interests in spheres traditionally left to local control.
In my view the initial inquiry should be into what the competing subject areas are. The first step should be a determination of whether the subject area is one traditionally left to state control, not whether the source of right is state or federal. Especially when dealing with those powers left to the states, the courts should tread gingerly to the conclusion that Congress has preempted the field. See Hisquierdo v. Hisquierdo, 439 U.S. 572, 581, 99 S.Ct. 802, 808, 59 L.Ed.2d 1 (1979); Santa Fe Industries, Inc. v. Green, 430 U.S. 462, 477-80, 97 S.Ct. 1292, 1302-05, 51 L.Ed.2d 480 (1977); United States v. Yazell, 382 U.S. 341, 86 S.Ct. 500, 15 L.Ed.2d 404 (1966). Indeed, a premise to the interstitial choice of law rulemaking is that Congress has not spoken, and therefore it should be rare to uncover an intent to preempt state law. Perhaps this explains why state law is adopted as the federal rule in so many choice of law cases.
Instead of focusing on the allocation of state-federal control over the subject areas, the current choice of law analysis requires looking to the source of the right in question. Very little space is spent discussing this threshold inquiry. If the source of right is determined to be federal, the requirements of Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) and the Rules of Decision Act
In a world in which the ever-burgeoning federal government colors most aspects of life, this federal nexus is rarely lacking, and, accordingly, state law rarely applies of its own force.
Perhaps it is splitting hairs to argue over the means for selecting state law as the rule of decision so long as that result is reached in the majority of cases. I, for one, however, find an inherent harm in this usurpation of state power contrary to the precepts of federalism, even if the displacement is in name only. But the characterization of the source of the question as federal goes beyond the appellation. First, the courts still may reject state law that conflicts with or is hostile to federal policies, or is aberrant. Although prevailing preemption analysis might also weed out conflicting state rules, to call the source federal casts uncertainty over whether, in any particular case, that state's law will apply, or will be found lacking in federal court. Second, characterizing the source as federal binds state courts to follow the federal rule. Third, by entitling the source federal, state conflicts of law rules will not apply, even if the state law is adopted as the federal rule. Klaxon Co. v. Stentor Elec. Mfg. Co., Inc., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Fourth, the characterization and subsequent steps of the analysis relegate state interests to a simple balancing against federal policies rather than requiring a focus on constitutional allocations and unconstitutional infringements of power.
In this case, the open question is one of property law, one of the few areas traditionally left to the states. See United States v. Little Lake Misere Land Co., 412 U.S. 580, 605-08, 93 S.Ct. 2389, 2403-05, 37 L.Ed.2d 187 (1973) (Stewart & Rehnquist, J.J., concurring); United States v. Yazell, 382 U.S. 341, 352-58, 86 S.Ct. 500, 506-10, 15 L.Ed.2d 404 (1966); United States v. Burnison, 339 U.S. 87, 89, 70 S.Ct. 503, 504, 94 L.Ed. 675 (1950); Davies Warehouse Co. v. Bowles, 321 U.S. 144, 155-56, 64 S.Ct. 474, 480-81, 88 L.Ed. 635 (1944); see also Sunderland v. United States, 266 U.S. 226, 232-34, 45 S.Ct. 64, 65, 69 L.Ed. 259 (1923). The Supreme Court sometimes mentions this tradition of state property control when choosing the federal rule. E. g. Butner v. United States, 440 U.S. 48, 55, 99 S.Ct. 914, 918, 59 L.Ed.2d 136 (1979); United States v. Brosnan, 363 U.S. 237, 241-42, 80 S.Ct. 1108, 1111-12, 4 L.Ed.2d 1192 (1960); RFC v. Beaver County, 328 U.S. 204, 210, 66 S.Ct. 992, 995, 90 L.Ed. 1172 (1946). The property question arises between
It is true that section 21 appears to grant licensees some eminent domain power, though it may be limited. See Public Utility District No. 1 v. Seattle, 382 F.2d 666, 669-73 (9th Cir. 1967). But see Dodson, 563 F.2d 1178, 1187-88 (5th Cir. 1977). To call the source federal and to apply the choice of law analysis, however, skips the questions of whether Congress can constitutionally act in the property area, and whether Congress can constitutionally delegate the federal eminent domain power to private individuals or other legal entities and immunize such recipients from the requirements of state law.
B. State Law Preference
While I depart from the majority on the route it took, I agree that state law governs. Although "considerations of federalism"
This is not to suggest that federal courts have no power to shape federal common-law rules; the Supreme Court has reaffirmed for almost forty years the judiciary's authority to fill many of the gaps left by Congress.
ALVIN B. RUBIN, Circuit Judge, with whom AINSWORTH, TJOFLAT and FRANK M. JOHNSON, Jr., Circuit Judges, join, dissenting.
Because I fail to perceive any sound reason to distinguish between condemnation proceedings brought by the United States and those in which it authorizes its power to be used by its statutory licensee for a federal public purpose, I respectfully dissent. Federal rules ex proprio vigore should apply to such condemnation proceedings for the reasons set forth in the majority opinion in Georgia Power v. 54.20 Acres of Land, 563 F.2d 1178 (5th Cir. 1977), cert. denied, 440 U.S. 907, 99 S.Ct. 1213, 59 L.Ed.2d 454 (1979), and followed in the panel opinion, 596 F.2d 644.
Georgia Power was issued a license by the FPC for the Lake Wallace Project (then called the Laurens Shoals Project), on August 6, 1969. 42 F.P.C. 356 (1969).
It appears that the two differences in the method of determining just compensation under Georgia and federal law discussed in the text above are the key differences. In any event, they are the only ones mentioned specifically on appeal. Any questions concerning the exact parameters of Georgia law on this issue will have to be resolved on remand.
28 U.S.C. § 1652 (1976).
Dodson, 563 F.2d at 1186, n. 21. While a decision to apply federal rules of compensation might implicitly involve a determination that federal interests outweigh state interests, we do not find the cases cited persuasive since they contain no express interest analysis, which may be indicative of the importance attached to the presence of the United States as the condemnor in those cases.
In support of its contention that there is no need to balance any interests in this case, Georgia Power Company places great reliance on Richmond Elks Hall Ass'n v. Richmond Redevelopment Agency, 561 F.2d 1327 (9th Cir. 1977), where the court refused to apply the law of the state (which, unlike federal law, awards costs and expenses, including attorneys' fees, to landowners who obtain judgments in inverse condemnation actions against public entities) in a successful inverse condemnation action brought under the fifth amendment against a federally assisted city redevelopment agency. The Ninth Circuit viewed the Supreme Court's reasoning in a Miller Act case, F. D. Rich Co. v. Industrial Lumber Co., 417 U.S. 116, 94 S.Ct. 2157, 40 L.Ed.2d 703 (1974), controlling. The Miller Act provides a remedy for suppliers and subcontractors who perform services or provide material for a contractor in connection with construction on federal property who must bring suit to recover money owed them by the contractor. 40 U.S.C. § 270a et seq. (1976). In F. D. Rich Co., the Supreme Court stressed the importance of a uniform national rule and reversed the Ninth Circuit's holding that the Miller Act requires an award of attorneys' fees where the "public policy" of the state in which suit is brought allows an award of fees in similar contexts. One reason for reversal was expressed as follows:
417 U.S. at 128, 94 S.Ct. at 2164. The Court also pointed out that "[m]any federal contracts involve construction in more than one State, and often, as here, the parties to Miller Act litigation have little or no contact, other than the contract itself, with the State in which the federal project is located." Id. at 127, 94 S.Ct. at 2164. In view of the foregoing analysis, discussing federal and state interests, we do not think Richmond Elks Hall lends much support to Georgia Power's theory that there is no need to balance interests and we do not deem controlling on the issue before us the following language from F. D. Rich Co. quoted by the court in Richmond Elks Hall:
561 F.2d at 1334. Furthermore, we note that unlike Section 21 licensees, the redevelopment agency in Richmond Elks Hall was federally funded.
16 U.S.C. § 807(a)(1976). The option provision has been cited as illustrative of the "closeness of the relationship of the Federal Government to these projects and its obvious concern in maintaining control over their engineering, economic and financial soundness." First Iowa Hydro-Electric Coop. v. FPC, 328 U.S. 152, 172-73, 66 S.Ct. at 906, 90 L.Ed. 1143 (1946). See also id. at 181 n. 25, 66 S.Ct. at 920, n. 25. The government, however, in its amicus brief to the Supreme Court on petition for certiorari in Dodson, brief for United States at 12, Boswell v. Georgia Power Company, 440 U.S. 907, 99 S.Ct. 1213, 59 L.Ed.2d 454 (1979), described the governmental interest arising from this option as a "less important federal interest" since it cannot be predicted with confidence that many licensed projects will be recommended for federal take-over as their terms expire. Since under Section 7(b) of the Act, 16 U.S.C. § 800(b), approval may not be given for any application for a project when the Commission finds that "the development of any water resources for public purposes should be undertaken by the United States itself," the landowners argue that exercise of the option is unlikely because it will have already been determined that it was unnecessary for the United States to undertake the project initially.
First Iowa Hydro-Electric Coop., 328 U.S. at 174-75 n. 19, 66 S.Ct. at 916, 917 n. 19. This integration refutes any argument that failure to promote ease in federal administration through adoption of uniform national standards of compensation significantly undermines operation of the energy program. We think that Sections 19 and 20, 16 U.S.C. §§ 812 and 813, expressly limiting the Commission's authority to regulate rates and other charges, which are directly related to energy costs, to situations where a state does not have its own regulations, is telling of the absence of intent to apply uniform federal law to the compensation question.
Although cost of land acquisition is included in rate-base determinations by the Commission in regulating interstate wholesale rates for electric power and by state utility commissions setting rates for the intrastate sale of power, the government conceded in its amicus brief to the Supreme Court on petition for certiorari in Dodson, brief for United States at 12 n. 11, Boswell v. Georgia Power Company, 440 U.S. 907, 99 S.Ct. 1213, 59 L.Ed.2d 454 (1979), that "the Commission has not, either in its rules and decisions determining what costs for hydroelectric projects are allowable under 16 U.S.C. 797(b) [determination of "actual legitimate original cost of and the net investment in a licensed project"] or in its rules and decisions governing rate-making by interstate wholesalers of electricity and natural gas, developed a standard favoring the use of either federal or state criteria in the valuation for land acquisition purposes." See also Grand River Dam Auth. v. Grand Hydro, 335 U.S. 359, 374-75, 69 S.Ct. 114, 121-122, 93 L.Ed. 64 (1948) (discussing materiality of fact that valuations are used in determination of rates and net investment; holding that Federal Power Act does not displace state rules of compensation where a licensee relies only on the powers of eminent domain granted by the state; leaving open the questions of the proper measure of value in a condemnation proceeding instituted by the United States [since settled in favor of application of federal law, United States v. Twin City Power Co., 350 U.S. 222, 76 S.Ct. 259, 100 L.Ed. 240 (1956)] or by one of its licensees under Section 21).
We agree with the majority in Dodson that the landowners' arguments that impermissible forum shopping and denial of equal protection may result from application of different standards of compensation when a licensee has the option of proceeding under state or federal powers of eminent domain are without merit. Id. at 1191-93.
The landowners also assert in their en banc briefs that the Wallace Dam Project was budgeted in anticipation that state law would control the setting of just compensation. The Power Company vigorously denies that this was the case. We decline to give weight to this disputed assertion. Cf. Kimbell Foods, 440 U.S. at 729-32, 99 S.Ct. at 1459-61; Yazell, 382 U.S. 341, 86 S.Ct. 500, 15 L.Ed.2d 404.
440 U.S. at 55, 99 S.Ct. at 918. Under these circumstances, the state interests outweigh the federal, regardless of whether a general presumption favoring state law is utilized.