Respondent is an agency of the State of Oklahoma created to
develop hydroelectric power on the Grand River, a nonnavigable
tributary of the navigable Arkansas River. It proposed a river
development plan at Pensacola, Markham Ferry, and Ft. Gibson, all
sites on the Grand River, and, under license from the Federal Power
Commission, completed a project at Pensacola in 1940. Subsequently,
by the Flood Control Act of 1941, Congress incorporated the Grand
River plan into a comprehensive plan for regulation of navigation,
control of floods and production of power on the Arkansas River and
its tributaries, and the United States constructed a project at Ft.
Gibson, in connection with which it compensated respondent for a
condemned tract of land, flowage rights over its lands, and
relocation of its transmission lines. Respondent sued in the Court
of Claims for additional compensation for the "taking" of its water
power rights at Ft. Gibson and its franchise to develop electric
power and energy at that site.
Held: Respondent is not entitled to recover. It failed
to show that it had any rights in the flow of the river. The United
States had the superior right under the Commerce Clause to build
the Ft. Gibson project itself to protect the navigable capacity of
the Arkansas River, and the frustration of respondent's plans and
expectations which resulted when the United States chose to do so
did not take property from respondent in the sense of the Fifth
Amendment. Pp.
363 U. S.
230-236.
___ Ct. Cl. ___ 175 F. Supp. 153, reversed.
Page 363 U. S. 230
Opinion of the Court by MR. JUSTICE DOUGLAS, announced by MR.
JUSTICE HARLAN.
Grand River is a nonnavigable tributary of the navigable
Arkansas River, and flows through Oklahoma. Respondent was created
by the Oklahoma Legislature to develop hydroelectric power on the
Grand River. It is, to use the statutory language of the law
creating it, "a governmental agency and body politic and
corporate." Session Laws of Oklahoma, 1935, c. 70, Art. 4, § 1, 82
O.S.1951 § 861. A report of the Army Corps of Engineers, made in
1930, indicated that federal development at Pensacola, Markham
Ferry, and Ft. Gibson -- all sites on the Grand River -- was not
then economically justified. [
Footnote 1] Respondent, following its creation in 1935,
proposed a river development plan at these three sites. In 1939,
the Army Engineers recommended a three-dam coordinated project as a
federal undertaking. [
Footnote
2] Congress, by the Flood Control Act of August 18, 1941,
[
Footnote 3] incorporated that
Grand River plan into a comprehensive plan for the Arkansas River
basin.
Meanwhile respondent obtained a license under § 23(b) of the
Federal Power Act [
Footnote 4]
to build and operate a project at Pensacola, and completed it in
1940. The United States took over the operation of this project
during World War II, after which it was returned to respondent. In
1946, the United States started the construction of a project at
Ft. Gibson. It has been completed as an integral part of a
comprehensive plan for the regulation of navigation, the control of
floods, and the production of power on the Arkansas River and its
tributaries. Congress, by modifying its plan for the Arkansas River
basin, [
Footnote 5] cleared
Page 363 U. S. 231
the way for respondent to obtain from the Federal Power
Commission a license for a project at Markham Ferry. Thus, the
United States operates the Ft. Gibson project, which is the
farthest downstream, while the respondent has the two upstream
projects. A 70-acre tract owned by the respondent was condemned
when the Ft. Gibson project was built; flowage rights over its
lands were acquired; and payment was made for relocation of its
transmission lines. Respondent claimed more. It demanded of the
United States $10,000,000 for the "taking" of its water power
rights at Ft. Gibson and its franchise to develop electric power
and energy at that site. [
Footnote
6] The Court of Claims, while reserving the question as to the
amount of compensation due, held by a divided vote that the United
States was liable. Ct.Cl., 175 F. Supp. 153. The case is here on a
writ of certiorari. 361 U.S. 922.
The Court of Claims recognized that, if the Grand River were a
navigable stream, the United States would not be liable for
depriving another entrepreneur of the opportunity to utilize the
flow of the water to produce power. Our cases hold that such an
interest is not compensable, because, when the United States
asserts its superior authority under the Commerce Clause, Const.
art. 1, § 8, cl. 3, to utilize or regulate the flow of the water of
a navigable stream, there is no "taking" of "property" in the sense
of the Fifth Amendment because the United States has a superior
navigation easement which precludes private ownership of the
water
Page 363 U. S. 232
or its flow.
See United States v. Chandler-Dunbar Water
Power Co., 229 U. S. 53,
229 U. S. 69;
United States v. Twin City Power Co., 350 U.
S. 222,
350 U. S.
224-225. The Government contends that the navigational
servitude of the United States extends also to nonnavigable waters,
preempting state-created property rights in such waters, at least
when asserted against the Government. In the view we take in this
case, however, it is not necessary that we reach that contention.
Congress, by the 1941 Act already mentioned, [
Footnote 7] adopted as one work of improvement
"for the benefit of navigation and the control of destructive
floodwaters" the reservoirs in the Grand River. That action to
protect the "navigable capacity" of the Arkansas River (
United
States v. Rio Grande Dam & Irrigation Co., 174 U.
S. 690,
174 U. S. 708)
was within the constitutional power of Congress. We held in
Oklahoma v. Atkinson Co., 313 U.
S. 508, that the United States, over the objection of
Oklahoma, could build the Denison Dam on the Red River, also
nonnavigable, but a tributary of the Mississippi. We there
stated,
"There is no constitutional reason why Congress cannot, under
the commerce power, treat the watersheds as a key to flood control
on navigable streams and their tributaries."
Id. at
313 U. S. 525.
And see United States v. Appalachian Electric Power Co.,
311 U. S. 377,
311 U. S. 426;
Grand River Dam Authority v. Grand-Hydro, 335 U.
S. 359,
335 U. S. 373.
We also said in
Oklahoma v. Atkinson Co., supra, that ". .
. the power of flood control extends to the tributaries of
navigable streams."
Id. at
313 U. S. 525.
We added,
"It is for Congress alone to decide whether a particular
project, by itself or as part of a more comprehensive scheme, will
have such a beneficial effect on the arteries of interstate
commerce as to warrant it. That determination is legislative in
character."
Id. at
313 U. S. 527.
We held that the fact that the project had a multiple purpose was
irrelevant to the
Page 363 U. S. 233
constitutional issue,
id. at
313 U. S.
528-534, as was the fact that power was expected to pay
the way.
Id. at
313 U. S.
533.
"[T]he fact that ends other than flood control will also be
served, or that flood control may be relatively of lesser
importance, does not invalidate the exercise of the authority
conferred on Congress."
Id. at
313 U. S.
533-534.
We cannot say on this record that the Ft. Gibson dam is any less
essential or useful or desirable from the viewpoint of flood
control and navigation than was Denison Dam. [
Footnote 8] When the United States appropriates
the flow either of a navigable or a nonnavigable stream pursuant to
its superior power under the Commerce Clause, it is exercising
established prerogatives and is beholden to no one. Plainly, under
our decisions, it could license another to build the project and
operate it. If respondent sued for damages for failure of the
Federal Government to grant it a license to build the Ft. Gibson
project, it could not claim that something of right had been
withheld from it. So it is when the United States exercises its
prerogative by building the project itself. [
Footnote 9]
Respondent, however, argues that it had a vested interest in the
waters of the Grand River, and points to the grant made by Oklahoma
to it for the development of hydroelectric power on the Grand
River. It seeks to trace the title of Oklahoma through the
Cherokees, who, in consideration of their agreement to remove to
the territory which included the Grand River, received, on December
31, 1838, a deed from the United States to the
Page 363 U. S. 234
territory. [
Footnote 10]
By § 15 of the Act of March 3, 1893, 27 Stat. 612, 645, Congress
agreed that this Cherokee land could be allotted to the members of
the nation in severalty. The argument is that the United States had
divested itself entirely of any rights in the water of the Grand
River prior to Oklahoma's admission as a State in 1907. Assuming
arguendo that that is true, respondent's claim is not
advanced. In dealing with a grant by the United States to the Osage
Indians over a nonnavigable stretch of the Arkansas River, the
Court, in
Brewer-Elliott Oil & Gas Co. v. United
States, 260 U. S. 77,
260 U. S. 87-88,
said:
"The title of the Indians grows out of a federal grant when the
Federal government had complete sovereignty over the territory in
question. Oklahoma, when she came into the Union, took sovereignty
over the public lands in the condition of ownership as they were
then, and if the bed of a nonnavigable stream had then become the
property of the Osages, there was nothing in the admission of
Oklahoma into a constitutional equality of power with other states
which required or permitted a divesting of the title."
Respondent argues that, if any rights in the waters of the Grand
River remained in the United States after the grant to the Indians
in 1838, rights over them were later given to Oklahoma. The
reference is to § 25 of the Act of April 26, 1906, 34 Stat. 137,
146, which granted light and power companies the right to construct
dams across nonnavigable streams in Cherokee territory for power
and other purposes. The right to acquire or condemn property was
granted the companies in prescribed situations "subject to approval
by the Secretary of the Interior." And § 25 contained at the end a
proviso critical to respondent's case and reading as follows:
"
Provided, That all rights
Page 363 U. S. 235
granted hereunder shall be subject to the control of the future
Territory or State within which the Indian Territory may be
situated."
But this Act was no more than a regulatory measure. It did not
purport to grant title to waters and appurtenant lands. The 1906
Act was an assertion of power possessed by the Federal Government
to regulate Indian territory. Moreover, no water rights condemned
under this Act are shown to have passed to Oklahoma and from
Oklahoma to respondent. Yet the Federal Government was the initial
proprietor in these western lands, and any claim by a State or by
others must derive from this federal title.
See United States
v. Gerlach Live Stock Co., 339 U. S. 725,
339 U. S. 747;
Federal Power Commission v. Oregon, 349 U.
S. 435. Congress has made various grants or conveyances
or by statute recognized certain appropriations of lands or waters
in the public domain made through machinery of the States.
United States v. Gerlach Live Stock Co., supra, at
339 U. S.
747-748;
Federal Power Commission v. Oregon,
supra, at
349 U. S.
446-448. Yet the only Federal Act on which reliance is
based by respondent for the grant of these water rights to Oklahoma
is § 25 of the Act of April 26, 1906. As we have seen, that was a
regulatory measure through which title might be obtained, but no
water rights under it were acquired by a light or power company
which is now asserted to be in respondent's chain of title. If the
1906 Act be less clear than we believe, nevertheless the
construction urged by respondent would be precluded by the
principle that all federal grants are construed in favor of the
Government lest they be enlarged to include more than what was
expressly included.
See United States v. Union Pacific R.
Co., 353 U. S. 112,
353 U. S.
116.
Respondent argues that, since Oklahoma gave it rights to the
waters of the Grand River, it has a compensable interest in them
under the decision in
Federal Power Commission v. Niagara
Mohawk Power Corp., 347 U. S. 239.
Page 363 U. S. 236
That decision merely held that the Federal Power Act treats
"usufructuary water rights like other property rights,"
id. at
347 U. S. 251,
making it necessary for a licensee to compensate the claimant for
them. Here no licensee claims under the Federal Act; the United
States builds the project on its own account.
The Court of Claims erred in failing to distinguish between an
appropriation of property and the frustration of an enterprise by
reason of the exercise of a superior governmental power. Here,
respondent has done no more than prove that a prospective business
opportunity was lost. More than that is necessary, as
Omnia
Commercial Co. v. United States, 261 U.
S. 502, holds. In that case, the claimant stood to make
large profits from a contract it had with a steel company. But the
United States, pursuant to the War Power, requisitioned the
company's entire steel production. Suit was brought in the Court of
Claims for just compensation. The Court, after pointing out that
many laws and rulings of Government reduce the value of property
held by individuals, noted that there the Government did not
appropriate what the claimant owned, but only ended his opportunity
to exploit a contract. "Frustration and appropriation are
essentially different things."
Id. at
261 U. S. 513.
And see Mitchell v. United States, 267 U.
S. 341,
267 U. S. 345;
United States ex rel. TVA v. Powelson, 319 U.
S. 266,
319 U. S.
281-283. No more need be said here.
In conclusion, the United States did not appropriate any
business, contract, land, or property of respondent. It had the
superior right by reason of the Commerce Clause to build the Ft.
Gibson project itself or to license another to do it. The
frustration of respondent's plans and expectations which resulted
when the United States chose to undertake the project on its own
account did not take property from respondent in the sense of the
Fifth Amendment.
Reversed.
[
Footnote 1]
H.R.Doc. No. 308, 74th Cong., 1st Sess., Vol. 3.
[
Footnote 2]
H.R.Doc. No. 107, 76th Cong., 1st Sess.
[
Footnote 3]
55 Stat. 638, 645.
[
Footnote 4]
49 Stat. 846, 16 U.S.C. § 817.
See Grand River Dam Authority
v. Grand-Hydro, 335 U. S. 359.
[
Footnote 5]
68 Stat. 450.
[
Footnote 6]
Severance damages, storage and headwater benefits accruing to
Ft. Gibson from the Pensacola unit, the cost and value of surveys,
plans, and specifications for the Ft. Gibson unit, the loss of the
use and value of lands and rights-of-way acquired for the
interconnection of the Ft. Gibson unit with respondent's system and
for the distribution of power from Ft. Gibson were also claimed.
But these claims were denied by the Court of Claims, and no review
of that denial has been sought here.
[
Footnote 7]
Note 3 supra, at
639, 645.
[
Footnote 8]
The findings are "There is storage capacity between elevation
554 and elevation 582 that is reserved for the control of flood
waters."
[
Footnote 9]
No riparian land is involved, and it cannot be claimed, as was
asserted in
United States v. Kelly, 243 U.
S. 316,
243 U. S. 330,
that, in substance, there was a taking of land.
And see United
States v. Willow River Power Co., 324 U.
S. 499,
324 U. S. 507,
which narrowly confined the holding in the
Kelly case.
[
Footnote 10]
See Mills, Oklahoma Indian Land Laws (1924), 27.