DocketNumber： Nos. 75-4448 and 77-1327
Citation Numbers： 563 F.2d 1178
Judges： Simpson, Wisdom
Filed Date： 11/28/1977
Status： Precedential
Modified Date： 11/27/2022
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 Power Commission exercises the power of eminent domain in federal court as authorized by Section 21 of the Federal Power Act, 16 U.S.C. § 814 (1970). We reserved this question in Louisiana v. Lindsey, 5 Cir. 1975, 524 F.2d 934, as did the Supreme Court in Grand River Dam Authority v. Grand-Hydro, Inc., 1948, 335 U.S. 359, 69 S.Ct. 114, 93 L.Ed. 64. We now hold that federal law controls.
I.
The plaintiff-appellee, Georgia Power Company, is a privately owned Georgia utility. It intends to operate a hydroelectric power generating facility with a dam across the Oconee River in Hancock and Putnam Counties, Georgia, at a point known as Lau-rens Shoals. The dam will produce a lake to be known as Lake Wallace. The appellants are Georgia landowners with property which will be inundated by Lake Wallace.
When any licensee cannot acquire by contract or pledges an unimproved dam site or the right to use or damage the lands or property of others necessary to the construction, maintenance, or operation of any dam, reservoir, diversion structure, or the works appurtenant or accessory thereto ... it may acquire the same by the exercise of the right of eminent domain in the district court of the United States for the district in which such land or other property may be located, or in the State courts. The practice and procedure in any action or proceeding for that purpose in the district court of the United States shall conform as nearly as may be with the practice and procedure in similar action or proceeding in the courts of the State where the property is situated: Provided, That United States district courts shall only have jurisdiction of cases when the amount claimed by the owner of the property to be condemned exceeds $3,000.
Exercising this right, Georgia Power brought actions in the District Court for the Middle District of Georgia. Senior Judge W. A. Bootle appointed a three-member Commission, see Fed.R.Civ.Proc. 71A, to determine the amount of compensation due the condemnees. In his instructions to the Commissioners, Judge Bootle set out the federal law of compensation. These rules differ from Georgia law. Instruction No. 20 directs the Commissioners to ignore an increase in value which the Georgia Power project has created in the condemned property; a Georgia court might recognize' such value. See Hard v. Housing Authority, Ga. 1963, 219 Ga. 74,132 S.E.2d 25. Instruction No. 21 allows the Commissioners to offset any recovery for land actually taken with benefits to any remaining property caused by the project; Georgia law prohibits such a set-off. See Ga.Code Ann. § 36-504 (1970). The district court declined to instruct the Commissioners to include a reasonable attorneys’ fee in their award; in a Georgia proceeding a reasonable attorneys’ fee would be allowed. See White v. Georgia Power Company, Ga.1976, 237 Ga. 341, 227 S.E.2d 385.
After these instructions were first made in 1975 several condemnees in cases other than No. 75-4448 filed motions and objections opposing the use of federal law. The district court held a pre-trial hearing on the objections. Judge Bootle made several changes in the phrasing of his instructions, but he regarded federal law as controlling.
No. 77-1327 began after Judge Bootle’s decision in No. 75-4448 to apply federal law. The condemnees in No. 77-1327 nevertheless moved that the court incorporate Georgia law into its instructions.
II.
Before a federal court may reach the question of applying state or federal common law to an issue before it, the court must determine that the source of the right or authority in question is federal. If the source is not federal, Erie Railroad Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, and the Rules of Decision Act
We find that the source of the power to condemn property contained in Section 21 is federal. Eminent domain inheres in sovereignty. See Kohl v. United States, 1876, 91 U.S. 367, 23 L.Ed. 449. Within our federal system the states and the federal government exercise independent powers of eminent domain, and neither can delegate the use of the other’s authority. 91 U.S. at 372-73, 23 L.Ed. 449; Latinette v. City of St. Louis, 7 Cir. 1912, 201 F. 676, 678. Thus, when Congress provided that licensees could exercise “the” power of eminent domain, it was referring to the federal power. Both courts and commentators have described the eminent domain power delegated in Section 21 as the federal power. Federal Power Commission v. Tuscarora Indian Nation, 1960, 362 U.S. 99, 120, 80 S.Ct. 543, 4 L.Ed.2d 584; City of Tacoma v. Taxpayers of Tacoma, 1958, 357 U.S. 320, 340, 78 S.Ct. 1209, 2 L.Ed.2d 1345; Chapman v. Public Utility District No. 1, 9 Cir. 1966, 367 F.2d 163, 167; 7 Moore’s Federal Practice ¶ 71A.10[2]. When it condemns land under Section 21, a licensee acts as the agent of the United States government. Tuscarora Nation of Indians v. Power Authority, 2 Cir. 1958, 257 F.2d 885, 894, vacated as moot sub nom, McMorran v. Tuscarora Nation of Indians, 362 U.S. 608, 80 S.Ct. 960, 4 L.Ed.2d 1009. This delegation of federal power is constitutional. Missouri v. Union Electric Light & Power Co., C.D.Mo.1930, 42 F.2d 692; see Thatcher v. Tennessee Gas Transmission Co., 5 Cir. 1950, 180 F.2d 644, cert. denied, 340 U.S. 829, 71 S.Ct. 66, 95 L.Ed. 609 (upholding identical delegation in the Natural Gas Act, 15 U.S.C. § 717(b) (1970)).
Appellants argue that Section 21 does not delegate federal authority, but merely provides a federal forum for exercise of a state created eminent domain power. Such an interpretation does not accord with decisions upholding the right of a licensee to condemn property that it could not obtain under the applicable state statute. E. g., City of Tacoma v. Taxpayers of Tacoma, 1958, 357 U.S. 320, 78 S.Ct. 1209, 2 L.Ed.2d 1345; First Iowa Hydro-Electric Cooperative v. Federal Power Commission, 1946, 328 U.S. 152, 66 S.Ct. 906, 90 L.Ed. 1143.
We are not persuaded by the argument that the $3,000 in controversy requirement shows that Section 21 is a jurisdictional provision. It is true that this requirement parallels the amount in controversy requirement for diversity cases at the time the Federal Power Act was enacted. Congress, however, added the $3,000 requirement late in the consideration of the Federal Power Act. Compare H.R.Rep.No.715, 65th Cong., 2d Sess. 27, H.R.Rep.No.1147, 65th Cong., 3d Sess. 13, and H.R.Rep.No.61, 66th Cong., 1st Sess. 10 (original versions without the $3,000 amount in controversy requirement) with S.Rep.No.180, 66th Cong., 1st Sess. 9 and 16 U.S.C. § 814 (1970) (versions containing $3,000 amount in controversy requirement as added on the House floor). As a result, the requirement cannot be read as an indication of the original purpose of Section 21. Members of Congress do not seem to have believed the amount in controversy amendment significantly changed Section 21; the Senate and Conference Committee Reports, written after the House adoption of the amendment, do not mention it. Furthermore, the House debates establish that the amount in controversy minimum was designed to prevent inconvenience to a landowner who might otherwise need to travel several hundred miles to press a small compensation claim. 58 Cong.Rec. 2240 (1919) (remarks of Mr. Stevenson).
We have not found any congressional directive to apply state law in either the language of Section 21 or its legislative history. Therefore, the second prerequisite to our consideration of the choice of law issue is met. The language in the statute referring to state “practice and procedure” does not govern the choice between substantive rules of compensation. The Supreme Court has held that such language “[does] not, and could not, affect questions of substantive right — such as the measure of compensation — grounded upon the Constitution of the United States”. United States v. Miller, 1943, 317 U.S. 369, 380, 63 S.Ct. 276, 283, 87 L.Ed. 336. Accord United States v. 93.970 Acres of Land, 1959, 360 U.S. 328, 79 S.Ct. 1193, 3 L.Ed.2d 1275. The appellants attempt to distinguish Miller on the ground that the plaintiff was the United States rather than a private licensee. We cannot see why in this context the identity of the plaintiff would change the meaning of virtually identical language.
There is little discussion of Section 21 in the Committee Reports or the congressional debates, and none of it illuminates the choice of law issue. Appellants argue, however, that other sections of the statute, such as Sections 19 and 20, evidence a congressional respect for state law which includes state rules of compensation in an eminent domain proceeding. We are not ready to make this inference from unrelated provisions in the Federal Power Act without more support in the legislative materials. The legislative history reveals that Congress took care to preserve state rights in the regulation of power and property to forestall a constitutional attack on the Federal Power Act. See, e. g., First Iowa Hydro-Electric Cooperative v. Federal Power Commission, 328 U.S. at 174, 66 S.Ct. 906. As a result, the Federal Power Act contains many explicit acknowledgements of state authority. See, e. g., Id. at 174 n. 19, 66 S.Ct. 906; Sections 4(a) and (c)
The appellants also argue that Congress endorsed the use of state compensation law when it enacted a provision substantially identical to Section 21 in the Natural Gas Act, 15 U.S.C. § 717f(h) (1970), without commenting adversely on certain cases appellants read to mandate adoption of state law for all substantive issues arising in a Section 21 lawsuit. In a similar vein, the appellants urge us to follow these decisions as a matter of stare decisis. In particular, they draw our attention to a line of Eighth Circuit cases beginning with Feltz v. Central Nebraska Public Power and Irrigation District, 8 Cir. 1942, 124 F.2d 578
We do not read these cases as determinative of the issue before us. In Feltz, a FPC licensee condemned land for relocation of a highway. The landowner claimed consequential losses because the property was divided and because of increased distance to the railhead. The jury gave a smaller award than the appraisers, and the court added interest from the date of the taking. Both sides appealed. Among other questions, the court of appeals ruled on the exclusion of evidence of consequential damages, 124 F.2d at 578, and the propriety of interest on a compensation award, 124 F.2d at 584. Without articulating its reasoning, the court indicated that Nebraska law controlled both issues. There is no indication that the parties contested this issue or that the court gave it any serious consideration. Indeed, because of the mixture of issues each party may have thought it to his advantage to rely upon state law. The con-demnees had read that state law to allow consequential damages and the condemnor could cite favorable state law on interest. The specific issue of just compensation raised before this Court was not considered. The other Eighth Circuit cases also lack any discussion of a general choice of law problem or of the specific issue before us. In the absence of any reasoned discussion of the difficult choice of law issue, we cannot accept these cases as persuasive authority or interpret congressional inattention to them as an endorsement of the view that state law should fill all substantive gaps in Section 21.
Oakland Club is not on point. In that case the federal licensee enjoyed state as well as federal power of eminent domain. It filed a condemnation in federal court which the property owner contested on the grounds that the South Carolina procedure was constitutionally defective and that Section 21 authorized the licensee to take only an easement rather than a fee.
The district court upheld the state procedure and interpreted Section 21 to authorize the taking of a fee interest. It went on to make several observations that the appellants have emphasized in this case. First, the court stated that Section 21 is not a “comprehensive, self-contained and exclusive law of eminent domain”. Second, the
Insofar as the Oakland Club litigation stands for the point that Section 21 does not preempt any applicable state powers of eminent domain, it is irrelevant to the issue before us.
III.
We now proceed to the principal issue. Because the source of the power delegated by the Federal Power Act is federal, the governing law must be federal. See, e. g., Friendly, In Praise of Erie — And of the New Federal Common Law, 39 N.Y.U.L. Rev. 383, 407 (1964); 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, 798-801 (1957); Comment, Adopting State Law as the Federal Rule of Decision: A Proposed Test, 43 U.Chi.L.Rev. 823, 826-27 (1976). Of course, federal law may be fashioned by adopting parallel state rules. E. g., Clearfield Trust Co. v. United States, 1943, 318 U.S. 363, 367, 63 S.Ct. 573, 87 L.Ed. 838. For instance, the courts usually determine what constitutes “property” by looking to state law. E. g., United States v. Certain Property Located In Borough of Manhattan, 2 Cir. 1965, 344 F.2d 142, 144-
Courts apply independent rules, however, when considering the specific issue of compensation in federal condemnations. E. g., United States v. Miller, 1943, 317 U.S. 369, 380, 63 S.Ct. 276, 87 L.Ed. 336; United States v. Certain Property Located in Borough of Manhattan, 2 Cir. 1965, 344 F.2d 142, 146; United States v. City of New York, 2 Cir. 1948, 165 F.2d 526, 528 (L. Hand, J.); United States v. Certain Parcels of Land, 3 Cir. 1944, 144 F.2d 626, 628; United States v. 3,595.98 Acres of Land, 1962 N.D.Cal., 212 F.Supp. 617; 12 Wright & Miller, Federal Practice and Procedure: Civil § 3042 (1973). These cases did not arise in the specific context of a federal condemnation by a Federal Power Act licensee pursuant to Section 21. Nevertheless, we should follow the same rule unless there are circumstances unique to a federal condemnation under Section 21 which require the opposite result.
The appellants suggest that several such circumstances exist. First, they contend that we should distinguish between cases where the United States is a party and where it is not, applying federal rules of compensation only in the former situation. Since a licensee exercises the federal power of eminent domain, it is not immediately apparent why such a distinction should be made. That the property will be used privately is not reason enough. In Miller, for instance, the United States took land for use by a private railroad. Appellants, however, cite Public Utility District No. 1 v. City of Seattle, 9 Cir. 1967, 382 F.2d 666, 1969, cert. dismissed, 396 U.S. 803, 90 S.Ct. 22, 24 L.Ed.2d 59, and Tacoma v. Taxpayers of Tacoma, 1957, Wash., 307 P.2d 567, rev’d, 357 U.S. 320, 78 S.Ct. 1209, 2 L.Ed.2d 1345, to support a theory that the Federal Power Act delegates less than the full power of eminent domain. As a result, the appellants continue, a licensee should not benefit from the same legal rules as the United States.
In City of Seattle the Court considered whether a licensee must compensate the owner of shorelands and, for power site values, the owner of adjoining uplands, for property needed for a licensed hydroelectric project. The United States would not have paid any compensation if it had condemned the same property. Instead, it could have relied upon the dominant navigational ser--
Whether a licensee enjoys the dominant navigational servitude is irrelevant to the issue before us. The Ninth Circuit did not question that Section 21 delegates some of the federal government’s powers. And the opinion does not support the contention that a licensee enjoys anything less than the full federal power to condemn private property. Significantly, when the Ninth Circuit turned to the amount of compensation due the shoreland and upland property owners it relied exclusively on federal cases. See 382 F.2d at 673-74.
Tacoma holds that Section 21 does not give a licensee power to condemn state-owned land. The theory of the case appears to be that' Congress could not delegate such power to a state-created entity, rather than that it did not intend to do so. 207 P.2d at 577. This theory is questionable at best. See First Iowa Hydro-Electric Cooperative v. Federal Power Commission, 1946, 328 U.S. 152, 66 S.Ct. 906, 90 L.Ed. 1143; Kohl v. United States, 1876, 91 U.S. 367, 23 L.Ed. 449; Washington Department of Game v. Federal Power Commission, 9 Cir. 1953, 207 F.2d 391, 1954, cert. denied, 347 U.S. 936, 74 S.Ct. 626, 98 L.Ed. 1087.
Although the Supreme Court has never ruled directly on the scope of the delegation of federal power in Section 21, Federal Power Commission v. Tuscarora Indian Nation, 1960, 362 U.S. 99, 80 S.Ct. 543, 4 L.Ed.2d 584, suggests that the delegation is not a limited one. As part of its case against condemnation by a FPC licensee, the Indian Nation argued that 25 U.S.C. § 177
But § 177 is not applicable to the sovereign United States nor hence to its licensees to whom Congress has delegated federal eminent domain powers under § 21 of the Federal Power Act.
362 U.S. at 120, 80 S.Ct. at 555 (emphasis added). In its discussion of this point the Court cited decisions in which the United States was a party without any indication they would not be equally applicable to a federal licensee. See 362 U.S. at 120-21, 80 S.Ct. 543.
Similarly, in Grand River Dam Authority v. Grand-Hydro, 1948, 335 U.S. 359, 69 S.Ct. 114, 93 L.Ed. 64, the Supreme Court appears to draw no distinction between the federal government and its licensee under the Federal Power Act:
*1187 If either the United States, or its licensee as such, were seeking to acquire this land under the Federal Power Act, it might face different considerations from those stated above.
Second, the appellants have argued that the federal interest in the value of property taken in a Section 21 proceeding is so small that the analysis established by Clearfield Trust Co. v. United States, 1943, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838 and its progeny, including most recently Miree v. DeKalb County, 1977,-U.S.-, 97 S.Ct. 2490, 53 L.Ed.2d 557, compels federal adoption of state law. Even if a sharp distinction between a licensee and the United States cannot be drawn, it may be that the federal interest in the price paid for licensed hydroelectric plants is less than in other government projects. If so, use of state law would be appropriate notwithstanding the usual rule that federal common law of compensation governs in federal condemnation.
A review of Clearfield, Miree, and other federal common law decisions fails to convince us, however, that state law should be followed. That review reveals a changing emphasis of factors and shifting preferences for one law or the other. In Clear-field Trust the Court chose uniform federal common law to govern an action against the United States on a federal check. The federal interest in uniformity for easier administration was sufficient to justify use of uniform federal common law. See 318 U.S. at 366, 63 S.Ct. 573; Comment, Adopting State Law as the Federal Rule of Decision: A Proposed Test, 43 U.Chi.L.Rev. 823, 831 (1976).
United States v. Standard Oil Company, 1947, 332 U.S. 301, 67 S.Ct. 1604, 91 L.Ed. 2067 also took a hospitable stance to the use of federal common law. That case posed the question whether the United States could recover for damages suffered when a serviceman is injured. The Court found first that the source of any legal right to recover should be federal. It then held such federal law should be uniform because there was no affirmative need for diverse results, the issue did not involve local concerns, and a uniform rule would be appropriate in fiscal matters. Id. at 310-11, 67 S.Ct. 1604.
Other cases diverge from this presumption favoring federal law. For instance, Bank of America v. Parnell, 1956, 352 U.S. 29, 77 S.Ct. 119, 1 L.Ed.2d 93 refused to extend the Clearfield approach of uniform law to suits between private parties simply because the subject matter of the controversy happens to be federal commercial paper. Instead, the Court indicated that an immediate federal interest must be involved. Id. at 33-34, 77 S.Ct. 119. And in Wallis v. Pan American Petroleum Corp., 1966, 384 U.S. 63, 86 S.Ct. 1301, 16 L.Ed.2d 369, the Supreme Court indicated that state law should usually govern unless a “significant conflict between some federal policy or interest and the use of state law in the premises” is shown. Id. at 68, 86 S.Ct. at 1304. Accord Miree v. DeKalb County, 1977, - U.S. -, 97 S.Ct. 2490, 53 L.Ed.2d 557. The Court found no such interest in United States v. Yazell, 1966, 382 U.S. 341, 86 S.Ct. 500, 15 L.Ed.2d 404, a suit by the federal government to collect a debt owed the Small Business Administration. The Court held that Texas community property rules would apply because the Small Business Administration had individually negotiated the loan in the context of and with specific reference to Texas law and because the role of the United States as creditor in the case was no different from any private creditor. The Court also noted the intense local interest in family property and the protection of women, as well as the lack of any existing federal common law to apply. Id. at 346-53, 86 S.Ct. 500. In United States v. Little Lake Misere Land Co., 1973, 412 U.S. 580, 93 S.Ct. 2389, 37 L.Ed.2d 187, on the other hand, the Supreme Court refused to adopt state law. The issue in Little Lake was whether a
Together these cases produce a balancing test. See generally Comment, Adopting State Law as the Federal Rule of Decision: A Proposed Test, 43 U.Chi.L.Rev. 799 (1976). On one side is the federal interest in carrying out a program in the most efficient and effective manner possible. On the other is a state’s interest in the preservation of its control over local interests, particularly traditional interests such as family law and real property transactions, and in preventing displacement of state law. Of course, the ultimate goal of the creation of federal law by the courts is to carry out the federal program in question. See United States v. Little Lake Misere Land Co., 412 U.S. at 584-601, 93 S.Ct. 2389; United States v. Standard Oil Co., 332 U.S. at 309-11, 67 S.Ct. 1604. Thus, if state law would actually frustrate rather than only hinder a federal program, federal common law must be applied regardless of state interests. See, e. g., United States v. Little Lake Misere Land Co. On the other hand, the Supreme Court has demonstrated a growing desire to minimize displacement of state law. See Miree v. DeKalb County, 1977, - U.S. -, 97 S.Ct. 2490, 53 L.Ed.2d 557.
Each side of this controversy has provided us with weights for its side of the scale. Georgia Power points to the degree of federal involvement in a licensed project. A license is a prerequisite to construction of a project. 16 U.S.C. § 817 (1970). The design, construction, recreation facilities, and ecological impact of a project are subject to approval by the FPC. 16 U.S.C. § 803, (1970), 18 C.F.R. § 4.41 et seq. (1977). The Commission has certain powers to regulate the rates and charges of electricity generated by the project. 16 U.S.C. §§ 812-13 (1970). Georgia Power also points out that the federal government has a financial interest in minimizing acquisition costs for a licensed project since it holds an option to acquire the project when the license expires upon payment of net investment, less certain items. 16 U.S.C. § 807 (1970). In addition, Georgia Power notes that the government may acquire a project in time of national emergency, 16 U.S.C. § 809 •(1970).
The landowners emphasize that this lawsuit involves private parties and that Georgia Power (or any other licensee) is likely to condemn property only in the state where it operates. They also point out that property rights are a traditional state concern and that Georgia has an elaborate law of eminent domain that reflects considered policy judgments a state would want the federal courts to respect. Finally they contend that no substantial rights and duties of the United States hinge on the outcome of this litigation.
The balance tips toward the need for federal law. That this controversy is between private parties is not determinative. Miree v. DeKalb County, - U.S. -, -, 97 S.Ct. 2490, 53 L.Ed.2d 557 (Burger, C. J., concurring); United States v. Little Lake Misere Land Co., 412 U.S. at 592-93, 93 S.Ct. 2389; Bank of America v. Parnell, 352 U.S. at 34, 77 S.Ct. 119. Nor must we automatically apply state law because property is involved. Little Lake involved a property transaction. Moreover, eminent domain is not like most areas of property law, where state regulation has been virtually exclusive, but one where the United States has developed and exercises an independent power. See, e. g., Kohl v. United States, 91 U.S. 367, 23 L.Ed. 449.
One possible reason for adopting state law as the federal rule of decision is the
Most importantly, federal common law of compensation is the appropriate choice in this case because the use of state law could interfere with achievement of congressional aims. Even when Congress passed the Federal Power Act in 1920 its primary concern was to stimulate private development of America’s hydroelectric power resources. See, e. g., First Iowa Hydro-Electric Cooperative v. Federal Power Commission, 1946, 328 U.S. 152, 180, 66 S.Ct. 906, 90 L.Ed. 1143; 56 Cong.Rec. 9810 (remarks of Mr. LaFollette); H.R.Rep.No.715, 65th Cong., 2d Sess. 15. That goal has become even more significant with the energy shortages of the 1970’s and the adoption of a national policy to reduce dependence on foreign sources of energy. To fulfil that congressional policy, hydroelectric development must be maximized. The use of state rules of compensation when they would produce a substantially higher award for the landowner could retard development and frustrate the goal of full utilization of hydroelectric resources. If we considered only the increased cost to the Lake Wallace project from these appeals the interference with the federal policy might not appear significant. When, however, all the acquisitions for a major project are grouped together, and even more so when many licensed projects are considered as an aggregate, the increase in cost and the accompanying chill on development resulting from adoption of state rules such as those in Georgia would be substantial. State compensation rules could also interfere with the national interest in reducing energy costs because the higher land acquisition expenses would need to be offset by higher utility rates.
The federal government’s option under Section 14 of the Act, 16 U.S.C. § 807, to acquire a project at the expiration of a license creates another United States interest in minimizing the cost of licensed facilities by applying federal valuation rules. See First Iowa Hydro-Electric Cooperative v. Federal Power Commission, 328 U.S. at 172-73, 66 S.Ct. 906;
For these reasons, we find that nothing in United States v. Clearfield Trust Co. and its progeny gives reason to diverge from the practice of employing federal compensation rules in a federal compensation proceeding. If anything, those cases push toward use of the federal law. As required by Wallis v. Pan American Petroleum Corp., 384 U.S. 63, 86 S.Ct. 1301, 16 L.Ed.2d 369, a significant conflict between the federal policy of the Federal Power Act and the use of Georgia law can be shown.
The appellants have raised a third argument against federal law in Section 21 cases. They contend that if we apply federal common law, licensees such as Georgia Power will have the choice of a Section 21 suit in federal court with federal rules or a suit in state court governed by state law.
Any broader implications of the Erie decision about the desirability of uniformity between state and federal courts do not apply here either. If a licensee were to bring a Section 21 condemnation action in a state court, that court would be required to follow the same law as a federal court even if that were federal common law. Friendly, In Praise of Erie — And of the New Federal Common Law, 39 N.Y.U.L.Rev. 383, 405 (1964). See also P. Bator, P. Mishkin, D. Shapiro & H. Wechsler, Hart and Wechsler’s The Federal Courts and the Federal System at 825 (1973). If the proceeding in the state court is under the federal power, the defendant may remove. 7 Moore’s Federal Practice ¶ 71A.10[2] at 71A-252 (2d ed. 1975).
IV.
The appellants argue to us that a decision to apply federal common law in this litigation would render Section 21, as applied, unconstitutional. The theory is that a law permitting Georgia Power to “grant” the benefits of Georgia law arbitrarily through its choice of forum denies equal protection to landowners sued under the federal rather than the state statute. This contention was mentioned (though not developed) in several of the original answers to Georgia Power’s condemnation complaint, but otherwise appears to have received no attention below.
V.
The appellants have made several other arguments in their briefs and at oral argument which we regard as unnecessary to discuss in this opinion. We have, however, considered these arguments. We find them to be without merit.
NO. 75-4448 — AFFIRMED.
NO. 77-1327 — AFFIRMED AND REMANDED FOR FURTHER PROCEEDINGS.
. The numerous appellants in this consolidated appeal fell into three groups for briefing purposes. In addition, Mrs. Nellie W. Larman, another landowner involved in a Lake Wallace condemnation proceeding, filed an amicus brief. Because each appellant’s argument, if successful, would benefit the appellants as a group, we generally have not identified the
. 42 F.P.C. 356 (1969). At that time, the project was known as the Laurens Shoals Project and the license is issued in that name.
. After the hearing, Judge Bootle provided a Memorandum to Counsel citing cases supporting his conclusion that federal law of compensation applies. Those cases are Clearfield Trust Co. v. United States, 1943, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838; United States v. County of Allegheny, 1944, 322 U.S. 174, 64 S.Ct. 908, 88 L.Ed. 1209; United States v. Standard Oil Co., 1947, 332 U.S. 301, 67 S.Ct. 1604, 91 L.Ed. 2067; United States v. Yazell, 1966, 382 U.S. 341, 86 S.Ct. 500, 15 L.Ed.2d 404; Duvall-Wheeler Livestock v. United States, 5 Cir. 1969, 415 F.2d 226; United States v. McCleskey Mills, Inc., 5 Cir. 1969, 409 F.2d 1216.
. During the condemnation proceedings of 75-4448 the appellant Jim Dodson conveyed his interest in the condemned property to Patricia Womack. On March 21, 1975 Judge Bootle granted Georgia Power’s motion to add Patricia Womack as a defendant.
. The composition of the Commission and the Instructions given to the Commissioners are the same in both cases before us.
. The laws of the several states, except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide, shall be regarded as the rules of decision in civil actions in the courts of the United States, in cases where they apply.
28 U.S.C. § 1652 (1970).
. The Miller opinion specifically interpreted the following statutes:
In every case in which the Secretary of the Treasury or any other officer of the Government has been, or hereafter shall be, authorized to procure real estate for the erection of a public building or for other public uses, he may acquire the same for the United States by condemnation, under judicial process, whenever in his opinion it is necessary or advantageous to the Government to do so, and the Attorney General of the United States, upon every application of the Secretary of the Treasury, under this section and section 258 of this title, or such other officer, shall cause proceedings to be commenced for condemnation within thirty days from receipt of the application at the Department of Justice.
40 U.S.C.A. § 257.
The practice, pleadings, forms and modes of proceeding in causes arising under the provisions of this act shall conform, as near as may be, to the practice, pleadings, forms and proceedings existing at the time in like causes in the courts of record of the State within which such [district court is] held, any rule of the court to the contrary notwithstanding.
Act of Aug. 1, 1888, c. 728 § 2, 25 Stat. 357. This section was codified, as amended, at 40 U.S.C. § 258 until it was superceded by Rule 71A of the Federal Rules of Civil Procedure.
The Secretary of the Army may cause proceedings to be instituted, in the name of the United States in any court having jurisdiction of such proceedings, for the acquirement by condemnation of any land, right of way or material needed to enable him to maintain, operate or prosecute works for the improvement of rivers and harbors for which provision has been made by law; such proceedings to be prosecuted in accordance with the*1183 laws relating to suits for the condemnation of property of the States wherein the proceedings may be instituted: Provided, however, That when the owner of such land, right of way, or material shall fix a price for the same, which in the opinion of the Secretary of the Army, shall be reasonable, he may purchase the same at such price without further delay: And provided further, That the Secretary of the Army is authorized to accept donations of land or materials required for the maintenance or prosecution of such works.
33 U.S.C.A. § 591.
. 16 U.S.C. § 797(a) and (c) (1970).
. 16 U.S.C. § 797(f) (1970).
. 16 U.S.C. § 800(a) (1970).
. 16 U.S.C. § 803(e) (1970).
. 16 U.S.C. § 807 (1970).
. 16 U.S.C. § 812 (1970).
. 16 U.S.C. § 813 (1970).
. 16 U.S.C. § 821 (1970).
. The dissent makes much of the fact that Congress did not assure “application of a uniform, federal standard in any exercise of eminent domain power, state or federal, to acquire land on which to build these federally regulated facilities”. (Emphasis changed.) This omission becomes much less telling when one realizes that it is not certain that Congress had the power to compel such uniformity.
Congress could not have simply passed a statute instructing the states to apply federal rules of compensation whenever a licensee chose to exercise a state-granted power of eminent domain to take property for a licensed project. As Justice Brandeis stated in Erie: “Congress has no power to declare substantive rules of common law applicable in a state whether they be local in their nature or ‘general,’ be they commercial law or a part of the law of torts”. 304 U.S. at 78, 58 S.Ct. at 822.
Nor could Congress have passed a law forbidding a state from delegating state eminent domain power to a federal licensee. A state has exclusive control over its power of eminent domain. Kohl v. United States, 91 U.S. at 372-73, 23 L.Ed. 449. Just as the federal government could not force the states to grant licensees the use of state eminent domain power, it could not force them not to make the grant.
. We note that Congress passed the Federal Power Act in 1920, during the era of Swift v. Tyson, 1842, 41 U.S. 1, 10 L.Ed. 865. Thus, Congress would have expected federal courts to apply general common law absent a specific congressional direction to the contrary.
. The other Eighth Circuit cases are Central Nebraska Public Power & Irrigation Dist. v. Harrison, 8 Cir. 1942, 127 F.2d 588, Central Nebraska Public Power & Irrigation Dist. v. Fairchild, 8 Cir. 1942, 126 F.2d 302; Samuelson v. Central Nebraska Public Power & Irrigation Dist., 8 Cir. 1942, 125 F.2d 838; Burnett v. Central Nebraska Public Power & Irrigation Dist., 8 Cir. 1942, 125 F.2d 836; McGinley v. Central Nebraska Public Power & Irrigation Dist., 8 Cir. 1942, 124 F.2d 692; and Central Nebraska Public Power & Irrigation Dist. v. Berry, 8 Cir. 1942, 124 F.2d 586.
. This Circuit has held that § 7(h) of the Natural Gas Act, 15 U.S.C.A. § 717f(h), which is almost identical to § 21 of the Federal Power Act, does not preempt state laws of eminent domain. Robinson v. Transcontinental Gas Pipe Line Corp., 5 Cir. 1970, 421 F.2d 1397, cert. denied, 398 U.S. 905, 90 S.Ct. 1695, 26 L.Ed.2d 64.
. The other cases cited in various landowner briefs as expressing a direct or indirect conclusion that state law of compensation applies in a Section 21 condemnation are also off the mark. King v. Grand River Dam Auth., 10 Cir. 1964, 336 F.2d 682, expressly refuses to reach the issue. Id. at 683. In Tennessee Gas Transmission Co. v. Thatcher, 1949 W.D.La., 84 F.Supp. 344, aff’d sub nom Thatcher v. Tenn. Gas Transmission Co. 5 Cir. 1950, 180 F.2d 644, cert. denied, 340 U.S. 829, 71 S.Ct. 66, 95 L.Ed. 609, a landowner challenged § 7(h) of the Natural Gas Act. Among his theories was one that the Act violates the fifth amendment because it makes no provision within itself for ascertaining and paying adequate compensation. The district court rejected this challenge, noting that “it has been uniformly held that state procedure may be used in condemnation cases under Federal Laws” and citing Oakland Club. Id. at 346 (emphasis added). The Court of Appeals did not discuss the question specifically. The trial judge’s statement is ambiguous and may refer only to procedural matters that have been governed by Rule 71A since 1951. At any rate, the complete lack of reasoning to support the statement undercuts any comfort the opinion may give to the appellants here. All the other cases cited as precedent for appellants’ position are also either off point or unpersuasive.
. Despite the dissent’s implication to the contrary, we are well aware of Judge Friendly’s distinction between the question whether an issue is a federal one so that federal courts may formulate a rule of decision and the question whether the rule formulated should follow state or uniform national law. Judge Simpson reads these cases to establish only the first step, that compensation in a federal condemnation is a federal question. But the cases take the second step. They chose to apply uniform nation-wide rules.
For instance, as the excerpt quoted by the dissent shows, dissenting opinion, at p. 1196 n. 6, the Supreme Court in Miller saw no need to determine local law of compensation. The reason was that the Court applied federal rules of decision. 317 U.S. at 373-79, 63 S.Ct. 276. The dissent singles out United States v. Certain Property as an example of a proper analysis of the choice of law issue. Dissenting opinion, at p. 1196 n. 7. The quoted segment suggests that Judge Friendly refused to rely on national law in federal condemnations. In fact, the quotation comes from a section of the opinion dealing only with the definition of “property”, an issue not raised in this case. When Judge Friendly considered the much more relevant compensation question he acknowledged that compensation in federal condemnations is set by federal rules. He looked to state decisions only “in the absence of some authoritatively determined federal rule to the contrary” and only to the extent that the persuasiveness of state decisions justified including them into' the national law. 344 F.2d at 147.
Nowhere do we suggest that the proper analysis for a choice of law question changes because the issue is one of just compensation in a federal condemnation. Nor do we consider ourselves blindly bound by past cases in the sense of reading them to mandate federal rules of compensation in every federal condemnation. We do find, however, that these cases are helpful starting points. Other courts in federal compensation cases have balanced the state and federal interests and have concluded that federal, rather than state, law should supply the rules of compensation. Unless we find the weights on our scale to be substantively different, we see no reason to diverge from the conclusion of the Supreme Court and some of our Courts of Appeals.
. Although the Supreme Court reversed Tacoma on the technical ground that the state litigation constituted an improper collateral attack on a FPC determination, the Court’s opinion casts doubt on the validity of the state court’s substantive holding as well. See City of Tacoma v. Taxpayers of Tacoma, 357 U.S. 320, 339—40, 78 S.Ct. 1209, 2 L.Ed.2d 1345.
. No purchase, grant, lease, or other conveyance of lands, or of any title or claim thereto, from any Indian nation or tribe of Indians, shall be of any validity in law or equity, unless the same be made by treaty or convention entered into pursuant to the Constitution. .
. 16 U.S.C. § 715 et seq. (1970).
. At oral argument, appellants contended for the first time that there is no federal common law of compensation. They would limit United States v. Miller, 1943, 317 U.S. 369, 63 S.Ct. 276, 87 L.Ed. 336 and Bauman v. Ross, 1896, 167 U.S. 547, 17 S.Ct. 966, 42 L.Ed. 270, along with their rules that compensation need not include an increase in value created by the condemning project and may be offset by benefits created in remaining property, to the specific statutes implicated in the cases.
This contention should have been raised long ago so the trial court could have considered it. Without ruling on the propriety of the instructions actually given below — an issue not properly before us, see, e. g., Commercial Credit Business Loans, Inc. v. St. Louis Terminal Field Warehouse, 5 Cir. 1974, 514 F.2d 75, 77 — we reject the appellants’ general point that there is no federal common law of compensation. Cases such as Miller and Bauman have force independent of their statutory context. See, e. g., United States v. Trout, 5 Cir. 1967, 386 F.2d 216, 221. They hold that the compensation requirements of the fifth amendment — not solely of the statutes involved — are satisfied when project enhancement value is excluded and a set-off for specific benefits to remaining property is allowed. Only the fifth amendment limits the federal power of eminent domain, 1 Nichols’ The Law of Eminent Domain §§ 1.14 & 1.3 (rev. 3d. ed. 1976). Since we find no indication that Congress did not delegate all of the federal power to condemn private property, the federal law defining the minimum compensation requirements of the fifth amendment becomes the law of compensation for a § 21 case.
. In First Iowa the Supreme Court wrote:
The closeness of the relationship of the Federal Government to these [licensed] projects and its obvious concern in maintaining control over their engineering, economic and financial soundness is emphasized by such provisions as those of § 14 authorizing the Federal Government, at the expiration of a license, to take over the license project
328 U.S. at 172-73, 66 S.Ct. at 915-16.
. Judge Simpson disputes this conclusion. He says our concern that Georgia law may interfere with the development of hydroelectric power has led us down the wrong path trav-elled by the panel majority in McKenna v. Wallis. Dissenting opinion, at p. 1198. We disagree. The legislative history to the Federal Power Act shows that Congress strongly sought full and rapid development of hydroelectric power. That federal interest is solid and important. The panel in Wallis relied on a federal policy against monopolization of federally owned mineral deposits as well as a policy of development. The Supreme Court reversed the panel not because those policies were abstract or unimportant, but because Louisiana law did not interfere with them.
Wallis turned on whether the interstices of a federal statute making federal oil and gas leases assignable should be filled with Louisiana law which did not recognize title by parol and resulting or constructive trusts. The panel majority’s conclusion that Louisiana law would frustrate important policies rested on the unusual and speculative premise that:
Trusts ex maleficio are part of the congressional scheme for carrying out the national policies on mineral resources and monopoly. In litigation between private persons over the nature of the ownership of a federal mineral lease, national policies on mineral resources and monopoly will suffer unless courts recognize beneficial title to the lease in a claimant whom the Secretary has not investigated and has not approved as lessee, and who may be unknown to the Secretary.
McKenna v. Wallis, 5 Cir. 1965, 344 F.2d 432, 447-48 (Wisdom, J., dissenting), rev’d, 384 U.S. 63, 86 S.Ct. 1301, 16 L.Ed.2d 369.
The civil law of Louisiana was clear and both easy and inexpensive to apply. In some ways, it promoted federal interests better than the common law. 344 F.2d at 446 (Wisdom, J., dissenting). It is certainly difficult to see how the choice of Louisiana law would interfere with the policies the panel majority claimed to be protecting. The federal government has the power to disapprove assignments running afoul of the anti-monopoly policy no matter what law governs assignments. 384 U.S. at 70, 86 S.Ct. 1301. Nor did the panel explain how the trust ex maleficio — rarely invoked even in jurisdictions that recognize it — could encourage development.
The difference in this case arises from the simple fact that people are more hesitant to pay more money for property than they are to meet inexpensive filing requirements. That Georgia provides some formula of compensation does not mean state law offers a feasible route to the federal objective if the resulting cost is substantially higher. We disagree with the dissent’s assertion that any interference from the Georgia statute is conjectural. Dissent, at p. 1190. In No. 75-4448 the difference amounts to $540 an acre — a substantial difference totaling almost $30,000 for that small tract alone. If Georgia law added a similar premium on every acre needed for the project the additional cost would be $ 11,456,100. Even if the average premium is only one-tenth of the one in No. 75-4448, the extra cost will be over $1,000,000. It is more than conjecture to conclude that such additional costs could interfere with the policy of full hydroelectric development.
. A state based condemnation brought in state court by a federal licensee is not removable. 7 Moore’s Federal Practice ¶ 71A.10[2] at 71A-253 (2d ed. 1975); Algonquin Gas Transmission Co. v. Gregory, D.Conn.1952, 105 F.Supp. 64, cert. denied, 344 U.S. 818, 73 S.Ct. 13, 97 L.Ed. 637.
. Since § 21 does not appear to grant jurisdiction over state based condemnations, but see Oakland Club v. South Carolina Public Service Ass’n, 4 Cir. 1940, 110 F.2d 84, 86 and since a licensee’s claim based on state law is not a federal question for purposes of jurisdiction on dee basis of a general federal question, 7 Moore’s Federal Practice ¶71A.11 (2d ed. 1975), such jurisdiction would most likely be based upon diversity of citizenship. See 12 Wright & Miller, Federal Practice and Procedure: Civil § 3055 (1973), 13 Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction § 3577 (1975).
. The district court did not mention the issue in its order denying the motion to apply federal law.