Sunland Estates Hoa v. Ferc

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS APR 23 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
SUNLAND ESTATE HOMEOWNERS No. 17-73060
ASSOCIATION, Sunland HOA,
FERC Nos. 2114-277
Petitioner, 2114-289
v.
MEMORANDUM*
FEDERAL ENERGY REGULATORY
COMMISSION,
Respondent,
PUBLIC UTILITY DISTRICT NO. 2 OF
GRANT COUNTY, WASHINGTON,
Intervenor.
On Petition for Review of an Order of the
Federal Energy Regulatory Commission
Argued and Submitted March 5, 2019
Seattle, Washington
Before: GOULD and PAEZ, Circuit Judges, and PREGERSON,** District Judge.
Petitioner-Appellant, Sunland Homeowners Association (“Sunland HOA”),
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Dean D. Pregerson, United States District Judge for
the Central District of California, sitting by designation.
appeals the Federal Energy Regulatory Commission’s (“FERC”) order denying
rehearing of FERC’s underlying order amending the Priest Rapids Hydroelectric
Project’s (“Project”) boundary. See Pub. Util. Dist. No. 2 of Grant Cty., Washington,
160 FERC ¶ 61096 (Sept. 20, 2017) (Order Denying Rehearing); Pub. Util. Dist. No.
2 of Grant Cty., Washington, 158 FERC ¶ 61036 (Jan. 19, 2017) (Order Amending
Project Boundary).
Petitioner represents the homeowners of the Sunland Estates community.
Sunland Estates is a residential community comprised of 549 lots located adjacent
to the Project shorelines. Every lot within Sunland Estates is subject to conditions,
covenants, and restrictions (“CC&Rs”) restricting it to residential uses only. In
2001, the Project’s licensee, Public Utility District No. 2 of Grant County,
Washington (“PUD”), acquired an undeveloped lot of land (“Lot 51”) within the
Sunland Estates community. Lot 51 is directly adjacent to the Project shorelines and
is the subject of this dispute.
In 2015, PUD applied to FERC for a Project boundary amendment to include
Lot 51 because PUD needed Lot 51 for Project purposes. In 2017, FERC granted
the Project boundary amendment. Pub. Util. Dist. No. 2 of Grant Cty., Washington,
158 FERC ¶ 61036 (Jan. 19, 2017). Sunland HOA claims that FERC’s decision to
amend the Project boundary was (1) not based on substantial evidence, and (2) FERC
improperly decided that Lot 51’s CC&Rs are subject to federal preemption. We
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have jurisdiction under 16 U.S.C. § 825l(b).
1. As a preliminary matter, we address Sunland HOA’s standing to seek
review of the FERC order. “Any party to a proceeding under this chapter aggrieved
by an order issued by [FERC] in such proceeding may obtain a review of such order
in the United States court of appeals for any circuit wherein the licensee or public
utility to which the order relates is located . . . .” 16 U.S.C. § 825l(b). “[B]oth
aggrievement and standing require that petitioners establish, at a minimum, injury
in fact to a protected interest.” Port of Seattle v. FERC, 499 F.3d 1016, 1028 (9th
Cir. 2007) (internal quotations omitted) (citation omitted). “An association has
standing . . . when its members would otherwise have standing to sue in their own
right, the interests at stake are germane to the organization’s purpose, and neither
the claim asserted nor the relief requested requires the participation of individual
members in the lawsuit.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC),
Inc., 528 U.S. 167, 181 (2000).
Sunland HOA has standing to appeal FERC’s order because it was a party in
the FERC proceedings below and it is a party aggrieved by FERC’s order. Sunland
HOA represents the Sunland Estates homeowners who hold legally protected
property interests negatively affected by FERC’s order, namely, their interest in
ensuring that all lots abide by the CC&Rs. FERC’s order adds Lot 51 to the Project
boundary and permits non-residential uses in violation of the CC&Rs. As will be
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discussed below, whether these property interests can be enforced, eliminated, or
compensated, is a question that must be resolved by a court of competent jurisdiction
and is not a matter before this court. We conclude that Sunland HOA has standing
to seek review of the FERC order.
2. We review the FERC’s decision under a highly deferential standard to
determine “‘only whether [a] decision was arbitrary, capricious, an abuse of
discretion, unsupported by substantial evidence, or not in accordance with law.’”
California Trout v. FERC, 572 F.3d 1003, 1012 (9th Cir. 2009) (quoting
Steamboaters v. FERC, 759 F.2d 1382, 1388 (9th Cir. 1985)). The agency’s findings
of fact are “conclusive if supported by substantial evidence.” Pub. Utils. Comm’n
of Cal. v. FERC, 462 F.3d 1027, 1045 (9th Cir. 2006). “Substantial evidence ‘means
such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.’” Snoqualmie Indian Tribe v. FERC, 545 F.3d 1207, 1212 (9th Cir.
2008) (quoting Bear Lake Watch, Inc. v. FERC, 324 F.3d 1071, 1076 (9th Cir.
2003)).
The Federal Power Act authorizes FERC to issue licenses “for the use or
benefit of interstate or foreign commerce, for the improvement and utilization of
water-power development . . . and for other beneficial public uses, including . . .
recreational and other purposes . . . .” 16 U.S.C. § 803(a)(1). FERC determines the
project’s purposes and accordingly, the project boundary. See 18 C.F.R. § 4.41(h)(2)
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(“The boundary must enclose only those lands necessary for operation and
maintenance of the project and for other project purposes, such as recreation,
shoreline control, or protection of environmental resources.”).
Here, the stated Project purposes, not in dispute, “required that lands within
the project boundary be managed for public recreation, shoreline control, and
environmental protection.” The only issue before us is whether FERC’s finding that
Lot 51 was needed for Project’s purposes was based on substantial evidence. We
conclude that this finding was based on substantial evidence. FERC reviewed
evidence of Sunland HOA’s proposed alternative access points and found that they
were not suitable because one proposed alternative had steep topography, evident
from a map attached to PUD’s application for the amendment, and the second
proposed alternative had higher reservoir pool levels making it unsuitable for vehicle
and public access. FERC also considered PUD’s previous use of Lot 51 and specific
information of how PUD would continue to use Lot 51. For example, PUD required
access for heavy equipment to install native plants, remove illegal encroachments,
hazard trees, unpermitted structures, and maintain power distribution line, and
required access for ATVs, light duty trucks, and/or watering trucks to establish new
plants and perform weed control. Based on this evidence, FERC further determined
that Lot 51 was the only land-based access point owned and controlled by the PUD
and that provided access to Project shoreline adjacent to Sunland Estates. Thus,
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FERC concluded that Lot 51 was needed for Project purposes and should be included
in the Project boundary. FERC’s order amending the Project boundary is supported
by substantial evidence.
3. Lastly, Sunland HOA contends that FERC improperly decided that the
Federal Power Act preempts Lot 51’s CC&Rs. We disagree. FERC clearly stated
that it does not have authority to determine property rights: “[D]isputes as to current
property rights are not matters for the commission[,] [r]ather, they must be resolved
through the courts, if necessary.” Pub. Util. Dist. No. 2 of Grant Cty., Washington,
160 FERC ¶ 61096, at P 6, (Sept. 20, 2017) (Order Denying Rehearing) (citing
Andrew Peklo III, 149 FERC ¶ 61,037, at P 53 (Oct. 16, 2014)). FERC did not
decide whether the property interests, namely, the CC&Rs, can be enforced,
eliminated, or compensated. Therefore, the issue is not before us on this petition for
review. Sunland HOA must seek relief from a court of competent jurisdiction.
PETITION FOR REVIEW IS DENIED.
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