United States: 11th Circuit Court Of Appeals Weighs In On Army Corps' Statutory Authority For Lake Lanier Operations

What is now commonly known as the Tri-state water war between Georgia, Alabama, and Florida recently reached its latest turning point in its decades-long unfolding. The object of this war — water from Lake Lanier, an Army Corps of Engineers reservoir on the Chattahoochee River north of Atlanta with a conservation pool of 1,049,000 acre-feet.¹ Built in the 1950s,² hydropower releases from Lake Lanier meander down the river, eventually forming the Alabama-Georgia state line. The Chattahoochee River converges with the Flint River to form the Florida Panhandle's Apalachicola River, and eventually discharges fresh water to the Apalachicola Bay, an inlet of the Gulf of Mexico. The players on the battlefield: Georgia and its multi-million and growing population in the Atlanta metropolitan area; Alabama and its municipal, industrial, and agricultural users; and Florida, where the fresh water inflows support all manner of fish, shrimp, and oysters.

The focus of this battle was the Corps' authority to use Lake Lanier to meet Atlanta's water supply needs. At the heart of the battle are the Corp's original statutory authority to build the reservoir, as viewed through its legislative history, including the Corps' technical reports,³ and the interplay between the reservoir's creation statute and the subsequently enacted Water Supply Act of 1958.⁴

In a 2009 U.S. District Court order, the district judge concluded that the Corps, the owner and operator of the reservoir, lacked authority to reallocate reservoir storage to water supply at the expense of hydropower generation because water supply was not an authorized purpose for Lake Lanier. According to the district court, the references to water supply benefits in the legislative history of the statute authorizing construction of Lake Lanier, the Rivers and Harbors Act of 1946 (referred to in this article as 1946 RHA) were descriptive of the incidental benefits associated with the regulation of river flow by releases for hydropower.⁵ Further, the court held that the 1958 Water Supply Act could not be used as authority to allow the Corps to redistribute water from Lake Lanier.⁶ The Water Supply Act limits modifications of a reservoir project if the change would "seriously affect the purposes for which the project was authorized, surveyed, planned or constructed, or which would involve major structural or operational changes ..."⁷ The district court found that the level of water supply contemplated by the Corps and requested by Atlanta would be a significant redistribution and result in a major operational change.⁸ Moreover, use of Lake Lanier for significant water supply would seriously affect the purposes for which Lake Lanier was originally authorized.⁹ The district court judge himself called his ruling "draconian," but nevertheless set July 2012 as the deadline for which the water tap out of Lake Lanier for the City of Atlanta would have been turned down to a slender trickle (absent intervening legislative action).¹⁰

But on June 28, 2011, the 11th Circuit Court of Appeals held that water supply is an express purpose of Lake Lanier under its original statutory authorization, the 1946 RHA, and that authorization was not superseded or limited by the 1958 Water Supply Act.¹¹ The court remanded the cases to the Corps for further action.¹²

The court relied on the full breadth of the original authorizations that predate the 1958 Water Supply Act and hinted at the propriety of ignoring initial contributions to construction as a limiting factor in defining original authority. The court also gave a wink of approval to addressing detriment to hydropower from storage reallocation with financial compensation and defining that detriment by a look at the system-wide impact or other metrics beyond just the percentage shift in storage allocation.

While Atlanta breathes a sigh of relief, the beating heart of this multi-decade, multi-lawsuit water battle between Georgia, Alabama, and Florida has been set firmly back in the hands of the Corps, which has been given "one year to make a final determination of its authority to operate [Lake Lanier]."¹³ The court instructed that the 1946 RHA contemplates a balance between the reservoir's authorized purposes — water supply, hydroelectric power, navigation, and flood control — and the extent of the Corps' authority to change the allocations is to be determined by the Corps in the first instance.¹⁴

The interpretation of the original authorization was the key factor in the court's decision and, interestingly, the court came to its conclusion despite the Corps' position, articulated in various forms since 1955, including in a 2002 formal memo, that water supply was not an authorized purpose of Lake Lanier. The court held that the Corps' interpretation of the statute was not entitled to any form of deference because of the "plain and express will of Congress" that water supply was "an authorized purpose of the [Lake Lanier] Project."¹⁵ The "Newman Report," a 1946 Corps Report proposing the project, which the court held "became part of the authorizing legislation for the project,"¹⁶ provided several statements that the Lake Lanier Project "would protect and assure the water supply of the Atlanta metropolitan area ... [and] authorized the use of water for water supply at the expense of maximum hydropower generation."¹⁷

This 1946 RHA authority was not limited by the 1958 Water Supply Act, which supplemented any authority granted by the 1946 RHA, offering "greater water supply authority in federal water projects than had previously existed."¹⁸ The court ruled that "Congress aimed only to expand water supply allocations, not contract them by limiting previous authorizations,"¹⁹ so the 1946 RHA must be treated as the baseline of authority in this case.

The Southeastern Power Administration paid $30 million of the $47 million in construction costs and the remainder of Lake Lanier was funded by federal appropriations.²⁰ The fact that the Georgia localities did not make a single financial contribution to the original construction of Lake Lanier for water supply or any other purpose was of "no moment in determining Congress' intent with respect to water supply authorization."²¹ When Lake Lanier was built, Atlanta's water demands were low enough that they could be satisfied by the flows associated with the hydropower, which were similar to the natural flows occurring prior to the dam's construction. The future water supply benefit was not quantified, but was addressed qualitatively,²² and the court was satisfied that a cost allocation for Atlanta would have been "speculative" and the plain language of the Newman Report need not be muddled by the absence of an initial financial contribution.²³ It is noteworthy that the Atlanta metropolitan area had a population of less than one million people in 1946, while today it is home to over 5 million people.

Despite the finding that the plain language established water supply as one of the authorized purposes, the court ultimately called the legislation "ambiguous with respect to the extent of the Corps' balancing authority" because securing Atlanta's water supply was discussed as being done with "a slight decrease in system power value" and as a sacrifice of "maximum" power generation.²⁴ So the court left to the Corps' expertise how to analyze Atlanta's needs and the impact on power generation, including how to factor in return flows and other intricacies.²⁵ The Corps can set a new metric for measuring the degree of its operational change, rather than continue to focus on the percentage change in storage allocation as previously done.²⁶ For example, the percent change in system-wide hydropower is provided as an example of an alternative metric.²⁷ Further, the court indicates that the Corps could appropriately consider compensation for detriment to hydropower as part of its balance, leaving open a window through which more water might be allocated to water supply than previously contemplated by the Corps.²⁸

Realizing that metropolitan, north Georgia gets more than 99 percent of its water from surface water supplies and Lake Lanier and the Chattahoochee River supply 72 percent of that water,²⁹ the court certainly had real-world incentive to conclude the reservoir was always intended to serve a water supply purpose — at least to some extent. To what degree remains to be seen as the Corps scrambles to meet its one year deadline to interpret the extent of its authority. That determination and the operational plan the Corps proposes within the limits of that authority will be the opening shots of the next³⁰ round of battles on this particular water front.

Footnotes

^{1 In re MDL-1824 Tri-State Water Rights Litig., No. 09-14657, slip op. at p. 15 (11th Cir. June 28, 2011), available athttp://www.ca11.uscourts.gov/opinions/indexpub.php . The conservation storage is 1,087,600 acre-feet in the summer. Id.}

^{2 The groundbreaking was in 1950 and impoundment began in 1956. Lake Sydney Lanier, History, athttp://lanier.sam.usace.army.mil/history.htm .}

^{3 1946 Rivers and Harbors Act, Pub. L. No. 79-525, 60 Stat. 634 (1946). This Act is not to be confused with the Rivers and Harbors Appropriation Act of 1899 (33 U.S.C. 403; Chapter 425, March 3, 1899; 30 Stat. 1151), which is now commonly referred to as the "Rivers and Harbors Act" and which prohibits the construction of any bridge, dam, dike or causeway over or in navigable waterways of the U.S. without Congressional approval. Rather, Corps Civil Works projects are authorized by legislation generically referred to as Omnibus Legislation and these were generally called Rivers and Harbors Acts of [Year] until about 1970.}

^{4 Water Supply Act, 43 U.S.C. § 390 et seq.}

^{5 In re Tri-State Water Rights Litig., 639 F. Supp.2d 1308, 1347 (M.D. Fla. 2009).}

^{6 Id. at 1346.}

^{7 WSA, 43 U.S.C. § 390b(b).}

^{8 In re Tri-State Water Rights Litig., 639 F. Supp.2d at 1350.}

^{9 Id. at 1354.}

^{10 Id. at 1355.}

^{11 In re MDL-1824 Tri-State Water Rights Litig., No. 09-14657, slip op. at p. 6, 17 (11th Cir. June 28, 2011), available athttp://www.ca11.uscourts.gov/opinions/indexpub.php . Four cases were part of this multidistrict litigation over the Corps' management of the Apalachicola-Chattahoochee-Flint and Alabama-Coosa-Tallapoosa River Basins. The Court of Appeals held that the Corps had not taken final agency action by allowing continued withdrawals from Lake Lanier by Atlanta and other localities during the pendency of various litigations, stays, and settlement negotiations. Therefore, the district court lacked jurisdiction to have heard three of the cases and they were remanded to the Corps for final action. Id. at p. 50. The Corps' denial of Georgia's formal request for storage reallocation to water supply was final agency action, and the court's opinion addressed the merits of that case. Id. at p. 52.}

^{12 Id. at p. 76. The Georgia parties asserted only that the 1946 RHA authorized increased releases from the dam. Therefore the court expressed no opinion on whether the 1946 RHA could be construed to also authorize direct withdrawals from the reservoir. Id. at p. 84, n.35.}

^{13 Id. at p. 6.}

^{14 Id. at p. 76, 82-86.}

^{15 Id. at p. 58.}

^{16 Id. at p. 11. The 1946 RHA says very little: it simply approves plans proposed in a letter from the Chief of Engineers dated May 13, 1946, which the legislation incorporates by reference and, which, in turn, recommends approval of a survey report prepared by General Newman, Division Engineer for the South Atlantic Division of the Corps.}

^{17 In re MDL-1824, slip op. at p. 67.}

^{18 Id. at p. 71 (emphasis added).}

^{19 Id. at p. 17.}

^{20 Id. at p. 13; In re Tri-State Water Rights Litig., 639 F. Supp.2d at 1317-18.}

^{21 In re MDL-1824, slip op. at p. 62.}

^{22 Corps did not begin requiring cost-benefit analysis on all project purposes until 1952. Id. at p. 64, n.26.}

^{23 Id. at p. 63-64. But note that in 1954 the Corps entered into an agreement with the Department of the Interior and the Federal Power Commission establishing uniform standards for allocating costs for multiple purpose projects. See Hearings on H.R. 6766 84th Cong., 13-15 (1955) (statement of Major General S.D. Sturgis, Chief of Engineers) and In re Tri-State Water Rights Litig., 639 F. Supp.2d at 1320. This change in the Corps' procedures for allocating costs could distinguish an analysis of a later authorized reservoir.}

<sup>24 In re MDL-1824, slip op. at p. 82-83.

25 See id. at p. 82-86.

26 Id. at p. 85.

27 Id. at p. 75, n.31 and 8
5, n.36.

28 Id. at p. 75, n.31.

29 CRS Report for Congress, ACR Drought: Federal Water Management Issues, May 1, 2008 at p. CRS-11.

30 This round of battles will continue as well — Alabama has already indicated it will appeal the 11th Circuit ruling and Florida is considering an appeal as well.</sup>

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