Power Authority v. Federal Power Commission

247 F.2d 538

• Court: Court of Appeals for the D.C. Circuit
• Decided: June 20, 1957
• Docket: No. 13652
• Status: Published

Opinions

BAZELON, Circuit Judge.

Petitioner, an agency of the State of New York, applied to the Federal Power Commission for a license to construct a power project to utilize all of the Niagara River water which, under the 1950 treaty between the United States and Canada,¹ is available for American exploitation.

In consenting to the treaty, the Senate had attached the following “reservation”:

The United States on its part expressly reserves the right to provide by Act of Congress for redevelopment, for the public use and benefit, of the United States share of the waters of the Niagara River made available by the provisions of the treaty, and no project for redevelopment of the United States share of such waters shall be undertaken until it be specifically authorized by Act of Congress. [1 U.S.T. 694, 699.]

The Commission dismissed petitioner’s application on November 30, 1956, in an opinion and order declaring:

“In the absence of the treaty reservation we would act on the Power Authority’s application in accordance with the provisions of the Federal Power Act [16 U.S.C.A. § 791a et seq.] But if we are to accept the injunction of the reservation as it stands, we would have no authority to consider the application of the Power Authority on its merits. * * -*

“Since the reservation here was intended by the Senate as part of the treaty and was intended to prevent our jurisdiction attaching to the water made available by the treaty, it is entirely authoritative with us as the Supreme Law of the Land under Article VI of the Constitution. * * *

“We are without authority to issue a license for the redevelopment (Project No. 2216) proposed by the Power Authority of the State of New York.”

An application for rehearing was denied on January 2, 1957, and petitioner brought this review proceeding.

The parties agree that, if the reservation to the 1950 treaty is not “Law of the Land,” the order should be set aside. Since the reservation did not have the concurrence of the House of Representatives, it is not “Law of the Land” by way of legislation.² The question is whether it became “Law of the Land” as part of the treaty.

The Commission argues that the reservation is an effective part of the treaty because: (1) it was a condition of the Senate’s consent to the ratification of the treaty; (2) the condition was sanctioned by the President, was “accepted” by Canada, and was included in the exchange of ratifications; and (3) it “thus became a part of the Treaty.” Simple as this argument seems, we cannot agree with it.

The treaty was signed on behalf of the United States and Canada on February 27, 1950. It defined the quantity of Niagara River water which was to be available for power purposes and provided that it “shall be divided equally between the United States of America and Canada.” How each party was to exploit its share of the water was left for that party to decide.

In transmitting the treaty to the Senate on May 2,1950, the President pointed, out that the treaty did not determine how the United States was to exploit its share-of the water. He said:

“ * * * It is a question which we in the United States must settle under our own procedures and laws.. It would not be appropriate either for this country or for Canada to require that an international agreement between them contain the solution of what is entirely a domestic problem.” ³

The Foreign Relations Committee of' the Senate agreed that the question was-“domestic in nature” and “concerns the-United States constitutional process alone.” It recommended the reservation, because, without it, “the redevelopment. for power purposes would be governed by the Federal Power Act. The Committee-intends by the reservation to retain that power in-the hands of Congress.”⁴ The-Senate accepted the Committee’s recommendation and consented to the ratification of the treaty with the reservation on August 9, 1950.⁵

Meanwhile, the Canadian Parliament had approved the treaty as signed, without the reservation. In a note on August 17, 1950, the Legal Advisor of the Department of State called the attention of the Canadian Government to the Senate action, saying:

“It appears that, while recognizing the subject matter of the reservation as domestic in nature and concerning the United States constitutional process alone, the Senate considered the reservation necessary in order to make certain that implementation of the treaty on the part, of the United States would be made only by specifically authorized acts of Congress and would not be governed by the Federal Power Act.”

A week later, without waiting for Canadian reaction to the reservation, the President ratified the treaty subject to the reservation. On September 21, 1950, the Canadian Ambassador, replying to the State Department’s note, advised that his government accepted the reservation and would indicate its acceptance “by a statement to be included in the Protocol of exchange of ratifications.” Two weeks later, without resubmitting the treaty to Parliament for approval of the reservation, the Canadian Government ratified the treaty. In the Protocol, on October 10, 1950, Canada inserted the following statement:

“Canada accepts the above-mentioned reservation because its provisions relate only to the internal application of the Treaty within the United States and do not affect Canada’s rights or obligations under the Treaty.”

The Canadian view that the reservation was of purely domestic concern to the United States and of no concern to Canada was shared, as we have shown, by the President, the Department of State and the Senate.

Unquestionably the Senate may condition its consent to a treaty upon a variation of its terms. The effect of such a “consent,” by analogy to contract law, is to reject the offered treaty and to propose the variation as a counteroffer which will become a binding agreement only if accepted by the other party.⁶ But, if what the Senate seeks to add was implicit in the original offer, the purported “conditional acceptance” is an acceptance and the contract arises without a further acceptance by the other party being required. Restatement, Contracts § 60, comment a (1932). The disposition of the United States share of the water covered by this treaty was, even apart from the reservation, something “which we in the United States must settle under our own procedures and laws.” The reservation, therefore, made no-change in the treaty. It was merely an expression of domestic policy which the Senate attached to its consent. It was not a counter-offer requiring Canadian acceptance before the treaty could become effective. That Canada did “accept” the reservation does not change its character. The Canadian acceptance, moreover, was not so much an acceptance as a disclaimer of interest. It is of some significance in this regard that the Canadian Government, although it had submitted the original treaty to the Parliament for its approval, found it unnecessary to resubmit the treaty to Parliament after the reservation was inserted. Also significant is the fact that the President ratified the treaty with the reservation without even waiting for Canada to “accept.”

A true reservation which becomes a part of a treaty is one which alters “the effect of the treaty in so far as it may apply in the relations of [the] State with the other State or States, which may be parties to the treaty.”' Report of the Harvard Research in International Law, 29 Am.J. Int’l L. Supp.. 843, 857 (1935). It creates “a different relationship between” the parties and varies “the obligations of the party proposing it * * * ” 2 Hyde, International Law, Chiefly As Interpreted and Applied by the United States, (2d revised ed. 1945) 1435; International Law Commission, 2d Sess., Report on the Law of Treaties by J. N. Brierly, UJSL Doc. A/CN. 4/23, 14 April 1950, pp. 41,, 42-43. The purported reservation to the 1950 treaty makes no change in the relationship between the United States and Canada under the treaty and has nothing at all to do with the rights or obligations of either party. To the extent here relevant, the treaty was wholly executed on its effective date. Each party became entitled to divert its half of the agreed quantum of water. Neither party had any interest in how the share of the other would be exploited, nor any obligation-to the other as to how it would exploit its own share. The Senate could, of course, have attached to its consent a reservation to the effect that the rights and obligations of the signatory parties should not arise until the passage of an act of. Congress. Such a reservation, if accepted by Canada, would have made the treaty executory. But the Senate did not seek to make the treaty executory. By the terms of its consent, the rights and obligations of both countries arose at once on the effective date of the treaty. All that the Senate sought to make executory was the purely municipal matter of how the American share of the water was to be exploited.

A party to a treaty may presumably attach to it a matter of purely municipal application, neither affecting nor intended to affect the other party. But such matter does not become part of the treaty. The Republic of New Granada, in 1857, attached such purely municipal matter to its ratification of a treaty with the United States. The President of the United States treated the added articles as being no part of the treaty. He ratified the treaty without resubmitting it to the Senate, stating in the Protocol of Exchange of Ratifications:

“ * * * considering the said articles as in no way affecting the provisions of the said Treaty, but as being acts simply of domestic legislation⁷ on the part of the Granadian Confederacy, and as implying no reciprocal obligation on the part of the United States, the said exchange has this day been effected in due form. [Miller, Reservations To Treaties (1919) 27.]”

The constitutionality of the reservation as a treaty provision was extensively argued by the parties. The respondent merely suggests that “there is no apparent limit” to what may be done under the treaty power, citing State of Missouri v. Holland, 1920, 252 U.S. 416, 40 S.Ct. 382, 64 L.Ed. 641. Intervenor Rochester Gas and Electric Corporation puts the proposition more baldly. It defends this reservation as an “exercise of the treaty-making power to legislate in the domestic field * * * ” calling our attention to the fact that the Supreme Court has never held a treaty provision unconstitutional.⁸ But it has been pointed outi i that the Court has never had occasion to 'consider a treaty provision which “lacked an obvious connection with a matter of international concern.” 2 Hyde, International Law, Chiefly As Interpreted and 'Applied By The United States (2d revised ed. 1945) 1401. The instant reservation is sui generis. There is complete agreement by all concerned that it relates to a matter of purely domestic concern.

In State of Missouri v. Holland, 252 U.S. at page 433, 40 S.Ct. at page 383, Mr. Justice Holmes questioned, but did not decide, whether there was any constitutional limitation on the treaty-making power other than the formal requirements prescribed for the making of treaties.⁹ The treaty he sustained related to a “national interest of very nearly the first magnitude” which “can be protected only by national action in concert with that of another power.” Id., 252 U.S. at page 435, 40 S.Ct. at page 384. And it conferred rights and imposed obligations upon both signatories. Id., 252 U.S. at page 431, 40 S.Ct. at page 383. The treaty power’s relative freedom from constitutional restraint, so far as it attaches to ’ “any matter which is properly the subject of negotiation with a foreign country,” Ware v. Hylton, 1796, 3 Dali. 199, 1 L.Ed. 568, is a long-established fact. ! Geofroy v. Riggs, 1890, 133 U.S. 258, 10 S.Ct. 295, 33 L.Ed. 642. No court has ever said, however, that the treaty power can be exercised without limit to affect matters which are of purely domestic concern and do not pertain to our relations with other nations.

Our present Secretary of State has said that the treaty power may be exercised with respect to a matter which “reasonably and directly affects other nations in such a way that it is properly a subject for treaties which become contracts between nations as to how they should act”; and not with respect to matters “which do not essentially affect the actions of nations in relation to international affairs, but are purely internal.” ¹⁰ He had earlier said:

“ * * * I do not believe that treaties should, or lawfully can, be used as a device to circumvent the constitutional procedures established in relation to what are essentially matters of domestic concern.¹¹”

Charles Evans Hughes, just before he became Chief Justice and after he had been Secretary of State, addressing himself to the question whether there is any constitutional limitation of the treaty power, said:

“ * * * The Supreme Court has expressed a doubt whether there could be any such * * *. But if there is a limitation to be implied, I should say it might be found in the nature of the treaty-making power.

“«- * * The power is to deal with foreign nations with regard to matters of international concern. It is not a power intended to be exercised, it may be assumed, with respect to matters that have no relation to international concerns. * * the nation has the power to make any agreement whatever in a constitutional manner that relates to the conduct of our international relations, unless there car be found some express prohibition in the Constitution, and I am not aware of any which would in any way detract from the power as I have defined it in connection with our relations with other governments. But if we attempted to use the treaty-making power to deal with matters which did not pertain to our external relations but to control matters which normally and appropriately were within the local jurisdiction of the States, then I again say there might be ground for implying a limitation upon the treaty-making power that it is intended for the purpose of having treaties made relating to foreign affairs and not to make laws for the people of the United States in their internal concerns through the exercise of the asserted treaty-making power.¹²

In the Dulles view this reservation, if part of the treaty, would be an invalid exercise of the treaty power. In the Hughes view, its constitutionality would be a matter of grave doubt. “The path of constitutional concern in this situation is clear.” United States v. Witkovich, 1957, 353 U.S. 194, 77 S.Ct. 779, 783,1 L.Ed.2d 765. We construe the reservation as an expression of the Senate’s desires and not a part of the treaty. We do not decide the constitutional question.

It is argued that, since the reservation was a condition to the Senate’s consent to the treaty, to deny effect to the condition vitiates the consent and thus invalidates the whole treaty. That argument, we think, was disposed of by the Supreme Court in New York Indians v. United States, 1898, 170 U.S. 1, 18 S.Ct. 531, 42 L.Ed. 927. That case involved a treaty with certain Indian tribes. The Senate in its resolution of consent to the treaty, had attached certain amendments and declared that “the treaty shall have no force or effect whatever, * * * nor shall it be understood that the senate have assented to any of the contracts connected with it until the same, with the amendments herein proposed, is submitted and fully and fairly explained by a commissioner of the United States to each of said tribes or bands, separately assembled in council, and they have given their free and voluntary assent thereto * * * Id., 170 U.S. at pages 21-22, 18 S.Ct. at page 536. The amendments which the Senate attached to its resolution consenting to the treaty, as the Supreme Court recognized, were not communicated to the Indian tribes. The Court concluded that the amendments were not part of the treaty. It nevertheless treated the Senate’s consent as effective to make the treaty valid and operative. Id., 170 U.S. at pages 22-24, 18 S.Ct. at page 536.

The order under review is set aside and the case remanded to the Federal Power Commission.

It is so ordered.

1 . Treaty Between the United States and Ganada Concerning Uses of the Waters of the Niagara River, Feb. 27, 1950, 1 U.S.T. 694.

2 . New York Indians v. United States, 3898, 170 U.S. 1, 23, 18 S.Ct. 531, 42 L.Ed. 927; Fourteen Diamond Rings v. United States, 1901, 183 U.S. 176, 184, 22 S.Ct. 59, 46 L.Ed. 138, concurring opinion of Mr. Justice Brown.

3 . Senate Executive N, 81st Cong., 2d Sess. 3.

4 . S.Exec.Rep. No. 11, 81st Cong., 2d Sess. 7.

5 . 96 Cong.Rec. 12095.

6 . “A reservation is upon analysis the refusal of an offer and the making of a fresh offer.” 1 Oppenheim, International Law (8th ed., Lauterpaeht, 1955) 914.

7 . Under our Constitution, of course, such matter added to a treaty cannot be effeetive as legislation. Supra note 2.

8 . But cf. United States v. Guy W. Capps, Inc., 4 Cir., 1953, 204 F.2d 655, affirmed on other grounds, 1955, 348 U.S. 296, 75 S.Ct. 326, 99 L.Ed. 329.

9 . The question raised by Mr. Justice Holmes was given an affirmative answer by Mr. Justice Black in Reid v. Covert, S.Ct. 1222.

10 . Hearings on S.J.Res. 1 Before a Subcommittee of the Senate Judiciary Committee, 84th Cong., 1st Sess. 183 (May 2, 1955).

11 . 1 Hearings on S.J.Res. 1 and S.J.Res. 43 Before a Sub-committee of the Senate Judiciary Committee, 83d Cong., 1st Soss. 825 (April 6, 1953).

12 . Proceedings of The American Society of International Law (1929) 194, 196.