author: TAMM, Circuit Judge: LUMBARD, Senior Circuit Judge

text:
    Anne E. MILES v. DISTRICT OF COLUMBIA, a Municipal Corporation, Appellant, and John A. Taylor.
    No. 73-2250.
    United States Court of Appeals, District of Columbia Circuit.
    Argued Dec. 6, 1974.
    Decided March 21, 1975.

      David P. Sutton, Asst. Corp. Counsel for the District of Columbia, Washington, D. C., with whom C. Francis Murphy, Corp. Counsel, Louis P. Robbins, Principal Asst. Corp. Counsel, and Richard W. Barton, Asst. Corp. Counsel, Washington, D. C., were on the brief for appellant.
    J. Hampton Baumgartner, Jr., Washington, D. C., with whom Bruce S. Mencher and Michael B. McGovern, Washington, D.C., were on the brief for appellee Miles.
    Paul J. Sedgwick, Washington, D. C., entered an appearance for appellee Taylor.
    Before LUMBARD, Senior Circuit Judge for the Second Circuit, and McGOWAN and TAMM, Circuit Judges.

       Sitting by designation pursuant to 28 U.S.C. § 294(d).

   Opinion for the Court filed by Circuit Judge TAMM.

Opinion filed by Senior Circuit Judge LUMBARD, concurring in part and dissenting in part.

TAMM, Circuit Judge:

Plaintiff-appellee, Mrs. Anne E. Miles, brought suit in district court alleging that the destruction by the District of Columbia of two buildings owned by her constituted a taking of property without just compensation and due process of law. District Court Judge Oliver Gasch found that the demolition of appellee’s property violated due process in that the District failed to grant a hearing at a meaningful time and in a meaningful manner and to provide for adequate notice. Miles v. District of Columbia, 354 F.Supp. 577 (D.D.C.1973). Hearings on damages were held before a Master, who recommended an award which Judge Gasch accepted. Although we adopt a narrower theory than the district court’s, we find that the District failed to accord plaintiff due process of law, uphold the damage award, and affirm.

I. Facts

Appellee, an elderly widow, owned two four-story buildings in Northwest Washington and since 1945 has paid all applicable real property taxes to the District of Columbia. She has resided two or three blocks from the buildings in question since 1932. A. 32-33, 36, 61 — 62. In June, 1963, the District of Columbia Board for the Condemnation of Insanitary Buildings (hereinafter “the Board”) ordered appellee to show cause why her buildings should not be condemned, alleging insanitary conditions dangerous to health including broken windows and doors, decayed floors and stairways, and defective wiring and plumbing. A. 75, 85, 86. In November, 1963, the Board, after a hearing, issued an order pursuant to 5 D.C.Code § 618 (1973) condemning the building and directing appellee to abate the insanitary conditions or demolish and remove the buildings by March 12, 1964. A condemnation sign was posted upon the building. A. 62, 75, 90, 93.

With Board permission, Mrs. Miles undertook to convert the buildings from tenement dwellings into apartment houses of eight units each. Toward that end, she obtained a $30,000 loan commitment from the Perpetual Building Association and hired a series of contractors who first gutted both buildings and then periodically performed work on the conversions. Appellee spent approximately $37,000 to $42,000 on the project. A. 62, 129-130.

Mrs Miles failed to meet the March 12, 1964 deadline imposed by the Board’s order, but, as authorized by 5 D.C.Code § 620 (1973), obtained a series of extensions, the last of which expired on January 24, 1966. A. 76, 79. As the work progressed, the condemnation sign was removed from the building. A. 41. Mrs. Miles has stated that she received a representation during this period from a Board official that work had progressed too far for the building to come down. A. 69. To supervise its order, the Board sent the case to the Law Enforcement Division of the Corporation Counsel’s Office, which also gave Mrs. Miles and her lawyer, Mr. George Hayes, assurances that the building would not be torn down. A. 57, 60.

An inspection in June, 1966 disclosed that repairs were incomplete, construction debris remained on the premises, and vandalism was present. A. 79. Between July, 1966 and August, 1967, the Board sent three letters to Mr. Hayes, pointing out that Mrs. Miles had failed to restore the buildings completely and absent prompt action by her, the Board would proceed against the buildings under the statute. A. 79-80. After an August, 1967 inspection, similar letters were sent in October, 1967, March, 1968, and February, 1969. A. 80. In May, 1969, following the death of Mr. Hayes and the subsequent death of the architect involved, the Corporation Counsel’s Office sent the case back to the Board. A. 103.

On June 5, 1969, the Board reviewed the case and made an ex parte determination that the two buildings be processed for demolition. The Board also directed that Mrs. Miles be so informed. A. 63 — 64. On July 17, 1969, the Board sent notice by certified mail to George Windsor, Esquire, a former partner of Mr. Hayes. However, Mr. Windsor responded by letter on July 23, 1969 that he was “not the owner of these properties and neither am I the agent to them for purposes of receiving notices of any kind.” A. 81. Apparently thereafter on July 25, 1969, the Board attempted to inform appellee by non-registered letter of its intention to demolish the buildings. A. 81. Mrs. Miles stated she did not receive the letter. A. 61. On July 29, 30, and 31, 1969, the Board attempted to provide notice through publication by placing an official notice in the Washington Evening Star. The property was identified only by address and lot number in a group notice, and the owner was given until noon on August 8, 1969 to commence repair or demolition of the buildings. A. 81-82. The record reveals no evidence that a condemnation notice was ever reposted on the property.

In October, 1970, a wrecking crew under contract with the District razed the two buildings. A. 63. This suit followed.

II. Liability

The district court did not dispute the validity of the November 1963 condemnation order entered following hearing and notice. However, “[bjased upon the peculiar facts of this case,” the court concluded that appellee “was not afforded due process of law and, therefore, she is entitled to just compensation for the loss of her property.” 354 F.Supp. at 585. Specifically, the court found that the Board failed to provide for a hearing at a meaningful time, since in June, 1969, appellee was not given “an opportunity to explain her position that the repairs should be continued rather than have her buildings razed.” Id. at 581. Moreover, the district court found that under the facts of this case “due process of law requires no less than registered or certified mail notice as the type of feasible notice reasonably designed to inform the plaintiff of the Board’s final decision to demolish and afford her the opportunity to register her objections.” Id. at 585. We agree with the latter basis for the court’s decision.

A municipality in the exercise of its police power may, without compensation, destroy a building or structure that is a menace to the public safety or health. However, that municipality must, before destroying a building, give the owner sufficient notice, a hearing and ample opportunity to demolish the building himself or to do what suffices to make it safe or healthy; such a procedure is the essence of the governmental responsibility to accord due process of law. 7 E. McQuillan, Municipal Corporations § 24.561 (3d ed. 1968). The District of Columbia statute incorporates these procedural protections and substantive restraints, and its facial constitutional validity has been upheld. Keyes v. Madsen, 86 U.S.App.D.C. 24, 179 F.2d 40 (1949), cert. denied, 339 U.S. 928, 70 S.Ct. 628, 94 L.Ed. 1349 (1950).

However, the question remains whether the Board in the exercise of its police powers in this case afforded the proper constitutional and statutory protections before irrevocably depriving appellee of her vested property right without compensation. Appellee does not deny that she was accorded her full panoply of due process rights prior to the original 1963 condemnation order. She, however, contends that the Board had the duty to provide notice before ordering destruction of the buildings in 1969.

Our analysis begins with the Supreme Court’s statement of the constitutional rule of notice in Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950):

An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections, (citations omitted).

In the instant case, the 1963 condemnation order was followed by a six year period during which appellee attempted to restore the buildings by obtaining substantial financing after receiving several extensions of time from the Board. After the last extension expired, the Board took no action for three years except for sending a sporadic stream of threatening letters. In fact, only after the July, 1969 decision to process the buildings for demolition was final action truly “pendent”. Our inescapable conclusion is that under the circumstances of this case due process required that the Board convey to Mrs. Miles notice of its 1969 decision to finally have the buildings destroyed.

Moreover, under the statutory scheme, notice in this case clearly would not have been a vain and empty gesture. If she had received notice of the Board’s final decision, Mrs. Miles, pursuant to 5 D.C.Code § 628 (1973), could have taken an administrative appeal to the Condemnation Review Board. If unsuccessful there, she then had the right to appeal to the District of Columbia Superior Court which “shall give precedence to any such case.” See 5 D.C.Code § 629 (1973). While pursuing these remedies, the statute mandates that any challenged order be stayed. 5 D.C.Code § 622 (1973); see Urciolo v. Washington, 305 A.2d 252 (D.C.App.1973).

The District places heavy reliance on the case of Tingle v. City of Wichita, 211 Kan. 119, 505 P.2d 717 (1973); in oral argument counsel proclaimed that Tingle was on “all-fours” with the case at bar. We disagree. In Tingle, the Kansas court upheld a jury finding that the demolition of a building was proper and that after condemnation no additional notice was required. However, the court focused on the crucial fact that the city followed the Kansas statute, which mandated that it inform the owner that he may undertake repairs but if he “fails to diligently prosecute the same until the work is completed, the governing body may cause the structure to be razed and removed.” 505 P.2d at 721. The court then concluded that the propriety of both the owner’s and the city’s actions are questions of fact for the jury and upheld its verdict. Id. Thus, Tingle is a far cry from the instant case where the owner was not placed on such jeopardy notice and had in fact through a course of dealing with the government received every indication that no demolition was imminent.

Having concluded that due process required that the District provide notice in this case, we must then determine whether adequate notice was in fact afforded appellee. It is uncontested that notice by publication occurred through advertisement in the Washington Evening Star. However, this publication only identified the property by address and lot number, and ran in a group notice which included other properties. The Supreme Court described the deficiencies of this type of notice in Mullane v. Central Hanover Bank & Trust Co., supra, 339 U.S. at 315, 70 S.Ct. at 658:

Chance alone brings to the attention of even a local resident an advertisement in small type inserted in the back pages of a newspaper The chance of actual notice is further reduced when as here the notice required does not even name those whose attention it is supposed to attract, and does not inform acquaintances who might call it to attention.

We cannot conclude that this publication was reasonably calculated to apprise interested parties of the pendency of final action.

Besides the publication, the Board attempted to provide notice in July, 1969, by sending a certified letter to a law partner of appellee’s deceased attorney. However, he responded that he was neither the owner of the properties nor an agent for receipt of notice. The District attempts to make much of the fact that when deposed in 1972, Mrs. Miles stated that at one point, the attorney, Mr. Windsor, “talked to me and told me he was acting on my account as a lawyer.” A. 56. However, during that same deposition, appellee, in response to the direct question, “Do you consider Mr. Windsor to be your attorney?”, answered, “I did not consider — I considered him nothing.” A. 54. Moreover, at the time of its action in 1969, the Board had before it only Mr. Windsor’s response. Its actions, therefore, are not sustainable on that ground.

The Board also attempted to notify Mrs. Miles directly by regular mail. She testified at her deposition she never received such a notice. A. 6. The fact of non-receipt has never been put into dispute.

It is important to focus upon the statutory scheme for notice. 5 D.C. Code § 625 (1973) mandates that the Board forward notice required under the statute by registered or certified mail. Notice by publication is permissible only if the registered mail notice is returned for reasons other than refusal. While other methods are allowable, regular mail notice is explicitly recognized as not satisfying the statutory requirement. We must agree with the District Court which concluded that:

This Court can discern no persuasive reason in this case for approving a mode of service that is less effective than that directed by the D.C.Code in those situations where a property owner is sent notice compelling him to show cause why his building should not be condemned.

354 F.Supp. at 585.

In sum, we hold that the District failed to accord appellee due process by providing effective notice of its pendent final action and hence must be held liable for damages. The grant of summary judgment for appellee is affirmed.

III. Damages

After entering summary judgment in appellee’s behalf, the court referred to a special master the question of the proper assessment of damages. The Special Master held four days of hearings, the difficulty being the assessment of buildings which no longer existed. The Special Master issued findings of facts, including inter alia:

Wallace L. Kidwell, a qualified real estate appraiser, testified that in June 1966 he appráised the property for loan purposes on behalf of Perpetual Building Association to have a value of $62,500 upon completion of rehabilitation. The value of the ground was $12,500 and $50,000 was projected as the value of the buildings. The income or capitalization approach was utilized for Kidwell’s conclusion. Based upon the reproduction or cost method of appraising, he appraised the properties at a value of $72,500, with $60,000 attributable to the buildings and $12,500 to the land. (Plaintiff’s Exhibit No. 12.)
Frank Calcara, a qualified expert on the subject of the cost of rehabilitation of structures, was accepted as an expert witness by the Court and his qualifications were not questioned by the defendants. He testified, without objection, that the cost to replace the two buildings in their then existing condition immediately prior to the demolition in October 1970 would be $48,000, or $3,000 per unit for the “shells” alone . . . based upon his examination of the plans, specifications, and photographs, conversations with the plaintiff, examination of similar houses in the same row immediately adjacent to plaintiff’s houses and a hypothetical question asked him containing all of the conditions of the buildings as recited by the witnesses, concluded that the cost to replace both buildings immediately prior to their demolition as they stood in that condition was approximately $78,800.
Based upon District of Columbia Inspector Wilson’s estimate that the buildings were 40% rehabilitated, Calcara’s conclusion of value was that the buildings were worth approximately $92,800.
Irvin R. King testified on behalf of the District of Columbia that based on the same hypothetical question the two buildings would sell for $17,000 or $8,500 each. He admitted that he was not an appraiser, not a broker, had not analyzed the blueprints for the buildings in question, belonged to no professional real estate organizations, had never qualified before as an expert in court, and only bought and sold property for his own account. King’s experience in buying and selling properties similar to the ones in this case was nearly non-existent. In the opinion of this Court, King does not qualify as an expert to appraise the market value of the two properties involved in this case. This Court, therefore, gives little or no weight to his testimony.

A. 131-33, 135-36.

The Special Master determined that the “income approach to valuation is not controlling in this case since the buildings were never completed or were they ever income producing from the date rehabilitation commenced until their destruction.” A. 136. He also found the fair market value approach not controlling, concluding that “this Court gives little or no weight to the testimony adduced by the defendant as to fair market value.” He found the testimony on replacement value was credible, and applied it to recommend an award of $75,-000 for the buildings and $3,500 for the land, a total of $78,500.

In a Memorandum-Order the district court “carefully reviewed the findings” of the Special Master and concluded that the District’s fair market value evidence was not credible and that appellee’s evidence “as to the cost of replacing the structures was the only credible expert testimony” before the Special Master. While recognizing that “[t]he proper measure of damages is never an easy question,” the court upheld the Special Master and awarded $78,500 in damages. A. 194 — 95. The District attacks this award by arguing that the district court’s finding that replacement cost estimates were the “only credible expert testimony” is plainly erroneous and that the court applied an erroneous damage standard. Appellant’s Br. at 31 — 32.

We note that the appropriate measure of damages in this type of case is a question upon which neither this court nor the District of Columbia Court of Appeals has ruled. However, we also recognize that no single rule of damages exists and that the replacement cost method of calculation is one which has been recognized and utilized. See, e. g., Missouri, Kansas & Texas Railway Co. v. Jackson, 174 F.2d 297 (10th Cir. 1949) (recognizing original cost and replacement cost evidence); Chicago, Milwaukee, St. Paul & Pacific Railroad Co. v. Tindal, 249 F.Supp. 988 (S.D.Iowa 1966) (utilizing replacement cost evidence); cf. United States v. 564.54 Acres of Land, 506 F.2d 796 (3rd Cir. 1974) (utilizing replacement value in eminent domain proceeding and rejecting restriction of that method to public condemnees). See generally 22 Am.Jur.2d §§ 138-40 (1965). Since the proper method of damage computation must vary with the facts of each case, we cannot conclude, as the District urges, that the mere invocation of the replacement cost standard is erroneous.

Turning to the facts, we recognize that the district court was bound by Fed. R.Civ.P. 53(e)(2) which instructs the court to accept the Master’s findings of fact unless clearly erroneous. The Special Master found that the District’s witness’ testimony should be given little or no weight. He heard testimony from two qualified expert witnesses who gave damage estimates based upon alternative methods of computations. The District now apparently challenges the award of $78,500 by pointing to expert testimony quoting a lower, $60,000 figure. However, testimony was also elicited suggesting an even higher, $92,800 award. The Special Master determined that the $78,-500 award was the most appropriate under the facts of this case; the district court, after reviewing carefully the Master’s findings, found the replacement cost evidence “the only credible expert testimony” and “the most appropriate measure of compensation.” A. 194 — 95. It is difficult to discern how the actions of either the Special Master or district court were in error.

A court’s award of damages is a finding of fact; an appellate court will, therefore, not set aside an award unless it finds it “clearly erroneous.” Fed.R.Civ.P. 52(a); see, e. g., Baggett v. Richardson, 473 F.2d 863, 865 (5th Cir. 1973); Cunningham v. Rederiet Vindeggen A/S, 333 F.2d 308, 312 (2d Cir. 1964). After carefully reviewing the record, we find that the district court’s damage award is supported by the facts, is not clearly erroneous, and consequently should not be disturbed.

Affirmed.

LUMBARD, Senior Circuit Judge

(concurring in part, dissenting in part):

Although I concur in the majority’s conclusion that the District of Columbia failed to accord plaintiff due process of law, I believe that the district court’s award of $75,000 for the damage to the buildings must be set aside.

The Special Master held:

3. The income approach to valuation is not controlling in this case since the buildings were never completed nor were they ever income producing from the date rehabilitation commenced until their destruction.
6. The measure of damages to the buildings in this case is the cost to replace or reproduce them in the condition in which they existed immediately prior to their destruction in October of 1970, which was $37,500 per building or a total of $75,000. Chicago, Milwaukee, St. Paul & Pacific RR. Co. v. Tindal, 249 F.Supp. 988 (S.D. Iowa 1966).

Affirming that decision, the district court stated:

Considering the wrongful nature of the taking, that is, the demolition of the buildings without proper notice to plaintiff Miles, and considering the testimony presented to the Special Master, it is the conclusion of this Court that the cost of replacement as determined by Magistrate Margolis is the most appropriate measure of compensation to plaintiff Miles.

The Special Master erred as a matter of law in not taking account of the testimony of plaintiff’s own witness, Wallace Kidwell, who testified as to the value of the properties using the eapitalization-ofearnings or income approach. Mrs. Miles held the properties as investments, with a view toward again making them income-producing properties. Certainly their value to her as such should be taken into account to limit an assessment of damages based upon replacement cost. Indeed, the case cited by the Special Master stands for that very proposition. In Chicago, Milwaukee, St. Paul & Pacific RR. Co. v. Tindal, 249 F.Supp. 988 (S.D.Iowa 1966), the court found that the replacement cost of a railroad warehouse destroyed by fire was $8,000 (value new ($20,000), less depreciation prior to the fire ($12,000)). But as the defendant had paid an annual rental of only $284 for the building, which had few alternate uses, the court found the actual value to be only $3,000 (roughly ten times earnings).

The Special Master disregarded Kid-well’s testimony because the buildings were never completed and never produced any income between the date rehabilitation commenced and the date of demolition. However, Mr. Kidwell, an expert, clearly could and did make an estimate of the income-producing potential of the property based on rentals generated and costs incurred by similar properties when wholly rehabilitated. The fact that Mrs. Miles’ properties never produced income following the commencement of rehabilitation does not make the capitalization-of-earnings-approach irrelevant. Indeed, it is the most appropriate measure because Mrs. Miles was rehabilitating the buildings for the very purpose of generating income.

Kidwell testified that, based on the capitalization-of-earnings-approaeh, the value of the buildings in 1966, if completed, would have been $50,000. However the value of the property as it then stood was probably somewhat less since Kidwell testified that the neighborhood had deteriorated since 1966. Moreover, Kidwell’s determination of the value of the buildings was on the assumption that they were completed. Mrs. Miles’ buildings were far from completed. The District of Columbia’s examiner had concluded that the interior was only forty percent rehabilitated. Thus, it would be necessary to subtract the cost of completion from Kidwell’s estimate of the properties’ value in order to arrive at a proper damage award.

The majority suggests that the Special Master may have found that Kidwell’s testimony using the income-valuation approach was not credible, and that that accounts for the exclusive focus on the cost of reconstruction in assessing damages. I must disagree. Kidwell was Mrs. Miles’ own witness, and the Special Master described him as a “qualified real estate appraiser.” His testimony, which took account of the location of the buildings and the rental income which would probably have been generated if the buildings had been completed, was not contradicted by any other witness. Calcara, plaintiff’s other witness, was offered only as a professional builder and rehabilitator, not as a professional real estate appraiser. (A. 163) It seems that the Special Master disregarded Kidwell’s testimony not because he did not find it credible, but because he incorrectly held that the measure of damages should be replacement cost, where the buildings were never completely rehabilitated pri- or to their demolition and had not begun to generate income again.

The majority opinion also relies upon the finding of the district court, reviewing the Special Master’s award, that “the evidence put forth by plaintiff Miles as to the cost of replacing the structures was the only credible expert testimony before the Special Master.” However the district court offered no reasons to support its conclusion, and indeed none are apparent from the transcript which the district court had before it. In these circumstances, I believe that the court’s complete disregard of Kidwell’s testimony as to the value of the buildings, based on an income or capitalization-of-earnings-approach, was clearly erroneous.

Moreover, the district court’s finding as to Kidwell’s credibility may well have been influenced by the court’s apparent belief that the “wrongful nature of the taking” should be taken into account in assessing damages to Mrs. Miles. The court was clearly in error when it considered the inadequacy of the notice as a factor in assessing damages. In any event the attempts of the District of Columbia to contact Mrs. Miles, even though constitutionally insufficient, make the district court’s “punishment” rationale for the high damage award wholly inappropriate, especially since Mrs. Miles had discontinued any rehabilitation efforts years earlier and had permitted the properties to become more and more run down.

The damage award should be vacated and the case remanded for reconsideration of the amount of damages in light of the foregoing.

      . In light of this conclusion, we do not reach, nor express approval or disapproval of the district court’s alternative ground that an additional hearing was required. Notice is generally considered a less burdensome requirement to place upon the government, and since, as discussed infra, appellee had additional statutory remedies available even absent the right to a 1969 hearing, we prefer to rest our decision on the notice issue.

      . The due process principles of notice have been applied to condemnation proceedings. See Schroeder v. City of New York, 371 U.S. 208, 83 S.Ct. 279, 9 L.Ed.2d 255 (1962); Walker v. City of Hutchinson, 352 U.S. 112, 77 S.Ct. 200, 1 L.Ed.2d 178 (1956).

      . Of course, when faced with conditions extremely dangerous to health or safety, the government may act summarily without notice. See 7 E. McQuillan, Municipal Corporations § 24.561 (3d. ed. 1968). Such an emergency clearly did not exist in the case at bar. A period of six years passed between the Board’s initial and final condemnation orders. Moreover, more than another year passed between the demolition order and the actual destruction of the buildings.

      . The District apparently argues in its brief, albeit imprecisely, that Urciolo held that these statutory procedures are exclusive, see 305 A.2d at 254, and that appellee by by-passing these remedies has waived her right to chailenge the demolition in the district court. See Appellant’s Br. at 16, 23. However, even assuming the validity of that interpretation, we find that no waiver occurred where appellee was not provided timely notice in order that she could pursue her appropriate remedies,

      . The District, in attempting to justify the procedures it employed, asserts that the Board had previously sent registered letters to appellee which had been returned unclaimed, and that regular mail was the course of correspondence selected by appellee in her dealings with the Board. We find neither argument a persuasive rationale for departing from statutorily mandated procedures.

      . Rule 52(a) explicitly provides that “[t]he findings of a master, to the extent that the court adopts them, shall be considered as the findings of the court.”
      We are disturbed by one aspect of the district court’s memorandum-order. The court found that
      [c]onsidering the wrongful nature of the taking, that is, the demolition of the buildings without proper notice to plaintiff Miles, and considering the testimony presented to the Special Master, it is the conclusion of this Court that the cost of replacement as determined by Magistrate Margolis is the most appropriate measure of compensation to plaintiff Miles.
      A. 195. The fact of liability, or the degree of wrongful conduct by a defendant, is never a proper factor in assessing damages in a case where punitive damages are inappropriate. If we believed that the court was attempting to punish appellants by its damage award, instead of compensating appellees, we would be forced to vacate the damage award.
      However, we are unable to reach that conclusion on this record. There is no indication that the Special Master considered the District’s wrongful action as a factor in reaching his damage award. The district court must accept those findings unless clearly erroneous and, except for the one questionable phrase, the district court’s brief memorandum properly focused upon the damage evidence and the Special Master’s findings. We reiterate that when compensatory damages are to be awarded, defendant’s wrongdoing is an irrelevant factor and should never be considered.

      . See also O’Brien Bros. v. The Helen B. Moran, 160 F.2d 502, 505-06 (2d Cir. 1947) (damage to a ship).


source: Caselaw Access Project

author: J. SKELLY WRIGHT, Circuit Judge: MacKINNON, Circuit Judge

license: Public Domain

text:
    LAC COURTE OREILLES BAND OF LAKE SUPERIOR CHIPPEWA INDIANS, Petitioner, v. FEDERAL POWER COMMISSION, Respondent, Northern States Power Company, Intervenor. NORTHERN ENVIRONMENTAL COUNCIL, INC., et al., Petitioners, v. FEDERAL POWER COMMISSION, Respondent, Northern States Power Company, Intervenor.
    Nos. 73-2063, 73-2130.
    United States Court of Appeals, District of Columbia Circuit.
    Argued Dec. 16, 1974.
    Decided March 21, 1975.

      L. Graeme Bell, III, Washington, D. C., and Larry B. Leventhal, Minneapolis, Minn., of the bar of the Supreme Court of Minnesota, pro hac vice, by special leave of court, for petitioner in No. 73-2063.
    Romulo L. Diaz, Jr., Atty., F. P. C., with whom Leo E. Forquer, Gen. Counsel, and George W. McHenry, Jr., Sol., F. P. C., were on the brief, for respondent.
    William J. Madden, Jr., Washington, D. C., with whom Paul T. Nowak, Jr., Washington, D. C., was on the brief, for intervenor Northern States Power Co.
    John M. Wiley, Wausau, Wis., and Roger L. Gette, Devils Lake, N. D., were on the brief for petitioner Great Lakes Inter-Tribal Council, Inc. in No. 73 — 2130.
    Edward Berlin, Washington, D. C., entered an appearance for petitioner Northern Environmental Council, Inc. in No. 73-2130.
    Before WRIGHT, MacKINNON and ROBB, Circuit Judges.
   Opinion for the court filed by Circuit Judge J. SKELLY WRIGHT.

Concurring and dissenting opinion filed by Circuit Judge MacKINNON.

J. SKELLY WRIGHT, Circuit Judge:

Petitioners seek review of the Federal Power Commission’s Opinion No. 664, which held that the Commission has authority, under the relicensing section of the Federal Power Act, to grant a new long-term license or an interim annual license for FPC Project No. 108 despite the refusal of petitioner Lac Courte Oreilles Band of Lake Superior Chippewa Indians (the Band) to consent to further use by the licensee (intervenor Northern States Power Company (Northern States)) of tribal lands underlying the project. Petitioners also object to the Commission’s issuance of annual licenses for Project No. 108 in 1972 and 1973. We hold that, under the circumstances of this case, the FPC was required to issue the annual licenses to the intervenor. In light of this disposition we hold that, pending the continuing administrative proceedings described below, the question of the Commission’s authority to license tribal lands notwithstanding tribal unwillingness to assent to such licensing is not ripe for review, although we believe the Commission premised its holding on an erroneous assumption and should therefore reevaluate its opinion, taking account of any relevant material being developed in the current proceedings.

I

FPC Project No. 108 is a reservoir and dam across the Chippewa River in Wisconsin consisting of approximately 29,000 acres, 525 of which are situated on tribal lands of the Band. Although the project itself produces no power, it is operated as a storage reservoir to regulate the flow of the Chippewa River for seven downstream hydroelectric plants. As part of a comprehensive system of headwater improvements on the Chippewa and Wisconsin Rivers and their tributaries, Project No. 108 was constructed pursuant to a 50-year license issued by the FPC on August 8, 1921 to the predecessor of intervenor Northern States, the current licensee.

Prior to expiration of the original license in 1971, Northern States filed with the FPC an application for a new license. No other license applications to operate Project No. 108 have been filed, although the United States Department of Agriculture, Forest Service, and the United States Department of the Interi- or have recommended that the United States take over, or “recapture,” operation and maintenance of Project No. 108 pursuant to Section 14 of the Federal Power Act. Petitioners, who intervened in the hearings concerning the recapture-relicensing issue, have expressed their desire for federal recapture of the project while asserting their objections to Northern States’ operation for eventual power generating purposes.

(a) Compensation; condemnation by Federal or State Government.
Upon not less than two years’ notice in writing from the Commission the United States shall have the right upon or after the expiration of any license to take over and thereafter to maintain and operate any project * * * upon the condition that before taking possession it shall pay the net investment of the licensee in the project
(b) Time of applications for new licenses; relicensing proceedings; Federal agency recommendations of take over by Government; stay of orders for new licenses; termination of stay; notice to Congress.
No earlier than five years before the expiration of any license, the Commission shall entertain applications for a new license and decide them in a relicensing proceeding pursuant to the provisions of section 808 of this title [see infra, 166 U.S.App.D.C. at---, 510 F.2d at 203-204], In ' any relicensing proceeding before the Commission any Federal department or agency may timely recommend, pursuant to such rules as the Commission shall prescribe, that the United States exercise its right to take over any project or 'projects. Thereafter, the Commission, if it does not itself recommend such action pursuant to the provisions of section 800(c) of this title [see note 7 infra], shall upon motion of such department or agency stay the effective date of any order issuing a license, except an order issuing an annual license in accordance with the proviso of section 808(a) of this title, for two years after the date of issuance of such order, after which period the stay shall terminate, unless terminated earlier upon motion of the department or agency requesting the stay or by action of Congress. The Commission shall notify the Congress of any stay granted pursuant to this subsection.

In petitioning to intervene before the Commission in the recapture-relicensing proceeding, the Band maintained that, pursuant to Section 16 of the Indian Reorganization Act of 1934, it had the power to prevent any unwanted use of tribal lands by a Commission licensee, and that, since the existence and operation of Project No. 108 disrupted the Band’s culture, affronted its respect for the environment, and prevented the growth of the Band’s traditional staple, wild rice, it denied its permission for further use of its land for the project. Moreover, the Band claimed that issuance of any license over this denial would be contrary to the terms of the Treaty of 1854 which established the Lac Courte Oreilles Reservation; since the Commission purportedly could not therefore make the requisite finding under Section 4(e) of the Federal Power Act that “the license will not interfere or be inconsistent with the purpose for which such reservation was created or acquired,” it allegedly lacked jurisdiction to issue a new license. Based on these assertions, the Band moved to restrict all future hearings on Project No. 108 to the issue of federal recapture, and to exclude any consideration of Northern States’ application for a new license. The Commission denied this motion, and that ruling was not appealed.

During the course of these still pending recapture-relicensing proceedings, the Commission’s secretary, acting pursuant to Section 15(a) of the Federal Power Act, issued interim annual licenses to Northern States in August of 1971, 1972, and 1973. On September 1, 1972 the Band filed an application for rehearing concerning the secretary’s public notice that the second of these annual licenses for Project No. 108 was issued to Northern States for the period August 8, 1972 to August 7, 1973. In granting the motion for rehearing, the Commission directed the parties to submit briefs “on the question of the jurisdiction of this Commission to issue both an annual license and a new license in Project No. 108 without the consent of the Lac Courte Oreilles Band.” After this briefing was completed the Commission, on August 6, 1973, issued the third annual license to Northern States, conditioning the grant on the fact that should the Commission decide, based on the previously submitted briefs, that it did not have jurisdiction to issue such an annual license, the license would terminate as of the date of the Commission’s opinion. On August 31, 1973 the Band applied for a rehearing with respect to issuance of that license, and on September 5, 1973 a similar application was filed by several intervenors. These petitions repeated the substance of the claims made by the Band in the recapture-relicensing proceedings.

On September 14, 1973 the Commission issued Opinion No. 664, the subject of this appeal. In concluding that opinion, the Commission declared:

(A) In exercising the authority conferred upon it by section 15 of the Federal Power Act, the Commission may grant a new license or an annual license for Project No. 108, notwithstanding the unwillingness of the Lac Courte Oreilles Band of Lake Superior Chippewa Indians to consent to the use by the licensee of tribal lands underlying such project.
(B) The petition and application for rehearing, filed herein on September 1, 1972, and the applications for rehearing filed on August 31, 1973, and September 5, 1973, are denied.

However, the Commission explicitly stated that its opinion was not to be construed as indicating any predisposition on the issues of recapture and relicensing, or as a finding under Section 4(e) of the Federal Power Act that a new license could issue consistent with the purposes for which the reservation was established; these issues are the subject of administrative hearings which, as already noted, are still pending.

Commissioner Moody nevertheless dissented, stating:

[W]e cannot, as a matter of law make the essential finding required by 4(e). By treaty and by statute, the Lac Courte Oreilles Band has been given sovereignty over tribal lands; this was, and continues to be, the “purpose for which such reservation was created.” With the Band’s unequivocal rejection of use of tribal lands by Northern States or any Commission licensee for power purposes, we have no lawful basis for the issuance of a license.

II

Section 15(a) of the Federal Power Act, 16 U.S.C. § 808(a) (1970), provides:

If the United States does not, at the expiration of the original license, exercise its right to take over, maintain, and operate any project or projects of the licensee, as provided in section 807 of this title,[] the commission is authorized to issue a new license to the original licensee upon such terms and conditions as may be authorized or required under the then existing laws and regulations, or to issue a new license under said terms and conditions to a new licensee, which license may cover any project or projects covered by the original license, and shall be issued on the condition that the new licensee shall, before taking possession of such- project or projects, pay such amount, and assume such contracts as the United States is required to do in the manner specified in section 807 of this title: Provided, That in the event the United States does not exercise the right to take over or does not issue a license to a new licensee, or issue a new license to the original licensee, upon reasonable terms, then the commission shall issue from year to year an annual license to the then licensee under the terms and conditions of the original license until the property is taken over or a new license is issued as aforesaid.

(Emphasis added.) Defending its grant of annual licenses to Northern States under this provision, the Commission asserted:

In this proceeding, the conditions are met: the United States had not exercised its right to take over, and a new license has not been granted. The operative word is “shall”. We had no option not to issue annual licenses in August 1971, 1972, and 1973 to the Northern States Power Compa- * * *

In essence, petitioners argue that this literal interpretation of Section 15, which accords the FPC a purely ministerial and nondi'scretionary function in the issuance of interim annual licenses, leads to incongruous results. Reasoning from the premise that the Treaty of 1854 and Section 16 of the Indian Reorganization Act do in fact accord the Band a veto power over undesired Commission licensing of its tribal lands, petitioners contend that this power would be vitiated unless Section 15 were interpreted to require annual licenses only when the Commission has jurisdiction to grant a new license under Section 4(e) of the Federal Power Act. This contention is supported by the hypothetical of a perpetual license: if the Band vetoes a proposed Section 4(e) license utilizing its lands, a literal interpretation of Section 15(a) would require annual licenses to issue until either congressional recapture of the project or other disposition under Commission order. But if Congress does not desire to recapture the project, the annual licenses would issue indefinitely, yielding a result which, under the hypothesis of a tribal veto of a long-term license, could not be directly achieved by the Commission. This result would therefore frustrate the presumed powers conferred on the Band by the Treaty of 1854 and the Indian Reorganization Act. Thus the Band contends that if it in fact possesses the power to veto any relicensing of the project, it necessarily follows that, in order to avoid the incongruity of indefinite annual licensing, it must also have the power to veto any interim annual license for the project. As Commissioner Moody stated in accepting the Band’s contentions in his dissent to Opinion No. 664, “the annual li-

censing provisions of Section 15(a) must be read as authorizing annual licenses only in those instances where the Commission is empowered to act on a relicense application.”

Assuming arguendo that the Commission erred in holding that it has the legal authority to issue a new license for Project No. 108 encompassing Indian tribal lands despite objections of the tribe with sovereignty over those lands, we agree with the Commission that Section 15(a) mandates the grant of annual licenses under the circumstances of this case. Not only the plain language of the statute, but also the legislative history of and the policies served by Section 15(a) support this result. However, since we believe the Band would be in error in its suggested interpretation of Section 15(a) even if it were correct in its claim to possess a veto power over issuance of long-term licenses, we feel constrained to amplify somewhat on the Commission’s relatively opaque reasoning.

The basic fallacy of the Band’s interpretation of Section 15(a) lies in its assumption that “the Commission’s authority to issue annual licenses derives from its concurrent consideration of a perfected application for a new license, and not from the expiring or expired license.” Congress fashioned Section 15 to prevent abrupt termination of a power project which should, in the public interest, be continued, but with respect to which the identity of the operator and the exact method of operation must be reevaluated. Admittedly, one possible disposition by the Commission at the expiration of a license would be issuance of a new license to a new applicant or to the original licensee. However, another possible disposition would entail a congressional decision to recapture the project. Indeed, Section 15(a) specifies that the Commission only has authority to issue a new long term license if Congress fails to exercise its recapture option. Section 15(a) annual licenses are designed to prevent a possible hiatus in the operation of a project while either of these decisions is being made, preserving the status quo at the expiration of a long-term license and thereby guaranteeing that “industries created by [Commission projects] and dependent upon them may not suffer.” The Band does not contend that Congress is without power to abrogate prior treaties or statutes concerning Indian tribal lands, so long as Congress acts with sufficiently specific intent and complies with constitutional requirements of due process and just compensation. And the Band accepts the fact that congressional action on recapture of Project No. 108 would constitute such a specific action respecting the relevant tribal lands. What the Band apparently fails to appreciate, however, is that by requiring issuance of annual licenses pending such congressional action, Section 15 affords the Commission and Congress time to make a reasoned decision concerning the desirability of federal takeover of a project, at the same time preserving the status quo while that decision is being made.

That Congress intended Section 15 to preserve its option of making a careful, deliberate judgment concerning disposition of a project at the expiration of an initial license term is evident in the legislative history of the 1968 amendments to the Federal Power Act, by which Congress established efficient, consolidated recapture-relicensing procedures. Congress specifically indicated

that if, after notice and opportunity for hearing, the Commission determines that the United States should take over any project or projects for public purposes, the Commission shall not issue a new license but shall submit its recommendation to Congress, together with such information as it considers appropriate. Until the Congress acts there would be an annual renewal of the expired license as provided under existing law.

Moreover, Congress had been made aware by the Commission that one of the fundamental choices upon license termination occurs when the licensee wants to abandon a project (and presumably fails to apply for a new license), but the public interest dictates that it be maintained in whole or in part for nonpower purposes. Admittedly, this could be effectuated by grant of a nonpower license to a new applicant, but it could also be done, in the absence of any application for a license for either power or nonpower use, through federal recapture of the project. And as indicated above, annual licenses were to issue until that congressional decision was made. It would indeed be anomalous if Section 15, which is plain on its face, w^re arbitrarily construed to deny Congress an opportunity to guarantee the continued operation of a project which the Government believes should be maintained in the public interest, but which no private concern believes would be feasible to operate and for which no new license applications are submitted at the expiration of an initial license period. And the situation is absolutely analogous when the Commission lacks- authority to issue a new license, but considers the project so important for the public good that Congress should be presented with the opportunity to either take over operation of the project or otherwise institute proceedings that would ensure continued private operation. Section 15 is the vehicle by which Congress reserved the option of taking such action on a project without detrimentally affecting the status quo during its deliberations.

Thus, even if we were to hold that the Indian Reorganization Act and the Treaty of 1854 conferred a veto power upon the Lac Courte Oreilles Band of Lake Superior Chippewa Indians with respect to grant of a new license or relicensing of Northern States, we would have to hold that the recapture-relicensing proceedings now pending before the Commission could continue, although limited to the issue of federal recapture. And pending a final determination of that issue, Section 15 embodies the congressional intent that licenses must issue to Northern States. Whatever the rights of a tribe to prevent an initial licensing of a project, once such a license has been issued Section 15 renders those rights subordinate to the congressional right to determine the most efficient and desirable disposition of that project upon ■ the termination of that license.

Nor need we worry about the possibility that Congress will in the end decide against federal recapture. Section 15 was fashioned to afford Congress the opportunity to make such a determination; its operative effect cannot be conditioned on speculation as to how Congress will utilize that opportunity. As long as Congress and the Commission are proceeding with due diligence in making a recapture determination (even under the hypothesis that relicensing is precluded due to lack of tribal consent), it is reasonable to interpret the language of the statute to dictate what its language plainly requires — “the commission shall issue from year to year an annual license to the then licensee under the terms and conditions of the original license until the property is taken over or a new license is issued.” (Emphasis added.) Indeed, we see no escape from holding that under the circumstances of this case, Northern States not only had the right, but also the obligation, to operate Project No. 108 under interim annual licenses. Considering the purposes served by Section 15, this result is as wise as a matter of policy as it is necessary as a matter of law.

The propriety of this interpretation is underscored by the circumstances of the case before us. As indicated above, the Commission is gathering data and opinions on which to base its recapture recommendations for Project No. 108 in a consolidated recapture-relicensing proceeding, as mandated by the 1968 amendments to thá Federal Power Act. Federal recapture of the project has been strenuously urged at those hearings by the Departments of Agriculture and the Interior; the Band, while continuously expressing its disapproval of any relicensing of its tribal lands that would permit operation of the storage reservoir as part of a power-generating system, has acquiesced in their proposal for recapture, under which the Government would operate the reservoir in a more environmentally acceptable manner. But if annual licenses cannot lawfully issue pending resolution of the recapture issue, the option of maintaining a reservoir under any circumstances may be lost. For although only 525 of the 29,-000 acres within the project are situated on Indian tribal lands, a portion of those tribal lands is so located that restoration of the lands to the tribe would require that the dam be removed and the whole reservoir drained. Moreover, the parties stipulated in oral argument that although the record in the recapture-relicensing proceeding had been closed, the Band and the Departments of Agriculture and the Interior had moved to reopen it for the purpose of introducing further evidence supporting recapture; this motion was opposed by Northern States, which was willing to have the recapture-relicensing decision made as expeditiously as possible. It is thus clear that the Commission is diligently attempting to make a recapture-relicensing determination, and that delay in reaching an ultimate resolution of that question is in fact attributable to closer examination of the recapture option which the Band wants Congress to exereise.

We of course recognize the merits of the Band’s contention that the literal language of Section 15 could produce absurd results in the hypothetical “perpetual license” situation. But as the Commission noted:

We will not address ourselves to the hypothetical question of a perpetual franchise. We instead observe that annual licenses for Project No. 108 will cease when this proceeding is completed.

We are confident that the Commission intended by this statement to indicate that if recapture were not effectuated and it could not make the Section 4(e) finding requisite for issuance of a new long-term license, it would not regard Section 15 as mandating indefinite annual licensing. Such an interpretation is, we believe, necessary to a coherent and reasonable interpretation of Section 15. But short of that eventuality, Section 15 requires interim annual licenses. For as our previous discussion should make clear, Section 15 contemplates annual licenses to preserve either the alternative of issuing a new license or that of federal recapture. Even if the alternative of a new license is obviated, whether because no applications for a long-term license are filed or because the Commission lacks authority for any reason to issue a new license, Section 15 does not lead to absurd results since it preserves the congressional option to act. However, if Congress decides against federal recapture, then continued operation of Section 15 would indeed serve no rational purpose if a new license cannot issue. Under the circumstances of the case sub judice, this would mean that if Congress does not recapture the project, the Band could litigate its contention that the Indian Reorganization Act and relevant treaty provisions vest it with a veto power which deprives the Commission of all authority to issue any licenses over its failure to assent.

Ill

As should be evident from our discussion of the validity of the annual licenses which have been issued to Northern States, our decision in no way turns upon the Commission’s authority vel non to issue a long term license for Project No. 108 over the objections of the tribe with sovereignty over the affected lands. Moreover, the Commission may recommend federal recapture of the project or may be unable, for a variety of reasons, to make the Section 4(e) determination that a new license “will not interfere or be inconsistent with” the purpose for which the Lac Courte Oreilles Band of Lake Superior Chippewa Indians’ reservation was established. Either of these results would moot the controversy and avoid the necessity of our passing on the question of the Commission’s power to effectively ignore the Band’s objections to the long-term licensing of its tribal lands for power generating purposes. Thus, since interim annual licenses must issue in any event while the recapturerelicensing hearings proceed, the Commission’s ruling does not now have an immediate and significant impact upon petitioners. Moreover, our review of the authority of the Commission to license Northern States ovér the Band’s lack of assent may be further informed by developments in those recapture-relicensing proceedings now being conducted by the Commission, should the Commission issue a new license and thereby render review necessary and appropriate. We hold that, in this posture, the determination of the Commission is not ripe for review. Although we therefore decline to vacate Opinion No. 664 or to decide the basic question addressed therein, we nevertheless believe that in our role as a reviewing court we have an obligation to point out a plain error in the opinion which, if not corrected, might cause unnecessary delay and waste of Commission and judicial resources in any later review proceedings.

Having determined that the affected tribal lands were part of a “reservation” within the meaning of the Federal Power Act, the Commission observed:

The issue, as we see it, is whether we are dealing with a “reservation” for
purposes of the Power Acts, not what kind of rights or interests the pertinent Indians have in that reservation. * * * Congress, by enacting the Federal Water Power Act of 1920, abrogated the 1854 Treaty [with the Chippewas] to the extent necessary to permit construction of hydroelectric projects on the lands reserved to the Band.
* * * * * &
Two provisions of the 1920 Act, contained in sections 4(d) and 10(e), make plain the Congress’ intent to authorize the Federal Power Commission to exercise its responsibilities with respect to land on Indian reservations. Section 4(d) authorized the Commission to issue licenses for hydroelectric projects “along, from or in any of the navigable waters of the United States, or upon any part of the public lands and reservations of the United States”; and the section further provided
That licenses shall be issued within any reservation only after a finding by the commission that the license will not interfere or be inconsistent with the purpose for which such reservation was created or acquired, and shall be subject to and contain such conditions as the Secretary of the department under whose supervision such reservation falls shall deem necessary for the adequate protection and utilization of such reservation . . . (41 Stat. 1065).
Section 10(e) of the 1920 Act provided for the payment by the licensee to the United States of reasonable annual charges, with the proviso
That when licenses are issued involving the use of Government dams or other structures owned by the United States or tribal lands embraced within Indian reservations the commission shall fix a reasonable annual charge for the use thereof .. . (41 Stat. 1069).
In our judgment, these explicit references in the 1920 Act to the licensing of projects on Indian reservations make clear the Congress’ purpose to abrogate such a treaty as that of September 30, 1854, if necessary and to the extent necessary to permit the licensing, by the Federal Power Commission of projects on Indian reserved land. We thus hold that the rights of the Lac Courte Oreilles Band under the 1854 Treaty were diminished by the Congress to the extent necessary to permit the Commission to exercise the licensing authority conferred upon it by the Federal Water Power Act of 1920.
* 5k * * * *
[W]e reach that conclusion in light of the plain statutory language. That is, the land made available for the “use” of the Band under the 1854 Treaty was, subsequently, also made subject to the authority of this Commission, this as shown by section [sic] 3, 4(d), and 10(e) of the 1920 Act and corresponding sections of the 1935 Act; and if the Treaty and the statutes are in conflict, the later in time prevails.

The logic behind this reasoning escapes us. There is no doubt that the 1920 Act, as the Commission argues and the quoted provisions indicate, gave the Commission authority to issue licenses affecting Indian tribal lands. Yet it is also plain that the Act conditioned the Commission’s authority to grant such licenses on its ability to find “that the license will not interfere or be inconsistent with the purpose for which such reservation was created.” This determination can obviously only be made by ascertaining the rights conferred upon the Band by the treaties establishing the reservation. Indeed, if those rights are automatically abrogated to the extent necessary to allow every license the Commission wishes to issue, it is difficult to see why the Commission need make any determination under Section 4(e) in the pending recapture-relicensing proceedings. Yet the Commission, in Opinion No. 664, inconsistently stated that such a determination would still be required.

We intimate no views as to what rights the relevant treaties confer upon the Band, or what light Section 16 of the Indian Reorganization Act and the later 1935 amendments to Section 10(e) of the Federal Water Power Act shed upon the existence or scope of those rights. These are issues which need not now be reached, and which we leave to the Commission to ascertain before it decides to issue any new license for Project No. 108. We merely wish to indicate to the Commission that those rights must be assessed, as required by Section 4(e), as a precondition to issuance of any long-term license affecting the Band’s tribal lands.

The issuance to Northern States of interim annual licenses is affirmed, and the question of whether the Section 4(e) determination can be made despite the Band’s failure to assent to any further long-term licenses covering its tribal lands is left to the Commission for further consideration in the pending recapture-relicensing proceedings.

So ordered.

MacKINNON, Circuit Judge

(concurring and dissenting):

I concur generally in the forepart of this opinion but in my view the expressions of opinion as to section 4(e) are unnecessary to our disposition of the principal issue, i. e., the annual renewals. Accordingly, I do not join in the comments with respect to section 4(e) that might be considered as holdings. This has particular reference to the comments beginning at the end of the first paragraph of Part III on page 210 and continuing thereafter to the end of the opinion and to footnote 22.

If section 4(e) is given an overly literal interpretation it would prevent the use of any lands in a “reservation” (including tribal lands) in a power project, if as Commissioner Moody’s dissent states, the purpose for which the reservation was created was to “give sovereignty over tribal lands.” That might be stated to be the broad purpose behind the creation of every Indian reservation. Thus, no reservation lands could ever be used in power projects. Such interpretation, however, would be internally inconsistent with the remainder of the 4(e) proviso, and a number of other provisions in the Act, and the legislative history thereof, which definitely contemplate and provide for incorporating such reservation lands into federal power projects on proper terms. Probably, the congressional intent of 4(e) was to prohibit any use of land within a reservation that would substantially interfere with the purpose for which such reservation was created or acquired. But I would not express any final opinion on this phase of the case.'

The majority opinion asserts that the Commission stated that a “determination [under 4(e)] would still be required." Opinion, supra, 166 U.S.App.D.C. at -, 510 F.2d at 212 and note 49. What the Commission did say in its opinion was that it was “not now, in this order, undertaking to make any statutory finding that may be required under section 4(e) of the 1935 Act.” App. 55. The Commission thus left the matter open.

      . Northern States Power Co., Project No. 108, Opinion and Order Concerning Commission Authority to Issue New License or Annual License for Hydroelectric Project on Certain Indian Tribal Lands, 50 FPC 753 (1973) (Nassikas, Chairman) (3-1 decision).

      . 16 U.S.C. § 808(a)(1970), quoted infra, 166 U.S.App.D.C. at ---, 510 F.2d at 203-204.

      . See infra, 166 U.S.App.D.C. at ---; ---, 510 F.2d at 200-203, 208-209.

      . The reservoir itself covers about 17,600 acres, constituting the third largest lake in Wisconsin. Of the 29,000 acres in the project, 7,761 were lands reserved for the habitat of the Band by the Treaty of September 30, 1854, 10 Stat. 1109. Much of this land had been subsequently placed in the hands of individual Indians through an allotment program conducted pursuant to Article 3 of the Treaty, and those Indians could dispose of the land as they saw fit. Moreover, in 1901 Congress enacted a law permitting condemnation of allotted fee lands in the same manner as lands owned in fee by non-Indians. 25 U.S.C. § 357 (1970). Through purchase and condemnation, Northern States acquired title to about 5,500 acres out of this total, and easements over an additional 1,745 acres. The remaining 525 acres of tribal land are the subject of the order sub judice.

      It should be noted that when the original license for Project No. 108 was issued, only 315 acres of tribal land were to be affected, but after the reservoir was filled “it was determined” that 525.5 acres had been flooded (including inundation of one of the villages on the reservation), and the license was amended accordingly. See Opinion No. 664, 50 FPC at 756-758; brief for respondent FPC at 6; brief of petitioner American Indian Movement National Directors, Inc. (hereinafter AIM) at 1-2. Pursuant to § 10(e) of the Federal Power Act, 16 U.S.C. § 803(e) (1970), see note 38 infra, an annual charge, payable to the Government for use by the tribe, was fixed at $1,389.09 for the licensed lands.

      . Section 14 of the Federal Power Act, 16 U.S.C. § 807 (1970), provides in pertinent part:

      . Intervenors included the Band, Save the Chippewa Flowage Alliance, Inc., Wisconsin Resources Conservation Council, and petitioners Great Lakes Inter-Tribal Council, Inc. and American Indian Movement National Directors, Inc.

      . Until 1968, about two years before a license was to expire the Commission would prepare a report, based on preliminary investigations, as to whether federal recapture at the expiration date was desirable. The report and attendant recommendations would be sent to Congress and, if Congress took no action before the license expiration date, the Commission would consider that it could proceed with relicensing unless the relicensing hearing developed new information which would warrant a further evaluation of the recapture question. See generally H.R.Rep.No.1643, 90th Cong., 2d Sess. (1968), U.S.Code Cong. & Admin.News, 1968, p. 3081 (House report on bill whose language was substituted for Senate bill, which was passed by both Houses).
      In 1968 Congress amended the Federal Power Act to alter this practice. Section 14(b) of the Act, 16 U.S.C. § 807(b) (1970), now provides that the Commission consider recapture and relicensing in a single proceeding. See note 5 supra. See generally H.R. Rep.No.1643, supra. If the Commission determines that the United States should exercise its right to take over the project, “the Commission shall not issue a new license to the original licensee or a new licensee but shall submit its recommendation to Congress” for its consideration. Federal Power Act § 7(c), 16 U.S.C. § 800(c) (1970). “Until the Congress acts, there would be an annual renewal of the expired license.” See H.R.Rep.No.1643, supra, at 5, U.S.Code Cong. & Admin.News 1968, p. 3084. If the Commission determines that recapture is not desirable and that a new license should issue, it can proceed without referring the matter to Congress. Any interested Government department or agency may, however, recommend recapture and move to stay for two years the effectiveness of any order issuing a new license, thereby according Congress an opportunity to consider the recapture-relicensing issue. Federal Power Act § 14(b), 16 U.S.C. § 807(b) (1970); see note 5 supra.

      . See, e. g., Petition to Intervene, Motion for Regional Hearing, and Motion for Limitation of Issues (Oct. 4, 1971), reprinted in Joint Appendix (JA) at 1-9.

      . See, e. g., Opinion No. 664, 50 FPC at 755-756, 758-759; Tribal Resolution No. 73-54, reprinted in brief for AIM at 30-31; Tribal Resolution No. 73-55, reprinted in JA at 49.
      There is a 17-foot average fluctuation in the water level of the reservoir under current operating conditions. The Band asserts that rice growth is impossible under these conditions, which have allegedly had an adverse effect on the environment. Under the recapture proposal supported by the Band, the water level would be stabilized and the lake maintained, although not for power production purposes; with a proposed 2-foot average water fluctuation, the growth of wild rice would again be possible. Moreover, the recapture proposal contemplates a return to the Band of the 5,500 acres of allotted Indian lands which had been acquired by Northern States through purchase or condemnation. See note 4, supra.

      . Under § 16 of the Indian Reorganization Act, 25 U.S.C. § 476 (1970), a tribe organized under the Act may adopt a constitution which would
      vest in such tribe or its tribal council * * [the right] to prevent the sale, disposition, lease, or encumbrance of tribal lands, interests in lands, or other tribal assets without the consent of the tribe * * *.
      In 1966 the Band organized under the Act, and its constitution and bylaws were approved by the Secretary of the Interior on Nov. 2, 1966. The § 16 power to prevent disposition or encumbrance of tribal land was specifically incorporated in Article V, § 1(b) of the tribal constitution and bylaws.

      . Section 4(e) of the Federal Power Act, 16 U.S.C. § 797(e) (1970), authorizes the Commission:
      To issue licenses * * * for the purpose of constructing, operating, and maintaining dams, water conduits, reservoirs, * * * or' other project works necessary or convenient for the * * * development, transmission, and utilization of power * * * upon any part of the public lands and reservations of the United States * * * except as herein provided: Provided, That licenses shall be issued within any reservation only after a finding by the Commission that the license will not interfere or be inconsistent with the purpose for which such reservation was created or acquired, and shall be subject to and contain such conditions as the Secretary of the department under whose supervision such reservation falls shall deem necessary for the adequate protection and utilization of such reservations!.]
      (Emphasis added.) Section 3(2) of the Federal Power Act, 16 U.S.C. § 796(2) (1970), defines “reservations” to include “tribal lands embraced within Indian reservations.”

      . Order Providing for Hearing, Prescribing Procedure, and Ruling on Motions (June 28, 1972), reprinted in JA at 11-17.

      . See infra, 166 U.S.App.D.C. at ---, 510 F.2d at 203-204.

      . See Petition and Application for Rehearing, reprinted in JA at 18-23. The Band was supported in its petition and application for rehearing by the other four intervenors, see note 6 supra, to the main recapture-relicensing proceeding.

      . Order Providing for the Submission of Briefs at 3 (Feb. 28, 1973), reprinted in JA at 46.

      . Those intervening were the organizations listed at note 6 supra, as well as the Northern Environmental Council, Inc.

      . 50 FPC at 776.

      . Id. at 756. Although the Commission at one point in its opinion indicated that “we are not now, in this order, undertaking. to make any statutory finding that may be required of us under Section 4(e) of the 1935 Act,” id. at 767 (emphasis added), the conditional was intended only as a recognition that if Congress decided to recapture the project, § 4(e) findings would obviously not have to be made. However, the Commission realized that if there was no federal recapture it would have to “make the necessary findings under Section 4(e) to support a[ny] further license.” Id. at 770.

      . 50 FPC at 777.

      . See note 5 supra.

      . 50 FPC at 773. The Commission also quoted § 9(b) of the Administrative Procedure Act (APA), 5 U.S.C. § 558 (1970), as an alternative statutory basis for its purported duty to issue annual licenses to Northern States. That section provides in part:
      When the licensee has made timely and sufficient application for a renewal or a new license in accordance with agency rules, a license with reference to an activity of a continuing nature does not expire until the application has been finally determined by the agency.
      The House Report on the 1968 amendments to the Federal Power Act, which altered the recapture-relicensing procedure, see note 5 supra, stated:
      Just as in the case of original licensing the controlling criteria [in the recapture-relicensing proceeding] would be the comprehensive development standard of section 10(a) of the Federal Power Act. In view of this fact the relicensing proceeding would be deemed to involve “initial licensing” within the context of the Administrative Procedure Act rather than “license renewal”.
      H.R.Rep.No.1643, supra note 7, at 5, U.S.Code Cong. & Admin.News 1968, p. 3084. We doubt, however, that this statement was intended to have any effect on the APA interim license provisions, since that section requires continuation of a prior license even when a licensee has made a timely and sufficient application for a new license. Rather, the Report appeared to be directed at the substantive standard for issuing a new license; it was to be awarded to the applicant which would provide the optimum development and accommodation (where a conflict arises) in terms of resource values, and not reissued on a pro forma basis to the old licensee. See generally id. at 5, 9-10.
      In any event, on the view of the case we develop in text the APA issue need not be reached, particularly since it would accord Northern States fewer rights than would § 15(a) with respect to Project No. 108. If § 9 of the APA were the only relevant provision, the Band would be on solid ground in arguing that the Commission must have authority to issue a new license before Northern States could continue operations after the nominal license termination date, since that section requires that there be a “timely and sufficient” application for a new license or license renewal (emphasis added). However, we do not reach that issue in our decision today, since we hold that even if the Commission could not issue a new license over the objections of the Band, § 15(a) of the Federal Power Act mandates that annual licenses issue until Congress has had an opportunity to evaluate whether it desires to exercise its option of recapturing the project. See generally infra, 166 U.S.App.D.C. at ---, 510 F.2d at 205-210.

      . Northern States suggests that § 4(e) of the Federal Power Act, see note 11 supra, applies only to “the issuance of original licenses * * * [and] is not applicable to a relicensing proceeding under section 15 of the Act.” Brief for Northern States Power Company at 7 n.l. Although we agree that § 15 governs issuance of interim annual licenses pending a recapture-relicensing determination, it is clear that any new license, whether issued to the original licensee or to a new applicant, must be issued according to, inter alia, the standards of Federal Power Act § 10, 16 U.S.C. § 803 (1970) (stating that "all licenses issued under this subchapter shall be on the following [prescribed] conditions”) (emphasis added), see note 21 supra, and Federal Power Act § 4(e), 16 U.S.C. § 797(e) (1970) (empowering the Commission to issue licenses, but specifying that such licenses may only issue if the Commission can make certain specified findings), see, e. g., Opinion No. 664, 50 FPC at 756, 767, 770; notes 11, 18 supra; cf. FPC v. Tuscarora Indian Nation, 362 U.S. 99, 110— 111, 115, 80 S.Ct. 543, 4 L.Ed.2d 584 (1960).

      . It would also allegedly frustrate the § 4(e) requirement that licenses can only issue when they would “not interfere or be inconsistent with” the purpose for which the reservation was created. See note 11 supra.

      . See generally brief of the Band at 34-39. See also brief of AIM at 33-35.

      . 50 FPC at 776 n.l.

      . Brief of the Band at 35. See also brief of AIM at 34. The AIM brief also states that if “a complete application for a new license is not submitted, the Commission does not have jurisdiction to issue annual licenses to an undeserving licensee,” implying that the failure to submit an application for a new license renders an old licensee “undeserving” of annual licenses. To the contrary, an old licensee has an obligation to continue operation of a project under annual licenses pending Commission disposition, whether he desires to or not. Indeed, this is the case even if the licensee submits an application but the Commission considers that the project would be better run by the Government. See infra, 166 U.S.App.D.C. at ---, 510 F.2d at 206-207.

      . At the expiration of a license, the Commission must decide who can best run the project, see note 21 supra, and may alter the conditions under which the project is to be operated, see supra, 166 U.S.App.D.C. at ---, 510 F.2d at 203-204.

      . Section 15 begins by stating, “If the United States does not * * * [exercise its right to recapture the project], the commission is authorized” to issue a new license. See supra, 166 U.S.App.D.C. at -, 510 F.2d at 203. See also H.R.Rep.No.1643, supra, note 7, at 3.

      . S.Rep.No.180, 66th Cong., 1st Sess., 2 (1919) (legislative history of Federal Water Power Act, which first included § 15 and which became the Federal Power Act of 1935).

      . Brief of the Band at 11-17; see, e. g., Menominee Tribe of Indians v. United States, 391 U.S. 404, 413, 88 S.Ct. 1705, 20 L.Ed.2d 697 (1968); Lone Wolf v. Hitchcock, 187 U.S. 553, 566, 23 S.Ct. 216, 47 L.Ed. 299 (1903); Bennett County, South Dakota v. United States, 8 Cir., 394 F.2d 8, 11-12 (1968), and cases cited therein. See also note 38 infra.

      . See, e. g., brief of the Band at 25-26 (when Indians object to license issuance “Congress, and not the Commission, is the final arbiter”).

      . See note 7 supra.

      . H.R.Rep.No.1643, supra note 7, at 5, U.S. Code Cong. & Admin.News 1968, p. 3084 (emphasis added); see note 7 supra. See also S.Rep.No.1319, 90th Cong., 2d Sess., 6 (1968). Moreover, although Congress accorded interested agencies the power to require the Commission to stay issuance of new licenses, it explicitly excluded interim annual licenses from this power. See note 5 supra.

      The legislative history of the original § 15, ■ which first appeared in the conference report to the Federal Power Act of 1920, see H.R. Rep.No.1147, 65th Cong., 3d Sess., 9 (1919), is rather scant. However, in explaining the conference report, the Chairman of the Special Water Committee of the House stated that the annual license provisions were requested by the Senate conferees, who “were very insistent upon not having a possible hiatus” in the operation of a project until Congress had acted or a new license had been granted. 57 Cong.Rec. 4637 (1919) (remarks of Rep. Sims). See also S.Rep.No.180, 'supra note 29, at 2 (“The works must be continued in operation at the end of 50 years in order that the industries created' by them may not suffer.”).

      . See, e. g., H.R.Rep.No.1643, supra note 7, at 9 (letter to Speaker of the House from Chairman of Federal Power Commission).

      . Congress explicitly provided the Commission the power to accomplish this by enacting § 15(b) of the Federal Power Act in 1968. See 16 U.S.C. § 808(b) (1970). Such licenses were, however, to be temporary, to be terminable as soon as any state, municipality, interstate agency, or federal agency other than the Commission which is authorized and willing to take over regulatory responsibility does so. See id.

      . Congress could, if it wished, pass special legislation or institute eminent domain proceedings that would place operation of a project in private hands for operation for the public good, since the Fifth Amendment’s “public use” language refers to the purpose for which something is employed, not to the identity of the operator. See generally Nichols’, Eminent Domain §§ 3.21 [2], 7.5-7.51 (rev. 3d ed., J. Sackman ed. 1974).

      . It is no response to say that Congress should make these decisions before expiration of the initial license term. The inclusion of § 15(a) in the Act and the provisions by which Congress specified consolidated recapture-relicensing proceedings indicate that Congress clearly contemplated that the hearings held by the Commission concerning these issues would take time, and would in all likelihood continue after the nominal license expiration date. Moreover, even if the Band did have a veto power over issuance of new long-term licenses, it is evident that Congress would have to make its determinations after the license expiration date if the Indians merely withheld any indication of their intention to exercise any such veto until at or very near -the time the initial license was set to expire; in such a situation, the need for an early congressional recapture-relicensing determination could not be anticipated and accounted for by prior congressional action. Thus we believe Commission and congressional action is proper even significantly after the license expiration date, and interim licenses should issue so long as the Commission is proceeding in good faith with the hearings necessary to make a proper disposition of the project. See also infra, 166 U.S.App.D.C. at ---, 510 F.2d at 207-209.

      . This result does not entail in a taking without just compensation under the Fifth Amendment. Section 10(e) of the Federal Power Act, 16 U.S.C. § 803(e) (1970), requires the licensee to pay a reasonable annual charge to the United States “recompensing it for the use, occupancy, and enjoyment of its lands,” and § 17 of the Federal Power Act, 16 U.S.C. § 810 (1970), provides that “[ajll proceeds from any Indian reservation shall be placed to the credit of the Indians of such reservation.” This compensation would continue during the interim annual licensing, since § 15(a) renders those interim licenses subject to “the terms and conditions of the original license.” Moreover, for long-term licenses issued after 1935, § 10(e) subjects fixing of the reasonable annual license charges “to the approval of the Indian .tribe having jurisdiction” over the affected tribal lands.

      . See note 9 supra. Tribal consent is of course not a prerequisite to congressional action. See supra, 166 U.S.App.D.C. at ---, 510 F.2d at 206, notes 30 & 31. Nevertheless, the Band does appear to desire federal recapture under the proposals submitted by the Department of Agriculture and the Interior. Indeed, the Band did not seek an abortion of the pending Commission proceedings, which might transpire if annual licenses cannot lawfully issue. Rather, it merely sought to limit them to the issue of federal recapture. See supra, 166 U.S.App.D.C. at -, 510 F.2d at 202.

      . Section 23(b) of the Federal Power Act, 16 U.S.C. § 817 (1970), would render it unlawful for Northern States to operate Project No. 108 in such a manner that tribal lands were inundated unless the company had a valid license from the Commission covering the affected lands.

      . The Commission has since granted the Departments’ joint petition to reopen the record so that a Land Use and Resource Management Plan could be introduced into evidence. See Order Reopening the Proceeding (FPC, issued Feb. 14, 1975). However, to avoid “an indefinite delay,” the Commission ordered that the Plan be filed not later than eight months from the date of the order, the shortest interval within which the Departments could prepare the Plan. Id. at 6.

      . The Band suggests that the Commission’s interpretation of the statute would require the issuance of indefinite annual licenses in a situation in which no one seeks a new license and the Government does not believe federal recapture is appropriate, as well as in the hypothetical situation noted supra 166 U.S.App.D.C. at ---, 510 F.2d at 204-205. See brief of the Band at 38. However, as we indicate below in text, an interpretation of § 15(a) which says that interim annual licenses must issue when one of the possible dispositions (whether relicensing or recapture) cannot occur, but the other is still possible and is still being actively considered, does not mean that § 15(a) must be similarly interpreted when neither possible disposition can occur, and neither is still being considered. In any event, even if annual licenses were required in the situation posed by the Band, the Commission and the licensee could achieve their mutual desire to terminate operation of the project through the voluntary surrender provisions of § 6 of the Federal Power Act, 16 U.S.C. § 799 (1970).

      . 50 FPC at 773.

      . It is well established, as the Band claims, that there is a judicial presumption against imputing to Congress an intent to produce an absurd, clearly unintended result. See, e. g., Red River Broadcasting Co. v. FCC, 69 App. D.C. 1, 5-6, 98 F.2d 282, 286-287, cert. denied, 305 U.S. 625, 59 S.Ct. 86, 83 L.Ed. 400 (1938). Our disagreement with the Band stems from the fact that, although we believe there are situations in which a strict interpretation of § 15(a) could produce such a result, we do not find this to be such a case.

      . If the Commission recommends against federal recapture, the Departments of Agriculture and the Interior, or any other federal agency, could still require that the effective date of any order issuing a new license be stayed for up to two years, thereby affording Congress an opportunity to overrule such a determination. See note 5 supra. Presumably the Band could appeal the initial agency order, cf. infra, 166 U.S.App.D.C. at ---, 510 F.2d at 209-210, although any judicial injunction against a new license would probably have to be stayed while Congress had the two-year period to itself overrule the Commission determination.

      . See supra, 166 U.S.App.D.C. at ---, 510 F.2d at 203 and notes 18, 22.

      . See, e. g., Abbott Laboratories v. Gardner, 387 U.S. 136, 148-149, 87 S.Ct. 1507, 1515, 18 L.Ed.2d 681 (1967) (ripeness doctrine “protect[s] the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties”).
      Indeed, the question whether the Band has a veto power over unwanted disposition of its tribal lands was only appealable because annual licenses have been issuing. Had that question not been inextricably linked to the Band’s interpretation of § 15(a), see supra, 166 U.S.App.D.C. at ---, 510 F.2d at 204-205, it is doubtful we would have had jurisdiction, under the “party * * * aggrieved by an order” standard of § 313 of the Federal Power Act, 16 U.S.C. § 8251 (1970), to review the portion of Opinion No. 664 addressing that question. Cf. Pacific Gas & Electric Co. v. FPC, 165 U.S.App.D.C. 371, 383-384, 506 F.2d 33, 45-46 (1974) (similar standard of § 19(b) of the Natural Gas Act, 15 U.S.C. § 717r(b) (1970)). Since our rejection of the Band’s interpretation of § 15(a) is valid even assuming arguendo that the Commission erred in its holding concerning the alleged tribal veto power, we decline to address the merits of the Commission’s holding.

      . Opinion No. 664, 50 FPC at 760-761; see note 11 supra.

      . 50 FPC at 761-763 (emphasis added).

      . Id at 756; see note 18 supra.

      . See supra, 166 U.S.App.D.C. at ---, 510 F.2d at 203.

      . See note 38 supra.

      . The pertinent part of § 4(e) provides:
      [Licenses shall be issued within any reservation only after a finding by the Commission that the license will not interfere or be inconsistent with the purpose for which such reservation was created or acquired, and shall be subject to and contain such conditions as the Secretary of the department under whose supervision such reservation falls shall deem necessary for the adequate protection and utilization of such reservations
      16 U.S.C. § 797(e).