Hardin v. Kentucky Utilities Company

Respondent, a private utility company, sued to enjoin the Tennessee Valley Authority (TVA) from supplying TVA power in alleged violation of § 15d of the TVA Act for use in two small Tennessee towns where, as of July 1, 1957, respondent had supplied 94% of the electric power and TVA 6%. At that time TVA supplied 62% of the power used in all Claiborne County. It supplied most of the county's rural areas, and on a relatively unprofitable basis. Respondent's retail rates in the two towns were about 2½ times those of TVA. Section 15d of the Act bars TVA from expanding sales outside "the area for which [it] or its distributors were the primary source of power on July 1, 1957." The District Court upheld the determination of the TVA Board of Directors that Claiborne County as a whole constituted TVA's primary service "area" and dismissed the action. The Court of Appeals reversed, holding that the towns and a narrow corridor between them and respondent's main service area in nearby Kentucky constituted the "area." Both courts ruled against petitioner's contention that the respondent lacked standing to sue.

Held:


 * 1. Respondent, being within the class of private utilities which § 15d, is designed to protect from TVA competition, has standing to maintain this suit. Pp. 5-7.


 * 2. TVA's determination that Claiborne County constituted the primary service "area" within the meaning of § 15d should be upheld since it was within the range of permissible choices contemplated by the Act and had reasonable economic and technical support in relation to the statutory purpose of controlling but not altogether prohibiting TVA's territorial expansion. Pp. 8-13.

375 F. 2d 403, reversed.

William R. Stanifer argued the cause for petitioners in Nos. 40 and 50. With him on the brief for petitioners in No. 40 was ''Philip P. Ardery. Clyde Y. Cridlin'' was on the brief for petitioner in No. 50. Robert H. Marquis argued the cause for petitioner in No. 51. With him on the brief were Acting Solicitor General Spritzer, Richard A. Posner, Charles J. McCarthy and Thomas A. Pedersen.

Malcolm Y. Marshall argued the cause for respondent in all three cases. With him on the brief were Squire R. Ogden and James S. Welch.