United States District Court, W.D. Virginia, Roanoke Division
NORMAN K. MOON, District Judge.
Appalachian Power Company ("APCO, " or "Plaintiff") filed this action on October 3, 2014 pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201 et seq., and the Federal Power Act, 16 U.S.C. §§ 791a et seq. Its complaint arises out of the construction of a boat dock by William Nissen, II and Lora J. Nissen (collectively "Nissens, " or "Defendants") on their Smith Mountain Lake property. Plaintiff argues that this construction contravenes both a flowage easement it holds on the property and a license order granted to it by the Federal Energy Regulatory Commission ("FERC"). On February 13, 2015, Defendants filed an Answer and Counterclaim, wherein they requested five separate declaratory judgments.
This matter is now before the Court on Plaintiff's Motion to Dismiss Defendants' Counterclaims. A hearing was held on April 10, 2015, wherein Defendants conceded their first, second, and fifth requests for declaratory judgment. Accordingly I will address only Defendants' third request, wherein they ask me to declare that APCO lacks a property interest sufficient to compel the Nissens to take certain actions on their land, and their fourth request, wherein they ask me to declare that a taking has occurred. For the reasons that follow, I will grant Plaintiff's motion in part and deny it in part.
APCO operates the Smith Mountain Hydroelectric Project ("the Project") pursuant to a license issued to it by FERC. The Project boundary encompasses the reservoir at Smith Mountain Lake and all lands on the shoreline of the lake falling below a specific elevation, generally 800 feet above mean sea level ("FMSL"). When FERC initially granted APCO the license in 1960, it required APCO to acquire title to or the right to use all property necessary to construct, maintain, and operate the Project. Accordingly, APCO obtained property rights to all lands abutting the lake and falling below 800 FMSL, and now either owns these lands in fee or holds flowage right and easement deeds on them.
Plaintiff manages the Project in accordance with a Shoreline Management Plan ("SMP") which it developed in 2003 and FERC later incorporated into the terms of the license that it issued APCO. The SMP provides detailed guidelines as to how development should be managed within the Project's boundaries. It imposes various restrictions aimed at promoting shoreline stabilization and the protection of aesthetic and environmental quality. APCO polices lakeside landowners' compliance with the SMP through a permitting program, whereby it issues permits authorizing specified uses of Project land and waters. For example, the SMP establishes certain "Vegetative Cover Regulations, " which require that vegetation within the Project boundary be preserved, and that none may be removed without a permit from APCO. The SMP also limits what can be constructed between an elevation of 795 and 800 FMSL, restricting structures within this zone to those that provide access to a dock, as well as pilings or cables installed for purposes of enhancing the stability of a floating structure. Docks may be built upon receiving a permit from APCO, but must comply with SMP regulations regarding their location, length, height, and maximum size.
Defendants own a parcel of land abutting Smith Mountain Lake. Their property is located at 164 Windmere Trail, Moneta, Virginia 24121 and consists of approximately 1.4 acres, with some land lying above and some land lying below the Project boundary of 800 FMSL. The parcel was conveyed to Defendants subject to all easements, restrictions, reservations and covenants of record by deed dated April 14, 2014. Plaintiff APCO had previously obtained an interest in this property by means of a Flowage Right and Easement Deed ("Flowage Easement") dated September 12, 1960, by and between APCO and Defendants' predecessors-in-title. The pertinent provisions of the Flowage Easement read as follows:
NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) and other valuable considerations in hand paid by Appalachian to Grantors, the receipt of which is hereby acknowledged, Grantors hereby grant, bargain, sell and convey with covenants of general warranty, unto Appalachian forever the right to overflow and/or affect so much of said premises as may be overflowed and/or affected, continuously or from time to time in any manner whatsoever, as the result of the construction, existence, operation and/or maintenance of the aforesaid dam and/or power station, the impounding of the waters of said river and tributaries and/or the varying of the level of the so impounded waters by reason of the operation of said power station, including any pumping as part of such operation.
ALSO, for the above mentioned considerations, Grantors hereby grant to Appalachian the further right to enter upon said premises at any time and from time to time and, at Appalachian's discretion, to cut, burn and/or remove therefrom any and all buildings, structures, improvements, trees, bushes, driftwood and other objects and debris of any and every kind or description which are or may hereafter be located on the portion of said premises below the contour the elevation of which is 800 feet....
Grantors shall have the right to possess and use said premises in any manner not inconsistent with the estate, rights and privileges herein granted to Appalachian, including (a) the right to cross said land to reach the impounded waters for recreational purposes and for obtaining their domestic water supply and water for their livestock and (b) the right to extend and maintain necessary fences across said land and into the impounded waters for a sufficient distance to prevent livestock from wading around said fences.
AND, FOR THE ABOVE MENTIONED CONSIDERATIONS, GRANTORS HEREBY COVENANT AND AGREE TO AND WITH APPALACHIAN THAT:
(a) If Grantors exercise any of the rights set forth [above] or make any other use of said premises or of any other lands or, of any waters in or to which any estate, right or privilege is now or hereafter owned or held by Appalachian, such exercise or use shall be at the sole risk of Grantors and no claims shall be mode against Appalachian for any injuries or damages arising out of or in connection with such exercise or use and such other use shall be deemed to be made under a revocable license from Appalachian and not adverse to any right, title, interest or privilege of Appalachian;
(b) Grantors will not cause, permit or suffer any garbage, sewage, refuse, waste or other contaminating matter to be cast, drained or discharged onto the portion of said premises below the contour the elevation of which is 800 feet or onto or into any of the other lands or waters referred ...