Ashwander v. Tennessee Valley Authority 297 U.S. 288 (1936)

• Author: Kenneth L. Karst
• Pages: 128

Page 128

Ashwander was part of a protracted litigation over the constitutionality of the Tennessee Valley Authority (TVA), a government development corporation established by the NEW DEAL. (See CONSTITUTIONAL HISTORY, 1933?1945; TENNESSEE VALLEY AUTHORITY ACT.) TVA was organized to develop the economy of a river valley by improving navigation and flood control and especially by generating cheap electric power for homes, farms, and industry. In Ashwander preferred shareholders in an existing power company sued in federal court to enjoin the company and TVA from carrying out a contract under which TVA would purchase much of the company's property and equipment, and TVA would allocate areas for the sale of power. The plaintiffs attacked the whole TVA program as exceeding the scope of congressional power. The district court granted the INJUNCTION, but the court of appeals reversed, upholding the contract. The Supreme Court, 8?1, affirmed the court of appeals.

Chief Justice CHARLES EVANS HUGHES, for the majority, concluded that Wilson Dam, where TVA was generating power, had been built in 1916 to provide power for national defense needs, including the operation of nitrate plants used in the making of munitions, and to improve navigation?both objectives concededly within the powers of Congress. If excess electricity were generated at the dam, Hughes said, Congress had the power to sell it, as it might sell any other property owned by the United States. Justice JAMES C. MCREYNOLDS, dissenting alone on the constitutional merits, pointed out the transparency of the majority's doctrinal clothing: TVA was in the power-generating business for its own sake, not as an adjunct to some military program long since abandoned.

Justice LOUIS D. BRANDEIS, dissenting in part, agreed with the majority's views on congressional power but argued that the plaintiffs' complaint should have been dismissed for want of STANDING. As preferred shareholders, they could show no injury to themselves from the contract. Brandeis went on, in Ashwander 's most famous passages, to discuss a series of...