A federal appeals court in Richmond, Virginia, Thursday took up a long-running dispute between North Carolina and aluminum giant Alcoa over who owns the land under the Yadkin River. As the state appealed a lower court ruling, oral arguments delved into American history, and whether the river has ever been navigable.
North Carolina and Alcoa are battling over control of a 45-mile stretch of the Yadkin River, where Alcoa owns four dams. The dams originally powered a smelter on Badin Lake, where a thousand people once worked. That's now closed and the jobs are gone, but Alcoa still makes money selling electricity from the dams.
State officials say they don’t like that, because it’s the public’s water, but there’s no public benefit anymore. So they've been fighting Alcoa's application for a new license from the Federal Energy Regulatory Commission. In 2013, the state sued Alcoa in state court, as part of an effort to show that Alcoa shouldn’t be eligible for a new license.
Alcoa got the case transferred to federal court, where it won a year ago. So North Carolina appealed.
At the hearing, former state Supreme Court Justice Bob Orr argued for the state.
“Sovereignty over navigable waters, both navigable and non-navigable, for the original 13 states was created by the Declaration of Independence, the break from the British government, the adoption of a state constitution, and in the case of North Carolina, that was 1776,” he said.
What the state is saying is that the original 13 colonies owned the riverbeds of major rivers. And that didn't change when they formed the union in 1789. The state argues the same isn't true for the other 37 states.
Alcoa's lawyer, Erin Murphy, called that argument unprecedented. She says the U.S. Supreme Court has long ruled that the Constitution applies to all states equally.
She also focused on another legal point: Navigability, which she said the law defines as able to handle a "sea-faring ship."
That description doesn't fit most of the Yadkin. Murphy says that means Alcoa owns the riverbed, through Badin, High Rock and two other lakes. And she said that makes it a federal case.
“There's certainly a lot going on in this case, but I think what it boils down to is navigability is a federal question, for all 50 states in the union,” Murphy said.
Will Scott is the Yadkin Riverkeeper, and his organization filed a brief in support of the state’s case. He was at last week’s hearing, and said: “Alcoa, a $22.5 billion dollar company, is trying to call the second largest river in the state ‘non-navigable’ so that it can claim title to the bed of that river. Why? The electricity generated by the dams on the river are worth tens of millions of dollars a year, making Alcoa’s dams likely worth several hundred millions of dollars. Private interests see a great deal of value in the Yadkin and, currently, the people North Carolina realize none of that value.”
One judge joked that the issues were so interesting that the case should just go straight to the U.S. Supreme Court.
Alcoa won the federal license renewal in September. The appeals court decision is expected within a few months.
Meanwhile, Alcoa is moving ahead with plans to sell the Yadkin River dams. The company said in July it was selling the project to Cube Hydro Partners of Maryland.