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Ashwander v. Tennessee Valley Authority
United States Supreme Court
297 U.S. 288 (1936)
In 1916, Congress authorized building the Wilson Dam to produce nitrates for munitions and improve navigation during the war. In 1933, Congress created the Tennessee Valley Authority (TVA) (defendant), which administered the dam. The TVA contracted to buy property and power-distribution lines around the dam from Alabama Power Company (APC) and to sell APC surplus power generated by the dam. George Ashwander and other APC shareholders (plaintiffs) sued to enjoin the transaction on multiple grounds. Among them, Ashwander argued that the TVA acquiring power lines and selling surplus electricity exceeded the federal government’s constitutional powers. The trial court annulled the contract and enjoined the TVA from buying the lines or selling surplus electricity. The Fifth Circuit reversed, reasoning that Congress’s commerce and wartime powers authorized the dam’s original construction, and the United States owned and could sell the electricity under its disposition powers. On the shareholders’ appeal, the United States Supreme Court reviewed only the issue of whether Congress may distribute and sell electricity. The TVA countered that the shareholders lacked standing, had not raised a genuine case or controversy, and had not shown actual injury.
Rule of Law
Holding and Reasoning (Hughes, C.J.)
Concurrence (Brandeis, J.)
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