Public Utility District No. 1 of Pend Oreille County v. United States of America, Inland Power & Light Co.

Public Utility District No. 1 of Pend Oreille County (PUD) is a municipal corporation. Inland Power & Light Co. (Inland) is a private non-profit membership corporation. Both are organized under the laws of Washington. Inland furnished electrical energy to its members in ten counties in Washington, including Pend Oreille County, and two counties in Idaho. It is and has been financed by the Rural Electrification Administration and has mortgaged all of its assets to the Administration. PUD seeks to acquire the facilities of Inland in Pend Oreille County.

Federal law provides that a borrower of funds from the Administration may not sell or dispose of its property without the consent of the Administrator. Inland has refused to sell and the Administrator refused to consent and both oppose the condemnation. The District Court upheld the right to condemn and this appeal followed. We reverse.

Under the law of Washington a public utility district may condemn any facilities for the generation or distribution of electrical energy even though those facilities are already devoted to a public use. The commissioners of the PUD by resolution determine the necessity for the taking and that…