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Ashwander v. Tennessee Valley Authority
''Ashwander v. Tennessee Valley Authority'', , was a United States Supreme Court case that provided the first elaboration of the doctrine of "Constitutional avoidance".
==Background==
In ''Ashwander'', the Supreme Court faced a challenge to the constitutionality of a congressional program of development of the Wilson Dam. The plaintiffs, preferred stockholders of the Alabama Power Company, had unsuccessfully protested to the corporation about its contracts with the Tennessee Valley Authority ("TVA"). Plaintiffs then brought suit against the corporation, the TVA, and others alleging breach of contract and advancing a broad constitutional challenge to the governmental program.〔''Ashwander'', 297 U.S. at 316-17. Plaintiffs argued that the federal government, through the TVA, was undertaking a "coup" which "would open every essential industry and service to direct and permanent governmental competition." Id. at 291-92. Plaintiffs challenged the TVA program's "validity in every respect, in its entirety, and in detail, asserting that the program and all of its essentials, the means employed to promote it, its dominant objectives, and its arbitrary methods, do not consist with the letter and spirit of the Constitution." 297 U.S. at 293; see also 297 U.S. at 317.〕 In December 1934, Federal Judge William Irwin Grubb held that the government had no right to engage in the power business except to dispose of a surplus incidental to the exercise of some other Constitutional function. While he did not directly rule that the TVA was unconstitutional, he issued an injunction that caused Senator George Norris, prime sponsor of the New Deal's power program, to declare: "The effect of the injunction is practically to nullify the whole TVA Act." In July 1935, the injunction was overturned by the 5th Federal Circuit Court in New Orleans. When the matter reached the Supreme Court, the plurality did not reach the broadest constitutional questions presented by plaintiffs, but instead upheld Congress's constitutional authority to dispose of electric energy generated at the dam and validated the contracts.〔''Ashwander'', 297 U.S. at 339-40. The district court below did not reach plaintiffs' request for general declaratory relief, but it did annul the contract at issue, enjoin transfer of the transmission lines and auxiliary properties, and enjoin the municipal defendants from "making or performing any contracts with the () for the purchase of power." 297 U.S. at 317. The court of appeals reversed, finding that Congress had the constitutional authority to construct the Wilson Dam and dispose of the surplus energy thereby produced. 297 U.S. at 318.〕
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