## Facts

- Congress created the Tennessee Valley Authority (TVA) to build and operate dams for navigation and flood control and to sell electricity generated from those projects.
- Multiple private electric utility companies operating in Tennessee and nearby states held state franchises and certificates of convenience and necessity to provide electric service.
- The utilities sued TVA and its officers to stop TVA from generating, transmitting, and selling power; building competing generation and transmission facilities; and using contracts that allegedly fixed or influenced retail resale rates.
- The utilities alleged TVA exceeded federal authority and that federal competition and contractual resale-rate terms would destroy their businesses and displace state rate regulation, violating the Fifth, Ninth, and Tenth Amendments; they also asserted a federal-officials “conspiracy” involving financing of municipal systems.
- TVA removed the case to federal court; a three-judge district court dismissed the bill after trial, and the utilities appealed directly to the Supreme Court.

## Issues

1. Whether utilities suffering competitive injury from TVA’s power sales have standing to enjoin TVA as an allegedly unconstitutional federal enterprise.
2. Whether economic losses from TVA’s competition constitute an actionable legal injury or merely *damnum absque injuria*.
3. Whether state utility franchises and certificates of convenience and necessity confer a protected right to be free from competition sufficient to support injunctive relief.
4. Whether TVA’s pricing and contract terms affecting resale rates amount to unlawful federal rate regulation violating the Tenth (or Ninth) Amendment, or a deprivation of property without due process under the Fifth Amendment.
5. Whether the record established an actionable conspiracy between TVA and another federal official to coerce sales of private utility systems.

## Decision

- The Supreme Court affirmed dismissal of the utilities’ suit.
- The doctrine permitting suits against federal officers to prevent enforcement of an unconstitutional statute protects only invaded legal rights, not mere economic interests.
- The utilities’ harm from TVA competition was *damnum absque injuria* and did not create standing to challenge TVA’s statutory authority.
- State-granted corporate and utility franchises, including nonexclusive rights to use public ways, and certificates of convenience and necessity did not confer immunity from competition or a right to exclude TVA operating with state consent.
- TVA’s underselling and contractual resale-rate provisions did not constitute unlawful regulation of the utilities’ rates under the Tenth (or Ninth) Amendment and did not support a due process claim.
- The evidence did not support the alleged conspiracy; cooperation between federal officials acting under separate statutes was insufficient to establish actionable wrongdoing.

## Legal Principles

- A plaintiff may not obtain injunctive relief against federal officers on constitutional grounds without showing invasion of a legally protected right; economic injury alone is insufficient.
- Nonexclusive public-utility franchises and privileges to use public property do not include a right to be free from competition, including competition from a government enterprise.
- Competitive harm resulting from the exercise of a statutory grant of power, without invasion of a legal right, is *damnum absque injuria* and does not confer standing to challenge the statute’s validity.
- State certificates of convenience and necessity generally authorize operation and do not create an enforceable entitlement to exclude competitors, particularly where the competitor operates with the state’s consent.
- Government competition and contractual pricing terms that influence market rates are not, without more, unconstitutional “regulation” of private rates under the Tenth Amendment.

## Conclusion

The Court held that the utilities’ asserted injury—loss of business from TVA competition—did not invade a legal right and therefore did not permit them to enjoin TVA or litigate broad constitutional objections to TVA’s power program; the bill was properly dismissed.


Tennessee Elec. Power Co. v. Tenn. Valley Auth., 306 U.S. 118 (1939)