City of Taylor v. Detroit Edison Company

Page 28

715 N.W.2d 28

475 Mich. 109

CITY OF TAYLOR, Plaintiff-Appellee, v. THE DETROIT EDISON COMPANY, Defendant-Appellant.

No. 127580.

Supreme Court of Michigan.

May 31, 2006.

Plunkett & Cooney, P.C. (by Mary Massaron Ross and Christine D. Oldani), and Sommers Schwartz, P.C. (by Patrick B. McCauley), for the plaintiff. Detroit, Southfield.

Bruce R. Maters, George H. Hathaway, and Foster, Swift, Collins & Smith, P.C. (by William K. Fahey and Stephen J. Rhodes), for the defendant. Detroit, Detroit, Lansing.

Law, Weathers & Richardson, P.C. (by David W. Centner and Ann E. Liefer), for Michigan Municipal League and Michigan Townships Association. Grand Rapids.

Michael A. Cox, Attorney General, Thomas L. Casey, Solicitor General, and David A. Voges, Steven D. Hughey, Michael A. Nickerson, and Kristin M. Smith, Assistant Attorneys General, for the Michigan Public Service Commission. Lansing.

Dykema Gossett PLLC (by Daniel J. Martin) for International Transmission Company. Grand Rapids.

Foster, Swift, Collins & Smith, P.C. (by Stephen O. Schultz), for Michigan Electric Transmission Co., LLC. Lansing.

Dickinson Wright PLLC (by Michael A. Holmes, Jeffery V. Stuckey, and Susan G. Schwochau) for the Telecommunications Association of Michigan. Lansing.

Jon R. Robinson and Vincent P. Provenzano for Consumers Energy Company. Jackson.

Dykema Gossett PLLC (by Albert Ernst and Christine Mason Soneral) for the Michigan Electric Cooperative Association. Lansing.

James A. Ault for the Michigan Electric & Gas Association. Lansing.

Before the Entire Bench.

YOUNG, J.

We granted leave to appeal in this case to reconcile plaintiff's constitutional authority to exercise "reasonable control" over its streets with the Michigan Public Service Commission's (MPSC) broad regulatory control over public utilities. Consistent with our longstanding precedent, we hold that a municipality's exercise of "reasonable control" over its streets cannot impinge on matters of statewide concern nor can a municipality regulate in a manner inconsistent with state law. In this case, the MPSC has promulgated uniform rules governing the relocation of utility wires underground. To the degree plaintiff's ordinance on this subject conflicts with the MPSC's rules, the ordinance exceeds plaintiff's power to exercise "reasonable control" over its streets and is invalid. Furthermore, because the question of allocation of costs for the relocation of utility wires underground falls under the primary jurisdiction of the MPSC, that entity should be the first to consider this dispute. We reverse the judgment of the Court of Appeals and remand to the Wayne Circuit Court to enter an order granting summary disposition to defendant. The dismissal is without prejudice to plaintiff's right to seek a remedy before the MPSC.

FACTS AND PROCEDURAL HISTORY

In the fall of 1999, the City of Taylor (plaintiff) and the Michigan Department of Transportation planned for a major reconstruction project of a four-mile portion of Telegraph Road that intersects the city. The project called for major infrastructure improvements, including the underground relocation of all utility wires along Telegraph Road. Under the proposal, the Detroit Edison Company's (defendant) utility poles along Telegraph Road would be removed and their wires relocated underground. In early 2000, officials from plaintiff and defendant met several times to discuss the project and its implementation.

Defendant agreed to relocate the lines underground, but would not agree to bear the costs of that effort. When the parties' negotiations failed, plaintiff enacted Taylor Ordinance 00-344, the "Telegraph Road Improvement and Underground Relocation of Overhead Lines Ordinance." Section 3 of that ordinance requires all public utilities with lines or poles adjacent to Telegraph Road "to relocate underground all of their overhead lines and wires and remove all poles and related overhead facilities equipment at their sole cost and expense and at no cost or expense to the City."¹ After plaintiff enacted the ordinance, the parties continued to discuss the dispute, but could not come to an amicable resolution. Ultimately, plaintiff agreed to advance the cost of relocating the wires underground, but reserved its rights to enforce the ordinance against defendant and seek reimbursement.

In June 2002, plaintiff filed a complaint for a declaratory judgment in circuit court, seeking a determination that defendant was obligated to pay the entire cost of relocating the wires under Taylor Ordinance 00-344. Defendant moved for summary disposition under MCR 2.116(C)(4), arguing that the MPSC rules required plaintiff to pay for the relocation, and that the MPSC had primary jurisdiction over this dispute. Plaintiff filed a cross-motion for summary disposition under MCR 2.116(C)(10), arguing that the ordinance controlled. The circuit court granted summary disposition to plaintiff, holding that it was unnecessary to consider the issue of primary jurisdiction because the city's ordinance was enforceable regardless of the MPSC's interpretation of its rules.

On appeal, the Court of Appeals affirmed in part the judgment of the circuit court in a published opinion per curiam.² The Court held that the MPSC did not have primary jurisdiction because the question was one of law, and the courts could craft an answer that would promote uniformity without interfering with the MPSC's ability to perform its regulatory duties. Then, relying on its governmental function/proprietary function test, first articulated in City of Pontiac v. Consumers Power Co.,³ the Court determined that plaintiff exercised a governmental function and properly required defendant to bear the entire cost of relocation. The Court also determined that state law did not preempt the city's ordinance.

This Court granted leave to appeal, specifically directing the parties to address the scope of a city's power over utilities under its constitutional authority to exercise reasonable control over its streets; whether that constitutional authority permits a city to impose relocation costs on utilities under Const. 1963, art. 7, § 29, and how the city's constitutionally authorized power to control its streets could be reconciled with the MPSC's broad regulatory authority over utilities.⁴

STANDARD OF REVIEW

This Court reviews the decision to grant or deny a motion for summary disposition de novo.⁵ Issues of constitutional and statutory construction are questions of law that are also reviewed de novo.⁶

ANALYSIS

The City's Constitutional Authority

Article 7 of the Constitution of 1963 enumerates the general authority and limits on the authority of local governments, such as counties, townships, cities, and villages.⁷ Subject to authority specifically granted in the Constitution, local governments derive their authority from the Legislature.⁸ We have held that

"[local governments] have no inherent jurisdiction to make laws or adopt regulations of government; they are governments of enumerated powers, acting by a delegated authority; so that while the State legislature may exercise such powers of government coming within a proper designation of legislative power as are not expressly or impliedly prohibited, the local authorities can exercise those only which are expressly or impliedly conferred, and subject to such regulations or restrictions as are annexed to the grant."⁹

Notwithstanding that local governments obtain their authority from the Legislature, the Constitution reserves to local governments certain authorities. In this case, plaintiff relies on the authority to exercise reasonable control over its streets, which is specifically reserved in art. 7, § 29, which states:

No person, partnership, association or corporation, public or private, operating a public utility shall have the right to the use of the highways, streets, alleys or other public places of any county, township, city or village for wires, poles, pipes, tracks, conduits or other utility facilities, without the consent of the duly constituted authority of the county, township, city or village; or to transact local business therein without first obtaining a franchise from the township, city or village. Except as otherwise provided in this constitution the right of all counties, townships, cities and villages to the reasonable control of their highways, streets, alleys and public places is hereby reserved to such local units of government.¹⁰

Thus, the authority reserved to local units of government to exercise reasonable control over the enumerated subject areas is explicitly made subject to the other provisions of the Constitution. One such provision is art. 7, § 22, which empowers cities and villages "to adopt resolutions and ordinances relating to its municipal concerns, property and government, subject to the constitution and law."¹¹

In People v. McGraw,¹² this Court interpreted the similarly worded "reasonable control" predecessor of art. 7, § 29 found in the 1908 Constitution,¹³ along with the predecessor of art. 7, § 22, the provision regarding municipal powers.¹⁴ McGraw involved traffic ordinances enacted by the City of Detroit that conflicted with the general state traffic laws. This Court held that "[t]aking the [constitutional] sections together, they should be so construed as to give the power to municipalities to pass such ordinances and regulations with reference to their highways and bridges as are not inconsistent with the general State law."¹⁵ Thus, McGraw permits a city to exercise "reasonable control" to regulate matters of local concern, but only in a manner and to the degree that the regulation does not conflict with state law.

In 1939, the Legislature created the MPSC, giving it broad regulatory authority over public utilities. Under its enabling statute,

[t]he public service commission is vested with complete power and jurisdiction to regulate all public utilities in the state...