City of Detroit v. Ambassador Bridge Co.

Bridge of Detroit v Ambassador CITY OF DETROIT v AMBASSADORBRIDGE COMPANY (Calendar 3). Argued 2, Docket No. 132329. October No. Decided 7,May 2008. brought Wayne The an action Circuit Court against Bridge Company, doing the Ambassador business as De- Bridge Company (DIBC),seeking injunction troit International city zoning stop to enforce a ordinance in order to several DIBC Bridge. construction related to the Ambassador The regarding cited concerns increases of truck exhaust and noise. The court, Rashid, J., ultimately J. James held that the DIBC is instrumentality purpose facilitating for the limited of bridge, supported purpose traffic across the which the federal free-flowing commerce, foreign interstate and and that the federal government’s demonstrated intent to control the entire complex preempted city’s zoning ordinance. The Court of EJ., Appeals, JJ., reversed, and Wilder Hoekstra, Zahra, concluding finding concerning that the trial court’s interstate and clearly international commerce was erroneous that federal law preempt zoning govern- did not ordinance because the federal bridge. ment did not intend to exercise exclusive control over the Bridge Detroit, curiam, unpublished opinion per Detroit Int’l vCo (Docket 257415). September issued Nos. 257369 and The applied appeal, Supreme DIBC for leave to which the Court (2007). granted. 477 Mich 1064 opinion by Supreme In a unanimous Justice CAVANAGH, Court held: instrumentality is a for the limited facilitating traffic flow across and is any regulation directly immune from state law or local purpose, including particular appli- conflicts that federal with city’s zoning cation of the ordinance at issue in this case. preemption Supremacy 1. Federal under the Clause occurs regulation when a state law or local stands as an obstacle to accomplishment purposes objectives and execution of the full Congress. regulation It can occur when a state law or local prevents private entity carrying from out a federal function that [May- 481 Mich 29 entity perform. private entity Congress requires A is a instrumentality acting appli- when in furtherance purpose. cable federal instrumentality part-time 2. A federal actor is a limited federal regulations acting is immune from state laws and local when that (1) only purpose limited federal and when in furtherance of a scope purpose Congress federal has actions are within the of the (2) assigned regulation, applied, to it and the state law or local if sufficiently private entity’s purpose. would restrict federal bright-line determining private rule if a actor 3. There is no for instrumentality. three-part a federal Under the test of United is (CA Michigan, 6,1988), States v 851 F2d 803 a court must consider (1) private claiming immunity function which the actor (2) established, regulations from local or state laws was whether (3) function, private actor continues to serve that and on, significance of the federal control exerted and the federal with, private question involvement actor. The essential is private closely whether the actor’s actions were so associated with purpose regulations a federal that it should be immune from local purpose. state laws that or inhibit Solutions, Inc, Name.Space, 4. Inc Under test of v Network (CA 2, 2000), instrumentality F3d a federal has status- immunity, immunity, based which is absolute but limited federal instrumentality immunity has conduct-based that is than less by looking absolute and is evaluated to the nature of the activity challenged identity private entity rather than the of the question Congress 5. The essential in this case is whether give authority carry intended to the DIBC the limited to out a unique purpose such that the DIBC immune from state regulation carrying purpose. or local when out that The tests Michigan Name.Space provide articulated United States v analysis unique involving the correct under the facts of this case federal-instrumentality immunity. claim of limited foreign free 6. The flow of interstate and commerce is a long-recognized purpose. The trial court found that the bridge would increase traffic volume over the delays, findings clearly reduce traffic and those were not errone- Applying ous. the tests described above to this case favors a federal-instrumentality status, conclusion that the DIBC has clearly directly limited to actions that are associated with facilitating Bridge. the flow of traffic across the Ambassador monetary profit DIBC’s interest and motivations related to from duty-free tolls and sales are irrelevant to that status. application city’s zoning sufficiently 7. The ordinance purpose merely inhibits DIBC’s federal and is not incidental. effectively stop Because the ordinance would the DIBC’s actions purpose, related to its federal the DIBC is immune from that local regulation. court, On remand to the trial that court must enter an enjoining zoning order the enforcement of the ordinance. joined concurring, majority’s analysis Justice in the Corrigan, separately emphasize scope and wrote the limited of the DIBC’s federal-instrumentality regard op- status with to its commercial fueling eration of directly stations and similar activities less taking facilitating bridge related to tolls or traffic. Because the challenge fueling itself, did not the existence of the station the trial properly court reconfiguration, focused on whether the station’s existence, purpose. rather than its furthered the DIBC’s federal may engage expansion The DIBC not in unfettered or relocation of simply expansion its current activities because the or relocation activity aids traffic flow.The itself must be related to the DIBC’s regulation. for it to Analysis be immune from local limited, immunity requires conduct-based an examination of the underlying challenged. regulation facts each action All local is not automatically preempted respect with to the DIBC’s immune police activities. The power protect retains the traditional safety may impose its citizens’ health safely and and health and regulations regulations to the extent that those do not inhibit the ability carry DIBC’s purpose. out its federal Reversed and remanded to the trial court. — — — Preemption

Constitutional Law Federal Commerce Interstate — — Commerce Private Actors Federal Instrumentalities. preemption may Federal occur regulation when a state or law local prevents private entity carrying a from out a federal function that Congress required perform; acting it to when in furtherance of the applicable purpose, private entity is a federal instru- mentality; part-time federal actor is a limited federal instrumen- tality regulations that is immune only from state laws and local acting when furtherance of a limited federal function and (1) scope purpose when its actions are within the of the federal (2) Congress assigned regulation, to it and the state or local law if applied, sufficiently private entity’s would restrict the purpose. Johnson, John Jr., E. Corporation Counsel, and Linda D. Fegins, Senior Assistant Corporation Counsel, for the plaintiff. 481 Mich 29 & Stewart, and Seikaly, Steptoe R. T. William

Jeffrey Coburn, Willard, David (by LLP Richard Johnson Sevcenko), defendant. for the Catherine Amici Curiae: Driker,

Barris, Sott, (by Daniel M. Denn & P.L.L.C. Robinson), Michigan Tiffany L. Share Association, Bridge- League, Bagley Housing Municipal Detroit, Community Development Mexicantown watch Church, Southwest Ste. Anne’s Catholic Corporation, Association, Inc., Community People’s Detroit Business Detroit, and the Interna- Metropolitan Services for Lawyers Municipal tional Association. presents J. This case us with invitation CAVANAGH, findings the trial court’s factual second-guess Bridge Plaza projects

construction on the Ambassador congestion traffic and facilitate inter- would alleviate court, foreign commerce. Because the trial state delivering bench trial and conducting after a four-week rely clearly did not on erroneous 20-page opinion, facts, Accordingly, decline that invitation. we reverse judgment Appeals of the Court of because the (DIBC) is a Bridge Company Detroit International facili- instrumentality for the limited and, such, as tating traffic over the zoning regulation is immune from the fur- preclude Detroit that would construction thering purpose. this limited federal

I. FACTS AND PROCEDURE ordi- zoning The of Detroit seeks to enforce its stop nance on the DIBC to DIBC’s construction Bridge’s located in and around the Ambassador Bridge v Ambassador footprint.1 Part of the Ambassador Bridge sits on land owned the DIBC that is within the city’s geographi- cal boundaries. The DIBC is for-profit, private com- pany that has a unique relationship with the federal government. In 1921, Congress gave the DIBC the construct, authority maintain, and operate the Am- bassador Bridge and its approaches. Ambassador Bridge act, authorization PL 66-395, 41 Stat 1439. This autho- rizing statute requires that bridge’s private opera- (the DIBC) tor also comply with the Bridge 1906, Act of 33 USC 491 et seq. The Bridge Act of applies to all bridges over navigable waters, and it requires all bridge operators to obtain the approval of the United States Secretary of Transportation regarding the “plans and specifications and the location of such bridge acces- sory works” before commencing construction of a new bridge or construction on an old or bridge its accesso- ries. 33 USC 491. late the DIBC was working with the several agencies that operate in and around the bridge gain approval for the installation of new tollbooths trucks, cars and a diesel fuel duty-free station for its

plaza, and truck weighing stations.2 The federal agen- cies initially refused to allow projects, citing con- cerns about projects’ plans and locations. Eventu- ally, after making changes suggested by those federal The Ambassador bridge is an international that connects Detroit, Michigan, Windsor, Ontario. The trial court found that “largest is the crossing commercial in North America. It carries (30%) approximately thirty percent per day of more than $1 billion daily trade between the United States and Canada.” time, At that the tollbooths were located on the Canadian side of the Bridge. proposed change, With the the tollbooths would be holding located outside the customs area on the American side of the bridge. voiced up concern that this could cause vehicles to back leaving on the American side after paying customs but before bridge-use toll. Mich 29 481

34 Opinion op the Court government’s the federal gained the DIBC agencies, Next, requested DIBC the for the the projects.3 approval The denied begin construction. city’s approval to ordinance, and refused to zoning its request, citing the increased variances, citing regarding concerns issue Nonetheless, the DIBC went and noise. truck exhaust result, a city’s building its As the projects. forward with sites and DIBC’s construction inspectors visited the to the for violations related issued several citations construction. city filed February 2001, injunctive

In the action the After a stop the DIBC to construction. against trial, orally trial ruled that bench the court four-week zoning DIBC was immune from the ordinance the instrumentality. The of its status as a because decision, but, planned prepare trial court to written concerns, security the events of border given 9/11 suggested parties the enter extended the court they agreed. negotia- After the negotiations, which failed, delivered a decision in tions the court written DIBC The ruled that was July again 2004. court immune from the ordinance as a federal instrumental- city’s addition, the trial court held that ity. govern- the federal zoning preempted ordinance was the entire bridge ment’s demonstrated intent control complex.4 Court of reversed city appealed. Appeals

The The on First, relying Bridge on Detroit Int’l Co v grounds. both 289; (1930), Mich 791 Co, American Seed 249 228 NW 3 government approved projects implicitly The federal it but, adopted initially disapproved projects, after the DIBC recommendations, government longer disapproved the federal no began completed projects, and the then construction projects. 4 interim, completed August 2001. were In the Bridge Detroit v Ambassador 35 York, and Int 'l Bridge 56; Co v New 254 US 41 CtS (1920), L Ed the Court of Appeals held that the finding trial “court’s that DIBC was constructed facilitating interstate and international com clearly merce is erroneous” and that the DIBC could not instrumentality. be Int'l Detroit Co v Detroit, unpublished opinion per curiam of the Court of (Docket Appeals, issued September Nos. 257415), p Appeals 7. Court of also held that the city’s zoning ordinance not was preempted by law because federal government not did intend to exercise exclusive bridge. control over the Id. at 11-12.

II. STANDARD of review This case involves an issue of federal of preemption state law and local regulation, which involves statutory interpretation. 141, v New Philadelphia Jersey, 430 US (1977). 142; 987; 97 S Ct L Ed 2d 51 224 Statutory interpretation law, is a of question which we de review novo. In re Investigation March 1999 Riots in East of (2000). Lansing, 378, 383; Mich 463 617 NW2d 310 addition, we review the trial findings court’s factual support legal holdings clear error. MCR 2.613(C); Services, Appliance Wilson, Sands Inc v 463 (2000). 231, 238; Mich 615 241 A NW2d trial court’s findings factual clearly are erroneous when the “ reviewing court is ‘left with the definite and firm ” conviction that a has Miller, mistake been made.’ In re (1989) (citation 331, 337; 433 Mich 445 NW2d 161 omitted).

III. ANALYSIS “The doctrine of preemption origin has its 2, the Supremacy VI, Clause of article cl of the United 29 481 Mich 36 Opinion op the Court laws of the Constitution, that the which declares States Law of the be the supreme States ‘shall United 20, 27; 454 Mich Ryan Corp, v Brunswick Land (1997), abrogated in on other part 541 NW2d 557 Marine, US 51 Mercury v 537 grounds Sprietsma (2002). ‘stands as “when a state law Preemption occurs of execution accomplishment to the an obstacle ” Wisconsin objectives Congress.’ purposes full Mortier, 597, 605; 111 S 501 Ct Intervenor v US Pub (1991) omitted). (citations 2476; L 2d 115 Ed 532 regula or local Preemption can occur when state law entity carrying out a from prevents private tion per it with Congress function has tasked 178-179; Train, 167, v 96 forming. See Hancock 426 US (1976), 2006; citing 48 L Ed 2d 555 Johnson S Ct 51, 57; 41 S L Ed 126 254 Ct 65 Maryland, US (1920). A takes on the title of “federal private actor instrumentality” acting when furtherance federal function. Union Joint Stock Land applicable Kissane, 668, 670; 270 Detroit v Mich NW Bank of (1936); v Salt Lake Cemetery Mount Olivet Ass’n (CA 10, 1998); 480, 164 F3d Fed Land Bank City, 146, Comm’rs, US v Kiowa Co Bd Wichita (1961). Thus, 151; 282; S Ct L Ed 2d 199 federal 82 7 instrumentality apply only can be limited to status acting is in furtherance of the private actor when a purpose instrumentality. that made it federal federal Kissane, (accepting 277 Mich at 669-672 that a See federally was a instrumentality, chartered bank federal a the bank was not immune from state holding but that did affect its federal Further purpose). law that not more, a is not an being instrumentality” “federal all-or- status; actor a federal instru nothing private may a be actions, for of not a mentality being one set while a instrumentality during set of actions. separate federal Co, 1132, v F2d 1139 Mortgage Mendrala Crown 955 of v Detroit 37 op Opinion the Court (CA 1992) 7, (noting private that because a actor is not instrumentality federal for purpose one “does not preclude a determination that it is a federal instrumen- tality for other purposes”).

We part-time refer to federal as actors limited federal they instrumentalities because are immune from state laws and local regulations they acting when are in furtherance of the limited purpose that served as impetus granting them federal- Also, instrumentality status. “[designating entity colors instrumentality typical preemption analysis by requiring presume, the court absence of clear and unambiguous congressional autho- the contrary, Congress rization to intended to preempt regulation state or local of federal instru- Olivet, mentality.” 486, Mount 164 F3d at Don’t citing Down, Tear It Pennsylvania Inc v Corp, Avenue Dev 206 122, 129-130; US App DC (1980); F2d 527 see also Train, 178-179; Hancock v US at 167, Mayo States, 441, United 446-448; 319 US 63 S L Ct (1943). And, Ed 1504 case, in this there no such congressional regulation. authorization local How- ever, despite above, the presumption noted a limited federal instrumentality is immune from local state and (1) regulation only when actions are within the scope purpose Congress the federal it assigned has (2) the or if regulation, state law local would applied, sufficiently restrict the private entity’s purpose. See Fed York, James v Reserve Bank New 471 F Supp (ED 2007). NY, 2d case,

In this the trial court relied on primarily federal-instrumentality preemption holding that the immune the city’s zoning was from ordinance. Indeed, the trial court found the DIBC was a federal instrumentality for the limited of facili- 29Mich 481

38 Opinion the of Court Bridge, which the Ambassador tating traffic across free-flowing interstate the of supports foreign commerce. first decide is Accordingly, we must whether issue, instrumentality. On that limited federal a has that is fair “[i]t Court stated Supreme United States when action deciding private might ‘our say that cases a model state have not been deemed that of the be ” Passenger Corp, v Railroad consistency.’ Lebron Nat’l (1995) L Ed 2d 902 374, 378; 115 S Ct 130 513 US omitted). (citations Thus, is rule bright-line there no instrumentality. if is a determining a actor private Olivet, result, As courts Mount F3d at 486. a have determining in federal- numerous tests applied in United States status. Id. For instrumentality example, (CA 1988), Michigan, 851 F2d 803, 6, the court v (1) the which three factors: function for considered (2) established, claiming immunity actor was private that private actor continues to serve func whether (3) tion, of the federal control exerted significance on, with, the private and the federal involvement actor. the factor-based to the example approach This is one analysis. federal-instrumentality addition, a applied federal courts have varia- some v Michigan United States test when the tion of claiming to a limited entity be private Name.Space, instrumentality. example, the court in For (CA Solutions, Inc, Inc v Network 573, 581-582 F3d 2000), differentiated between “conduct-based immu- evaluating nity” immunity and “status-based” entity federal-instrumentality private status contract operating government under a with was immunity from a evaluating entity’s While agency. Name.Space suit, Act antitrust Sherman court instrumentality that a federal has status-based noted immunity, is immunity, which absolute when “the fed- eral or government agencies its directly own and/or plenary exercise control over the [private] entity ... And, Id. alternatively, at 581. a limited federal instru- mentality has that less immunity is than absolute Id., under a “conduct-based instrumentality doctrine.” Motor citing Southern Carriers Rate v Conference, Inc States, 48, 58-59; United US 471 105 S Ct 85 L Ed (1985). 2d 36 The in Name.Space court that held such limited immunity by conduct-based could be evaluated activity to the ‘nature “looking challenged, of the rather than the . identity defendant’. . .” Name.Space, Carriers, 581, citing 202 F3d at Southern Motor 471 US at 58-59. the Finally, gave entity court the private federal-instrumentality that immunity was limited its required acts that were under contract with the government agency. Name.Space, F3d at 582. acknowledge

We that the in Name.Space court was with dealing slightly the issue governmen- different immunity tal Further, from antitrust suits. courts that analyzed have general the federal-instrumentality issue have used several variations of used by the factors the court in United States Michigan, and additional in factors some instances.5 The question essential to be in case Did Congress answered this is: to give intend private actor authority the limited carry unique out federal such purpose that the is private actor immune from state or local it regulation when is carrying out that purpose? Because we are convinced applying that the factors from United in Michigan States v conjunc- tion analysis by with “conduct-based” used the count (CA See Mendrala, 7, 1992) (reviewing 955 F2d at 1136 these factors: “(1) (2) government’s ownership entity; the federal interest in the (3) activities; government structure; entity’s entity’s control over the (4) (5) government finances; entity’s entity’s involvement in the mission”). function or 481 Mich op Opinion the Court believe that question, answer this Name.Space will unique present facts of analysis for the

it is the correct federal-instrumentality involving of limited a claim case Clause. immunity Supremacy based on this case matter, we note that preliminary As a free- long-recognized purpose involves The commerce. Ambas- foreign flowing interstate pur- distinctly related to that federal sador transportation, it is a conduit pose, given and the United States. commerce, between Canada thus accepted by and was parties riot disputed This is case this concerns dispute both lower courts. has to further the DIBC been tasked whether necessary for it to be to the extent instrumentality. That as a limited federal recognized earlier. hybrid test discussed question initiates First, when the test from United States apply it that the trial court under- becomes clear Michigan, factual being pivotal this as laden with stood issue its “unique” in its of the case as on description disputes dutifully court understanding, facts. With that trial hotly trial. The facts were con- conducted four-week Indeed, produced both numerous parties tested at trial. support evidence to their witnesses voluminous claims, its vigorously oppo- and each cross-examined result, As a the court nent’s witnesses and evidence. heavily relied opinion thorough, 20-page issued findings. on The trial made several its factual court bridge’s findings regarding opera- of fact important surrounding property: tion and (1) 3.5 million trucks and approximately bridge. cars passenger million crossed (2) area complex separated The is an enclosed bridge walls, by fences, brick and barbed surroundings from its wire. v Ambassador

(3) DIBC, under federal supervision, controls all of the few entrance and exit points the complex.

(4) The government DIBC and the federal each owns property bridge within the complex.

(5) Several agencies share control over the bridge complex: United States Customs and Border Protection, United States Immigration and Customs Enforcement, the General Administration, Services the Department of Agriculture.

(6) The federal government has plenary control over bridge complex: “[I]f it is in the compound, it is under federal control.” Trial court opinion, p 9.

(7) All DIBC are personnel under federal government control. They report must to the government before leaving the complex.

(8) Federal employees at the bridge complex are charged with enforcing laws, maintaining border security, controlling immigration, and con- ducting customs They missions. have responsibil- no ity for regulating or facilitating traffic flow over the bridge.

(9) The solely DIBC is responsible for regulating and facilitating traffic flow over the bridge.

The trial court also made findings several of fact regarding the proposed DIBC’s construction projects and their effect on traffic:

(1) The DIBC had proposed three construction (a) (b) projects: cars, new toll booths for changes in the (c) location and number of pumps, diesel and new tollbooths for trucks. delays Traffic due to backups on the bridge were

(2) problem a serious to the steady flow of traffic across the bridge. Mich 29 Opinion op the Court

(3) delayed being trucks were delivery Commercial occasions. regular on several for hours suffering were manufacturers Large automobile (4) delayed just-in-time as a result of economic losses acute deliveries.

(5) caused, too few part, were delays These tollbooths.

(6) would construction proposed The DIBC’s and reduce traffic over the increase traffic flow delays.

(7) bridge complex within the agencies All federal locating, designing planning, involved were plans (present all DIBC construction processes of past). the court espoused by trial the test applied court Michigan

in United States v to these facts. After error, any we decline to reverse review for clear However, recognize we do findings. trial court’s factual city at trial contradicted proffered that the evidence the Court, Indeed, before this findings. of these several testimony of two fed- city marshaled persuasively in the Their bridge complex. eral who work employees DIBC’s contentions that the testimony contradicted the delays would reduce traffic construction proposed overtly controlled or man- government that the federal Furthermore, projects. dated the construction that federal control strong argument makes a factual attenuated at best because the federal over the DIBC is (or veto negative exercises control government proposed projects. over the power) argued be- But those factual assertions were better court under a preponderance fore the trial face review arguments Those factual evidence standard. error, means the must for clear which by this Court Ambassador Opinion of the Court leave us with the definite and firm conviction that a mistake in has been made the factual basis that the trial Miller, court relied In on. re 433 Mich at 337. The city has not met its burden of proving that the trial court’s factual findings clearly were erroneous because each of findings those supported by was valid evidence and testimony the DIBC presented that city’s belied the arguments. factual Simply put, we will not answer the city’s call for us to retry credibility competing evidence and witnesses’ testimony simply because the city lost what is a unique and close factual contest. Therefore, we accept trial court’s factual findings proceed to review de novo legal rulings below. legal

The first question whether, under the United test, States v Michigan the DIBC is a federal instru- mentality. The first factor of that test asks for what function the DIBC was established and whether that function advances a federal purpose. Applying this factor to this case is somewhat like putting a square peg into a round hole because the DIBC was existence before the Bridge’s commission.6 Nonethe- less, case, in this it is reasonable to apply by this factor asking what function served as the impetus for the DIBC to enter into its current interaction with the federal government.7

The DIBC’s interaction with the federal government is tied to the federal purpose of the Ambassador Bridge, which is ostensibly facilitating the flow of interstate and actuality, predecessor bridge’s the DIBC’s existed before the commission, viewing corporate but we see no error in the DIBC and its predecessor purposes as one for the of this case because the act autho rizing bridge just does that. Johnson, 57, holding federal-instrumentality See 254 US at (because immunity applied employee obviously ato federal who existed born) gained he had federal-instrumentality by been before he status being government hired as a mail carrier. 481 Mich 29 Indeed, purposes, for commerce

foreign commerce. “construct, maintain, the DIBC to Congress directed Thus, 66-395, 41 PL Stat 1439. bridge. operate” build, and maintain operate, if DIBC is tasked to made for the and if the was bridge, commerce, then the function free-flowing for the DIBC’s interaction impetus that as the served purpose the federal government the federal was with There- foreign commerce. free-flowing interstate federal-instrumentality status fore, factor this favors for the DIBC. DIBC continues factor asks whether the

The second maintaining The DIBC is still to serve that function. Bridge, which necessar- the Ambassador operating free-flowing the federal inter- ily furthers Thus, this factor favors foreign state and commerce. for the DIBC. federal-instrumentality status significance The third factor evaluates the on, and the federal involvement federal control exerted by the trial with, Relying the DIBC. on the facts found court, legal holding that court’s agree with Federal strong is a and substantial level of “there control and involvement with the DIBC within this factor favors federal- Bridge Complex,” such the DIBC. instrumentality status for this findings support legal The trial court’s factual maintains strict government conclusion. The federal compound. The trial court stated that control over “if it in the it is under federal control.” compound, is is maintained as a sterile area that is not compound edict, public usage. By to the for common open is not associated with a federal entering all traffic that or the DIBC must continue on to Canada. agency vehicle randomly any customs can search United States workers. including in the all DIBC person compound, or v Ambassador agencies The federal do not any personnel allow photograph any portion of the compound. The federal agencies power exercise veto over all construction in projects compound. When the DIBC began plan- ning construction it question, was re- quired, any project, as with such gain agencies’ approval. agencies Those denied the DIBC’s requests initial for approval. adopted The DIBC then federally mandated modifications and began con- Thus, projects. struction the federal government, hav- ing power to preclude the DIBC’s construction projects, at least implicitly approved the projects’ final design and construction. This is most evident physical structures’ today. existence In light of these facts, the trial court stated that “[t]he evidence in this case establishes that the overall effective and efficient management of the bridge only accomplished through the cooperative mutual effort and coordinated activity of the DIBC and the various federal agencies maintain- ing presence at the bridge Therefore, complex.” this third factor favors federal-instrumentality status for the DIBC.

Regarding factor, this third we note that the and the Court of Appeals, in suggesting deficient federal control for federal-instrumentality status, make much of the fact that the DIBC is financially independent from the federal government. They argue that DIBC is simply a moneymaking private citizen whose purely interest is in moving more traffic in gain order to tolls, more profit from the sale duty-free goods, and fuel dispensing. essence, In they believe that the cannot metamorphose being itself into a federal instru- mentality on the basis of a financially driven decision coincidentally that has a beneficial effect on an unre- lated federal purpose. They support argument this by noting that the federal agencies bridge compound Mich 29 that, changes DIBC’s proposed mandated the

never expressed have ambivalence fact, agencies those forward. going projects’ toward the arguments. those disagree We with is not necessar- federal-instrumentality status Again, the private status for all of all-encompassing an ily monetary the DIBC’s regard, activities. actor’s are irrelevant to its federal- interest and motivations is relevant is that instrumentality status. What acting purpose. in furtherance of a federal DIBC is that showed that trial court relied on record evidence by attempt projects the construction were motivated new, tollbooths bridge separate facilitate traffic: the separate automobiles attempts were successful trucks, project and the allowed diesel- diesel-pump efficiently in a location trucks to fuel more powered gasoline-driven from that automobiles. separate Also, required 53-foot-long diesel location semi- the old turn, whereas the new negotiate 90-degree trucks to straighter for a and more efficient location allowed earlier, fueling. Accordingly, as stated system DIBC, that the accept finding irrespec- the trial court’s motives, trying financial to facilitate tive of its projects. traffic means of these the federal at the Additionally, agencies the fact that did is irrel- bridge complex projects not mandate are directed to control and agencies evant because those that are distinct from the regulate purposes customs, immigra- such as free-flowing-traffic purpose, control, security. explains This tion border projects; agencies ambivalence toward the agencies’ any projects are unconcerned with traffic-facilitation their distinct federal pur- unless such inhibit noted, Yet, foreign and interstate poses. previously as Thus, purpose. traffic over the is a federal what Opinion Court is relevant here is whether acting DIBC was in furtherance of that federal purpose. accepting the trial court’s statement that “[t]here was sufficient evidence presented by DIBC for the [c]ourt to conclude proposed that DIBC’s construction will have a positive impact on traffic flow and reduce delays for traffic at the bridge,” necessarily accept such an action was in furtherance of the DIBC’s federal mandate to maintain and operate bridge. all

With three factors favoring federal- status, instrumentality we next apply the conduct- based test used the court in Name.Space. Like the instrumentality in Name.Space, DIBC does not have immunity, status-based which is absolute immu- nity, because it is tasked to conduct a limited Thus, purpose. like the in instrumentality the DIBC Name.Space, has conduct-based immunity, applies which only to its conduct furthers purpose. earlier, As discussed Congress has build, required the DIBC to operate, and maintain Thus, bridge. like the instrumentality Name.Space, which had immunity conduct that it was required to do under its contract with the federal agency, the DIBC has immunity for its conduct in the operation and maintenance of the Ambassador Bridge. operat- While ing the the DIBC must bridge, keep the flow of bridge Thus, traffic at an optimal level. the DIBC’s conduct- based immunity extends to its conduct that facilitates bridge traffic.

Therefore, under both the test in United States v Michigan and the conduct-based test Name.Space, correctly the trial court concluded that the DIBC is an instrumentality of the federal lim- government for the ited traffic facilitating bridge. flow over the 29 481 Mich

48 Opinion of the Court status as a federal instru- note that the DIBC’s We clearly that are mentality is limited to actions of traffic across with the facilitation directly associated may not Accordingly, the Bridge. the Ambassador actions into this status. fit its non-traffic-facilitative scope of evaluating could be described as This issue immunity. This issue is instrumentality’s the federal in cases of limited federal instru- particularly important case, mentalities, immunity because ex- such as this of instru- scope tends to acts that are within the attempt While we do not mentality’s purpose. do not fall within the list all the actions that do or agree of we with the trial court scope immunity, DIBC’s its projects that the DIBC’s construction are within scope immunity. of findings compelling trial court’s factual are on

this issue. It held that the volume of traffic was low, projects that the construction were problematically volume, projects meant to increase that and that Therefore, under a conduct- accomplished goal. that test, immunity projects based the DIBC’s construction of its limited federal- scope were within directly instrumentality immunity they because were they motivated the DIBC’s Finally, we actually promote purpose. worked immunity stops caution that there is a line where this instrumentality’s scope because the act is outside the however, the purpose; its federal DIBC’s construction line in this projects have not crossed the case. by declaring But our does not end the DIBC analysis instrumentality holding a limited federal scope were actions within its construction Indeed, with federal instru- immunity. entity “where from a mentality immunity particular status claims exaction, state test is whether that exaction proper Detroit v James, function.” entity’s interfere with the will And, 2d if the ordinance does Supp city’s 471 F at 242. DIBC’s limited federal purpose, interfere with the of that interference be analyze magnitude must instrumentalities are not “insulated from cause federal local requirements.” incidental or nonburdensome 130-131, Down, App citing Don’t Tear It 206 US DC at 2285; Mexico, 529, 543; Ct v New 426 US 96 S Kleppe (1976), Evansville-Vanderburgh Airport L Ed 2d 34 Airlines, 720-721; Inc, Auth Dist v Delta 405 US (1972), Cook, Ed US S Ct 31 L 2d 620 Wilson 474, 486-488; (1946), 66 S Ct 90 L Ed 793 Johnson, supra at 56. in in point opinion

Justice Holmes made this clear his Johnson, earlier, 254 US at 56. As discussed the defen- the employee dant Johnson was an United States challenged driving Postal who his conviction for Service a motor vehicle without a state-issued driver’s license. conviction, Id. at 55. In reversing the defendant’s that, States,” Court held as “instruments of the United defendant, federal like the employees, were immune from the requirement obtaining state’s driver’s license before their conducting purposes. Id. at However, 57. Justice Holmes also cautioned that employee general an of the United not States does secure a immunity acting from in the state law while course of his may that, employment.... very It well be when the United spoken, subjection States has not to local law would general might incidentally extend to rules that affect instance, carrying employment as, mode of out the — regulating turning statute or ordinance the mode of at the 56.] corners of at [Id. streets.” words,

In other the defendant in Johnson was immune regulations sufficiently from state or local that inhib- immune from purpose, ited his federal but he was not 481 Mich 29 merely incidentally local that affected his regulations instrumentality. a federal operation as of a sufficient inhibi- presents example This case the local instrumentality’s purpose; tion of an Indeed, effect is not incidental. regulation’s merely application city’s effectively stop ordinance would Furthermore, if projects. the DIBC’s construction DIBC, problems ordinance had to the the traffic applied Therefore, on the have because persisted. would city’s completely stopped ordinance would have actions, DIBC’s which were within the of its scope purpose, the DIBC is immune from that local regulation instrumentality. as a limited federal makes claims in that arguing two its ordi nance does not interfere DIBC’s federal pur with the First, pose preemption May such that is required. issued a variance to the DIBC that purportedly allowed construction at issue here; therefore, it argues preemption analysis is disagree. rendered moot. We This “Court does not reach questions moot or declare or rules principles of law that practical legal have no effect in the case before us unless the issue is one of public significance likely recur, yet judicial evade Federated review.” Publica tions, 98, 112; Inc v City Lansing, 467 Mich (2002), citing NW2d 383 In re Publishing, Midland (1984). Thus, Mich n 362 NW2d 580 while the issue is moot because the authority DIBC’s to the projects longer undertake construction is no at issue variance, with the respect legal we conclude that the question justiciable likely because it is again to arise and judicial aptly out, avoid review. As the DIBC points many the variance has amorphous conditions concern noise, smoke, ing odor, all effectively give of which city the unrestricted If authority to revoke the variance. Bridge City op Detroit v Ambassador zoning its city applies later revokes the variance the DIBC, challenges and if the DIBC that ordinance to the ordinance, city simply could application challenge by the DIBC’s stop reissue the variance Also, legal this issue resolves the claiming mootness. inter- concerning operation the busiest dispute state; therefore, clearly in the it is national border Thus, justi- find this public issue of concern. we issue ciable.

Next, the primarily contends that ordinance expansion any restricts the DIBC’s business and that restriction on the is incidental to the effect on projects bridge city supports by noting traffic. The this that the can still these construction bridge operate without past. response as it did in the Our is twofold. projects, First, reiterate that the DIBC’s economic interests no projects these are of moment. What is relevant is ordinance application city’s sufficiently whether hinders the DIBC in out its federal carrying purpose. Second, argument that city’s limiting bridge preconstruction merely incidentally its state affects point. traffic misses the fails to acknowl- edge government’s the federal interest lies sustaining free-flowing by increasing bridge commerce In- preconstruction, problematic traffic above level. stead, city wrongly contends that the preconstruc- traffic, commerce, acceptable. tion level of or was But by the court’s argument supported is not trial findings. Therefore, argument factual this is of no avail city. to the DIBC,

Accordingly, the as a limited federal instru- it mentality, city’s is immune from the ordinance as before us. applies to the construction reliance on American Finally, Appeals Court of Those cases misplaced. Seed Co and Int’l Co is 481 Mich 29 simply stand for the fact that international bridges are not pervasively by so controlled federal law that field always preemption apply any will to invalidate state or regulation words, local of them. In other both the state governments and federal have interests international bridges. But that ruling truism does not affect our today. Indeed, did opinions analyze those not federal- instrumentality preemption. Moreover, our decision to- day, accepting while does have some (and over) regulatory authority interest the Ambas- Bridge, sador holds that the gone has too far in inhibiting DIBC’s limited federal purpose. sayWe nothing to disturb the holdings venerable of the Ameri- can Seed Co and Int’l Bridge Co..

Because we are satisfied that the trial court was correct in federal-instrumentality analysis, and be- cause analysis provides we believe that an adequate basis for ruling today, our we see it as prudential not to the rulings evaluate of the trial or court the Court of Appeals any other regarding preemption theories.

IV CONCLUSION After accepting the facts established the trial court, affirm the judgment court, we of the trial reverse judgment Court of Appeals, hold that the DIBC is a federal instrumentality for the pur- limited pose facilitating traffic flow across the Ambassador Bridge is, therefore, immune any from state law or regulation local that directly inhibits that purpose. Further, we affirm the trial court’s holding this particular application of the city’s zoning ordinance inhibits the DIBC’s purpose. However, choose not to formulate an arbitrary bright-line rule concerning future DIBC, conflicts between the in its federal-instrumentality status, limited and state or Detroit v Opinion by Concurring Corrigan, J. trial to examine trust courts regulation. We local inhibits directly regulation or local a state law whether federal-instrumentality and limited unique DIBC’s any disputes. future status reversed, of Appeals of the Court judgment entry trial court for the remanded to the

and the case is opinion. with this injunction consistent Young, Weaver, Kelly, Corrigan, Taylor, C.J., and CAVANAGH,J. MARKMAN,JJ., concurred with in Justice I concur CORRIGAN, (concurring). J. emphasize I separately write analysis. CAVANAGH’s federal-instrumentality sta- scope the limited Bridge Company International tus of the Detroit (DIBC) operation to its commercial regard with that are less and similar activities fueling stations facilitating bridge tolls or directly taking related to Justice CAVANAGH’s I also write to underscore traffic. to the that are related that even activities point immune from entirely not purpose DIBC’s federal are regulation. local states, an instru- CAVANAGH “the DIBC is

As Justice limited for the mentality government of the federal Ante facilitating bridge.” traffic flow over the purpose concluded that the new reasonably at 47. The trial court aided traffic flow. of the diesel station configuration argued that Further, appear not to have does previous in its wrongly maintained station merely by zoning requirements local location or violated I Accordingly, pumps. the number of slightly increasing result and this Court’s the trial court’s agree with affirming that result. reasons for the record does first, that emphasize, I simply would maintaining a diesel the extent which not establish to the DIBC’s at all relates fueling station 481 Mich 29 Concurring Opinion Corrigan, J. Rather, purpose.1 because the did not challenge itself, existence of the station the trial court correctly focused on whether the station’s reconfiguration —not existence —furthered the DIBC’s federal purpose. Therefore, I find it worth noting may that the DIBC not engage unfettered expansion or movement of its current simply activities expansion because or reloca- flow; rather, tion aids traffic the activity to be relocated expansion or the activity of that must he related to itself the DIBC’s in order for it to be immune from full regulation by the I city. highlight Justice that, conclusion in analyzing limited, CAVANAGH’s conduct-based immunity, the facts underlying each ac- challenged tion must be examined to ensure that action does not cross the “line where this immunity stops because the instrumentality’s act is outside the scope of its federal purpose[.]” Ante at 48.

Second, I would emphasize that all regulation local is not automatically preempted with respect to the DIBC’s immune activities. Justice CAVANAGH notes that the city issued a variance to the DIBC that included amorphous noise, smoke, conditions concerning and odor at the DIBC’s site. The effectively give conditions the city unrestricted authority to revoke the variance. Ante at 50. Because the variance gives city the same broad power to inhibit the DIBC’s federally mandated activi- ties did zoning ordinance, as the variance would be similarly preempted. But seeks, because the city in part, 1 Perhaps commercial may trucks’ use of the include —which idling delays as a including result of federal activities customs inspections significantly by facilitated on-site to access diesel fuel. —is Perhaps profit fueling operation DIBC derives from its that offsets maintaining bridge and, therefore, the costs of enables tolls to remain Nonetheless, at affordable challenged only levels. because the reconfiguration fueling station, the exact nature of the station’s relationship to the DIBC’s federal is not at issue. v Concurring Opinion Corrigan, J. including local air safety, health and public regulate to police the traditional I that the retains note quality, citizens.2 safety of its the health protect to power regu- safety health and certainly impose city may The not regulations those do to the extent lations pur- ability carry out its the DIBC’s inhibit pose. Supreme in Pike v Bruce Court observed As the United States (1970), 844;

Church, Inc, 137, 142; “the 25 L Ed 2d 174 397 US 90 S Ct regulation] of that will be tolerated will [from of the burden local extent The depend local interest involved----” on the nature of the course safety protect police power the health and traditional state’s Supreme unquestioned. Court has observed: citizens imposed determining an undue whether the state has commerce, that the it must be borne in mind on interstate

burden “conferring Congress regulation upon Constitution when legislating commerce,... offfrom never intended to cut States health, life, safety subjects relating of their to the on all might indirectly citizens, though legislation affect the com- Detroit, country.” [Huron Portland Cement Co v merce of the (1960) (citation 813; 440, 443-444; 4 L 80 S Ct Ed 2d 53 US omitted).] 278, 306-307; Corp Tracy, Similarly, 117 S Ct see Gen Motors 519 US 761(1997); Optometry 811; L Ed 2d Head v New Mexico Bd (1963). 428-429; Examiners, 83 S 10 L Ed 2d 983 374 US Ct

Case Details

Case Name: City of Detroit v. Ambassador Bridge Co.

Court Name: Michigan Supreme Court

Date Published: May 7, 2008

Citation: 748 N.W.2d 221

Docket Number: Docket 132329

Court Abbreviation: Mich.