City of Taylor v. Detroit Edison Co.

City Taylor v Detroit Edison CITY OF TAYLOR v DETROIT EDISON COMPANY (Calendar 1). 7,2006 Argued May Docket No. 127580. March No. Decided 31, 2006. Taylor brought Wayne an action Circuit Court against Company, seeking the Detroit Edison reimbursement of the costs incurred in the removal of the defendant’s overhead major underground during lines and their relocation project along Telegraph plaintiff reconstruction Road. The passed requiring aboveground an ordinance utilities to remove facilities and to relocate them the owner’s pay expense. The defendant refused to in accord with the ordinance, plaintiff and the advanced the costs to the defendant complete project. court, J., Murphy, granted John A. summary disposition plaintiff, ordering for the reimbursement. contending, part, appealed, The defendant that the circuit jurisdiction court had no because the Public Service (MPSC) primary jurisdiction. Commission has The Court of PJ., JJ., Appeals, and and affirmed in Geiffin Murphy, White, part proceed- and remanded the matter to the circuit court for ings opinion per App its curiam. consistent with 263 Mich (2004) . The Court held that the MPSC did not have question one of and because was law the courts promote uniformity could craft an answer that would without interfering ability perform regulatory with the MPSC’s governmental function/proprietary duties. In reliance on the function test first articulated in Pontiac v Consumers (1980), App Appeals Power the Court of plaintiff governmental determined that the exercised a function properly required the defendant to bear the entire cost of relocation. The Court also determined that state law did not preempt plaintiff’s Supreme granted ordinance. The appeal. application the defendant’s for leave to 474 Mich 877 (2005) . Young, joined by opinion In an Justice Chief Justice Supreme Court Corrigan, and Justices Weaver, Maekman, held-. 475 Mich 109 29, §§ 1. Under Const 22 and a local unit of government may highways, exercise reasonable control over its streets, alleys, public places long regulation as as does not governmental function/proprietary conflict with state law. The applied by supported by function test the Court of is not Appeals apply statute or the Constitution. The Court of cases that governmental function/proprietary the function test in this area of the law must be overruled. City Telegraph Co, 2. The decisions in v Monroe Postal of (1917), Detroit, (1952),

Mich 467 Detroit Edison Co v 332 Mich 348 (1965), and Detroit v Bell Tel 374 Mich 543 must be abrogated they to the extent that conflict with the MPSC’s interpretation of its rules. regarding placement utility 3. The MPSC’s rules wires underground appear to cover the same matter as the plaintiffs may ordinance and conflict with the ordinance. The provisions may of the ordinance contravene of the portion requiring MPSC in this area. If the of the ordinance defendant to bear the entire cost of relocation conflicts with the rules, portion MPSC’s of the ordinance invalid. Application determining 4. of the factors considered in primary jurisdiction whether MPSC has over the issue of how to allocate the costs of the lines leads to a primary jurisdiction conclusion that the MPSC has over the issue of cost allocation. judgment Appeals 5. The of the Court of must be reversed and entry the matter must be remanded to the circuit court for the judgment granting summary disposition a and order to the defen- dant. only. Justice concurred in the result Cavanagh Kelly, dissenting, judgment Justice would affirm the properly applied long Court of because it line of cases holding municipality’s right that a constitutional and common-law rights-of-way of reasonable control over its includes the utility utility’s expense. order a to relocate its facilities at the existing provides uniformity common-law rule and should not be abrogated. plaintiffs represents ordinance reasonable control plaintiffs right-of-way. regarding over the The MPSC’s rules placement preempt plaintiffs right lines do not rights-of-way; fact, anticipate municipal control its the rules plaintiffs. primary ordinances such as the isNor the MPSC’s jurisdiction implicated in this case. Reversed and remanded. ill Detroit Edison — Municipal Corporations Constitutional Law.

1. may government over its exercise reasonable control A local unit regu- streets, alleys, public places long highways, as as such (Const 1963, §§ does not conflict with state law lation 29). — Primary 2. Administrative Law Jurisdiction. determining may an whether admin-

Factors that be considered dispute agency include has over istrative agency’s specialized knowl- the matter falls within whether edge, the court interfere with the uniform resolu- whether would issues, upset the of similar and whether the court would tion regulatory agency. scheme of the Ross and Cooney, (by Mary Plunkett & EC. Massaron Schwartz, Oldani), (by D. and Sommers P.C. Christine McCauley), plaintiff. Patrick B. Maters, Foster, H. George Hathaway,

Bruce R. Smith, Fahey Collins & P.C. K. Swift, (by William Rhodes), defendant. J. for the Stephen Amici Curiae:

Law, Richardson, (by Weathers & P.C. David W Michigan and Ann E. for Liefer), Municipal Centner League Michigan Townships Association. Cox, General, Casey, Thomas L. Attorney

Michael A. General, Voges, and David A. Steven D. Solicitor Nickerson, Smith, A. and Kristin M. Hughey, Michael General, Attorneys Michigan Assistant for the Public Commission. Service Martin) (by PLLC Daniel J. for

Dykema Gossett Company. International Transmission Smith, Foster, (by Stephen Collins & P.C. O. Swift, Co., LLC. Schultz), Michigan for Electric Transmission 475 Mich 109 op the Court Holmes, A. Wright (by Dickinson PLLC Michael Schwochau) Jeffery Stuckey, V. and Susan G. Michigan. Telecommunications Association of Jon R. Robinson and P. Provenzano for Con- Vincent Energy sumers Company. (fay Gossett PLLC Albert Ernst and Christine

Dykema Soneral) Mason for the Electric Cooperative Association. A. the Michigan

James Ault for Electric & Gas Association.

YOUNG,J. granted appeal We leave to this case to reconcile plaintiffs constitutional to exercise “reasonable control” over its streets with the Michigan (MPSC) regulatory Public Service Commission’s broad control over utilities. long- Consistent with our standing precedent, we hold that a municipality’s exercise of “reasonable control” over its streets cannot on impinge matters of statewide concern can municipality nor regulate a manner inconsistent with state law. case, the promulgated MPSC has uniform governing rules the relocation of utility underground. degree wires To the plaintiffs ordinance on this with the conflicts rules, MPSC’s plaintiffs ordinance exceeds exercise “reasonable control” over its streets and is in- Furthermore, valid. the question because of allocation of costs for the relocation of utility wires falls primary jurisdiction MPSC, under the entity should be the dispute. first to consider this reverse the We judgment of the Court of remand to the Wayne Circuit Court to enter an granting summary order disposition to defendant. The preju- dismissal is without plaintiffs right dice to to seek a remedy before MPSC. City Taylor v Detroit Edison Opinion of the Court

FACTS AND PROCEDURAL HISTORY 1999, In Taylor (plaintiff) the fall of and planned Department Transportation a major project portion for a reconstruction four-mile Telegraph city. project Road that intersects the major improvements, called for infrastructure includ- ing underground along relocation of all wires Telegraph proposal, Road. Under the the Detroit Edi- (defendant) son Company’s utility poles along Tele- Road graph would be removed and their wires relocated underground. In early plaintiff officials from and defendant met several times to discuss the and project implementation. its

Defendant agreed underground, to relocate the lines but not agree would to bear costs of that effort. negotiations failed, When the parties’ plaintiff enacted Taylor 00-344, Ordinance Im- “Telegraph Road provement Underground Relocation of Overhead Lines Ordinance.” requires Section 3 of that ordinance adjacent all utilities with lines or to Tele- poles graph Road “to relocate all of their over- head lines and poles wires remove all and related overhead facilities at their equipment sole cost expense and at no or expense City.”1 cost to the After plaintiff ordinance, enacted the continued to parties dispute, discuss the but could not come to an amicable Ultimately, plaintiff agreed resolution. to advance the cost of the wires but reserved underground, to enforce the ordinance defendant rights against and seek reimbursement. plaintiff complaint June filed a for a declara- court,

tory judgment seeking circuit determination obligated pay that defendant was the entire cost of Ordinance 00-344. Mich 109 op the Court Taylor the wires under Ordinance 00-344. summary disposition Defendant moved for 2.116(C)(4), under MCR required arguing that the MPSC rules plaintiff pay relocation, for the and that the to MPSC dispute. had Plaintiff over summary disposition filed a under cross-motion 2.116(0(10), arguing MCR the ordinance con- granted summary disposition trolled. The circuit court plaintiff, holding unnecessary to that it was to consider primary jurisdiction city’s the issue of because the regardless ordinance was enforceable of the MPSC’s interpretation of its rules. appeal, part

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

This Court leave to di- recting parties scope city’spower to address the of a authority over utilities under its constitutional to exer- streets; cise reasonable control over its whether that permits impose constitutional a relo- § 7, 29, cation costs on utilities under Const city’s constitutionally and how the authorized (2004). 551; App 263 Mich NW2d App 300 NW2d 594 v Detroit Edison Opinion of the Court control its could reconciled streets be with the MPSC’s regulatory authority broad over utilities.4 OF

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

ANALYSIS THE CITY’S CONSTITUTIONAL AUTHORITY Article of7 the Constitution of 1963 enumerates general authority authority and limits on the of local counties, governments, cities, such as townships, and villages.7 Subject authority specifically granted Constitution, governments local derive authority their from Legislature.8 have held that 9We governments]

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

quoting ^{[4] [5]} 7 Const ^[9] Spiek Dep’t Transportation, 474 Mich 877 Const Wayne 1963, Cooley, 1963, Co v Kalamazoo v Hathcock, art art 7. Constitutional (2005). §§ Titus, 1, 17, Mich and 21. Limitations Mich 684 NW2d 765 252, 262; (7th ed), 331; 572 NW2d 201 175 NW 480 pp et ^[264] (1998). (1919), seq. 475 Mich op the Court their governments that local obtain

Notwithstanding the Constitution re- authority Legislature, from the certain authorities. governments serves to local reason- case, authority on the to exercise plaintiff relies streets, re- specifically control over its which is able 7, 29,§ in art which states: served corporation, pub person, partnership, or No association public utility right private, operating lic or shall have streets, alleys highways, public or to the use of the other wires, any county, city village places township, or facilities, tracks, poles, pipes, conduits or other authority duly without the consent of constituted county, city village; township, or or to transact local busi obtaining therein a franchise from the ness without first village. Except provided in township, as otherwise counties, townships, all cities this constitution villages highways, their and to the reasonable control of streets, alleys places hereby is reserved to such government.[10] local units of Thus, govern reserved to local units of the enumer ment to exercise reasonable control over subject areas made to the other explicitly ated is provisions provision of the Constitution. One such 7, 22,§ “to empowers villages adopt which cities relating municipal resolutions and ordinances to its concerns, government, subject to the con property 11 stitution and law.” McGraw,12 interpreted this Court People control” similarly predecessor worded “reasonable 7, Constitution,13 along § art 29 found the 1908 with 7, 22, regarding § of art predecessor provision 10 added). 1963, 7, (emphasis § Const art 29 added). 1963, 7, (emphasis § 22 Const art 1908, 8, (1915), interpreting 150 NW 836 Const art §§ 21 and 28. 1908, 8, provided: § Const art City v Detroit Edison Opinion of the Court municipal powers.14 McGraw involved traffic ordi- nances enacted of Detroit that conflicted general with the traffic state laws. This Court held that “[t]aking sections together, they [constitutional] should be so construed to give power as to munici- palities pass to such and regulations ordinances with reference to their and highways bridges as are not general Thus, inconsistent with the State law.”15 permits city McGraw a to exercise “reasonable control” person, partnership, corporation operating No association or a public utility right highways, shall have the to the use of the streets, alleys public places any city,village township or other or wires, poles, pipes, tracks, conduits, or without the consent of duly city, village township; constituted authorities of such or nor to obtaining transact a local business therein without first city,village township. franchise therefor from such or cities, villages townships all and to the reasonable control of then- streets, alleys public places hereby cities, and is reserved to such villages townships. 1963, 7, The differences § between this section and Const art 29 are relatively stylistic changes, minor. In addition to counties are added to municipalities; the list of public places the list of items that can be used general utility facilities”; for now includes the “other and the reservation power municipalities explicitly subject to provisions to other of the Constitution. 1908, 8, provided: § Const art general laws, Under city village such the electors of each frame, adopt shall have and amend its charter, existing and to village amend an charter of the or granted passed by legislature heretofore government or for the city village and, through regularly constituted author- ity, pass relating all municipal laws and ordinances to its concerns, subject general to the Constitution and laws of this state. differences § between this section and Const 22 are relatively stylistic changes, also merely minor. Besides the the section city’s village’s powers general reaffirms that a or a are to the laws of the state. 15McGraw, supra at 238. Mich 109 Opinion the of Court concern, in a only of local but regulate matters does not degree regulation and to the that the

manner state law. conflict with MPSC, giving the Legislature

In the created Under public over utilities. regulatory broad statute, enabling complete public [t]he service commission is vested with jurisdiction regulate public all utilities in the power and except... public as restricted law. The state otherwise jurisdic power with the and service commission is vested fares, fees, services, rates, charges, regulate tion to all rules, service, pertaining conditions of and all other matters formation, operation, public to the or direction of utilities. public granted is further service commission jurisdiction upon pertain pass to hear and all matter to, ing necessary, regulation or incident to the .[16] utilities ... promulgated governing MPSC rules underground placement existing utility of new and Specifically, promulgated wires.17 the MPSC Rule “ 460.516, governing [replacement existing over- lines,” 460.517, concerning “[under- head Rule ground facilities for convenience of utilities or where required by appear ordinances.”18 These rules to cover 00-344, Taylor same matter as Ordinance and in a possibly manner creates conflict between rules and the plaintiffs MPSC’s ordinance. Because governing the MPSC has not construed how its rules the allocation costs for the relocation of circumstance, in this apply wires because appear of the ordinance to fall within the provisions MPSC, regulatory purview, MPSC’s rather than a added). (emphasis MCL 460.6 seq. AC, et R 460.511 AC, titles of 1999 R 460.516 and 460.517 See Detroit Edison court, should whether there is an actual conflict. assess As discussed later in this the doctrine of opinion, us to defer to the requires judg- ment of the on If the question. MPSC this ordinance rules, 7, §§ conflicts with MPSC then under art 22 and McGraw, Taylor Ordinance 00-344 yield. must The cases from this Court relied on the Court of Appeals plaintiff readily distinguishable are from matter, present the case. As an initial all the cases from this that a holding municipality Court has the to a utility force to relocate its facilities at its own expense were decided before the promulgation MPSC’s of rules regarding Thus, relocation of wires.19 there no was state law for the municipal action to conflict with. To the extent these cases conflict with the rules, interpretation however, MPSC’s of its they are abrogated. Moreover, no case factually cited is analo- For gous. example, the Court of cited opinion Court’s in Detroit Edison Co v Detroit20 for the proposition that this Court that city “ruled Detroit could order the utility poles to move its at its expense own under the municipality’s constitutional Edison, to control public places.”21 Detroit erected an utility poles granted city on easement to the public The utility utilities. claimed exclusive control over the easement because the grantor dedicated it for utilities rather than use. This Court held that the utility easement fell under the “public places” language 8, § However, article 28 of the 1908 Constitution. rely Court did not on that constitutional provision Co, 467; (1917), Monroe v Postal Tel See 195 Mich 162 NW 76 Detroit, 348; (1952), Detroit Edison Co v 332 Mich 51 NW2d 245 (1965). 543; Detroit v Bell Tel 374 Mich 132 NW2d 660 332 Mich 51 NW2d Detroit Edison. App citing 475 MICH109 require utility pay that the could

holding Rather, utility’s the Court relied on the poles. move the it if the easement was concession that would be liable Therefore, place.”22 determined to be a Detroit “public argument or the support plaintiffs Edison does not Appeals.23 of the Court of holding noted, governs that the resolution precedent As Because Ordinance of this case is McGrow. rules, may 00-344 conflict not be a may with MPSC plaintiffs valid exercise of reasonable control over its Therefore, portion streets. if the of the ordinance that requires to bear the entire cost of relocation subject, conflicts with the MPSC rules on the of the ordinance is invalid. reverse the Court portion We Appeals judgment contrary. that held to the

THE COURT OF APPEALS TEST reaching holding, its the Court of did not Appeals Instead, question focus on the of “reasonable control.” the Court of relied on a rule Appeals “general that if may imposed relocation costs be on the neces- the by municipality’s discharge governmen- sitated of function, expenses by tal while the must be borne the 22 Edison, supra Detroit at 354-355. The dissent has created a doctrine “perpetual concession” and would bind Edison to a concession it made years ago litigation. Merely stating position 50 in unrelated the dissent’s why any jurisprudence. shows it has never had basis in our 23 by dissent, City The case relied on the Monroe v Postal Tel supra, support Appeals also does not Court of conclusion. Monroe statute, 1886, gave involved a federal the Post Road Act of which any telegraph companies telegraph along to construct lines post United States road. The issue before the Court was whether the ability federal statute limited the state’s to exercise control the lines. over determined, consistently jurisdictions, This Court with other permissive police power. federal was to the states’ statute Not surprisingly, § did or 28 or Monroe not mention utilize Const McGrow in its resolution of the case. City v Detroit Edison 121 op the Court if municipality discharge propri necessitated of a etary “general appears function.”24 This rule” to ema Co,25 nate from Pontiac v Consumers Power McQuillin, Municipal is derived from Corporations, 34.74(a), § p many Michigan 184. Court of Ap While peals “general rule,” cases have applied there is no for it in either our support statutes Constitution. rule,” The proper “general inexplicably which has been by the ignored Appeals, Court was articulated in nearly years ago. Today, McGraw we reaffirm the holding and standard articulated being McGraw as consistent with the modern constitu tional provisions analogues of these provisions A construed: municipality may regulate “highways, streets, alleys, and public places” degree such regulations are consistent with state law. We overrule Court of cases that apply proprietary function/governmental function test this area of the law.27

Having plaintiffs decided that effort to compel de- fendant’s compliance by may decree contravene the MPSC, authority of the we next address whether the primary jurisdiction MPSC has over the dispute about allocation of the costs of the wires under- App 263 Mich at 557-558. App 101 Mich 300 NW2d 594 26Pontiac, supra 453-454, Detroit, was cited in Detroit Edison Co v (1989) App 145; (expansion Hall), NW2d of Cobo Auth, Michigan Transportation Detroit Edison Co v Southeastern (1987) App 28; (public system); Mich 410 NW2d 295 transit see also (1981) Michigan Detroit, App Bell Tel Co v 106 Mich 308 NW2d 608 (sewer facility). treatment 27 26, supra. See n [May- 475 Mich 109

122 Opinion of the Court formula, but there are There is no fixed ground.28 in an determining factors to consider whether several jurisdiction over a agency primary administrative has (1) agen- the matter within the whether falls dispute: (2) the court cy’s knowledge, whether would specialized issues, resolution of similar interfere with the uniform (3) upset regulatory whether the court would Appeals analyzed of the The Court of agency.29 scheme three factors and determined that the MPSC did these primary jurisdiction dispute. not have over the We disagree. of Appeals

The fundamental error the Court the Travelers factors analysis applied is that the court question city’s authority to the constitutional agree exercise control over its streets. reasonable We has no to con absolutely MPSC constitutional scope plaintiffs sider 7, § earlier in opinion, under 29.30As discussed McGraw articulates proper standard for resolution of the constitutional issue. Once the constitutional Travelers factors resolved, are ap issue has been plied to determine whether the MPSC has jurisdiction over issue how allocate the costs of underground. the lines factor, Applying appropriate the first method for allocating moving the cost of the facilities of utilities 28 why. preemption length. The dissent discusses We cannot discern opinion preemption, rely Our does not mention much less on the doctrine, plays disposition and it no role our of this case. Co, 185, 198-200; Travelers v Detroit Ins Co Mich (2001); see also Rinaldo’s Constr Co v Bell Tel NW2d 65, 71-72; 454 Mich 559 NW2d 647 City Novi, 617, 646-647; As stated in Wikman v (1982), “Generally speaking, agency exercising quasi- an NW2d judicial power does not undertake the determination of constitutional questions possess to hold statutes unconstitutional.” City of v Detroit Edison Opinion of the Court clearly expertise within the of the MPSC. Additionally, in position interpret MPSC is the best to and apply subject. Regarding its own rules on this the second factor, arguably the MPSC has devised a uniform sys- tem for overhead removing allocating lines and associated costs. Because the expense incurred com- plying with plaintiffs may potentially demands affect a wide range ratepayers, most of whom do not reside in City Taylor, this is an area of law where unifor- mity is critical. Finally, factor, under the third decision of the Taylor appears directly to impli- cate the rate-making authority of the MPSC and defen- dant’s tariffs created under that authority. Given the authority MPSC’s broad to regulate public utilities, and promulgation its pertaining of rules to the relocation of overhead lines underground, the circuit court’s resolu- tion of this case could adversely affect the MPSC’s ability carry to out regulatory responsibilities. Be- application cause of the Travelers factors overwhelm- ingly MPSC, favors the agency has juris- diction to determine the proper allocation of costs associated relocating with underground. wires Ac- cordingly, the circuit court granted should have defen- motion dant’s to dismiss and required plaintiff to seek a remedy from the MPSC.

CONCLUSION Today, we reaffirm this Court’s decision McGraw. 7, Under §§ Const 22 a local unit of government may exercise reasonable control over its streets, “highways, alleys, and public places” long as as that regulation Here, does not conflict with state law. plaintiff’s may because ordinance be incongruent with regulations the MPSC’s governing underground reloca- wires, tion of and the regulation utility, of defendant 475 Mich [May- Dissenting J. Kelly, may ordinance be invalid. MCL 460.6 vests MPSC utilities, and the regulate public with broad subject. rules on this Accord- promulgated MPSC has primary jurisdic- conclude that the MPSC has ingly, we tion over the issue of cost allocation. judgment

We reverse the Wayne grant summary remand to the Circuit Court remedy Plaintiff seek a disposition may to defendant. concerning the costs of defendant’s wires from the MPSC.

Taylor, C.J., Weaver, Corrigan, Markman, JJ., J. YOUNG, concurred with

CAVANAGH, J., concurred in the only. result Today, J. (dissenting). majority of this KELLY, change Court has made a drastic in the I law. believe are legal underlying change conclusions erroneous. The Michigan provides Constitution local units of government reasonably control their rights-of-way. 7, § Const Michigan 29. courts long have held that right reasonable control includes the to order a utility to move its facilities to another location at the utility’s expense. The state in occupied has not the field this area of the And law. the primary of the Public Service (PSC) Therefore, Commission not in it. implicated is remanding the Court of was correct in the case court, to the circuit and I would affirm its decision. ESSENTIAL FACTS AND PROCEDURAL HISTORY a large project This case involves reconstruction on Road, M-24, in Telegraph city also known as in the Taylor. Telegraph major thoroughfare city. Taylor v Detroit Dissenting J. Kelly, 70,000 About vehicles travel on its four-mile stretch day. Taylor each Plaintiff that Tele- indicates graph heavily is the most congested business district traffic city. Hundreds of accidents occur there each year, and some involve collisions with utility poles. Defendant Detroit Edison’s utility poles along run Telegraph Taylor’s within right-of-way. Edison’s facili- placed ties were in the right-of-way pursuant to a franchise agreement made clear that did streets, not surrender control any highways, over public places. Taylor began work cooperation with the

Michigan Department Transportation on the Tele- graph project. reconstruction It involved a massive overhaul of the right-of-way, calling for pavement, new sidewalks, mains, new new water lights, new street new conduit for median irrigation and utilities. A sig- nificant part plan involved the relocation of ground. Edison’s facilities below parties disagreed about who was responsible relocation, for the pay failed, and after negotiations Taylor City passed Taylor Council Ordinance 00-344. It directed all persons owning, leasing, operating, or main- taining lines, wires, overhead poles, or facilities to relocate them and to remove all above- ground specified facilities. work was to be done at expense of the persons owning, leasing, operating, maintaining or the overhead facilities.

The ordinance why listed several reasons relocation was It required. public enhanced safety by preventing wires, and falling poles by downed and eliminating vehicle facilities, collisions with the and enhancing visibility drivers’ sightlines. and The ordinance stated that underground operate lines would more reliably than overhead Finally, pointed lines. it out that 475 MICH 109 Dissenting J. Kelly, improve and overhead lines would poles

removal and facilitate the future of the development aesthetics city. objected

Edison to ordinance refused to expense. Taylor relocate its facilities at its own ad- portion vanced a of the cost of relocation so that project progress, right litigate could but reserved the When, time, to recover expenditures. sued ordinance, Edison to enforce the parties sought both The trial summary disposition. granted Taylor’s court motion, motion, denied Edison’s and ordered Edison Taylor. reimburse in the appealed Appeals, Court of which

affirmed the It ruling. remanded case on a subissue regarding the sufficiency of some the conduit that had installed. Taylor Detroit Edison (2004). App NW2d This Court subsequently granted leave to and heard appeal oral argument. 474 Mich 877 THE

REASONABLE CONTROL OF RIGHT-OF-WAY provides Constitution at article section 29: person, partnership, corporation, pub-

No association or private, operating public utility lic or right shall have streets, highways, alleys to the use of the or other places any county, city wires, township, village or tracks, poles, pipes, utility facilities, conduits or other duly the consent of without constituted county, township, village; or or to transact local busi- obtaining ness therein without first a franchise from the township, city village. Except provided as otherwise counties, townships, this constitution the of all cities villages highways, to the reasonable control of their streets, alleys public places hereby reserved to such government. local units of City Detroit Edison 127 v Opinion by Dissenting Kelly, J. is not a public on streets Conducting private business “ private enterprise public ‘The use of streets

right. but, so, privilege it is a good, even may public be for ’ ” Red Star or withheld. granted, regulated, bemay 398, 409; 208 Detroit, 234 Mich Drivers’ Ass’n v Motor Duluth, v 163 (1926), City Schultz quoting NW 602 (1925). fact, In this Court has 65, 68; 203 Minn NW right-of-way special of the that such use stated radically it from ordi- extraordinary because differs v streets, for travel. Fostini Grand use of which is nary 40-41; (1957), Mich 81 NW2d 393 Rapids, CJS, § Municipal Corporations, pp quoting limit the of streets deny 224-225. The use If the munici- government. in the local unit of reposes streets, grant permission decides to to use pality it sees fit. do under such terms and conditions as may so limitation Fostini, on the munici- only at 41. The supra 1963, art is that its control be reasonable. Const pality 7, § 29. century, Michigan uniformly courts

Through last Our courts con- applied appellate this rule to utilities. sistently municipality may require held that a utility’s relocate its at the own poles facilities fact, repeatedly been the expense. has constitutionally struggle against of these cases. Its right of reasonable control has been unsuc- protected cessful until now. illustration, nearly years ago, this Court

By way case, remarkably dealt with a similar Monroe There, Tel 162 NW 76 Postal requiring an ordinance vari- of Monroe issued their and facilities under- ous utilities to relocate lines that a at their own This Court stated ground expense. “ ‘incommode cannot utility’s right-of-way use ” (citation omitted). The Id. at 472 its use.’ Mich Dissenting Opinion by Kelly, J. Court further stated that the cost of relocation cannot be a deciding factor in whether the control of the right-of-way is reasonable. We wrote:

“The mere fact designated by that the route the munici- pality is less convenient or part involves on the telephone company larger expenditure consequence is of no long so company thereby as the prevented is not from reaching all those it desires to serve or who desire service from it. The record before us fails to disclose this condition. municipality, Where a in the of police exercise its inherent power, adopts reasonably an ordinance regulating the man- ner, character, place contemplated line, construction of a telephone company comply must regulations with such right entry and exercise its general powers under by conferred [Id. the State 473-474, them.” at quoting Village Jonesville v Michigan Southern Tel (1908).] 86, 90; 155 Mich 118 NW 736 In 1952, this Court followed in the footsteps of the Monroe case. The city of Detroit sought to install and expand its sewer system in an area where Edison had installed its facilities. Detroit Detroit, Edison Co v 348, (1952). 349-350; 51 NW2d 245 We held designated area equivalent was to those dedi- cated city to the for streets or alleys. Id. at 354. That being case, concluded, we Edison must bear the cost removing and replacing its facilities located there pursuant 1908, to Const 8, § art 28.1Edison conceded as much. Both it and the majority have failed to explain why Edison should not be bound in by this case earlier fact, concession. In the majority uses this con- cession as a reason to distinguish Detroit Edison Co from this case. Given that Edison made this concession in a case involving facts, similar I see no why reason should not be bound its clearly stated posi- former tion. predecessor 7, This was the § to Const 29. v Detroit Dissenting Opinion Kelly, J. an involv- addressed issue again 1965, this Court of Detroit city utility facilities. relocation of

ing alleys part as streets dedicated previously vacated area. blighted for a plan redevelopment urban of an Co, Mich Tel Michigan Bell Detroit Telephone Bell Both NW2d from the reimbursement sought and Edison Company at facilities. Id. their lines and relocation of for the city utilities to relocate for the plan Detroit’s called 549-550. Id. at underground. aboveground facilities both legal had a that the Court stated Again, this 557. to relocate their facilities the utilities require case, made no in the Monroe we As expense. their own reloca- aboveground and relocation distinction between underground. tion being after the baton picked up of Appeals

The Court relocating the of question to address repeatedly asked utility found that the consistently It has utility lines. as the relocation long of relocation as the cost must bear govern- of a discharge of the in the course required is Power v Consumers Pontiac City function. See mental of (1980), Detroit 450; 594 Mich 300 NW2d Co, App 101 Michigan Transportation Co v Southeastern (1987), Detroit 28; 410 295 Auth, App 161 Mich NW2d 145; 615 446 NW2d Detroit, App 180 Mich Edison Co v 26; Detroit, App 208 Mich (1989), Edison Co v Detroit App (1994), Taylor, 527 NW2d 9 of 551.2 2 from the Court of majority this line of cases contends that the governmental test is inconsistent with

Appeals applying function the disagree. the cases I I believe standard. “reasonable control” Appeals by assure that Court of created the articulate a further test Therefore, holdings supported reasonably. the are governmental units act majority Michigan errs in Constitution. The by the our case law and both majority’s Contrary state to the overruling helpful line of cases. this ” ‘general ignore "proper rule’ ments, did not Court of 475 Mich 109 Dissenting Opinion by Kelly, J. long discussing

This line cases reasonable control supported by under Const 1963, 29 7, § by Taylor common law. And control exercised here is also in accord with common law. rule,

Under the traditional utilities common-law have been bear required the entire from cost public right-of-way requested whenever to do so state or McQuillin, Municipal local 12 E. authorities. Law Cor (3d 1970); Sackman, porations § 34.74a ed. 4A J. Nichols’ (rev. 1981). § Law Eminent Domain 15.22 3d ed. This recognized approved by rule long ago was this Court as Light Drainage as New Orleans Gas Co. v. Comm’n Newof (1905) Orleans, 453, (holding injury 197 U.S. that the absque injuria[3]). sustained is damnum Redevelopment Housing Chesapeake & v Auth & [Norfolk 30, 35; 304; Potomac Tel 464 US L S Ct 78 Ed 2d 29 (1983).] abandoning law, Far from this common state’s constitution specifically retains it. Const art 3, Stout v Keyes, Doug 7; 1845). § (Mich, 188-189 Nothing in article 7, § 29 Constitution is inconsistent with common law in this area. Instead, as earlier in opinion, shown this Court has consistency underlined the in repeatedly requiring utili ties to Therefore, bear the cost relocation. the com mon law general rule, remains this state. Under its the Taylor represents ordinance a reasonable control of expressed McGraw, People Mich 150 NW 836 Ante at Instead, dutifully law, 121. followed the common which has not been repudiated in this state. legal remedy. Loss or harm for which there is no Black’s Law (7th ed). Dictionary 4 Legislature abrogate The the has to the common law. Rusinek v Schultz, Snyder Co, 502, 507-508; & Steele Lumber 411 Mich (1981). But, so, speak 309 NW2d 163 when it does must clear terms. v Marquis Remand), Indemnity (After Accident & 444 Mich Hartford v 17; (1994), quoting Bandfteld, 652 n 513 NW2d 799 Bandfield Taylor 131 Detroit Edison v by Dissenting Opinion Kelly, J. 5 is rea the control city’s right-of-way. Given the by Const constitutionally protected sonable, it is should be the decision 7, 29,§ and affirmed. McGraw, Mich People relies on majority (1915). stated, McGraw, the Court 150 NW together, Constitution] the [of the sections

“Taking to give as to they be so construed should regulations ordinances pass to such municipalities are not bridges as highways reference to their with Id. at 238. general State law.” inconsistent with the law as if it this statement of majority general treats area, prece- in the even precedent overrides all other Moreover, it inaccurate. directly point.6 dent on This is with McGraw. is inconsistent law earlier, the common law remains viable As noted Stout, Under the common Doug state. 188-189. law, to bear the entire cost required “utilities have been re- right-of-way from a whenever by state or local authorities.” quested to do so Norfolk Auth, creating & 464 US 35. In Housing Redevelopment PSC, did not overrule the Legislature explicitly contrary, common law. To the the PSC’s 460.6(1). restricted law.” MCL limited “as otherwise 80, 82; Legislature speaking in I find no action NW abrogate subject. clear terms that the common law on this remediating is reasonable also because it is directed at The ordinance If, any primary right-of-way, travel. an interference with the use of the time, utility public’s presence of a becomes a burden on the travel, way. utility’s give franchise must Postal Tel 195 Mich 472. poles case, directed at the fact that Edison’s In this the ordinance was sightlines led to collisions. This and facilities blocked vehicular rights-of-way use of the allowed interference with expense require exercise of its relocation at Edison’s as reasonable right-of-way. police powers Id. and control of its ordinances, traffic not the relocation McGraw dealt with local McGraw, 184 Mich 234-235. facilities. 475 Mich 109 Dissenting Opinion by Kelly, J. The common of part law the state is that restricting of Therefore, law. unless common law expressly is overruled, controls, it even with respect jurisdic- to the tion of the PSC.

Applying this to the hand, case at McGraw did not change the common-law rule that a municipality may require a utility to bear the cost of relocating its facilities. The Supreme Court and the Appeals Court of have consistently followed this rule. In continuing in this case its adherence law, to the common the Court of did err, not and its decision should be affirmed.

THE ORDINANCE IS NOT PREEMPTED Instead of properly respecting Taylor’s constitutional reasonably to control its rights-of-way, major- ity focuses its attention on the jurisdiction of the PSC. my analysis Given law, of the I conclude that this focus is misplaced. But I will address it in order fully demonstrate that the majority has reached an incorrect legal conclusion.7 municipality A precluded is enacting from an ordinance 1)

if the ordinance is in direct conflict with the state 2) statutory scheme, or if statutory the state scheme pre-empts by occupying ordinance regula- the field of tion municipality enter, which the seeks to to the exclusion ordinance, of the even where there is no direct conflict regulation. between the two schemes of [People v Llewel- lyn, (1977).] 257 NW2d 902 In determining whether the state preempted the field, (1) weighs certain considerations: whether state (2) law stipulates that exclusive, is legislative whether history implies that it preempted, majority why states that it cannot preemption. discern I address by appellant I do so because it was raised and addressed the Court Appeals. important part Therefore it is an of the discussion of this case. Detroit Edison Dissenting Kelly, J. (3) the statutory scheme pervasiveness whether (4) whether the nature preemption,8 and supports regulation matter exclusive state demands fourth uniformity. Regarding Id. 322-324. achieve provided: factor, this Court point, As to this last examination relevant regulated the nature indicates that where cases adapted regulation matter to local condi- calls for tions, the regulation the does not interfere with local scheme, regulatory supplementary regulation local state generally upheld. [Id. 324-325.] been has jurisdiction not factor, the first the PSC’s is Under Instead, is other- jurisdiction limited “as exclusive. its 460.6(1). directs restricted law.” MCL Edison wise legislative im- nothing history attention to in the our Therefore, Llewellyn the preemption. second plying fails to support preemption. factor also The favor preemption. Nor does third factor regulations pervasive they not so that cover PSC’s are entire area or field of lines. This power has that the PSC has no specifically stated city’s in the and control of a development interest left Rather, it must be to the individual right-of-way. municipality:

The commission not interested —nor should it he —in develop- will the effect which the construction have on the through If passes. ment of the which it communities upon binding local units of determination were to be government, public hearings and notifica- absence municipalities suggest process affected would tion to due City Wixom, shortcomings. [Detroit Co v 382 (1969) 673, 682; (opinion by Mich NW2d BRENNAN, C.J.), citing Twp, Gust Canton Mich 70 NW2d (1955).] preemption. to find factor alone will not sufficient This be 475 Mich 109 Dissenting Opinionby Kelly, J. This also ruled Court has the cost-conscious na- incompatible of the preempting ture PSC is with PSC municipality’s right rights-of-way: a control its But a have an location does interest and route high power specific of a tension electric line. It is land use compatible which is not with other uses. It land is a land neighborhood use which characterizes and influences adjacent development real estate. public The service commission statute does not vest high commission with to determine the routes “rates, except upon fares, tension lines as those routes bear fees, services, rules, charges, conditions of service” or the “formation, operation public or direction of such utilities.” (Stat etseq. 1961, § § CLS Supp 460.1 Aim 1965 Cum 22.13[1] (Stat seq.). et 1961, § first sentence CLS 460.6 Ann 22.13[6]), § Supp Cum vests the commission “with complete regulate all utilities * * * except in the state as otherwise restricted law.” empowered is not commission to assume the role of city. arbiter between the and the The company’s approach cost-conscious to route selection and the commis sion’s rate-and-service-conscious evaluation selected closely aligned. [Detroit Edison route are too BRENNAN, C.J.).] by (opinion 682-683 Aside from the Court’s in reasoning cases, these the PSC’s own contemplate rules no in preemption this area the Instead, they of law. anticipate municipalities that will pass rights-of-way. ordinances intended to control their AC, provides: R 460.517 utility “The shall bear the of cost construction where electric facilities are placed option the utility for its own convenience or where underground construction is re- quired by ordinance in heavily congested dis- business added.) (Emphasis tricts.”

This rule specifically that contemplates municipali- will pass subject. ties ordinances on the And specifi- it Taylor v Detroit Dissenting by J. Kelly, control. Edison cannot these caUy states that ordinances preempted ordinance is that the argue plausibly specifically the scheme when scheme regulatory a state regulatory ordinance. Because the state allows for such an by municipali- regulation and allows contemplates scheme field. ties, it not the preempt does not subject matter does the nature of the Finally, purpose the regulation state for require exclusive A city has uniformity throughout Michigan. achieving lines in the location route an interest land that is not location involves use of because their Conversely, the is other land uses. PSC compatible with construction will not effect interested Detroit Edison rights-of-way. have on cities’ C.J.). (opinion by Mich 682-683 BRENNAN, uniformity in this provided can and have courts law that utilities area of the law. common states Michigan courts pay must their facilities. Only this rule. this Court consistently upheld have It decision that this case failed to follow it. has is Municipalities less sure now creates confusion. will be they may when exercise their constitutional And is now unclear rights-of-way. control their abrogated common in this in all whether the law area is just in situations or some situations. legal justification.

This None of confusion without factors preemption favors PSC. Llewellyn Ap- Past incarnations of this Court and the Court of result, a point. understood this As a consis- peals have regarding tent rule of law has been created reloca- Court, of this I majority tion of lines. Unlike the rule would leave this of law unmolested. THE IMPLICATED

THE PRIMARY JURISDICTION OF PSC IS NOT rein- Adhering to doctrine agency the courts are expertise forces which 136 475 Mich 109 by Dissenting Opinion Kelly, J. matter, judicial

deferring expenditure and avoids the of by that resources for issues can better be resolved jurisdiction’ agency. question ‘primary “A when arises a may cognizable in but claim be a court initial resolution of special competence within the of an issues administrative agency required.” Co, [Travelers is Co v Ins Detroit Edison (2001) (citation 185, 197; Mich NW2d 733 omit- ted).] fixed formula determining

No exists when jurisdiction primary applies. major But three consid- (1) erations have been agen- identified: whether cy’s specialized preferable forum, makes a expertise (2) is a uniformity whether there need for in the (3) issue, resolution of judicial whether a determination of the issue have an will adverse effect agency’s on the performance of its regulatory respon- sibilities. Constr Corp Rinaldo’s Bell Tel Co, 454 Mich (1997), quoting NW2d (3d Pierce, & § Davis ed), 14.1, Administrative Law p Application 272. of these considerations does not a support finding that this rests case with the PSC.

The issue here whether Taylor exercising is is rea- sonable control rights-of-way.9 over streets and is not PSC to deal that equipped with issue. Detroit Edison (opinion by BRENNAN, 682-683 C.J.). It does not rate Instead, involve structures. it is a legal question regarding interpretation application question a constitutional It a provision. is of law best left expertise courts, not an administrative agency. majority implies just preliminary this controlled matter reality, goes is the McGraw. this entire And it focus case. beyond application ruling it, the mere of McGraw. In on the lower courts precedent were bound to common follow the law and directly point. on

that is v Detroit Dissenting Kelly, J. agree, seems to majority and the argues, Defendant by the PSC should be resolved in this case the issue that affected. Es- adversely may rates be Edison’s because may communities many fear is that Edison’s sentially, utility’s at the placed lines be that require that this It asserts has done so. once expense so, If millions of dollars. hundreds of cost Edison might its rates. Because it to raise require this will argues, it rates, raising Edison that deals with body the PSC is the PSC. go to that this case should reasons to cannot be asked logic. The PSC I this question rates. utility affect may ultimately that control all jurisdiction over Otherwise, original it have would regulations to environmental everything from utility employees. to wages paid follows: reasoning would be as extension, Edison’s By sum of significant Edison a wages cost employees’ to consumers. When on passed This cost is money. Therefore, the PSC should rise, rates rise. wages wages utility employees’ involving handle all cases setting that can deal with only body it is because the maximum could set that the PSC rates. It follows an hour in employees pays $1 wage that it I find disheart- to the customers. order to lower costs itself to be dis- has allowed majority that ening presented. from the real issue argument this tracted support not uniformity does Next, the need for fact, today, a in the PSC. In before involving the in all cases applied of law single rule Both the common law utility facilities. relocation of municipality that a this Court held from precedent facilities at utility to move its a require could century, the last this nearly For expense. utility’s own was The PSC uniformly applied. had been rule of law 475 Mich 109 Dissenting Opinion Kelly, J. destroyed. neither threatened nor that unifor- Given achieved, mity can and has been there is no need now to defer to the PSC.10 judicial a not

Finally, determination will have an performance adverse effect on the PSC’s its regula- tory case responsibilities. The ordinance does not regulatory conflict with PSC’s scheme. The PSC’s a contemplate own rules will municipality that enact an that a utility’s ordinance when decides facilities must be relocated. municipality empowered require the utility pay for the relocation. Given this, PSC’s rules allow for no effect negative on the regulatory responsibilities should be assumed. majority apparently draws distinction between precedents this case and other because the lines are to be underground. moved The common law makes no such did distinction. Nor this Court previously draw such a Instead, forward, distinction. from least this Court underground treated replacement the same as any other replacement. Postal Tel To 472. create this requires distinction a in change existing law.

The governing moving rule a utility’s poles and structures that are situated within right-of-way a should be retained. a application Under consistent rule, this regulatory the PSC’s responsibilities are as they unaffected now as were when all the other cases that I have discussed were decided.

Everything considered, case a presents question this that the is ill-equipped PSC handle. The PSC has no factor, majority points system Under this to the “uniform removing above, overhead lines....” Ante at 123. As noted the PSC’s contemplate municipal subject. Moreover, own rules ordinances on this AC, controlling. Therefore, the ordinances are R 460.517. “uniformity” weigh disallowing does not in favor of these ordinances jurisdiction. guise primary under the Taylor Detroit Edison Dissenting Opinion by J. Kelly, constitutional dealing applying with expertise jurisdic- Therefore, deferring to its provisions. unnecessary. unwise tion is both

CONCLUSION 7, 29,§ Constitution, 1963, art Const Michigan right to reason- government local units of provides courts rights-of-way. over their able control to order held that this includes long have at the to another location utility to relocate its facilities Therefore, justified was utility’s expense. to relocate its requiring an ordinance passing for the relocation itself. pay facilities not area of law. The state has well-developed This is a field, and the primary occupied there no need for Quite simply, implicated. PSC is not makes in majority that the of this Court change the sea judgment of the Court of today. the law affirmed. should be

Case Details

Case Name: City of Taylor v. Detroit Edison Co.

Court Name: Michigan Supreme Court

Date Published: May 31, 2006

Citation: 715 N.W.2d 28

Docket Number: Docket 127580

Court Abbreviation: Mich.