213 Mich. App. 82 | Mich. Ct. App. | 1995
Defendant appeals as of right a circuit court order denying its motion for summary disposition and enjoining defendant from expanding its natural gas service in Highland Township. We reverse and grant summary disposition for defendant.
In 1956, defendant obtained a franchise from Highland Township to provide natural gas service to customers in §§ thirty-one through thirty-six of the township. In 1962, plaintiff also secured a nonexclusive franchise to provide natural gas service in Highland Township. Although plaintiff’s nonexclusive franchise covered the entire township, defendant apparently provided nearly all the natural gas service in §§ thirty-one through thirty-six of the township until 1992, when plaintiff renewed its franchise and began to expand its gas service in those sections.
After its franchise expired in 1986, defendant deliberately chose not to renew its franchise. It nonetheless continued to provide and expand natural gas service in §§ thirty-one to thirty-six of the township. Highland Township never objected to defendant’s continued service in those sections after defendant’s franchise expired. Nor did it affirmatively consent to defendant’s continued service.
After renewing its own franchise in 1992, plaintiff filed suit to enjoin defendant from expanding its gas service to new customers. Having agreed that no material facts were in dispute, the parties requested the circuit court to determine plaintiff’s entitlement to relief as a matter of law. The court found that defendant and the township had not
Although the trial court apparently never entered an order conforming to the requirements of MCR 3.310(C), the parties treated the court’s order granting plaintiff’s request for injunctive relief as effective. At oral argument, defense counsel acknowledged that defendant transferred its remaining rights and interests in Highland Township to plaintiff in response to the decision and to protect the gas service customers involved.
On appeal, defendant contends that it retains certain rights and obligations to continue to provide and expand its gas service in §§ thirty-one to thirty-six, despite the termination of its thirty-year franchise. Defendant contends that continuation does not violate plaintiff’s rights under its renewed franchise because plaintiffs franchise is nonexclusive. Additionally, defendant argues that only Highland Township has standing to object to its continuation of service and that plaintiff lacks standing to object because plaintiffs own renewed franchise was never confirmed by the township’s voters. Defendant also argues that an injunction is inappropriate because plaintiff has unclean hands because of its failure to obtain a certificate of public convenience and necessity from the Public Service Commission pursuant to 1929 PA 69 before extending its gas service into defendant’s service area and because no public nuisance is involved.
After a franchise has been granted by a township board and accepted in writing by the grantee, the action of the board in granting the franchise shall be submitted to a vote of the electors of such township for confirmation at the next regular election.
Section 5 provides:
If a majority of the electors of such township voting upon the question shall vote in the affirmative such franchise shall be confirmed and shall be irrevocable, otherwise it shall not be confirmed.
A confirmatory vote is required for franchise renewals as well as for the original franchise granted. See Walker Bros Catering Co v Detroit City Gas Co, 230 Mich 564; 203 NW 492 (1925). We reject plaintiff’s contention that these statutes do not apply to franchises that the parties intend to be revocable simply because § 5 purports to make franchises irrevocable upon confirmation by majority vote. Viewing the act in its entirety, the plain language appears to apply to all public utility franchises granted by townships, without limita
We find no constitutional violation or conflict results from the Legislature’s imposition of greater restrictions on the authority to grant public utility franchises than those imposed by the constitution. The grant of a franchise is an exercise of the sovereign power of the state, vested in the Legislature. Although such power may be delegated to municipalities, municipalities exercise the power as agents of the state, subject to the conditions prescribed by law. Niles v Michigan Gas & Electric Co, 273 Mich 255, 265; 262 NW 900 (1935).
Incidentally, we note that plaintiff’s original franchise from the township in 1962 was expressly subject to confirmation by majority vote of the township electors, notwithstanding the intended revocability of the franchise.
Because plaintiff’s renewed franchise has not been confirmed by the township’s voters, the franchise is invalid. See Walker Bros, supra at 571. Accordingly, we leave for another day the determination whether a public utility holding a valid, nonexclusive franchise has any right to enjoin competition by other public utilities that continue to provide and expand service after their franchises have expired, or whether only the municipality has standing to object. Because plaintiff’s
We emphasize that the continued provision of utility service after a franchise has expired and without a valid franchise renewal is not necessarily prohibited or illegal conduct. Although Const 1963, art 7, § 29 conditions the right of public utilities to transact local business upon first obtaining a franchise from the municipality, it is not unlawful to continue to transact business after a properly obtained franchise has expired. At most, the utility’s "right” to do so has expired. It is unnecessary for us to decide today whether a utility in that situation would be subject to ouster by another utility holding a valid, existing franchise, as well as ouster by the municipality itself, because there is no holder of a valid, continuing franchise in this case. Our disposition of this case based upon the voter confirmation issue also makes it unnecessary for this Court to reach the various other arguments raised by defendant.
Reversed and remanded for entry of summary disposition in defendant’s favor. We do not retain jurisdiction.