YELLOW FREIGHT SYSTEM, INC v STATE OF MICHIGAN
Docket Nos. 104703, 195564
Court of Appeals of Michigan
August 14, 1998
231 Mich. App. 194
Yellow Freight System, Inc., a carrier engaged in interstate commerce, brought an action in the Court of Claims against the state of Michigan and others, seeking a partial refund of truck registration fees paid pursuant to
The Court of Appeals held:
1. The trial court correctly deferred to the Interstate Commerce Commission with respect to the commission‘s interpretation of
3. The plaintiff was not required by § 63 or § 64 of the Administrative Procedures Act,
4. The ordered refund is an appropriate remedy. Prospective relief only would be inadequate. Due process requires backward-looking relief to rectify any unconstitutional deprivation of property that results where the state places a taxpayer under duress to pay a tax when due and relegates the taxpayer to a postpayment refund action in which to challenge the legality of the tax.
5. The trial court correctly denied the plaintiff‘s request for attorney fees pursuant to
Affirmed.
O‘CONNELL, J., concurring in part and dissenting in part, stated that there is no ambiguity in
- COURTS — STATUTORY CONSTRUCTION — FEDERAL STATUTES.
A court reviewing a federal statute that is silent or ambiguous regarding congressional intent should defer to the interpretation of the statute made by the federal agency charged with its administration unless the interpretation is unreasonable.
- ACTIONS — RECOVERY OF FEES PAID TO STATE — ASSUMPSIT FOR MONEY HAD AND RECEIVED.
An action to recover fees paid to the state in excess of the amount allowed by federal law is in assumpsit for money had and received.
CONSTITUTIONAL LAW — DUE PROCESS — REFUND OF ILLEGAL TAXES. Due process obligates a state to provide meaningful backward-looking relief, e.g., a refund, to rectify any unconstitutional deprivation that results where the state places a taxpayer under duress to pay a tax when due and relegates the taxpayer to a postpayment refund action in which to challenge the legality of the tax (
US Const, Am XIV ).- CIVIL RIGHTS — FEDERAL CIVIL RIGHTS ACT — PERSONS — STATE AGENCIES.
The federal civil rights act does not apply to a state agency; the act applies to persons, and a state agency is not a person for purposes of the act (
42 USC 1983 ). - CIVIL RIGHTS — FEDERAL CIVIL RIGHTS ACT — STATE TAX CASES — INJUNCTIVE OR DECLARATORY RELIEF.
A state court cannot grant injunctive or declaratory relief under the federal civil rights act in state tax cases when an adequate legal remedy exists (
42 USC 1983 ).
Eames Wilcox (by Ronald J. Mastej and John W. Bryant), for the plaintiff.
Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, and Don L. Keskey and Judith I. Blinn, Assistant Attorneys General, for the defendants.
Before: GRIFFIN, P.J., and MCDONALD and O‘CONNELL, JJ.
MCDONALD, J. Plaintiff, an interstate commercial carrier, brought this action asserting that defendants (the state) had collected registration fees pursuant to
I
In 1991, Congress passed the Intermodal Surface Transportation Efficiency Act (ISTEA), PL 102-240, which substantially amended
The provision at issue,
The change in the method of determining reciprocity resulted in a substantial increase in the fees plaintiff owed the state for the 1992 registration year. Under the base-plating system used for 1991, plaintiff paid the state $50 for five vehicles that were “base-plated” in Oklahoma, but paid nothing for 3,730 vehicles “base-plated” in Illinois and Indiana, because
II
The state argues the Court of Claims erred in determining that the state could not charge plaintiff $10 a vehicle. According to the state, it had “charged or collected” $10 a vehicle as of November 15, 1991. Plaintiff argued, and the Court of Claims agreed, the statute was properly interpreted to refer to the fees charged or collected for the 1991 registration year. We affirm the Court of Claims’ decision with regard to this issue.
The Court of Claims’ opinion indicates its decision was based on the ICC‘s decision in American Trucking Ass‘ns Ins-Petition for Declaratory Order-Single State Ins Registration, 9 ICC2d 1184 (1993). In American Trucking, the ICC discussed various issues that had arisen under the SSRS. The plaintiff sought clarification from the ICC concerning the statutory language. The ICC summarized the issue raised by the plaintiff in the following way:
Yellow [Freight] raises the issue of whether the statutory language concerning the fee charged on November 15, 1991, relates to fees charged for the 1991 registration year or the 1992 registration year. (Under the “bingo” regulations, carri-
ers filed applications between October 1 and December 31 for stamps or identification numbers for the ensuing year.) Yellow points out that it paid a State zero fees covering 1991 operations and $10 per vehicle fees covering 1992 operations. However, Yellow paid the 1992 fees prior to November 15, 1991. It would have the Commission conclude that the focus of the statute is on the 1991 registration year and that the fee for 1992 is not germane.
The ICC resolved the matter as follows:
Yellow has raised the issue of whether the statutory language concerning the “fee charged or collected as of November 15, 1991[,]” relates to fees charged for the 1991 registration year or for the 1992 registration year. We think it clear that the statutory language concerns only fees charged or collected for the 1991 registration year, and we so find.
The state argues the court should not have followed American Trucking because it does not comport with the unambiguous language of the statute and renders the November 15, 1991, deadline a “nullity.” Therefore, the state argues the decision was not entitled to the deference usually afforded an agency‘s interpretation of a statute that the agency is charged with enforcing.
This Court has recognized that deference should be given to the interpretation of a federal statute by the agency administering it and that following an agency‘s interpretation promotes uniformity in application by the states. Gibbs v General Motors Corp, 134 Mich App 429, 432; 351 NW2d 315 (1984). Where a statute is silent or ambiguous regarding congressional intent, a reviewing court “should defer to a federal agency‘s construction of the statute unless the agency‘s interpretation is unreasonable.” Walker v Johnson & John- son Vision Products, Inc, 217 Mich App 705, 713; 552 NW2d 679 (1996), citing Chevron USA, Inc v Natural Resources Defense Council, Inc, 467 US 837, 844; 104 S Ct 2778; 81 L Ed 2d 694 (1984).
Congress’ intent concerning the allowable fee levels is not clear with respect to the pertinent period for fixing the fee levels. The phrase “as of November 15, 1991” denotes a period that ends on the specified date. However, the statute is silent regarding when the period begins. One could argue a state that had charged or collected fees from a carrier in any year before 1991 was entitled to continue to collect the fees under the SSRS. On the other hand, one could conclude, as the ICC did, that the relevant period was the registration year that included November 15, 1991. We do not believe Congress “had an intention on the precise question at issue. . . .” Id. at 843, n 9. Because the statute does not reveal congressional intent, we should defer to the ICC‘s interpretation unless it is unreasonable. Walker, supra.
We conclude that the agency‘s interpretation of the statute was reasonable. In our opinion, the agency acted reasonably in determining the fees should be fixed at the level in effect for the 1991 registration year, regardless of whether a new basis for determining reciprocity had been announced for 1992 or whether certain carriers had paid fees for 1992 before November 15, 1991. Plaintiff‘s voluntary payment of fees not due and owing does not affect our analysis.
The state also contends the Court of Claims’ ruling applying the American Trucking decision by the ICC “effectively repeals existing reciprocity agreements and/or alters them to reinstate a previous basis for determining fee waivers thereunder[,]” and thereby
The state argues the language in the American Trucking decision by the ICC was not binding on the state because the notice of institution of declaratory action resulting in that decision did not indicate facts specific to Michigan. We disagree. The Court of Claims did not conclude that the ICC decision in American Trucking was binding on the state. However, the court could not properly disregard the agency‘s interpretation of a statute merely because the state did not participate in the proceeding. The state has not provided, nor are we aware of, any authority holding that an alleged deficiency in the notice of institution of declaratory action affects judicial review of an agency‘s interpretation of a statute.
The state also suggests that states should not be required to consider reciprocity agreements in determining the amount of fees “charged or collected as of November 15, 1991.” In Single-State Ins Registration, 9 ICC2d 610 (1993), the ICC determined that states must consider the reciprocity agreements. The ICC‘S decision in this regard was upheld in Nat‘l Ass‘n of Regulatory Utility Comm‘rs v ICC, 309 US App DC 325; 41 F3d 721 (1994). Although that decision is not binding on this Court, we find it persuasive and adopt its ruling with regard to this issue.
III
We also reject the state‘s argument that governmental immunity,
IV
The state also contends plaintiff was required to request a declaratory ruling from the PSC as a prerequisite to court review. We disagree. The state relies on both §§ 63 and 64 of the Administrative Procedures Act,
Plaintiff‘s action is not accurately characterized as simply an action for a declaratory judgment available under § 64. Rather, as previously discussed, the action was essentially an action in assumpsit for
To the extent that the state claims that plaintiff was required to get a declaratory ruling under § 63, we also find that section inapplicable. Section 63 indicates that the agency “may issue a declaratory ruling as to the applicability to an actual state of facts of a statute administered by the agency or of a rule or order of the agency.” Assuming plaintiff could have requested a declaratory ruling, § 63 does not require plaintiff to do so before seeking judicial review.
V
We next address the relief that the court awarded to plaintiff, specifically, a refund of $99,580, which is the amount collected for 1994, 1995, and 1996. Arguing that a refund is contrary to the United States Supreme Court decision in McKesson Corp v Division of Alcoholic Beverages & Tobacco, 496 US 18; 110 S Ct 2238; 110 L Ed 2d 17 (1990), the state requests the remedy be limited to prospective relief commencing at the time of “any final appellate decision” on the issue.
The question before us is whether prospective relief, by itself, exhausts the requirements of federal law. The answer is no: If a State places a taxpayer under duress promptly to pay a tax when due and relegates him to a postpayment refund action in which he can challenge the tax‘s legality, the Due Process Clause of the Fourteenth Amendment obligates the State to provide meaningful backward-looking relief to rectify any unconstitutional deprivation. [Id. at 31.]
The state cites McKesson for its discussion of the “pass-on” defense to an action for a tax refund. See McKesson, supra at 47-48. The state suggests a refund is not necessary if the expense of the unlawfully collected fees was passed on to plaintiff‘s customers. However, the McKesson Court ultimately rejected the defense in that case, id. at 48-49. The state has not cited any authority indicating that the pass-on defense has been adopted in this jurisdiction, and we decline to adopt it in this case.
The state also cites LCI Int‘l Telecommunications Corp v Dep‘t of Commerce, 227 Mich App 196; 574 NW2d 710 (1997), as support for its argument that plaintiff should receive only prospective relief. In LCI, this Court determined that the defendants had con-
The state also contends that, if this Court does not limit Yellow Freight to prospective relief, it should order a remand to the PSC to allow the state to change the fee schedule to retroactively surcharge carriers who benefited from the state‘s misapplication of the SSRS. The state relies on language in McKesson suggesting that, as one of the alternatives to providing a refund to the aggrieved distributors in that case, Florida could assess and collect back taxes from the petitioners’ competitors. Id. at 40. However, the adequacy of any remedy necessarily depends on the basis for relief. In McKesson, the petitioners were entitled to relief because a statute imposing an excise tax discriminated in favor of distributors of local products. The remedies the Court approved were ways Florida could undo the discriminatory effects of the statute and make the tax scheme valid under the Commerce Clause. In the present case, plaintiff is entitled to relief because the state collected fees contrary to a statute. Because the purpose of the relief in this instance is not to undo discriminatory effects, surcharging carriers who were allegedly undercharged is unrelated to providing plaintiff with an adequate remedy in this case. The only way to provide plaintiff with “meaningful backward-looking relief,” McKesson,
VI
In Docket No. 195564, plaintiff advances several issues relating to the court‘s denial of plaintiff‘s motion for attorney fees pursuant to
Case law indicates plaintiff could not prevail in a § 1983 action against the state agencies. Section 1983 applies to “person[s],” and the United States Supreme Court has held that a state agency is not a “person” for the purposes of § 1983. Hardges v Dep‘t of Social Services, 201 Mich App 24, 27; 506 NW2d 532 (1993), citing Howlett v Rose, 496 US 356; 110 S Ct 2430; 110 L Ed 2d 332 (1990), and Will v Michigan Dep‘t of State Police, 491 US 58, 66; 109 S Ct 2304; 105 L Ed 2d 45 (1989).
Plaintiff was not entitled to relief on the basis of its § 1983 claim brought against the state officials acting in their official capacity. Section 1983 claims seeking prospective injunctive relief may be brought against
We are not persuaded by plaintiff‘s attempt to distinguish Nat‘l Private Truck on the basis that the fees in this case were collected under federal law pursuant to a system implemented by the ICC. Plaintiff contends the principles of comity and federal deference to state authorities underlying the decision in Nat‘l Private Truck are not relevant in this case. However, federal law does not require that states charge the fees, but rather sets forth the method and limits on states that choose to collect the fees. Plaintiff‘s contention, “No issues of state tax law or state tax administration are here involved,” is disingenuous and does not provide a meritorious basis for distinguishing Nat‘l Private Truck.
We also disagree with plaintiff‘s suggestion that the Supreme Court intended its decision in Nat‘l Private Truck to be limited to taxes and therefore not apply to fees. On the basis of the principles of comity and federalism, the Supreme Court concluded that Congress did not intend § 1983 claims to be brought in state tax cases when an adequate state remedy is available. Those principles apply equally well when the revenue collection is in the form of a fee.
The Court of Claims properly granted plaintiff‘s motion for summary disposition. The state was precluded from collecting fees from plaintiff in excess of the amount charged or collected for the 1991 registration year. Plaintiff is entitled to a refund of the amount improperly collected. We also affirm the Court of Claims’ denial of plaintiff‘s motion for attorney fees pursuant to § 1988 because plaintiff had no viable § 1983 claim against any of the defendants.
Affirmed.
GRIFFIN, P.J., concurred.
O‘CONNELL, J. (concurring in part and dissenting in part.) I respectfully dissent from part II of the majority opinion. I find no ambiguity in the statutory provision in dispute and accordingly would instruct the Court of Claims to apply the statutory language according to its plain meaning and not according to the ICC‘s strained construction.
The primary goal of statutory interpretation is to ascertain and give effect to legislative purpose. Haworth, Inc v Wickes Mfg Co, 210 Mich App 222, 227; 532 NW2d 903 (1995). The language of the statute itself is the primary indicator of legislative intent. Folands Jewelry Brokers, Inc v City of Warren, 210 Mich App 304, 307; 532 NW2d 920 (1995). “If the plain and ordinary meaning of the statute is clear, judicial construction is normally neither necessary nor permitted.” Dep‘t of Transportation v Thrasher, 196 Mich App 320, 323; 493 NW2d 457 (1992), aff‘d 446 Mich 61; 521 NW2d 214 (1994).
The pertinent language in
As the majority states, it was the intent of Congress to “freeze fees at the level as of November 15, 1991.” To determine the particulars of that intent, I would restore “collected” as the companion of “charged,” and respect the specificity of “November 15, 1991.” A court should presume that every word has some meaning and avoid rendering any word nugatory. Tiger Stadium Fan Club, Inc v Governor, 217 Mich App 439, 457; 553 NW2d 7 (1996). Accordingly, I
The statute does not refer to a “period” ending on November 15, but simply to that specific date. It does not refer only to the fee structure in place at the specified time, but to fees “collected or charged” at that time, identifying fees payable to the state, or already paid to the state (for whatever the reason), as establishing the level at which the fees are to be frozen. The words “as of” in reference to a specific date clearly refer to the status quo in place on that date. Thus, the congressional intent to freeze fees at the rates “collected or charged as of November 15, 1991” plainly recognizes for this purpose both the rates actually charged and those according to which fees were actually collected on that date.
Accordingly, because the state had collected plaintiff‘s fees as envisioned for the 1992 registration year “as of November 15, 1991,”
At stake here is the state‘s interest in collecting higher fees from plaintiff in accordance with recent changes in the state‘s regulatory scheme, and plaintiff‘s interest in avoiding those fee increases and continuing to operate under the old scheme. Each party argues that the other stands to receive a windfall if the other‘s interpretation of the statutory language at issue is adopted. That statutes have the effect, intentionally or not, of benefiting some and burdening
Although I express no disagreement with the reasoning of part V of the majority opinion, I do not join in that part because it concerns the relief to which plaintiff is entitled, where under my reading of the statute in question plaintiff is not entitled to any relief. I concur with parts III, IV, and VI.