*1 1976] v Detroit LA SALLE TOWNHOUSES COOPERATIVEASSOCIATIONv THE

DETROIT EDISON COMPANY

Opinion of the Court 1. Courts —Jurisdiction—Public Service Commissions —Viola- Regulations tions of —Invalid Tariffs or Rates. may utility company general

A customer sue a in a court of damage when the customer contends regulation resulted from a violation of a tariff or or when the approved by customer contends that the rates the Public Ser- vice Commission are invalid. 2. Public Service Commissions —Courts—Jurisdiction—Tariff

and Code Provisions. party aggrieved by provisions A of a tariff or code should seek provisions relief first an attack before the Public Ingham County Service Commission and from it to the Circuit Court. Application Utility 3. Public Service Commissions — Rates. applicable Customers who claim that the rates to them should be approved by different from those the Public Service Commis- directly challenge sion and who do not of the rates approved by the commission should seek relief from the Public Service Commission. Application Utility

4. Public Service Commissions — Rates. questions The Public Service Commission is best suited to hear concerning application approved by of rates the commis- sion, particularly since such a determination is within the province specialized knowledge exper- of the commission’s approved tise and if the rates are found not to then the approve apply. commission can find or a rate which would [1, [3, ^[10] 1 Am Jur 5-7] 64 Am Jur 64 Am Jur 2d, References Administrative 2d, 2d, Public Public Utilities for Points Utilities 230 et Law 95.§ in Headnotes § §§ 79-132. seq. by Bronson, Jurisdiction—Primary 5. Courts — Jurisdiction —Administrative *2 Law. primary guide jurisdiction The is used to a court doctrine in determining exercising juris- whether it refrain from should agency diction after an until administrative determined question arising proceeding some before the court. Primary 6. Courts — Jurisdiction —Factors—Administrative Law. Application jurisdiction primary requires of the doctrine of (1) degree trial consider as factors pursue by requiring litigant which be will achieved admin- (2) remedies, expertise for istrative the need the administrative (3) area, agency particular of an in a if issues of law are paramount proceed- the trial decision to court’s entertain the ings however, usually upheld, is if factual issues involved agency be allowed to resolve those issues ñrst. Primary 7. Courts — Jurisdiction —Court’s Discretion —Adminis- trative Law. jurisdiction primary Under the doctrine of the ultimate decision agency whether an administrative should ñrst consider a case court, is within the discretion and because the policy judicial restraint, only doctrine rests a sound ñrmly expediences should be considered exercise of that discretion. 8. Courts —Public Service Commissions —Jurisdiction—Rate Is- sues.

The Service Public Commission and the courts have concurrent utility over rate issues. 9. Courts —-Rate Issues —Rules—Public Service Commissions.

The creation of a hard-and-fast rule that all direct rates must ñrs’t be before the Public Service accepted precedent Commission cannot be where the for it case is dictum. Statutory op Interpretation 10. Administrative Law — —Issue op Body. Fact —Issue Law- —Administrative statutory interpretation usually legal While as a classiñed issue, body same cannot said be of an administrative interpreting regulations. its own La Salle Opinion of the Court Appeal Dingeman, Jr., from J. Wayne, Harry J. (Docket Submitted October at Detroit. 23738.) No. Decided May Cooperative Townhouses Association and others brought suit challenging the rate for steam heat applied to the association De- troit Edison Accelerated Company. judgment for defendant. appeal. Plaintiffs Affirmed.

Byron H. Higgins and Samuel Shuman, I. Fischer, Franklin & Ford (by George Jr., Hogg, and Francis E. Bentley), for defendant. J.,

Before: P. and Bashara and M. F. Cavanagh, JJ.

M. F. Cavanagh, J. Plaintiffs are four coopera- associations, tive and various individual members of associations, who use steam heat provided defendant, The Detroit Edison Company. For a number years, Edison has included in its steam computations rate an automatic adjustment fuel clause which it passes on to all steam heat users any increases the cost of fuel utilized to produce the steam. Plaintiffs suit Wayne County Circuit Court challenging the fuel adjustment clause seeking to recover the money paid pursuant to it.

Detroit Edison moved for judgment accelerated ground on the that the circuit court lacked subject matter jurisdiction. The trial judge granted the motion ruling that exclusive jurisdiction subject matter inwas the Public Service Commis- pursuant 22.13(6). sion 460.6; to MCLA MSA Alter- natively, the trial judge ruled that even if the op Opinion Court the jurisdiction in such circuit courts have concurrent Michigan matters, Bell Tele- under Valentine phone 199 NW2d Mich validity go the MPSC rates them- the that commission. Plaintiffs selves must first appeal ruling. now 460.6a; on MCLA action Plaintiffs base their 22.13(6a) prior 1972 amend- which, to the MSA ment, prohibited Service Commission the Public adjust- incorporation permitting of fuel from ment clauses in rate schedules ser- for domestic they are domestic contend vice. Plaintiffs only rates Edison has two users. Detroit approved by PSC; heat; for steam both are adjustment fuel clauses. both contain judge noted, As the basic issue is plaintiffs service within whether the Plaintiffs the PSC rates do Detroit are "domestic” 22.13(6a). meaning 460.6a; MSA of MCLA challenge directly not

do rates, argue but do apply challenge to them. Plaintiffs not adjustment application of the fuel Edison’s part clause to them. But the clause is the rate. heat has no rate schedule for steam fuel which does not include a clause. sell The PSC has authorized Detroit Edison to adjust- a fuel steam heat at rates which include question Thus, rates ment. approved by the PSC approved rates

Since the include presume clauses, plaintiffs rates we are "commercial”. service, commercial, not are domestic then are entitled to a third "domestic” rate. *4 plaintiffs Whether are entitled to a classification and a third with- "domestic service” rate schedule a clause the trial court out fuel is—as "particularly province within the noted — commission’s specialized knowledge exper- and v Bronson, P. J. then apply, not do rates approved tise”. If the a rate which approve and require PSC can find or would apply. involving rates which a situations "There are some general juris- in a court of may sue a

customer 25. Valentine, supra, Mich at diction.” Plaintiffs do of those situations. But this is not one damage as a have suffered that not contend regulations. See tariffs and of violations of result Co, supra, at Telephone Bell Michigan Valentine the two PSC that contend plaintiffs 30. Nor do position is Basically, plaintiffs’ rates are invalid. and to them apply rates do not approved rate, without another clause, apply. provisions of a party aggrieved

"Ordinarily, a upon those relief an attack or code should seek tariff the Public Service provisions before Ingham County Circuit Court.” from it to the at approved

The PSC should determine rates

Affirmed. J., concurred.

Bashara, (concurring). I reach the same say I cannot majority because result as requiring abused his discretion their claims before initially pursue sepa- I write Public Service Commission. that Valentine agree I do not because rately Telephone Bell Michigan any application here. NW2d *5 App 7 12 Bronson, P. J. Concurrence specifically Although majority men- does not proceeding it, under the doctrine of we are tion "primary jurisdiction”, as the courts and inasmuch have concurrent the Public Service rate issues. We do not over ruling accept that the alternative the trial court’s jurisdic- has exclusive Public Service Commission subject tion over that matter. jurisdiction” "primary is used to

The doctrine of determining guide it should a court in exercising jurisdiction until after refrain from agency has determined some an administrative proceeding question arising in the before the decision whether the adminis- court.1 The ultimate agency' first consider the case is trative within the discretion of the

trial Yet court.2 be- policy cause the doctrine rests a "sound "firmly expedi- judicial restraint”, in the exercise of that ences” should be considered discretion.3 appellate developing decisions the doctrine recognized important,

have that certain factors are judge. and should be considered One frequently which is mentioned is whether issues paramount. law, fact, rather than issues of significant, issues of law are the trial court’s deci- proceedings up- usually to entertain the is sion primarily held.4 tual if the case involves fac- agency issues, should be 1 (1st Davis, ed, 1958), 19.01, p Law 3. Administrative Treatise § 2 Association, Thorp Corp, Wisconsin Collectors Inc v Finance 32 Improvement 36, 45; (1966), White Lake Wis 2d 145 NW2d 37 Whitehall, City 35; v Association fn 177 (1970). NW2d 473 Co, (Fla Tampa App, State ex rel Shevin v Electric 291 So 2d 45 1974). den, 1974), (Fla, cert 297 So 2d 571 4 See, Dairyland Co-op, 45, 56; State v Power 52 Wis 2d 187 NW2d Kovarsky Brooklyn Union Gas 279 NY (1938), Davis, supra, p NE2d 287 important Another first.5

allowed to resolve degree which will be factor pursue litigant by requiring his achieved administrative remedies.6

Finally, a need for the par- agency expertise” in a "administrative the court to decline ticular area is a reason jurisdiction.7 depart language seems to in Valentine

Certain *6 analysis and to create a hard- from this traditional respect utility rates —that all to and-fast rule with direct must be first such rates to Service Commission. the Public before holding in was that Valentine the actual public against utilities can be decided tort actions applicable. initially by even if a tariff the courts dictum, I would "rule” is Because the Valentine simply inflexible, and it. It is too decline to follow contrary "primary jurisdic- ordinary rules of to the applications.8 in some of its tion” 5 Co, 469; See, Paper R 198 Mich Co v Detroit & Mackinac Fletcher Co, (1917), Chicago, St Paul R Milwaukee & 164 NW 528 Anderson (1919), Railway 424; United v Oakland 208 Mich 175 NW 246 Detroit (1921), 275; Judge, Federal Gravel Co v Mich 183 NW 938 Circuit 215 (1929), Co, 49; Texas & 226 NW 677 & Mackinac R 350; Co, 426; L 27 S Ct 51 R Cotton Oil 204 US Pacific Co v Abilene Co, (1907), Syndicate Croydon (1947), 72 v Consolidated Edison Ed 553 NYS2d Co, 846, 222 & R US 849 Robinson v Baltimore Ohio (1912). 114; 506; 32 S Ct 56 L Ed 288 6 Court, concept sitting Levin, on our stated that Justice while Association, pp Improvement supra, fn as White Lake follows: require a court to cause of action "To rule on the would perhaps duplicate and of the water resources commission the efforts observed, which, agreements have function as we to contradict orders. In order consistency in this vital to achieve and ruling area, to from think it would be wise for the courts refrain we at time. the association’s claims this on the merits of ' recognition principal the doctrine is The reason behind agencies orderly of the work of and sensible coordination the need for ’ Court.) ’’(Emphasis of courts. 7 285; Co, Railway 259 US 42 v Merchants Elevator Great Northern 477; Pacific R States v Western S 66 L Ed United Ct (1956). 161; 77 S Ct 1 L Ed 2d 352 US Co, supra, example, Kovarsky Brooklyn fn a Union Gas For App 7 plain- this case is

Important to resolution their claim. Plaintiffs tiffs’ own characterization their brief repeatedly state in as a their cause of action erroneously viewed Instead, of the rates. on the direct attack ambiguous as argue regulations be assessed a which steam heat users should to charge: " * * * promulgated rates The this brief as Exhibits A and attached to Commission and delivering clearly B contain a basic rate for applying an automatic fuel and a formula for steam or- adjustment der does not direct or comment users. Commission’s commercial upon whether or not required the auto- utility company was every clause to customer served matic fuel system, indeed it must be assumed by its central steam apply only it to that the Commission intended com- mercial customers. It must be concluded the Com- a rate schedule which called mission did not establish prohi- utility company to contravene the clear ” * * 460.6(a).* bition as set forth in MCLA *7 characterization, agree I with Accepting my first hear this brothers commission should case.

The decisive factor this case is the need for the state uniformity. the circuit courts across claim, type likely decide this result will be a group gas sought gas charge $1 of consumers of to have a connection contrary declared lower court could consider that issue first: to a certain statute. The Court concluded that "Although may charge’ it not be clear whether the term 'service as charge turning gas used in the statute covers a on after it has summer, being question been turned off for the of law there is necessity sending plaintiff get no back to the statute, interpretation of the term as used in the as the Commission judicial power such as is incidental to the exercise of its powers.” 279 other NY at 313. "rule”, challenge Under the strict Valentine this to the rates would by the be first heard commission. La Salle meaning number of decisions as to the inconsistent regulations. However, with the commission hearing case, first intent regulations definitively behind the can be settled. statutory interpretation addition, In while is usu- ally legal issue,9 classified as a the same cannot be body interpreting said of an administrative regulations. Consequently, applying ordinary prin- its own ciples "primary jurisdiction”, I concur in the initially affirmance of the trial court’s decision to defer to the Public Service Commission on this matter.

9See footnote