ANO-TECH INC V MICHIGAN CONSOLIDATED GAS CO
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STATE OF MICHIGAN
COURT OF APPEALS
ANO-TECH, INC.,
UNPUBLISHED
May 25, 2004
Plaintiff-Appellee,
v
No. 245355
Wayne Circuit Court
LC No. 2000-030268-CZ
MICHIGAN CONSOLIDATED GAS
COMPANY,
Defendant-Appellant.
Before: Saad, P.J., and Sawyer and Fort Hood, JJ.
PER CURIAM.
Defendant appeals as on leave granted from the trial court’s order denying its motion for
summary disposition.1 We reverse.
Defendant first argues that the trial court erred when it denied its respective motions for
summary disposition and reconsideration once the trial court concluded that deferral of this
action to the Michigan Public Service Commission (MPSC) was not required on the basis of the
primary jurisdiction doctrine. Specifically, defendant argues that this is a rate case that falls
within the MPSC’s regulatory scheme, and because plaintiff seeks to avoid paying the
distribution charges for the gas commodity under a new voluntary experimental program
(“customer choice program”), the matter should be decided by the MPSC. We agree.
On appeal, a trial court’s grant or denial of summary disposition is reviewed de novo.
First Public Corp v Parfet, 468 Mich 101, 104; 658 NW2d 477 (2003). Similarly, the
applicability of the primary jurisdiction doctrine presents a question of law, which this Court also
reviews de novo. Michigan Basic Property Ins Ass’n v Detroit Edison Co, 240 Mich App 524,
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Defendant filed an application for leave to appeal the trial court’s order in this Court. That
application was denied. Subsequently, plaintiff filed an application for leave to appeal to the
Supreme Court. In response to that application, the Supreme Court remanded the case to this
Court for consideration as on leave granted in lieu of granting leave to appeal. Ano-Tech, Inc v
Michigan Consolidated Gas Co, 467 Mich 907; 654 NW2d 332 (2002).
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528; 618 NW2d 32 (2000). Lastly, this Court reviews a motion for reconsideration for an abuse
of discretion. Churchman v Rickerson, 240 Mich App 223, 233; 611 NW2d 333 (2000).
The primary jurisdiction doctrine pertains to matters “whereby a court defers its own
jurisdiction to the jurisdiction of an administrative agency better suited to handle the parties’
dispute.” Durcon Co v Detroit Edison, 250 Mich App 553, 556; 655 NW2d 304 (2002), citing
Michigan Basic Property Ins Ass’n, supra. This Court in Durcon, articulated the following
principles pertaining to primary jurisdiction:
Primary jurisdiction “is a concept of judicial deference and discretion.” LeDuc,
Michigan Administrative Law, § 10:43, p 70. The doctrine exists as a
“recognition of the need for orderly and sensible coordination of the work of
agencies and of courts.” White Lake Improvement Ass’n v City of Whitehall, 22
Mich App 262, 282; 177 NW2d 473 (1970). In White Lake, the Court of Appeals
correctly noted that “[t]he doctrine of primary jurisdiction does not preclude civil
litigation; it merely suspends court action.” Id. at 271. Thus, LeDuc notes,
“[p]rimary jurisdiction is not a matter of whether there will be judicial
involvement in resolving issues, but rather of when it will occur and where the
process will start.” Id. at § 10:44, p 73. A court of general jurisdiction considers
the doctrine of primary jurisdiction “whenever there is concurrent original subject
matter jurisdiction regarding a disputed issue in both a court and an administrative
agency.” Id., § 10:43 at 70. [Durcon Co, supra at 557, quoting Rinaldo’s Constr
Corp v Michigan Bell Telephone Co, 454 Mich 65, 70; 559 NW2d 647 (1997).]
The Durcon Court further reaffirmed the factors articulated in Rinaldo’s that guide a court’s
decision to suspend an action in favor of agency review:
First, a court should consider “the extent to which the agency’s specialized
expertise makes it a preferable forum for resolving the issue . . . .” Second, it
should consider “the need for uniform resolution of the issue . . . .” Third, it
should consider “the potential that judicial resolution of the issue will have an
adverse impact on the agency’s performance of its regulatory responsibilities.”
Where applicable, courts of general jurisdiction weigh these considerations and
defer to administrative agencies where the case is more appropriately decided
before the administrative body.
Accordingly, “the Rinaldo’s opinion directs us to consider the nature of the
plaintiff's claim (tort/contract; violation of regulatory code or tariffs) in light of
the three purposes underlying the primary jurisdiction doctrine.” Michigan Basic,
supra at 534. [Durcon Co, supra at 558.]
Relying on this Court’s opinion in Dominion Reserves, Inc v Michigan Consolidated Gas
Co, 240 Mich App 216, 218-222; 610 NW2d 282 (2000), the trial court determined that the
special expertise of the MPSC was not needed because (1) the parties only disputed whether
defendant could collect the distribution charges, and (2) the “contract” involved was not
complex. However, the trial court erroneously concluded that Dominion Reserves required that
the MPSC should hear and decide a contract claim only if the parties’ dispute involved a complex
contract. Rather, the Dominion Reserves Court specifically recognized that if a plaintiff’s claim
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is governed by the MPSC’s regulatory scheme, initial jurisdiction lies with the MPSC. Michigan
courts have recognized that (1) contractual relationship claims or claims “pertaining to,
necessary, or incident to the regulation of” a public utility should be deferred to the MPSC, and
(2) claims that the defendant has somehow violated a tariff or code, or claims that plead facts
“which give rise to a legal duty in tort independent of breach of contract,” may be heard and
decided in the trial courts (although the MPSC may also hear tort claims). See Travelers Ins Co
v Detroit Edison, 465 Mich 185, 202, 209-211; 631 NW2d 733 (2001); Rinaldo’s, supra;
Durcon, supra; Dominion Reserves, supra; Michigan Basic Property Ass’n, supra.
Here, plaintiff pleaded facts regarding defendant’s inaccurate billings and defective meter
in its complaint. Additionally, in the course of the parties’ negotiations, but after the complaint
was filed, plaintiff clarified its dispute of the billings and specifically contested the distribution
charge for the gas commodity. On the basis of plaintiff’s complaint alone, plaintiff did not plead
an identifiable tort independent of contract, nor has plaintiff alleged that defendant violated a
specific tariff or code since plaintiff has not identified a specific tariff or code. Consequently,
plaintiff’s claims either constitute a contractual claim or a claim “pertaining to, necessary, or
incident to the regulation of” a public utility. Consequently, we conclude that the matter should
be deferred to the MPSC.
Where the claim asserted is essentially a matter already contemplated by the
controlling tariffs, such as a claim for defective . . . equipment or service, and the
only issue is the extent to which those tariffs will apply, deferral to the MPSC
under the doctrine of primary jurisdiction is proper. The MPSC, charged with the
authority to regulate and oversee [public utility] companies, possesses the degree
of expertise with regard to the purpose and effect of the governing tariffs to
decide whether the presumptively valid tariff provisions apply to particular facts
that do not constitute tortious conduct or a violation of the code or tariff. Thus,
the first consideration, the need for agency expertise, weighs in favor of deferral
of such matters to the MPSC. [Rinaldo’s, supra at 75-76.]
We note that plaintiff asserts that the distribution charges do not apply, which is tantamount to a
request for a different rate since the distribution charge would not be included. In this respect,
the instant case is analogous to La Salle Townhouses Cooperative Ass’n v Detroit Edison Co, 69
Mich App 7, 9-11; 244 NW2d 343 (1976), where this Court concluded that the MPSC should
determine whether the approved rates applied to the plaintiffs because their position was “that
the approved rates [did] not apply to them and that another rate, without a fuel adjustment clause,
should apply.” Id. In sum, we conclude that the MPSC is best equipped to determine if the
distribution charges apply to plaintiff in accordance with the requirements of the new voluntary
experimental consumer choice program. Rinaldo’s, supra.
We need not address defendant’s remaining arguments, including the trial court’s
decision to deny defendant’s motion for reconsideration, in light of our conclusion that the
matter should be heard and decided by the MPSC under the primary jurisdiction doctrine.
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Reversed. We do not retain jurisdiction.
/s/ Henry William Saad
/s/ David H. Sawyer
/s/ Karen M. Fort Hood
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