CITY OF TAYLOR V DETROIT EDISON CO
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Michigan Supreme Court
Lansing, Michigan
Opinion
Chief Justice:
Justices:
Clifford W. Taylor
Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman
FILED MAY 31, 2006
CITY OF TAYLOR,
Plaintiff-Appellee,
v
No. 127580
THE DETROIT EDISON COMPANY,
Defendant-Appellant.
_______________________________
BEFORE THE ENTIRE BENCH
YOUNG, J.
We granted leave to appeal in this case to reconcile plaintiff’s constitutional
authority to exercise “reasonable control” over its streets with the Michigan Public
Service Commission’s (MPSC) broad regulatory control over public utilities.
Consistent with our longstanding precedent, we hold that a municipality’s exercise
of “reasonable control” over its streets cannot impinge on matters of statewide
concern nor can a municipality regulate in a manner inconsistent with state law.
In this case, the MPSC has promulgated uniform rules governing the relocation of
utility wires underground. To the degree plaintiff’s ordinance on this subject
conflicts with the MPSC’s rules, the ordinance exceeds plaintiff’s power to
exercise “reasonable control” over its streets and is invalid. Furthermore, because
the question of allocation of costs for the relocation of utility wires underground
falls under the primary jurisdiction of the MPSC, that entity should be the first to
consider this dispute. We reverse the judgment of the Court of Appeals and
remand to the Wayne Circuit Court to enter an order granting summary disposition
to defendant. The dismissal is without prejudice to plaintiff’s right to seek a
remedy before the MPSC.
FACTS AND PROCEDURAL HISTORY
In the fall of 1999, the City of Taylor (plaintiff) and the Michigan
Department of Transportation planned for a major reconstruction project of a fourmile portion of Telegraph Road that intersects the city. The project called for
major infrastructure improvements, including the underground relocation of all
utility wires along Telegraph Road.
Under the proposal, the Detroit Edison
Company’s (defendant) utility poles along Telegraph Road would be removed and
their wires relocated underground.
In early 2000, officials from plaintiff and
defendant met several times to discuss the project and its implementation.
Defendant agreed to relocate the lines underground, but would not agree to
bear the costs of that effort.
When the parties’ negotiations failed, plaintiff
enacted Taylor Ordinance 00-344, the “Telegraph Road Improvement and
Underground Relocation of Overhead Lines Ordinance.”
Section 3 of that
ordinance requires all public utilities with lines or poles adjacent to Telegraph
Road “to relocate underground all of their overhead lines and wires and remove all
2
poles and related overhead facilities equipment at their sole cost and expense and
at no cost or expense to the City.”1 After plaintiff enacted the ordinance, the
parties continued to discuss the dispute, but could not come to an amicable
resolution. Ultimately, plaintiff agreed to advance the cost of relocating the wires
underground, but reserved its rights to enforce the ordinance against defendant and
seek reimbursement.
In June 2002, plaintiff filed a complaint for a declaratory judgment in
circuit court, seeking a determination that defendant was obligated to pay the
entire cost of relocating the wires under Taylor Ordinance 00-344. Defendant
moved for summary disposition under MCR 2.116(C)(4), arguing that the MPSC
rules required plaintiff to pay for the relocation, and that the MPSC had primary
jurisdiction over this dispute.
Plaintiff filed a cross-motion for summary
disposition under MCR 2.116(C)(10), arguing that the ordinance controlled. The
circuit court granted summary disposition to plaintiff, holding that it was
unnecessary to consider the issue of primary jurisdiction because the city’s
ordinance was enforceable regardless of the MPSC’s interpretation of its rules.
On appeal, the Court of Appeals affirmed in part the judgment of the circuit
court in a published opinion per curiam.2 The Court held that the MPSC did not
have primary jurisdiction because the question was one of law, and the courts
1
Taylor Ordinance 00-344.
2
263 Mich App 551; 689 NW2d 482 (2004).
3
could craft an answer that would promote uniformity without interfering with the
MPSC’s ability to perform its regulatory duties. Then, relying on its governmental
function/proprietary function test, first articulated in City of Pontiac v Consumers
Power Co,3 the Court determined that plaintiff exercised a governmental function
and properly required defendant to bear the entire cost of relocation. The Court
also determined that state law did not preempt the city’s ordinance.
This Court granted leave to appeal, specifically directing the parties to
address the scope of a city’s power over utilities under its constitutional authority
to exercise reasonable control over its streets; whether that constitutional authority
permits a city to impose relocation costs on utilities under Const 1963, art 7, § 29,
and how the city’s constitutionally authorized power to control its streets could be
reconciled with the MPSC’s broad regulatory authority over utilities.4
STANDARD OF REVIEW
This Court reviews the decision to grant or deny a motion for summary
disposition de novo.5
Issues of constitutional and statutory construction are
questions of law that are also reviewed de novo.6
3
101 Mich App 450; 300 NW2d 594 (1980).
4
474 Mich 877 (2005).
5
Spiek v Dep’t of Transportation, 456 Mich 331; 572 NW2d 201 (1998).
6
Wayne Co v Hathcock, 471 Mich 445; 684 NW2d 765 (2004).
4
ANALYSIS
The City’s Constitutional Authority
Article 7 of the Constitution of 1963 enumerates the general authority and
limits on the authority of local governments, such as counties, townships, cities,
and villages.7 Subject to authority specifically granted in the Constitution, local
governments derive their authority from the Legislature.8 We have held that
“[local governments] have no inherent jurisdiction to make laws or
adopt regulations of government; they are governments of
enumerated powers, acting by a delegated authority; so that while
the State legislature may exercise such powers of government
coming within a proper designation of legislative power as are not
expressly or impliedly prohibited, the local authorities can exercise
those only which are expressly or impliedly conferred, and subject to
such regulations or restrictions as are annexed to the grant.”[9]
Notwithstanding that local governments obtain their authority from the
Legislature, the Constitution reserves to local governments certain authorities. In
this case, plaintiff relies on the authority to exercise reasonable control over its
streets, which is specifically reserved in art 7, § 29, which states:
No person, partnership, association or corporation, public or
private, operating a public utility shall have the right to the use of the
highways, streets, alleys or other public places of any county,
township, city or village for wires, poles, pipes, tracks, conduits or
other utility facilities, without the consent of the duly constituted
authority of the county, township, city or village; or to transact local
7
Const 1963, art 7.
8
Const 1963, art 7, §§ 1, 17, and 21.
9
City of Kalamazoo v Titus, 208 Mich 252, 262; 175 NW 480 (1919),
quoting 1 Cooley, Constitutional Limitations (7th ed), pp 163, 264 et seq.
5
business therein without first obtaining a franchise from the
township, city or village. Except as otherwise provided in this
constitution the right of all counties, townships, cities and villages to
the reasonable control of their highways, streets, alleys and public
places is hereby reserved to such local units of government.[10]
Thus, the authority reserved to local units of government to exercise reasonable
control over the enumerated subject areas is explicitly made subject to the other
provisions of the Constitution. One such provision is art 7, § 22, which empowers
cities and villages “to adopt resolutions and ordinances relating to its municipal
concerns, property and government, subject to the constitution and law.”11
In People v McGraw,12 this Court interpreted the similarly worded
“reasonable control” predecessor of art 7, § 29 found in the 1908 Constitution,13
10
Const 1963, art 7, § 29 (emphasis added).
11
Const 1963, art 7, § 22 (emphasis added).
12
184 Mich 233; 150 NW 836 (1915), interpreting Const 1908, art 8, §§ 21
and 28.
13
Const 1908, art 8, § 28 provided:
No person, partnership, association or corporation operating a
public utility shall have the right to the use of the highways, streets,
alleys or other public places of any city, village or township for
wires, poles, pipes, tracks, or conduits, without the consent of the
duly constituted authorities of such city, village or township; nor to
transact a local business therein without first obtaining a franchise
therefor from such city, village or township. The right of all cities,
villages and townships to the reasonable control of their streets,
alleys and public places is hereby reserved to such cities, villages
and townships.
(continued…)
6
along with the predecessor of art 7, § 22, the provision regarding municipal
powers.14 McGraw involved traffic ordinances enacted by the City of Detroit that
conflicted with the general state traffic laws. This Court held that “[t]aking the
[constitutional] sections together, they should be so construed as to give the power
to municipalities to pass such ordinances and regulations with reference to their
highways and bridges as are not inconsistent with the general State law.”15 Thus,
McGraw permits a city to exercise “reasonable control” to regulate matters of
local concern, but only in a manner and to the degree that the regulation does not
conflict with state law.
(…continued)
The differences between this section and Const 1963, art 7, § 29 are
relatively minor. In addition to stylistic changes, counties are added to the list of
municipalities; the list of items that public places can be used for now includes the
general “other utility facilities”; and the reservation of power to municipalities is
explicitly subject to other provisions of the Constitution.
14
Const 1908, art 8, § 21 provided:
Under such general laws, the electors of each city and village
shall have power and authority to frame, adopt and amend its
charter, and to amend an existing charter of the city or village
heretofore granted or passed by the legislature for the government of
the city or village and, through its regularly constituted authority, to
pass all laws and ordinances relating to its municipal concerns,
subject to the Constitution and general laws of this state.
The differences between this section and Const 1963, art 7, § 22 are also
relatively minor. Besides the stylistic changes, the section merely reaffirms that a
city’s or a village’s powers are subject to the general laws of the state.
15
McGraw, supra at 238.
7
In 1939, the Legislature created the MPSC, giving it broad regulatory
authority over public utilities. Under its enabling statute,
[t]he public service commission is vested with complete power and
jurisdiction to regulate all public utilities in the state except . . . as
otherwise restricted by law. The public service commission is
vested with the power and jurisdiction to regulate all rates, fares,
fees, charges, services, rules, conditions of service, and all other
matters pertaining to the formation, operation, or direction of public
utilities. The public service commission is further granted the power
and jurisdiction to hear and pass upon all matter pertaining to,
necessary, or incident to the regulation of public utilities . . . .[16]
In 1970, the MPSC promulgated rules governing the underground
placement of new and existing utility wires.17
Specifically, the MPSC
promulgated Rule 460.516, governing the “[r]eplacement of existing overhead
lines,” and Rule 460.517, concerning “[u]nderground facilities for convenience of
utilities or where required by ordinances.”18 These rules appear to cover the same
subject matter as Taylor Ordinance 00-344, and in a manner that possibly creates a
conflict between the MPSC’s rules and the plaintiff’s ordinance. Because the
MPSC has not construed how its rules governing the allocation of costs for the
underground relocation of utility wires apply in this circumstance, and because
provisions of the ordinance appear to fall within the MPSC’s regulatory purview,
the MPSC, rather than a court, should assess whether there is an actual conflict.
16
MCL 460.6 (emphasis added).
17
1999 AC, R 460.511 et seq.
18
See titles of 1999 AC, R 460.516 and 460.517
8
As discussed later in this opinion, the doctrine of primary jurisdiction requires us
to defer to the judgment of the MPSC on this question. If the ordinance conflicts
with MPSC rules, then under art 7, §§ 22 and 29, and McGraw, Taylor Ordinance
00-344 must yield.
The cases from this Court relied on by the Court of Appeals and plaintiff
are readily distinguishable from the present case. As an initial matter, all the cases
from this Court holding that a municipality has the power to force a utility to
relocate its facilities at its own expense were decided before the MPSC’s
promulgation of rules regarding the underground relocation of wires.19 Thus, there
was no state law for the municipal action to conflict with. To the extent these
cases conflict with the MPSC’s interpretation of its rules, however, they are
abrogated. Moreover, no case cited is factually analogous. For example, the
Court of Appeals cited this Court’s opinion in Detroit Edison Co v Detroit20 for
the proposition that this Court “ruled that the city of Detroit could order the utility
to move its poles at its own expense under the municipality’s constitutional right
to control public places.”21 In Detroit Edison, the utility erected poles on an
easement granted to the city for public utilities. The utility claimed exclusive
19
See City of Monroe v Postal Tel Co, 195 Mich 467; 162 NW 76 (1917),
Detroit Edison Co v Detroit, 332 Mich 348; 51 NW2d 245 (1952), and Detroit v
Michigan Bell Tel Co, 374 Mich 543; 132 NW2d 660 (1965).
20
332 Mich 348; 51 NW2d 245 (1952).
21
263 Mich App at 558, citing Detroit Edison.
9
control over the easement because the grantor dedicated it for utilities rather than
public use. This Court held that the utility easement fell under the “public places”
language of article 8, § 28 of the 1908 Constitution. However, the Court did not
rely on that constitutional provision in holding that the city could require the
utility to pay to move the poles.
Rather, the Court relied on the utility’s
concession that it would be liable if the easement was determined to be a “public
place.”22 Therefore, Detroit Edison does not support plaintiff’s argument or the
holding of the Court of Appeals.23
As noted, the precedent that governs the resolution of this case is McGraw.
Because Taylor Ordinance 00-344 may conflict with MPSC rules, it may not be a
valid exercise of plaintiff’s reasonable control over its streets. Therefore, if the
portion of the ordinance that requires the utility to bear the entire cost of relocation
22
Detroit Edison, supra at 354-355. The dissent has created a doctrine of
“perpetual concession” and would bind Edison to a concession it made 50 years
ago in unrelated litigation. Merely stating the dissent’s position shows why it has
never had any basis in our jurisprudence.
23
The case relied on by the dissent, City of Monroe v Postal Tel Co, supra,
also does not support the Court of Appeals conclusion. Monroe involved a federal
statute, the Post Road Act of 1886, which gave telegraph companies the right to
construct telegraph lines along any United States post road. The issue before the
Court was whether the federal statute limited the state’s ability to exercise control
over the lines. This Court determined, consistently with other jurisdictions, that
the federal statute was permissive and subject to the states’ police power. Not
surprisingly, Monroe did not mention or utilize Const 1908, art 8, § 28 or McGraw
in its resolution of the case.
10
conflicts with the MPSC rules on the subject, that portion of the ordinance is
invalid. We reverse the Court of Appeals judgment that held to the contrary.
The Court Of Appeals Test
In reaching its holding, the Court of Appeals did not focus on the question
of “reasonable control.” Instead, the Court of Appeals relied on a “general rule
that relocation costs may be imposed on the utility if necessitated by the
municipality’s discharge of a governmental function, while the expenses must be
borne by the municipality if necessitated by its discharge of a proprietary
function.”24
This “general rule” appears to emanate from City of Pontiac v
Consumers Power Co,25 and is derived from McQuillin, Municipal Corporations,
§ 34.74(a), p 184. While many Michigan Court of Appeals cases have applied the
“general rule,” 26 there is no support for it in either our statutes or Constitution.
The proper “general rule,” which has been inexplicably ignored by the Court of
Appeals, was articulated by this Court in McGraw nearly 100 years ago. Today,
we reaffirm the holding and standard articulated in McGraw as being consistent
with the modern constitutional provisions of the analogues of these provisions it
24
25
263 Mich App at 557-558.
101 Mich App 450; 300 NW2d 594 (1980).
26
Pontiac, supra at 453-454, was cited in Detroit Edison Co v Detroit, 180
Mich App 145; 446 NW2d 615 (1989) (expansion of Cobo Hall), and Detroit
Edison Co v Southeastern Michigan Transportation Auth, 161 Mich App 28; 410
NW2d 295 (1987) (public transit system); see also Michigan Bell Tel Co v Detroit,
106 Mich App 690; 308 NW2d 608 (1981) (sewer treatment facility).
11
construed: A municipality may regulate “highways, streets, alleys, and public
places” to the degree such regulations are consistent with state law. We overrule
the Court of Appeals cases that apply the proprietary function/governmental
function test in this area of the law.27
Primary Jurisdiction
Having decided that plaintiff’s effort to compel defendant’s compliance by
decree may contravene the authority of the MPSC, we next address whether the
MPSC has primary jurisdiction over the dispute about the allocation of the costs of
relocating the wires underground.28 There is no fixed formula, but there are
several factors to consider in determining whether an administrative agency has
primary jurisdiction over a dispute: (1) whether the matter falls within the
agency’s specialized knowledge, (2) whether the court would interfere with the
uniform resolution of similar issues, and (3) whether the court would upset the
regulatory scheme of the agency.29 The Court of Appeals analyzed these three
27
See n 26, supra.
28
The dissent discusses preemption at length. We cannot discern why. Our
opinion does not mention preemption, much less rely on the doctrine, and it plays
no role in our disposition of this case.
29
Travelers Ins Co v Detroit Edison Co, 465 Mich 185, 198-200; 631
NW2d 733 (2001); see also Rinaldo’s Constr Co v Michigan Bell Tel Co, 454
Mich 65, 71-72; 559 NW2d 647 (1997).
12
factors and determined that the MPSC did not have primary jurisdiction over the
dispute. We disagree.
The fundamental error in the Court of Appeals analysis is that the court
applied the Travelers factors to the question of the city’s constitutional authority to
exercise reasonable control over its streets.
We agree that the MPSC has
absolutely no jurisdiction to consider the scope of plaintiff’s constitutional
authority under art 7, § 29.30
As discussed earlier in this opinion, McGraw
articulates the proper standard for resolution of the constitutional issue. Once the
constitutional issue has been resolved, the Travelers factors are applied to
determine whether the MPSC has primary jurisdiction over the issue of how to
allocate the costs of relocating the lines underground.
Applying the first factor, the appropriate method for allocating the cost of
moving the facilities of utilities is clearly within the expertise of the MPSC.
Additionally, the MPSC is in the best position to interpret and apply its own rules
on this subject. Regarding the second factor, the MPSC arguably has devised a
uniform system for removing overhead lines and allocating the associated costs.
Because the expense incurred in complying with plaintiff’s demands may
potentially affect a wide range of ratepayers, most of whom do not reside in the
30
As stated in Wikman v City of Novi, 413 Mich 617, 646-647; 322 NW2d
103 (1982), “Generally speaking, an agency exercising quasi-judicial power does
not undertake the determination of constitutional questions or possess the power to
hold statutes unconstitutional.”
13
City of Taylor, this is an area of law where uniformity is critical. Finally, under
the third factor, the decision of the City of Taylor appears directly to implicate the
rate-making authority of the MPSC and defendant’s tariffs created under that
authority. Given the MPSC’s broad authority to regulate public utilities, and its
promulgation of rules pertaining to the relocation of overhead lines underground,
the circuit court’s resolution of this case could adversely affect the MPSC’s ability
to carry out its regulatory responsibilities. Because application of the Travelers
factors overwhelmingly favors the MPSC, that agency has primary jurisdiction to
determine the proper allocation of costs associated with relocating the wires
underground.
Accordingly, the circuit court should have granted defendant’s
motion to dismiss and required plaintiff to seek a remedy from the MPSC.
Conclusion
Today, we reaffirm this Court’s decision in McGraw. Under Const 1963,
art 7, §§ 22 and 29, a local unit of government may exercise reasonable control
over its “highways, streets, alleys, and public places” as long as that regulation
does not conflict with state law. Here, because plaintiff’s ordinance may be
incongruent with the MPSC’s regulations governing underground relocation of
wires, and the regulation of defendant utility, the ordinance may be invalid. MCL
460.6 vests the MPSC with broad authority to regulate public utilities, and the
MPSC has promulgated rules on this subject. Accordingly, we conclude that the
MPSC has primary jurisdiction over the issue of cost allocation.
14
We reverse the judgment of the Court of Appeals and remand to the Wayne
Circuit Court to grant summary disposition to defendant. Plaintiff may seek a
remedy concerning the costs of relocating defendant’s wires underground from the
MPSC.
Robert P. Young, Jr.
Clifford W. Taylor
Elizabeth A. Weaver
Maura D. Corrigan
Stephen J. Markman
Cavanagh, J., concurred in the result only.
Michael J. Cavanagh
15
STATE OF MICHIGAN
SUPREME COURT
CITY OF TAYLOR,
Plaintiff-Appellee,
V
No. 127580
THE DETROIT EDISON COMPANY,
Defendant-Appellant.
KELLY, J. (dissenting).
Today, the majority of this Court has made a drastic change in the law. I
believe the legal conclusions underlying the change are erroneous.
The Michigan Constitution provides local units of government the authority
to reasonably control their rights-of-way. Const 1963, art 7, § 29. Michigan
courts have long held that the right of reasonable control includes the right to order
a utility to move its facilities to another location at the utility’s expense. The state
has not occupied the field in this area of the law. And the primary jurisdiction of
the Michigan Public Service Commission (PSC) is not implicated in it. Therefore,
the Court of Appeals was correct in remanding the case to the circuit court, and I
would affirm its decision.
ESSENTIAL FACTS AND PROCEDURAL HISTORY
This case involves a large reconstruction project on Telegraph Road, also
known as M-24, in the city of Taylor. Telegraph is a major thoroughfare in the
city. About 70,000 vehicles travel on its four-mile stretch each day. Plaintiff city
of Taylor indicates that Telegraph is the most heavily congested business district
in the city. Hundreds of traffic accidents occur there each year, and some involve
collisions with utility poles. Defendant Detroit Edison’s utility poles run along
Telegraph within Taylor’s right-of-way. Edison’s facilities were placed in the
right-of-way pursuant to a franchise agreement that made clear that Taylor did not
surrender its control over any streets, highways, or public places.
In 1999, Taylor began work in cooperation with the Michigan Department
of Transportation on the Telegraph reconstruction project. It involved a massive
overhaul of the right-of-way, calling for new pavement, new sidewalks, new water
mains, new street lights, and new conduit for median irrigation and utilities. A
significant part of the plan involved the relocation of Edison’s facilities below
ground.
The parties disagreed about who was responsible to pay for the relocation,
and after negotiations failed, the Taylor City Council passed Taylor Ordinance 00344. It directed all persons owning, leasing, operating, or maintaining overhead
lines, wires, poles, or facilities to relocate them underground and to remove all
aboveground facilities. The work was specified to be done at the expense of the
persons owning, leasing, operating, or maintaining the overhead facilities.
The ordinance listed several reasons why relocation was required.
It
enhanced public safety by preventing falling and downed poles and wires, by
eliminating vehicle collisions with the facilities, and by enhancing drivers’
2
visibility and sightlines.
The ordinance stated that underground lines would
operate more reliably than overhead lines. Finally, it pointed out that the removal
of poles and overhead lines would improve aesthetics and facilitate the future
development of the city.
Edison objected to the ordinance and refused to relocate its facilities at its
own expense. Taylor advanced a portion of the cost of relocation so that the
project could progress, but reserved the right to litigate to recover its expenditures.
When, in time, it sued Edison to enforce the ordinance, both parties sought
summary disposition. The trial court granted Taylor’s motion, denied Edison’s
motion, and ordered Edison to reimburse Taylor.
Edison appealed in the Court of Appeals, which affirmed the ruling. It
remanded the case on a subissue regarding the sufficiency of some of the conduit
that Taylor had installed. City of Taylor v Detroit Edison Co, 263 Mich App 551;
689 NW2d 482 (2004). This Court subsequently granted leave to appeal and
heard oral argument. 474 Mich 877 (2005).
REASONABLE CONTROL OF THE RIGHT-OF-WAY
The Michigan Constitution provides at article 7, section 29:
No person, partnership, association or corporation, public or
private, operating a public utility shall have the right to the use of the
highways, streets, alleys or other public places of any county,
township, city or village for wires, poles, pipes, tracks, conduits or
other utility facilities, without the consent of the duly constituted
authority of the county, township, city or village; or to transact local
business therein without first obtaining a franchise from the
township, city or village. Except as otherwise provided in this
constitution the right of all counties, townships, cities and villages to
3
the reasonable control of their highways, streets, alleys and public
places is hereby reserved to such local units of government.
Conducting private business on public streets is not a right. “‘The use of
public streets for private enterprise may be for the public good, but, even so, it is a
privilege that may be granted, regulated, or withheld.’” Red Star Motor Drivers’
Ass’n v Detroit, 234 Mich 398, 409; 208 NW 602 (1926), quoting Schultz v City of
Duluth, 163 Minn 65, 68; 203 NW 449 (1925). In fact, this Court has stated that
such use of the right-of-way is special and extraordinary because it differs
radically from the ordinary use of streets, which is for travel. Fostini v Grand
Rapids, 348 Mich 36, 40-41; 81 NW2d 393 (1957), quoting 64 CJS, Municipal
Corporations, § 1774, pp 224-225. The right to deny or limit the use of streets
reposes in the local unit of government. If the municipality decides to grant
permission to use the streets, it may do so under such terms and conditions as it
sees fit. Fostini, supra at 41. The only limitation on the municipality is that its
control be reasonable. Const 1963, art 7, § 29.
Through the last century, Michigan courts uniformly applied this rule to
utilities. Our appellate courts consistently held that a municipality may require a
utility to relocate its poles and facilities at the utility’s own expense. In fact,
Edison has repeatedly been the subject of these cases. Its struggle against the
constitutionally protected right of reasonable control has been unsuccessful until
now.
4
By way of illustration, nearly 90 years ago, this Court dealt with a
remarkably similar case, City of Monroe v Postal Tel Co, 195 Mich 467; 162 NW
76 (1917).
There, the city of Monroe issued an ordinance requiring various
utilities to relocate their lines and facilities underground at their own expense.
This Court stated that a utility’s use of the right-of-way cannot “‘incommode the
public in its use.’” Id. at 472 (citation omitted). The Court further stated that the
cost of relocation cannot be a deciding factor in whether the control of the rightof-way is reasonable. We wrote:
“The mere fact that the route designated by the municipality
is less convenient or involves on the part of the telephone company a
larger expenditure is of no consequence so long as the company is
not thereby prevented from reaching all those it desires to serve or
who desire service from it. The record before us fails to disclose this
condition. Where a municipality, in the exercise of its inherent
police power, adopts an ordinance reasonably regulating the manner,
character, or place of construction of a contemplated line, the
telephone company must comply with such regulations and exercise
its right of entry under the general powers conferred by the State
subject to them.” [Id. at 473-474, quoting Village of Jonesville v
Southern Michigan Tel Co, 155 Mich 86, 90; 118 NW 736 (1908).]
In 1952, this Court followed in the footsteps of the Monroe case. The city
of Detroit sought to install and expand its public sewer system in an area where
Edison had installed its facilities.
Detroit Edison Co v Detroit, 332 Mich 348,
349-350; 51 NW2d 245 (1952). We held that the designated area was equivalent
to those dedicated to the city for streets or alleys. Id. at 354. That being the case,
we concluded, Edison must bear the cost of removing and replacing its facilities
5
located there pursuant to Const 1908, art 8, § 28.1
Edison conceded as much.
Both it and the majority have failed to explain why Edison should not be bound in
this case by its earlier concession. In fact, the majority uses this concession as a
reason to distinguish Detroit Edison Co from this case. Given that Edison made
this concession in a case involving similar facts, I see no reason why it should not
be bound by its clearly stated former position.
In 1965, this Court again addressed an issue involving the relocation of
utility facilities. The city of Detroit vacated previously dedicated streets and
alleys as part of an urban redevelopment plan for a blighted area. Detroit v
Michigan Bell Tel Co, 374 Mich 543, 548; 132 NW2d 660 (1965). Both the
Michigan Bell Telephone Company and Edison sought reimbursement from the
city for the relocation of their lines and facilities. Id. at 549-550. Detroit’s plan
called for the utilities to relocate facilities both aboveground and underground. Id.
at 557. Again, this Court stated that the city had a legal right to require the
utilities to relocate their facilities at their own expense. As in the Monroe case, we
made no distinction between relocation aboveground and relocation underground.
The Court of Appeals picked up the baton after being asked repeatedly to
address the question of relocating utility lines. It has consistently found that the
utility must bear the cost of relocation as long as the relocation is required in the
course of the discharge of a governmental function.
1
See City of Pontiac v
This was the predecessor to Const 1963, art 7, § 29.
6
Consumers Power Co, 101 Mich App 450; 300 NW2d 594 (1980), Detroit Edison
Co v Southeastern Michigan Transportation Auth, 161 Mich App 28; 410 NW2d
295 (1987), Detroit Edison Co v Detroit, 180 Mich App 145; 446 NW2d 615
(1989), Detroit Edison Co v Detroit, 208 Mich App 26; 527 NW2d 9 (1994), and
City of Taylor, 263 Mich App 551.2
This long line of cases discussing reasonable control under Const 1963, art
7, § 29 is supported by the common law. And the control exercised by Taylor here
is also in accord with the common law.
Under the traditional common-law rule, utilities have been
required to bear the entire cost of relocating from a public right-ofway whenever requested to do so by state or local authorities. 12 E.
McQuillin, Law of Municipal Corporations § 34.74a (3d ed. 1970);
4A J. Sackman, Nichols' Law of Eminent Domain § 15.22 (rev. 3d
ed. 1981). This rule was recognized and approved by this Court as
long ago as New Orleans Gas Light Co. v. Drainage Comm'n of New
Orleans, 197 U.S. 453, 462 (1905) (holding that the injury sustained
by the utility is damnum absque injuria[3]). [Norfolk Redevelopment
& Housing Auth v Chesapeake & Potomac Tel Co, 464 US 30, 35;
104 S Ct 304; 78 L Ed 2d 29 (1983).]
2
The majority contends that this line of cases from the Court of Appeals
applying the governmental function test is inconsistent with the “reasonable
control” standard. I disagree. I believe that the cases articulate a further test
created by the Court of Appeals to assure that governmental units act reasonably.
Therefore, the holdings are supported by both our case law and the Michigan
Constitution. The majority errs in overruling this helpful line of cases. Contrary
to the majority’s statements, the Court of Appeals did not ignore the “proper
‘general rule’” expressed in People v McGraw, 184 Mich 233; 150 NW 836
(1915). Ante at 11. Instead, it dutifully followed the common law, which has not
been repudiated in this state.
3
Loss or harm for which there is no legal remedy. Black’s Law Dictionary
(7th ed).
7
Far from abandoning the common law, this state’s constitution specifically
retains it. Const 1963, art 3, § 7; Stout v Keyes, 2 Doug 184, 188-189 (Mich,
1845). Nothing in article 7, § 29 of the Michigan Constitution is inconsistent with
the common law in this area. Instead, as shown earlier in this opinion, this Court
has underlined the consistency in repeatedly requiring utilities to bear the cost of
relocation. Therefore, the common law remains in this state.4 Under its general
rule, the Taylor ordinance represents a reasonable control of the city’s right-ofway.5 Given that the control is reasonable, it is constitutionally protected by Const
1963, art 7, § 29, and the Court of Appeals decision should be affirmed.
The majority relies on People v McGraw, 184 Mich 233; 150 NW 836
(1915). In McGraw, the Court stated, “Taking the sections [of the Constitution]
together, they should be so construed as to give the power to municipalities to pass
4
The Legislature has the authority to abrogate the common law. Rusinek v
Schultz, Snyder & Steele Lumber Co, 411 Mich 502, 507-508; 309 NW2d 163
(1981). But, when it does so, it must speak in clear terms. Marquis v Hartford
Accident & Indemnity (After Remand), 444 Mich 638, 652 n 17; 513 NW2d 799
(1994), quoting Bandfield v Bandfield, 117 Mich 80, 82; 75 NW 287 (1898). I
find no action by the Legislature speaking in clear terms that abrogate the common
law on this subject.
5
The ordinance is reasonable also because it is directed at remediating an
interference with the primary use of the right-of-way, travel. If, at any time, the
presence of a utility becomes a burden on the public’s right to travel, the utility’s
franchise must give way. Postal Tel Co, 195 Mich 472. In this case, the
ordinance was directed at the fact that Edison’s poles and facilities blocked
sightlines and led to vehicular collisions. This interference with the primary use of
the rights-of-way allowed Taylor to require relocation at Edison’s expense as a
reasonable exercise of its police powers and control of its right-of-way. Id.
8
such ordinances and regulations with reference to their highways and bridges as
are not inconsistent with the general State law.” Id. at 238. The majority treats
this general statement of the law as if it overrides all other precedent in the area,
even precedent directly on point.6 This is inaccurate. Moreover, it is inconsistent
with McGraw.
As noted earlier, the common law remains viable law in this state. Stout, 2
Doug 188-189. Under the common law, “utilities have been required to bear the
entire cost of relocating from a public right-of-way whenever requested to do so
by state or local authorities.” Norfolk Redevelopment & Housing Auth, 464 US
35. In creating the PSC, the Legislature did not explicitly overrule the common
law. To the contrary, the PSC’s jurisdiction is limited “as otherwise restricted by
law.” MCL 460.6(1). The common law of the state is part of that restricting law.
Therefore, unless the common law is expressly overruled, it controls, even with
respect to the jurisdiction of the PSC.
Applying this to the case at hand, 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 Court of Appeals have consistently
followed this rule. In continuing in this case its adherence to the common law, the
Court of Appeals did not err, and its decision should be affirmed.
6
McGraw dealt with local traffic ordinances, not the relocation of utility
facilities. McGraw, 184 Mich 234-235.
9
THE ORDINANCE IS NOT PREEMPTED
Instead of properly respecting Taylor’s constitutional right to reasonably
control its rights-of-way, the majority focuses its attention on the jurisdiction of
the PSC. Given my analysis of the law, I conclude that this focus is misplaced.
But I will address it in order to fully demonstrate that the majority has reached an
incorrect legal conclusion.7
A municipality is precluded from enacting an ordinance if 1)
the ordinance is in direct conflict with the state statutory scheme, or
2) if the state statutory scheme pre-empts the ordinance by
occupying the field of regulation which the municipality seeks to
enter, to the exclusion of the ordinance, even where there is no direct
conflict between the two schemes of regulation. [People v
Llewellyn, 401 Mich 314, 322; 257 NW2d 902 (1977).]
In determining whether the state preempted the field, this Court weighs
certain considerations: (1) whether state law stipulates that it is exclusive, (2)
whether legislative history implies that it is preempted, (3) whether the
pervasiveness of the statutory scheme supports preemption,8 and (4) whether the
nature of the subject matter demands exclusive state regulation to achieve the
uniformity. Id. at 322-324. Regarding the fourth factor, this Court provided:
As to this last point, examination of relevant Michigan cases
indicates that where the nature of the regulated subject matter calls
for regulation adapted to local conditions, and the local regulation
7
The majority states that it cannot discern why I address preemption. I do
so because it was raised by the appellant and addressed by the Court of Appeals.
Therefore it is an important part of the discussion of this case.
8
This factor alone will not be sufficient to find preemption.
10
does not interfere with the state regulatory scheme, supplementary
local regulation has generally been upheld. [Id. at 324-325.]
Under the first factor, the PSC’s jurisdiction is not exclusive. Instead, its
jurisdiction is limited “as otherwise restricted by law.” MCL 460.6(1). Edison
directs our attention to nothing in the legislative history implying preemption.
Therefore, the second Llewellyn factor also fails to support preemption.
Nor does the third factor favor preemption. The PSC’s regulations are not
so pervasive that they cover the entire area or field of relocating power lines. This
Court has specifically stated that the PSC has no interest in the development and
control of a city’s right-of-way.
Rather, it must be left to the individual
municipality:
The commission is not interested—nor should it be—in the
effect which the construction will have on the development of the
communities through which it passes. If its determination were to be
binding upon local units of government, the absence of public
hearings and notification to affected municipalities would suggest
due process shortcomings. [Detroit Edison Co v City of Wixom, 382
Mich 673, 682; 172 NW2d 382 (1969) (opinion by Brennan, C.J.),
citing Gust v Canton Twp, 342 Mich 436; 70 NW2d 772 (1955).]
This Court has also ruled that the cost-conscious nature of the PSC is
incompatible with the PSC preempting a municipality’s right to control its rightsof-way:
But a city does have an interest in the location and route of a
high tension electric power line. It is a specific land use which is not
compatible with other land uses. It is a land use which characterizes
the neighborhood and influences the development of adjacent real
estate.
11
The public service commission statute does not vest the
commission with authority to determine the routes of high tension
lines except as those routes bear upon “rates, fares, fees, charges,
services, rules, conditions of service” or the “formation, operation or
direction of such public utilities.” CLS 1961, § 460.1 et seq. (Stat
Ann 1965 Cum Supp § 22.13[1] et seq.). The first sentence of CLS
1961, § 460.6 (Stat Ann 1965 Cum Supp § 22.13[6]), vests the
commission “with complete power and jurisdiction to regulate all
public utilities in the state * * * except as otherwise restricted by
law.”
The commission is not empowered to assume the role of
arbiter between the utility and the city. The company's costconscious approach to route selection and the commission's rate-andservice-conscious evaluation of the selected route are too closely
aligned. [Detroit Edison Co, 382 Mich 682-683 (opinion by
Brennan, C.J.).]
Aside from the Court’s reasoning in these cases, the PSC’s own rules
contemplate no preemption in this area of the law. Instead, they anticipate that
municipalities will pass ordinances intended to control their rights-of-way. 1999
AC, R 460.517 provides: “The utility shall bear the cost of construction where
electric facilities are placed underground at the option of the utility for its own
convenience or where underground construction is required by ordinance in
heavily congested business districts.” (Emphasis added.)
This rule specifically contemplates that municipalities will pass ordinances
on the subject. And it specifically states that these ordinances control. Edison
cannot plausibly argue that the Taylor ordinance is preempted by a state regulatory
scheme when the scheme specifically allows for such an ordinance. Because the
state regulatory scheme contemplates and allows regulation by municipalities, it
does not preempt the field.
12
Finally, the nature of the subject matter does not require exclusive state
regulation for the purpose of achieving uniformity throughout Michigan. A city
has an interest in the location and route of power lines because their location
involves a use of land that is not compatible with other land uses. Conversely, the
PSC is not interested in the effect that the construction will have on cities’ rightsof-way. Detroit Edison Co, 382 Mich 682-683 (opinion by Brennan, C.J.).
The courts can and have provided uniformity in this area of the law. The
common law states that utilities must pay for relocating their facilities. Michigan
courts have consistently upheld this rule. Only this Court in this case has failed to
follow it. It is this decision that now creates confusion. Municipalities will be less
sure when they may exercise their constitutional right to control their rights-ofway. And it is now unclear whether the common law in this area is abrogated in
all situations or just in some situations.
This confusion is without legal justification. None of the Llewellyn factors
favors preemption by the PSC. Past incarnations of this Court and the Court of
Appeals have understood this point. As a result, a consistent rule of law has been
created regarding the relocation of utility lines. Unlike the majority of this Court,
I would leave this rule of law unmolested.
THE PRIMARY JURISDICTION OF THE PSC IS NOT IMPLICATED
Adhering to the doctrine of primary jurisdiction reinforces the
expertise of the agency to which the courts are deferring the matter,
and avoids the expenditure of judicial resources for issues that can
better be resolved by the agency. “A question of ‘primary
jurisdiction’ arises when a claim may be cognizable in a court but
13
initial resolution of issues within the special competence of an
administrative agency is required.” [Travelers Ins Co v Detroit
Edison Co, 465 Mich 185, 197; 631 NW2d 733 (2001) (citation
omitted).]
No fixed formula exists for determining when primary jurisdiction applies.
But three major considerations have been identified: (1) whether the agency’s
specialized expertise makes it a preferable forum, (2) whether there is a need for
uniformity in the resolution of the issue, and (3) whether a judicial determination
of the issue will have an adverse effect on the agency's performance of its
regulatory responsibilities. Rinaldo’s Constr Corp v Michigan Bell Tel Co, 454
Mich 65, 71; 559 NW2d 647 (1997), quoting 2 Davis & Pierce, Administrative
Law (3d ed), § 14.1, p 272. Application of these considerations does not support a
finding that primary jurisdiction in this case rests with the PSC.
The issue here is whether Taylor is exercising reasonable control over its
streets and rights-of-way.9 The PSC is not equipped to deal with that issue.
Detroit Edison Co, 382 Mich 682-683 (opinion by Brennan, C.J.). It does not
involve rate structures. Instead, it is a legal question regarding interpretation and
application of a constitutional provision. It is a question of law best left to the
expertise of the courts, not an administrative agency.
9
The majority implies that this is just a preliminary matter controlled by
McGraw. In reality, this is the entire focus of the case. And it goes beyond the
mere application of McGraw. In ruling on it, the lower courts were bound to
follow the common law and the precedent of this Court that is directly on point.
14
Defendant argues, and the majority seems to agree, that the issue in this
case should be resolved by the PSC because Edison’s rates may be adversely
affected. Essentially, Edison’s fear is that many communities may require that
lines be placed underground at the utility’s expense once Taylor has done so. It
asserts that this might cost Edison hundreds of millions of dollars. If so, it argues,
this will require it to raise its rates. Because the PSC is the body that deals with
raising rates, Edison reasons that this case should go to the PSC.
I question this logic. The PSC cannot be asked to control all that may
ultimately affect utility rates. Otherwise, it would have original jurisdiction over
everything from environmental regulations to the wages paid to utility employees.
By extension, Edison’s reasoning would be as follows: employees’ wages
cost Edison a significant sum of money. This cost is passed on to consumers.
When wages rise, utility rates rise. Therefore, the PSC should handle all cases
involving utility employees’ wages because it is the only body that can deal with
setting rates. It follows that the PSC could set the maximum wage that Edison
pays its employees at $1 an hour in order to lower costs to the customers. I find it
disheartening that the majority has allowed itself to be distracted by this argument
from the real issue presented.
Next, the need for uniformity does not support primary jurisdiction in the
PSC. In fact, before today, a single rule of law applied in all cases involving the
relocation of utility facilities. Both the common law and the precedent from this
Court held that a municipality could require a utility to move its facilities at the
15
utility’s own expense. For nearly the last century, this rule of law had been
uniformly applied. The PSC was neither threatened nor destroyed. Given that
uniformity can and has been achieved, there is no need now to defer to the PSC.10
Finally, a judicial determination will not have an adverse effect on the
PSC's performance of its regulatory responsibilities. The ordinance in this case
does not conflict with the PSC’s regulatory scheme.
The PSC’s own rules
contemplate that a municipality will enact an ordinance when it decides that a
utility’s facilities must be relocated. The municipality is empowered to require the
utility to pay for the relocation. Given that the PSC’s rules allow for this, no
negative effect on the regulatory responsibilities should be assumed.
The majority apparently draws a distinction between this case and other
precedents because the lines are to be moved underground. The common law
makes no such distinction. Nor did this Court previously draw such a distinction.
Instead, at least from 1917 forward, this Court treated underground replacement
the same as any other replacement. Postal Tel Co, 195 Mich 472. To create this
distinction requires a change in existing law.
The rule governing moving a utility’s poles and structures that are situated
within a right-of-way should be retained. Under a consistent application of this
10
Under this factor, the majority points to the “uniform system for
removing overhead lines . . . .” Ante at 13. As noted above, the PSC’s own rules
contemplate municipal ordinances on this subject. Moreover, the ordinances are
controlling. 1999 AC, R 460.517. Therefore, this “uniformity” does not weigh in
favor of disallowing these ordinances under the guise of primary jurisdiction.
16
rule, the PSC’s regulatory responsibilities are as unaffected now as they were
when all the other cases that I have discussed were decided.
Everything considered, this case presents a question that the PSC is illequipped to handle.
The PSC has no expertise in dealing with or applying
constitutional provisions. Therefore, deferring to its primary jurisdiction is both
unwise and unnecessary.
CONCLUSION
The Michigan Constitution, Const 1963, art 7, § 29, provides local units of
government the right to reasonable control over their rights-of-way. Michigan
courts have long held that this includes the right to order a utility to relocate its
facilities to another location at the utility’s expense.
Therefore, Taylor was
justified in passing an ordinance requiring Edison to relocate its facilities
underground and pay for the relocation itself.
This is a well-developed area of law. The state has not occupied the field,
and the primary jurisdiction of the PSC is not implicated. Quite simply, there is
no need for the sea change that the majority of this Court makes in the law today.
The judgment of the Court of Appeals should be affirmed.
Marilyn Kelly
17
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