Westlake Transportation, Inc. v. PSC

• Decision Date: 15 May 2003
• Docket Number: Docket No. 226137,Docket No. 226052,Docket No. 226122.,Docket No. 226053
• Parties: WESTLAKE TRANSPORTATION, INC., Vanderkooi Carriers, Inc., El Toro Motor Freight, Inc., Myriah, Inc., Prism, Inc., Gerrigs Trucking & Leasing, Inc., and Best Way Express, Inc., Plaintiffs-Appellants, and American Trucking Association, Inc. and TNT Holland Motor Express, Inc., Intervening Plaintiffs-Appellants, v. Michigan PUBLIC SERVICE COMMISSION, Department of Treasury, and the State of Michigan, Defendants-Appellees. Troy Cab, Inc., Deeco Services, Inc., d/b/a Deeco Transportation, Tiberio Frank, d/b/a Fairfield Towing, Elex, Inc., d/b/a Lafond Express, Dale Constine & Sons, Inc., Calcut Sales & Services, Inc., d/b/a Calcut Trucking Company, Ambassador Transportation, Inc., Hawkins Steel Cartage, Inc., Midcon Freight Systems, Inc., JLH Transfer, Inc., H & H Enterprises, Inc., d/b/a S & M Cartage, Inc., Central Transport, Inc., Bancroft Trucking Company, U.S. Truck Company, Inc., West End Cartage, Inc., Central Cartage Company, CTX, Inc., Mohawk Motor Michigan, Inc., Economy Transport, Inc., McKinlay Transport Limited, Mason & Dixon Lines, Inc., Universal AmCan Limited, Romeo Expediters, Inc., Tom Thumb Services, Inc., d/b/a Rei, OJ Transport Company, JLAW Enterprises Inc., and OJ Transport, Inc., Plaintiffs-Appellants, and American Trucking Association, Inc. and TNT Holland Motor Express, Inc., Intervening Plaintiffs-Appellants, v. Michigan Public Service Commission, Department of Treasury, Department of Commerce, and the State of Michigan, Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

662 N.W.2d 784

255 Mich. App. 589

WESTLAKE TRANSPORTATION, INC., Vanderkooi Carriers, Inc., El Toro Motor Freight, Inc., Myriah, Inc., Prism, Inc., Gerrigs Trucking & Leasing, Inc., and Best Way Express, Inc., Plaintiffs-Appellants, and American Trucking Association, Inc. and TNT Holland Motor Express, Inc., Intervening Plaintiffs-Appellants, v. Michigan PUBLIC SERVICE COMMISSION, Department of Treasury, and the State of Michigan, Defendants-Appellees.

Troy Cab, Inc., Deeco Services, Inc., d/b/a Deeco Transportation, Tiberio Frank, d/b/a Fairfield Towing, Elex, Inc., d/b/a Lafond Express, Dale Constine & Sons, Inc., Calcut Sales & Services, Inc., d/b/a Calcut Trucking Company, Ambassador Transportation, Inc., Hawkins Steel Cartage, Inc., Midcon Freight Systems, Inc., JLH Transfer, Inc., H & H Enterprises, Inc., d/b/a S & M Cartage, Inc., Central Transport, Inc., Bancroft Trucking Company, U.S. Truck Company, Inc., West End Cartage, Inc., Central Cartage Company, CTX, Inc., Mohawk Motor Michigan, Inc., Economy Transport, Inc., McKinlay Transport Limited, Mason & Dixon Lines, Inc., Universal AmCan Limited, Romeo Expediters, Inc., Tom Thumb Services, Inc., d/b/a Rei, OJ Transport Company, JLAW Enterprises Inc., and OJ Transport, Inc., Plaintiffs-Appellants, and American Trucking Association, Inc. and TNT Holland Motor Express, Inc., Intervening Plaintiffs-Appellants, v. Michigan Public Service Commission, Department of Treasury, Department of Commerce, and the State of Michigan, Defendants-Appellees.

Docket Nos. 226052, 226053, 226137, 226122.

Court of Appeals of Michigan.

Submitted December 17, 2002, at Lansing.

Decided March 11, 2003, at 9:00 a.m.

Released for Publication May 15, 2003.

Michael A. Cox, Attorney General, Thomas L. Casey, Solicitor General, and David A. Voges, Henry J. Boynton, David M. Gadaleto, and William W. Derengoski, Assistant Attorneys General, for the defendants.

Foster, Swift, Collins & Smith, P.C. (by Robert E. McFarland), and Scopelitis, Garvin, Light & Hanson, P.C. (by James Hanson), Farmington Hills; Indianapolis, IN, for the plaintiffs.

Fraser Trebilcock Davis & Dunlap, P.C. (by Michael S. Ashton), and ATA Litigation Center (by Robert Digges, Jr.), Lansing; Alexandria, VA, for the intervening plaintiffs. Before MARKEY, P.J., and SAAD and SMOLENSKI, JJ.

SMOLENSKI, J.

In these consolidated class actions, plaintiffs, individual class-representative trucking companies, and intervening plaintiffs, two trucking companies, appeal by right from a December 30, 1998, judgment of the Court of Claims that granted summary disposition in favor of defendants. The appeals were consolidated. We affirm.

I

This case involves the effect of several federal laws, specifically 49 USC 11501, 49 USC 11506, and subsection 601(h) of the Federal Aviation Administration Authorization Act of 1994 (FAAAA), PL 103-105, subsection 601(h), on various provisions of Michigan's Motor Carrier Act (MCA), M.C.L. § 475.1 et seq. This litigation began on January 3, 1995, when plaintiffs Westlake Transportation, Inc., et al., filed their complaint, alleging that the state's $100 annual fees for interstate and intrastate motor carriers were unconstitutional because federal laws, 49 USC 11506 and 49 USC 11501, respectively, preempted the state laws. On January 9, 1995, Troy Cab, Inc., et al., filed their complaint, and made similar allegations.

In Michigan, since 1933, motor-carrier regulation has been pursuant to the Michigan MCA. The act authorizes the Michigan Public Service Commission (PSC) to enforce the act. MCL 475.1(c); MCL 475.2. Under the MCA, motor carriers must pay a fee of $100 for each application filed with the commission for a certificate of authority or for a permit to operate intrastate. MCL 478.1. Also, motor carriers are required to pay an annual fee of $100 a vehicle for the administration of the act. MCL 478.2(1) and (2). Subsection 1 applies to motor-carrier vehicles that operate intrastate pursuant to a certificate of authority, while subsection 2 applies to motor-carrier vehicles licensed in Michigan that engage entirely in interstate commerce.¹ The act also provides that motor carriers that are registered outside Michigan are required to pay a registration fee of $10 a vehicle. MCL 478.7.

In February 1995, intervening plaintiffs filed their complaint, alleging that the intrastate-decal fee violated the Commerce Clause, U.S. Const, art I, § 8, cl 3, and were subsequently granted the right to intervene. Plaintiffs Westlake Transportation, Inc., et al., and intervening plaintiffs both amended their complaints, adopting the other's substantive claims. The plaintiffs' cases were consolidated in April 1995 and the classes were certified in June 1995.

On June 22, 1995, plaintiffs filed two separate motions for partial summary disposition pursuant to MCR 2.116(C)(10): one regarding their intrastate-preemption claim and the other regarding their interstate-preemption claim. On June 30, 1995, intervening plaintiffs filed their motion for partial summary disposition pursuant to MCR 2.116(C)(10), regarding their claim alleging violation of the Commerce Clause. On October 27, 1995, defendants renewed their own motion for summary disposition. The Court of Claims issued its opinion on October 13,1998, concluding that plaintiffs' and intervening plaintiffs' claims were meritless, and denied their motions for partial summary disposition in an order entered on November 12, 1998. Subsequently, the court granted defendants' motion for summary disposition "for the reasons defendants stated in their November 10, 1998 supplemental brief," which relied on the court's October 13, 1998, opinion.

The court concluded that § 601 of the FAAAA did not preempt M.C.L. § 478.2(1) because the federal law did not preempt safety-related regulatory fees. The court also found that M.C.L. § 478.2(2) was not preempted because the federal law imposed the $10 maximum only on "participating states," not "registration states." The court further determined that M.C.L. § 478.2(1) did not implicate the Commerce Clause because it did not burden foreign motor carriers more heavily as compared to Michigan motor carriers engaged in interstate commerce, since the state statute only affects Michigan motor carriers who engage solely in intrastate commerce. Plaintiffs filed a motion for reconsideration, which was denied. Plaintiffs and intervening plaintiffs now appeal by right.

II

Summary disposition of all or part of a claim or defense may be granted when

[e]xcept as to the amount of damages, there is no genuine issue as to any material fact, and the moving party is entitled to judgment or partial judgment as a matter of law. [MCR 2.116(C)(10).]

A motion for summary disposition under MCR 2.116(C)(10) tests whether there is factual support for a claim, and is reviewed de novo on appeal. Spiek v. Dep't of Transportation, 456 Mich. 331, 337, 572 N.W.2d 201 (1998). When deciding a motion for summary disposition, a court must consider the pleadings, affidavits, depositions, admissions, and other documentary evidence submitted in the light most favorable to the nonmoving party. Ritchie-Gamester v. Berkley, 461 Mich. 73, 76, 597 N.W.2d 517 (1999). A motion for summary disposition based on the lack of a material factual dispute must be supported by documentary evidence. MCR 2.116(G)(3)(b), Meyer v. Center Line, 242 Mich.App. 560, 574, 619 N.W.2d 182 (2000). All reasonable inferences are to be drawn in favor of the nonmovant. Bertrand v. Alan Ford, Inc., 449 Mich. 606, 618, 537 N.W.2d 185 (1995).

III

Plaintiffs argue that M.C.L. § 478.2(2) is preempted by federal law, specifically 49 USC 11506.² Determining whether federal law preempts a state law presents an issue of statutory construction and is a question of law. Konynenbelt v. Flagstar Bank, FSB, 242 Mich.App. 21, 27, 617 N.W.2d 706 (2000). Congressional intent is the cornerstone of preemption analysis. Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1, 8, 107 S.Ct. 2211, 96 L.Ed.2d 1 (1987).

The Supremacy Clause of the United States Constitution provides Congress with the power to preempt state law. US Const, art VI, cl 2. A general presumption exists in the law against federal preemption. Duprey v. Huron & E R Co, Inc., 237 Mich.App. 662, 665, 604 N.W.2d 702 (1999). Federal preemption occurs only under certain conditions, such as when (1) Congress enacts a federal statute that expresses a clear intent to preempt state law, (2) an outright or actual conflict exists between federal and state law, (3) compliance with both federal and state law is effectively impossible, (4) an implicit barrier to state regulation exists in federal law, (5) Congress has legislated comprehensively, thereby occupying an entire field and leaving no room for supplemental state law, or (6) the state law stands as an obstacle to the accomplishment and execution of the full objectives of Congress. Id.

49 USC 11506 provided, in part:

(b) General rule.—The requirement of a State that a motor carrier, providing transportation subject to jurisdiction under subchapter I of chapter 135 and providing transportation in that State, must register with the State is not an unreasonable burden on transportation referred to in section 13501 when the State registration is completed under standards of the Secretary under subsection (c). When a State registration requirement imposes obligations in excess of the standards of the Secretary, the part in excess is an unreasonable burden.

(c) Single State registration system.—

(1) In general.—The Secretary shall maintain standards for implementing a system under which—

(A) a motor carrier is required to register annually with only one State by providing evidence of its Federal registration under chapter 139;

(B) the State of registration shall fully comply with standards prescribed under this section; and

(C) such single State registration shall be deemed to satisfy the

...