City of Detroit v. Ambassador Bridge Co.

• Decision Date: 07 May 2008
• Docket Number: Calendar No. 3.,Docket No. 132329.
• Citation: 748 N.W.2d 221,481 Mich. 29
• Court: Michigan Supreme Court
• Parties: CITY OF DETROIT, Plaintiff/Counter-Defendant/Appellee, v. AMBASSADOR BRIDGE COMPANY, a/k/a Detroit International Bridge Company, Defendant/Counter-Plaintiff/Appellant.

748 N.W.2d 221

481 Mich. 29

CITY OF DETROIT, Plaintiff/Counter-Defendant/Appellee, v. AMBASSADOR BRIDGE COMPANY, a/k/a Detroit International Bridge Company, Defendant/Counter-Plaintiff/Appellant.

Docket No. 132329.

Calendar No. 3.

Supreme Court of Michigan.

Argued October 2, 2007.

Decided May 7, 2008.

John E. Johnson, Jr., Corporation Counsel, and Linda D. Fegins, Senior Assistant Corporation Counsel, for the plaintiff.

Jeffrey T. Stewart, William R. Seikaly, and Steptoe & Johnson LLP (by Richard Willard, David Coburn, and Catherine Sevcenko), Southfield, Southfield, Washington, D.C., for the defendant.

Barris, Sott, Denn & Driker, P.L.L.C. (by Daniel M. Share and Tiffany L. Robinson), Detroit, for the Michigan Municipal League, Bagley Housing Association, Bridgewatch Detroit, Mexicantown Community Development Corporation, Ste. Anne's Catholic Church, Southwest Detroit Business Association, Inc., People's Community Services for Metropolitan Detroit, and the International Municipal Lawyers Association.

MICHAEL F. CAVANAGH, J.

This case presents us with an invitation to second-guess the trial court's factual findings that construction projects on the Ambassador Bridge Plaza would alleviate traffic congestion and facilitate interstate and foreign commerce. Because the trial court, after conducting a four-week bench trial and delivering a 20-page opinion, did not rely on clearly erroneous facts, we decline that invitation. Accordingly, we reverse the judgment of the Court of Appeals because the Detroit International Bridge Company (DIBC) is a federal instrumentality for the limited purpose of facilitating traffic over the Ambassador Bridge and, as such, is immune from the zoning regulation of the city of Detroit that would preclude construction projects furthering this limited federal purpose.

I. FACTS AND PROCEDURE

The city of Detroit seeks to enforce its zoning ordinance on the DIBC to stop the DIBC's construction projects located in and around the Ambassador Bridge's footprint.¹ Part of the Ambassador Bridge sits on land owned by the DIBC that is within the city's geographical boundaries. The DIBC is a for-profit, private company that has a unique relationship with the federal government. In 1921, Congress gave the DIBC the authority to construct, maintain, and operate the Ambassador Bridge and its approaches. Ambassador Bridge authorization act, P.L. 66-395, 41 Stat. 1439. This authorizing statute requires that the bridge's private operator (the DIBC) also comply with the Bridge Act of 1906, 33 U.S.C. 491 et seq. The Bridge Act of 1906 applies to all bridges over navigable waters, and it requires all bridge operators to obtain the approval of the United States Secretary of Transportation regarding the "plans and specifications and the location of such bridge and accessory works" before commencing construction of a new bridge or construction on an old bridge or its accessories. 33 U.S.C. 491.

In late 2000, the DIBC was working with the several federal agencies that operate in and around the bridge to gain approval for the installation of new tollbooths for cars and trucks, a diesel fuel station for its duty-free plaza, and truck weighing stations.² The federal agencies initially refused to allow the projects, citing concerns about the projects' plans and locations. Eventually, after making changes suggested by those federal agencies, the DIBC gained the federal government's approval for the projects.³ Next, the DIBC requested the city's approval to begin construction. The city denied the request, citing its zoning ordinance, and refused to issue variances, citing concerns regarding increased truck exhaust and noise. Nonetheless, the DIBC went forward with its projects. As a result, the city's building inspectors visited the DIBC's construction sites and issued several citations for violations related to the construction.

In February 2001, the city filed an injunctive action against the DIBC to stop the construction. After a four-week bench trial, the trial court orally ruled that the DIBC was immune from the zoning ordinance because of its status as a federal instrumentality. The trial court planned to prepare a written decision, but, given the events of 9/11 and border security concerns, the court suggested that the parties enter extended negotiations, to which they agreed. After the negotiations failed, the court delivered a written decision in July 2004. The court again ruled that the DIBC was immune from the ordinance as a federal instrumentality. In addition, the trial court held that the city's zoning ordinance was preempted by the federal government's demonstrated intent to control the entire bridge complex.⁴

The city appealed. The Court of Appeals reversed on both grounds. First, relying on Detroit Int'l Bridge Co. v. American Seed Co., 249 Mich. 289, 228 N.W. 791 (1930), and Int'l Bridge Co. v. New York, 254 U.S. 126, 41 S.Ct. 56, 65 L.Ed. 176 (1920), the Court of Appeals held that the trial "court's finding that DIBC was constructed for the purpose of facilitating interstate and international commerce is clearly erroneous" and that the DIBC could not be a federal instrumentality. Detroit Int'l Bridge Co. v. Detroit, unpublished opinion per curiam of the Court of Appeals, issued September 14, 2006, 2006 WL 2639520 (Docket Nos. 257369 and 257415), p. 7. The Court of Appeals also held that the city's zoning ordinance was not preempted by federal law because the federal government did not intend to exercise exclusive control over the bridge. Id. at 11-12.

II. STANDARD OF REVIEW

This case involves an issue of federal preemption of state law and local regulation, which involves statutory interpretation. Philadelphia v. New Jersey, 430 U.S. 141, 142, 97 S.Ct. 987, 51 L.Ed.2d 224 (1977). Statutory interpretation is a question of law, which we review de novo. In re Investigation of March 1999 Riots in East Lansing, 463 Mich. 378, 383, 617 N.W.2d 310 (2000). In addition, we review the trial court's factual findings that support its legal holdings for clear error. MCR 2.613(C); Sands Appliance Services, Inc. v. Wilson, 463 Mich. 231, 238, 615 N.W.2d 241 (2000). A trial court's factual findings are clearly erroneous only when the reviewing court is "`left with the definite and firm conviction that a mistake has been made.'" In re Miller, 433 Mich. 331, 337, 445 N.W.2d 161 (1989) (citation omitted).

III. ANALYSIS

"The doctrine of federal preemption has its origin in the Supremacy Clause of article VI, cl 2, of the United States Constitution, which declares that the laws of the United States `shall be the supreme Law of the Land....'" Ryan v. Brunswick Corp., 454 Mich. 20, 27, 557 N.W.2d 541 (1997), abrogated in part on other grounds by Sprietsma v. Mercury Marine, 537 U.S. 51, 123 S.Ct. 518, 154 L.Ed.2d 466 (2002). Preemption occurs "when a state law `stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.'" Wisconsin Pub. Intervenor v. Mortier, 501 U.S. 597, 605, 111 S.Ct. 2476, 115 L.Ed.2d 532 (1991) (citations omitted). Preemption can occur when a state law or local regulation prevents a private entity from carrying out a federal function that Congress has tasked it with performing. See Hancock v. Train, 426 U.S. 167, 178-179, 96 S.Ct. 2006, 48 L.Ed.2d 555 (1976), citing Johnson v. Maryland, 254 U.S. 51, 57, 41 S.Ct. 16, 65 L.Ed. 126 (1920). A private actor takes on the title of "federal instrumentality" when acting in furtherance of the applicable federal function. Union Joint Stock Land Bank of Detroit v. Kissane, 277 Mich. 668, 670, 270 N.W. 178 (1936); Mount Olivet Cemetery Ass'n v. Salt Lake City, 164 F.3d 480, 486 (C.A.10, 1998); Fed Land Bank of Wichita v. Kiowa Co. Bd. of Comm'rs, 368 U.S. 146, 149, 151, 82 S.Ct. 282, 7 L.Ed.2d 199 (1961). Thus, federal instrumentality status can be limited to apply only when the private actor is acting in furtherance of the federal purpose that made it a federal instrumentality. See Kissane, 277 Mich. at 669-672, 270 N.W. 178 (accepting that a federally chartered bank was a federal instrumentality, but holding that the bank was not immune from a state law that did not affect its federal purpose). Furthermore, being a "federal instrumentality" is not an all-or-nothing status; a private actor may be a federal instrumentality for one set of actions, while not being a federal instrumentality during a separate set of actions. Mendrala v. Crown Mortgage Co., 955 F.2d 1132, 1139 (C.A.7, 1992) (noting that because a private actor is not a federal instrumentality for one purpose "does not preclude a determination that it is a federal instrumentality for other purposes").

We refer to part-time federal actors as limited federal instrumentalities because they are only immune from state laws and local regulations when they are acting in furtherance of the limited federal purpose that served as the impetus for granting them federal-instrumentality status. Also, "[d]esignating an entity a federal instrumentality colors the typical preemption analysis by requiring the court to presume, in the absence of clear and unambiguous congressional authorization to the contrary, that Congress intended to preempt state or local regulation of the federal instrumentality." Mount Olivet, 164 F.3d at 486, citing Don't Tear It Down, Inc. v. Pennsylvania Avenue Dev. Corp., 206 U.S.App.D.C. 122, 129-130, 642 F.2d 527 (1980); see also Hancock v. Train, 426 U.S. at 167, 178-179, 96 S.Ct. 2006; Mayo v. United States, 319 U.S. 441, 446-448, 63 S.Ct. 1137, 87 L.Ed. 1504 (1943). And, in this case, there is no such congressional authorization of local regulation. However, despite the presumption noted above, a limited federal instrumentality is immune from state and local regulation only when (1) its actions are within the scope of the federal purpose Congress has assigned to it and (2) the state law or local regulation, if applied, would...