Attorney General v. PUBLIC SERVICE COM'N

• Decision Date: 14 February 2001
• Docket Number: Docket No. 215919.
• Citation: 625 N.W.2d 16,243 Mich. App. 487
• Parties: ATTORNEY GENERAL Jennifer M. Granholm, Appellant, v. MICHIGAN PUBLIC SERVICE COMMISSION and Detroit Edison Company, Appellees.
• Court: Court of Appeal of Michigan — District of US

625 N.W.2d 16

243 Mich. App. 487

ATTORNEY GENERAL Jennifer M. Granholm, Appellant, v. MICHIGAN PUBLIC SERVICE COMMISSION and Detroit Edison Company, Appellees.

Docket No. 215919.

Court of Appeals of Michigan.

Submitted June 6, 2000, at Lansing.

Decided December 8, 2000, at 9:10 a.m.

Released for Publication February 14, 2001.

Jennifer M. Granholm, Attorney General, Thomas L. Casey, Solicitor General, J. Peter Lark and Donald E. Erickson, Assistant Attorneys General, for the Attorney General.

David A. Voges, Henry J. Boynton, and Patricia S. Barone, Assistant Attorneys General, and Allan Falk, Special Assistant Attorney General, for the Public Service Commission.

Foster, Swift, Collins & Smith, P.C. (by William K. Fahey and Stephen J. Rhodes) and Bruce R. Mathers and Jon P. Christinidis, for Detroit Edison Company. Lansing, Detroit.

Before METER, P.J., and RICHARD ALLEN GRIFFIN and TALBOT, JJ.

RICHARD ALLEN GRIFFIN, J.

Appellant Attorney General appeals as of right an order of the Public Service Commission (PSC) granting appellee Detroit Edison Company's motion to terminate the proceedings in Case Nos. 00-011449 and 00-011528 regarding Edison's request for a suspension of its power supply cost recovery (PSCR) clause.

At the time of oral arguments in this appeal, the Attorney General was both appellant and counsel for appellee PSC. Upon calling the case, the Court raised the issue of the apparent conflict of interest of the Attorney General regarding her dual roles. When the opposing assistant attorneys general were unable to cite any authority to support their adversarial relationship, this Court invited supplemental briefs on the issue. Following our inquiry, appellee PSC objected to a brief prepared by its assigned assistant attorney general that argued the Attorney General and her assistant attorneys general had no conflict of interest. Thereafter, appellee PSC requested that the Attorney General appoint a special assistant attorney general to represent its interests. By mutual agreement, the Attorney General eventually appointed attorney Allan Falk as special assistant attorney general for the PSC. However, a stipulation for substitution of counsel has not been filed. Further, the Attorney General represents that her appointment of Mr. Falk is a limited appointment for the purpose of filing a brief on the conflict question only.

The authority of the Attorney General to appoint special assistant attorneys general is well established. See, e.g., Dearborn Fire Fighters v. Dearborn, 394 Mich. 229, 309-310, 231 N.W.2d 226 (1975) (opinion by Williams, J.); Sprik v. Regents of Univ. of Michigan, 43 Mich.App. 178, 184, 204 N.W.2d 62 (1972); OAG, 1985, No. 6295, p. 72 (May 15, 1985). In addition, the Legislature through statutory enactment has recognized the position of "independent special assistant attorney general." See, e.g., M.C.L. § 333.16237(2); MSA 14.15(16237)(2).¹ Once appointed, an independent special assistant attorney general is not subject to the control and direction of the Attorney General. Id. Rather, and if needed, the independent special assistant attorney general is supervised by the court.

Conflict of Interest Issue

A Independent Judicial Duty

The judiciary has the exclusive constitutional prerogative, Const. 1963, art. 3, § 2, to define and regulate the practice of law insofar as judicial proceedings are concerned, Detroit Bar Ass'n v. Union Guardian Trust Co., 282 Mich. 216, 225-228, 276 N.W. 365 (1937), and our Supreme Court has the power under Const. 1963, art. 6, § 5 to regulate and discipline the members of the bar of this state. Grievance Administrator v. Lopatin, 462 Mich. 235, 242, 247, 612 N.W.2d 120 (2000). Starting with In re Mills, 1 Mich. 392 (1850), Michigan has a long tradition of judicial oversight of the ethical conduct of its court officers. See Pasman, The conflict of "conflict of interest": The Michigan example, 1995 Det. Col. L. R. 133. The more recent cases in which our courts have taken affirmative action to enforce our ethical standards and rules regarding counsel are In re Schlossberg, 388 Mich. 389, 200 N.W.2d 219 (1972), In re Norris Estate, 151 Mich.App. 502, 391 N.W.2d 391 (1986), GAC Commercial Corp. v. Mahoney Typographers, Inc., 66 Mich.App. 186, 238 N.W.2d 575 (1975), and Auseon v. Reading Brass Co., 22 Mich.App. 505, 177 N.W.2d 662 (1970).

Our ethic rules were originally based on statute and common law. However, in 1971, the Michigan Supreme Court adopted a version of the American Bar Association Code of Professional Conduct. Thereafter in 1988, the Code of Professional Conduct was superseded by the Supreme Court's adoption of a version of the ABA's Model Rules of Professional Conduct.

The Michigan Code of Judicial Conduct, adopted by the Supreme Court in 1974, provides that each judge shall have administrative responsibilities to ensure professional conduct by his court officers. Specifically, Canon 3(B)(3) provides: "A judge should take or initiate appropriate disciplinary measures against a judge or lawyer for unprofessional conduct of which the judge may become aware." Pursuant to our independent responsibility to supervise the ethical conduct of our court officers, this Court has raised and now addresses the issue whether the Attorney General's dual roles in this case as both the party appellant and as counsel for appellee PSC constitute an impermissible conflict of interest.

B Mootness

The Attorney General argues that we should not address the conflict of interest issue because it has been rendered moot by her appointment of Special Assistant Attorney General Allan Falk. We disagree.

First, the Attorney General represents that attorney Falk's appointment in this case is not plenary, but limited: "Mr. Falk's authority to represent a state agency derives solely from the action of the Attorney General in appointing him a special assistant attorney general for the limited purpose of filing a brief on the conflict question." (Emphasis added.) Further, a stipulation for substitution of counsel has not been filed with this Court and an order of substitution has not been entered. Accordingly, the Attorney General continues as both the appellant and as counsel for appellee PSC, MCR 2.117(C)(2), In re Withdrawal of Attorney, 234 Mich.App. 421, 594 N.W.2d 514 (1999), and therefore the conflict of interest issue is not moot. Thus, the conflict is not hypothetical, but real and ongoing.

Second, while the Attorney General would prefer to focus on the ultimate result of the case rather than on the tangible ethical conflict of interest, we agree with the State Bar of Michigan Ethics Committee that "[t]he purpose of [the conflict of interest rules] is to condemn the creation and existence of the dual relationship instead of merely scrutinizing the results that may flow therefrom." State Bar of Michigan, Ethics Opinion, R-160 (November 1954), quoting Ethics Opinion, R-132 (January 1950).

C Standing

Pursuant to a directive of our Supreme Court,² we must also address "the question whether the Public Service Commission has standing to participate in the appeal, in defense of its own ruling." In Michigan jurisprudence

[s]tanding is a legal term used to denote the existence of a party's interest in the outcome of litigation that will ensure sincere and vigorous advocacy. However, evidence that a party will engage in full and vigorous advocacy, by itself, is insufficient to establish standing. Standing requires a demonstration that the plaintiff's substantial interest will be detrimentally affected in a manner different from the citizenry at large. [House Speaker v. State Administrative Bd., 441 Mich. 547, 554, 495 N.W.2d 539 (1993).]

The issue of standing was not raised or briefed by the parties to this appeal; hence, it has not been properly preserved for appellate review. Meagher v. McNeely & Lincoln, Inc., 212 Mich.App. 154, 156, 536 N.W.2d 851 (1995). In any event, we note that in the sole reference to this issue, the Attorney General concedes that the PSC has standing under the present circumstances:

The Commission's brief states, at page 14, "the MPSC is by statute a party in interest ..." and compares itself to the Michigan Employment Security Commission. In fact, nothing in M.C.L. § 462.26; MSA 22.4 as most recently amended makes the Commission a "real party in interest." The former version of that statute vested jurisdiction in the Ingham County Circuit Court and said that actions in the circuit court were to be commenced against the Commission as a defendant, but the amended statute dropped any such language.3 Compare M.C.L. § 462.26; MSA 22.4 with M.C.L. § 421.38; MSA 17.540. ("The [MESC] shall be considered to be a party to any judicial action....")

3The Attorney General does not mean to imply that the MPSC cannot appear in appeals from its orders, and the Public Service Division has regularly and consistently represented the MPSC in appeals. Furthermore, in many MPSC decisions there is no party other than the regulated business which has filed the appeal, so an appearance by the MPSC is a practical action. MCR 7.204(E) requires service of appeals from MPSC decisions upon the MPSC. MCR 7.204(C)(3) requires service upon all other parties in the proceeding below, so when there was no party other than the appellant in the case below, it is only logical to consider the administrative agency as an appellee. For example, MCR 7.105(C)(1)(b) permits but does not require an administrative agency to become a "respondent." [Emphasis added.]

We hold that the PSC has standing to defend its decisions because it has a substantial interest that will be detrimentally affected in a manner different from the citizenry at large and its participation is often necessary to ensure vigorous advocacy. House Speaker v. Governor, 443 Mich. 560, 572, 506 N.W.2d 190 (1993); House Speaker v. State Administrative Bd., supra at 554, 495 N.W.2d 539. In addition,...