City of Taylor v. Detroit Edison Co., Docket No. 250648.

• Decision Date: 10 November 2004
• Docket Number: Docket No. 250648.
• Citation: 689 N.W.2d 482,263 Mich. App. 551
• Parties: CITY OF TAYLOR, Plaintiff-Appellee, v. The DETROIT EDISON COMPANY, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

689 N.W.2d 482

263 Mich. App. 551

CITY OF TAYLOR, Plaintiff-Appellee, v. The DETROIT EDISON COMPANY, Defendant-Appellant.

Docket No. 250648.

Court of Appeals of Michigan.

Submitted July 8, 2004, at Detroit.

Decided September 14, 2004, at 9:00 a.m.

Released for Publication November 10, 2004.

Sommers, Schwartz, Silver & Schwartz, P.C. (by Patrick B. McCauley and Patrick Burkett), Southfield, for the plaintiff.

Foster, Swift, Collins & Smith, P.C. (by William K. Fahey, Stephen J. Rhodes, and Peter R. Albertins), Lansing, George H. Hathaway, Detroit, and Cummings, McClorey, Davis & Acho, P.L.C. (by T. Joseph Seward and Karen M. Haapala), Livonia, for the defendant.

Before: MURPHY, P.J., and RICHARD ALLEN GRIFFIN and WHITE, JJ.

PER CURIAM.

Defendant appeals as of right the circuit court's order granting plaintiff's cross-motion for summary disposition. We affirm.

This case involves a major reconstruction project along the portion of Telegraph Road passing through the city of Taylor. As part of this project, the Taylor city council passed an ordinance directing all persons owning, leasing, operating, or maintaining overhead lines, wires, poles, or facilities to relocate the facilities underground and to remove all the above-ground facilities. The ordinance stated that the relocation was to be done at the expense of the persons owning, leasing, operating, or maintaining the overhead facilities. Notwithstanding the ordinance, defendant maintained that it was not obliged to pay the costs of the relocation. Plaintiff ultimately advanced a portion of the costs to defendant, reserving its right to litigate the issue. Plaintiff commenced this action seeking to enforce the ordinance and to require defendant to pay for the relocation. The parties filed motions for summary disposition. The court granted plaintiff's motion, denied defendant's, and ordered defendant to reimburse plaintiff.

I

Defendant first contends that the circuit court erred in not deferring to the primary jurisdiction of the Michigan Public Service Commission (MPSC). We disagree. The application of the primary jurisdiction doctrine is a question of law this Court reviews de novo. Spect Imaging, Inc. v. Allstate Ins. Co., 246 Mich.App. 568, 580, 633 N.W.2d 461 (2001).

"A question of `primary jurisdiction' arises when a claim may be cognizable in a court but 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 N.W.2d 733 (2001), quoting District of Columbia v. Thompson, 570 A.2d 277, 288 (D.C.App., 1990), rev'd in part on other grounds 593 A.2d 621 (D.C.App., 1991). In such circumstances, the judicial process is suspended pending referral of the issue to the administrative body for its views. Travelers Ins, supra at 198, 631 N.W.2d 733. "[T]he doctrine underscores the notion that administrative agencies possess specialized and expert knowledge to address issues of a regulatory nature. Use of an agency's expertise is necessary in regulatory matters in which judges and juries have little familiarity." Id. at 198-199, 631 N.W.2d 733. Three main factors govern the applicability of the primary jurisdiction doctrine. The court must consider: 1) the extent to which the agency's specialized knowledge makes it the preferable choice to decide the case; 2) the need for uniformity in resolutions of the issue; and 3) the potential that its decision 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 N.W.2d 647 (1997). We conclude that these factors do not undermine the circuit court's decision to decline to defer to the MPSC in this case.

First, this is not a case in which the MPSC's specialized knowledge would be invoked. The case does not directly involve utility rate structures, licensing, or tariffs. Rather, it presents a question of law regarding a municipality's authority. Although a utility is involved in the case, it is not a situation requiring specialized knowledge, excluding legal knowledge.

The second factor, need for uniformity, does raise a concern. There is a potential that, on the statewide level, utilities may be unsure of a municipality's ability to direct them to move their lines underground at their own expense. But uniformity can be reached equally well through the judicial process. The courts have uniformly applied the rule that a municipality may require a utility to bear the costs of relocation if the municipality is performing a governmental function. Detroit Edison Co. v. Detroit, 208 Mich.App. 26, 30, 527 N.W.2d 9 (1994). Given that uniformity can be, and has been, achieved through the courts, there is no need to defer to the MPSC.

Third, failure to defer to the MPSC will not have an adverse effect on the MPSC's performance of its regulatory duties. This is not a situation in which a pervasive regulatory scheme is thrown out of balance. The ordinance does not conflict with the regulatory scheme. Given that the regulatory scheme of the MPSC is not thrown out of balance, this case does not have a sufficient effect on the MPSC's performance to require deference to it. Spect Imaging, Inc, supra at 581, 633 N.W.2d 461.

In sum, the three factors used to decide if a court should defer to an agency's primary jurisdiction do not require that the courts in these circumstances defer to the MPSC, and the circuit court did not err in proceeding with the case.

II

Next, defendant contends that the ordinance passed by plaintiff's city council mandating that defendant relocate its lines and facilities at its own expense exceeds plaintiff's right to reasonable control over its public roads and rights-of-way. We disagree.

A

Local units of government retain the right to the reasonable control of their rights-of-way. Const. 1963, art. 7, § 29;¹ Detroit Edison Co. v. Detroit, 332 Mich. 348, 354, 51 N.W.2d 245 (1952); TCG Detroit v. Dearborn, 261 Mich.App. 69, 79, 680 N.W.2d 24 (2004). Where the state occupies the field, the right to reasonable control is subject to the paramount authority of the state, except concerning matters that are "strictly referable" to the reasonable control of the streets. TCG Detroit, supra at 91, 680 N.W.2d 24. Here, the state has not purported to occupy the field regarding a municipality's authority over the location of power lines, or the allocation of related costs.² Further, this Court has recognized a municipality's right to control the location and route of electric power lines. Detroit Edison Co. v. Richmond Twp., 150 Mich.App. 40, 47, 50, 388 N.W.2d 296 (1986).

B

On the issue of relocation costs, this Court has repeatedly articulated 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. Detroit Edison Co, 208 Mich.App. at 30,527 N.W.2d 9. In Detroit Edison Co. v. Detroit, 332 Mich. 348, 51 N.W.2d 245, the Michigan Supreme 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. In Detroit Edison Co. v. Southeastern Michigan Transportation Auth., 161 Mich.App. 28, 410 N.W.2d 295 (1987), this Court ruled that the installation of the People Mover constituted a governmental function, and, consequently, the utility bore the cost of relocating its facilities and lines. In Detroit Edison Co. v. Detroit, 180 Mich.App. 145, 446 N.W.2d 615 (1989), this Court ruled that the expansion of Cobo Hall constituted a governmental function, and, as a result, the utility had to bear the cost of relocating its facilities. And, in Detroit Edison Co v. Detroit, 208 Mich.App at 29-30, 527 N.W.2d 9, this Court ruled that the Jefferson/Conner Industrial Revitalization Project constituted a governmental function, that the city undertook the project for a public purpose, and that, therefore, the utility bore the cost of relocation. We must thus determine whether the Telegraph project constituted a governmental or proprietary function.

A proprietary function is defined as any activity conducted for the purpose of producing a pecuniary gain or profit for the governmental agency, excluding any activity normally supported by taxes or fees. Russell v. Dep't of Corrections, 234 Mich.App. 135, 138, 592 N.W.2d 125 (1999). Defendant does not allege that plaintiff is conducting this road improvement for its own financial gain. It is clear from the ordinance that plaintiff is performing a governmental function in attempting to relieve utility and transportation burdens in the business district. Plaintiff conducted the project not for monetary gain for itself, but to relieve traffic congestion, to improve traffic safety, to improve utility reliability, and to improve the aesthetics of the area. These are governmental, rather than proprietary, concerns. Russell, supra at 138, 592 N.W.2d 125; Detroit Edison Co, 208 Mich.App. at 30, 527 N.W.2d 9.

Defendant argues that relocation was not "necessary" for the governmental function because the project amounted to a mere beautification project. However, the ordinance contains more than a goal of mere beautification of Telegraph. The ordinance states several reasons for the road improvement such as improvement of infrastructure in the area, including roads, sidewalks, and sewers, relieving utility and transportational burdens, enhancing traffic safety, improving visibility, protecting persons traveling on Telegraph from potentially falling lines, and improving utility reliability. Removal of the overhead utilities for reasons other than beautification was a major objective and component of the project. The goals of improving visibility and reducing the dangers of...