General Telephone Co. of Northwest, Inc. v. City of Bothell
| Decision Date | 03 April 1986 |
| Docket Number | No. 51433-0,51433-0 |
| Citation | 716 P.2d 879,105 Wn.2d 579 |
| Court | Washington Supreme Court |
| Parties | GENERAL TELEPHONE COMPANY OF the NORTHWEST, INC., a Washington corporation, Petitioner, v. CITY OF BOTHELL, a municipal corporation; Royal M. Donelson, Mayor of the City of Bothell, and Bothell City Council Members; Lowell Haynes, Bothell City Council Member; Clair C. Inghram, Bothell City Council Member; Sue Kienast, Bothell City Council Member; Steve Palevich, Bothell City Council Member; Sue Walsh, Bothell City Council Member; and Aelred Zweber, Bothell City Council Member, Respondents. The CITY OF REDMOND, a municipal corporation, Respondent, v. GENERAL TELEPHONE COMPANY OF the NORTHWEST, INC., a Washington corporation, Petitioner. GENERAL TELEPHONE COMPANY OF the NORTHWEST, INC., a Washington corporation, Petitioner, v. CITY OF REDMOND, a municipal corporation, Christine T. Himes, Mayor of the City of Redmond; Redmond City Council Members: Lorin R. Love, Redmond City Council Member; Doreen Marchione, Redmond City Council Member; Robert Scheitlin, Redmond City Council Member; Arnold J. Tomac, Redmond City Council Member; Roger I. Trepanier, Redmond City Council Member; and John R. Vache, Redmond City Council Member, Respondents. |
Ogden, Ogden & Murphy, Wayne D. Tanaka, Seattle, for respondents.
Alan Gardner, Seattle, for Pacific N.W. Bell.
Ken Eikenberry, Atty. Gen., Larry V. Rogers, Asst. Atty. Gen., Olympia, for Washington Utilities & Transp. Comn.
Perkins, Coie, Stone, Olsen & Williams Stoel, Rives, Boley, Fraser & Wyse, James F. Fell, Portland, Or. for Pacific Power & Light ANDERSEN, Justice.
John D. Ballbach, Frederic A. Morris, William S. Weaver, Seattle, for Puget Sound Power & Light. Co.
FACTS OF CASE
At issue in this case is whether a public utility's tariff preempts contradictory provisions of subsequently enacted city ordinances.
On May 5, 1971, the Washington Utilities and Transportation Commission (WUTC) adopted WAC 480-120-076, which provides that "[e]ach telephone utility shall set forth in its tariff its conditions for providing underground facilities." In 1972, General filed a tariff requiring a customer requesting underground facilities to pay the difference in cost between installing aerial and underground facilities. In 1977, General amended its tariff to pass the costs of relocating aerial facilities underground on to "the owners of real property served along the route of the constructed facility or to others requesting such relocation construction."
On March 16, 1981, the City of Bothell enacted ordinance 999, granting General a 10-year franchise to maintain a general telephone system in Bothell. The ordinance notes initially that General, as the successor to West Coast Telephone Company, had been operating under the terms of the now-expired West Coast franchise. Ordinance 999 then refers to Bothell's policy of relocating aerial electrical and communication facilities underground for reasons of safety and aesthetics, and provides that whenever a public right-of-way is improved, existing poles and related facilities are to be undergrounded at General's expense.
On March 15, 1982, Bothell enacted ordinance 1039 providing for the improvement of specific streets to promote the public health, safety and welfare as well as aesthetic values. Section 3 orders General to underground existing Bothell then instructed General to underground its facilities along the streets identified in ordinance 1039. General declined to do so and filed a declaratory judgment action in King County Superior Court, challenging both ordinances 999 and 1039. Bothell counterclaimed and sought an order requiring General to underground its facilities at General's expense. The trial court granted General's motion for summary judgment, holding that General's tariff conflicted with and preempted Bothell's ordinances.
aerial facilities along the improved streets and also orders it to bear the costs of such relocation.
A similar sequence of events occurred in Redmond. On March 31, 1981, Redmond enacted an ordinance granting General a franchise, again on the condition that the utility pay for undergrounding its aerial facilities along public rights-of-way as they were improved. After General refused to comply with the ordinance, Redmond filed an action in the Superior Court seeking to compel compliance. General filed a separate action challenging the ordinance. The two actions were consolidated, and in that consolidated case another judge held that General's tariff also conflicted with and preempted Redmond's ordinance.
Both Redmond and Bothell appealed. The Court of Appeals consolidated the appeals and reversed both trial courts, holding that General's tariff did not preempt the ordinances because it was invalid. 1 The Court of Appeals also held that the Bothell ordinances were a valid exercise of the police power, and granted the cities' motions for summary judgment.
General then petitioned this court and we granted discretionary review. 2
There are two issues.
ISSUES
ISSUE ONE. Is a city ordinance valid that conflicts with a ISSUE TWO. Does a tariff that imposes undergrounding costs on a city result in a gift of city funds in violation of Washington Const. art. 8, § 7?
preexisting tariff adopted by a utility pursuant to authority lawfully granted by the Washington Utilities and Transportation Commission?
DECISION
ISSUE ONE.
CONCLUSION. Pursuant to state statute, RCW 80.01.040(3), the WUTC has authority to regulate the facilities and practices of a utility. Tariffs enacted pursuant to such WUTC regulation have the force of state law and are preemptive authority over subsequently enacted city ordinances.
Only the facts of the Bothell case need be discussed here since our resolution of that case is dispositive of the Redmond case.
By way of background, it is, of course, the general rule in this state and elsewhere that "public utility companies operating under a franchise must bear the cost of removing and of relocating their facilities, as it is made necessary by highway improvements." 3 A qualification of this rule, however, is that "the common-law duty of a utility to relocate its facilities at its own expense when public convenience or necessity so requires may be changed by contract between the utility and a municipality so that relocation expenses are borne by the municipality, or may be changed by statute so that relocation expenses in certain cases are borne by the state, or the municipality." 4 (Footnotes omitted.)
The first question in connection with this issue is whether the tariff and the ordinances conflict. Section 6 of ordinance 999 and Section 3 of ordinance 1039 require General to underground its existing facilities at its own expense. General's prior tariff provides that if the utility is requested or required by law to place its aerial facilities underground, the costs of such placement shall be passed on to owners of real property served along the route or to others requesting the relocation. The tariff does not expressly state that costs pass to the entity requiring undergrounding. Bothell is such an entity and argues that, accordingly, it is not required to bear the undergrounding costs under General's tariff.
Bothell's attempt to harmonize these laws rests on too narrow an interpretation of "requesting". 5 The effect of its ordinances is clearly to require General to pay for undergrounding while the tariff as clearly requires the costs to be passed on to another party. Despite Bothell's argument, the City is both requesting and requiring undergrounding, and the tariff and ordinances thus contain contradictory terms.
The question therefore becomes which law has precedence over the other. Franchises have the legal status of contracts. 6 The power to grant franchises is a sovereign power that rests in the state, but which may be delegated to cities. 7 Washington municipalities may grant franchises to telephone companies under RCW 35.22.280(7), RCW 35.24.290(10), and RCW 35A.47.040.
Despite their status as contracts, franchises must yield to a municipality's police power if it be reasonably exercised to attain reasonable ends. 8 Cities exercise such power, again due to a grant of authority from the state under Const. art. 11, § 11, which provides that any city may make and enforce within its limits all such local police, sanitary and other regulations as are not in conflict with general laws. 9
Some of the general laws referred to in Const. art. 11, § 11 may be promulgated by the WUTC, which also has been delegated authority to regulate public utilities. Under RCW 80.01.040, the WUTC may regulate the rates, services, facilities and practices of telephone companies. 10 Pursuant to that authority, the WUTC promulgated WAC 480-120-076, which allows each telephone utility to set forth terms in its tariff for providing underground facilities.
Once a utility's tariff is filed and approved, it has the force and effect of law. 11 Acting pursuant to WAC 480-120-076, General filed a tariff on May 24, 1977. The tariff was not contested by the WUTC or others and became effective on June 25, 1977.
The Court of Appeals held that this would have been a valid tariff except for the fact that it abrogated terms contained in General's franchise agreement with Bothell. 12 To "abrogate" is "to abolish by authoritative, official or formal action: annul, repeal". 13 The Bothell franchise ordinance was not enacted until 1981, some 4 years after the effective date of the tariff. Thus, the 1977 tariff did not repeal or otherwise abrogate the franchise ordinance.
The Court of Appeals analyzed Bothell's ordinance 999 as both a contractual and a police power exercise; an analysis General contends was erroneous. Because of the conflict between the tariff and the undergrounding provisions of...
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