The Detroit Edison Co. v. Southeastern Michigan Transp. Authority

• Citation: 161 Mich.App. 28,410 N.W.2d 295
• Decision Date: 19 August 1987
• Docket Number: Docket No. 88462
• Parties: THE DETROIT EDISON COMPANY, Plaintiff-Appellant, v. SOUTHEASTERN MICHIGAN TRANSPORTATION AUTHORITY, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 295

410 N.W.2d 295

161 Mich.App. 28

THE DETROIT EDISON COMPANY, Plaintiff-Appellant, v. SOUTHEASTERN MICHIGAN TRANSPORTATION AUTHORITY, Defendant-Appellee.

Docket No. 88462.

Court of Appeals of Michigan.

Submitted April 21, 1987.

Decided June 16, 1987.

Released for Publication Aug. 19, 1987.

Solomon Bienenfeld and Jane K. Souris, Detroit, for plaintiff-appellant.

George E. Ward, Detroit, for defendant-appellee.

Before SULLIVAN, P.J., and MacKENZIE and DANIELS ^*, JJ.

MacKENZIE, Judge.

Plaintiff appeals as of right from an order denying its motion for summary disposition and granting defendant's motion for summary disposition pursuant to MCR 2.116(C)(10). We affirm.

This case arises out of defendant's construction of the Central Automated Transit System (CATS), commonly known as the downtown Detroit People Mover. Before construction began, it was determined that certain of plaintiff's utility facilities were located on or under public streets within the projected route of CATS, and would have to be relocated, removed, or abandoned. Plaintiff was willing to relocate its facilities, but demanded that defendant bear the cost. Defendant refused, apparently on the basis of an opinion of the Attorney General, OAG, 1981-1982, No. 6004, p. 436 (October 30, 1981). The parties eventually entered into an agreement whereby they essentially agreed that plaintiff would proceed with the relocation work but would sue defendant to recover its costs. This suit, and the parties' respective motions for summary disposition, followed.

The issue presented is whether plaintiff or defendant must bear the cost of the relocation of plaintiff's public utility facilities in connection with defendant's construction of CATS. In a well-reasoned opinion, Circuit Judge Arthur Bowman held that defendant is not liable for the expenses incurred by plaintiff in the relocation of its utility facilities. We quote Judge Bowman's opinion and adopt it as our own:

"In City of Pontiac v. Consumers Power Co., 101 Mich.App. 450, 453 (1980), lv. den. 410 Mich. 908 (1981), the Court stated the general rule in utility relocation cases:

" 'Relocation costs must be borne by the utility if necessitated by the city's discharge of a governmental function, whereas the expenses must be borne by the city if necessitated by its discharge of a proprietary function. Whether the utility has located its transmission facilities by virtue of an easement, franchise, plat, or other grant is irrelevant; all are treated identically.'

"The rationale behind the rule was explained by the Court in New Orleans Gaslight Co. v. The Drainage Commission of New Orleans, 197 U.S. 453, 460-462, 25 S.Ct. 471 [473-474], 49 L.Ed. 831 (1905):

" 'The police power, in so far as its exercise is essential to the health of the community, it has been held cannot be contracted away.... We think whatever right the gas company acquired was subject, in so far as the location of its pipes was concerned, to such future regulations as might be required in the interest of the public health and welfare.

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" 'In the exercise of the police power of the state, for a purpose highly necessary in the promotion of the public health, it has become necessary to change the location of the pipes of the gas company so as to accommodate them to the new public work. In complying with this requirement at its own expense, none of the property of the gas company has been taken, and the injury sustained is damnum absque injuria.'

"Also see, People ex rel City of Chicago v. Chicago City R. Co., 324 Ill. 618, 155 N.E. 781 (1927); Peoples Gas Light & Coke Co. v. City of Chicago, 413 Ill. 457, 109 N.E.2d 777 (1952).

"In Michigan this line of reasoning has been applied to the situation where a city desired to change the existing grade of a road and pursuant to this goal requested a trolly [sic] car company to remove parts of its railway ties, Detroit v. The Fort Wayne & E.R. Co., 90 Mich. 646 (1892), or where the construction of city sewers necessitated the removal of utility poles, Detroit Edison Co. v. Detroit, 332 Mich. 348 (1952), or where the construction of a sewage treatment facility required the relocation of a utility's equipment, Michigan Bell Telephone Co. v. Detroit, 106 Mich.App. 690 (1981), lv. den. 414 Mich. 869 (1982). See also, Consumers Power Co. v. Costle, 468 F.Supp. 375 (E.D.Mich.1979).

"In each of these cases it is significant to note that the Courts by examining the relevant statutes, ordinances or agreements, found that the right of the utility to use the public road was subordinate to that of the municipality's proposed use. In these cases the activities of the cities which necessitated a relocation of a utility's equipment were found to be for a public purpose--or a governmental function.

"By way of contrast, courts have found a governmental agency liable for the utility's relocation costs where the peculiar statutory scheme under which a municipality was condemning land contemplated that the city would acquire interests in land, such as the utility's in the roads, through purchase, City of Centerline v. Michigan Bell Telephone Co., 387 Mich. 260 (1972), or where the governmental agency which required relocation was not among those agencies under the statutes pertaining to the vacation of plats, MCL 560.2 and 560.60; MSA 26.432 and 26.490, which were entitled not to pay for relocation costs, Detroit Bd. of Ed. v. Michigan Bell Telephone Co., 395 Mich. 1 (1975). Significantly, in both of these cases the Court's decisions eschewed addressing whether a municipality would ever require relocation without having to pay costs, but rather narrowly based the result achieved on the provisions of relevant statutes. Finally, a municipality has been found liable for relocation costs where its activity was not deemed to be a governmental function, City of Pontiac v. Consumers Power Co., supra.

"In the case at bar plaintiff argues that defendant is liable for the relocation costs for several reasons. First, it is contended that the nature of defendant is such that it cannot exercise police powers in the same manner as does a municipal corporation such as a city, township or village. This argument is reminiscent of the reasoning used by the Court in Detroit Bd. of Ed., supra, discussed above, to find the plaintiff liable for relocation costs.

"The strength or weakness of plaintiff's argument is found in an examination of precisely what power has been delegated to authorities, such as defendant, under the Metropolitan Transportation Authorities Act; 1967 PA 204, MCL 124.401 et seq. [MSA 5.3475(101) et seq.], under which defendant was created.

"Section 3 of the Act, MCL 124.403 [MSA 5.3475(103) ] provides as follows:

" 'Authorities created under this act shall plan, acquire, construct, operate, maintain, replace, improve, extend and contract for public transportation facilities. An authority is a public benefit agency and instrumentality of the state with all the powers of a public corporation, for the purpose of planning, acquiring, constructing, operating, maintaining, improving and extending public transportation facilities, and for controlling, operating, administering and exercising the franchise of such transportation facilities, if any, including charter operations as acquired.' (Emphasis added.)

"Further elaboration of an authority's powers and rights is found in [sub]section 6(c) of the Act, MCL 124.406(c) [MSA 5.3475(106)(c) ], which states in pertinent part that an authority may:

" 'Acquire and hold, by purchase, lease, grant, gift, devise, bequest, condemnation or other legal means, real and personal property, including franchises, easements or rights of way on, under or above any property within the area included within the metropolitan transportation authority.... The authority shall have the right to use space and areas over, under and upon the public streets and highways to carry out its duties subject to reasonable use.' (Emphasis added.)

"While the Court would agree with plaintiff that the Legislature has not conferred on defendant general police powers, the fact remains that Sec. 3 of the Act expressly confers on authorities such as defendant, 'all the power' of a public corporation for the purpose of, inter alia, constructing public transportation facilities. This unrestricted grant of 'all power['] to an authority when the authority is constructing public transportation facilities must therefore be seen as including those police powers typically delegated to other public corporations such as municipalities which pertain to the use and control of the streets. Moreover, apart from the broad grant of power to authorities for purposes of constructing public transportation facilities, [sub]section 6(c) additionally, expressly confers on authorities such as defendant the specific right 'to use space and areas over, under and upon the public streets' to carry out its duties such as constructing public transportation facilities. This latter express grant of power to use the streets further makes clear the legislative intent that authorities would have police power with respect to streets for the purposes enumerated in Sec. 3.

"Based on the foregoing statutory analysis the Court finds that in this case, unlike that found in Detroit Bd. of Ed., supra, the [L]egislature has conferred on defendant powers akin to municipalities over public roads when the defendant is constructing public transportation facilities. Plaintiff's argument to the contrary is thus without merit.

"The next argument of plaintiff as to why defendant ought be found liable for relocation costs is that the activity engaged in by defendant is not a governmental function. If true, the holding of City of Pontiac, supra, would dictate that defendant must pay the relocation costs. Reliance by plaintiff is placed on the holding of Borski v. City of Wakefield, 239 Mich. 656 (1927), which...