One Court of Justice

The Supreme Court granted the application of an interest group challenging the Court of Appeals’ affirmance permitting Detroit Edison to issue a prospective rebate to its customers to refund a prior unapproved rate increase.  Our July 2012 post on the Court of Appeals’ decision affirming the prospective rebate, and the dissent arguing that it was not permitted because it was contrary to the plain language of the statute at issue, can be found here.

Detroit Edison had implemented a rate hike to customers prior to receipt of Michigan Public Service Commission approval.  When only part of the rate increase was approved, Detroit Edison wanted to refund the overcharge by crediting a future bill.  The Association of Businesses Advocating Tariff Equity (ABATE) argued that such a refund was impermissible under the applicable statute and failed to compensate past customers who paid the unapproved additional charges.

In Natural Resources Defense Council v. Department of Environmental Quality, the Court of Appeals upheld the City of Holland’s permit to install new coal-burning equipment in its power plant.  The Court ruled that (1) it had jurisdiction to consider the propriety of the permit on an appeal as of right because the MDEQ’s decision was not a decision of a “court or tribunal” ; (2) any error by the trial court in formulating the standard of review was harmless because it properly determined that the MDEQ’s decision was authorized by law; and (3) the MDEQ’s review of the “best available control technology” for the Holland plant met the requirements of the Clean Air Act, even though it did not employ the EPA-endorsed “topdown” model of review. Read more »

Because Michigan’s septage waste disposal statute explicitly states it does not preempt local ordinances imposing stricter requirements, the Court of Appeals in Gmoser’s Septic Service LLC v Michigan Septic Tank Association upheld East Bay Township’s mandate that all township septic waste be disposed of in the Grand Traverse facility.

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On remand, the Court of Appeals in Department of Environmental Quality v Township of Worth considered whether remedial measures, fines, and attorney fees imposed against Worth Township for allowing private septic systems to leak into Lake Huron were authorized under Michigan’s Natural Resources and Environmental Protection Act (“NREPA”) or violated the Headlee Amendment to the Michigan Constitution.  The Court of Appeals held that NREPA did authorize the ordered remedies and that the remedial measures did not violate the Headlee Amendment.

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In 2009 and 2010, Detroit Edison Co. self-implemented a rate increase while waiting for the Michigan Public Service Commission (“MPSC”) to act on its rate-increase request.  On January 11, 2010, the MPSC approved only a portion of Detroit Edison’s requested increase.  Detroit Edison proposed to refund its customers’ overpayments among customer classes based upon each customer class’s pro rata share of the total overpayment, by providing a discount on the January, 2010 billing cycle.  The Association of Business Advocating Tariff Equity (“ABATE”) objected because former primary customers of Detroit Edison, who paid the improperly high rates, would not receive a refund.  Despite the objection, the MPSC approved Detroit Edison’s plan, and the Michigan Court of Appeals affirmed.  In re Appl of Detroit Edison Co. to Increase Rates, No. 302110.  Read more »

On May 18, the Michigan Supreme Court reversed the Court of Appeals, and held that the state’s Natural Resources and Environmental Protection Act (NREPA) required municipalities to be responsible for and prevent raw sewage discharge originating within their borders — even when a private party was responsible for the release.

Justice Hathaway authored the majority opinion in Department of Environmental Quality v. Worth Township, which remanded the matter for consideration of the township’s remaining arguments.  Chief Justice Young was the lone dissenter.  At issue here was a battle of statutory interpretation. NREPA contains a provision, MCL 324.3109(2), providing that:

“The discharge of any raw sewage … into any waters of the state shall be considered prima facie evidence of a violation of this part by the municipality in which the discharge originated unless the discharge is permitted by an order or rule of the [DEQ].  …”

The Court of Appeals interpreted the statute to mean that this created a rebuttable presumption that municipalities could overcome to avoid any NREPA responsibility.  The Supreme Court’s six-member majority agreed with the dissent in the Court of Appeals, which held that “prima facie evidence” created a rebuttable presumption of a violation of NREPA itself that the discharge was, in fact, injurious and thus a violation in the first place, but that the municipality remained responsible for any violation.

Two groups, Michigan Townships Association and Citizens Voice for Property Owners, Inc., each wrote amicus curiae briefs.

In In re Michigan Consolidated Gas Company Compliance to 2008 PA 286/295, No. 292683 the Court of Appeals considered three issues on appeal and ultimately affirmed the June 2, 2009, order of the Michigan Public Service Commission (“PSC”), approving the energy optimization plan submitted by Michigan Consolidated Gas Company (“MichCon”). On appeal, the appellant Association of Business Advocating Tariff Equity (“ABATE”) challenged the PSC’s interpretation of Michigan’s Clean, Renewable, and Efficient Energy Act, 2008 PA 295, MCL 460.1001 et seq. (“the Act”). The Court of Appeals noted that under the applicable standard of review, PSC orders are presumed to be lawful and reasonable, and the evidentiary burden is on the party challenging the order to prove “by clear and satisfactory evidence that the order is unlawful or unreasonable.” Additionally, agency interpretations of statutes are entitled to “respectful consideration,” although they are not binding on the courts and may not conflict with the legislative intent behind the statute.

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In Price v. High Pointe Oil Co., No. 298460, the Court of Appeals held that “in negligence actions, a plaintiff may seek recovery of mental anguish damages naturally flowing from the damage to or destruction of real property.”

In Prince, plaintiff was awarded $100,000 in non-economic damages resulting from defendant filling the basement of plaintiff’s home with nearly 400 gallons of fuel oil.  A year before the incident, plaintiff converted her home heating system from an oil furnace to a propane furnace.  Plaintiff notified defendant of the change, and defendant took plaintiff off the “keep full” oil list.  Despite this notice, however, plaintiff was inadvertently placed on the “keep full” list, which resulted in defendant’s oil truck driver filling the fill pipe located on the exterior of the house while plaintiff was at work.  Because the oil furnace had been replaced, the fuel oil flooded the basement.  The resulting contamination required the demolition of the house and plaintiff being displaced from a permanent home for nearly two years.

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In In re Application of Michigan Consolidated Gas Company, Nos. 298830, 298887, the Michigan Public Service Commission (“PSC”) had decided to allow the Michigan Consolidated Gas Company (“Mich Con”) to use an uncollectable expense true-up mechanism (“UETM”) and to charge ratepayers over $5 million to support the Low-Income and Energy Efficiency Fund (“LIEEF”).  The Court of Appeals affirmed the use of the UETM, but held that the PSC did not have authority to approve the collection of funds for the LIEEF.

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On July 12, 2011, in In the Matter of In Review of Consumers Energy Company Renewable Energy Plan, No. 292659, the Michigan Court of Appeals affirmed the Public Service Commission’s (“PSC”) decision to approve Consumers Energy’s energy optimization and renewable energy plans for its electric division and its energy optimization plan for its gas division, pursuant to Michigan’s Clean, Renewable, and Efficient Energy Act, 2008 PA 295, MCL 460.1001 et seq. (the “Act”).  The opinion also reports that the Court has resolved a similar challenge to Michigan Consolidated Gas Company’s energy optimization plan in a separate appeal, but the decision has yet to be released. Read more »