The Michigan Public Service Commission determined that Consumers Power Company was entitled to an annual increase of $16,514,000 in operating revenue for electric service. In a departure from past practice, the commission, before entering a final order adopting new rate schedules allocating the annual increase among Consumers' customers, ordered a public hearing to determine the reasonableness of the proposed rate schedules.
Consumers asked the commission to implement the proposed rates under bond with any excess collected to be refunded after the commission issued its final rate order. The commission denied this request. It said that it "was unaware of any statutory authority empowering it" to provide such immediate relief.
Consumers applied to the circuit court for a preliminary injunction authorizing it to implement the proposed rates under bond. The court granted the preliminary injunction and Consumers collected $7,762,873, of which $39,855 was later refunded to a class of customers for whom lower rates were set in the final commission order.
We reaffirm this Court's decision in Michigan Consolidated Gas Co v Public Service Comm, 389 Mich. 624; 209 N.W.2d 210 (1973), that the general equity jurisdiction of the circuit court has not been superseded by statutory procedures. In an appropriate case the circuit court can, in the exercise of general equitable powers, provide injunctive relief permitting a public utility to collect revenues in excess of those approved by the commission, subject to refund if, after final commission action and appellate review, an excessive amount has been collected.
We conclude that, under the circumstances of the instant case, including that the commission did not regard itself as having the authority to provide immediate relief, the circuit court acted properly in entering an injunctive order. The commission's subsequent action making the proposed rate structure effective as of the date that the injunction became effective confirmed Consumers' right to retain substantially all the money collected pursuant to the injunctive order.
A public utility has a substantive right, set forth in the statutes and rooted in the constitution, to rate relief where the revenue produced by an existing rate structure is less than the amount required by the statutes or the constitution.
The power to decide whether any rate relief should be provided and whether immediate relief shall be provided is vested in the commission. Because the authority to set utility rates is vested in the commission and statutory procedures must be observed, the judicial role is limited.
The circuit court may, however, provide relief from an erroneous order of the commission. And, where statutory or administrative procedures inadequately protect the substantive rights of the utility, the circuit court can, in the exercise of its equity powers, provide a remedy to avoid irreparable harm to the substantive rights of the utility.
The substantive right to rate relief includes the right to a determination, following a hearing if necessary, whether immediate or permanent relief shall be granted. Adequate statutory procedures must be observed. In the instant case, however, the commission was of the opinion that the statute
If the commission had ultimately determined that relief was not warranted as of the time it was secured by the circuit court injunction, Consumers would — because a court is not empowered to fix or make permanently effective a rate not approved by the commission — be required to refund so much of the money collected not authorized by the final order.
In the instant case, the commission's final order provided that Consumers was entitled to collect the new rates as of the time the injunction became effective, thereby determining that relief as of that date was warranted. It is thus the commission's action and not the court's which, in the instant case, authorizes Consumers' retention of the money collected pursuant to the temporary injunction.
The circuit court, sitting as a court of equity, preserved the status quo, the commission having taken the view that it was unable to do so, until the commission determined whether relief should be granted as of the time it was secured by the injunction. Absent an injunctive order, Consumers would have suffered irreparable harm because it may have been impossible to later implement the higher rates authorized by the commission.
Some fourteen months after Consumers filed an application, on July 15, 1968, for rate increases for gas and electric service, the commission issued an order, on September 29, 1969, which authorized an annual increase of $16,514,000 in operating revenue for electric service. The order also directed Consumers to submit a proposed rate structure allocating the revenue increase among its customers. Prior to issuing the order, the commission had given notice of hearing to Consumers' customers and had conducted rate proceedings involving 17 days of public hearings in which the Attorney General and other persons participated.
Under then prevailing practice, unless a question involving specific rates and schedules was raised, the commission made findings regarding operating revenue and expenses, and rate base and rate of return, and then directed a utility to file a schedule of new rates in compliance with the findings. Filing procedures regarding specific proposed rates and schedules included staff review of the new rates and determination by the commission that the new rates were appropriate.
The commission conceded in its answer to the complaint filed by Consumers in the circuit court that theretofore ex parte approval of proposed schedules had followed the filing of such schedules,
In the instant case, however, on October 1, 1969, the Attorney General requested a public hearing to determine the reasonableness of the rate schedules proposed by Consumers to implement the $16,514,000 increase in revenue. The commission departed from the established practice and granted the request. On October 3, 1969, Consumers asked the commission to permit it to implement the proposed new rates under bond subject to refund of any excess collected. The commission refused the request, although its staff had found that the proposed rates would generate the additional revenue authorized by the commission, were reasonable, and equitably distributed the additional charges among the various classes of customers. The commission said that it was unaware of any statutory authority empowering it to grant immediate relief.
On October 6, 1969, the day on which the commission issued a notice of hearing scheduling an October 16-17 hearing on the proposed rates, Consumers sought injunctive relief in the Ingham Circuit Court, alternatively in equity and as a statutory appeal. On October 21, 1969, the circuit court issued a preliminary injunction authorizing the collection of the increased revenue under bond, stating that it found that Consumers had demonstrated that it would otherwise suffer irreparable harm. The Court of Appeals affirmed.
Six months later, on April 20, 1970, the commission entered a rate order fixing final rates to be
In the circuit court and the Court of Appeals, the commission maintained that Consumers should not be compelled to make further refunds because the commission had found, in its April 20, 1970, order, the charges collected to be reasonable.
The commission now supports the Attorney General's and Michigan Retailers Association's appeal to this Court.
The Attorney General, the Michigan Retailers Association, and the commission contend that the circuit court improperly exercised general equity jurisdiction because Consumers had not exhausted
We are persuaded that the circuit court properly exercised its general equity power. There was a sufficient factual basis to support the conclusion that there was no adequate administrative remedy which would avert irreparable harm Consumers would suffer if it continued to be limited to the collection of revenue at a level the commission had already found to be inadequate.
In General Telephone Co of Michigan v Public Service Comm, 341 Mich. 620, 633; 67 N.W.2d 882 (1954), and in Michigan Consolidated Gas Co v Public Service Comm, 389 Mich. 624, 631, 634-636; 209 N.W.2d 210, 212, 213-214 (1973), this Court ruled that the Ingham Circuit Court may, when reviewing a commission decision, exercise its general equity power
As this Court construed the 1909 act, so we construe in the same manner the language of the 1939 act, creating the Michigan Public Service Commission, concerning the circuit court's power to grant an injunction to suspend or to stay a commission decision.
The 1939 act vests the commission with jurisdiction to regulate public utility ratemaking.
The utility in Michigan Consolidated complained that new rates set by the commission were inadequate. The utility in this case complained that the commission's change in practice would cause further delay in setting new rates and result in the collection of inadequate revenue and there was no adequate administrative recourse.
To decide that the circuit court has general equity jurisdiction does not decide whether the court properly exercised its jurisdiction. "Whether a given case falls within equity jurisdiction is a question different from whether the case is one in which the relief peculiar to that jurisdiction should be granted." Solo v Chrysler Corp (On Rehearing), 408 Mich. 345, 353; 292 N.W.2d 438, 441 (1980).
In Michigan Consolidated Gas Co v Public Service Comm, 405 Mich. 803 (1979), where it was asserted that the commission had erred in making factual determinations in setting rates, this Court remanded to the circuit court for further findings because the circuit court's preliminary findings were insufficient to support temporary injunctive relief. This Court said that before granting such relief, the circuit court must find probable cause to believe that the commission had erred in setting rates and must be able to state with "preliminary certainty" how the commission had erred. A temporary injunction may not issue unless there is a clear showing of irreparable harm and of likelihood of prevailing on the merits.
The commission's refusal to implement the rate schedules proposed by Consumers without further hearings on the rate schedules after the commission had found a revenue deficiency was a departure from the then established agency practice.
The circuit court properly concluded, at the time it granted the injunction, that Consumers would suffer irreparable harm from further delay in the implementation of rates which would generate revenue sufficient to alleviate the $16,514,000 revenue deficiency. The object of the preliminary injunction was to preserve the status quo by averting irreparable injury to either party.
The dissenting opinion, while acknowledging that this Court in Michigan Consolidated Gas Co, supra, approved the granting of a temporary injunction authorizing collection of increased rates pursuant to bond where a utility appealed from a final rate order and established irreparable harm, argues that here the commission had not entered a final rate order before Consumers sought injunctive relief.
The absence of a final rate order does not, in our opinion, prevent the circuit court from exercising general equity jurisdiction to determine whether a temporary injunction should enter to avert irreparable harm. Courts generally require an exhaustion of administrative remedies and a final administrative decision before reviewing agency determinations. There are, however, exceptions to the general rule. Where a party can demonstrate that it would suffer irreparable harm if required to await final administrative action or that the absence of an adequate administrative remedy or remedy at law would cause irreparable harm,
In sum, while a court may, in deference to an adequate administrative process or for other reasons, e.g., no showing of irreparable harm or of likelihood of prevailing on the merits, withhold injunctive relief, the Court's power or jurisdiction to grant injunctive relief does not depend on whether there is a final administrative order.
The circuit court granted injunctive relief in accordance with the conditions for providing such relief set forth in Michigan Consolidated Gas Co, 389 Mich. 639-642; 209 N.W.2d 215-217, and therefore did not err in granting Consumers' request for a temporary injunction.
FITZGERALD, C.J., and KAVANAGH, COLEMAN, and RYAN, JJ., concurred with LEVIN, J.
WILLIAMS, J. (for reversal).
On September 29, 1969, the Michigan Public Service Commission (MPSC), after 14 months of hearing and deliberation,
The principal question before this Court is whether the Ingham Circuit Court had jurisdiction to issue an injunctive order implementing the proposed rate structure, either under general equity jurisdiction, as the Ingham Circuit Court held on review, or under 1909 PA 300, § 26; MCL 462.26; MSA 22.45, as the Court of Appeals held on appeal. We hold that the Ingham Circuit Court had no such jurisdiction under either theory. As to § 26, there was not the prerequisite prior rate order for Consumers to complain of, and in any event § 26 does not authorize a court to set rates. As to general equity jurisdiction there is no authority in equity to set utility rates, because setting rates is a legislative function.
The companion question is whether in equity Consumers should be compelled to distribute to former ratepayers the excess rates collected for the six-month period between the circuit court order authorizing collection of the proposed rates and the MPSC final rate determination. Balancing the equities, including the facts that the MPSC had originally, although unlawfully, made its rates
Finally, if MPSC does not have statutory authorization, as MPSC avers (and we have not ruled to the contrary) to set rates in advance under bond subject to change where it appears likely the final rate decision will reflect a similar rate, then such a procedure might well merit legislative consideration. Such a procedure would tend to channel utilities into the MPSC's domain where they should find the necessary expertise rather than into the court's jurisdiction where the courts would be encroaching on the legislative function.
1. Consumers, July 15, 1968, petitioned MPSC for an electric rate increase.
2. MPSC, September 29, 1969, issued a 65-page opinion finding an income deficiency and ordering (A) a $16,514,000 increase in operating revenues and (B) submission of a proposed rate structure by Consumers.
3. Attorney General, October 1, 1969, submitted a "demand for public hearing" petition to the MPSC in expectation of Consumers' proposed rate schedule.
4. Consumers, October 3, 1969, filed proposed rate schedule and requested in writing that the
5. MPSC, October 6, 1969, granted the demand of the Attorney General for a public hearing on October 16 and 17, 1969 to determine the reasonableness of the proposed rate.
6. Consumers, October 6, 1969, filed a complaint in the Ingham Circuit Court seeking injunctive protection, either as an original action in equity, or, in the alternative, as a statutory appeal to make the October 3, 1969 proposed rates effective without further hearing. The complaint alleged:
A. MPSC staff approved the October 3, 1969 proposed rates. MPSC admitted this.
B. Ex parte approval of proposed rates following determination of a revenue deficiency was an established practice. MPSC admitted prior commissions had made rate schedules effective without further hearing.
C. Contrary to its established practice, MPSC issued the October 6, 1969 hearing notice, continuing pre-existing rates. MPSC admitted this.
D. Consumers requested its proposed rates be made effective under bond subject to refund pending an order, but MPSC refused. MPSC admitted refusing a verbal request because it lacked authority to grant it.
F. MPSC's refusal to make the proposed rates effective without further hearing was unlawful and unreasonable and would cause irreparable harm. MPSC denied such refusal was unlawful or unreasonable.
7. Michigan Retailers Association, October 10, 1969, filed petitions to intervene in MPSC hearings and petitions to intervene in Ingham Circuit Court on October 21, 1969.
8. Circuit Judge Salmon, October 21, 1969, issued a preliminary order of injunction authorizing Consumers Power to collect its proposed electric rates effective the following day, ruling
"that the plaintiff will suffer irreparable harm if such rates and schedules were not permitted to become effective immediately because increased rates cannot be made effective retroactively and plaintiff will be forced to continue to supply * * * electric energy to its customers at rates which the defendant [MPSC] has heretofore found * * * to be inadequate and noncompensable by an amount of $16,514,000 annually."
The injunction required Consumers Power to file a $5,000,000 bond guaranteeing the refund in the event that (1) the MPSC ultimately approved electric rates different from those proposed by the utility or (2) the injunction was modified or set aside by the circuit court or an appellate court. Finally, the injunction required Consumers Power to maintain adequate records to permit individual refunds with interest should the occasion arise.
10. MPSC, April 20, 1970, issued an order approving electric rates prospectively with a slightly changed schedule. Between October 22, 1969 and April 20, 1970 Consumers collected $7,762,873 over the pre-existing schedule. Consumers, May 26, 1970, refunded the difference between the MPSC and the Consumers rate schedules with interest of 7.15% leaving a net amount of $6,623,417 in dispute.
11. The Attorney General and City of Wyoming, May 20, 1970, brought an action in Ingham Circuit Court under § 26 appealing the April 20 MPSC rate schedule order claiming, inter alia, that the order unlawfully purports to ratify the rates fixed by Judge Salmon for the period of October 22, 1969 through April 19, 1970. Michigan Retailers Association was permitted to intervene on June 5, 1970.
12. Ingham Circuit Judge Hotchkiss, December 14, 1977, entered summary judgment for Consumers, asserting that there was general equity jurisdiction in Judge Salmon, that Consumers had exhausted administrative remedies, that Consumers' action was a "direct action and the court was therefore not limited by the statutory appeal provisions of [MCL 462.26; MSA 22.45]," and that Consumers' complaint did not constitute mandamus against a state officer, because "the court exercised its own authority and jurisdiction."
13. The Court of Appeals unanimously affirmed, holding that the circuit court had statutory appellate jurisdiction to enter the preliminary injunction
The above facts raise the following issues:
A. Whether 1939 PA 3, § 6a; MCL 460.6a; MSA 22.13(6a) authorizes MPSC to grant partial and immediate rate relief to a utility without notice and hearing?
B. Whether 1909 PA 300, § 26; MCL 462.26; MSA 22.45 gives the Ingham Circuit Court jurisdiction under the facts of this case to review the MPSC refusal to issue an ex parte order granting a temporary rate increase and the October 6, 1969 notice of hearing order and to issue temporary rates?
C. Whether the Ingham Circuit Court has original general equity jurisdiction to establish temporary utility rates?
D. Whether under the unique facts of this case customers are entitled to a refund of the difference
III. PARTIAL AND IMMEDIATE RELIEF
The Court of Appeals ultimately decided that the Ingham Circuit Court had statutory appellate authority under § 26 to fix temporary Consumers rates, an issue we will consider in Part IV. The Court held:
"By statute the Legislature has granted the circuit court appellate jurisdiction over any action to vacate and set aside any order fixing rates on the ground that the rates are unreasonable or unlawful. MCL 462.26; MSA 22.45. The denial of a request to place increased rates into effect pending final approval is an `order fixing rates.' Accord Mountain States Telephone & Telegraph Co v Arizona Corporation Comm, 331 F.Supp. 1167 (D Ariz, 1971). As reasoned by the Arizona district court, `A "No" answer is just as much rate fixing as an unreasonably low "Yes". Id., p 1170.'"
But, in order for the Court of Appeals to make its § 26 decision, it had to establish that MPSC denied Consumers' request to fix rates. It did so by considering at length § 6a. Let us consider in substantial part the Court of Appeals rationale:
"Appellants contend that Consumers Power, before seeking a court injunction, should have sought immediate relief from the Public Service Commission under § 460.6a of the compiled laws. MCL 460.6a; MSA 22.13(6a). In pertinent part that section provides:
"`When such utility shall have placed in evidence facts relied upon to support its petition or application to so increase its rates and charges, or to so alter, change or amend any rate or rate schedules, the commission,
* * *
"In this case Consumers Power Company sought interim relief from the Public Service Commission before requesting a court injunction. Following past agency practices, the company did not formally move the commission to exercise its discretion under § 460.6a. The company's `Filing of Rate Schedules and Request for Approval Thereof,' however, was supported by affidavit. The affidavit showed the schedules were in accord with the commission's earlier order concerning rate deficiencies. It also stated that the distribution of rate increases among consumer classifications was fair and reasonable. As related above, the prayer to put the new schedules into immediate effect was written.
"Under the circumstances here presented, we find this to be substantial compliance with § 460.6a, sufficient to invoke the Public Service Commission's authority to grant immediate relief. The commission's order of October 3 implicitly denied such relief and thereby completed the administrative process. Affected parties were afforded due process at the subsequent injunction hearing." 88 Mich.App. 639-641.
The Court of Appeals finding that there was "substantial compliance with [MCL 460.6a]" is manifestly erroneous. The language of § 6a is clear and unambiguous as to what is required. These requirements were not substantially met. In fact there was no compliance at all. First, § 6a declares
MPSC correctly observed:
"The commission is a creature of statute, 1939 PA 3, § 1, as amended, MCL 460.1; MSA 22.13(1), without any common-law power, and the warrant for its exercise of authority must be found in a statutory enactment vesting the specific authority exercised. Huron Portland Cement Co v Public Service Comm, 351 Mich. 255; 88 N.W.2d 492 (1958); Sparta Foundry Co v Michigan Public Utilities Comm, 275 Mich. 562; 267 NW 736 (1936)."
That being so, the only two ways MPSC can order rates are under the general rate powers
IV. APPELLATE JURISDICTION OF CIRCUIT COURT
The Court of Appeals found that Circuit Judge Salmon under 1909 PA 300, § 26 had jurisdiction to issue a preliminary injunction establishing a rate structure, October 21, 1969. In its opinion, the Court said:
"By its order of October 3, the Public Service Commission denied the utility's request for immediate relief. * * * [T]he utility's complaint for injunction invoked the circuit court's appellate jurisdiction to review that order. The circuit court granted the injunction on grounds authorized by the statute." 88 Mich.App. 639.
1909 PA 300, § 26 in pertinent part provides:
"Any * * * party in interest, being dissatisfied with any order of the commission fixing any rate * * * may within 30 days from the issuance of such order and notice thereof commence an action in the circuit court in chancery for the county of Ingham, against the commission as defendant to vacate and set aside any such order on the ground that the rate or rates * * *
The Court of Appeals rationale above quoted is not fully clear, as MPSC issued no order fixing rates on October 3, 1969 (or any other date prior to the decision of Judge Salmon) denying Consumers' request to make immediately effective Consumers' proposed rates. It is likely, however, that the appellate court intended to refer to MPSC's refusal to grant Consumers' request for immediate effectiveness of the proposed rates and to the October 6, 1969 notice of hearing granting the request of the Attorney General for public hearings to review the proposed rate structure. The Court of Appeals apparently agreed with Consumers that insofar as MPSC had stated it had no authority to give immediate and ex parte effect under bond to Consumers' proposed rates and insofar as MPSC had set the public hearings for October 16 and 17, Consumers' request for immediate implementation of the proposed rates was effectively denied on October 6, 1969. See 88 Mich.App. 639.
The question before us, therefore, is whether the Court of Appeals erred in holding that Judge Salmon's issuance of a temporary injunction had sufficiently complied with the jurisdiction requirements of § 26. Two criteria appear pertinent. First, was there "any order of the commission fixing any rate"? Second, if there was such an order does the language "vacate and set aside any such order" authorize a temporary injunction fixing a rate schedule?
A. Alleged MPSC Order Fixing Rates
As noted, the Court of Appeals makes reference to an apparently nonexistent or mislabeled order.
B. Statutory Authority for Issuance of Temporary Injunction
Even assuming MPSC's refusal to grant Consumers' request for immediate effectiveness of the proposed rates and MPSC's October 6 notice of hearing constituted an order fixing rates for purposes of § 26, the relief granted was outside the scope of the statute. Section 26 permits the utility company to petition the circuit court "to vacate and set aside any such order on the ground that the * * * rates fixed are unlawful or unreasonable". We hold that the language "vacate and set aside any such order" is clear and unambiguous.
Our reading of 1909 PA 300, § 26, comports with the decision of this Court in Michigan Central R Co v Wayne Circuit Judge, 156 Mich. 459, 470; 120 NW 1073 (1909), with respect to 1909 PA 300's predecessor, 1907 PA 312, § 26, using practically the identical language, including: "[T]he circuit courts in chancery are hereby given jurisdiction of such suits and empowered to affirm, vacate or set aside the order of the commission * * * and to make such other order or decree as the courts shall decide to be in accordance with the facts and the law." In that case, this Court said:
"We do not construe the provisions of this act to lodge in the courts the power to establish rates. The power conferred upon the courts is solely to determine whether the rates are confiscatory or unreasonable. If
In conclusion, we hold that the Court of Appeals erred in finding that statutory appellate jurisdiction under § 26 sustained Circuit Judge Salmon's temporary injunction of October 21, 1969.
V. GENERAL EQUITY POWER TO ESTABLISH TEMPORARY UTILITY RATES
Consumers placed its chief reliance in petitioning the circuit court to establish its proposed rate schedule on the fact that that court had general equity jurisdiction. Ingham Circuit Judge Salmon's October 21, 1969 preliminary order of injunction implicitly assumes general equity jurisdiction and makes no mention or reliance on 1909 PA 300, § 26. Ingham Circuit Judge Hotchkiss, in his December 14, 1977 opinion determining the legality of the charge and collection of the rates set by Judge Salmon, stated:
"In granting the injunction, the court relied on its general equity jurisdiction. * * *
The Court of Appeals noted: "It is unnecessary to decide in this case whether the circuit court had original equity jurisdiction to grant the preliminary injunction at issue." 88 Mich.App. 638. The Court of Appeals rested its decision on 1909 PA 300, § 26 and 1939 PA 3, § 6a. We have in Parts IV and V held that the Court of Appeals erred in this.
We therefore here address the issue whether the Ingham Circuit Court correctly assumed that original general equity jurisdiction includes the authority to fix utility rates.
Any consideration of whether the Ingham Circuit Court correctly assumed that original equity jurisdiction includes the authority to fix utility rates must begin with the basic proposition that ratemaking is a legislative function. In City of Niles v Michigan Gas & Electric Co, 273 Mich. 255, 263; 262 NW 900 (1935), this Court said:
"Primarily the authority to fix rates for public utilities is a governmental power vested in the Legislature."
The issue in that case was what rate fixing authority was granted by the Legislature to the municipality.
The Legislature has over a period of years properly delegated its rate fixing power to an executive agency, most recently MPSC. It is undisputed that the Legislature has the authority, through its police powers, to regulate business affected with public use. See Michigan State Telephone Co v Michigan Railroad Comm, 193 Mich. 515; 161 NW 240 (1916). The Legislature initially delegated this
The Legislature has delegated its rate setting power to MPSC with considerable particularity. Not only is the general rate setting function described but provision is made for a method of seeking partial and immediate relief pending final order (1939 PA 3, § 6a) and for general appeal in case of dissatisfaction (1909 PA 300, § 26). Subsequent to this case the Legislature has set a goal for MPSC to conclude its deliberations within nine months. 1972 PA 300; MCL 460.6a(3); MSA 22.13(6a)(3).
We have recognized that none of this legislative delegation contemplates any judicial rate setting. Michigan Central R Co v Wayne Circuit Judge, supra; recently reaffirmed in Michigan Consolidated Gas Co v Public Service Comm, 389 Mich. 624, 642, 647; 209 N.W.2d 210 (1973).
It is abundantly clear that the Legislature has carefully circumscribed its rate setting power, confining it to the MPSC and excluding judicial rate setting. Consequently, we hold that if Ingham Circuit Judge Hotchkiss intended to rule that
VI. GENERAL TELEPHONE CASE
Ingham Circuit Judge Hotchkiss, in his December 14, 1977 opinion, speaking of Ingham Circuit Judge Salmon's rate setting injunction, observed:
In General Telephone Co, the company appealed to the Ingham Circuit Court a rate order granting only a partial increase. That court took additional testimony, which it transmitted to MPSC. MPSC refused to consider the additional testimony and would not modify its order. The court thereupon considered MPSC's order and held the rates were unreasonable, unlawful and confiscatory. The court then remanded the matter to MPSC to fix just rates and pending MPSC action authorized the utility to collect rates not in excess of the rates it had requested MPSC to approve under a refund bond. This Court observed:
"The court by its decree did not establish a rate, but only provided, dependent upon final adjudication by the court, that the company could collect the charges it requested in its application as a trust fund under a bond * * *." 341 Mich. 620, 632 (emphasis supplied).
To begin with, the General Telephone Co and Michigan Consolidated Gas Co cases are critically distinguishable from the instant case in that in each of those cases MPSC had issued a rate order that the circuit court had under review. In the instant case, MPSC had not issued a rate order. Otherwise the cases are substantially similar, although not on all fours.
The issue raised by these two cases is whether there is a real difference, on the one hand, between the circuit court permitting the utility to collect its requested rates not approved by MPSC under bond subject to refund pending final MPSC decision and, on the other, setting a rate. The practical result pending MPSC's final decision is that the utility collects at a higher rate allowed by the court rather than the MPSC's original rate. Furthermore, the collection begins at the time of
On the other side of the picture, the court's order is temporary and subject to correction by the final order of MPSC. In addition the collections are under bond and subject to refund. However, the collections, as noted, date from the time of the court order rather than MPSC's final order.
Permitting such a court order preserves the utility from unrecoverable loss from the time of the court order to the time of the final MPSC rate order if MPSC rules in its favor. This has equitable appeal. On the other hand, ratepayers are put to inconvenience and perhaps financial difficulty that subsequent repayment may not fully compensate. In addition, repayment may not find some ratepayers.
On balance there may well be instances where such a system would be in the public interest. However, it is difficult to say that calling such a procedure not rate fixing is anything more than an exercise in semantics. It appears to us that the court is really setting rates. If it is setting rates, then it is, without license, intruding on the Legislature's power and function to set rates, and this Court should not permit it. This is particularly so because the courts lack the special expertise of the MPSC in the subject matter, as we have often remarked.
We have held that the courts do not have general equity power to set rates and that the actions in General Telephone Co and Michigan Consolidated Gas Co do invalidly set rates. Furthermore, it is worth noting that during the administrative proceedings, when the issue of whether the MPSC could or should have ordered immediate implementation
Having determined that the Court of Appeals and Judge Hotchkiss erred in holding Judge Salmon had general equity or statutory authority to set rates, we must now consider whether it is equitable to allow appellants' request that Consumers refund from October 22, 1969, the effective date of Judge Salmon's order, to the April 20, 1970 date of the MPSC's final rate order the revenues collected over and above the prior rates.
Weighing the equities we must begin with the fact favoring appellants that technically Judge Salmon acted unlawfully in permitting the higher rates to be collected. But, on the other hand, we must consider (1) that MPSC had already determined that Consumers was entitled to higher revenues, (2) that MPSC in its final rate order of April 20, 1970 purported to make the new higher rates
Balancing these equities, we are compelled to conclude that the appellants were not unjustly disadvantaged economically. Furthermore, we must recognize that all this happened 12 years ago and it is not too easy to put Humpty Dumpty together again.
The cost and effort of distribution would be altogether disproportionate to the advantage of relatively small checks to subscribers. The excess collections were in the amount of approximately $6.6 million. There were over a million electric ratepayers. As a consequence, the average check without interest would be less than $6.50. Furthermore, because of the mobility of our population, many subscribers would not be found, despite the special records which were kept, and others only at excessive cost.
In sum, we hold that, balancing the equities, we do not find a persuasive case to order the requested refund. "Lex neminem cogit ad vana seu inutilia peragenda." The law compels no one to do vain or useless things. Black's Law Dictionary (4th rev ed), pp 1056-1057. See Sir Anthony Main's Case, 3 Coke, Part 5, pp 20b, 21a (1596). Cf. Chases's Blackstone Commentaries (3d ed, 1892), pp 701, 1071. Michigan has long recognized that "the law does not require the doing of a useless thing". Friedman v Winshall, 343 Mich. 647, 654; 73 N.W.2d 248 (1955). To order a refund at this late date would be a vain and useless act. The order would
We hold that the Court of Appeals and the circuit court erred for different reasons in finding Judge Salmon properly permitted collection of revenues under Consumers' proposed rates, because there is neither statutory nor general equity jurisdiction and power in the circuit court to set utility rates. We further hold that, balancing the equities, the refund is not in order.
Costs to appellants, since they prevailed at law.
The late Justice BLAIR MOODY, JR., took no part in the decision of this case.
In the instant case, the commission had already determined the amount of the revenue deficiency and, under prior practice, would have made effective without delay the increase in revenue. Its subsequent April 20, 1970, order, making the increase effective on the date the injunction became effective, did not constitute retroactive ratemaking, as proscribed in Michigan Bell.
The September 29, 1969, order also found an annual revenue deficiency of $21,308,000 for gas service. The commission completed its hearings on Consumers' proposed gas rates and entered a final rate order on October 21, 1969, the date upon which the preliminary injunction issued. Consumers' request for injunctive relief from inadequate rates for gas service became moot when the commission authorized the new gas rates.
Additionally, in consequence of a change in the federal income tax surcharge, Consumers refunded $1,099,601 of the $7,762,873 collected. Consumers Power Co v Public Service Comm, 65 Mich.App. 73; 237 N.W.2d 189 (1975), lv den 396 Mich. 817 (1976).
"and it is the position of the commission at this time that in view of the fact that the commission has found that the electric rates collected under the preliminary injunction were the modifications resulting from the order from which I have just read, are reasonable and that the commission order should relate back to the date approximately of the preliminary injunction, that the commission will not at this time any longer, will not contest Consumers Power's claim to the rates collected under the court's injunction as modified by the commission order."
"Circuit courts have original jurisdiction to hear and determine all civil claims and remedies, except where exclusive jurisdiction is given in the constitution or by statute to some other court or where the circuit courts are denied jurisdiction by the constitution or statutes of this state." MCL 600.605; MSA 27A.605.
The Attorney General cites Michigan Bell Telephone Co v Ingham Circuit Judge, 325 Mich. 228; 38 N.W.2d 382 (1949), for the proposition that the circuit court has no general equity jurisdiction apart from the jurisdiction expressly conferred in § 26(a) of the 1909 act and incorrectly asserts that this Court construed the 1909 act in that opinion. This Court did not but, rather, construed 1913 PA 206, §§ 14-16, MCL 484.114-484.116; MSA 22.1454-22.1456, which parallel § 26(a) of the 1909 act with the significant exception that the 1913 act permits appeals only from "any final order". The statement in Michigan Bell Telephone Co that the 1913 statute "vest[s]" the power to protect a party from confiscatory rates "by the grant of review of the commission's rate orders", 325 Mich. 234, does not apply to the 1909 act. Nor does such language imply that no source other than a statute confers general equity jurisdiction upon the circuit court.
"The old saying, `Justice delayed is justice denied,' applies with particular force to a rate hearing. Every day a warranted rate increase is withheld is a day in which justice has been denied unless judicial action, as in this case, can be taken. Any statutory attempt to so curtail the power of the judiciary would be unconstitutional as an infringement of due process.
"In Michigan Bell Telephone Co v Ingham Circuit Judge, 325 Mich. 228, 234; 38 N.W.2d 382 (1949), this Court, while denying the remedy therein sought by plaintiff, specifically affirmed the proposition that: `A rate order which is confiscatory is an unreasonable order and cannot be sustained.' See, also, General Telephone Co of Michigan v Public Service Comm, supra.
"In Ohio Valley Water Co v Ben Avon Borough, 253 U.S. 287, 289; 40 S.Ct. 527; 64 L Ed 908 (1920), where the issue of judicial review was raised, it was stated:
"`In all such cases, if the owner claims confiscation of his property will result, the State must provide a fair opportunity for submitting that issue to a judicial tribunal for determination upon its own independent judgment as to both law and facts; otherwise the order is void because in conflict with the due process clause, Fourteenth Amendment.'"
See, e.g., Arizona Corporation Comm v Mountain States Telephone & Telegraph Co, 71 Ariz. 404, 409, 412; 228 P.2d 749 (1951); Southern Bell Telephone & Telegraph Co v Georgia Public Service Comm, 203 Ga. 832, 870; 49 S.E.2d 38 (1948); Mountain States Telephone & Telegraph Co v Jones, 75 Idaho 78, 82; 267 P.2d 634 (1954); Joy v Winstead, 70 Idaho 232, 236; 215 P.2d 291 (1950); Sprague v Biggs, 390 Ill. 537, 548; 62 N.E.2d 420 (1945) (injunction against insufficient existing rates while rate proceedings pending, after commission denial of common carrier request for increased temporary rates); Peoples Gas Light & Coke Co v Slattery, 373 Ill. 31, 42; 25 N.E.2d 482 (1939); South Central Bell Telephone Co v Louisiana Public Service Comm, 256 La. 497, 506; 236 So.2d 813 (1970) (injunction granted before commission determination on interim rate relief); Southwestern Bell Telephone Co v State, 202 Okla. 291; 214 P.2d 715 (1949); Auclair v Vermont Electric Power Co, Inc, 133 Vt. 22, 24; 329 A.2d 641 (1974).