A municipality’s decision to deny a franchise for electrical service; Const. 1963, art. 7, § 29; TCG Detroit v. City of Dearborn; City of Lansing v. State; Whether such a decision is subject to judicial review for reasonableness; Union Twp. v. City of Mount Pleasant; Due process; U.S. Const. amend. XIV; Delmarva Power & Light Co. v. City of Seaford (DE); Procedural due process; Cummings v. Wayne Cnty.; Galien Twp. Sch. Dist. v. Department of Educ. (On Remand); Property interest; Board of Regents of State Colls. v. Roth; Principle that a franchise is a contractual agreement; City of Niles v. Michigan Gas & Elec. Co.; City of Detroit v. Detroit United R.R.; Consumers Power Co. v. Michigan Consol. Gas Co.; Unfair competition; In re MCI Telecomm. Corp. Complaint; Burns v. Schotz; Tortious interference with a business expectation; Cedroni Ass’n, Inc. v. Tomblinson, Harburn Assoc., Architects & Planners, Inc.; Constitutional takings claim; Inverse condemnation; Blue Harvest, Inc. v. Department of Transp.; In re Certified Question; Town of Castle Rock v. Gonzales
The court held that the trial court did not err by granting defendants-village, power company, and sales representative summary disposition of plaintiff-utility company’s claims. Plaintiff alleged a variety of claims after the village declined to renew plaintiff’s franchise to provide electrical service in the village. On appeal, the court rejected plaintiff's argument that the trial court erred by ruling that a municipality's decision to deny a franchise under Const. 1963, art. 7, § 29, is not subject to judicial review for reasonableness. "[M]erely because a village’s decision related to a utility’s use of the village’s right-of-way is subject to a reasonableness standard, that does not mean that the same standard should apply to the village’s decision related to whether the utility is authorized to conduct business within the village.” In addition, plaintiff “failed to allege facts to show that it was denied due process.” Further, although plaintiff “may have had a unilateral expectation that it would be issued another franchise, that is all it had.” When plaintiff’s franchise with the village expired, "it had no 'right' to continue servicing" those customers. "And without this right, it had no legitimate claim to service those customers, which is fatal to any claim of a protected interest." The court also rejected plaintiff’s contention that the trial court erred by granting defendants summary disposition of its unfair competition claim. Not only was plaintiff “not given an exclusive right to service the” village, it “was only permitted to service customers who were unable to obtain electric service” from the village. It next upheld summary disposition for defendants on plaintiff’s tortious interference with a business expectation claim, finding plaintiff had no valid business expectation, and there was nothing improper about the village “starting to plan for life without” plaintiff before the franchise was set to expire. Finally, as to plaintiff's contention that the trial court should have ruled that the village's acquisition of its customers constituted an unconstitutional taking, requiring that it be compensated, plaintiff could not “establish the necessary property right because after the franchise expired, which is when [the] property purportedly was taken, it had no ‘right’ to provide electric service to any customers” in the village. Affirmed.
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