# Petition for Writ of Certiorari — Troy Cab, Inc. v. Michigan Public Service Commission > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386001_1168%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2005 - **Citation:** 543 U.S. 1088 ## Text Supreme Court, US. FILED No. __Q31250F&B 272004 In THOFFICE OF 1: HE CLERK Supreme Court of the Gnited States ¢ TROY CAB, INC., DEECO SERVICES, INC., d/b/a DEECO TRANSPORTATION, FRANK TIBERIO, d/b/a FAIRFIELD TOWING, LAFOND EXPRESS, INC., CALCUT SALES & SERVICES, INC., d/b/a CALCUT TRUCKING COMPANY, MID-CON FREIGHT SYSTEMS, INC., H & H ENTERPRISES, INC., d/b/aS & M CARTAGE, INC., ECONOMY TRANSPORT, INC., MASON & DIXON LINES, INC., ROMEO EXPEDITORS, INC., WESTLAKE TRANSPORTATION, INC., VANDERKOOI CARRIERS, INC., GERRIG’S TRUCKING & LEASING, INC. and BESTWAY EXPRESS, INC., individually and on behalf of all others similarly situated, Petitioners, V. MICHIGAN PUBLIC SERVICE COMMISSION, MICHIGAN DEPARTMENT OF TREASURY, MICHIGAN DEPARTMENT OF COMMERCE, AND THE STATE OF MICHIGAN, Respondents. @ ~~ On Petition For A Writ Of Certiorari To The Michigan Court Of Appeals a PETITION FOR A WRIT OF CERTIORARI ¢ ROBERT E. MCFARLAND* FOSTER, SWIFT, COLLINS & SMITH, P.C. 32300 Northwestern Highway, Suite 230 Farmington Hills, MI 48334 (248) 539-9900 *Counsel of Record COCKLE LAW BRIEF PRINTING CO. (800) 225-6964 OR CALL COLLECT (402) 342-2831 QUESTION PRESENTED FOR REVIEW May Michigan continue to assess an annual $100 per- powered-vehicle regulatory fee, on intrastate motor carri- ers, when the purposes and provisions of its underlying economic regulatory act were preempted by Congress in 1995? ii LIST OF PARTIES Additional parties to the proceedings below were as follows: (a) As plaintiffs, Prism, Inc.; El Toro, Inc.; Myriah, Inc.; Dale Constine & Sons, Inc.; Ambassador Transporta- tion, Inc.; Hawkins Steel Cartage, Inc.; JLH Transfer, Inc.; Central Transport, Inc.; Bancroft Trucking Co.; U.S. Truck Co., Inc.; West End Cartage, Inc.; Central Cartage Co.; CTX, Inc.; Mohawk Motor of Michigan, Inc.; McKinlay Transport, Ltd.; Universal Am-Can, Ltd.; Tom Thumb Services, Inc., d/b/a REI; O-J Transport Company; J. Law Enterprises, Inc.; and Alliznce of O-J Transport, Inc.; (b) as intervening plaintiffs, The American Trucking Associa- tions, Inc. and TNT Holland Motor Express, Inc.; and (b) as defendants, the Commissioners and Chairman of the Michigan Public Service Commission; the Treasurer of the State of Michigan; and the Director of the Michigan Department of Commerce. RULE 29.6 STATEMENT Petitioners, Troy Cab, Inc., Deeco Services, Inc., d/b/a Deeco Transportation, Frank Tiberio, d/b/a Fairfield Towing, Lafond Express, Inc., Calcut Sales & Services, Inc., d/b/a Calcut Trucking Company, Mid-Con Freight Systems, Inc.. H & H Enterprises, Inc., db/a S & M Cartage, Inc., Romeo Expeditors, Inc., Westlake Transpor- tation, Inc., VanDerKooi Carriers, Inc., Gerrig’s Trucking & Leasing, Inc. and Bestway Express, Inc. have no parent companies and are not owned in any respect by any publicly-held entity. Petitioners, Economy Transport, Inc., and Mason & Dixon Lines, Inc. are subsidiaries of Univer- sal Truckload Services, Inc., and are not owned in any respect by any publicly-held entity. ill TABLE OF CONTENTS Page QUESTION PRESENTED FOR BOI oisccsicesscasseses i eR OI 56655655 hossdeschecensnsersdodesevincssesoness,. ii RULE 29.6 STATEMENT ...0.......ssceeeeeeesccscssseeeeececccce. ii TABLE OF AUTHORITIES ...00......cceccccccccccooececceccs. iv NII a ssssensssccsdnvsninosidicitisosossonccesc,.. 1 aay ee 1 CONSTITUTIONAL AND STATUTORY PROVISIONS — SENSES Reni Seelam 2 STATEMENT OF THE CASE... oeeseccccccccoecceccccc. 2 REASONS FOR GRANTING THE MO Aictibintcsiitees _16 A. The Michigan Courts Ignored The Letter And Spirit Of Federal Preemption Of Intrastate Truck Regulation ....0..........cccccsecscssssessseececcs. 17 B. All Of The Pre-Preemption Michigan Authority Supports The Underlying Economic Regula- tory Purpose Of The MMCA............ccccccc 23 WN i seinasinenscceocseccsassiisbaresticdascocopeccrccci.. 27 lv TABLE OF AUTHORITIES CASES American Airlines, Inc. v. Wolens, 513 U.S. 219, 115 S.Ct. 817, 130 L.B.2d T1656 (1985).........rcccssecrsccoscoee Associated Truck Lines, Inc. v. Michigan Public Service Commission, 377 Mich. 259, 140 N.W.2d 515 (1966), appeal after remand, sub. nom. 73 Mich.App. 476, 252 N.W.2d 495 (1977), appeal after remand, 94 Mich.App. 241, 269 N.W.2d 548 (1978), remanded, 404 Mich. 808, 272 N.W.2d LD knsdccinssspunsnnecvnnsonstutiswnesannbessninenaserincottoassaphaaabeenians City of Columbus v. Ours Garage and Wrecker Service, 5386 U.S. 424, 122 S.Ct. 2226, 153 Rie GG LD cseeieretsssonnsuvensannisnccssnmanvionios 16, 21, 22 Federal Armored Service v. Michigan Public Service Commission, 204 Mich.App. 24, 514 N.W.2d 178 ED civciniivesiinninminiiainestiuhceemnnviceumebinssncnciiimmamntenionnee Federal Express Corporation v. California Public Utilities Commission, 936 F.2d 1075 (9th Cir. 1991), cert. denied, 504 U.S. 979, 112 S.Ct. 2956, DED FB Oe 0 CR asec cssnnenesnsesnsssvnsanesarevevansasovene Fidelity Federal Savings and Loan Association v. de la Cuesta, 458 U.S. 141, 102 S.Ct. 3014, 73 Di IE ID Sasiesn ytnsindessciinnsemeedinaiienmamierantbantes Furniture Capital Truck Lines, Inc. v. Michigan Public Service Commission, 340 Mich. 173, 65 se re Ce ctintioniiesnncinnenninnnesniesabncsncetapemnineiess G & B Transportation Co. v. Michigan Public Service Commission, 19 Mich.App. 379, 172 Fee I CITE itech dssabniccntisesunkapbonvanciomntbblnniiedthorns Giaras v. Michigan Public Service Commission, 301 Mich. 262, 3 N.W.2d 268 (1942)............csccsssssssseseeees nee 26 TABLE OF AUTHORITIES - Continued Greyhound Corporation v. Michigan Public Service Commission, 360 Mich. 578, 104 N.W2d 395 TT xii inserncionsianeitdeasaeuuias toca bulatieae tie te ae 26 In the Matter of Contested Case Proceedings for an Order regarding the Michigan Motor Carrier Act, Federal Preemption, and Continuing Jurisdiction of the Commission, T-12738................0..eccsosccoocoseesee, 13, 24 In Re Application of Smith, 270 Mich. 343, 259 Fass RAD AEE Eiciestncinvsmccinstvadeadiibea ine tee aes 25 In Re Federal Preemption of Provisions of the Motor Carrier Act, 223 Mich.App. 288, 566 N.W.2d 299 (1997); lv. denied, 458 Mich. 852, 587 N.W.2d 632 (1998); cert. denied, 525 U.S. 1018, 119 S.Ct. 544, FRE Bic I i ithicktnctasnictlteatdaetn 13, 14, 23, 24, 26 In Re Joe Brown & Sons, 273 Mich. 652, 263 N.W. Pe SE tiviaviscsccernieseunieet mi ee eee 24 J.E. Bejin Cartage Co. v. Michigan Public Service Commission, 352 Mich. 139, 89 N.W2d 107 CIP TT sicintcindpiteinsiicie hc tiacaiasiadinaasiiene laced tana 26 Kirkby v. Michigan Public Service Commission, 320 Mich. 608, 32 N.W.2d 1 (1948)... cecccsccsscesscssseesecees 26 Michigan Intra-State Motor Tariff Bureau, Inc. v. Michigan Public Service Commission, 200 Mich.App. 381, 504 N.W.2d 677 (1998).......ccccccccccocceeeee 25 Morales v. Trans World Airlines, Inc., 504 U.S. 374, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992).............. 5, 18, 19 Russello v. United States, 464 U.S. 16, 104 S.Ct. 296, 78 L.Ed.2d 17 (1983)............cccccccccccoccocoosceeceece, 20, 21 TABLE OF AUTHORITIES — Continued Telischak Trucking, Inc. v. Michigan Public Service Commission, 11 Mich.App. 23, 160 N.W.2d 592 CIEE vnsivsvessscissensahiaiusesasanseatbupmuaiaiaaacanaann lamas 26 Westlake Transportation, Inc. v. Michigan Public Service Comm’n, 255 Mich.App. 589, 662 N.W.2d 784 (2003), appeal denied, 673 N.W.2d 752............... 1,14 Yellow Transportation, Inc. v. Michigan, 537 U.S. 36, 123 S.Ct. 371, 154 L.Ed.2d 377 (2002).................... 27 CONSTITUTIONAL PROVISIONS CE Cet. Ft. 8 OG, BBs ccnissominunesaaaane 2 Sek CE, BOE. FE UE. Bicticssicomcaseieisnaes 3, 37 STATUTES AND REGULATIONS SETAC. 6 i cicseiiccccsasamantain oe 1 UEC, 6 isoessincvcetieee cee eee 2 UTR 6 TAN io iicicccicicctei cas ee 2 AD UBC. 9 UUBOUGNRNAD ose csenscsnassnarnaiesnionceses 6, 7, 20, 21 USC. 6 TORII bikin 6 BO UBC. © SURI os ssisorscecisssiesicesassancisirenressen 6 49 U.S.C. § 14GB 2EMSNANAW) -2nccsccenecesscosecnsessecsnsoscoesenesss 6 CURE BO ioc 15 49 U.S.C. § 14504 (eX 2NBMIvNS) .......0.ccccscoscesssvesscscesereseee 22 MUBE. CAT iiss died cee eee 2 Airline Deregulation Act (ADA) of 1978, Pub. L. No. SG-O0G, GE TEE Ce rvesccticceensctacgnenn 4 vii TABLE OF AUTHORITIES - Continued Page Federal Aviation Administration Authorization Act of 1994 (F4A), Pub. L. No. 103-305, Title VI, 108 BOR GIP Mia alnensiiccsssicinsasesonmsdsbniidipatcesambiccanssiusece. 2,18 I.C.C. Termination Act of 1995, Pub. L. No. 104-88 RII TS, I cc seessscecsiercssvetnosucenbatosacesesccestecetat 2 EAE till neh tlatiectCorissucauemanaie wh ete) 8 MN ii cirleliaiasarchonk cunsunacalen a cakes 2 Nae te 9 PE sessile Uchieinssutoovideeeeie a eica coe 9 PND fa sesscenscsidshanmnckaniatevecetsiaieiectins totais 9 ig o_O ELTA LR ROPE WANE SET 9 I niinivariatattaitiinassdiniatis sat Oe ce foo 9,10 PEE Bs etihninvehacnseialiasciceman tos 10 INE WiiecAihcainaciccdountipacsidtnciocs Meine ee Atte 10 pig ss sy ORR OR REET Neale eR AER 10 ee tee ae OT ORR AES ARM LWT ois 10 I eis itrisnstiadchelinntimsisssrredinsbeidnnsncnae ecoueal 10 PT NN sab hse ciscssaccasiaweiiiscssidhcsabiidis uiintsasciects cata 10 MN phcceictaiesstccsaciamnneasamasdisccencens samaaasiaiae 10 TE icnivacitestnincctegtisuniaiaite tot teeta 11 NI Misi chepatiiaiesseninksabe Seoeaiintscanddecssiahesaies cok ah 11 PNT INT sais hii fdesiinenicssnccennnudsanchcedecendeuat taxa wab ne 3, 7, 11 I MN cis cis scctal esecosecdessidlicaon eeniceatsstactnice oe oe aa 3 Pc oiirdns iodissclcinivcnindcacgsndscasecaceaivomstksd calc at 8 RI I slik biichireruises ice cseiabenerte ot Cans 11 BO RR, OE GI ie cssindsnicacistiressoccdsadnccsecn ccc, 12, 22 Vili TABLE OF AUTHORITIES - Continued Page MISCELLANEOUS H.R. Conf. Rep. No. 103-677, August 5, 1994... 3, 4, 5, 6, 18 B. Orlebeke, Truck Safety and Economic Regulation of the Trucking Industry, Michigan Department of Commerce, Office of Policy and Legislative Ee TPP FI sn svcckinn cecesicestssacesasadeiadanseiavecess 12 DE RS NS oeovweneoncinalll i a AE ae TA ARSON Ee RE Le LRM nite nthe Kn Pe 5h eee AE DT APN CCR ROR 68 CRIN chlo, 1 PETITION FOR A WRIT OF CERTIORARI Petitioners, Troy Cab, Inc., Deeco Services, Inc., d/b/a Deeco Transportation, Frank Tiberio, d/b/a Fairfield Towing, Lafond Express, Inc., Calcut Sales & Services, Inc., d/b/a Calcut Trucking Company, Mid-Con Freight Systems, Inc, H & H Enterprises, Inc., db/a S & M Cartage, Inc., Economy Transport, Inc., Mason & Dixon Lines, Inc., Romeo Expeditors, Inc., Westlake Transporta- tion, Inc., VanDerKooi Carriers, Inc., Gerrig’s Trucking & Leasing, Inc. and Bestway Express, Inc. respectfully petition for a writ of certiorari to review a judgment of the Michigan Court of Appeals. 4 v OPINIONS BELOW The opinion of the Michigan Court of Appeals (App. 1- 35) is reported as Westlake Transportation, Inc. v. Michi- gan Public Service Comm’n, 255 Mich.App. 589, 662 N.W.2d 784 (2003). The trial court rulings (App. 36-72) and the judgment of the Michigan Supreme Court denying leave to appeal (App. 73-75) are all unreported. @ v JURISDICTION The Michigan Court of Appeals decision was entered on March 11, 2003. The judgment of the Michigan Su- preme Court denying Petitioners’ timely Application for Leave to Appeal was entered December 3, 2003. The jurisdiction of this Court is invoked under 28 U.S.C. § 1257(a). Sd CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED The Supremacy and Commerce Clauses of the United States Constitution, Art. VI, cl. 2 and Art. I, § 8, cl. 3, provide in relevant part as follows: This Constitution, and the Laws of the United States which shall be made in Pursuance thereof ... Shall be the supreme Law of the Land; and the judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding. * * * The Congress shall have Power ... [t]o regulate Commerce . . . among the several States. ... + STATEMENT OF THE CASE On August 23, 1994, President Bill Clinton signed into law the Federal Aviation Administration Authorization Act of 1994 (F4A), Pub. L. No. 103-305, Title VI, 108 Stat. 1604,’ Section 601 of which preempted state regulation of “price, route, or service” of intrastate motor carriers, with the sole exception of household goods carriers. All of the Petitioners (with the exception of two, which later ob- tained intrastate authority) conducted operations in " This section was amended and recodified in part, at 49 U.S.C. § 14501, by the I.C.C. Termination Act of 1995, Pub. L. No. 104-88 (December 29, 1995). It formerly appeared at 49 U.S.C. § 11501(h). See, also, 49 U.S.C. § 41713(b)(4), for the corresponding “air carrier affili- ates” preemption language of Section 601. 3 Michigan intrastate commerce at the time of the preemp- tion, and were regulated economically with the Michigan Public Service Commission (MPSC). On January 3, 1995, the first business day following the law’s effective date, the Petitioners, on behalf of themselves and as class represen- tatives for other Michigan intrastate carriers similarly situated, commenced a class action in the Michigan Court of Claims, challenging the continued imposition of intra- state economic regulatory fees assessed on them at the rate of $100 per vehicle per year through the operation of MCL 478.2(1). According to the Act’s own terms, these fees were “assessed against and collected from each motor carrier for the administration of this act,” the provisions of which had been declared preempted by operation of federal law. A second class action was commenced on January 9, 1995, also challenging the imposition of the intrastate fees.’ The two actions were consolidated and the classes certified by the Michigan Court of Claims. At the time of the federal preemption, 41 jurisdictions, including Michigan, regulated intrastate prices, routes, and services of motor carriers, according to the House Conference Report No. 103-677, August 5, 1994 regarding the F4A. (App. 88). The Conference Report accompanying the preemption provision of the F4A discussed existing state regulation: Typical forms of regulation include entry controls, tariff filing and price regulation, and * The class actions also challenged the imposition of certain other fees imposed by the Michigan Motor Carrier Act including an interstate fee mandated by MCL 478.2(2). This petition involves only the issue of the intrastate fee. 4 types of commodities carried. Not all 41 States regulate each of these aspects nor do they all regulate them in the same manner or to the same degree. Entry controls at the State level vary from liberal to strict. Strict entry controls often serve to protect carriers, while restricting new appli- cants from directly competing for any given route and type of trucking business. About 26 States strictly regulate trucking prices. Such regulation is usually designed to insure not that prices are kept low, but that they are kept high enough to cover all costs and are not so low as to be ‘preda- tory’. Price regulation also involves filing of tar- iffs and long intervals for approval to change prices. A company which wants to change its prices often must go through a costly and lengthy hearing proceeding in each State in which it op- erates. Id. The conferees pointed out the differing level of regula- tion for air carriers also conducting motor carrier opera- tions, which had been found exempt from intrastate motor carrier regulation in Federal Express Corporation v. California Public Utilities Commission, 936 F.2d 1075 (9th Cir. 1991), cert. denied, 504 U.S. 979, 112 S.Ct. 2956, 119 L.Ed.2d 578 (1992). Id. (App. 89). Congress wanted to end the competitive disadvantage which ground carriers competing with air carriers still faced, because of intra- state economic regulation. Jd. (App. 81, 89). Thus, Congress, in enacting the F4A preemption, desired to extend to all motor carriers the deregulatory approach which had been effected by the Airline Deregula- tion Act (ADA) of 1978, Pub. L. No. 95-405, 92 Stat. 1707 (1978). Id. (App. 81). Continuing with their statement of purpose, the conferees explained: Despite the movement toward deregulation by some individual states, the conferees believe preemption legislation is in the public interest as well as necessary to facilitate interstate com- merce. State economic regulation of motor carrier operations causes significant inefficiencies, in- creased costs, reduction of competition, inhibition of innovation and technology and curtails the ex- pansion of markets. House Conference Report at p. 87. (App. 90). In the preemption of laws “related to price, route, or service of any motor carrier”, the conferees were careful to note the wide swath of the preemptive statute. They underscored that: In substituting the word ‘related’ for the prior : word ‘relating’ and the word ‘price’ for the word ‘rates’ we are intending no substantive change to the previously enacted preemption provision in ; Section 105 of the Federal Aviation Act and do ‘ not intend to impair the applicability of prior ju- dicial case law interpreting these provisions. In : particular, the conferees do not intend to alter the broad preemption interpretation adopted by the United States Supreme Court in Morales v. Trans World Airlines, Inc., 504 U.S. 374, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992). Id. (App. 81). The Act itself left a few areas untouched by the preemption including certain specified “safety | regulatory authority” over vehicles, 49 U.S.C. § 14501(c)(2)(A); the transportation of household goods,’ 49 U.S.C. §14501(c)(2)(B); so-called non-consensual towing operations, 49 U.S.C. § 14501(c)(2)(C); and certain articulated state standard transportation practices con- cerning uniform cargo liability rules, uniform bills of lading, uniform cargo credit rules, and antitrust immunity for joint line rates or for household goods agent van line operations, 49 U.S.C. § 14501(c)(3)(A)(i)-(v). (App. 76-77). With regard to this residue of state regulatory authority, the conferees issued a cautionary statement: The conferees do not intend the regulatory authority which the States may continue to exer- cise ... to be used as a guise for continued eco- nomic regulation as it relates to prices, routes or services. Conference Report at p. 84. (App. 83). According to the statute itself, with respect to safety, the preemptive effect: ... Shall not restrict the safety regulatory au- thority of a State with respect to motor vehicles, the authority of a State to impose highway route controls or limitations based on the size or weight of the motor vehicle or the hazardous na- ture of the cargo, or the authority of a State to regulate motor carriers with regard to minimum amounts of financial responsibility relating to * This class action does not involve in any respect carriers of household goods, still economically regulated by Michigan, and exempted by the preemption. 7 insurance requirements and self-insurance au- thorization ... 49 U.S.C. § 14501(c)(2)(A). (App. 76). (Emphasis supplied). Significantly, the authority of a state to regulate motor carriers themselves was only mentioned in the statute “with regard to minimum amounts of financial responsibil- ity relating to insurance requirements and self-insurance authorization.” There was safety regulatory authority conferred on the states with respect to “motor vehicles,” not “motor carriers”. The MPSC assesses the intrastate regulatory fee only on regulated intrastate carriers, albeit on a per-vehicle basis, not on commercial motor vehicles generally. The MMCA says the $100 is a fee, not a tax, at MCL 478.2(1). (App. 103). The fee structure is part of the strict regulatory regime of the Michigan Motor Carrier Act (MMCA), passed in 1933. The word “safety” does appear once in the Act’s title. However, the Act regulated only “carriers of property for hire” in its title. (See App. 93). The MMCA’s title indicates the legislation is “to preserve, foster, and regu- late transportation and permit the coordination of motor vehicle transportation facilities.” The law is designed “to classify and regulate carriers of property by motor vehicles for hire upon such public highways for such purposes... ” Id. It is structured: ... to insure adequate transportation service; to give the commission jurisdiction and authority to * At the time of the Act’s passage, it regulated both motor carriers of property and passengers. Passenger regulation was transferred to another state agency in 1982. 8 fix, alter, regulate, and determine rates, fares, charges, classifications, and practices of common motor carriers for such purposes; to require filing with the commission of rates, fares, and charges of contract carriers and to authorize the commis- sion to prescribe minimum rates, fares, and charges... Id. The Michigan Legislature declared its purpose in enacting the MMCA at MCL 475.2 (App. 94). Again, the word “safety” is mentioned at MCL 475.2(b), in only one of 14 enumerated purposes. Those other purposes include such economic regulatory designs as the promotion of “efficient transportation services,” the meeting of the needs of “shippers, receivers, and consumers,” the allow- ance of “a variety of quality, price, and service options,” the allowance of “the most productive use of equipment,” the provision “for efficient and well-managed motor carriers to earn adequate profits,” the promotion of “intermodal transportation,” the prevention of “unjust discrimination,” the maintenance of “service to small communities and small shippers,” the promotion of “entrepreneurship in the motor carrier industry by allowing greater contract carrier economic and entry flexibility,” and the promotion of “jointly considered and initiated rates.” See MCL 475.2(c), (d), (e), (f), (g), (h), (i), (kK), (m), and (n). These purposes all had as their root the regulation of price, route, and service of the motor carrier industry. Even that one mention of safety is limited to for-hire carriers only, thus excluding from the scope of MPSC regulation all private fleets which carry their own goods. Numerous other classes of vehicles are exempted from the Act as delineated at MCL 479.2, including transporters of logs, raw milk, agricultural 9 products, disabled motor vehicles from the location of an accident, recyclable materials, fertilizers, and certain sand and gravel shipments. Similarly, local transportation, defined as operations within eight miles of the boundary of a city or village, was deregulated for all but the City of Detroit. The “safety” concerns of the Legislature did not extend to such operations, because the focus of the Legis- lature was on economic regulation. The Michigan Legislature established an elaborate process for motor carriers to obtain required certificates as a common carrier at MCL 476.5 (App. 95). Existing carri- ers were allowed to “protest” an application and demon- strate that “the service proposed will create excess service inconsistent with the public interest.” Id. Again, the word “safety” is found at MCL 476.5(1)(a), as a small component of a complicated application process. An important “re- quired” public purpose component was in the MMCA which had to be demonstrated through the presentation of evidence by supporting shippers that additional motor carrier service was required. See MCL 476.5(1)(c) (App. 95). It was mandated that the Commission consider not only the transportation policy, but also: Whether the service proposed will create ex- cess service inconsistent with the public interest. The commission shall not find diversion of reve- nue or traffic from an existing motor carrier to be in and of itself inconsistent with the public inter- est. MCL 476.5(2)(c) (App. 96). Certificates of authority granted to common carriers were even divided into three separate classes. MCL 476.5(6). (App. 97). Those classes included those carriers operating over fixed routes, those carriers operating within an eight-mile radius of a city 10 having a population of 500,000 or more (Detroit), and certificates issued to all other motor common carriers. Id. Common carriers holding authority were required to keep tariffs on file. The MMCA prohibited predatory rates. Joint rates over through routes were authorized for carriers. MCL 476.6 (App. 98). All common carrier rates were required to be “just and reasonable”. MCL 476.7 (App. 99). Rates could not “be unjustly discriminatory, prejudicial, or preferential.” Jd. In making a determination as to whether rates were just and reasonable, the MMCA directed: The commission shall take into account reason- able estimated or foreseeable future costs in de- termining whether rates, fares, and charges meet the requirements of this subsection. Id. Finally, carriers were required to charge the rates contained in their tariffs filed with the MPSC. MCL 476.7(2) (App. 99). Refunds or remittances from those rates were prohibited. MCL 476.7(3) (App. 99-100). Contract carriers were distinguished from common carriers. These carriers had a similar labyrinth of regula- tions to negotiate. Again, contract carrier applications were required to have shipper support. The Commission again looked at the transportation policy at MCL 477.2 (App. 100). The Commission was also required to look at whether the proposed operation of the contract carrier “strictly conform[ed] with the definition of a motor con- tract carrier.” MCL 477.2(1)(a) (App. 100). Safety was only a minor component of that entire process. Once a contract carrier had received authority, it also was required to file its rates with the Commission. MCL 477.6 (App. 101). Contract carriers were also required to 11 make “available to the commission its complete contract or contracts.” MCL 477.6(2) (App. 101-102). The MMCA directed the Commission to “promulgate rules covering the filing with the commission of the charges, and the opera- tions of motor contract carriers in competition with motor common carriers over the highways of this state.” MCL 477.6(1). (App. 101). The MPSC was again required in the case of contract carrier rates to ensure that such rate filings were not “predatory.” MCL 477.6(2) (App. 102). The MPSC was even given the power in the MMCA to establish “a prescribed minimum rate” for contract carriers. MCL 479.6(2)(b) (App. 102). For the administration of this complex economic regulatory act, carriers were assessed the annual intra- state fee challenged here of $100 for each self-propelled motor vehicle. MCL 478.2(1). (App. 103). The fee of $100 per power unit added up to substantial sums in the opera- tion of larger carriers. In the case of United Parcel Service, Inc., those amount to well over $100,000 per year. It is termed a fee, not a tax. Id. The Court of Claims was presented with uncontroverted evidence that those carri- ers affiliated with class representative Economy Trans- port, Inc. had expended over $50,000 per year from 1982 through 1994, the year prior to the F4A’s effective date. A Michigan Senate agency report presented to the Court of Claims revealed that, for the state fiscal years from 1982- 1983 through 1994-1995, the MMCA had generated fee revenues of $63,861,600. A separate agency, the Motor Carrier Division of the Michigan State Police, is charged with the responsibility for safety regulation of commercial motor vehicles on Michigan highways. That division of the State Police administers an entirely separate law, the Motor Carrier 12 Safety Act of 1963, MCL 480.11(a), et seq. Its jurisdiction extends not just to intrastate for-hire trucking companies, but to all commercial motor vehicles on the roads in Michigan, as well as their operators. The Michigan De- partment of Commerce, the department of which the Michigan Public Service Commission was then a part, commissioned its own study in November of 1992, entitled Truck Safety and Economic Regulation of the Trucking Industry by Britany Orlebeke. This report noted that: MPSC regulates only segments of the for-hire transportation of property within the state. There are numerous exemptions to economic regulation, none of which are motivated by safety concerns. Orlebeke, supra, at p. 32. On the other hand, the State Police regulated “all commercial vehicles.” Jd. (Emphasis in original). The report further noted that: Most of the [MPSC] Motor Carrier Regulation Division’s energy is spent supporting economic regulation and its contributions to safety we have already discussed. Id. That study concluded that economic regulation con- tributed only marginally to motor carrier safety, by pro- moting an ethical atmosphere which was not “the most effective nor the most efficient way to ensure that truck companies operate safely.” Orlebeke, supra, Executive Summary. The Orlebeke report was part of the record before the Court of Claims. On January 11, 1995, days after the commencement of these consolidated class actions, the MPSC issued an order in a contested case proceeding initiated sua sponte by the Commission that “it continues to possess substantial eS ee ae ee 13 regulatory authority over intrastate motor carriage ... ” (In the Matter of Contested Case Proceedings for an Order regarding the Michigan Motor Carrier Act, Federal Pre- emption, and Continuing Jurisdiction of the Commission, T-1273 at p. 24). This administrative proceeding had been commenced on September 8, 1994, and consisted of two days of administrative hearings on October 31 and No- vember 1, 1994, as well as briefing by the parties. The January 11 order of the Commission accepted its staff’s own conclusions on every issue on which the MPSC made a determination in that first holding, including the issue of the continued validity of the intrastate fee involved here.” The MPSC rushed to judgment, then, in order to preserve its fee structure and continued regulatory power. An appeal of that administrative agency decision is governed by Michigan statute, with: ... appellant’s burden to show by clear and sat- isfactory evidence that the order of the PSC com- plained of is unlawful or unreasonable. ... This Court gives due deference to the PSC’s adminis- trative expertise and will not substitute its judgment for that of the PSC, particularly in leg- islative matters such as setting rates. In Re Federal Preemption of Provisions of the Motor Carrier Act, 223 Mich.App. 288, 295, 566 N.W.2d 299 (1997); lv. denied, 458 Mich. 852, 587 N.W.2d 632 (1998); cert. denied, 525 U.S. 1018, 119 S.Ct. 544, 142 L.Ed.2d * The Commission did hold open for decision two issues on which it indicated that additional testimony was required — collective rate making and the MMCA leasing provisions, and ultimately differed from staff in its decision regarding preemption on those two issues in a decision issued on May 18, 1995, not involved here. 14 452. In their complaint in the Court of Claims, Petitioners had sought an impartial interpretation as to the continued propriety of the intrastate fee, in the wake of the federal preemption of economic regulation. A motion for summary disposition was filed by Petitioners in the summer of 1995, with oral argument on those motions taking place on September 28, 1995. Later that fall, defendants filed a motion for summary disposition, with oral arguments heard on November 16, 1995. The Court of Claims subse- quently issued an order dated November 12, 1998 (App. 51-53), based on its written opinion dated October 13, 1998 (App. 36-50), denying plaintiffs’ motion for summary disposition on the intrastate claim.° Then, on December 30, 1998, the Court of Claims issued an order granting defendants’ motion for summary disposition (App. 54-56), to which plaintiffs filed a motion for reconsideration on January 13, 1999. That motion was denied by the Court of Claims on March 7, 2000. (App. 57-72). Thereafter, the Michigan Court of Appeals affirmed the Court of Claims decision in Westlake Transportation, Inc. v. Michigan Public Service Comm’n, 255 Mich.App. 589, 662 N.W.2d 784 (2003), appeal denied, 673 N.W.2d 752. (App. 1-36). The Court of Appeals relied upon its earlier affirmance of the MPSC decision In Re Federal Preemption in affirming, as had the Court of Claims * The Court of Claims also denied the motion for summary disposition on the interstate decal fee, not the subject of this petition, at the same time. 15 below.’ The Michigan Supreme Court denied leave to appeal (App. 74-76). The Court of Appeals and the Court of Claims simply ignored the Congressional history of the F4A preemption, in rejecting Petitioners’ claims. This is an instance where a state has ignored the plain effect of federal preemption legislation in order to protect its revenue sources. Michigan, along with one other state, West Virginia, continues to assess a regulatory fee of anywhere near this magnitude (App. 105-110, presented to the Court of Claims). Only two other states, Ohio and Idaho, charge a per vehicle fee for intrastate carriers which exceeds the $10 per vehicle maximum contained at 49 U.S.C. § 14504 for registration of interstate carriers’. Again, the only direct safety regulatory authority left to the states by Section 601 over motor carriers is insurance filings, the same function for interstate carriers which leads to a $10 maximum per vehicle fee. The Michigan intrastate regula- tory fee, then, of $100 per vehicle per year assessed against intrastate motor carriers represents the same kind ’ Discovery had not closed in the Court of Claims when the tribunal issued its summary disposition order. In fact, the court had ordered that discovery was not to close until six months after its summary disposition order was to be handed down. In this case, the parties had agreed amongst themselves, with full knowledge and approval of the Court of Claims as evidenced by the allowance of six months to conduct discovery after the Court of Claims ruled on the summary disposition motions, that they would await the court's issuance of orders on the summary disposition motions that had been placed before the court some three years earlier in the belief that the court’s ruling would distill down the issues in the case. * Ohio charges $30 per year per vehicle and Idaho charges $21 per year. (App. 105-110). 16 of burden that Congress aimed to eliminate when it passed Section 601 of the F4A in the summer of 1994. Despite the prompt legal challenges initiated over nine years ago to the continued imposition of those regulatory fees, the courts of Michigan, using precedent involving the affir- mance of a truncated and rushed administrative agency decision designed to protect its own fund raising mecha- nism, has allowed those fees to continue to be charged ever since. @ v REASONS FOR GRANTING THE WRIT This case represents a direct affront by a state to a clear Congressional mandate of federal preemption of intrastate laws regulating price, route, or service of intrastate motor carriers, and is contrary to this Court’s recent determination in City of Columbus v. Ours Garage and Wrecker Service, 536 U.S. 424, 442, 122 S.Ct. 2226, 153 L.Ed.2d 430 (2002) that regulation “not genuinely responsive to safety concerns garners no exemption” from the preemption. The Michigan Motor Carrier Act was over 60 years old at the time of the federal preemption. It has always been rooted in economic regulatory principles which pitted carrier against carrier and, more occasionally, carrier against shipper, in battles over entry, competition, and price in the trucking industry. That Congress left to the states in Section 601 certain specified residual author- ity over safety of motor vehicles, and insurance filing by motor carriers themselves, did not give license to the State of Michigan to continue to impose the $100 per vehicle per year regulatory fee for the purposes contained in the MMCA, virtually all of which had been preempted by the F4A. Michigan’s actions ignore an Act of Congress which Pn ticle SRO aa ota Bh ARREARS SORA RI het 17 was a valid exercise of federal powers under the Com- merce Clause. Michigan should not be allowed to continue to burden interstate commerce with a fee which had been designed to support an elaborate economic intrastate regulatory structure. Michigan also puts motor carriers which compete with air carriers, such as United Parcel Service, at a continuing competitive disadvantage, directly contrary to the Congressional intent behind the preemp- tion in the first place. The writ should be granted. A. The Michigan Courts Ignored The Letter And Spirit Of Federal Preemption Of Intrastate Truck Regulation The Supremacy Clause of the U.S. Constitution, Art. VI, cl. 2, provides that United States statutes “shall be the supreme Law of the Land; ... any Thing in the Constitu- tion or Laws of any State to the Contrary notwithstand- ing.” This provision is the foundation of preemption analysis. Determination of preemption questions requires an examination of the “ultimate touchstone,” Congres- _ sional intent. As the Supreme Court stated in Fidelity Federal Savings and Loan Association v. de la Cuesta, 458 U.S. 141, 152-153, 102 S.Ct. 3014, 73 L.Ed.2d 664 (1982), preemption may be either express or implied, and is “‘compelled whether Congress’ command is explicitly stated in the statute’s language or implicitly contained in its structure and purpose.’” An examination of the Con- gressional purpose points to the clear error of the state courts below in finding the intrastate regulatory fees not preempted. With regard to intent, Congress made certain express findings when it passed the federal preemption of state 18 regulation of price, route, or service of motor carriers. As set forth in the F4A, Congress determined: (1) the regulation of intrastate transportation of property by the States has — (A) imposed an unreasonable burden on interstate commerce; (B) impeded the free flow of trade, traffic, and transportation of interstate com- merce; and (C) placed an unreasonable cost on the American consumers... 108 Stat. 1605. By continuing to assess the onerous annual regulatory fees on intrastate motor carriers from what was an economic regulatory statute, Michigan continues to impose an unreasonable burden on interstate commerce, impede the free flow of trade, and place an unreasonable cost on American consumers, just as Con- gress found with the state economic regulation of motor carriers generally, at the time that the preemption legisla- tion was enacted. Congress particularly indicated in the legislative history that it desired to accomplish the same broad preemption of state regulation that it had wrought in the earlier deregulation of airlines. H.R. Conf. Rep. No. 103- 677, supra, at p. 83. Congress even cited the Supreme Court’s Morales decision, supra, and its desire to follow “the broad preemption interpretation” of that case. H.R. Conf. Rep. No. 103-677, supra, at p. 83. Morales involved an injunction action brought by the airlines which sought to prevent enforcement of state deceptive practices laws against their advertising. In ruling that the state 19 guidelines concerning such fair advertising had been expressly preempted by the ADA, the Supreme Court emphasized that the key “relating to” phrase in the Act was “a broad one ... and the words thus express a broad preemptive purpose.” Morales, supra, at 383. The court further proclaimed: ... State enforcement actions having a connec- tion with or reference to airline ‘rates, routes, or services’ are pre-empted under 49 U.S.C.App. § 1305(a)(1). Morales, supra, at 384. Thus, the state attempts to regu- late airline advertising fell in the face of the federal preemption. This Court encountered a second case involving the meaning of the ADA preemption shortly after the F4A motor carrier preemption had taken effect, in American Airlines, Inc. v. Wolens, 513 U.S. 219, 115 S.Ct. 817, 130 L.Ed.2d 715 (1995). In that case, the Supreme Court ruled on a case commenced by frequent flyer members against an airline for violations of a state consumer fraud act and also for breach of contract. This Court in Wolens allowed the breach of contract action to survive, while declaring preempted the claim based on the state consumer fraud law. With respect to the claim grounded in the consumer fraud statute, the Court stated: American maintains, and we agree, that ‘Congress could hardly have intended to allow the States to hobble [competition for airline pas- sengers] through the application of restrictive state laws.’ Wolens, supra, 513 U.S. at 228. On the other hand, the state law breach of contract action was viewed by the Court in Wolens as an action to determine whether an atmeapiniipanncien™ a” 20 airline’s own contractual undertakings have been breached, which had nothing to do with restrictive state enforcement. The residual safety regulatory authority of the state does not save the intrastate economic regulatory fee from the broad preemption of the F4A in this case. That remain- ing state regulatory authority is delineated at 49 U.S.C. § 14501(c)(2)(A). According to the statute’s own terms, the preemption does not affect a state’s safety regulatory authority with respect to: 1) “motor vehicles;” 2) “highway route controls or limitations based on the size or weight of the motor vehicle or the hazardous nature of the cargo;” or 3) the regulation of “motor carriers with regard to mini- mum amounts of financial responsibility relating to insurance requirements and self-insurance authorization.” Id. (App. 76). Thus, the state has authority over “motor vehicles” with respect to safety, size and weignt, route controls, and hazardous cargo limitations. The state has authority remaining over “motor carriers” only with respect to insurance issues. The MMCA imposes the intrastate fee, however, on motor carriers. It does not have the authority to do so. This use of disparate language, giving the states authority over motor vehicles at one point in this section and over motor carriers in another, must be presumed to be intentional. See, in this regard, Russello v. United States, 464 U.S. 16, 104 S.Ct. 296, 78 L.Ed.2d 17 (1983). As the court there stated, at 464 U.S. 23: ‘(W]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally or purposely in the disparate inclusion or exclusion.’ aetna a eee 21 That is the situation here. Congress chose to confer au- thority to the states over motor carriers only on the subject of insurance. It could have provided state authority over motor carriers with regard to both safety and the other subjects, but did not do so. Of course, this Court examined the Russello exception in a recent decision involving the interpretation of-the scope of exceptions to the F4A preemption, that being Ours Garage, supra. In that case, the court held that 49 U.S.C. § 14501(c)(2)(A) (App. 76) “ ... spares from preemption local as well as state regulation.” 536 U.S. 442. This was true even though political subdivisions of states had not been mentioned in the “safety authority” exception as they had been at several other points in the F4A preemption. In discussing the Russello precedent, the Supreme Court stated: The Russello presumption — that the presence of a phrase in one provision and its absence in an- other reveals Congress’ design — grows weaker with each difference in the formulation of the provisions under inspection. 536 U.S. 435-436. In the instant provision, the same distinction does not apply. The disparate language is used in the very same subsection, 49 U.S.C. § 14501(c)(2)(A). That provision leaves authority to the states and, after Ours Garage, their political subdivisions, with respect to motor vehicles, on the subject of safety, highway route controls, and hazardous cargo, and, with respect to motor carriers, on insurance filings. There are not the numerous differences in formulation that the Court noted in Ours Garage. Neither do the other reasons stated in Ours Garage for disregarding the Russello presumption arise. 22 The fee thwarts the broad regulatory effect of the preemption intended by Congress. It also continues to place ground carriers at a competitive disadvantage with air carriers, which are not required to pay the annual fee. Michigan still has safety authority over vehicles. That safety authority is exercised by a separate state agency, the Motor Carrier Division of the Michigan State Police, which administers the separate Motor Carrier Safety Act of 1963, MCL 480.11(a), et seg. The provisions of that Act apply to the operation of all commercial motor vehicles on Michigan highways and not just for-hire intrastate carri- ers. Similarly, the size and weight laws are enforced by the Michigan State Police, as well as political subdivisions of the state. The MPSC still has the authority, under the plain language of the preemption, to require insurance filings to be made and for carriers to register their intra- state operations, which they do. There is certainly no justification, however, for the MPSC to impose on intra- state carriers the regulatory fee of $100 per self-propelled vehicle annually, when the registration fee for interstate carriers cannot exceed $10 per vehicle per year for the filing of satisfactory proof of required insurance with the states. See 49 U.S.C. § 14504(c)(2)(B)(iv)(3). At a fee ten times that level, Michigan still continues to burden inter- state commerce through the assessment of an intrastate economic regulatory fee, when Michigan is no longer regulating motor carriers economically. As this Court stated in Ours Garage, supra, at 536 U.S. 442: We reiterate that § 14501(c)(2)(A) shields from preemption only ‘safety regulatory authority’ (and ‘authority of a State to regulate ... with POP IIE BE ig Fart, 23 regard to minimum amounts of financial respon- sibility relating to insurance requirements’). Lo- cal regulation of prices, routes, or services of tow trucks that is not genuinely responsive to safety concerns garners no exemption from § 14501(c)(1)’s preemption rule. The Supreme Court further noted that it was expressing no opinion on the issue of whether the regulations of the municipality in that case qualified in whole or part for the preemption exemption. The economic regulatory fee contained in the MMCA, imposed by the Michigan statute’s own terms “from each motor carrier for the administration of this act,” flies defiantly in the face of the federal preemption. It prevents an even playing field for air and ground carriers. It should have been held preempted below. B. All Of The Pre-Preemption Michigan Authority Supports The Underlying Economic Regulatory Purpose Of The MMCA The Michigan courts below relied upon a single case, In Re Federal Preemption, supra, in finding that the intrastate fee had not been preempted. This precedent, again, involved a challenge to an administrative proceed- ing commenced by the MPSC within days of the enactment of the F4A preemption, which proceeding had as its clear purpose from the outset the preservation of the economic regulatory fees generated by the MMCA as well as the maximum protection of the MPSC’s jurisdiction and role. It was the burden of appellants in that case, pursuant to the state standard for appellate review of decisions from that agency, “to show by clear and satisfactory evidence that the order of the PSC complained of is unlawful or 24 unreasonable.” 223 Mich.App. 295. As the MPSC itself summarized the position of its staff in the administrative proceeding: The Staff takes the position that, based on (1) the language of Section 601, (2) statements found in the August 5, 1993 Conference Report issued by Congress in conjunction with the FAA Act (Conference Report), and (3) federal court rulings concerning similar legislation, the pre- emptive effect of Section 601 is relatively narrow. T-1273, p. 5. (Emphasis supplied). The MPSC reflexively endorsed its own staff’s view, despite the fact that it was directly contrary to Congressional intent about the scope of the preemption. The Michigan courts rubber-stamped the same. They did so without a review of their own past decisions interpreting that Act. The MMCA became effective on October 17, 1933, in the middle of the Great Depression. The Michigan Su- preme Court shortly had occasion to examine a decision under the then new Act, In Re Joe Brown & Sons, 273 Mich. 652, 263 N.W. 887 (1935), which case, although turning on procedural grounds, involved the question of whether an applicant should be awarded authority to transport iron and iron products generally between Mus- kegon, Grand Rapids, and Detroit and various points or be limited within such geographical territory to the transpor- tation of only certain types of iron and iron products (coil springs, sheet steel, scrap iron, scrap metals, and used machinery). In Re Joe Brown was a portent of the cases to come. One proceeding, Associated Truck Lines, Inc. v. Michigan Public Service Commission, 377 Mich. 259, 140 N.W.2d 515 (1966), appeal after remand, sub. nom. 73 Mich.App. 476, 252 N.W.2d 495 (1977), appeal after a gS Wee ee 25 remand, 94 Mich.App. 241, 269 N.W.2d 548 (1978), re- manded, 404 Mich. 808, 272 N.W.2d 563, a transfer of operating rights proceeding involving the issue of whether a carrier, Yellow Transit Freight Lines, Inc., had aban- doned its Michigan intrastate authority prior to attempt- ing to transfer the same, lasted nearly 18 years and, in addition to the published opinions referenced, was the subject of numerous unpublished opinions by the appellate court of first review. The focus of such cases was entirely economic. That emphasis did not change until the time of the MMCA’s preemption. See, in this regard, Michigan Intra- State Motor Tariff Bureau, Inc. v. Michigan Public Service Commission, 200 Mich.App. 381, 504 N.W.2d 677 (1993), involving the propriety of an MPSC order revoking ap- proval on the part of certain organizations to conduct collective rate making, and Federal Armored Service uv. Michigan Public Service Commission, 204 Mich.App. 24, 514 N.W. 2d 178 (1994), interpreting the meaning of the term “demonstrated public need” and the quality of ship- per support evidence required for a proposed new motor carrier service, as well as that applicant’s financial fitness. Indeed, over the MMCA’s 60-plus years, all decisions turned on the economic regulation which Congress in- tended to preempt through Section 601 of the F4A.” The * See, also, In Re Application of Smith, 270 Mich. 343, 345, 259 N.W. 119 (1935), in which the Michigan Supreme Court rejected appellant’s argument that the Commission’s findings “amount[ed] to a stifling of legitimate competition”; Giaras v. Michigan Public Service Commission, 301 Mich. 262, 3 N.W.2d 268 (1942), in which at issue was the propriety of the Commission’s denial of an application for authority based on adequate service already received from protesting carriers; (Continued on following page) 26 courts below were wrong to rest their decisions on the appeal in In Re Federal Preemption of Provisions of the Motor Carrier Act, supra, a decision which particularly noted that “the PSC does not possess the power to deter- mine the constitutionality of statutes, and direct chal- lenges to the constitutionality of statutes belong in a different forum.” Jd. at 203. The courts below, as did the precedent upon which they relied, ignored the language of Congress and their own past decisions in straining to convert an economic regulatory fee into a safety regulatory fee, when the only safety regulation which remained for existing intrastate carriers was the filing of insurance. To rectify this blatant affront to the primacy of a Kirkby v. Michigan Public Service Commission, 320 Mich. 608, 32 N.W.2d 1 (1948), in which at issue was the question of whether the MPSC could issue a certificate of authority greater than that applied for; Furniture Capital Truck Lines, Inc. v. Michigan Public Service Commission, 340 Mich. 173, 65 N.W.2d 303 (1954), in which the issue addressed was the validity of a Commission order revoking a permit for non-use; J.E. Bejin Cartage Co. v. Michigan Public Service Commission, 352 Mich. 139, 89 N.W.2d 107 (1958), in which the issue involved was prior abandonment or discontinuance of authority in a transfer case; Greyhound Corporation v. Michigan Public Service Commission, 360 Mich. 578, 104 N.W.2d 395 (1960), where the issue was a grant of an extension of authority to United Parcel Service, Inc. and whether it was a contract, as opposed to a common carrier; Telischak Trucking, Inc. v. Michigan Public Service Commission, 11 Mich.App. 23, 160 N.W.2d 592 (1968), which had to do with a complaint proceeding and whether a carrier’s authority contained a commodity restriction as opposed to a job site delivery restriction; and G & B Transportation Co. v. Michigan Public Service Commission, 19 Mich.App. 379, 172 N.W.2d 898 (1969), where the Commission interpreted what shipments were authorized ‘ under a grant of authority reading Grand Rapids and vicinity. These, and every other published appellate court decision, support the economic regulatory purpose of the MMCA and the fee which it generated. mre eee ey ee ee ee ee ee Ee ee ee Se ee ee ee ae eee 27 Congressional statute involving interstate commerce, and the concomitant negative effect thereon by intrastate economic regulation of the motor carrier industry, a writ should issue. ¢ CONCLUSION The MMCA calls for “fees,” not taxes, to be imposed on motor carriers for the administration of an intrastate economic regulatory act, preempted by Section 601 of the F4A. These fees amount to tens and even hundreds of thousands of dollars per year for the largest carriers. As they impose additional costs on providing intrastate transportation in Michigan, they burden interstate com- merce, just as much as did the economic regulation which the fees were designed to support. They prevent ground carriers from competing on a fair basis with air carriers. Michigan should not be allowed to continue this disregard of federal preemption, any more than was the case in Yellow Transportation, Inc. v. Michigan, 537 U.S. 36, 123 S.Ct. 371, 154 L.Ed.2d 377 (2002). This Petition for a Writ of Certiorari should be granted. Respectfully submitted, ROBERT E. MCFARLAND* FOSTER, SWIFT, COLLINS & SMITH, P.C. 32300 Northwestern Highway, Suite 230 Farmington Hills, MI 48334 (248) 539-9900 *Counsel of Record App. l APPENDIX A STATE OF MICHIGAN COURT OF APPEALS WESTLAKE TRANSPORTATION, FOR PUBLICATION INC., VANDERKOOI CARRIERS, March 11, 2003 INC., EL TORO MOTOR FREIGHT, 9:00 a.m. INC., MYRIAH, INC., PRISM, INC., GERRIGS TRUCKING & LEASING, INC., and BEST WAY EXPRESS, INC., Plaintiffs-Appellants, and AMERICAN TRUCKING ASSOCIATION, INC. and TNT HOLLAND MOTOR EXPRESS, INC., Intervening Plaintiffs-Appellants, ‘ No. 226052: 226122 MICHIGAN PUBLIC SERVICE ai COMMISSION, DEPARTMENT OF TREASURY, and the STATE OF MICHIGAN, Defendants-Appellees. TROY CAB, INC., DEECO SERVICES, INC., d/b/a DEECO TRANSPORTA- TION, TIBERIO FRANK, d/b/a FAIRFIELD TOWING, ELEX, INC., d/b/a LAFOND EXPRESS, DALE CONSTINE & SONS, INC., CALCUT SALES & SERVICES, INC., d/b/a CALCUT TRUCKING COMPANY, App. 2 AMBASSADOR TRANSPORTATION, INC., HAWKINS STEEL CARTAGE, INC., MIDCON FREIGHT SYSTEMS, INC., JUH TRANSFER, INC., H & H ENTERPRISES, INC., d/b/a S & M CARTAGE, INC., CENTRAL TRANSPORT, INC., BANCROFT TRUCKING COMPANY, US TRUCK COMPANY, INC., WEST END CARTAGE, INC., CENTRAL CARTAGE COMPANY, CTX, INC., MOHAWK MOTOR MICHIGAN, INC., ECONOMY TRANSPORT, INC., MCKINLAY TRANSPORT LIMITED, MASON & DIXON LINES, INC., UNIVERSAL AMCAN LIMITED, ROMEO EXPEDITERS, INC., TOM THUMB SERVICES, INC., d/b/a REI, OJ TRANSPORT COMPANY, JLAW ENTERPRISES INC., and OJ TRANSPORT, INC., Plaintiffs-Appellants, and AMERICAN TRUCKING ASSOCIATION, INC., and TNT HOLLAND MOTOR EXPRESS, INC., Intervening Plaintiffs-Appellants, v No. 226053; 226137 MICHIGAN PUBLIC SERVICE an ee mati tone COMMISSION, DEPARTMENT OF | TREASURY, DEPARTMENT OF COMMERCE, and the STATE OF MICHIGAN, Updated Copy Defendants-Appellees. May 9, 2003 NS ee App. 3 Before: Markey, P.J., and Saad and Smolenski, JJ. SMOLENSKI, J. In these consolidated class actions, plaintiffs, individ- ual class-representative trucking companies, and interven- ing plaintiffs, two trucking companies, appeal by right from a December 30, 1998, judgment of the Court of Claims that granted summary disposition in favor of defendants. The appeals were consolidated. We affirm. I This case involves the effect of several federal laws, specifically 49 USC 11501, 49 USC 11506, and subsection 601(h) of the Federal Aviation Administration Authoriza- tion Act of 1994 (FAAAA), PL 103-105, subsection 601(h), on various provisions of Michigan’s Motor Carrier Act (MCA), MCL 475.1 et seq. This litigation began on January 3, 1995, when plaintiffs Westlake Transportation, Inc., et al., filed their complaint, alleging that the state’s $100 annual fees for interstate and intrastate motor carriers were unconstitutional because federal laws, 49 USC 11506 and 49 USC 11501, respectively, preempted the state laws. On January 9, 1995, Troy Cab, Inc., et al., filed their complaint, and made similar allegations. In Michigan, since 1933, motor-carrier regulation has been pursuant to the Michigan MCA. The act authorizes the Michigan Public Service Commission (PSC) to enforce the act. MCL 475.1(c); MCL 475.2. Under the MCA, motor carriers must pay a fee of $100 for each application filed with the commission for a certificate of authority or for a permit to operate intrastate. MCL 478.1. Also, motor carriers are required to pay an annua! fee of $100 a vehicle App. 4 for the administration of the act. MCL 478.2(1) and (2). Subsection 1 applies to motor-carrier vehicles that operate intrastate pursuant to a certificate of authority, while subsection 2 applies to motor-carrier vehicles licensed in Michigan that engage entirely in interstate commerce.’ The act also provides that motor carriers that are regis- tered outside Michigan are required to pay a registration fee of $10 a vehicle. MCL 478.7. In February 1995, intervening plaintiffs filed their complaint, alleging that the intrastate-decal fee violated the Commerce Clause, US Const, art I, § 8, cl 3, and were subsequently granted the right to intervene. Plaintiffs Westlake Transportation, Inc., et al., and intervening plaintiffs both amended their complaints, adopting the other’s substantive claims. The plaintiffs’ cases were consolidated in April 1995 and the classes were certified in June 1995. On June 22, 1995, plaintiffs filed two separate mo- tions for partial summary disposition pursuant to MCR 2.116(C)(10): one regarding their intrastate-preemption claim and the other regarding their interstate-preemption claim. On June 30, 1995, intervening plaintiffs filed their motion for partial summary disposition pursuant to MCR 2.116(C)(10), regarding their claim alleging violation of the Commerce Clause. On October 27, 1995, defendants renewed their own motion for summary disposition. The Court of Claims issued its opinion on October 13, 1998, ' The fees in MCL 478.1 and 478.2(1) will be referred to as the “intrastate fees,” and the fee in MCL 478.2(2) will be referred to as the “interstate fee.” App. 5 concluding that plaintiffs’ and intervening plaintiffs’ claims were meritless, and denied their motions for partial summary disposition in an order entered on November 12, 1998. Subsequently, the court granted defendants’ motion for summary disposition “for the reasons defendants stated in their November 10, 1998 supplemental brief,” which relied on the court’s October 13, 1998, opinion. The court concluded that § 601 of the FAAAA did not preempt MCL 478.2(1) because the federal law did not preempt safety-related regulatory fees. The court also found that MCL 478.2(2) was not preempted because the federal law imposed the $10 maximum only on “participat- ing states,” not “registration states.” The court further determined that MCL 478.2(1) did not implicate the Commerce Clause because it did not burden foreign motor carriers more heavily as compared to Michigan motor carriers engaged in interstate commerce, since the state statute only affects Michigan motor carriers who engage solely in intrastate commerce. Plaintiffs filed a motion for reconsideration, which was denied. Plaintiffs and inter- vening plaintiffs now appeal by right. II Summary disposition of all or part of a claim or defense may be granted when [e]xcept as to the amount of damages, there is no genuine issue as to any material fact, and the moving party is entitled to judgment or partial judgment as a matter of law. [MCR 2.116(C)(10).] A motion for summary disposition under MCR 2.116(C)(10) tests whether there is factual support for a claim, and is reviewed de novo on appeal. Spiek v Dep't of 0 LG App. 6 Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998). When deciding a motion for summary disposition, a court must consider the pleadings, affidavits, depositions, admissions, and other documentary evidence submitted in the light most favorable to the nonmoving party. Ritchie- Gamester uv Berkley, 461 Mich 73, 76; 597 NW2d 517 (1999). A motion for summary disposition based on the lack of a material factual dispute must be supported by documentary evidence. MCR 2.116(G)(3)(b), Meyer v Center Line, 242 Mich App 560, 574; 619 NW2d 182 (2000). All reasonable inferences are to be drawn in favor of the nonmovant. Bertrand vu Alan Ford, Inc, 449 Mich 606, 618; 537 NW2d 185 (1995). Il Plaintiffs argue that MCL 478.2(2) is preempted by federal law, specifically 49 USC 11506.’ Determining whether federal law preempts a state law presents an issue of statutory construction and is a question of law. Konynenbelt v Flagstar Bank, FSB, 242 Mich App 21, 27; 617 NW2d 706 (2000). Congressional intent is the corner- stone of preemption analysis. Fort Halifax Packing Co, Inc v Coyne, 482 US 1, 8; 107 S Ct 2211; 96 L Ed 2d 1 (1987). The Supremacy Clause of the United States Constitu- tion provides Congress with the power to preempt state law. US Const, art VI, cl 2. A general presumption exists in the law against federal preemption. Duprey v Huron & E R Co, Inc, 237 Mich App 662, 665; 604 NW2d 702 (1999). * This statute is currently codified as 49 USC 14504; however, we will refer to the law as § 11506. App. 7 Federal preemption occurs only under certain conditions, such as when (1) Congress enacts a federal statute that expresses a clear intent to preempt state law, (2) an outright or actual conflict exists between federal and state law, (3) compliance with both federal and state law is effectively impossible, (4) an implicit barrier to state regulation exists in federal law, (5) Congress has legislated comprehensively, thereby occupying an entire field and leaving no room for supplemental state law, or (6) the state law stands as an obstacle to the accomplishment and execution of the full objectives of Congress. Id. 49 USC 11506 provided, in part: (b) General rule. — The requirement of a State that a motor carrier, providing transporta- tion subject to jurisdiction under subchapter I of chapter 135 and providing transportation in that State, must register with the State is not an un- reasonable burden on transportation referred to in section 13501 when the State registration is completed under standards of the Secretary un- der subsection (c). When a State registration re- quirement imposes obligations in excess of the standards of the Secretary, the part in excess is an unreasonable burden. (c) Single State registration system. — (1) In general. — The Secretary shall main- tain standards for implementing a system under which — (A) a motor carrier is required to register annually with only one State by providing evi- dence of its Federal registration under chapter 139; a App. 8 (B) the State of registration shall fully comply with standards prescribed under this sec- tion; and (C) such single State registration shall be deemed to satisfy the registration requirements of all other States. (2) Specific requirements. — (A) Evidence of Federal registration; proof of insurance; payment of fees. — Under the stan- dards of the Secretary implementing the single State registration system described in paragraph (1) of this subsection, only a State acting in its capacity as registration State under such single State system may require a motor carrier regis- tered by the Secretary under this part — (i) to file and maintain evidence of such Federal registration; (ii) to file satisfactory proof of required in- surance or qualification as a self-insurer; (iii) to pay directly to such State fee amounts in accordance with the fee system es- tablished under subparagraph (B)(iv) of this paragraph, subject to allocation of fee revenues among all States in which the carrier operates and which participate in the single State regis- tration system; and (iv) to file the name of a local agent for ser- vice of process. (B) Receipts; fee system. — The standards of the Secretary = (i) shall require that the registration State issue a receipt, in a form prescribed under the App. 9 standards, reflecting that the carrier has filed proof of insurance as provided under subpara- graph (A)(ii) of this paragraph and has paid fee amounts in accordance with the fee system es- tablished under clause (iv) of this subparagraph; (ii) shall require that copies of the receipt issued under clause (i) of this subparagraph be kept in each of the carrier’s commercial motor vehicles; (iii) shall not require decals, stamps, cab cards, or any other means of registering or iden- tifying specific vehicles operated by the carrier; (iv) shall establish a fee system for the fil- ing of proof of insurance as provided under sub- paragraph (A)(ii) of this paragraph that — (I) is based on the number of commercial motor vehicles the carrier operates in a State and on the number of States in which the carrier op- erates; (II) minimizes the costs of complying with the registration system; and (III) results in a fee for each participating State that is equal to the fee, not to exceed $10 per vehicle, that such State collected or charged as of November 15, 1991; and (v) shall not authorize the charging or col- lection of any fee for filing and maintaining evi- dence of Federal registration under subparagraph (A)(i) of this paragraph. (C) Prohibited fees. —- The charging or col- lection of any fee under this section that is not in accordance with the fee system established under App. 10 subparagraph (B)(iv) of this paragraph shall be deemed to be a burden on interstate commerce. The MCA applies to entities engaged in interstate commerce only to the extent it is consistent with federal law. MCL 476.12. MCL 478.2(2) provides, in pertinent part, “A motor carrier licensed in this state shall pay an annual fee of $100.00 for each vehicle operated by the motor carrier which is registered in this state and operat- ing entirely in interstate commerce.”” Plaintiffs contend that the interstate fee was pre- empted both before and after the implementation of the Single State Registration System (SSRS) on January 1, 1994. With the implementation of the SSRS, § 11506 was amended and significant language changes were made. We will first address plaintiffs’ preemption argument regard- ing § 11506 after January 1, 1994. However, before we do so, an understanding of the evolution of this federal law is helpful. The United States Supreme Court has summa- rized this evolution in Yellow Transportation, Inc v Michi- gan, 537 US __, __; 123 S Ct 371, 374-375; 154 L Ed 2d 377, 383-384 (2002): Beginning in 1965, Congress authorized States to require interstate motor carriers operating within their borders to register with the State proof of their Interstate Commerce Commission (ICC) interstate operating permits. Pub L 89-170, 79 Stat 648, 49 USC § 302(b)(2) (1970 ed). Congress provided that state registration requirements * The subsection also provides that the fee is only $50 if the motor carrier begins operations after June 30th of the year. The other provisions in the subsection are not at issue in this appeal. App. 11 would not constitute an undue burden on inter- state commerce so long as they were consistent with regulations promulgated by the ICC. Ibid. Prior to 1994, the ICC allowed States to charge interstate motor carriers annual registra- tion fees of up to $10 per vehicle. See 49 CFR § 1023.33 (1992). As proof of registration, partici- pating States would issue a stamp for each of the carrier’s vehicles. § 1023.32. The stamp was af- fixed on a “uniform identification cab car[d]” car- ried in each vehicle, within the Square bearing the name of the issuing State. § 1023.32(d)-(e). This system came to be known as the “bingo card” system. Single-State Insurance Registra- tion, 9 ICC2d 610, 610 (1993). The “bingo card” regime proved unsatisfac- tory to many who felt that the administrative burdens it placed on carriers and participating States outweighed the benefits to those States and to the public. HR Rep No 102-171, pt I, p 49 (1991), HR Conf Rep No 102-404, pp 437-438 (1991), US Code Cong & Admin News 1991, pp 1526, 1679. In the Intermodal Surface Transpor- tation Efficiency Act of 1991 (ISTEA), Congress therefore directed the ICC to implement a new system to replace the “bingo card” regime.* See Pub L 102-240, § 4005, 105 Stat 1914, 49 USC § 11506(c) (1994 ed). Under the new system, called the Single State Registration System, “a motor carrier [would be] required to register an- nually with only one State,” and “such single State registration [would] be deemed to satisfy the registration requirements of all other States.” §§ 11506(c)(1)(A) and (C). Thus, one State would — on behalf of all other participating States — register a carrier’s vehicles, file and maintain paperwork, and collect and distribute App. 12 registration fees. § 11506(c)(2)(A). Participation in the Single State Registration System was lim- ited to those States that had elected to partici- pate in the “bingo card” system. § 11506(c)(2)(D). ISTEA also capped the per-vehicle registra- tion fee that participating States could charge in- terstate motor carriers. Congress directed the ICC to “establish a fee system ... that (I) will be based on the number of commercial motor vehi- cles the carrier operates in a State and on the number of States in which the carrier operates, (II) will minimize the costs of complying with the registration system, and (III) will result in a fee for each participating State that is equal to the fee, not to exceed $10 per vehicle, that such State collected or charged as of November 15, 1991.” § 11506(c)(2)(B)Giv). Congress provided that the charging or collection of any fee not in accor- dance with the ICC’s fee system would “be deemed to be a burden on interstate commerce.” § 11506(c)(2)(C). *Congress abolished the ICC in 1995 and as- signed responsibility for administering the new Single State Registration System to the Secre- tary of Transportation. See ICC Termination Act of 1995, Pub L 104-88, § 101, 109 Stat 803. The provisions of ISTEA governing the system were amended and recodified. See 49 USC § 14504(c). The Federal Highway Administration, under the Secretary of Transportation, adopted the ICC regulations that implemented the Single State Registration System, 61 Fed Reg 54706, 54707 (1996), and the Federal Motor Carrier Safety Administration now has authority to administer the system, 49 USC § 113(f)(1). App. 13 A Plaintiffs argue that the federal statutory language is clear — a state may charge a maximum registration fee of $10 a vehicle to motor carriers engaged in interstate commerce, regardless of whether a motor carrier is regis- tered in Michigan or another state. Plaintiffs acknowledge that MCL 478.7 reflects the mandate of § 11506 with regard to motor carriers registered out of state,‘ and asserts that motor carriers registered in Michigan are required to be charged similarly. Defendants’ counterargument is_ two-fold. First, § 11506 applies to registration fees only, not regulatory fees, and the interstate fee at issue is a regulatory fee. Second, the fee limit in § 11506 applies to participating States only, not the registration state. The court agreed with defendants’ argument and granted summary disposi- tion on this issue for the same reasons. Therefore, the key questions are (1) to whom does the fee limit in § 11506 apply, and (2) to what type of fees. The answers to these questions can be found in the language of the statute itself and the federal regulations that interpret it. It is not an unreasonable burden on interstate com- merce to require vehicles to register with a state; however, * MCL 478.7 provides, in part: (4) The annual fee levied on each interstate or foreign motor carrier vehicle operated in this state and licensed in another state or province of Canada shall be $10.00. The commission may enter into a reciprocal agreement with a state or province of Canada that does not charge vehicles li- censed in this state economic regulatory fees or taxes and may waive the fee required under this subsection. App. 14 any registration requirements of a state that are in excess of the standards in subsection 11506(c) are considered an unreasonable burden. Subsection 11506(b). Under the SSRS, a motor carrier is required to register annually with only one state, and that registration satisfies the registration requirements of all the states. Subsection 11506(c)(1)(A). A motor carrier may only register with a participating state, a state which participated in the old “bingo card” system. Subsection 11506(c)(2)(D). The motor carrier must register with the state where its principal place of business is located, if it is a participating state, or else register with the participating state in which it operates the most vehicles. 49 CFR 367.3.° Therefore, a registration state, the state in which a motor carrier registers, is by defini- tion a participating state. Michigan is a participating state, Yellow Transportation, supra, 123 S Ct 376; 154 L Ed 2d 385, and therefore, can be a registration state. The registration state may require a motor carrier to (1) file proof of its federal registration (ICC permit), (2) file proof of insurance, (3) file the name of its agent for service of process, and (4) pay a fee. Subsection 11506(c)(2)(A). The registration state is then to issue the motor carrier a receipt, reflecting that proof of insurance was filed and that the fee was paid, a copy of which is to be kept in the carrier’s vehicles. Subsection 11506(c)(2)(B). The fee is for the filing of the proof of insurance, and may not be charged for the filing of the motor carrier’s ICC permit. Subsections 11506(c)(2)(B)(iv) and (v). * 49 CFR 1023.1 et seqg., was recodified as 49 CFR 367.1 et seq. App. 15 In support of the registration fee, the motor carrier must file with the registration state a form that delineates (1) the number of vehicles it intends to operate in each participating state, (2) the fee each~participating state charges each vehicle, (3) the total fee due each participat- ing state, and (4) the total of all the fees due. 49 CFR 367.4(c)(4). The fee each participating state is allowed to charge each vehicle is equal to the amount the state charged or collected as of November 15, 1991, not to exceed $10. Subsection 11506(c)(2)(B)(iv\(III); 49 CFR 367.4(c)(4)(ii). Congress wanted to “minimize[] the costs of complying with the registration system” for the motor carriers, subsection 11506(c)(2)(B)(iv)(II), while at the same time preserving “revenues for the states which had participated in the bingo program,” HR Conf Rep No 102- 404 reprinted in 1991 USCCAN 1817. The fees a registra- tion state collects on behalf of other participating states are remitted to those states monthly. 49 CFR 367.6. Thus, if a motor carrier registered in Michigan, it would first list the number of vehicles it operated in each participating © state. Because Michigan is a participating state, it would need to list the number of vehicles it operated in Michigan. The fee Michigan could charge cannot exceed $10. We find that the statutory language and its accompa- nying federal regulations are clear. A registration state is simply a participating state in which a motor carrier is registering. Therefore, when the statute states that a participating state may not charge a fee in excess of $10, this includes the registration state. To conclude otherwise, that a registration state could set its own fee, would contravene the express language and purpose of the statute. App. 16 The next question is whether the $100 fee in MCL 478.2(2) is a registration fee, so that it is subject to the limitation in § 11506, or whether it is a regulatory fee. Plaintiffs assert that the fee is for all practical purposes a registration fee. Because the fee must be paid at the time a motor carrier registers with a state, and in return for the fee receives an identification decal, plaintiffs contend that one can only conclude that the fee is, in actuality, a regis- tration fee. We disagree. Faced with a similar situation in Franks & Son, Inc v Washington, 136 Wash 2d 737, 759- 760; 966 P2d 1232 (1998), the Washington Supreme Court rejected the plaintiffs’ argument that because the regula- tory fee and federal identification fee were collected at the same time, an unlawful registration requirement resulted. The court adeptly stated, “We believe a more realistic rationale for concurrent collection of the two fees was administrative convenience and efficiency.” Jd. at 760. We find that the $100 interstate fee could reasonably be classified as a regulatory fee because it is a fee imposed for the administration of the MCA, particularly covering costs of enforcing safety regulations.® If the purpose of a fee is to regulate an industry or service, it can be properly classified as a regulatory fee. Bolt v Lansing, 459 Mich 152, 161-162; 587 NW2d 264 (1998). Because the fee in * Because vehicles licensed in Michigan that operate solely interstate are required to pay the $100 regulatory fee, the PSC waives the registration fee. Schneider Natl Carriers, Inc v Michigan (On Remand), 247 Mich App 716, 721; 637 NW2d 838 (2001). Hence, the registration fee Michigan charges for vehicles licensed in Michigan is $0, less than the $10 limit imposed by § 11506. Therefore, the registra- tion fee is within the federal mandate. ee App. 17 MCL 478.2(2) is not a registration fee, it is not subject to preemption by 49 USC 11506. Plaintiffs argue that the federal law prohibits constru- ing the fee as a regulatory fee, citing Roadway Express, Inc v Treasurer of State of Illinois, 120 Il App 3d 133; 458 NE2d 66 (1983). That case involved a $31 registration fee Illinois charged Ohio motor carriers. Id. at 133-134. At the time, the federal regulation allowed a maximum registra- tion fee of $& plus an additional reasonable fee imposed to defray the cost of the regulation of carriers within the state’s borders. Jd. at 135. Plaintiffs contend that Roadway Express “issued a warning” that “no such additional ‘regulatory fee’ was permissible after 1981” because the federal regulation interpreting § 11506 was amended in 1981 and set an absolute limit of $10 for identification fees. However, Roadway Express issued no such warning. The court merely noted, “again parenthetically,” that the federal regulation, 49 CFR 1023.33 (redesignated), was amended and set the limit at $10. Roadway Express, supra at 135. Plaintiffs appear to argue that because the amended federal regulation did not explicitly provide for an addi- tional fee, one was hence prohibited. However, plaintiffs provide no support for their argument. Further, plaintiffs fail to recognize the import of two other regulations in existence at the time. 49 CFR 1023.105 (1991) (super- seded) provided that the rules and regulations were not to be construed to affect the collection of taxes or fees by a state from motor carriers for the operation of vehicles within the borders of a state. 49 CFR 1023.104 (1991) (superseded) provided that states were “urged” to use fees collected for the purpose of defraying the cost of regulation of motor carriers within their borders. Therefore, the App. 18 ability of a state to collect fees in addition to the registra- tion fees was not affected by the removal from § 1023.33 of the language providing for additional fees.’ B Plaintiffs also argue that the interstate fee was prohibited before the creation of the SSRS in 1994, under the previous version of § 11506. Plaintiffs assert this. argument because their complaint was filed in the begin- ning of 1995, and with a three-year period of limitation, plaintiffs contend that they are entitled to a refund for the excess fees they have paid since 1992. Before the 1994 enactment of the SSRS, § 11506 read, in pertinent part: (b) The requirement of a State that a motor carrier ... register the certificate or permit is- sued to the carrier under section 10922 or 10923 of this title is not an unreasonable burden on transportation referred to in section 10521(a)(1) and (2) of this title when the registration is com- pleted under standards of the Commission under ” We note that the substance of 49 CFR 1023.104 and 1023.105 was not included in the 1994 amendments, 49 CFR 1023.1-1023.6. However, neither was there any express prohibition on state-imposed regulatory fees. The statute and its regulations address registration requirements only. Because there is a presumption against federal preemption, we believe that Congress’s silence cannot be interpreted as prohibiting state regulatory fees, see Wisconsin Pub Intervenor v Mortier, 501 US 597, 607; 111 S Ct 2476; 115 L Ed 2d 532 (1991), particularly given that regulatory and registration fees can coexist in the same field without conflicting, Duprey, supra at 665. EE ————— App. 19 subsection (c) of this section. When a State regis- tration requirement imposes obligations in ex- cess of the standards, the part in excess is an unreasonable burden. (c(1) The Commission shall maintain standards and amendments to standards (A) prepared and certified to it by the national or- ganization of the State Commissions, and (B) prescribed by the Commission. .. . The Commission prescribed the following interpretive regulation: The application for the issuance of such identification stamps or number shall . . . be duly completed and executed by an official of the mo- tor carrier, and shall be accompanied by the fee, if any, prescribed by the law of such State; pro- vided, however, that such fee shall not exceed $10 for the issuance of each such identification stamp; and provided further (when the State Commission assigns an identification number in lieu of issuing an identification stamp or stamps), that such fee shall not exceed $10 for each vehicle operated under the authority of the motor carrier identified in the cab card bearing such identification number. [49 CFR 1023.33 (superseded).] The pre-1994 federal regulation substantively mir- rored subsection 11506(c) as amended in 1994. Because we concluded that the interstate fee is a regulatory fee, it is outside the scope of the federal law and was not preempted.° * We note that the cases from other jurisdictions that plaintiffs cite are inapplicable in this case. The conclusion in this case turns on (Continued on following page) App. 20 Accordingly, the court did not err in granting defendants summary disposition. IV In their complaints, plaintiffs and intervening plain- tiffs allege that the intrastate fees in MCL 478.1 and MCL 478.2(1) were preempted by § 601 of the FAAAA. Subsec- tion 601(h), which became effective on January 1, 1995, prohibited state regulation of prices, routes, or services of motor carriers, save for a few delineated exceptions. (Currently codified as 49 USC 14501|[c].) Plaintiffs argue that the court erred in granting defendants summary disposition on this issue before discovery was complete.” Plaintiffs assert that they should have been allowed an opportunity to conduct additional discovery in order to show that, as utilized, the intrastate fees are prohibited by federal law. In re Fed Preemption of Provisions of the Motor Car- rier Act, 223 Mich App 288, 302; 566 NW2d 299 (1997), held that § 601 did not preempt the entire MCA and did not indicate an intent to preempt fee provisions such as MCL 478.1 and MCL 478.2. The Court noted that in response to the enactment of the FAAAA, the PSC “issued considered decisions that indicated how its regulation of the trucking industry in Michigan was affected by federal whether the interstate fee is classified as a regulatory fee or a registra- tion fee. In the cases plaintiffs cite, there was no disagreement that the fee at issue was a registration fee. * We note that plaintiffs do not contest the court’s summary- disposition ruling, that § 601 did not preempt the intrastate fees. App. 21 legislation preempting at least some aspects of state regulation.” In re Motor Carrier Act, supra at 300. In regard to the fee provisions at issue, the Court stated: The PSC still has significant regulatory obli- gations. For example, the PSC must supervise and regulate the safety of motor carrier opera- tions. MCL 479.41; MSA 22.587(1). There is stil] a certification process. It follows that the fees for obtaining a certificate of authority, MCL 478.1; MSA 22.560, for protesting an application for a certificate, MCL 478.1a; MSA 22.560(1), and for administering the act, MCL 478.2(1); MSA 22.561(1), are unaffected by the preemptive effect of § 601. In fact, because the PSC is not using its resources to enforce preempted portions of the Mo- tor Carrier Act, the fees collected by the PSC are not related to the preempted provisions and rules. Indeed, appellants Central Transport and Uni- versal Am-Can have not shown that the cost of the PSC’s operations has ever been totally funded by the fees it collects, and they have not provided any reason to believe that the fees col- lected were or can be used only for what is now preempted economic regulation. [Id. at 302-303; emphasis added.] Plaintiffs contend that the PSC intrastate fees were being used to fund p»sempted portions of the MCA, and, thus, the fees were elated to a preempted provision. Therefore, the fees were also preempted. Plaintiffs did not submit any documentary evidence below in support of this contention. Plaintiffs argue that they had intended to do so, but their opportunity was foreclosed when the court denied their motion for partial stay and bifurcation of issues. Plaintiffs requested a 90- to 120-day stay in the Proceedings to conduct discovery in order to present a Api. 22 factual record to the court in a supplemental brief in response to the decision in In re Motor Carrier Act, supra; however, the court denied the motion without prejudice because it believed its summary-disposition ruling would cover the issue. A court’s decision regarding matters of discovery is reviewed on appeal for an abuse of discretion. Jn re Pott, 234 Mich App 369, 373; 593 NW2d 685 (1999). Plaintiffs could not address this Court’s decision in Jn re Motor Carrier Act, supra, in their original motions for partial summary disposition because they were filed and argued in 1995, and the case was not decided until April 25, 1997. However, plaintiffs did not file their motion for partial stay and bifurcation of issues until March 1998, nearly one year later. The record indicates that plaintiffs were con- ducting discovery during this entire time, yet never sought evidence relating to this issue. We find that plaintiffs had ample opportunity to conduct discovery following the decision in Jn re Motor Carrier Act, supra, and file a supplemental brief contain- ing their findings. Given that one year had passed, we also find that there is no reason to believe that had plaintiffs been given another three or four months in which to conduct discovery, plaintiffs would have uncovered a factual basis for their claim. Furthermore, we note that by stipulation, discovery was to be completed 180 days after the court issued its ruling on the parties’ motions for summary disposition. Plaintiffs assert in their reply brief that they are not arguing that they were prevented from conducting discov- ery, but that they were denied an opportunity to supple- ment their motion papers. However, the court did not — oe App. 23 foreclose plaintiffs’ opportunity to present their argument. They could have filed additional briefs at any time before the court issued its ruling. In fact, on January 28, 1998, plaintiffs filed a supplemental brief in support of their motions for summary disposition and in opposition to defendants’ motion, in which they specifically mentioned In re Motor Carrier Act, supra. This indicates plaintiffs were well aware of the import of the case, and could have conducted discovery and presented their argument accord- ingly. ‘'laintiffs mention that defendants did not submit the opinion as authority until January 1998. However, In re Motor Carrier Act was decided in April 1997, and nothing prevented plaintiffs from proactively distinguish- ing their case from it. Moreover, the court specifically invited plaintiffs to present their argument again if they thought its ruling did not adequately cover the issue. Plaintiffs did file a motion for reconsideration after the court issued its orders on the parties’ motions for summary disposition, yet did not reraise this issue. We recognize that plaintiffs renewed their motion to stay on October 8, 1998; however, this was before the court issued its ruling. Because the court had not yet issued its ruling, plaintiffs could have attempted to conduct discovery after its first motion was denied. Therefore, we conclude that the court did not abuse its discretion in denying plaintiffs’ request to stay the pro- ceedings in order to conduct additional discovery. A deci- sion of a court that obtained the correct result, albeit for a different reason, will be affirmed on appeal. Lavey v Mills, 248 Mich App 244, 250; 639 NW2d 261 (2001). App. 24 V Plaintiffs Troy Cab, Inc., et al., allege that the intra- state fees in MCL 478.1 and MCL 478.2(1) are unconstitu- tional taxes in violation of various sections of the Michigan Constitution. The fees at issue are credited to the PSC. MCL 478.6. Whether a charge is a permissible fee or an illegal tax is a question of law. Bolt, supra at 158. A court’s factual findings are reviewed for clear error. A finding is clearly erroneous when, although there is evidence to support it, upon reviewing the entire record, the appellate court is left with a definite and firm conviction that a mistake was made. Christiansen v Gerrish Twp, 239 Mich App 380, 387; 608 NW2d 83 (2000). In determining whether a charge imposed by a unit of government is a fee or a tax, a court must consider: (1) whether the charge serves a regulatory purpose rather than operates as a means of raising revenue; (2) whether the charge is proportionate to the necessary costs of the service to which it is related; and (3) whether the payor has the ability to refuse or limit its use of the service to which the charge is related. Bolt, supra at 161-162. These factors should be considered in their totality, and a weak- ness in one area does not mandate a particular finding. Jd. at 167; Graham v Kochville Twp, 236 Mich App 141, 151; 599 NW2d 793 (1999). Taxes have a primary purpose of raising revenue, while fees are usually in exchange for a service rendered or a benefit conferred. Bolt, supra at 162. The stated purpose of the intrastate fees is for “the administration of [the MCA].” MCL 478.1; MCL 478.2(1). The express purposes of the act are es eC epanitinnses App. 25 to confer upon the [PSC] the power and authority and to make it its duty to supervise and regulate the transportation of property by motor vehicle for hire upon and over the public highways of this state in all matters whether specifically mentioned herein or not, so as to: (a) Relieve all future undue burdens and congestion on the highways arising by reason of the use of the highways by motor vehicles operated by motor carriers; (b) protect and conserve the highways and protect the safety and welfare of the travel- ing and shipping public in their use of the high- ways; (c) promote competitive and efficient transportation services; (d) meet the needs of mo- tor carriers, shippers, receivers, and consumers; (e) allow a variety of quality, price, and service options to meet changing market demands and the diverse requirements of the shipping public; (f) allow the most productive use of equipment and energy resources; (g) provide the opportunity for efficient and well-managed motor carriers to earn adequate profits and attract capital; (h) promote intermodal transportation; (i) prevent unjust discrimination; (j) promote greater par- ticipation by minorities in the motor carrier sys- tem; (k) provide and maintain service to small communities and small shippers; (1) prevent eva- sion of this act through any device or arrange- ment; (m) promote entrepreneurship in the motor carrier industry by allowing greater contract car- rier economic and entry flexibility; and (n) pro- mote the use of jointly considered and initiated rates, classifications, divisions, allowances, App. 26 charges, or rules of motor carriers under com- mission approved agreements. [MCL 475.2." This language indicates the exactions are regulatory. Taxes are designed to raise revenue for the general public, while a fee “confers benefits only upon the particu- lar people who pay the fee, not the general public or even a portion of the public who do not pay the fee.” Graham, supra at 151. In this case, in exchange for the fees, a motor carrier receives the right to operate its trucks in Michigan, and the fees are used to enforce the provisions of the act that carry out the above-listed purposes. Thus, there is a direct benefit to the one who pays the fees. We recognize that promoting and regulating safe use of the highways benefits the general public as well. However, a regulatory fee can have dual purposes and still maintain its regula- tory characterization. As long as the primary purpose of a fee is regulatory in nature, the fee can also raise money provided that it is in support of the underlying regulatory purpose, id. at 151, and thus benefit the general public. Plaintiffs’ argument focuses on the second prong of the test, whether the fees are proportional to the cost of the services to which they relate. Plaintiffs assert that in 1982, when the fees were increased,” they became taxes because the amounts collected were in excess of the '° Any purposes that related to economic regulation were pre- empted by § 601 of the FAAAA as of January 1, 1995, and the PSC ceased to enforce those regulations. Jn re Motor Carrier Act, supra at 300. However, the Legislature has yet to amend the MCA to reflect the federal preemption. " 1982 PA 399 raised the fees in MCL 478.1 and MCL 478.2(1) to their current levels. App. 27 expenses related to the services. A fee must be proportion- ate to the cost of the regulation, but its amount is pre- sumed reasonable unless its unreasonableness is established. Jd. at 151. “[W]here revenue generated by a regulatory ‘fee’ exceeds the cost of regulation, the ‘fee’ is actually a tax in disguise.” Gorney » Madison Hgts, 211 Mich App 265, 268; 535 NW2d 263 (1995). In support of their contention, plaintiffs presented two affidavits and a senate fiscal report. We find the affidavits of minimal value in determining whether the fees are unreasonable. Neither of the affiants worked for the PSC and they could only offer their opinion regarding how the fees were spent. The senate fiscal report, created by a senate fiscal analyst, showed how the funds received by the PSC were utilized for fiscal years 1982-83 to 1994-95,” and one of the charts showed that there was a surplus nearly every year.” ” Plaintiffs also assert that the report shows that the fees sup- ported activities not related to the regulation of motor carriers because a portion was allocated to the State Police, Department of Commerce, and Department of Civil Service. However, it is the duty of the police to assist the PSC in enforcement of the MCA, MCL 479.13, and the Department of Commerce provides administrative support to the PSC that enables it to carry out its duties. It follows that the PSC would allocate a portion of the fees to them. In addition, the allocation of a very small portion of the PSC’s revenues to the Department of Civil Service is mandated by the Legislature in accordance with the constitu- tion to fund the civil service. Const 1963, art 11, § 5. The allocations to this department averaged only $23,000 each year when revenues ranged from $3.2 to $6.3 million. * Plaintiffs present no evidence regarding the proportionality of the fees after 1995, when the PSC ceased any economic regulatory functions as mandated by § 601 of the FAAAA. Therefore, we have no basis on which to determine the proportionality of the fees after 1995. App. 28 However, defendants dispute the accuracy of the figures in the report. Defendants note that charts reflect the total fees collected, not just the fees collected pursuant to MCL 478.1 and MCL 478.2(1), and defendants got confirmation from the author of the report that appropria- tions to the Michigan Truck Safety Fund were not consid- ered. Therefore, defendants contend that the excess amounts were distorted. It is clear that the report on which plaintiffs rely included all fee revenues without excluding nonchallenged interstate fees collected pursuant to the SSRS and its predecessor system. Therefore, the surplus figures were distorted to some degree. Even without reducing the surplus figures, the aggregate excess during the thirteen years was only 11.7 percent, a relatively small percentage. The test is whether the fee is proportional, not whether it is equal, to the amount required to support the services it regulates. Graham, supra at 151. We conclude that the Court of Claims did not clearly err in finding that the fees were not “wholly disproportionate.” Lastly, plaintiffs argue that the exaction is not volun- tary because a motor carrier cannot operate its trucks in Michigan without paying it. Defendants argue that a motor carrier has a choice with regard to what extent its trucks will have a presence in Michigan, and, therefore, the exaction is voluntary. While this is true in regard to the application fee, MCL 478.1, defendants’ logic is errone- ous in regard to the administration fee, MCL 478.2(1), because every vehicle licensed in Michigan must pay this fee irrespective of where it operates. Even if we were to view the exaction as more compulsory than voluntary, when the totality of factors are considered, we believe the exactions are most properly classified as regulatory fees. App. 29 Bolt, supra at 167; Graham, supra at 151. Therefore, the court did not err in granting defendants summary disposi- tion on this issue. VI Plaintiffs next argue that the intrastate and inter- state fees violate the Equal Protection Clause of the United States and Michigan Constitutions because they apply to “for-hire” motor carriers only and not to private motor carriers.“ Both the federal and state constitutions guarantee equal protection, and afford similar protection. Const 1963, art 1, § 2; US Const, Am XIV, §1; Vargo v Sauer, 457 Mich 49, 60; 576 NW2d 656 (1998). A court’s ruling whether a statute violates equal protection is a question of law. McDougall v Schanz, 461 Mich 15, 24; 597 NW2d 148 (1999). Legislative classifications that do not implicate a fundamental right or target a suspect class are presumed to be constitutional if they have a rational basis, and one who challenges such a statute has the burden of showing that it bears no rational relation to some independent and legitimate legislative end. TIG Ins Co, Inc v Dep’ of Treasury, 464 Mich 548, 557; 629 NW2d 402 (2001); Vargo, supra at 60. Under the rational-basis test, a statute will ordinarily be sustained if it can be said to advance a legitimate governmental interest, even if the law seems to be unwise or works to the disadvantage of a particular “* Because we concluded that the fees are regulatory, plaintiffs additional argument, that the fees violate Michigan’s Uniform Taxation Clause, is without merit. App. 30 group, or if the rationale seems to be tenuous. People v Copper (After Remand), 220 Mich App 368, 372-373; 559 NW2d 90 (1996). A legislative classification may not be set aside if any set of facts may reasonably be conceived to justify it. Id. at 373. Before 1994, the fees were used to fund the economic- and safety-regulation of motor carriers. Motor carriers do not include private carriers. MCL 475.1(i). A private carrier is “any person engaged in the transportation of property by motor vehicle upon public highways where the transportation is incidental to, or in furtherance of, any commercial enterprise of the person, other than transpor- tation.” MCL 475.1(q). A “for hire” motor carrier is one that receives “remuneration or reward of any kind, paid or promised, either directly or indirectly.” MCL 475.1(e). Thus, “for hire” motor carriers are engaged in the business of transportation. The rationale behind the classification distinction may be supported by facts either known or reasonably as- sumed, even if those facts may be debatable. TJG Ins, supra at 557, citing Crego v Coleman, 463 Mich 248, 259- 260; 615 NW2d 218 (2000). We believe it is reasonable to assume that motor carriers have larger fleets than private carriers, operate under competitive pressures, and operate more frequently than private carriers. We can surmise that these carriers are in need of being more closely scrutinized in order to protect the general public, which also uses the public highways; thus, the need for regula- tions and fees to cover their enforcement. Even after economic regulation of the motor carriers ceased, as In re Motor Carrier Act, supra at 302, recognized, the PSC “still has significant regulatory obligations,” App. 31 including supervising and regulating the safety of motor- carrier operations, as well as the certification process. Therefore, the need for fees to support such regulations were not eliminated after the FAAAA was enacted. The same concerns that existed before still existed. Accord- ingly, we conclude that the Legislature’s classification bore a rational relation to a legitimate state purpose, and the court did not err in granting defendants summary disposi- tion. VII Finally, intervening plaintiffs argue that the intra- state fee imposed by MCL 478.2(1) violates the Commerce Clause because it burdens interstate commerce. Again, we disagree, but for a different reason than stated by the Court of Claims. The Commerce Clause provides that Congress “shall have power ... [tlo regulate commerce ... among the several states... .” US Const, art I, § 8, cl 3. The “dormant Commerce Clause” “denies the States the power unjusti- fiably to discriminate against or burden the interstate flow of articles of commerce.” Oregon Waste Systems, Inc v Dep't of Environmental Quality of the State of Oregon, 511 US 93, 98; 114 S Ct 1345; 128 L Ed 2d 13 (1994). The Court of Claims held that the Commerce Clause was not implicated because the fee applied to intrastate carriers only. However, any tax or regulation that affects interstate travel, even if imposed solely on intrastate commerce, is subject to Commerce Clause analysis. Citi- zens for Logical Alternatives & Responsible Environment v Clare Co Bd of Comm’rs, 211 Mich App 494, 499; 536 NW2d 286 (1995). Because the fee is imposed on any a App. 32 vehicle that operates intrastate pursuant to a certificate of authority, even if it also travels interstate, the fee affects interstate commerce, and thus, implicates the dormant Commerce Clause. Although the Court of Claims did not address this issue, our review is nevertheless proper because whether a statute violates the Commerce Clause is a question of law. Gillette Co v Dep't of Treasury, 198 Mich App 303, 311; 497 NW2d 595 (1993). “A statute is presumed constitutional absent a clear showing to the contrary.” Caterpillar, Inc v Dep't of Treas- t ury, 440 Mich 400, 413; 488 NW2d 182 (1992). The test for | determining whether a regulatory fee violates the Com- merce Clause involves a two-tiered approach.” The first step is to determine whether the statute discriminates ; against interstate interests or merely regulates evenhand- edly with only incidental effects upon interstate commerce. Oregon Waste, supra at 99. “‘[D]iscrimination’ simply means differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.” Id. The United States Supreme Court has recognized that there is no clear line separating the two categories. The critical consideration is the overall effect of the statute on both local and interstate activity. Brown- Forman Distillers Corp v New York State Liquor Auth, 476 ’* Intervening plaintiffs contend that the four-pronged test enunciated in Complete Auto Transit, Inc v Brady, 430 US 274, 279; 97 | S Ct 1076; 51 L Ed 2d 326 (1977), and utilized in American Trucking | Ass’ns, Inc v Scheiner, 483 US 266, 283; 107 S Ct 2829; 97 L Ed 2d 226 a (1987), is applicable. However, this test is used to analyze the constitu- : tionality of state-taxation statutes that tax interstate commerce itself, i.e., taxes for the privilege of doing business in the state, Complete Auto, supra at 279, not regulatory statutes. App. 33 US 573, 579; 106 S Ct 2080; 90 L Ed 2d 552 (1986). A state law will be invalidated if it “discriminate[s] against an article of commerce by reason of its origin or destination out of State.” C & A Carbone, Inc v Town of Clarkstown, New York, 511 US 383, 390; 114 S Ct 1677; 128 L Ed 2d 399 (1994). In making this determination, we must consider all the provisions of the challenged statute. MCL 478.2(1) requires that motor carriers that are licensed in Michigan and travel solely intrastate or travel both intrastate and interstate, a “mixed” carrier, must pay a fee of $100 for each vehicle. MCL 478.2(2) requires that motor carriers that are licensed in Michigan and travel solely interstate must also pay the $100 fee. Therefore, the regulatory fee is the same for all motor carriers licensed in Michigan, regardless of their final destination. It does not directly regulate interstate commerce, Pike v Bruce Church, Inc, 397 US 137, 142; 90 S Ct 844; 25 L Ed 2d 174 (1970), nor is economic protectionism at issue, Arkansas Electric Coop Corp.v Arkansas Pub Service Comm, 461 US 375, 394; 103 S Ct 1905; 76 L Ed 2d 1 (1983). Defendants assert that the majority of vehicles that pay the fee operate solely intrastate, which presumably leads to their conclusion that the effect on interstate commerce is minimal. However, the number of interstate vehicles burdened is inconsequential to a finding of dis- crimination. New Energy Co of Indiana v Limbach, 486 US 269, 276-277; 108 S Ct 1803; 100 L Ed 2d 302 (1988). Intervening plaintiffs argue that the mixed carrier invariably will pay a higher per-mile fee than the carrier who operates solely intrastate. They assert that because the fee is a flat annual fee, in order to receive the greatest App. 34 benefit for the fee, a carrier would need to maximize its intrastate operations and this could potentially affect a carrier’s economic decisions by discouraging an intrastate carrier from engaging in interstate commerce. While this may be so, it is a matter of pure specula- tion. Intervening plaintiffs present no evidence that any trucking firm’s route choices are affected by the imposition of the fee, only surmising that this could occur in the hypothetical. Only one affidavit was submitted by inter- vening plaintiffs, in which James Crozier, manager of licensing and fuel for intervening plaintiff TNT Holland Motor Express, Inc., stated that mixed carriers often top off their interstate loads with intrastate hauls or transport intrastate loads in between interstate hauls. However, he never averred that this was done only because of the fee -imposed by MCL 478.2(1). Regardless of the $100 fee, topping off loads or adding intrastate hauls in between interstate ones is an economically efficient decision for the motor carriers. We do not find that the fee raises a signifi- cant barrier to participation in interstate trade. Any effect the fee has on interstate commerce is incidental and does not rise to the level of discrimination. Having concluded that the statute regulates even- handedly, it will be upheld unless the burden it imposes on interstate commerce is “clearly excessive in relation to the putative local benefits.” Pike, supra at 142. Intervening plaintiffs do not contest that the statute serves a legiti- mate nondiscriminatory purpose, i.e., funding safety and related regulations. This is an exercise of the state’s police power and serves a critical function in protecting the people who use Michigan’s highways. Great deference is given to state legislation in the field of highway safety regulation and a strong presumption in favor of its validity App. 35 exists. Raymond Motor Transportation, Inc v Rice, 434 US 429, 443; 98 S Ct 787; 54 L Ed 2d 664 (1978). On the basis of the record before us, we cannot say that the burden imposed on interstate commerce by the $100 annual fee is clearly excessive in relation to Michigan’s substantial interest in regulating safety on its highways. Therefore, we hold that MCL 478.2(1) does not violate the Commerce Clause. Accordingly, we affirm the Court of Claims’ sum- mary-disposition ruling in favor of defendants even though it reached its decision for the wrong reason. Lavey, supra at 250. Affirmed. /s/_ Michael R. Smolenski /s/_ Jane E. Markey /s/_ Henry William Saad App. 36 APPENDIX B STATE OF MICHIGAN IN THE COURT OF CLAIMS WESTLAKE TRANSPORTATION, INC., et al., Plaintiffs, and AMERICAN TRUCKING : ASSOCIATIONS, INC. and DOCKET NO. TNT HOLLAND MOTOR 95-15628-CM EXPRESS, INC., OPINION Intervening Plaintiffs, -VS- MICHIGAN PUBLIC SERVICE COMMISSION, et al., Defendants. / TROY CAB, INC., et al., Plaintiffs, and AMERICAN TRUCKING ASSOCIATIONS, INC. and pegrenel = TNT HOLLAND MOTOR -15631- EXPRESS, INC., OPINION Intervening Plaintiffs, -VS- STATE OF MICHIGAN, et al., Defendants. / La App. 37 Before the Court in these consolidated class actions are three motions for partial summary disposition brought by Plaintiffs and Intervening Plaintiffs. All Plaintiffs collectively challenge the constitutionality and lawfulness of certain fees imposed on the trucking industry by Michi- gan statutes as administered by the Public Service Com- mission. The constitutional challenges are brought under both the federal and state constitutions, although those brought under Michigan fundamental law are not the subject of these motions. The nonconstitutional claims are predicated on federal statute and assert that the chal- lenged fees violate such supreme law and thus must be enjoined. The fees here challenged are mandated by Michigan’s Motor Carrier Act (MCA or Act), 1933 PA 254 as amended, MCL 475.1, et seq; MSA 22.531, et seq. They are three in number and are delineated in two sections of article IV of the Act. First there is the intrastate authority fee of $100.00 required when submitting to the Public “ervice Commis- sion (PSC or Commission) an application “or a certificate of authority or a permit, whether granted or © ot. That application fee is authorized by article IV, sectic » 1 of the Act, MCL 478.1; MSA 22.560. Second, section 2 of article IV, MCL 478.2; MSA 22.561, mandates annual fees of $100.00 for each motor vehicle operated by a motor carrier. Subsection (1) applies that requirement “for the administration of this act” to each vehicle used in intrastate service. Subsection (2) makes the same requirement applicable to each vehicle “registered in this state and operating entirely in inter- State commerce” by a “motor carrier licensed in this state.” App. 38 According to Plaintiffs, all three fees are unlawful because they, and especially the intrastate vehicle fee authorized by section 2(1), have been preempted by federal law. Further, they assert that the section 2(2) fee on each Michigan-registered vehicle operated entirely in interstate commerce by a Michigan-licensed motor carrier contra- venes another provision of federal law that created the Single State Registration System for motor carriers in interstate commerce. Finally, they complain also that the section 2(1) fee imposed on vehicles operated in intrastate service offends the dormant Commerce Clause of the United States Constitution by discriminating against foreign motor carriers operating substantially in interstate commerce. The Court will treat each claim in order, beginning with that on which Plaintiffs primarily rely. FEDERAL PREEMPTION Federal preemption has its erigin in the Supremacy Clause of US Const, art VI, which declares that the laws of the United States “shall be the supreme Law of the Land.” However, federal provisions that invalidate state law must be narrowly tailored to support a presumption against preemption of state law. Ryan v. Brunswick Corp, 454 Mich 20, 27; 557 NW2d 541 (1997). State police powers are not superseded by federal provisions unless that is the clear and unequivocal intent of Congress. Jd. This is especially true of state regulation of matters relating to health and safety. Jd. The plain meaning of federal provi- sions must be given effect unless there is reason to think Congress intended a more restrictive reading. Jd, p 28. Courts must seek the congressional intent from the text, structure and purpose of the federal provision as a whole. Id. Such considerations include “‘the way in which ee ee ee App. 39 Congress intended the statute and its surrounding regula- tory scheme to affect business, consumers, and the law.’” Id, quoting Medtronic, Inc v Lohr, 518 US _.) 2146 8 Ct 2240, 2251; 135 L Ed 2d 700 (1996). The Federal Aviation Administration Authorization Act of 1994 (FAAAA), PL 103-305, contains § 601, which added sub-section (h), “Preemption of State economic regulation of motor carriers,” to 49 USC 11501, subse- quently recodified as 49 USC 14501.’ By virtue of § 601, effective January 1, 1995, the FAAAA preempts state economic regulation of motor carriers by providing that a state “may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier ... or any motor private carrier with respect to the transportation of property.” 49 USC 11501 (h) (1), now recodified as 49 USC 14501 (c) (1). Such language clearly and expressly prohib- its a state from enacting or enforcing laws related to economic aspects of the service provided by a motor carrier. See Fitzpatrick v Simmons Airlines, Inc, 218 Mich App 689, 691; 555 NW2d 479 (1996). The question then becomes whether Michigan’s MCA is a law related to the price, route or service of a motor carrier. Jd. In Morales v Trans World Airlines, Inc, 504 US 374, 383; 112 S Ct 2031; 119 L Ed 2d 157 (1992), the United States Supreme Court concluded that, as used in a similar statute respecting the service of air carriers, the phrase ' The entirety of this preemption provision is quoted in Jn re Federal Preemption of Provisions of the Motor Carrier Act, 223 Mich App 288, 293-294; 566 NW2d 299 (1997), lv den 458 Mich 852 (1998). App. 40 “relating to” expressed a broad preemptive congressional purpose. See Jn re Federal Preemption of Provisions of the Motor Carrier Act, 223 Mich App 288, 300-301; 566 NW2d 299 (1997), lv den 458 Mich 852 (1998); Fitzpatrick, supra. Morales, p 384, determined that state laws having a “connection with” or “reference to” airline services were “related to” the federal act for purposes of preemption. See Fitzpatrick, p 692. Indeed, Morales, p 386, rejected the view that the federal act’s preemptive scope is limited to state laws specifically addressed to the air carrier indus- try, ruling instead that a state law may be preempted even if it is not designed to affect the area of preemption or its effect on that area is only indirect.’ Morales held, p 391, that a state law requiring truth-in-advertising of air fares was related to the price and service of carriers and was therefore preempted by the federal act. Accord American Airlines, Inc v Wolens, 513 US 219; 115 S Ct 817; 130 L Ed 2d 715, 724-725 (1995): state consumer fraud law is preempted where applied to rates and services of airline frequent-flyer programs. Thus, the Fitzpatrick court held, supra, that fidelity to the broad interpretation rendered by the United States Supreme Court in Morales required the conclusion that judicial enforcement of the Michigan Civil * On the other hand, Morales, p 390, left room for state actions “too tenuous, remote, or peripheral” to have preemptive effect — without, however, explaining what was meant by those terms of qualification or how they should be applied to “a borderline question.” Rather, Morales said only that “we express no views about where it would be appropri- ate to draw the line.” Jd, quoting Shaw v Delta Air Lines, Inc, 463 US 85, 100 n 21; 103 S Ct 2890; 77 L Ed 2d 490 (1983). PS VR neee ed De thd POPC end App. 41 Rights Act to protect against employment discrimination in the air carrier industry was likewise preempted.’ If federal legislation preempts some applications of the Michigan Civil Rights Act to the employment practices of air carriers in this state, as ruled in Fitzpatrick, then a fortiori the same preemptive effect of the FAAAA must apply to any economic regulation imposed on motor carriers by the MCA.* Thus, the question is whether the Michigan requirements challenged here, viz., the fees authorized by art IV, §§ 1 & 2 of the MCA, are manifesta- tions of economic regulation. If so, they are preempted. If not, they may still be preempted if related, no matter how indirectly, to the price, route or service of a motor carrier. See Morales, supra, p 386. However, where such indirect relationship is “too tenuous, remote, or peripheral” to * That ruling was recently limited by Gilman v Northwest Airlines, Inc, 230 Mich App 293, 303-304; ___§ NW2d ____ (1998), which held that the same federal statute does not preempt the Michigan Civil Rights Act prohibitions of age and sex discrimination because those employee characteristics have no apparent connection or relation to an airline’s routes, prices or services. Gilman, at 298-300, distinguished Fitz- patrick, supra, which had dealt only with height and weight discrimina- tion in employment. ‘The PSC acknowledges such preemptive effect on specific provisions of the MCA and has ceased to enforc [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386001_1168%3A1. Public record. Not legal advice.