On February 27, 2008, the Mackinac Center for Public Policy filed a brief of amicus curiae[*] with the Michigan Supreme Court in In re Complaint of Rovas Against SBC Michigan. Superficially, this case is about a mundane issue: whether it was proper for SBC to charge $71 for a service call. But the case may prove to be extremely important because the Court will likely clarify how closely courts should review the actions of Michigan's administrative agencies. This in turn will determine how much power such agencies can wield. In its amicus brief, the Mackinac Center sought a standard that would curb agency power by allowing rigorous judicial review of agencies' legal determinations.
The case arose when a household served by SBC experienced 10 days of phone trouble. On a service visit, the SBC technician could not find a problem with the outside line, so he concluded that the problem was with the line inside their house. Because the phone company has no duty to maintain the line inside the house, SBC charged the customers $71 for the service call. (There would have been no charge if the problem had been with the outside line). In fact, the technician had erred, and the problem was with the outside line.
The customers filed a complaint with the Michigan Public Service Commission (MPSC). They charged in part that SBC's misdiagnosis violated MCL 484.2502(1)(a), which prohibits the company from making "false, misleading, or deceptive" statements. After reviewing the case, the Administrative Law Judge recommended a finding that a misdiagnosis is not a "false" statement. The MPSC, however, concluded that what had occurred was more than a simple misdiagnosis and that SBC's actions constituted a "false" statement. The agency fined the company $15,000.
SBC contested this ruling in the Michigan Court of Appeals. The court subsequently noted two possible meanings of "false" in MCL 484.2502(1)(a): (1) wrong with the intent to mislead; and (2) wrong without the intent to mislead. The court found that the technician did not intend to mislead - he merely made a mistake. The court stated that if it were analyzing the issue anew, it would have interpreted the statute as employing the first definition of "false" and held that SBC did not violate the law. The MPSC, however, had chosen the second definition and consequently held that SBC violated the statute. The court affirmed the MPSC's ruling, claiming that courts are obligated to defer to the agency's interpretation of the statute.
The Michigan Supreme Court granted review, asking the parties and interested amici to address several questions, including "what legal framework appellate courts should apply to determine the degree of deference due an administrative agency in its interpretation of a statute within its purview." The Mackinac Center's brief focused entirely on this question.
The Michigan Supreme Court decided the case in July 2008. The justices held that the rulings of state agencies should not receive deference from the courts and that the Michigan judiciary hence plays an integral role in reviewing the legality of agency actions. The ruling places a direct check on the power of state agencies to interpret and to act upon laws passed by the Michigan Legislature.
The decision is a landmark in Michigan jurisprudence, particularly since it diverges from federal jurisprudence, which grants almost unlimited power to federal agencies in implementing laws passed by Congress. The court's ruling was substantially in agreement with the arguments presented in this brief.
[*] "Amicus curiae" means "friend of the court." Thus, the Mackinac Center is not a litigant in this case, but rather an interested observer supplying additional legal reasoning for the Michigan Supreme Court to consider.
