Case Name: ATTORNEY GENERAL v. CONSUMERS POWER COMPANY (ON REHEARING)
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1993-09-21
Citations: 202 Mich. App. 74
Docket Number: Docket No. 135168
Parties: ATTORNEY GENERAL v CONSUMERS POWER COMPANY (ON REHEARING)
Judges: Before: Weaver, P.J., and McDonald and Neff, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 202
Pages: 74–81

Head Matter:
ATTORNEY GENERAL v CONSUMERS POWER COMPANY (ON REHEARING)
Docket No. 135168.
Submitted November 5, 1992, at Lansing.
Decided September 21, 1993, at 9:10 A.M.
Submitted on rehearing October 12, 1993; Decided on rehearing October 14, 1993, at 9:00 A.M.
Leave to appeal sought.
The Attorney General, on behalf of the State of Michigan and on the relation of the Natural Resources Commission, the Department of Natural Resources, and the Director of the Department of Natural Resources, brought an action in the Ingham Circuit Court against Consumers Power Company and Detroit Edison Company, the holders of a federal license pursuant to the Federal Power Act, 16 USC 791a et seq., for the operation of a hydroelectric plant on the shore of Lake Michigan at Ludington. The plaintiff alleged that operation of the plant has caused the death of a substantial number of fish and the discharge of dead fish and fish parts into the lake. The plaintiff sought damages for the destruction of fish and to have declared void a lease between the state and the defendants because of certain breaches of the terms of the lease by the defendants. The court, Carolyn Stell, J., granted summary disposition for the defendants, finding the claims to be preempted by the Federal Power Act. The Attorney General appealed. The Court of Appeals, Weaver, P.J., and McDonald and Neff, JJ., issued an opinion per curiam on September 21, 1993, affirming in part, reversing in part, and remanding the matter to the circuit court for further proceedings. On October 12, 1993, the Court of Appeals, on its own motion, granted rehearing of the matter.
On rehearing the Court of Appeals held:
1. The Federal Power Act does not preempt state-law claims by the Attorney General against the defendants for negligent destruction or conversion of fish resources held in trust by the state for the people of the state. 16 USC 803(c) provides that licensees are liable for all damages occasioned to the property of others by the construction, maintenance, or operation of the licensees’ projects.
References
Am Jur 2d, Public Utilities § 294 et seq.
See ALR Index under Property Damage; Utilities.
2. Inasmuch as the Attorney General has conceded that the Federal Power Act prevents him from enjoining the defendants’ operation of the plant, a grant of the declaratory relief requested would conflict with the act because the defendants effectively would be prevented from operating the plant.
3. The trial court did not err in ruling that the Attorney General is limited by the statute of limitations, MCL 600.5805(8); MSA 27A.5805(8), to recovering damages incurred no more than three years before the action. In the absence of sufficient evidence that the defendants concealed the cause of action or induced the plaintiff to delay commencement of the action, the defendants are not estopped from asserting the statute of limitations.
Affirmed in part, reversed in part, and remanded.
Public Utilities — Power Plants — Damage to Property of Others — Federal Power Act.
The Federal Power Act expressly allows an owner of property damaged by the operation of a power plant of a utility licensed under the act to recover for damages incurred, subject to the limitation of state tort laws (16 USC 803[c]).
Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, and A. Michael LeiHer and Stanley F. Pruss, Assistant Attorneys General, for the plaintiff.
Honigman Miller Schwartz & Cohn (by Robert A. Fineman, Joseph M. Polito, and Daniel R. Perk), and Arunas T. Udrys, and John H. Flynn, for the defendants.
Amicus Curiae:
Mark Van Putten, for National Wildlife Federation, Michigan United Conservation Clubs, Wisconsin Wildlife Federation, Illinois Wildlife Federation, Indiana Wildlife Federation, Great Lakes Sport Fishing Council, and American Rivers.
ON REHEARING
Before: Weaver, P.J., and McDonald and Neff, JJ.

Opinion:
Per Curiam.
In 1969, the Federal Power Commission, now Federal Energy Regulatory Commission (ferc), granted defendants a license to construct and operate a hydroelectric plant on the shore of Lake Michigan, pursuant to the Federal Power Act (fpa), 16 USC 791a, et seq. On July 1, 1970, the State of Michigan executed a fifty year lease with defendants for ninety-eight acres of Lake Michigan bottom lands to accommodate construction of the plant. The hydroelectric plant commenced operation in 1973. On the basis of defendants' own studies, the federal courts have recognized that a "substantial number" of fish are killed and discharged into Lake Michigan as a result of the plant's operation. (See footnote 1.)
On September 3, 1986, plaintiff commenced the instant suit. Plaintiff alleged that defendants had violated the terms of the federal license and the lease with the State of Michigan. Plaintiff further alleged that defendants had unlawfully destroyed fish resources of the State of Michigan and had maintained a public nuisance by discharging fish parts into Lake Michigan. Plaintiff sought compensation for the fish destroyed by the plant. Plaintiff also sought to have the lease declared void for defendants' alleged violations of law. In an order entered on November 8, 1990, the court granted defendants' motion for summary disposition pursuant to MCR 2.116(C)(8), finding that plaintiff's claims were preempted by the fpa. Plaintiff now appeals as of right. We affirm in part, reverse in part, and remand for further proceedings. We do not retain jurisdiction.
i
The first issue is whether plaintiffs state-law claims for damages were preempted by the fpa.
We initially note that plaintiff properly pleaded a cause of action for negligent destruction of state property or for conversion. See Attorney General v Hermes, 127 Mich App 777; 339 NW2d 545 (1983). Because the fish resources destroyed by the plant are held in trust by the state for the people, the state is empowered to bring a civil action to protect those resources. Id.
State law may be preempted by federal law in three ways: (1) Congress may expressly do so through statutory language; (2) the state law may regulate conduct in a field that Congress intended for the federal government to exclusively occupy; or (3) the state law may conflict with federal law. English v General Electric Co, 496 US 72, 78-79; 110 S Ct 2270; 110 L Ed 2d 65 (1990). The presumption is that powers historically belonging to the states are not preempted by federal legislation unless that is the clear and manifest purpose of Congress. Puerto Rico Dep't of Consumer Affairs v Isla Petroleum Corp, 485 US 495; 108 S Ct 1350; 99 L Ed 2d 582 (1988).
The trial court found plaintiffs damage claim for destruction of fish resources was preempted because it was not the type of action that § 27 of the fpa, 16 USC 821, preserved from preemption. That section reads as follows:
Nothing contained in this chapter shall be con strued as affecting or intending to affect or in any way to interfere with the laws of the respective States relating to the control, appropriation, use, or distribution of water used in irrigation or for municipal or other uses, or any vested right acquired therein.
However, § 10 of the fpa, 16 USC 803(c), preserves the right to bring an action for damages, reading in pertinent part:
Each licensee hereunder shall be liable for all damages occasioned to the property of others by the construction, maintenance, or operation of the project works or of the works appurtenant or accessory thereto, constructed under the license, and in no event shall the United States be liable therefor.
Thus, the question is whether § 821 limits the actions that can be brought under § 803(c). We find that it does not.
In South Carolina Public Service Authority v Federal Energy Regulatory Comm, 271 US App DC 95; 850 F2d 788 (1988), the court held that Congress did not grant the ferc the authority to encroach upon state tort law, and held that the liability of the commission's licensees for damages caused by their projects is a matter left by Congress to state law. In Public Utility Dist No 1 of Pend Oreille Co v Seattle, 382 F2d 666 (CA 9, 1967), cert den 396 US 803 (1969), the court noted that "it is § 10(c) [16 USC 803(c)] of the Act which requires compensation for the taking of state-created property rights, and § 27 [16 USC 821] serves simply to bring water rights clearly within the scope of § 10(c) [16 USC 801(c)]." Seattle, supra at 670, n 6.
We conclude that § 10 of the fpa expressly al lows an owner of property damaged by a federal licensee to recover for all damages incurred, including those expressly saved by § 27, subject to the limitations of state tort laws.
Accordingly, we hold that plaintiffs state-law claim against defendants for negligent destruction or conversion of the fish destroyed by the Ludington hydroelectric plant has not been preempted by the fpa.
ii
The second issue raised by plaintiff is whether the claims under the lease between the state and Consumers Power have been preempted by the FPA.
Before the plant was constructed, the parties entered into a lease whereby defendants had the exclusive use of the Lake Michigan bottom lands for the construction and operation of the plant. Plaintiff alleged in counts n and m of the complaint that defendants had breached certain covenants contained in the lease, and plaintiff asked that the lease be declared void.
The parties have not presented any part of the fpa that expressly prohibits a lessor from bringing a declaratory action with regard to its lease with a federal licensee. Nor have we found any authority for the proposition that Congress intended the fpa to exclusively occupy the field regarding a licensee's contractual relationships. Accordingly, plaintiffs claims are preempted only if the law of Michigan regarding leases conflicts with the fpa. English v General Electric Co, 496 US 72; 110 S Ct 2270; 110 L Ed 2d 65 (1990).
If a state court were to find that defendants had breached the lease terms and declared the lease void, the state, as lessor, could either allow the plant to operate under a month-to-month tenancy or bring summary proceedings to evict defendants under MCL 600.5701 et seq.; MSA 27A.5701 et seq.
A state law conflicts with federal law when it "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." English, supra at 79.
Plaintiff has conceded that the fpa prevents him from enjoining defendants' operation of the plant. Evicting defendants while the defendants have a valid license from the Federal Power Commission to operate the plant would accomplish the same purpose. We conclude the declaratory relief requested by the plaintiff, that the lease be declared void, would conflict with the fpa. Thus, the court did not err in granting defendants' summary disposition with regard to plaintiff's lease claims. We are not holding that no action under the lease can be brought in state court, only that the plaintiff cannot bring an action asking that the lease be declared void.
hi
Finally, plaintiff argues that the trial court erred in finding that his claims for damages would be limited to those damages incurred no more than three years before the institution of this action. Plaintiff argues defendants should be es-topped from asserting the statute of limitations.
Defendants raised the three-year statute of limitations, MCL 600.5805(8); MSA 27A.5805(8), to plaintiff's claim for damages (see issue i). Plaintiff countered by claiming that defendants were es- topped from raising the statute of limitations because they made representations to plaintiff that they would correct the fish-kill problem and would compensate the state for its losses.
There is no question that a defendant may, by its conduct, be estopped from asserting a statute of limitations as a defense. Lothian v Detroit, 414 Mich 160; 324 NW2d 9 (1982). However, as the court found, there was nothing to show that defendants had either concealed the cause of action, misrepresented the length of the statute of limitations, or induced the plaintiff into not bringing the action at an earlier time. Robinson v Associated Truck Lines, Inc, 135 Mich App 571; 355 NW2d 282 (1984). A review of the record convinces us that there was insufficient evidence to support plaintiffs claim of estoppel. The court did not err in granting summary disposition on this ground.
Affirmed in part, reversed in part, and remanded.
For a detailed explanation of the plant and its operation see Nat'l Wildlife Federation v Consumers Power Co, 862 F2d 580 (CA 6, 1988), and Nat'l Wildlife Federation v Consumers Power Co, 657 F Supp 989 (WD Mich, 1987).
We note that we see no such impediment to allowing plaintiffs to obtain a prospective declaration voiding the lease upon (1) the expiration of the current license, (2) the revocation or annulment of the current license, or (3) the abandonment of the project by Consumers, whichever of the three occurs first.