Opinion ID: 839160
Heading Depth: 2
Heading Rank: 2

Heading: THE PSC'S CONSTRUCTION OF MCL 484.2502(l)(a)

Text: The majority purports to review the PSC's construction of MCL 484.2502(1)(a) de novo. As it acknowledges, the PSC never specifically interpreted the meaning of the phrase false, misleading, or deceptive in its decision. [10] But it did apply the statute to the facts of the case, as it is entitled to do in the case of an unambiguous statute. [11] The meaning that the PSC accorded to the phrase false, misleading, or deceptive can be inferred indirectly from the legal conclusions it drew from the facts. Although the majority recites the PSC's legal conclusions, it does not review them independently. Rather, it relies on the review of them made by the first Court of Appeals panel, and, in so doing, it repeats that panel's mistakes. [12] The majority reviews the decision of the first Court of Appeals panel de novo, but it does not directly review the decision of the PSC. The first Court of Appeals panel concluded that the PSC understood false to mean not true or correct and, consequently, deemed a false statement to mean a simple mistake. [13] In essence, the panel assumed that the PSC interpreted MCL 484.2502(1)(a) as imposing strict liability for any inaccurate statement, no matter how innocently made. The majority adopts this erroneous interpretation of the agency's decision. [14] It concludes that the PSC's statutory interpretation is erroneous because, in the phrase false, misleading, or deceptive, which is its proper context, the word false does not mean untrue. The majority concludes that it means  intentionally false or intended to deceive. [15] It derives its interpretation of false from the dictionary definitions of the words misleading and deceptive. [16] But the majority's conclusion that the statute refers to untrue statements made with an intent to deceive falls short of the mark. This occurs because it collapses two distinct elements of deceit into the phrase intent to deceive: (1) knowledge or reckless disregard of the falsity of a statement and (2) intent that the statement cause detrimental reliance. Deceit, also known as false or fraudulent misrepresentation, is a legal term of art with a long history in the common law. Legal terms of art are generally accorded their established meaning in the law. [17] In addition, statutes are construed so as not to abolish by implication well-settled common-law principles. [18] Black's Law Dictionary defines fraudulent misrepresentation as [a] false statement that is known to be false or is made recklesslywithout knowing or caring whether it is true or falseand that is intended to induce a party to detrimentally rely on it. [19] In Michigan, fraudulent representation requires (1) [t]hat defendant made a material representation; (2) that it was false; (3) that when he made it he knew that it was false, or made it recklessly, without any knowledge of its truth and as a positive assertion; (4) that he made it with the intention that it should be acted upon by plaintiff; (5) that plaintiff acted in reliance upon it; and (6) that he thereby suffered injury.[ [20] ] As these definitions make clear, the intent element of deceit consists of (1) knowledge of falsity or reckless disregard of the truth or falsity of a statement, and (2) an intent that a person detrimentally rely on the statement. The PSC's decision shows that the agency did apply the statute according to the established rules for false representation. The PSC applied the statute to the following facts: (1) the customers were told that the $71 service fee would be applied only if the problem was caused by inside wiring, (2) without so much as entering the home, the technician left a tag stating that the problem was with the inside wiring and the customers owed a $71 service fee, and (3) the customers subsequently received a $71 bill for the service call, even though, in the meantime, SBC had made several repairs to its own network that solved the customers' problem. The PSC expressly stated that the $71 service fee did not result from a simple misdiagnosis. Rather, it concluded that SBC's propensity for assuming that the problem is with the inside wiring whenever a service technician finds a dial tone at the network interface, and for assessing the $71 charge without first verifying that the problem actually arises from within the customer's premises can lead to repeated violations of the MTA. Because the PSC expressly declined to characterize the problem as a simple misdiagnosis, it is clear that it did not interpret the statute as imposing strict liability for simple mistakes. It deemed SBC's statements false because SBC initially imposed the $71 service fee without knowing that the problem the customers had complained of originated inside the customers' home. And it reimposed the fee after it ascertained that the problem was in its own network, not inside the home. These statements were made with at least a reckless disregard of their truth or falsity. They were made with an intent to cause the customers to pay the $71 service fee in reliance on SBC's representations that the problem originated inside the home. Thus, they were made with an intent to deceive. Had the PSC expressly interpreted the statute, or had it stated its conclusions differently, it might have avoided the confusion its decision has engendered. However, it cannot be seriously faulted for not specifically stating that it applied the statute according to the rules of deceit. Those rules are well established and clearly deducible from the agency's legal conclusion. The agency concluded that SBC assumes that a problem arises inside a customer's home without sufficiently testing its own network and without verifying that the problem is inside the home. The underlying premise of this conclusion is that SBC charges the service fee regardless of its lack of knowledge of the true origin of the customer's loss of service. Such a charge is in reckless disregard of the truth or falsity of its assumption that the problem is inside the home. [21] The Court misconstrues the agency's application of the statutory provision, and a misconstruction cannot constitute a cogent reason for overturning an agency's ruling.