BOSTON GAS COMPANY v. CITY OF NEWTON, 425 Mass. 697 (1997)

682 N.E.2d 1336

Supreme Judicial Court of Massachusetts. Suffolk.April 7, 1997.
August 14, 1997.

Present: Wilkins, C.J., Abrams, Lynch, Greaney, Fried, JJ.

Constitutional Law, Home Rule Amendment. Municipal Corporations, Home rule, By-laws and ordinances, Fees. Public Utilities, Energy company. Gas Company. A city ordinance assessing a fee on public utilities as a prerequisite to acquiring a permit to excavate public ways and sidewalks, for the purpose of recovering future maintenance costs on account of the reduction in the useful life of a street caused by such excavations, was inconsistent with the provisions of G.L.c. 164, § 70, and thus was invalid under § 6 of art. 89 of the Amendments to the Massachusetts Constitution. [699-701] A city ordinance assessing a fee on public utilities as a prerequisite to acquiring a permit to excavate public ways and sidewalks, for the purpose of reimbursing the city for costs incurred in inspecting the excavation sites, was inconsistent with the provisions of G.L.c. 164, § 70, and thus was invalid under § 6 of art. 89 of the Amendments to the Massachusetts Constitution. [701-706] A city ordinance assessing a fee on public utilities as a prerequisite to acquiring a permit to excavate public ways and sidewalks, for the purpose of reimbursing the city for its costs in processing permit applications, is not inconsistent with G.L.c. 164, § 70. [706-707]

CIVIL ACTION commenced in the Superior Court Department on September 11, 1992.

The case was heard by Gordon L. Doerfer, J., on motions for summary judgment.

The Supreme Judicial Court granted an application for direct appellate review.

Steven W. Phillips (Michael I. Joachim with him) for the plaintiff.

Frances E. Balin, Assistant City Solicitor, for the defendant.

The following submitted briefs for amici curiae:

Scott Harshbarger, Attorney General, Thomas A. Barnico, Assistant Attorney General, for the Department of Public Utilities.

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Paul K. Connolly, Jr., Eileen M. Fava for the Massachusetts Natural Gas Council.

Albert S. Robinson, Town Counsel, James A. Goodhue for the Town of Wellesley.

David M. Moore for the Massachusetts Municipal Association.

LYNCH, J.

The plaintiff filed an action for declaratory relief pursuant to G. L. c. 231A, arguing that § 26-11 of the Revised Ordinances of Newton, as amended by Newton Ordinance No. T-161, was preempted by State law and constituted an improper tax. On cross motions for summary judgment, a Superior Court judge allowed the city of Newton’s (city) motion. The plaintiff appealed. We granted the city’s application for direct appellate review.

The following facts are undisputed. The ordinance at issue imposes a monetary cost on public utility companies such as the Boston Gas Company as a prerequisite to acquiring a permit to excavate public ways and sidewalks in the city. Under the ordinance, a party seeking a permit to excavate a public way is charged an application fee of $25. In addition, for an excavation of one hundred square feet or less, an “Inspection and Maintenance” fee of $150 is imposed. For each additional one hundred square feet or portion thereof, an additional $50 is charged. The ordinance also imposes an inspection and maintenance fee of $50 for “shut-off holes” and a fee of $10 each for “corings.”[1] The city based the charges on the costs it incurs in issuing permits and in inspecting the excavations. The city maintains that the fee structure also takes into account the reduction in the useful life of streets and sidewalks caused by openings into their surfaces.[2] [3]

The plaintiff contends that the ordinance is invalid under § 6 of art. 89 of the Amendments to the Massachusetts Constitution

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(Home Rule Amendment) because it is inconsistent with G. L. c. 164, the State’s regulatory scheme for public utilities, including gas companies, and regulations of the Department of Public Utilities (department).[4] We agree that the portion of the ordinance charging inspection and maintenance fees is invalid; we conclude, however, that the city is entitled to charge a fee based on its administrative costs incurred in the issuance of permits.

Discussion. Municipalities may not adopt by-laws or ordinances that are inconsistent with State law. Boston Gas Co. v. Somerville, 420 Mass. 702, 703 (1995), and cases cited. “To determine whether a local ordinance is inconsistent with a statute, this court has looked to see whether there was either an express legislative intent to forbid local activity on the same subject or whether the local regulation would somehow frustrate the purpose of the statute so as to warrant an inference that the Legislature intended to preempt the subject.” Id. at 704. Accor Bloom v. Worcester, 363 Mass. 136, 155 (1973). “Moreover, in some circumstances we can infer that the Legislature intended to preempt the field because legislation on the subject is so comprehensive that any local enactment would frustrate the statute’s purpose.” Boston Gas Co. v. Somerville, supra. Accor Wendell v. Attorney Gen., 394 Mass. 518, 527-528 (1985); New England Tel. Tel. Co. v. Lowell, 369 Mass. 831, 834-835 (1976). We have stated that the purpose of G. L. c. 164 is to ensure uniform and efficient utility services to the public. Boston Gas Co. v. Somerville, supra at 706. See also New England Tel. Tel. Co. v. Lowell, supra at 834 (emphasizing “the desirability of uniformity of standards applicable to utilities regulated by the Department of Public Utilities”). We consider, therefore, whether the ordinance, which imposes a fee based on three separate considerations, is inconsistent with G. L. c. 164, such that it interferes with uniform and efficient utility services.

Maintenance. General Laws c. 164, § 70, imposes an affirmative obligation on the plaintiff to restore all streets, lanes, and highways to the condition they were in prior to being

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opened.[5] The ordinance, however, assesses a fee based on the city’s calculation that street life is reduced twenty-five per cent by excavations. While the city argues that it is entitled to recover such future costs as property damage under G. L. c. 164, § 75,[6] the logical corollary of the city’s argument is that it is all but impossible for the plaintiff to restore a street that has been the site of an excavation to its former condition and the plaintiff must therefore be made to pay for the diminished value. This assumption is contrary to that of the Legislature because the statute assumes that a street can and should be restored to its former condition. See G. L. c. 164, § 70. Therefore, imposing a cost on the plaintiff based on the reduction in street life caused by the excavation is inconsistent with the statute. See Boston Gas Co. v. Somerville, supra at 705 (requirement of ordinance that plaintiff maintain excavation site for three years inconsistent with statute); Seltzer v. Amesbury Salisbury Gas Co., 188 Mass. 242, 244 (1905) (construing predecessor to G. L. c. 164, § 70, and stating that “the statute has reference simply to a temporary condition of things, existing while the work is going on, and extending only so long as may be reasonably necessary to put the road in its former condition”). Indeed, despite the fact that this charge must be paid at the time the permit is sought, it is inescapable that the cost the city seeks to impose will be incurred in the future.[7] By demanding that the plaintiff, through an upfront fee, in effect pay for the long-term

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maintenance of the street, the ordinance mandates something not required by the statute and is, therefore, inconsistent with, and preempted by, G. L. c. 164.[8] See Wendell v. Attorney Gen., supra
at 528-529 (holding by-law inconsistent because imposed conditions beyond those established by statute and exceeded authority of town’s board of health); New England Tel. Tel. Co. v. Lowell, supra.

Inspection. The city also argues that, even if the portion of the fee attributable to the reduction in street life is eliminated, costs incurred by the city in inspecting the excavation sites justify the fee. Thus, according to the city, the fees are reasonable regardless of whether the city permissibly may charge the plaintiff for the reduction in street life and are impliedly authorized by the statutory and regulatory scheme. We disagree.

In mandating that public utilities restore a street or highway to the condition it was in prior to any excavation, we believe that the statute can be fairly read as placing the burden of fulfilling such statutory duties squarely on the shoulders of the public utility. See G. L. c. 164, § 70. The statute implies, therefore, that the plaintiff, not the city, has the obligation to inspect excavation sites after the necessary repairs have been made. Moreover, the statute vests with the department, not the city, the authority to oversee the plaintiff and to ensure the safe and efficient distribution of gas. Where excavation is necessary in order to ensure the safe and efficient distribution of such gas to consumers and compliance with numerous Federal and State regulations, such excavation is inextricably linked with the distribution of gas.[9] See G. L. c. 164, § 105A.[10] See also New England LNG Co. v. Fall River, 368 Mass. 259, 265 (1975)

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(establishing “supremacy” of G. L. c. 164, § 105A, over G. L. c. 164, § 75); Pereira v. New England LNG Co., 364 Mass. 109, 120 (1973) (G. L. c. 164, § 105A, indicates that Legislature “intended to give, and did give . . . paramount power to the Department” to regulate and control storage, transportation, and distribution of gas).

It is true, as the city argues, that the statute does not expressly forbid the inspection process established by the city here. What the statute does prohibit is the imposition of the city’s inspection costs on the plaintiff and its customers. We reiterate our conclusion in Boston Gas Co. v. Somerville, supra at 704, however, that “[t]he manufacture and sale of gas and electricity by public utilities is governed by G. L. c. 164. Given [its] comprehensive nature . . . the Legislature intended to preempt local entities from enacting legislation in this area.” See Boston Edison Co. v. Boston, 390 Mass. 772, 774
(1984) (recognizing comprehensiveness of G. L. c. 164).[11]
The city, of course, attempts to distinguish Boston Gas Co. v Somerville, supra, and argues that this language in Somerville
cannot be read so broadly as to encompass the situation now before us; to the extent that the language was meant to encompass a situation like the one before us, the city argues that it is dictum and incorrect. We disagree. Concededly, the ordinance at issue in Somerville was

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more onerous in some respects.[12] However, it too regulated street and sidewalk openings, and we concluded that that ordinance was invalid. Id. at 704-705. Thus, in the instant case, the portion of the ordinance attributable to inspection costs, which in essence attempts to exert more control over the plaintiff than exercised by the department, may not stand.

In rejecting the city’s argument that imposition of such fees is consistent with § 75, we do not agree with its contention that we have “effectively repealed § 75.” We have recognized that § 75 provides limited authority to a municipality and must yield at times to the broader grant of authority given to the department. See Boston Gas Co. v. Somerville, supra at 705-706 New England LNG Co. v. Fall River, supra. Allowing the city to use § 75 to assess fees not authorized by, and indeed, inconsistent with, the statute, however, would impose an additional burden on the plaintiff, a burden which undermines the “fundamental State policy of ensuring uniform and efficient utility services to the public.” Boston Gas Co. v. Somerville supra at 706. See New England Tel. Tel. Co. v. Lowell, supra
at 834 (ordinance imposing additional burden on plaintiff which forced plaintiff to expend in particular district sums it was not required to expend elsewhere interfered with uniformity desirable in regulation of utilities throughout Commonwealth and was preempted).[13] We emphasize, however, that our conclusion

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that the inspection and maintenance fees charged by the city in this case are inconsistent with G. L. c. 164, § 70, and are, therefore, preempted is not based merely on the fact that the ordinance requires the plaintiff to expend sums of money.[14] Rather, it is based on the fact that the ordinance requires the plaintiff to expend money in a manner not authorized by, and indeed inconsistent with, particular provisions of the statute.

That § 70 requires the city’s consent before excavating a street does not mandate the conclusion that an inspection fee is permitted. See Wendell v. Attorney Gen., 394 Mass. 518, 524
(1985) (in considering whether by-law is inconsistent with statute, question is whether Legislature intended to deny municipality right to legislate on subject). The plaintiff has the statutory obligation to restore the street to its preexcavation condition but preexcavation or postexcavation inspection by the city at the expense of the plaintiff is not specifically or impliedly a statutory requirement.[15] Given the comprehensiveness of the statute and the remedies provided therein, we conclude that the statute does not permit a municipality to charge the fees

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in question.[16] [17]

Finally, the city argues that the department has enacted regulations which consider municipal inspection and permit fees as legitimate costs for gas companies which may then be recovered by the plaintiff by passing on such costs to its customers.[18]
According to the city, these regulations indicate that the fees imposed by it are consistent with, and not preempted by, G. L. c. 164. The department, in its amicus brief, contends that these regulations do not indicate approval of such costs but deal with the accounting system and are only intended to provide the department with information on the operations of gas companies and to aid its review of company costs. Where the allowance of

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inspection fees assessed by individual municipalities is inconsistent with the statutory purpose of uniform and efficient distribution of utility services, we would be reluctant to conclude that a regulation approving such fees was valid. See generally American Family Life Assur. Co. v. Commissioner of Ins., 388 Mass. 468, 477, cert. denied, 464 U.S. 850 (1983). However, we accept the department’s interpretation of its own accounting regulations as not constituting tacit approval of the fees in question. See Boston Police Superior Officers Fed’n v Boston, 414 Mass. 458, 462 (1993), quoting Northbridge v. Natick, 394 Mass. 70, 74 (1985) (“[a]n agency’s construction of its own rules and regulations `is one to which considerable deference is due'”).

Administrative costs. Finally, we consider whether a fee to reimburse the city for its costs in processing permit applications is within the contemplation of the statute. We have long held that a municipality required by statute to participate in a scheme established by statute is entitled to “cover reasonable expenses incident to the enforcement of the rules.” Southview Coop. Hous. Corp. v. Rent Control Bd. of Cambridge, 396 Mass. 395, 400 (1985), quoting Commonwealth
v. Plaisted, 148 Mass. 375, 382 (1889). While in the instant case the authority of a municipality is severely circumscribed, it is clear that a utility desiring to perform excavation work must seek the written consent of a municipality’s governing body. G. L. c. 164, § 70. Thus, costs incurred by the municipality in granting that written permission are recoverable expenses. The plaintiff has not contested the portion of the summary judgment materials demonstrating that the $25 fee attributed to such administrative costs is reasonable.[19] The judgment of the Superior Court is reversed in part and affirmed in part; the case is remanded for

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the entry of a judgment in favor of the plaintiff with respect to the portion of the ordinance imposing maintenance and inspection fees.

So ordered.

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