Pacific Telephone & Telegraph Co. v. Redevelopment Agency

Opinion

The central issue on this appeal is whether a telephone company must bear the cost of relocating underground facilities it maintains in street rights-of-way where relocation is necessitated by

While the right granted to a telephone company by Public Utilities Code section 7901 has often been termed a “franchise” (Pac. Tel. & Tel. Co. v. City & County of S.F., 51 Cal.2d 766 , 770-771 [ 336 P.2d 514 ]; Pac. Tel. & Tel. Co. v. City of Los Angeles, 44 Cal.2d 272 , 276 [ 282 P.2d 36 ]; Western Union Tel. Co. v. Hopkins, 160 Cal. 106 , 119 [ 116 P. 557 ]), it is not a grant of a proprietary interest in the street (County of L.A. v. Southern Cal. Tel. Co., 32 Cal.2d 378 , 387 [ 196 P.2d 773 ]; Pacific Tel. & Tel. Co. v. City & County of San Francisco, 197 Cal.App.2d 133 , 154 [ 17 Cal.Rptr. 687 ]). The utility acquires only a limited right to use the streets to the extent necessary to furnish communication services to the public (County of L.A. v. Southern Cal. Tel. Co., supra, 32 Cal.2d 378 , 387; Pacific Tel. & Tel. Co. v. City & County of San Francisco, supra, 197 Cal.App.2d 133 , 154), and the franchise is subject to an implied obligation to relocate the facilities when necessary to make way for a proper governmental use of the streets (Pacific Tel. & Tel. Co. v. City & County of San Francisco, supra, 197 Cal.App.2d 133 , 154; see L.A. County Flood Control Dist. v. Southern Cal. Edison Co., supra, 51 Cal.2d 331 , 334; Southern Cal. Gas Co. v. City of L.A., supra, 50 Cal.2d 713 , 716.)

In light of the nature of the utility’s franchise or privilege, sections 33391 and 33395 cannot be construed to mean that relocation may be required only through exercise of the power of eminent domain or that compensation must be paid as though compelled by the federal and state Constitutions. Section 33391 is merely a provision empowering a redevelopment agency to exercise the power of eminent domain without which the power could not be exercised. (City of Beaumont v. Beaumont Irr. Dist., 63 Cal.2d 291 , 293 [ 46 Cal.Rptr. 465 , 405 P.2d 377 ]; County of Marin v. Superior Court, 53 Cal.2d 633 , 636 [ 2 Cal.Rptr. 758 , 349 P.2d 526 ]; People v. Superior Court, 10 Cal.2d 288 , 295-296 [ 73 P.2d

Although the Legislature may grant a utility the right to compensation for relocating its facilities to accommodate a proper governmental use of the street, such right should not be deemed to have been given unless the Legislature specifically so provides. (Southern Cal. Gas. Co. v. City of L.A., supra, 50 Cal.2d 713 , 719; First Nat. Bank of Boston v. Maine Turnpike Auth., 153 Me. 131 , 152 [ 136 A.2d 699 , 711]; Consolidated Edison of New York v. Lindsay, 24 N.Y.2d 309 [ 300 N.Y.S.2d 321 , 248 N.E.2d 150 ,154]; Appalachian Power Co. v. City of Huntington, —W.Va.— [ 210 S.E.2d 471 , 475].) The sections of the Community Redevelopment Law on which PT&T bases its claim do not, either singly or collectively, manifest a legislative will that a-utility be compensated for relocating facilities maintained in a public street pursuant to Public Utilities Code section 7901.

PT&T’s contention is similar to another utility’s unsuccessful argument in L.A. County Flood Control Dist. v. Southern Cal. Edison Co., supra, 51 Cal.2d 331 . There, the Southern California Edison Co. based its

“Therefore, if the relocating costs had been incurred as a result of an exercise of governmental power by the redevelopment agency (through an eminent domain proceeding or by a taking established as compensable in an inverse condemnation action) EBMUD would have been entitled to recover. . . .” (East Bay Muni. Utility Dist. v. Richmond Redevelopment Agency, supra, 51 Cal.App.3d 789 , 794.)

We would first observe that the East Bay court nevertheless affirmed the judgment denying recovery from the redevelopment agency for the utility district’s cost of relocating its water mains. (Id., at p. 795.) The reviewing court held that the trial court’s implied finding that relocation was not occasioned by the exercise of the agency’s power of eminent domain was supported by the record in that it appeared the utility had intended to replace its existing water main with a larger line, its engineers had planned the relocation, the redevelopment agency was never apprised of the cost of relocation, there was no resistance to the planned relocation and a claim for compensation was never filed. (Id., at pp. 794-795.) Thus, the quoted language is dictum.

In any event while we have the highest regard for the author of the East Bay opinion, for reasons heretofore stated, we respectfully decline to share the view expressed in the court’s dictum.

Nor are we persuaded by the cases from other jurisdictions cited by the East Bay court. In the cited cases, relocation costs were held to be compensable either because of the particular language of the state statute or redevelopment ordinance or on the theoiy that it was somehow unfair to require the utility to bear relocation costs where the urban renewal or

Other out-of-state cases which we believe to be better reasoned have held that a utility must bear the expense of a utility relocation necessitated by an urban renewal or redevelopment project. (Southern Union Gas Co. v. City of Artesia, 81 N.M. 654 [ 472 P.2d 368 , 369-370]; Consolidated Edison of New York v. Lindsay, supra, 24 N.Y.2d 309 [ 248 N.E.2d 150 , 153-154]; New York Telephone Co. v. City of Binghamton, 18 N.Y.2d 152 [ 272 N.Y.S.2d 359 , 219 N.E.2d 184 , 188]; Bristol Tennessee Housing Auth. v. Bristol Gas. Corp., 219 Tenn. 194 [ 407 S.W.2d 681 , 682-683]; Appalachian Power Co. v. City of Huntington, supra, 210 S.E.2d 471 , 475.)

PT&T maintains, however, that apart from the Community Redevelopment Law it is entitled to recover relocation expenses because the city and the agency were acting in a proprietary capacity. This contention must also be rejected.

The labels “governmental function” and “proprietary function” are of dubious value in terms of legal analysis in any context. The classification has been employed primarily in the tort field as a judicial technique for determining questions of common law governmental immunity. The distinction was, as Professor Van Alstyne observes, manifestly unsatisfactory: “It offered no solid grounds for prediction, invited test litigation, operated in a fortuitous and erratic fashion, and had little relevance to either the social need for risk distribution or the economic feasibility of shifting from the injured individual to the public treasury losses due to serious injuries. The eradication of the distinction from the governmental immunity doctrine was attributed in Muskopf to the fact that it operated both ‘illogically’ and ‘inequitably.’ Muskopf v. Corning Hosp. Dist. (1961) 55 C2d 211, 216, 11 CR 89, 92.” (Van Alstyne, Cal. Government Tort Liability (Cont.Ed.Bar 1964) § 1.17, p. 19.)

The classification is not a serviceable tool for decision making in the present context. “The distinction between ‘governmental function’ and ‘proprietary function’ is a sort of abstraction difficult to make meaningful in a day when municipalities continually find new ways to exercise police power in their efforts to cope with the pressing needs of their citizens.” (New York Telephone Co. v. City of Binghamton, supra, 18 N.Y.2d 152 [ 219 N.E.2d 184 , 186].) A utility’s right to compensation should depend, not on whether municipal activity is “governmental” or “proprietary,” but on whether compensation has been required by the Legislature, or whether there has been a constitutionally compensable taking or damaging of a valuable property right.

PT&T urges that City of Los Angeles v. Los Angeles Gas & Electric Corp., 251 U.S. 32 [ 64 L.Ed. 121 , 40 S.Ct. 76 ], and Postal Tel. Cable Co.

However, in this day and age it is too late to quarrel with the proposition that elimination of urban blight by acquiring and clearing areas so infected and converting them into sites for commercial and industrial development is a legitimate governmental function. (New York Telephone Co. v. City of Binghamton, supra, 18 N.Y.2d 152 [ 219 N.E.2d 184 , 187]; Bristol Tennessee Housing Auth. v. Bristol Gas Corp., supra, 407 S.W.2d 681 , 683.) To hold otherwise would be viewing “present day conditions under the myopic eyes of years now gone.” (Redevelopment Agency v. Hayes, 122 Cal.App.2d 777 , 803 [ 266 P.2d 105 ].) In New York Telephone Co. v. City of Binghamton, supra, the New York Court of Appeal held that it need not endorse or reject the “govemmentalproprietaiy” distinction drawn in In re Gillen Place, Borough of Brooklyn, etc., 304 N.Y. 215 [ 106 N.E.2d 897 ], cited in the East Bay court’s dictum and relied upon by PT&T, because “clearing, replanning and rehabilitation of substandard and insanitary areas is a public purpose separate in itself regardless of subsequent use of the property.” (New York Telephone Co. v. City of Binghamton, supra, 18 N.Y.2d 152 [ 219 N.E.2d 184 , 186-187].) We agree.

In this state, the Community Redevelopment Law contains the following legislative policy declaration: “(c) That the redevelopment of blighted areas and the provisions for appropriate continuing land use and construction policies in them constitute public uses and purposes for which public money may be advanced or expended and private property acquired, and are governmental functions of state concern in the interest of health, safety, and welfare of the people of the State and of the communities in which the areas exist.” (§ 33037, subd. (c), italics added.) While such legislative declarations are not binding on the courts, as statements of policy they are “entitled to great weight and it is not the duty or prerogative of the courts to interfere with such legislative finding unless it clearly appears to be erroneous and without reasonable

PT&T’s contention that it is entitled to compensation on the theory that the city and the agency were acting in a proprietary capacity is without merit.

The utility’s due process argument merits little consideration. PT&T urges that even if this court should conclude that relocation did not involve a “taking” or “damaging” of the utility’s property, it was nevertheless denied procedural due process because it was not afforded notice and an opportunity to be heard before being required to relocate. The only authority cited is Leppo v. City of Petaluma, 20 Cal.App.3d 711 [ 97 Cal.Rptr. 840 ]. Leppo is inapposite. That was an action for damages for the demolition of a building as a public nuisance. (Id., at p. 715.) The reviewing court held that absent an emergency, a municipality must give the owner notice and an opportunity to be heard before it may order demolition of a building as a public nuisance. (Id., at pp. 718-719.) As we have explained, in the case at bench there has been no taking or damaging of the utility’s property.

Furthermore, PT&T had ample opportunity tó be heard both on the scope and nature of the redevelopment plan as well as on the city’s intention to vacate the streets in question. PT&T did not allege that the city or the agency failed to comply with the notice and hearing requirements of the Community Redevelopment Law (§§ 33348, 33349, 33355, 33356, 33360-33363) or the provisions of the Streets and Highways Code pertaining to vacation of city streets (Sts. & Hy. Code, §§ 8322-8323). Nor does it contend it could amend its complaint to so

The judgment is affirmed.

Gardner, P. J., and McDaniel, J., concurred.

A petition for a rehearing was denied Januaiy 5, 1978, and appellant’s petition for a hearing by the Supreme Court was denied February 23, 1978.