The procedural wrangling is impressive, the arguments are exhaustive but the bottom line is this: The Detroit International Bridge Co. (DIBC) is not a “federal instrumentality,” according to the 6th U.S. Circuit Court of Appeals in Commodities Export Co. v. Detroit Int’l Bridge Co.
In so ruling, the federal appeals court said a contrary holding by a unanimous Michigan Supreme Court, City of Detroit v. Ambassador Bridge Co., 748 N.W.2d 221, 223 (Mich. 2008), is owed “no deference.”
The ruling has its genesis in the mid-1990s, when DIBC and the Michigan Department of Transportation began working on a project to make the Ambassador Bridge easier to get to from the interstate freeways (MDOT’s job) and to beef up the bridge’s infrastructure (DIBC’s job).
DIBC received federal approval to build new toll plazas, a duty-free gas station and a weight station for trucks. But the city of Detroit balked at granting DIBC the necessary zoning variances. DIBC plowed ahead with construction. Detroit sued. The case made it to the MSC, which ruled in Ambassador Bridge Co. that DIBC was a “a federal instrumentality for the limited purpose of facilitating traffic over the Ambassador Bridge,” and thus immune from Detroit’s zoning ordinances.
Commodities Export Co. sued the federal government and Detroit about a year later, complaining that DIBC, flexing its federal instrumentality muscle, unilaterally condemned and closed the only road providing access to Commodities Export’s property. Commodities Export said Detroit failed to protect Commodities from DIBC’s actions and that the federal government failed to rein in its federal instrumentality, DIBC.
DIBC intervened in the suit. The federal government then filed a cross-claim against DIBC, alleging that contrary to DIBC’s representations and the MSC’s decision in Ambassador Bridge Co., DIBC “’is not a federal instrumentality, of any kind, or any other type of arm, appendage, servant, or agent whatsoever of the United States,’ and thus its ‘representations that it is any kind of federal instrumentality are contrary to federal law.’”
The federal government argued that as a result, it could not be held liable for any claim by Commodities’ Export for an unlawful, uncompensated taking of its property.
The federal district court sided with the federal government. The 6th Circuit affirmed.
The 6th Circuit cut through a thicket of jurisdictional arguments, abstention claims, and assertions that the MSC’s decision had preclusive effect. The federal appeals court determined there were no barriers to declaring that Ambassador Bridge Co. “is at most non-binding, persuasive authority, which we are free to follow or to reject[.]”
The 6th Circuit chose “reject.”
“[T]he Bridge Company bears none of the hallmarks of a federal instrumentality. It is a private, for-profit corporation, created by private individuals, not by the United States. … The government, moreover, does not control the Bridge Company’s day-to-day operations. … Nor does it even have a significant financial stake in the Bridge Company’s success.”
The 6th Circuit continued, “The Bridge Company, moreover, is a frequent adversary of the United States in litigation, and the Supreme Court has twice held that the Bridge Company is not immune from state taxation, which, of course, it would be if it were a federal instrumentality.”
The DIBC is viewed as all sorts of things, depending on who is doing the looking. But after today’s 6th Circuit decision, DIBC can’t be seen as an extension of the federal government.
The Michigan Lawyer 