CITIES ‑- FRANCHISE ‑- WATER COMPANIES ‑- RIGHTS ON TERMINATION.
Upon expiration of a franchise to operate a water company, a city may compel the company to remove its properties from the city streets.
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March 18, 1952
Honorable Bernard J. Gallagher
805 Sherwood Building
Spokane, Washington Cite as: AGO 51-53 No. 261
You have requested our opinion on the following proposition:
Does a municipal corporation have the power to require a privately owned public service corporation (water) either to remove its pipes, hydrants, and other equipment from the public streets and from other public property, or to prevent this private corporation from further giving service within the municipal corporation upon the expiration of the time for which the franchise was granted?
From additional information furnished by you pursuant to our request, it appears that there are no provisions in the expired franchise in question that would alter the general law in the matter.
It is our conclusion that the municipality may prevent the company from offering service within its limits to the extent that use of its streets and ways would be involved, and may compel the company within a reasonable time to remove the company's property and facilities from the streets therein.
The most often cited authority dealing with the rights of a city and a utility upon the expiration of the latter's franchise is the case of Detroit United Railway v. City of Detroit, 229 U.S. 39, 57 L.Ed. 1056.
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In the above case the court held that where a street railway franchise is for a fixed period of time and this time has expired and no renewal is granted, the city may require the railway company to remove its tracks within a reasonable time after the expiration of the franchise period. The Supreme Court in so holding found that no constitutional rights were infringed by causing the company to remove its tracks upon expiration of its franchise.
On page 1059, L.Ed., the court stated:
"* * * The right to grant the use of the streets was in the City. It had exercised it, had fixed by agreement with the Railway the definite period at which such rights should end. At their expiration the rights thus definitely granted terminated by force of the terms of the instrument of grant. * * *"
To the same effect with respect to an electric company is the case of Texas-New Mexico Utilities Company v. City of Teague, 174 S.W. (2d) 57 (Texas Court of Appeals). In this case the company was the assignee of a 35-year franchise which had expired. The city refused to grant a renewal. The court held that the company's rights were terminated upon the expiration of the franchise period and that the city could compel the company to remove its power lines from the city streets notwithstanding that removal would result in great damage to the company. Also to the same effect, see McKittrick ex rel. City of California v. Missouri Utilities Company, 339 Missouri 385, 96 S.W. (2d) 607;Geneseo v. Illinois Northern Utilities Company, 378 Illinois 506, 39 N.E. (2d) 26.
The rule of the above cases has also been applied to water companies. InCity Water Company of Chillicothe v. City of Chillicothe, 207 Fed. 503, it was held that upon the expiration of a franchise, the rights of the company are terminated and cannot be enlarged by implication.
A 1945 case, Incorporated Town of Pittsburg v. Cochrane, 195 Oklahoma 593, 159 Pac. (2d) 534, involving a water and electric utility held that upon expiration of a franchise from a municipal corporation a public service company may be compelled to remove tangible property used in operating service from the city streets.
Thus, from the above authorities, we are of the opinion that the municipality may validly compel the water company to remove its properties from the city streets even though such removal results in cessation of service.
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The above conclusion is limited to a determination based upon the facts disclosed, and is not intended to embrace any matters which might give rise to rights by way of estoppel or implication.
Very truly yours,
ROBERT L. SIMPSON
Assistant Attorney General