2009 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

12-22-2009

Connection Training Services v. City of

Philadelphia

Precedential or Non-Precedential: Non-Precedential

Docket No. 09-1856

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Recommended Citation

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

 

No. 09-1856

 

CONNECTION TRAINING SERVICES, 

A Pennsylvania Non-Profit Corporation,

Appellant

 v.

CITY OF PHILADELPHIA; PERRITTI DIVIRGILIO; JAMES FERRARO.

 

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. Civil No. 2-06-cv-03753)

District Judge: Honorable Norma L. Shapiro

 

Submitted Pursuant to Third Circuit LAR 34.1(a)

December 16, 2009

Before: FISHER, HARDIMAN, and VAN ANTWERPEN, Circuit Judges.

(Filed: December 22, 2009)

 

OPINION OF THE COURT

 

VAN ANTWERPEN, Circuit Judge.

Plaintiff-Appellant Connection Training Services (“CTS”) filed this appeal of an

order of the United States District Court for the Eastern District of Pennsylvania granting
 The certification requirement was included in a footnote. The director and 1

program manager of CTS, Garnett Littlepage (“Littlepage”), asserted that he pursued the

training program after reviewing an online version of the Ordinance which contained no

2

summary judgment to defendants, the City of Philadelphia, Perritti DiVirgilio

(“DiVirgilio”), and James Ferraro (“Ferraro”) (collectively, the “Defendants”). CTS

appeals the District Court’s conclusion that CTS failed to show a genuine issue of

material fact that it suffered a detriment in relying on Defendants’ misrepresentations as

to the availability of a prevailing wage exemption pursuant to a city ordinance. The

District Court relied on an estoppel argument in its grant for summary judgment. We will

affirm the entry of summary judgment, but through alternative reasoning. 

I.

Because we write solely for the parties, we include only those facts necessary to

our disposition of this appeal.

On September 28, 1999, the City of Philadelphia enacted ordinance number

990221-A (the “Ordinance”), which purported to expand the scope of workers exempt

from the prevailing wage requirements for city contract work. The Ordinance would not

become effective until the Minority Business Enterprise Council (“MBEC”) provided

certain certifications to the Mayor’s Office and the City Council. MBEC never provided

those certifications and, therefore, the Ordinance never took effect.

Nevertheless, CTS developed a training program and sought certification as a bona

fide training program under the Ordinance. After receiving approval and discretionary 1
footnotes. Thus, the District Court concluded, for the purposes of summary judgment

review, that Littlepage was unaware of the certification requirement at the time CTS

initiated its training program.

3

funding from the Philadelphia Workforce Development Corporation (“PWDC”), CTS

sought to place its trainees with LP Group2, Inc. (“LP2”). LP2 attempted to use these

trainees on a contract with the city, but received citations from Philadelphia’s Labor

Standards Unit (“LSU”) for prevailing wage violations. DiVirgilio and Ferraro are the

director and deputy director, respectively, of the LSU, which is responsible for ensuring

that, inter alia, workers on city contracts receive the prevailing wages.

Prior to the Ordinance, the only exemption from the prevailing wage requirements

was for recognized apprenticeship programs. The Ordinance would have extended those

exemptions to bona fide training programs that complied with the requirements of the

Ordinance. The LSU refused to recognize an exemption for CTS’s training program on

the basis that the only available exemption was for apprenticeship programs. During the

course of this litigation, Defendants asserted that CTS’s claimed exemption was

unenforceable because the Ordinance never took effect. Nevertheless, the LSU enforced

other requirements under the Ordinance which similarly did not take effect without the

MBEC’s certification. 

CTS argues that Defendants’ refusal to recognize its training programs precludes it

from placing its trainees with construction firms working on city projects, thereby

violating its due process and equal protection rights, as well as violating Pennsylvania’s
 The District Court asserted that “[t]o estop a government agency, a plaintiff must 2

establish: (1) that the agency intentionally or negligently misrepresented some material

fact; (2) the agency had knowledge or reason to know that the other party would rely upon

it; and (3) the agency induced the other party to act to its detriment because of justifiable

reliance upon the misrepresentation.” J.A. at 1890 (citing Strunk v. Zoning Hearing Bd.

of Upper Milford Twp., 684 A.2d 682, 685 (Pa. Commw. Ct. 1996)).

4

Public Official and Employee Ethics Act (“POEEA”), 65 Pa. Cons. Stat. Ann. § 1101-

1113. Because these firms would have to pay the prevailing wage unless CTS’s training

program is exempt, the firms will not hire and pay unskilled workers at the same rate as

skilled workers. CTS’s argument continues that if it cannot place its trainees, then it

cannot receive additional funding from the city or city-related agencies, such as PWDC. 

Although CTS provided evidence of PWDC’s criteria for refunding a training program,

there is no indication CTS was guaranteed refunding if it met those criteria. Further, CTS

argues that it incurred long-term expenses in creating and initiating its training programs,

which it cannot recover if Defendants are permitted to refuse to exempt its training

program. 

On December 31, 2008, the District Court granted Defendants’ motion for

summary judgment as to CTS’s due process and equal protection claims under 42 U.S.C.

§ 1983. The court determined that because the Ordinance never went into effect, CTS

could only succeed on its claims if it could estop the Defendants from denying that the

Ordinance took effect. The court concluded that “the record does not show that CTS 2

sought wage exemptions in reliance on [D]efendants’ negligent misrepresentations . . . or

that such reliance would have been justified.” J.A. at 1891. Thus, CTS could not estop
 The notice of appeal in a civil action must be filed within thirty days after the entry

3

of the judgment appealed. Fed. R. App. P. 4(a)(1)(A). If, however, the party files a

motion to alter or amend the judgment within the time permitted under the Federal Rules

of Civil Procedure, the time for filing the notice of appeal runs from the entry of the order

disposing of such motion. Id. R. 4(a)(4)(A)(iv). A motion to reconsider is considered a

motion to alter or amend the judgment. Carrascosa v. McGuire, 520 F.3d 249, 253 n.3

(3d Cir. 2008) (citing United States v. McGlory, 202 F.3d 664, 668 (3d Cir. 2000) (en

banc)). The motion to reconsider must be filed within 10 days of the subject judgment. 

Fed. R. Civ. P. 59(e). CTS filed a timely motion to reconsider the District Court’s

December 31, 2008 order granting Defendants’ request for summary judgment. The

District Court disposed of CTS’s motion on February 25, 2009, and CTS filed its notice

of appeal within thirty days of that order. Therefore, CTS filed a timely appeal. See Fed.

5

Defendants from claiming the Ordinance was not in effect and, therefore, failed to

identify a protected property right.

CTS subsequently filed a timely motion for reconsideration, which the District

Court denied in a February 25, 2009 order. Although the court assumed that CTS could

show it justifiably relied on Defendants’ misrepresentations, it concluded that “CTS has

not produced evidence that its reliance caused it detriment.” Id. at 1898-99. The court

then denied a second motion for reconsideration as improper and declined to exercise

supplemental jurisdiction over CTS’s POEEA claim.

II.

The District Court had jurisdiction for CTS’s § 1983 claims under 28 U.S.C. §

1331. The District Court declined to exercise supplemental jurisdiction for CTS’s statelaw claim under § 1367. This Court has jurisdiction to review the grant of summary

judgment under § 1291. Dee v. Borough of Dunmore, 549 F.3d 225, 227 (3d Cir. 2008). 

Plaintiff filed a timely notice of appeal.3
R. App. P. 4(a)(1)(A).

6

The appeal from the denial of a motion for reconsideration brings up the

underlying judgment for review; therefore, the standard of review depends on the nature

of the underlying judgment. McAlister v. Sentry Ins. Co., 958 F.2d 550, 552-53 (3d Cir.

1992). Because the underlying judgment granted Defendants’ motion for summary

judgment, this Court exercises plenary review, applying the same standards the District

Court was required to apply. Bowers v. NCAA, 475 F.3d 524, 535 (3d Cir. 2007). 

Summary judgment is appropriate if the moving party has established that there is

no genuine issue of material fact and it is entitled to judgment as a matter of law. Celotex

Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed. R. Civ. P. 56(c)). The moving

party bears the initial burden of showing that the non-movant has failed to establish one

or more essential elements of its case. Id. at 322-23. The reviewing court must take all

facts in the light most favorable to and must draw all reasonable inferences in favor of the

non-movant. Bowers, 475 F.3d at 535.

If the moving party meets its burden, the burden then shifts to the non-movant to

establish that summary judgment is inappropriate. Matsushita Elec. Indus. Co. v. Zenith

Radio Corp., 475 U.S. 574, 586 (1986). To avoid summary judgment, the non-movant

must go beyond the pleadings and come forward with specific facts indicating a genuine

issue for trial. Celotex, 477 U.S. at 324. A genuine issue of material fact exists when the

evidence is such that a reasonable jury could return a verdict for the non-movant. 
7

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Summary judgment is

appropriate if the non-movant fails to make a showing sufficient to establish the existence

of an element essential to its case. Celotex, 477 U.S. at 322-23.

III.

On appeal, CTS argues that the District Court erred in concluding that it failed to

adduce evidence of its detrimental reliance which was sufficient to survive Defendants’

motion for summary judgment. Although CTS indicated in its notice of appeal that it was

appealing each of the District Court’s orders, CTS argues against only the District Court’s

denial of CTS’s first motion for reconsideration. More specifically, CTS argues the

District Court erred in granting summary judgment against CTS’s due process claims. 

Therefore, CTS has waived any other arguments it may have had on this appeal. See

Laborers’ Int’l Union of N. Am. v. Foster Wheeler Corp., 26 F.3d 375, 398 (3d Cir. 1994)

(considering party’s failure to raise issue in its opening brief as waiver of that argument

on appeal); Nagle v. Alspach, 8 F.3d 141, 143 (3d Cir. 1993) (requiring party to identify

issue in statement of issues or in argument section of brief to avoid waiver). Accordingly,

we will not address the District Court’s entry of summary judgment on CTS’s equal

protection claim or the court’s decision not to exercise supplemental jurisdiction over

CTS’s state-law claim. Rather, we will focus on the District Court’s entry of summary
 It is unclear from the record and from CTS’s brief whether it is asserting a 4

procedural or substantive due process claim. Despite passing references to substantive

due process in CTS’s brief opposing Defendants’ motion for summary judgment, the

District Court indicated it considered both types of due process claims. Nonetheless,

CTS’s brief does not indicate either procedural or substantive due process. See

Appellant’s Br. at 2, 38-48. And although Defendants maintain that CTS appeals its

substantive due process claim, Appellees’ Br. at 16, Defendants assert a procedural due

process argument in their brief, id. at 34-35 (citing O’Bannon v. Town Court Nursing

Ctr., 447 U.S. 773 (1980) (evaluating constitutionality of process under Fifth Amendment

Due Process Clause)). Because our ultimate conclusion does not depend on whether we

consider CTS’s claim as procedural or substantive, we will address both. 

8

judgment as to CTS’s due process claims.4

The Fourteenth Amendment prohibits state action which “deprive[s] any person of

life, liberty, or property, without due process of law.” U.S. Const. amend. XIV, § 1.

Congress enacted § 1983 as a federal cause of action against the deprivation of any rights,

privileges, or immunities secured by the Constitution or laws of the United States. Town

of Castle Rock v. Gonzales, 545 U.S. 748, 755 (2005). To state a § 1983 claim, a plaintiff

must demonstrate that the defendant, acting under color of state law, deprived plaintiff of

a right secured by the Constitution or laws of the United States. Chainey v. Street, 523

F.3d 200, 219 (3d Cir. 2008). We will assume, because the parties do not dispute, that for

the purposes of this appeal the Defendants are state actors subject to § 1983. 

 The Due Process Clause includes protections for both procedural and substantive

due process. See, e.g., Gonzales, 545 U.S. at 755-56 (acknowledging substantive and

procedural components of Due Process Clause). Because it is unclear whether CTS is

asserting a procedural or substantive due process claim, we will address each in turn. The
9

first step in evaluating a § 1983 claim, however, is to identify the exact contours of the

underlying right CTS claims was violated and to determine whether CTS has alleged a

deprivation of a constitutional right at all. Chainey, 523 F.3d at 219. 

A.

To establish a substantive due process claim under § 1983, the plaintiff must prove

(1) the particular interest at issue is protected by the Fourteenth Amendment, and (2) the

government’s deprivation of that protected interest shocks the conscience. Id.; see

Gottlieb v. Laurel Highlands Sch. Dist., 272 F.3d 168, 172 (3d Cir. 2001) (stating that

substantive due process is violated when state conduct is arbitrary, or conscience

shocking, in a constitutional sense) (quoting County of Sacramento v. Lewis, 523 U.S.

833, 847 (1998)). The plaintiff must have been deprived of a fundamental property

interest under the Constitution. Chainey, 523 F.3d at 219. If the right is fundamental, we

must then consider whether the conduct was arbitrary or irrational; however, if the right is

not fundamental, there is no substantive due process issue and the state conduct will be

upheld so long as the state complies with procedural due process. See Nicholas v. Pa.

State Univ., 227 F.3d 133, 142 (3d Cir. 2000).

This Court has recognized two strands of substantive due process correlating to the

nature of the government action, i.e. whether it was legislative or non-legislative. Id. at

139. Non-legislative, or executive, actions “typically apply to one person or to a limited

number of persons, while legislative acts, generally laws and broad executive regulations,
10

apply to large segments of society.” Id. at 139 n.1. In this case, CTS argues that

Defendants’ refusal to qualify its training program for the wage exemption violated its

due process rights; therefore, CTS argues it was deprived by non-legislative action.

To prevail on a non-legislative substantive due process claim, CTS must establish

a protected property interest to which the Fourteenth Amendment’s protection applies. 

Id. at 139-40. This Court has required plaintiffs in such circumstances to identify a

“particular quality of property interest.” Id. at 140. Whether a certain property interest

embodies this particular quality is not determined by reference to state law, but depends

on whether that interest is “fundamental” under the Constitution. Id. The asserted

property interest must be considered against the background of constitutional purposes,

rationally developed and historically perceived, with respect for the teachings of history

and a solid recognition of the basic values that underlie our society. Id. (quoting Regents

of Univ. of Mich. v. Ewing, 474 U.S. 214, 229-30 (1985) (Powell, J., concurring)). 

We focus on the nature of the property interest at stake and, so far, have limited

non-legislative substantive due process rights to real property ownership. Id. at 141. 

Further, we have declined to recognize a fundamental property interest in a variety of

other circumstances. See, e.g., Gikas v. Wash. Sch. Dist., 328 F.3d 731, 736-37 (3d Cir.

2003) (holding there is no property interest in statutory veterans’ employment preference

for substantive due process purposes); Nicholas, 227 F.3d at 143 (declining to find

interest in tenured employment); Indep. Enters. Inc. v. Pittsburgh Water & Sewer Auth.,
11

103 F.3d 1165, 1178, 1179-80 (3d Cir. 1997) (concluding lowest bidder has no

fundamental property interest in municipal contracts even though state statute requires

municipality to award contract to lowest bidder); Reich v. Beharry, 883 F.2d 239, 244-45

(3d Cir. 1989) (finding no interest in prompt payment for professional services); Ransom

v. Marrazzo, 848 F.2d 398, 411-12 (3d Cir. 1988) (asserting that state-law entitlement to

water and sewer services is not a protected property interest); Mauriello v. Univ. of Med.

& Dentistry of N.J., 781 F.2d 46, 52 (3d Cir. 1986) (dicta) (suggesting graduate student

has no property interest in continued enrollment in program).

In this case, CTS asserts property interests in recognition of its training program

under the Ordinance so that it can (1) continue to place its trainees, which CTS asserts is

necessary to receive future, discretionary funding from the City of Philadelphia or cityrelated agencies, and (2) recover the long-term fixed costs it expended in creating its

training program. Such interests are not “fundamental” under the Constitution, nor are

they basic values that underlie our society. CTS’s asserted interests are analogous to the

numerous interests we have declined to recognize, which rely on statutory rights or

relationships with government agencies, and are not similar to the “venerable commonlaw rights of real property ownership.” See Nicholas, 227 F.3d at 143. Therefore, CTS

has failed to identify an interest protected by substantive due process and we need not

consider whether Defendants’ conduct shocks the conscience. See Chainey, 523 F.3d at

219 (requiring deprivation of fundamental property interest). Accordingly, Defendants’
12

conduct will be upheld so long as it complied with procedural due process. See Nicholas,

227 F.3d at 142.

B.

To establish a procedural due process claim under § 1983, the plaintiff must prove

(1) a deprivation of an individual interest encompassed by the Fourteenth Amendment’s

protection of life, liberty, or property, and (2) that the procedures available did not

provide due process of law. Hill v. Borough of Kutztown, 455 F.3d 225, 233-34 (3d Cir.

2006). Procedural due process does not protect every benefit; rather, to have a property

interest in a benefit, a person must clearly have more than an abstract need or desire and

more than a unilateral expectation of receiving the benefit. Gonzales, 545 U.S. at 756. 

Thus, in constitutional parlance, the plaintiff must have a legitimate claim of an

“entitlement.” Id. Entitlements, however, are not established by the Constitution; rather,

they are created and defined by existing rules or understandings that stem from an

independent source, such as state law. Id.

It is undisputed that the Ordinance never took effect and, therefore, CTS is not

entitled to the prevailing wage exemption under statute. Thus, CTS must be able to estop

Defendants from denying the Ordinance took effect. Under Pennsylvania law, a party

asserting estoppel against a government agency must show (1) a negligent

misrepresentation, which (2) induced justifiable reliance and (3) caused the party to suffer

a detriment. See Strunk v. Zoning Hearing Bd. of Upper Milford Twp., 684 A.2d 682, 685
13

(Pa. Commw. Ct. 1996). A party asserting estoppel must offer clear, precise, and

unequivocal evidence in support of its claim and must produce more than mere

speculation. Novelty Knitting Mills, Inc. v. Siskind, 457 A.2d 502, 504 (Pa. 1983). 

Even assuming CTS can show negligent misrepresentation and justifiable reliance,

it cannot show Defendants’ misrepresentations caused it detriment. CTS asserts it

suffered detriment because, unless recognized under the prevailing wage exemption, it

will not (1) receive future discretionary funding, or (2) recoup its long-term expenses in

creating its training program. CTS’s claim for recoupment is just a variation of its claim

that it will not receive future funding – CTS would recoup its expenses from that funding. 

Further, because the funding is discretionary, it is too speculative to meet CTS’s burden

to show a detriment. See Novelty Knitting Mills, 457 A.2d at 504. Absent a cognizable

detriment, CTS cannot estop Defendants from denying the Ordinance took effect. 

Consequently, CTS cannot claim an entitlement under state law. Therefore, CTS

is not entitled to procedural due process protection. 

IV.

We conclude that CTS has not asserted a cognizable property interest under either

procedural or substantive due process. Consequently, as a matter of law, CTS cannot

maintain claims under § 1983 for violation of its due process rights. Therefore, we will

affirm the District Court’s entry of summary judgment for Defendants.