Court Opinion

ID: 9649479
Source: CourtListenerOpinion
Date Created: 2023-08-23 14:55:27.538857+00
Date Added: 2024-06-11T09:53:24.240608
License: Public Domain

SMITH, J.,
dissents.
I dissent from the majority decision to grant Respondents’ preliminary objections to Petitioner’s petition for review in the nature of a complaint for declaratory judgment. Petitioner has stated a clear cause of action in his case which challenges the constitutionality of the Capital Facilities *354Debt Enabling Act (Act l).1 The majority correctly notes the case law of this Commonwealth that an act of the general assembly may be declared unconstitutional only where it clearly, plainly and palpably violates the Constitution, citing Consumer Party of Pennsylvania v. Commonwealth, 510 Pa. 158, 507 A.2d 323 (1986), but it fails to thoroughly examine one of the most fundamental of precepts, viz., that the Commonwealth shall not incur debt on behalf of the state and/or pledge the credit of the Commonwealth to an individual, company, corporation or association or any other entity unless it is for a public purpose. Article VIII, § 8, Pa. Constitution.
The majority and Respondents emphasize that the funds generated from the Commonwealth’s incurring debt to fund new sports stadiums are to be made available to a contracting municipality or authority rather than to an individual, company, corporation or association, but they ignore the undisputed fact that the pass-through is for the' sole benefit of private sports organizations which operate for private, profit-making purposes. These organizations do not perform a public or governmental function; rather they operate to attract a targeted group of people — sports patrons and enthusiasts — to attend paid football, baseball or other sporting events for the personal and private social enjoyment of the patrons.
In Tosto v. Pennsylvania Nursing Home Loan Agency, 460 Pa. 1, 331 A.2d 198 (1975), a case of first impression involving the application of Article VIII, § 8 to the sale of general obligation bonds backed by.the credit of the Commonwealth as here, the Supreme Court stated that “pledge or loan of credit” is a term of art that did not prohibit various sorts of financial transactions between the Commonwealth and private citizens or corporations that serve a public purpose and are otherwise lawful. In Tosto the Legislature submitted to the voters the question of whether the Commonwealth should incur debt to make loans available for the repair, reconstruction and rehabilitation of nursing homes in the Commonwealth to meet health and safety standards. The voters approved the plan in 1974, and the Supreme Court rejected all challenges to the constitutionality of the former Nursing Home Loan Agency Law2 as it was enacted for a proper public purpose. The court held that the presumption of constitutionality of the challenged legislation was strengthened by the fact that the voters had approved the loan program by referendum in 1974. In the present case, the stadium funding plan was never submitted to the voters for their approval.
Black’s Law Dictionary 1231 (6th ed.1990) defines public purpose in relevant part as follows:
The term is synonymous with governmental purpose. [T]he essential requisite [is] that a public service or use shall affect the inhabitants as a community, and not merely as individuals. A public purpose or public business has for its objective the promotion of public health, safety, morals, general welfare, security, prosperity, and contentment of all the inhabitants or residents within a given political division, as, for example, a state, the sovereign powers of which are exercised to promote such public purpose or public business.
Thus the threshold question to be resolved in determining whether Petitioner has stated a cause of action is whether the contemplated sports stadium funding promotes the health, safety, morals, general welfare, security, prosperity and contentment of all of the citizens and residents of the Commonwealth or of the municipalities in which the new stadiums are to be constructed.
*355Relying on President Judge Colins’ memorandum opinion denying Petitioner’s motion for preliminary injunction and the Supreme Court’s decision in Basehore v. Hampden Industrial Development Authority, 433 Pa. 40, 248 A.2d 212 (1968), Respondents argue that even though the professional sports organizations for whom the legislation was enacted will be the primary beneficiaries, that fact does not render it unconstitutional. They correctly maintain that the Legislature may address an economic problem to benefit the public, but it may do so, however, only where the challenged legislation confers a public benefit and promotes a public purpose. Respondents further assert that because Act 1 authorizes grants with conditions to municipalities and authorities as opposed to grants to an individual, company, corporation or association and addresses “construction and renovation of certain public facilities,” its constitutionality is presumed. Moreover, the majority evidently relies in part upon certain specified conditions attached to the funding to conclude that Act 1 is constitutional.3
Nowhere in the majority opinion nor in Respondents’ brief is there any persuasive argument or case authority for the presumption or proposition that the planned public funding for the construction or renovation of sports stadiums for professional sports organizations serves a public purpose and is otherwise lawful. The sports organizations benefited by Act 1 are solely owned by private interests, although that fact alone is not dispositive; the alleged economic development to flow from the new construction is speculative; the alleged impact on unemployment is speculative as opposed to the clearly stated employment projections in Basehore; the long-term jobs, if any, which may be created for the communities at large surrounding the new stadiums would be seasonal and in all probability low-level; and the Court may take judicial notice of the fact that many of the sports players who contract with the professional sports organizations earn multi-millions in annual salary. (The dissent notes the 1999 Philadelphia Eagles’ $55 million 7-year contract with a recent first-round draft pick.) These factors raise genuine and fundamental questions as to the public benefit and public purpose behind the enactment of Act 1.
The legislation at issue in Basehore, originally titled the Industrial Development Authority Law,4 represented a legislative effort to resolve serious unemployment problems in parts of the Commonwealth. The Supreme Court noted the express principle behind creation of the industrial development projects: to encourage private manufacturing in the state with the resulting increase in employment and the development of new jobs, a public purpose enforced within the police powers of the Commonwealth. The legislative findings were that unemployment was a serious problem and that industrial development projects represented an effective tool to combat that problem. Notably, Justice Roberts emphasized in his concurring opinion in Basehore
[Although the immediate beneficiary is intended to be the industrial lessee, it acts solely as a conduit by which the public may realize the ultimate benefit of local economic growth. Here, ... the totality of the projects will be devoted to their stated purpose - the reduction of unemployment through the creation of *356new plant development. While private interests are necessarily aided, the purpose of this aid is to foster a vital public interest.
Id., 433 Pa. at 66-67, 248 A.2d at 225.
The legislative intent behind Act 1 does not represent the type of public benefit or public purpose contemplated by Article VIII. Respondents’ analogy to the state’s raising nursing home health and safety standards to protect nursing home residents or acting within its police powers to develop jobs to address serious unemployment problems may not, without more, transform funding for private sports stadiums to the level of governmental or public purpose necessary to confer constitutionality upon the challenged legislation. The Court therefore should not sustain Respondents’ demurrer in the face of this record, and any doubts about the merits should be resolved in Petitioner’s favor. DeHart v. Horn, 694 A.2d 16 (Pa.Cmwlth.1997). Hence, Respondents’ preliminary objections should be denied, and Petitioner should be permitted to proceed with his declaratory judgment action.
Judge DOYLE joins in this dissenting opinion.

. Act of February 9, 1999, P.L. 1, 72 P.S. §§ 3919.101-3919.5102.

. Act of July 22, 1974, P.L. 610, as amended, formerly 62 P.S. §§ 1521.101-1521.305, repealed by Section 9(a) of the Act of February 23, 1996, P.L. 27.

. The conditions include, among other things, setting aside an unspecified number of days for the municipality or the Commonwealth to use the new or renovated facilities contemplated by Act 1 and requiring the private sports organizations to make rental payments of $25 million after the first ten-year period of occupancy (possibly reduced to zero by available credits). These conditions do not elevate this venture to one of governmental proportions for the benefit of the general public.

. Act of August 23, 1967, P.L. 1609, as amended, 73 P.S. §§ 371-386, retitled the Economic Development Financing Law by Section 1 of the Act of December 17, 1993, P.L. 490.