Court Opinion

ID: 9692033
Source: CourtListenerOpinion
Date Created: 2023-08-25 15:37:21.604627+00
Date Added: 2024-06-11T18:19:29.939664
License: Public Domain

DISSENTING OPINION BY
Judge SMITH-RIBNER.
I respectfully dissent from the decision of the majority to sustain the preliminary objections in the nature of a demurrer filed by Respondents to the amended complaint of the City of Philadelphia and the Mayor of Philadelphia. Petitioners seek a declaration from this Court that 53 Pa.C.S. § 5508.1, enacted by Section 1 of Act 22 of 2001, is unlawful and null and void.1 Peti*1226tioners further request a declaration that the manner of selecting the governing body of the Philadelphia Parking Authority and the Authority’s purpose may not be lawfully changed until all outstanding Authority bonds have been fully satisfied and discharged in accordance with the statutory pledge made by the legislature when it enacted the former Parking Authority Law (Law), Act of June 5, 1947, P.L. 458, as amended, 53 P.S. §§ 341-356,2 now codified at 53 Pa.C.S. §§ 5501-5517.
I
In ruling on preliminary objections courts must decide whether the law says with certainty that, based on the factual averments, no relief is possible. P.J.S. v. Pennsylvania State Ethics Commission, 669 A.2d 1105 (Pa.Cmwlth.1996). Any doubts must be resolved in favor of the non-moving party by refusing to sustain the preliminary objections. Envirotest Partners v. Department of Transportation, 664 A.2d 208 (Pa.Cmwlth.1995). This case should be no different as it is obvious that the law does not say with certainty that no relief is possible. In addition, averments in the amended complaint raise facts that, if proved, may sufficiently establish a right to relief, and this Court therefore should not dispose of the merits without a proper record in this case. See Pennsylvania AFL-CIO v. Commonwealth, 563 Pa. 108, 757 A.2d 917 (2000).
I first part with the majority in its ruling that the City does not have standing to file this action because the City “has not described or established a discernible adverse impact upon some interest.” Slip op. at 9. This statement is utterly unsupported by a fair reading of the amended complaint or a careful reading of settled case law. In Wm. Penn Parking Garage, Inc. v. City of Pittsburgh, 464 Pa. 168, 346 A.2d 269 (1975), the Pennsylvania Supreme Court ruled that a party may establish standing to challenge governmental action by showing a substantial, direct and immediate interest in the subject matter under litigation. The court indicated that to show standing a party must demonstrate a discernible adverse effect to some interest other than an abstract interest common to all citizens, harm caused by the challenged action and a causal connection between the complained of action and injury to the plaintiff.
I agree with the City that its position is indisguishable from that of the municipality in Township of South Fayette v. Commonwealth of Pennsylvania, 73 Pa.Cmwlth. 495, 459 A.2d 41 (1983), and of the school district in Harrisburg School District v. Hickok, 762 A.2d 398 (Pa.Cmwlth.2000), where this Court readily conferred standing upon the governmental entities to bring their actions. In Township of South Fayette former President Judge Craig, writing for the majority, overruled the Commonwealth’s' preliminary objection on *1227standing and held that the township could bring its mandamus action against named state officials to compel them to act with respect to statutory reporting requirements on foreign fire insurance companies. Judge Craig reasoned that the township was not generally suing as fiduciary of the public interest but instead was suing because of its specific statutory responsibilities to offer fire protection to township residents.
In Harrisburg School District the school district challenged the constitutionality of certain legislation, regarding educational reform of the school district, which authorized the secretary of education to seize control of the school district and to transfer control to a board of control. The Commonwealth objected to the school district’s standing to bring the action contending that school districts possessed only those powers granted by the legislature, and as creations of the state they could not challenge the state’s actions. Citing DeFazio v. Civil Service Commission of Allegheny County, 562 Pa. 431, 756 A.2d 1103 (2000), Judge Pelligrini, writing for the majority, overruled the Commonwealth’s preliminary objection and held that the school district was adversely affected because, other than levying taxes, its affairs in operating the school district had been taken away. Therefore, its interests in the outcome of the litigation were substantial, direct and immediate.3 See also Township of Upper Merion v. State Horse Racing Commission, 145 Pa.Cmwlth. 82, 602 A.2d 459 (1992) (Judge Cohns, writing for the majority, held that the township had standing to challenge a commission order that approved a nonprimary location for pari-mutuel wágering because the township’s standing was based on its right to regulate parking and promote safety and protection of the public as opposed to some interest common to all citizens).
The City pleaded in its amended complaint that the challenged legislation posed a threat to the City’s right to govern itself under the Philadelphia Home Rule Charter and the Pennsylvania Constitution due to changes made to the manner in which the City manages its municipal functions in connection with on and off-street parking regulation and carrying out of state-induced contractual arrangements between the City and its Parking Authority. See Count I. The City pleaded that it lent its credit to guarantee that holders of Parking Authority bonds will be paid and that this contractual arrangement was made in reliance upon the statutory pledge. Also Act 22 poses a threat to the City’s affairs because of changes made to Parking Authority management, which will alter activities regarding on and off-street parking and long-term lease arrangements. The City further averred that it entered into various other contracts with the Parking Authority allowing it to act as agent for the City to carry out local parking functions, that the contracts were entered into based on the statutory pledge and that Act *122822- represents a breach of that pledge. See Counts II, III, IV and V.
The City additionally averred that the legislature changed the purpose of the Law and unlawfully diverted funds collected by the Parking Authority, including revenue from airport parking designated for airport purposes, to the Philadelphia School District. In this connection, the City pleaded that it is required under federal law to allocate all funds received from airport facilities into a fund for airport use and that if such funds are expended for other purposes, the federal government could force the City to repay the funds improperly diverted and impose other sanctions. These averments, among others, show that the City’s challenge is based on the right to perform its municipal functions, as a home rule municipality, rather than a challenge based on some abstract interest common to all citizens. The City’s interests are substantial, direct and immediate, and it clearly meets the standards for standing articulated in Wm. Penn Parking Garage.
II
Next, I dissent from the majority’s decision to sustain preliminary objections to Count I of the amended complaint (violation of Home Rule powers), Counts II, III and IV (violation of legislative pledge that no rights vested in a parking authority created by local ordinance shall be limited or altered until all bonds are fully met and discharged) and Count V (impairment of contracts in violation of the Pennsylvania Constitution’s Contract Clause, Article I, § 17). The City’s action is one for declaratory judgment, and under the Declaratory Judgments Act, 42 Pa.C.S. §§ 7581-7541, a litigant has the right to obtain a declaration from the courts when the litigant’s rights, status or other legal relations are affected by a statute. Instead of providing that declaration, the majority sustains objections to the City’s impairment-of-contracts count by finding that this count, included in the 146-paragraph amended complaint, lacked specificity.
The City pleaded, inter alia, that it entered into (1) an Agreement of Cooperation with the Parking Authority for it to act as an agent for the City in carrying out local parking functions; (2) long-term lease agreements with the Parking Authority, described as leases to operate parking garages and surface lots in Center City Philadelphia and at the Philadelphia International Airport; and (3) many contracts with the Parking Authority to ensure that its bondholders will be paid in the event the Authority cannot meet its debt service obligations.4 The City also pleaded that these contracts would be impaired and averred in what manner they would be impaired. A cursory review of the amended complaint discloses that the impairment-of-contracts count specifically pleads a cause of action.
Regarding the home rule and statutory pledge violations that the City averred, the majority simply holds that the authority of home rule municipalities may be limited by the Pennsylvania Constitution or by legislative acts and that even if the legislature reneged on its promise the cause of action would accrue only to potential bondholders. The majority’s abbreviated analysis of these issues fails to sufficiently establish with certainty that the law will permit no recovery under the facts pleaded. The majority ignores the City’s averments that *1229its municipal function of regulating parking within its borders has been taken away in violation of Article IX of the Pennsylvania Constitution. Parking is a purely local function under School District of Philadelphia v. Zoning Board of Adjustment, 417 Pa. 277, 207 A.2d 864 (1965), but this function in Philadelphia will now devolve upon a state-controlled entity. The majority also loses sight of the fact that the City guaranteed by contract the payment of Parking Authority bonds in the event of its default and that this guarantee was based upon the legislature’s promise that it would not alter or limit the rights vested in the Parking Authority until all of its bonds were fully satisfied and discharged. The City has averred that as guarantor of those bonds, its contractual rights have been impacted and have been directly and substantially impaired.
In his memorandum opinion and order following hearing on the City’s motion for preliminary injunction, former President Judge Doyle noted that the City’s allegations did not entirely lack merit and that the myriad of cases before the courts involving special legislation and home rule indicate that the law is far from clear at the present time. City of Philadelphia v. Philadelphia Parking Authority (Pa.Cmwlth., No. 343 M.D.2001, filed July 20, 2001). I agree that the law does not say with certainty that no relief is possible under the facts pleaded, and consistent with the required liberal construction of the Declaratory Judgments Act and with principles of fundamental fairness, this Court at a minimum ought to grant the City’s request for an evidentiary hearing to allow the City an opportunity to present evidence to sufficiently establish its entitlement to relief.
The City proposes to offer evidence, among other things, with regard to its guarantee of bonds issued by the Parking Authority and the risks that it now faces to City finances, its historical performance of local parking functions, its local parking legislation, its complex contractual relationships with the Parking Authority and the impact upon City operations due to the City’s reliance upon the statutory pledge. I note persuasive authority in United States Trust Co. of New York v. New Jersey, 431 U.S. 1, 97 S.Ct. 1505, 52 L.Ed.2d 92 (1977), which the City relied on to support its argument that the legislature does not have an absolute right to ignore statutory pledges at whim. The United States Supreme Court held in that case that the state of New Jersey was bound by a 1962 statutory pledge that it made, which expressed a clear intent on the part of New Jersey that it would not alter powers and rights of the port authority while the port authority’s bonds were outstanding. The port authority was created in 1921 pursuant to a bi-state compact to coordinate transportation and other commerce facilities in and through the port of New York, and the authority was given the power to pledge its revenue to guarantee the payment of its bonds.5 The *1230bonds were not guaranteed by any state or city.
While recognizing the power of the state to repeal or modify its legislation at any time, the Supreme Court considered New Jersey’s statutory pledge to be a contractual obligation and thus binding on the state. The Court held that as a consequence of New Jersey’s outright 1973 repeal of its 1962 statutory covenant New Jersey impaired the obligation of the contract in violation of the Contract Clause of the United States Constitution, Article I, § 10 (no state shall pass any law impairing the obligation of contracts). The Court noted that New Jersey made no effort to modify or replace its statutory covenant with a comparable provision. Thus I dissent from the majority’s decision to sustain Respondents’ preliminary objections to Counts I, II, III, IV and V of the amended complaint and to dismiss the City’s declaratory action.
President Judge COLINS joins in this dissent.

. Specifically, Section 5508.1 provides that the Governor of Pennsylvania shall appoint six new members to the Philadelphia Parking Authority's governing board and that the Mayor of Philadelphia may not appoint any new members to the Parking Authority's board. However, the Mayor’s original appointments to the Parking Authority’s board may serve out their respective current terms. Also during its fiscal year 2001, the Parking Authority shall transfer to the general fund of the Philadelphia School District that portion of the Authority’s retained earnings, not to exceed $45,000,000 and which will not jeop*1226ardize the Authority’s ability to meet its debt service payments -or to retire outstanding bonds. The result of Act 22 is to transfer control of the Parking Authority board from the Mayor to the Governor, and Counsel indicated at argument in this matter that, although not of record, there has been no transfer of $45,000,000 in Parking Authority earnings to the School District.

. See Section 13 of the Law, 53 P.S. § 353, which provided in part: "The Commonwealth does hereby pledge to and agree with any person, firm or corporation, or Federal agency subscribing to, or acquiring the bonds to be issued by the Authority for the construction, extension, improvement, or enlargement of any project or part thereof, that the Commonwealth will not limit or alter the rights hereby vested in the Authority until all bonds at any time issued, together with the interest thereon, are fully met and discharged.”

. In Franklin Township v. Department of Environmental Resources, 500 Pa. 1, 452 A.2d 718 (1982), the Supreme Court reversed this Court's decision to affirm the dismissal of an appeal based on lack of standing by the County of Fayette and Franklin Township. The Supreme Court held that pursuant to Wm. Penn Parking Garage the county and the township as legal persons are more than abstract entities, and in their role of promoting and protecting the quality of life for their residents they had a substantial, direct and immediate interest in the state government’s action to permit the establishment of a toxic waste landfill within their boundaries. Also see Borough of Glendon v. Department of Environmental Resources, 145 Pa.Cmwlth. 238, 603 A.2d 226 (1992) (standing conferred upon the borough to challenge solid waste permit because of increased threat of municipal contamination).

. The City noted in its brief, see n. 14, that the contracts between the City and the Parking Authority were too numerous to list and to attach to the amended complaint, nor was the City required to do so as the contracts are evidentiary and do not form the basis of the cause of action. See 4 Standard Pennsylvania Practice 2d, §§ 21:81, 82 (2001).

. The New Jersey statutory covenant provided in part:
The 2 states covenant and agree with each other and with the holders of any affected bonds ... that so long as any of such [Port Authority] bonds remain outstanding and unpaid and the holders thereof shall not have given their consent ... (b) neither the States nor the port authority nor any subsidiary corporation ... will apply any of the rentals, tolls, fares, fees, charges, revenues or reserves, which have been or shall be pledged in whole or in part as security for such bonds, for any railroad purposes whatsoever other than permitted purposes hereinafter set forth.
N.J.S.A. § 32:1-35.55. The statutory covenant further promised that New Jersey would not impair the port authority’s control over its fees or services.