Beattie v. Allegheny County

• Decision Date: 15 April 2004
• Citation: 847 A.2d 185
• Parties: Henrietta BEATTIE, Gertrude Ellis, Karen Rummel, Sandra Walls, Kenneth Pierce and Mon Valley Unemployed Committee, on their own behalf and on behalf of all others similarly situated, Appellants v. ALLEGHENY COUNTY, Pennsylvania, James Roddey, its Chief Executive and Manatron, Inc.
• Court: Pennsylvania Commonwealth Court

847 A.2d 185

Henrietta BEATTIE, Gertrude Ellis, Karen Rummel, Sandra Walls, Kenneth Pierce and Mon Valley Unemployed Committee, on their own behalf and on behalf of all others similarly situated, Appellants v. ALLEGHENY COUNTY, Pennsylvania, James Roddey, its Chief Executive and Manatron, Inc.

Commonwealth Court of Pennsylvania.

Argued February 4, 2004.

Decided April 15, 2004.

Kevin Quisenberry, Pittsburgh, for appellant.

George M. Janocsko, Pittsburgh, for appellee.

BEFORE: COLINS, President Judge, McGINLEY, Judge, PELLEGRINI, Judge, FRIEDMAN, Judge, COHN, Judge, SIMPSON, Judge and LEAVITT, Judge. OPINION BY President Judge COLINS

The members of this class action (Taxpayers) appeal an order of the Court of Common Pleas of Allegheny County that sustained preliminary objections filed by Allegheny County, its former Chief Executive, James Roddey, and Manatron, Inc. The class members aver that they are homeowners whose houses have actual values of $50,000 or less, and contend that the County's assessment system has caused approximately 80,000 such homes to be over-assessed, and also caused a significant number of high-value homes to be under-assessed. Their complaint¹ filed in equity challenges the constitutionality of the County's property assessment, and seeks declaratory, injunctive, and monetary relief.

Taxpayers asserted that the County had failed to follow a standard adopted by the County in its Assessment Standards and Practices Ordinance. Taxpayers contend that this standard required the County assessment to produce Price Related Differentials (PRDs)² no greater than 1.03³ on a county-wide and inter-municipality basis, and that the County's assessment in 2002 failed to satisfy this standard. In their pleadings Taxpayers have asserted that the County's method of determining the market value of homes has resulted in an unconstitutional lack of uniformity under Article VIII, Section 1 of the Pennsylvania Constitution. Taxpayers do not allege that the County has inappropriately applied disparate ratios to valid home values, but rather the converse—that the method the County used to determine value of homes has led to over-valuation of 80,000 homes that have a true value below $50,000, and an under-valuation of homes that have higher actual values. Complaint, paragraph 53.

Taxpayers raise the following issues: (1) whether the trial court erred in concluding that Taxpayers must avail themselves of the statutory remedies available; (2) whether the trial court erred in dismissing Taxpayers' claim under 42 U.S.C. § 1983; (3) whether the County's 2002 assessment failed to comply with the County's Assessment Standards and Practices Ordinance because the assessment produced PRDs greater than 1.03; and (4) whether the trial court erred in concluding that Taxpayers' challenge to the 2001 assessment is moot.

1. Equity Jurisdiction over Uniformity Clause Challenge

Taxpayers first argue that the trial court erred in granting the County's preliminary objections because they have raised a substantial constitutional question regarding the uniformity of the 2001 and 2002 assessments, and there is no adequate statutory remedy to address the harm caused by the assessments. However, in Jordan v. Fayette County Board of Assessment Appeals, 782 A.2d 642 (Pa.Cmwlth.2001), this Court addressed a challenge brought by a group of taxpayers who sought to have a common pleas court exercise equity jurisdiction over their claim that a county's assessment methods violated their rights under the uniformity clause. In concluding that those taxpayers must exhaust their statutory remedy, we were guided by the Supreme Court's statements in Borough of Green Tree v. Board of Property Assessments, 459 Pa. 268, 328 A.2d 819 (1974), wherein that Court noted the distinction between frontal attacks on taxing statutes and those that challenge the methods used to implement taxing authority. The purpose of requiring strict compliance with the statutory remedy is to ensure that the "foundation upon which the administrative process was founded" is not undermined. Jordan, 782 A.2d at 646 (quoting Shenango Valley Osteopathic Hospital v. Department of Health, 499 Pa. 39, 47, 451 A.2d 434, 438 (1982)). "The premature interruption of the administrative process restricts the agency's opportunity to develop an adequate factual record, limits the agency in the exercise of its expertise and impedes the development of a cohesive body of law in that area." Id. See also, Annenberg v. Commonwealth, 686 A.2d 1380 (Pa.Cmwlth.1996).

In this case, the trial court correctly concluded that Taxpayers are not presenting a frontal attack on the underlying taxing statute, but rather, as in Jordan, challenging the County's assessment methods. The trial court then recognized that, despite the direction of Borough of Green Tree, distinguishing facial constitutional challenges from constitutional challenges to the application of a taxing provision, this Court has nevertheless approved of courts exercising equity jurisdiction over uniformity clause challenges involving the latter variety of constitutional claims in limited circumstances.

The reason for this divergence may be that this Court perceived that, while the Supreme Court recognized that an administrative agency should be allowed to exercise its role of specialized fact-finder and apply "its administrative expertise," Borough of Green Tree, 459 Pa. at 281, 328 A.2d at 825, there are times when, despite the absence of a facial constitutional challenge, the balance between an administrative agency's exercise of its expertise and its ability to offer complete redress for an alleged wrong of egregious constitutional dimension falls in favor of proceeding in equity.

Thus, Taxpayers rely upon, and the trial court considered, several such cases in which courts were permitted to exercise equity jurisdiction despite the existence of a statutory remedy, even where the uniformity challenge did not present a facial constitutional attack. These cases hold in general that a party must establish discrimination in the application of the taxing statute, and that the statutory remedy, if any, is inadequate.

As to the first requirement, Taxpayers rely in part upon this Court's decision in City of Lancaster v. Lancaster County, 143 Pa.Cmwlth. 476, 599 A.2d 289, 294 (1991),petition for allowance of appeal denied, 530 Pa. 634, 606 A.2d 903 (1992). Taxpayers assert that they have raised a substantial constitutional question, albeit, one that involves a constitutional challenge to the application of taxing provisions— that the County has violated the Uniformity Clause of the Pennsylvania Constitution through its system of assessment. In order to satisfy this first requirement of a substantial constitutional question, a taxpayer must show that a statutory or administrative scheme violates the Uniformity Clause. A taxing scheme will satisfy the requirements of the Clause if there exists "a reasonable distinction and difference between classes of taxpayers sufficient to justify different tax treatment." Id. In Appeal of Armco, Inc., 100 Pa. Cmwlth. 452, 515 A.2d 326, 329 (1986), petitions for allowance of appeal denied, 516 Pa. 643, 533 A.2d 714 (1987), this Court stated: "In tax matters, alleged violations of the equal protection clause and the uniformity clause are analyzed in the same manner; a taxpayer alleging that the administration of a tax violates its rights to be taxed uniformly with others of its class must demonstrate deliberate, purposeful discrimination in the application of the tax before constitutional safeguards are violated." Although the use of the words "deliberate" and "purposeful" seem to indicate some level of intentional culpability is required, an early decision of the Pennsylvania Supreme Court suggests that that requirement is met simply when the challenged system is "part of a systematic, deliberate method of enforcement of the tax laws, and not mere errors or oversights." Fisher Controls Co. v. Commonwealth, 476 Pa. 119, 127, 381 A.2d 1253, 1257 (1977).

The question then becomes whether, based upon the factual averments in Taxpayers' complaint, they have shown that the County's methods have a discriminatory effect. In City of Lancaster, the County sought to avoid a full re-assessment of the entire county by selecting certain areas to be re-assessed. The last time of a full county-wide re-assessment was approximately twenty-five years before, in 1960. This Court stated: "We conclude that, as a matter of law, the County, in singling out ten of the County's taxing districts, in utilizing a different method of assessment on the properties in those districts, and in making unsubstantiated wholesale adjustments to grade and depreciation factors of certain of those properties, violated ... the uniformity requirement of Article VIII, Section 1 of the Pennsylvania Constitution." Id., 599 A.2d at 299. The Court concluded that the method constituted a de facto countywide reassessment, and that no adequate statutory remedy for a countywide assessment existed. The Court noted that having one court decide the larger question of the constitutionality of a countywide assessment rather than requiring each individual taxpayer to file an appeal provided a more efficient method of review for both taxpayers and the courts.

The Court reached a similar conclusion in Harrisburg v. Dauphin County Board of Assessment Appeals, 677 A.2d 350 (Pa. Cmwlth.1996), petition for allowance of appeal denied, 548 Pa. 620, 693 A.2d 590 (1997), where the Court held that the County's reassessment program, designed to reassess certain rehabilitated houses in the Shipoke section of the City of Harrisburg using a ratio program, constituted a de facto countywide reassessment. Similarly, Millcreek Township v. County of Erie, 714 A.2d 1095 (Pa.Cmwlth.1998), petition for allowance of appeal denied, ___ Pa. ___, ___ A.2d ___ (No. 547 W.D. Alloc. D...