Se. Pa. Transp. Auth. v. City of Phila.

• Decision Date: 26 April 2017
• Docket Number: No. 10 EAP 2016,10 EAP 2016
• Citation: 159 A.3d 443
• Parties: SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY, Appellee v. CITY OF PHILADELPHIA and Philadelphia Commission on Human Relations, Appellants
• Court: Pennsylvania Supreme Court

159 A.3d 443

SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY, Appellee

v.CITY OF PHILADELPHIA and Philadelphia Commission on Human Relations, Appellants

No. 10 EAP 2016

Supreme Court of Pennsylvania.

ARGUED: September 13, 2016

DECIDED: April 26, 2017

Kelly Susan Diffily, Esq., Richard Gerson Feder, Esq., for City of Philadelphia

and Philadelphia Com'n on Human Relations, Appellants.

Andrew A. Chirls, Esq., Fineman Krekstein & Harris, Mary Catherine Roper, Esq., American Civil Liberties Union of Pennsylvania, Thomas William Ude Jr., Esq., Mazzoni Center, for American Civil Liberties Union of Pennsylvania and Mazzoni Center, Appellant Amicus Curiae.

Martin C. Cunningham, Esq., PA Human Relations Commission, Kathy Weaver Morrison, Esq., for Pennsylvania Human Relations Com'n, Appellant Amicus Curiae.

Gino J. Benedetti, Esq., Katharine Virginia Hartman, Esq., Patrick Michael Northen, Esq., Dilworth Paxson, L.L.P., for Southeastern Pennsylvania Transp. Authority, Appellee.

SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

OPINION ANNOUNCING THE JUDGMENT OF THE COURT

JUSTICE MUNDY

This case comes to us for a second time to determine if the Southeastern Pennsylvania Transportation Authority (SEPTA) is exempted from the jurisdiction of the City of Philadelphia (the City) via the Philadelphia Commission on Human Relations (Philadelphia Commission) and the provisions of the Philadelphia Fair Practices Ordinance (FPO). We previously remanded this case to the Commonwealth Court to ascertain the legislative intent regarding this issue by employing the analysis set forth by this Court in Dep't of Gen. Serv s . v. Ogontz Area Neighbors Ass'n , 505 Pa. 614, 483 A.2d 448 (1984). See Southeastern Pennsylvania Transp. Auth. v. City of Philadelphia, et al. , 627 Pa. 470, 101 A.3d 79, 90–91 (2014) (SEPTA III ). On remand, the Commonwealth Court determined that, applying the Ogontz test, the language and statutory scheme of the relevant statutes revealed the legislature's intent to exempt SEPTA from actions brought under the FPO. Southeastern Pennsylvania Transp. Auth. v. City of Philadelphia, et al. , 122 A.3d 1163, 1173 (Pa. Cmwlth. 2015) (SEPTA IV ). For reasons that follow, we affirm the decision of the Commonwealth Court.

This Court recounted the early procedural history of this case in our SEPTA III opinion, which we set forth again here.

This case has its origins in seven administrative proceedings against SEPTA that individuals instituted with the Philadelphia Commission from July 2007 through April 2009, alleging violations of the FPO.² At least two of the administrative complaints included claims of types of discrimination against which the FPO offers protection, but that the Pennsylvania Human Relations Act ("PHRA") ³ does not cover. SEPTA filed a motion to dismiss each of the administrative cases for lack of jurisdiction, and the Philadelphia Commission denied the motions.

While all seven administrative proceedings were still pending,^{[ ]} SEPTA instituted this civil action against Appellants seeking both declaratory and injunctive relief. SEPTA maintained in its complaint ^{[ ]} that because it is a Commonwealth agency, and Appellants are a political subdivision and a municipal agency, respectively, the FPO does not apply to it, and the Pennsylvania Constitution barred Appellants from exercising jurisdiction over it.^{[ ]}

Appellants filed preliminary objections demurring to SEPTA's complaint. Appellants argued that because Philadelphia's powers under the First Class City Home Rule Act ⁷[ (FCCHRA) ] extend to enacting and enforcing anti-discrimination laws, the FPO applied to SEPTA and the Philadelphia Commission had jurisdiction over it. Appellants further contended that an original action for declaratory and injunctive relief was inappropriate because SEPTA had to await final agency decisions in the individual administrative cases against it before it could seek appellate review in court. In response, SEPTA pointed out that the statute authorizing the creation of metropolitan transportation authorities, such as SEPTA, provides that such an authority "shall exercise the public powers of the Commonwealth as an agency and instrumentality thereof," 74 Pa.C.S. § 1711(a), and asserted that Philadelphia's authority as a home-rule jurisdiction extends only to the regulation of its municipal affairs. In its brief in opposition to the preliminary objections, SEPTA did not rely upon, or refer to in any manner, the section of its enabling legislation pertaining to sovereign and official immunity. 74 Pa.C.S. § 1711(c)(3). The trial court sustained the preliminary objections and dismissed SEPTA's complaint.^{[ ]}

SEPTA appealed to the Commonwealth Court, which reversed. SEPTA v. City of Philadelphia, 20 A.3d 558 (Pa. Cmwlth. 2011) (en banc ) [ (Septa II ) ]. A majority of the court concluded that the Philadelphia Commission lacked jurisdiction because SEPTA is an "agency and instrumentality" of the Commonwealth and therefore within the jurisdiction of the Pennsylvania Human Relations Commission (the "State Commission"). The majority noted that the State Commission is responsible for the administration of the PHRA, which bans any "employer" from engaging in certain forms of discrimination. 43 P.S. §§ 955, 956(a). Because the PHRA defines "employer" as including "the Commonwealth or any political subdivision or board, department, commission or school district thereof," ⁹ and because neither the PHRA nor the FPO explicitly grants the Philadelphia Commission jurisdiction over SEPTA, the majority concluded the State Commission—and not the Philadelphia Commission—had jurisdiction over SEPTA. The Commonwealth Court did not base any portion of its reasoning upon the section of SEPTA's enabling legislation pertaining to sovereign and official immunity. 74 Pa.C.S. § 1711(c)(3). Because the majority considered the State Commission's jurisdiction over SEPTA to be clear, and a Commonwealth instrumentality's challenge to "the scope of a governmental body's action pursuant to statutory authority" through a declaratory judgment action to be proper, the majority also concluded that SEPTA had no duty to exhaust its administrative remedies before seeking relief in court. SEPTA [II] , supra at 563.

[ ] Judge Dante Pellegrini dissented. He concluded that SEPTA is not a Commonwealth agency, and even if it were, it would still be subject to the provisions of the FPO and the jurisdiction of the Philadelphia Commission. The dissent stated that the General Assembly had enacted the portion of SEPTA's enabling act that provides that a metropolitan transportation authority such as SEPTA is "an agency and instrumentality thereof" merely to avoid constitutional and statutory questions, such as limitations on local governments' acquisition of debt. 74 Pa.C.S. § 1711(a). The dissent opined that the cited language was not intended to render SEPTA a state agency for all purposes.

The dissent then concluded that even if SEPTA were part of the Commonwealth government, it nonetheless would be subject to the jurisdiction of the Philadelphia Commission under Commonwealth v. Ogontz Area Neighbors Association , 505 Pa. 614, 483 A.2d 448, 452 (1984). In that case, the Department of Public Welfare ("DPW")—which we characterized as "an agency of the Commonwealth"—applied to the City of Philadelphia for the permits needed to build a facility for the mentally handicapped. Id. at 449–50. The City denied the permits on the ground that the proposed facility did not comply with use and other restrictions under the Philadelphia Zoning Code. On review in this Court, we rejected the notion that DPW was immune from local land regulations because it had the power to condemn property to establish the facility it sought to construct. We reasoned that because the General Assembly had established both the City and DPW, and had fixed the extent of each entity's powers, we would need to examine the enabling act of each entity to determine which entity's authority the legislature had intended to prevail for purposes of the parties' controversy. Because the applicable statutes did not clearly state which entity the legislature had intended to be "preeminent," we applied the rule of statutory construction that a court may determine legislative intent by considering "the consequences of a particular interpretation." Id. at 455 (citing 1 Pa.C.S. § 1921(c)(6) ). Because Philadelphia's zoning scheme would have been frustrated if DPW were to have prevailed, while subjecting DPW to local zoning rules and restrictions would not necessarily have frustrated DPW's mandate to establish mental health facilities, we concluded that the legislature had intended the City to have priority in the circumstances at issue.

The dissent here applied the principles we set forth in Ogontz and concluded that, as in Ogontz , the relevant statutes were ambiguous as to which entity was intended to have priority. The dissent therefore considered the effect of holding each entity preeminent and determined that ruling in SEPTA's favor would frustrate the legislature's intended scheme. Characterizing the PHRA as granting the State and Philadelphia Commissions' "concurrent jurisdiction," the dissent explained that deeming SEPTA "preeminent" over Appellants would thwart the legislatively established system of shared jurisdiction. The dissent explained that, on the other hand, treating Appellants as "preeminent" would not interfere with SEPTA's purpose of providing public transportation. The dissent stated, "All the consequence of the City's and the [State Commission's] preeminence means is that SEPTA would still have to respond to complaints, like private companies, of those choosing to file their claims of unlawful discrimination with [the Philadelphia Commission]." SEPTA [III],supra at 569 (Pellegrini, J., dissenting).

² In general terms, the FPO protects against discrimination: in employment based upon a person's race, ethnicity,

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