BUILDING OWNERS v. City of Pittsburgh

Citations: 985 A.2d 711; 603 Pa. 506; 2009 Pa. LEXIS 2752Docket: 41 & 42 WAP 2008

Court: Supreme Court of Pennsylvania; December 27, 2009; Pennsylvania; State Supreme Court

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The case involves the Service Employees International Union (SEIU) and several building management entities appealing a decision regarding the City of Pittsburgh's ordinance concerning displaced contract workers. The ordinance, enacted on November 30, 2004, mandates that new contractors retain employees of previous contractors for a minimum of 180 days, allowing termination only for cause. The ordinance applies to contractors with five or more employees providing janitorial, security, or maintenance services in large commercial buildings.

The Appellees, consisting of various building management organizations, challenged the ordinance as ultra vires under Pennsylvania law (53 Pa.C.S. 2962(f)). The Allegheny County Court of Common Pleas ruled in favor of the Appellees, declaring the ordinance violated state law. This decision was affirmed by the Commonwealth Court, which noted that the ordinance imposed affirmative duties on businesses.

The Supreme Court of Pennsylvania granted allocatur to examine whether the Commonwealth Court's ruling conflicted with the Home Rule Law's intent to broadly empower municipalities. Ultimately, the Supreme Court found that the City of Pittsburgh exceeded its authority and violated the Home Rule Charter, affirming the Commonwealth Court's decision.

The Commonwealth Court upheld the trial court's ruling that the "Protection of Displaced Contract Workers Ordinance" (PDCWO) is ultra vires under 53 Pa.C.S. 2962(f). This section restricts home rule municipalities, like Pittsburgh, from regulating business duties and responsibilities unless explicitly permitted by statewide statutes. Appellees argue the Ordinance is invalid as it imposes requirements on businesses, which Section 2962(f) prohibits. In contrast, the appellant SEIU contends that this section should only limit municipalities from altering existing state-imposed duties. However, the Commonwealth Court found that the Ordinance imposes a requirement on new contractors to retain employees from prior contractors during a 180-day transition period, directly conflicting with the prohibitions of Section 2962(f). This ruling aligns with prior case law, specifically the Smaller Mfrs. Council v. Council of Pittsburgh case, where a similar ordinance was invalidated for overstepping municipal authority. The court reasoned that the PDCWO's requirements are more intrusive than those previously invalidated, further confirming its invalidity.

The Ordinance is deemed a direct regulation of contractors, violating Section 2962(f). SEIU argues for a reevaluation of the Smaller decision, asserting that the Ordinance resembles the one upheld in Hartman v. City of Allentown, which added sexual orientation and gender identity to prohibited discrimination bases. The trial court in Hartman found the ordinance ultra vires for imposing duties on businesses, but the Commonwealth Court reversed this, stating the ordinance did not impose affirmative duties, thus not violating Section 2962(f). The court emphasized a narrow interpretation of Section 2962(f) aligns with legislative intent, indicating that "regulation of business" refers to affirmative duties. The Hartman ordinance prohibited discrimination without imposing specific obligations; in contrast, the current Ordinance mandates employers retain employees for a transitional period, exemplifying invasive regulations prohibited by Section 2962(f). SEIU and dissenting opinions argue that Pittsburgh's regulatory limitations should be based solely on preemption, conflicting with the plain language of Section 2962(f). The court rejects this interpretation, affirming that Section 2962(f) prohibits imposing affirmative duties on employers. Consequently, the court upholds the Commonwealth Court's decision, with Chief Justice Castille and Justices Eakin, Baer, and McCaffery concurring and Justice Todd dissenting. Justice Todd contends that the Majority's interpretation undermines the powers of home rule municipalities, suggesting it leads to unreasonable limitations and potential challenges to existing local business regulations.

The Majority's interpretation of the Home Rule Law is flawed, particularly in its alignment with the Commonwealth Court's decision in Hartman v. City of Allentown, which upheld an anti-discrimination ordinance. The Majority creates an unwarranted distinction between affirmative and non-affirmative duties within the statute, which is not supported by the statute's plain language. This approach overlooks the prohibition against home rule municipalities determining legislatively imposed duties while still allowing regulation of businesses. The Majority restricts its review to the clarity of the statute's language, neglecting broader principles of statutory construction aimed at discerning legislative intent. Key principles include the presumption against unreasonable and absurd outcomes, the prioritization of public interest, and the liberal construction of home rule powers in favor of municipalities. The Home Rule Law specifies that municipalities may not impose duties on businesses unless expressly allowed by applicable statutes. The Majority's interpretation leads to an unreasonable result that contradicts the legislative intent and the fundamental purpose of home rule, which is to empower local governance over municipal affairs.

The Pennsylvania Constitution allows municipalities that adopt home rule to exercise any powers not restricted by the Constitution, the General Assembly, or their home rule charters. The General Assembly intends for home rule municipalities to have broader powers than non-home rule municipalities, as evidenced by the requirement for liberal construction of home rule powers. Non-home rule municipalities can enact ordinances for the general welfare, which have been upheld by courts. The Majority's ruling that home rule municipalities cannot regulate businesses contradicts the General Assembly's intent and creates an imbalance where non-home rule municipalities retain powers that home rule municipalities do not. This interpretation risks invalidating numerous ordinances aimed at protecting citizen welfare, including those related to licensure and public order. The dissent argues that a more nuanced approach should be adopted, allowing home rule municipalities to impose duties on businesses only if the Commonwealth has not already done so, thereby preserving the legislative intent for home rule municipalities to have greater authority. Under this interpretation, the City of Pittsburgh's Protection of Displaced Contract Workers Ordinance would be validly enacted.

The excerpt emphasizes that the Home Rule Law does not impose a total ban on municipalities regulating businesses and employers, as evidenced by specific provisions that clearly prohibit certain municipal actions, such as those related to firearms (53 Pa.C.S.A. 2962(g)) and employee rights prior to April 13, 1972 (53 Pa.C.S.A. 2962(c)(5)). The absence of similar clear prohibitions against business regulation indicates the General Assembly's intent to allow such municipal regulations. The critique focuses on the Majority's interpretation, which introduces an "affirmative duty" distinction not found in the statute, creating inconsistency with the Commonwealth Court's decision in Hartman. The Majority invalidates an ordinance by suggesting it imposes a requirement on contractors, paralleling this with Hartman’s anti-discrimination ordinance, which similarly imposes a requirement on businesses. This analysis illustrates the lack of coherence in the Majority's interpretation and highlights that the Home Rule Law does not differentiate between affirmative and non-affirmative duties. Consequently, the dissent argues that the Majority's conclusions and the approach taken in Hartman are fundamentally incompatible.

The Pittsburgh Code sections 769.01-769.07 are referenced, indicating that the section allowing a private right of action was deemed invalid. The City of Pittsburgh and the Pittsburgh City Council supported SEIU's motion for judgment on the pleadings. Non-home rule municipalities, as established by state law, have limited powers specifically enumerated to them, as discussed in City of Phila. v. Schweiker. In contrast, the repeal of former Section 302(d) clarified that home rule municipalities can dictate business-related duties only as allowed by state law.

In Hartman, it was determined that a non-home rule municipality could enact an anti-discrimination ordinance based on its police powers, supporting the argument that home rule municipalities like Allentown could also do so due to their broader authority. The dissent argues that since non-home rule municipalities can regulate businesses, home rule municipalities should possess at least the same powers. However, the dissent misinterprets the distinction between regulating business and health or safety ordinances affecting businesses. The case of Taylor v. Harmony Twp. is cited to illustrate that non-home rule municipalities can only enact ordinances within their specific statutory power, which does not grant them broader authority than home rule municipalities. The majority asserts that the limitations on non-home rule municipalities regarding business regulations support the conclusion that home rule municipalities have greater powers.