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decided: July 2, 1973.


Appeal from order of Court of Common Pleas, Civil Division, of Allegheny County, April T., 1970, No. 1699, and decision of Commonwealth Court of Pennsylvania, No. 643 C.D. 1971, in re Alco Parking Corporation, Arena Parking, Inc. et al. v. City of Pittsburgh.


Leonard M. Marks, of the New York Bar, and Leonard Boreman, with them Richard H. Martin, Gold, Farrell & Marks, and Baskin, Boreman, Sachs, Wilner, Gondelman & Craig, for appellants.

Ralph Lynch, Jr., City Solicitor, with him Grace S. Harris, Special Assistant Solicitor, for appellee.

Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Justice Roberts. Mr. Justice O'Brien concurs in the result. Dissenting Opinion by Mr. Justice Eagen. Mr. Chief Justice Jones joins in this dissenting opinion. Dissenting Opinion by Mr. Justice Pomeroy.

Author: Roberts

[ 453 Pa. Page 247]

This controversy presents the interesting and novel question of whether the enactment, by a municipal government, of a 20 percent gross receipts tax upon all non-residential, commercial parking facilities in that municipality, combined with direct governmental competition

[ 453 Pa. Page 248]

    in the form of a public parking authority, charging lower rates, has resulted in an unconstitutional taking and confiscation of private property without due process of law.

Appellants are twelve owners and operators of parking lots and garages representing approximately 71 percent of the total commercial parking spaces in downtown Pittsburgh. On February 20, 1970, appellants filed a complaint in equity in the Allegheny County Court of Common Pleas seeking to restrain the City of Pittsburgh (appellee) from enforcing the provisions of Ordinance No. 704 (Parking Tax Ordinance), and seeking a refund of all taxes paid thereunder. The Parking Tax Ordinance, approved by the Pittsburgh City Council on December 31, 1969, and enacted pursuant to the Local Tax Enabling Act, Act of December 31, 1965, P. L. 1257, §§ 1 et seq., 53 P.S. §§ 6901 et seq., imposed a tax of 20 percent on the gross receipts of all nonresidential commercial parking transactions within the city limits.

This Parking Tax Ordinance (No. 704) superseded and replaced Ordinance No. 675, enacted by the City of Pittsburgh in 1968 establishing a gross receipts tax of 15 percent on all non-residential commercial parking transactions in the city. Ordinance No. 675, in turn, had replaced Ordinance No. 434, which had originally established the gross receipts tax rate of 10 percent.

In their complaint in equity appellants asserted (1) that the Parking Tax Ordinance was so excessive and unreasonable that it amounted to a confiscation of appellants' property without due process of law, and (2) that the Ordinance violated Article VIII, Section 1 of the Pennsylvania Constitution,*fn1 and the equal protection

[ 453 Pa. Page 249]

    clause of the Fourteenth Amendment of the United States Constitution in that the city had no reasonable basis for separately classifying appellants' commercial parking operations for the purpose of taxation. After a trial the Allegheny County Court of Common Pleas issued a Decree Nisi, on March 19, 1971, dismissing appellants' complaint, having found no taking of property without due process, and no violation of either the Pennsylvania or the United States Constitutions. Appellants' timely filed exceptions to the decree were dismissed by the court en banc on July 11, 1971, whereupon a final decree was entered.

Appellants then appealed to the Commonwealth Court which affirmed the decree of the common pleas court on June 8, 1972, by a vote of four to three. Appellants' petition for reargument was granted by the Commonwealth Court on June 29, 1972. However, after reargument the Commonwealth Court adhered to its prior decision, affirming the chancellor's decree on October 10, 1972. Subsequently, on November 6, 1972, appellants filed a petition for allowance of appeal with this Court. That petition was granted on January 23, 1973. We now reverse and remand.


Appellee, the City of Pittsburgh, contends, initially, that this Court lacks jurisdiction to hear this appeal because appellants' petition for allowance of appeal was not timely filed. See Nardo v. Smith, 448 Pa. 38, 292 A.2d 377 (1972). Consequently appellee has moved to quash this appeal. In its motion to quash appellee alleges that appellants' petition for allocatur was not filed until November 6, 1972, almost five months after the issuance of the final order and opinion of the Commonwealth Court of June 8, 1972 -- clearly not within the 30-day time limit for perfecting an appeal as provided

[ 453 Pa. Page 250]

    by statute. See Act of July 31, 1970, P. L. 673, art. V, § 502, 17 P.S. § 211.502 (Supp. 1972).

Appellee's contention is that the grant of the petition for reargument by the Commonwealth Court on June 29, 1972 (within the 30-day appeal period), unless accompanied by an order staying the proceedings, does not toll the 30-day period within which appellants must file their appeal. See Francis v. J. A. Brashear M. School Dist., 435 Pa. 589, 258 A.2d 509 (1969); Smith v. Jones, 369 Pa. 13, 85 A.2d 23 (1951); Erie v. Piece of Land, 341 Pa. 310, 17 A.2d 399 (1941). Since no such specific stay of the proceedings was issued by the Commonwealth Court, appellee asserts that the time for perfecting the appeal expired 30 days after the original June 8, 1972 order of the Commonwealth Court, regardless of that court's grant of reargument within the 30-day period.

Appellants contend that in good faith, after reargument had been granted, they contacted the Prothonotary of the Supreme Court who advised them that a petition for allocatur should not be filed until after the Commonwealth Court's order, following reargument, had been entered. Relying upon this information appellants did not file their petition until November 6, 1972 -- a date within 30 days of the Commonwealth Court's order, after reargument, affirming the decree below.

While appellants may not have been justified in relying on the legal advice of a court official, nevertheless the rule of law urged upon this Court by the appellee is not only contrary to logic but to the laws of physics as well. The granting of a petition for reargument within the 30-day appeal period necessarily indicates an intention by the granting court to stay the proceedings, and is in reality such a stay, in order to keep the record before that court, during reargument, pending any change or modification of the court's initial order after reargument. In these circumstances to

[ 453 Pa. Page 251]

    require appellants to file a petition for allowance of appeal within 30 days of the original order of the Commonwealth Court would have the effect of placing them in two courts at the same moment. It is legally and physically impossible for the record in any case to be pending before two separate appellate courts of this Commonwealth simultaneously. Indeed, a reargument is clearly a reconsideration by a court of a particular case. To slavishly adhere, as the appellee insists, to a rule requiring a court to also issue an order staying the proceedings would be needlessly elevating mere form over substance.

Certainly it is illogical, as well as senseless, to require a litigant to file an appeal, or petition for allowance of appeal, to a second appellate court while his case is still pending before the first appellate court, about to reconsider his case. To compel him to do so in advance of the reargument is indeed a useless, wasteful, and premature procedure. Assuming the court's initial decision is reversed upon reargument, the litigant may not even desire to file an appeal at the later time. If an appeal is desired after the reargument, that is the appropriate time for setting the appeal procedure in motion. This Court will not mandate such a purposeless burden and expenditure of professional and judicial time and effort.

These considerations lead us inexorably to the conclusion that where, as here, the Commonwealth Court granted appellants' petition for reargument within the prescribed period, the proceedings were thereby stayed, pending a reconsideration upon the merits after reargument. Appellants' petition, filed within 30 days of the Commonwealth Court's post-reargument disposition, was therefore timely. The motion to quash the appeal is denied. To the extent that any prior decisions of this Court are inconsistent with this holding they are no longer controlling.

[ 453 Pa. Page 252]

    argues that the issues raised by appellants are not "substantial constitutional questions" and that appellants had a specific statutory remedy of which they failed to avail themselves. See Local Tax Enabling Act, Act of December 31, 1965, P. L. 1257, § 6, as amended, 53 P.S. § 6906.*fn3

However, appellee did not raise this issue below and may not raise this issue here for the first time. The record clearly discloses that appellee interposed no objection to the propriety of the equity court proceeding either prior to, during, or after the trial below. In fact, one of the chancellor's express conclusions of law, to which appellee took no exception was: "This court sitting

[ 453 Pa. Page 254]

    in equity has jurisdiction of the parties and of the subject matter of this proceeding." This Court has repeatedly emphasized, and it is now beyond cavil, that "we will not review questions that were neither raised, tried, or considered in the trial court." Robert J. Felte, Inc., v. White, 451 Pa. 137, 302 A.2d 347 (1973); Heppe Estate, 440 Pa. 328, 269 A.2d 687 (1970); Man O'War Racing Ass'n, Inc. v. State Horse Racing Commission, 433 Pa. 432, 250 A.2d 172 (1969); Brenner v. Sukenik, 410 Pa. 324, 189 A.2d 246 (1963); Clark v. Rutecki, 408 Pa. 25, 182 A.2d 687 (1962); Bechler v. Olivia, 400 Pa. 299, 161 A.2d 156 (1960); Rosenfeld v. Rosenfeld, 390 Pa. 39, 133 A.2d 829 (1957).


Proceeding to the merits of the case, appellants attack the constitutionality of the Parking Tax Ordinance on two grounds. They first contend that the Ordinance violates both the uniformity clause of the Pennsylvania Constitution and the equal protection clause of the Fourteenth Amendment of the United States Constitution. Specifically appellants assert that the Ordinance "constitutes an arbitrary use of the taxing power by [Pittsburgh] City Council in that the imposition of a separate tax on the parking business, in addition to its regular taxes, lacks any reasonable basis." Moreover, appellants contend that merely because the City could, under its police power, classify the parking business separately for regulatory purposes, it does not necessarily follow that they can separately classify the parking business for purposes of taxation.

This argument, presented to and rejected by this Court on numerous prior occasions, must, once again, be rejected. It is well established that the Commonwealth and its political subdivisions, in the exercise of the taxing power, are subject to the requirements of

[ 453 Pa. Page 255]

    equal protection and uniformity. See Allied Stores of Ohio, Inc. v. Bowers, 358 U.S. 522, 79 S. Ct. 437 (1959); Commonwealth v. Life Assurance Co. of Pa., 419 Pa. 370, 214 A.2d 209 (1965). However, the taxing authority must by necessity possess wide discretion for purposes of taxation of various businesses or occupations. Commonwealth v. Life Assurance Co. of Pa., supra at 376, 214 A.2d at 214, and the cases cited therein.

In Life Assurance Co., supra, this Court noted:

"The equal protection clause imposes no iron rule of equality prohibiting that degree of flexibility and variety appropriate to reasonable schemes of taxation. Allied Stores of Ohio, Inc. v. Bowers, 358 U.S. 522, 525, 79 S. Ct. 437, 440 (1959).

"The only constitutional limitation placed upon the power of the Legislature to distinguish between various entities for purposes of taxation is that their basis for doing so be reasonable. See Allied Stores of Ohio, Inc. v. Bowers, supra, at 527, 79 S. Ct. at 441; State Bd. of Tax Comm'rs of Indiana v. Jackson, 283 U.S. 527, 537, 51 S. Ct. 540, 543 (1931); Brown-Forman Co. v. Kentucky, 217 U.S. 563, 572, 30 S. Ct. 578, 580 (1910); Jones & Laughlin Tax Assessment Case, 405 Pa. 421, 433-34, 175 A.2d 856, 862 (1961); Commonwealth v. Lukens, 312 Pa. 220, 223, 167 Atl. 167, 169 (1933). And the burden of showing that the classification employed by the Legislature is not reasonable is upon the party attacking the tax. Cf. Chartiers Valley Jt. Schools v. Allegheny County Bd. of School Dir's, 418 Pa. 520, 546, 211 A.2d 487, 501 (1965). 'Especially is this so in light of the often reaffirmed rule that . . . "'[legislation] will not be declared unconstitutional unless it clearly, palpably and plainly violates the Constitution.'"' Ibid. (Citations omitted.)" Id. at 376-77, 214 A.2d at 214.

Moreover, the burden of proving the classification is unreasonable is a heavy one. Amidon v. Kane, 444 Pa. 38, 51,

[ 453 Pa. Page 256279]

A.2d 53, 60 (1971); F. J. Busse Co. v. Pittsburgh, 443 Pa. 349, 359, 279 A.2d 14, 19 (1971); Philadelphia v. Depuy, 431 Pa. 276, 279, 244 A.2d 741, 743 (1968). "So long as the classification imposed is based upon some standard capable of reasonable comprehension, be that standard based upon ability to produce revenue or some other legitimate distinction, equal protection of the law has been afforded." Commonwealth v. Life Assurance Co. of Pa., supra at 378, 214 A.2d at 215. Merely because "a statute may discriminate in favor of a certain class does not render it arbitrary if the discrimination is founded upon a reasonable distinction, or difference in state policy. American Sugar refining Co. v. State of Louisiana, 179 U.S. 89, 21 S. Ct. 43." Allied Stores, supra at 528, 79 S. Ct. at 441. Thus a tax based on a reasonable classification is not unconstitutional because one class may be placed at a competitive disadvantage. Williams and Co., Inc. v. Pittsburgh School District, 430 Pa. 509, 514, 244 A.2d 37, 39 (1968).

The determinative question, then, is whether the classification imposed by the Parking Tax Ordinance is a reasonable one. We said in Commonwealth v. Life Assurance Co. of Pa., supra at 378-79, 214 A.2d at 215 that: ". . . the essential question in testing the validity of such measures . . . is whether the distinctive treatment accorded rests upon substantial differences between the subjects so classified. . . . And where such distinctions rest upon differences recognized and acted upon by the business world, it is not within the province of the courts to intrude. . . . So long as the classification is neither capricious nor arbitrary, there is no denial of the equal protection of the law . . . ." (Citations omitted).

[ 453 Pa. Page 257]

This Court has in the past sustained numerous types of distinctive tax treatment of a wide diversity of businesses and occupations. See, e.g., Commonwealth v. Page 257} Lafferty, 426 Pa. 541, 233 A.2d 256 (1967) (contract carrier taxed differently from common carrier although engaged in similar enterprises); Allentown School District Mercantile Tax Case, 370 Pa. 161, 87 A.2d 480 (1952) (retailers and wholesalers taxed differently); DuFour v. Maize, 358 Pa. 309, 56 A.2d 627 (1948) (strip mining of coal taxed differently than deep mining of coal). Moreover, in 1940, this Court sustained the validity of a Philadelphia ordinance which distinguished open parking places from closed garages for the purpose of taxation. Philadelphia v. Samuels, 338 Pa. 321, 12 A.2d 79 (1940); see also McGillick v. City of Pittsburgh, 415 Pa. 581, 203 A.2d 480 (1964); Philadelphia v. Eglin's Garages, Inc., 342 Pa. 142, 19 A.2d 845 (1941).

Commercial parking lots are without question a proper subject for local, municipal taxation. The City of Pittsburgh has decided, not without reason, that commercial parking operations should be singled out for special taxation to raise revenue because of traffic related problems engendered by these operations. This Court cannot say that placing such businesses in a separate taxable class is, ipso facto, an action so devoid of any reasonable basis as to constitute a violation of either the equal protection clause of the United States Constitution or the uniformity clause of the Pennsylvania Constitution.*fn4 ". . . [W]here the state seeks to raise revenue, it need not justify any distinction drawn

[ 453 Pa. Page 258]

    between the taxed and nontaxed with respect to the raising of revenue so long as some other reasonable basis for treating the various classes differently exists. Where such distinction exists, the wisdom of the legislative policy of taxing one class and not another is not a matter for the courts. 'Whether the enactment is wise or unwise, whether it is based on sound economic theory, whether it is the best means to achieve the desired result, whether in short, the legislative discretion within its prescribed limits should be exercised in a particular manner, are matters for the judgment of the legislature, and an earnest conflict of serious opinion does not suffice to bring them within the range of judicial cognizance.' Chicago, Burlington & Quincy R. Co. v. McGuire, 219 U.S. 549, 569, 31 S. Ct. 259, 263 (1911)." Commonwealth v. Life Assurance Co. of Pa., supra at 377-78 n.11, 214 A.2d at 215 n.11.


Appellants' second avenue of attack is that the Parking Tax Ordinance, coupled with direct economic competition by the Public Parking Authority, created with public funds (see Price v. Philadelphia Parking Authority, 422 Pa. 317, 335, 221 A.2d 138, 148 (1966)), violates the due process clause of the Fourteenth Amendment of the United States Constitution. Specifically appellants maintain that the ordinance imposes a rate so excessive and unreasonable in light of the direct governmental competition, that it amounts to a confiscation of property without just compensation. Because of the alleged excessive and unreasonable rates, in these circumstances, appellants assert that the vast majority of parking lot owners and operators can no longer afford to remain in business. Additionally they argue that even those owners who are still not operating at a loss are not earning a reasonable return. This complete

[ 453 Pa. Page 259]

    inability to earn a reasonable return on investments is allegedly due to the combined effects of the 20 percent gross receipts tax and the competition from the Public Parking Authority, which charges lower rates. For example, the record establishes that the average all-day rate for the Public Parking Authority is about $2.00, while the average all-day rate for private operators is approximately $3.00.

In support of their contention appellants introduced at trial numerous statistical charts and compilations seeking to establish the unconstitutional impact of the gross receipts tax. A brief summary of this evidence shows the following.

After the imposition of the 20 percent gross receipts tax appellants' projected*fn5 figures for 1970 show that out of 14 different parking lot operators in downtown Pittsburgh nine would sustain operating losses. Of the five operators earning a profit only two would achieve a return of one percent or better. The highest return projected for any of the 14 operators in 1970 was 2.9 percent.

Moreover, the evidence produced by appellants indicates that as the gross receipts tax increases from the original 10 percent to the present 20 percent the percentage and number of parking lots unable to achieve any profit doubles. Again based on projections for 1970, when compelled to pay the 20 percent gross receipts tax, 65 percent of the individual lots would sustain operating losses. If the tax had remained at 15 percent, only 37 percent of the lots would fail to earn a profit. If the tax was reduced to its original 10 percent then only 30 percent of the lots would sustain losses.

[ 453 Pa. Page 260]

The chancellor, upon evaluating the evidence presented, held that appellants had failed to meet their heavy burden of establishing the tax was confiscatory.*fn6 Therefore, the chancellor concluded the Parking Tax Ordinance was not confiscatory or a taking without due process.*fn7 He noted that even though "a few borderline operations may fall by the way" the tax is not necessarily confiscatory. The Commonwealth Court unanimously agreed that the tax was imposed at an unreasonable rate, but the majority concluded that although appellants as a group ...

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