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decided: July 20, 1989.



Lewis H. Robertson, Levy & Robertson Ocean, N.J. and Stephen F. Dryden, Steinberg & Girsh, P.C., Philadelphia, Pa., (Pro Hac Vice Granted), for appellants.

Paul M. Fires, Asst. City Sol., Philadelphia, Pa., with him, Christine T. Bak, Chief Asst. City Sol., Andrew P. Bralow, Chief Dep. City Sol., and Seymour Kurland, City Sol., for appellees.

Crumlish, Jr., President Judge, and Craig, Barry, Colins, Palladino, McGinley and Smith, JJ.

Author: Colins

[ 127 Pa. Commw. Page 417]

This is an appeal from an order of the Court of Common Pleas of Philadelphia County granting the cross-motion for summary judgment filed by the City of Philadelphia, the Police Commissioner, Mayor and Council of the City of Philadelphia (collectively, City). We affirm.

Each of the appellants*fn1 maintains for profit coin-operated mechanical amusement devices for film or video presentations. In order to comply with Sections 19-902 and 19-903 of the Mechanical Amusement Device Tax Ordinance, Philadelphia Code Chapter 19-900, §§ 19-902 and 19-903,*fn2 (tax or Ordinance), appellants registered their devices annually and paid the attendant tax.*fn3 The Ordinance prohibits the use of devices for which the tax has not been paid or to which a label, disc or tag issued for that device for the current year is not attached. See § 19-902 of the Philadelphia Code.

Until the end of 1982, the Ordinance imposed a $25.00 per device tax. In June of 1982, the Ordinance was amended to increase the tax to $100.00 per device, pertaining to tax due for 1983. The appellants received notice of the increase in late 1982.*fn4 This notification included copies of the City's form entitled: CERTIFICATE OF OWNERSHIP AND TAX RETURN Mechanical Amusement Device Tax. Each

[ 127 Pa. Commw. Page 418]

    of the appellants tendered their completed form for 1983 and the attendant tax, thereby, registering their devices.

Appellants filed a complaint in equity in the trial court on July 18, 1985, alleging that the Ordinance, as applied to them, is unconstitutional. The appellants submitted that the Ordinance impermissibly imposes a tax on their free exercise of rights guaranteed by the First and Fourteenth Amendments to the United States Constitution.*fn5 Claiming that the trial court should exercise its equitable jurisdiction as well as that conferred by 42 U.S.C. § 1983, appellants requested a declaration that the Ordinance, as applied to them, is unconstitutional, an order permanently enjoining the City from enforcing the Ordinance against them, compensatory damages, costs and attorneys fees.

Cross motions for summary judgment were filed by the parties. On October 10, 1986, the trial court entered an order denying appellants' motion. On November 19, 1986, in a separate order, the trial court granted the City's motion. Appellants appeal from the November 19, 1986 order.*fn6

At the outset, we note an internal inconsistency with the trial court's opinion in this matter. After full discussion of the constitutionality of the Ordinance, the trial court opinion declares: "we refuse to assume equity jurisdiction over the case at bar." It is axiomatic that the trial court could not decide the issue if it lacked subject matter jurisdiction. We must conclude, therefore, that that portion of the trial court's opinion discussing the constitutionality of the Ordinance, although instructive, constitutes dicta.

The only issue for review then becomes whether the trial court was correct in declining to assume equity jurisdiction because appellants had failed to pursue adequate

[ 127 Pa. Commw. Page 419]

    and available administrative remedies with the Department of Collections and the City of Philadelphia Tax Review Board (Tax Review Board).*fn7 For the reasons which follow we agree that equity jurisdiction was not properly conferred upon the trial court*fn8 and that the grant of summary judgment was proper because appellants failed to exhaust their administrative remedies.*fn9 The Pennsylvania Supreme Court has held that the mere fact that a constitutional question is raised as to the validity of a statute does not confer equity jurisdiction upon a court. Borough of Green Tree v. Board of Property Assessments, Appeals and Review of Allegheny County, 459 Pa. 268, 328 A.2d 819 (1974) (plurality opinion). One must show the existence of a substantial question of constitutionality and the absence of an adequate statutorily prescribed remedy. Borough of Green Tree; Myers v. Department of Revenue, 55 Pa. Commonwealth Ct. 509, 423 A.2d 1101 (1980).

Appellants submit that the available administrative remedies are inadequate for attacking the validity of the Ordinance. The two possible avenues of administrative relief afforded to taxpayers under the Philadelphia Code were laid out in Robinson Protective Alarm Co. v. City of Philadelphia, 581 F.2d 371 (3d Cir.1978):

[t]he Philadelphia Code offers taxpayers two avenues of administrative relief. Section 19-1702 authorizes individuals to petition the Tax Review Board for review of the Department of Collections' determination that the taxpayer

[ 127 Pa. Commw. Page 420]

    has incurred liability on unpaid taxes. Alternatively, the taxpayer may pay the challenged tax and petition the Department of Collections for a refund pursuant to § 19-1703. Refunds may be sought for amounts 'paid under mistake of law or fact, or under an invalid law.' Grants or denials of refunds are reviewable by the Tax Review Board. Philadelphia Code § 19-703(4), (7). . . . Section 19-1706 of the Philadelphia Code authorizes taxpayer appeals from adverse decisions by the Tax Review Board in either a deficiency or refund action to be taken to any court of competent jurisdiction.

581 F.2d at 376-77 (footnotes omitted). See also City of Philadelphia v. Kenny, 28 Pa. Commonwealth Ct. 531, 545-46, 369 A.2d 1343, 1351, cert. denied, 434 U.S. 923, 98 S.Ct. 401, 54 L.Ed.2d 281 (1977).

It is asserted that because these options are coupled with sanctions for non-compliance,*fn10 the administrative process acts as a prior restraint on appellants' freedom of speech and is, therefore, inadequate. We agree with the trial court's conclusion that the Ordinance does not act as a prior restraint on appellants' right of free speech.

Actions of officials which have been condemned as constituting prior restraints by the U.S. Supreme Court are distinguishable from the scheme set up by the Philadelphia Code. In Southeastern Promotions, Ltd. v. Conrad, 420 U.S. 546, 95 S.Ct. 1239, 43 L.Ed.2d 448 (1975), injunctive relief was sought against a Chattanooga, Tennessee board for its refusal to allow the use of a municipal theater for the presentation of the musical "Hair." The Supreme Court held that the board's denial was violative of the First Amendment in that it imposed a prior restraint upon free

[ 127 Pa. Commw. Page 421]

    speech. Unlike the situation in Southeastern, where the board had the discretion to deny an application for use of the public theatre, the City in the matter at hand has no discretion to refuse to issue registration tags once the tax is paid. No censorship of the exhibited material occurs here. We conclude that no prior restraint is present under the facts of the instant scenario.

Likewise, we conclude that this case does not fall within what is commonly known as the "constitutional attack" exception to the exhaustion of administrative remedies doctrine. In order to fall within this narrow exception, one must attack the constitutionality of the statute as a whole and not merely as applied. Smolow v. Department of Revenue, 119 Pa. Commonwealth Ct. 324, 547 A.2d 478 (1988); St. Clair v. Pennsylvania Board of Probation and Parole, 89 Pa. Commonwealth Ct. 561, 493 A.2d 146 (1985). Here, appellants argue only that the Ordinance is unconstitutional as applied to them. This claim was insufficient to confer equity jurisdiction upon the trial court. We thus find that this constitutional claim is one for the administrative tribunal to adjudicate. Smolow.

An adequate avenue of relief was available to appellants through the administrative process before the Department of Collections and the Tax Review Board. The trial court correctly concluded that equity jurisdiction was not properly conferred.

Accordingly, we shall affirm the grant of summary judgment to the City, but on the sole basis that adequate administrative remedies were not pursued. We make no ruling as to the constitutionality of the Ordinance, but only upon the availability of the administrative appeals process. Since the constitutional validity of the Ordinance as applied to the appellants was not properly before the trial court, it is not reviewable by this Court.

Order affirmed.

[ 127 Pa. Commw. Page 422]


AND NOW, this 20th day of July, 1989, the order of the Court of Common Pleas of Philadelphia County in the above-captioned matter is affirmed.

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