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Minsec Companies, Inc. v. City of Philadelphia

March 18, 2010


The opinion of the court was delivered by: Tucker, J.


Presently before the Court are the Motion to Dismiss filed by Defendants, City of Philadelphia ("the City"), Philadelphia Department of Licenses and Inspections ("L&I"), and Philadelphia Zoning Board of Adjustment ("the Zoning Board") (Doc. 8), and the Response in Opposition thereto filed by Plaintiffs, Minsec Companies, Inc. ("Minsec") and Oxford Investments, L.P. ("Oxford") (Doc. 9). For the reasons outlined herein, this Court will grant in part and deny in part Defendants' Motion to Dismiss.


Minsec and Oxford have brought claims against the City, L&I, and the Zoning Board alleging discrimination in violation of the Fair Housing Act ("FHA"), 42 U.S.C. § 3601 et seq. In 2005, Plaintiffs began operating a transitional housing facility for individuals referred through the Pennsylvania court system, initially limiting the population to 44 male residents consistent with its prior use. (Compl. ¶ 14.) On July 2, 2007, Plaintiffs applied to L&I for a zoning permit to increase the population to 88 male residents. (Compl. ¶ 18.) On August 7, 2007, L&I issued a Zoning Refusal, labeling the use a "private penal and correctional institution," prohibited in the C-2 Commercial District. (Compl. ¶ 19.) On August 9, 2007, Plaintiffs filed an FHA reasonable accommodation request (Compl. ¶ 21), which was denied by L&I on October 9, 2008 (Compl. ¶ 23). On October 27, 2008, Plaintiffs filed an appeal with the Zoning Board, challenging L&I's Zoning Refusal and L&I's failure to grant a reasonable accommodation. (Compl. ¶ 25.) A public hearing was held on February 23, 2009, and the Zoning Board denied Plaintiffs' request for a use variance on May 5, 2009. (Compl. ¶ 35; Ex. F.) On May 14, 2009, Plaintiffs appealed the Zoning Board's decision to the Court of Common Pleas of Philadelphia County. (Mot. to Dismiss ¶ 18.) That action is pending before the Court of Common Pleas.*fn1

Plaintiffs assert four counts of discrimination based on the following: (1) L&I's classification of the facility as a penal institution (Count I); (2) L&I's failure to classify it as a transitional housing facility (Count II); (3) the disparate impact upon disabled individuals arising from L&I's treatment of a transitional housing facility as a penal institution (Count III); and (4) the failure of L&I and the City to grant a reasonable accommodation under § 3604(f)(3)(B) of the FHA (Count IV). (Pls.' Resp. 3-4.) Plaintiffs seek an order declaring L&I's classification of the use of the facility erroneous and declaring that Plaintiffs' proposed use of the facility is permitted as a matter of right by the Philadelphia Zoning Code. (Compl. ¶¶ 44(a), 54(a), 63(a), 80(a).) Plaintiffs also seek an award of actual damages, including attorneys' fees and costs, statutory damages, and such other relief as the Court deems just and proper. (Compl. ¶¶ 44(a)-(d), 54(a)-(d), 63(a)-(d), 80(a)-(d).)

Defendants argue that this Court should abstain and dismiss this action pursuant to either the Burford or Colorado River doctrines. In the alternative, Defendants argue that this Court should dismiss L&I and the Zoning Board as improperly named parties pursuant to Fed. R. Civ. P. 12(b)(6); dismiss Oxford from the suit for lack of standing pursuant to Fed. R. Civ. P. 12(b)(1); and dismiss Plaintiffs' claims for lack of ripeness pursuant to Fed. R. Civ. P. 12(b)(1).


While the Court agrees that L&I is not a separate legal entity capable of being sued, 53 Pa. Stat. Ann. § 16257 (Lexis 2009), the Court does not find that this action should be dismissed under Burford or Colorado River, that the Zoning Board should be dismissed as an improper party, that Oxford's claims should be dismissed for lack of standing, or that Plaintiffs' claims should be dismissed for lack of ripeness. The Court will address the abstention issue first, and then proceed to address Defendants' alternative grounds for dismissal.

I. Abstention

This Court will not abstain from exercising its jurisdiction over this matter. It is a settled axiom that federal courts have a "virtually unflagging obligation" to exercise their validly conferred jurisdiction. See, e.g., Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976). However, considerations of federalism and comity have led the Supreme Court to recognize certain narrow categories of cases from which a district court may properly abstain. See, e.g., County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 188-89 (1959); Heritage Farms, Inc. v. Solebury Twp., 671 F.2d 743, 746 (3d Cir. 1982). One such category of cases is derived from Burford v. Sun Oil Co., 319 U.S. 315 (1943), which dealt with abstention in the context of the complex statewide regulatory regime for gas and oil conservation in Texas. Burford abstention is appropriate when a case involves difficult state law problems of vital local concern and the state has provided a centralized administration system to address such problems, such that federal review would disrupt the state's efforts to establish a coherent policy on a matter of substantial public import. See Burford, 319 U.S. at 332-34. Specifically, the Supreme Court has outlined the following requirements for the application of Burford abstention:

Where timely and adequate state court review is available, a federal court sitting in equity . . . [may] decline to interfere with the proceedings or orders of state administrative agencies: (1) when there are 'difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case at bar'; or (2) where the 'exercise of federal review of a question in a case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern.'

New Orleans Pub. Serv. Inc. v. Council of the City of New Orleans ("NOPSI"), 491 U.S. 350, 361 (1989) (quoting Colorado River, 424 U.S. at 814); see also Izzo v. Borough of River Edge, 843 F.2d 765, 769 (3d Cir. 1988) (applying the same standard but splitting the first prong into two inquiries).

Here, Burford does not counsel against the exercise of jurisdiction because Plaintiffs' claims do not implicate any difficult questions of state law. See Matusow v. Trans County Title Agency, LLC, 545 F.3d 241, 248 (3d Cir. 2008). In Burford, "[t]he regulations at issue.required expertise in the complex area of gas and drilling, and there was a significant probability that courts unfamiliar with the industry would err in rendering decisions." Mt. Holly Citizens in Action, Inc. v. Mt. Holly Twp., No. 08-2584, 2008 U.S. Dist. LEXIS 87105, at *26 (D.N.J. Oct. 28, 2008) (distinguishing Burford's regulatory scheme from New Jersey's redevelopment and housing law). By contrast, here, the issue presented "is not so technical that it requires the district court to become enmeshed in a highly specialized area inconsistent with resolution of a relatively minor federal concern." See Izzo, 843 F.2d at 769. Although the state may have a special interest in land use regulation and federal courts are disinclined to sit as a statewide board of zoning appeals, "the scheme at hand does not approach the complexity of the one under scrutiny in Burford." See id. ("[T]he mere existence of land use regulation will not automatically mandate federal court abstention.").

Moreover, the exercise of federal jurisdiction is not likely to disrupt state efforts to establish a coherent policy with respect to a matter of substantial public concern. See Mt. Holly, 2008 U.S. Dist. LEXIS 87105, at *26. Where there is "no uniform policy for land use and development [in that] policies . . . differ from municipality to municipality," abstention under Burford is inappropriate. Heritage Farms, 671 F.2d at 747. Since there is no uniform state zoning code, ...

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