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Southeastern Pennsylvania v. City of Philadelphia and Philadelphia Commission On Human Relations

April 13, 2011


The opinion of the court was delivered by: Judge Butler

Argued: February 9, 2011



The Southeastern Pennsylvania Transportation Authority (SEPTA) appeals the November 9, 2009 order of the Court of Common Pleas of Philadelphia County (trial court) sustaining the preliminary objections of the Philadelphia Commission on Human Relations (Commission) and the City of Philadelphia (City), and dismissing SEPTA's claim for failure to exhaust its administrative remedies or make a case for injunctive relief. The issues before this Court are: 1) whether the trial court erred in determining that declaratory relief was not appropriate where SEPTA sufficiently pled that it was not subject to the Commission's jurisdiction because it is a Commonwealth agency and instrumentality; 2) whether the trial court erred in determining that injunctive relief was not appropriate where SEPTA sufficiently pled that denying injunctive relief would cause SEPTA irreparable harm and would preserve the public interest; and 3) whether the trial court erred in dismissing SEPTA's complaint for failing to exhaust administrative remedies based on the reasoning in Marriott Corp. v. Alexander, 799 A.2d 205 (Pa. Cmwlth. 2002). For the reasons that follow, we reverse the order of the trial court.

Seven separate complaints were initiated with the Commission against SEPTA between 2007 and 2009 pursuant to the Philadelphia Fair Practices Ordinance (Ordinance).*fn1 In each case, SEPTA requested dismissal of the case for lack of jurisdiction, or certification of the case for an appeal to address the jurisdictional issue. The Commission denied SEPTA's requests.

On July 23, 2009, SEPTA filed a complaint for injunctive and declaratory relief in the trial court pursuant to the Declaratory Judgments Act (DJA).*fn2 SEPTA sought a judgment declaring that the Ordinance could not be enforced against it, and that the Commission was prohibited from exercising jurisdiction over SEPTA under the Ordinance. On July 24, 2009, SEPTA filed a motion for preliminary injunction seeking an order enjoining the Commission from exercising jurisdiction over it. The Commission filed preliminary objections to SEPTA's complaint on August 17, 2009, maintaining that it was legally insufficient and that the Commission could not be sued individually. On August 28, 2009, the Commission responded to SEPTA's motion for preliminary injunction and asserted new matter opposing the imposition of a preliminary injunction.

On September 1, 2009, the trial court granted SEPTA's motion for preliminary injunction on the grounds that the Commission did not file a timely answer. SEPTA responded to the Commission's preliminary objections on September 8, 2009. The Commission filed a motion for reconsideration on September 11, 2009, and SEPTA opposed the motion for reconsideration. In an order dated September 17, 2009,*fn3 the trial court vacated the September 1, 2009 order granting SEPTA's motion for preliminary injunction, and further ordered that the merits of SEPTA's motion would be heard. SEPTA replied to the Commission's new matter on October 23, 2009.

A hearing was held on SEPTA's motion for preliminary injunction on November 3, 2009. On November 9, 2009, the trial court sustained the Commission's preliminary objections and dismissed SEPTA's complaint. The trial court never issued an order on the reconsideration of SEPTA's motion for preliminary injunction. SEPTA appealed to this Court.*fn4

SEPTA argues first on appeal that the trial court erred in denying its request for declaratory judgment and injunctive relief because it ignored the fact that SEPTA is a Commonwealth agency and, accordingly, the Commission lacks jurisdiction to regulate SEPTA's affairs. It further argues that the Ordinance does not give the Commission explicit jurisdiction over SEPTA. We agree.

The DJA is properly invoked in situations where challenges, particularly constitutional challenges, are set forth questioning the validity of a statute or questioning the scope of a governmental body's action taken pursuant to statutory authority, and that holds true regardless of whether an alternative remedy exists.

P.J.S. v. Pennsylvania State Ethics Comm'n, 669 A.2d 1105 (Pa. Cmwlth. 1996). Where an objection to the exercise of jurisdiction by a governmental body goes to the heart of its power, a petition for declaratory relief is appropriate. Id. The DJA is meant to be remedial, and "[i]ts purpose is to settle and to afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations, and is to be liberally construed and administered." 42 Pa.C.S. § 7541(a).

The Pennsylvania Human Relations Act (Act)*fn5 gives jurisdiction over "employers" to the Pennsylvania Human Relations Commission (PHRC), the state- wide commission responsible for enforcing Commonwealth laws that prohibit discrimination. 43 P.S. §§ 956-957. Further, Section 4 of the Act defines an "employer" as:

the Commonwealth or any political subdivision or board, department, commission or school district thereof and any person employing four or more persons within the Commonwealth, but except as hereinafter provided, does not include religious, fraternal, charitable or sectarian corporations or associations, except such corporations or associations supported, in whole or in part, by governmental appropriations. The term 'employer' with respect to discriminatory practices based on race, color, age, sex, national origin or non-job related handicap or disability, includes religious, fraternal, charitable and sectarian corporations and associations employing four or more persons within the Commonwealth.

43 P.S. § 954 (emphasis added). In addition, SEPTA's enabling legislation clearly indicates that it "shall in no way be deemed to be an instrumentality of any city or county or other municipality or engaged in the performance of a municipal function, but shall exercise the public powers of the Commonwealth as an agency and instrumentality thereof." 74 Pa.C.S. § 1711. Clearly then, as an agency and instrumentality of the Commonwealth, SEPTA qualifies as an "employer" for purposes of the Act, subject to the jurisdiction of the PHRC.

It is true, as the Commission argues, that in Mercy Hospital of Pittsburgh v. Pennsylvania Human Relations Commission, 499 Pa. 132, 451 A.2d 1357 (1982), the Pennsylvania Supreme Court held, "[t]here is no question that the PHRC is vested with the authority to consider and decide the challenge raised to its jurisdiction over the matter [of racial and national origin discrimination]." Mercy Hosp., 499 Pa. at 137, 451 A.2d at 1359. And it is also true that,

where the issue of jurisdiction has been raised before the PHRC, the Pennsylvania Supreme Court has determined that the PHRC is vested by the Pennsylvania legislature with the authority to decide challenges to its jurisdiction. The issue of jurisdiction is to be resolved initially by the PHRC during the investigation authorized under the Pennsylvania Human Relations Act. Pennsylvania Human Relations Commission v. Lansdowne Swim Club, 515 Pa. 1, 526 A.2d 758 (1987).

Pittsburgh Bd. of Public Educ. v. Pennsylvania Human Relations Comm'n, 820 A.2d 838, 841-42 (Pa. Cmwlth. 2003). However, the aforementioned cases addressed the jurisdiction of the PHRC, a state agency, not the Commission, a local agency. The PHRC's enabling legislation clearly gives the PHRC, not the Commission, jurisdiction over Commonwealth agencies like SEPTA. The Commission's enabling legislation is not so clear. It is true that Section 7 of the Act allows the PHRC to share its workload with local agencies, since the local agencies have sufficient expertise to investigate discrimination complaints. 43 P.S. § 957; see also Kedra v.

Nazareth Hosp., 857 F.Supp. 430 (E.D. Pa. 1994). However, the Act does not expand a local agency's geographical jurisdiction to include cases outside of its geographic boundaries, and it does not expand the subject matter jurisdiction of local agencies.

For purposes of discrimination cases covered under the Act, SEPTA is a Commonwealth agency.*fn6 As stated, the PHRC's enabling legislation clearly gives the PHRC, not the Commission, jurisdiction over SEPTA as an instrumentality of the Commonwealth in matters involving discrimination. Furthermore, there is no comparable grant of explicit jurisdiction to the Commission through its enabling ordinance, and any such grant would clearly conflict with the PHRC's enabling statute. Thus, we conclude that the trial court erred in sustaining the Commission's preliminary objection for legal insufficiency, thereby denying SEPTA's request for declaratory relief.

Next, SEPTA argues that the trial court's dismissal of SEPTA's claim for injunctive relief resulted from its application of the wrong standard. It further argues that it is not required to show irreparable harm and that the injunction will not adversely affect the public interest, in order to survive preliminary objections. SEPTA contends that to withstand the preliminary objection it needed only to properly plead its claim for injunctive relief. We agree.

For a "party to prevail on preliminary objections in the nature of a demurrer to such a claim for injunctive relief, the court must find that the petition is clearly insufficient to establish a right to injunctive relief, and any doubt must be resolved in overruling the demurrer." P.J.S., 669 A.2d at 1113. In order for SEPTA to prevail on a petition for injunctive relief, it needed only:

establish that [its] right to relief is clear; that there is an urgent necessity to avoid an injury which cannot be compensated for by damages; and the greater injury will result from refusing rather than granting the relief requested. This Court is precluded from granting injunctive relief where an adequate remedy exists at law.

P.J.S., 669 A.2d at 1113 (citing Merchant v. State Bd. of Medicine, 638 A.2d 484, 487 (Pa. Cmwlth. 1994)). Since the Commission does not have jurisdiction over SEPTA, the petition is not clearly insufficient to establish SEPTA's right to injunctive relief. Therefore, the trial court erred in sustaining the preliminary objection to SEPTA's claim for injunctive relief.

Finally, SEPTA argues that the trial court erred in dismissing its complaint on the basis that SEPTA failed to exhaust administrative remedies. We agree.

It is well established that a plaintiff must exhaust all administrative remedies available through the PHRC before filing a civil action alleging discrimination. See Pergine v. Penmark Mgmt. Co., Inc., 314 F.Supp.2d 486 (E.D.Pa. 2004); Clay v. Advanced Computer Applications, Inc., 522 Pa. 86, 559 A.2d 917 (1989); Marriott Corp. 799 A.2d at 208. In addition, "[f]iling a complaint with the [Commission] satisfies the Pennsylvania [Human ...

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