United States District Court, W.D. Pennsylvania
Maurice A. NERNBERG et al., Plaintiffs,
BOROUGH OF SHARPSBURG, Pennsylvania, Defendant.
JOY FLOWERS CONTI, Chief District Judge.
On March 2, 2015, the court held a hearing on a motion to dismiss the amended complaint (ECF No. 24) filed by defendant Borough of Sharpsburg ("Sharpsburg"). The amended complaint (ECF No. 23) filed by plaintiffs Maurice Nernberg and Nancy Nernberg (collectively "plaintiffs") challenged the validity of a rental-housing ordinance enacted by Sharpsburg. At the hearing, the court granted in part and denied in part the motion to dismiss. The purpose of this opinion is to explain further the reasons for the court's decision, which were detailed on the record.
II. Facts as Alleged in the Complaint
The following facts, set forth in the amended complaint, are accepted as true for the purpose of resolving the motion to dismiss. Plaintiffs are owners of a leased property in Sharpsburg, Pennsylvania, consisting of one residential and one commercial unit. (Am. Compl. ¶ 3.) Plaintiffs challenge the constitutionality of Ordinance No. 13-08 (the "ordinance") enacted by Sharpsburg in 2013. (Id. ¶ 4.) The ordinance regulates residential rental properties located in Sharpsburg. The "Whereas" clauses prefacing the ordinance explain that Sharpsburg officials received a disproportionate number of complaints about "unruly and disruptive conduct" at rental properties compared to owner-occupied properties and a disproportionate number of complaints and maintenance issues in which the owner or manager of leased property does not live near Sharpsburg. (Am. Compl. Ex. A, at 1.) Despite these statements in the ordinance, Sharpsburg kept no records indicating whether properties cited for code violations are owner occupied or tenant occupied, and Sharpsburg conducted no analysis to reach the conclusions stated in the ordinance. (Am Compl. ¶ 10.)
The ordinance's stated purpose is to "protect and promote the public health, safety and welfare of [Sharpsburg's] citizens, to establish rights and obligations of Owners and Occupants relating to the rental of certain dwelling units in the Borough of Sharpsburg[, ] and to encourage Owners and Occupants to maintain and improve the quality of rental housing within the community." (Am. Compl. Ex. A, at 1.) To this end, the ordinance requires owners of residential rental properties to be responsible for the conduct of their tenants. Owners and occupants of residential rental properties must follow various housing codes and abstain from disruptive or damaging activity. The ordinance requires that an owner of residential rental property must either reside within fifteen miles of Sharpsburg or appoint a manager who does. (Id. at 5.) All rental agreements must be in writing and a copy of the ordinance must be attached to the rental agreement. (Id. at 6-7.) Owners must apply for and obtain a license before entering into any rental agreement with tenants. (Id. at 10.) The license has a term of two years and the license fee is $60. (Am. Compl. ¶ 6; Am. Compl. Ex. A, at 11.) The licensing requirement does not apply to senior citizen housing or "convents and parish houses." (Am. Compl. Ex. A, at 11.)
The ordinance establishes "code enforcement officers, " who are responsible for investigating violations of housing codes and the ordinance. (Id. at 2.) The code enforcement officer shall inspect each rental property at a minimum every two years. (Id. at 12.) The code enforcement officer will provide written notice to a landlord of code violations by tenants. (Id. at 7.) The owner shall take immediate steps to remedy the violation and shall submit a written report of those steps to the code enforcement officer. (Id. ) If the same tenant has a second violation within one year, the code enforcement officer may direct the owner to evict the tenant. (Id. at 8.)
An owner must promptly correct any violations after receiving notice from the code enforcement officer. (Id. ) Sharpsburg has the authority to enter and make repairs on property if the owner fails to correct an issue after notice of the violation. (Id. ) The cost of such repairs will be imposed on the owner. (Id. ) The owner shall permit inspections of any premises by a code enforcement officer at reasonable times upon reasonable notice. (Id. at 8-9.)
Tenants are required to conduct themselves in a way that will not disturb the peaceful enjoyment of persons in adjacent or nearby dwellings. (Id. at 9.) This includes not engaging in "disruptive conduct." (Id. at 9-10.) The maximum number of persons permitted in a rental unit at one time may not exceed one person for each 150 square feet of "habitable floor space." Tenants must permit inspections by the code enforcement officer of the premises at reasonable times upon reasonable notice. (Id. at 10.)
Violations of the ordinance may lead to penalties. On a recommendation by a code enforcement officer, the Sharpsburg Borough Council has the authority to issue formal warnings and may suspend or revoke an owner's license, requiring the owner to take immediate steps to evict the occupants. (Id. at 13.) A violation of the ordinance also constitutes a summary criminal offense. (Id. at 17.)
Sharpsburg conducted no study or analysis indicating that tenant-occupied properties are the subject of more code violations than owner-occupied properties. (Am. Compl. ¶ 5.) Sharpsburg has no records justifying the fees imposed by the ordinance and the fees collected grossly exceed the amount necessary to enforce the ordinance. (Id. ¶ 26.) Owners of residential property who occupy the property are not subject to the requirements imposed by the ordinance, including being responsible for the violations of co-occupants, evicting other occupants, paying licensing fees, having a written lease agreement, permitting inspections, or limiting occupancy to one person per 150 square feet.
III. Standard of Review
A motion to dismiss tests the legal sufficiency of the complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). In deciding a motion to dismiss, the court is not opining on whether the plaintiff will be likely to prevail on the merits; rather, when considering a motion to dismiss, the court accepts as true all well-pleaded factual allegations in the complaint and views them in a light most favorable to the plaintiff. U.S. Express Lines Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir. 2002). While a complaint does not need detailed factual allegations to survive a Federal Rule of Civil Procedure 12(b)(6) motion to dismiss, a complaint must provide more than labels and conclusions. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A "formulaic recitation of the elements of a cause of action will not do." Id. "Factual allegations must be enough to raise a right to relief above the speculative level" and "sufficient to state a claim for relief that is plausible on its face." Id. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556).
The plausibility standard is not akin to a "probability requirement, " but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of entitlement to relief.'" Id. (quoting Twombly, 550 U.S. at 556-57) (internal citation omitted). Two working principles underlie Twombly. Id. First, with respect to mere conclusory statements, a court need not accept as true all the allegations contained in a complaint. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S. at 555). Second, to survive a motion to dismiss, a claim must state a plausible claim for relief. Id. at 679. "Determining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. "But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not show[n]'-that the pleader is entitled to relief.'" Id. (quoting FED. R. CIV. P. 8(a)(2)). A court considering a motion to dismiss may begin by identifying pleadings that are not entitled to the assumption of truth because they are mere conclusions.
While legal conclusions can provide the framework of the complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.
The amended complaint set forth six counts. Count 1 alleged that the licensing fee established by the ordinance "far exceed[s] the actual incremental costs of the program" and is therefore "a disguised tax" in violation of article VIII, section 1, of the Pennsylvania Constitution, which requires all taxes to be uniform. (Am. Compl. ¶ 39, ECF No. 23.) Count 2 asserted that the ordinance discriminates against "landlords, landlords residing greater than 15 miles from Sharpsburg, minorities, tenants of low income housing and non-owner occupants" in violation of the Fair Housing Act, 42 U.S.C. §§ 3601-3631. (Am. Compl. ¶ 41.) Count 3 alleged the ordinance violates the Fair Housing Act and the Pennsylvania Human Relations Act ("PHRA"), 43 PA. STAT. §§ 951-963, by discriminating on the basis of familial status. (Am. Compl. ¶ 48.) Count 4 alleged that the ordinance is unconstitutionally vague under both the United States and Pennsylvania Constitutions because it grants enforcement officers discretion and does not adequately define standards for ...