Z&R Cab, LLC, Zoro, Inc., R. Blount and D. Bell v. PPA , 187 A.3d 1025 ( 2018 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Z&R Cab, LLC, Zoro, Inc., :
Ronald Blount and Debra Bell, :
Appellants :
: No. 828 C.D. 2017
v. : 938 C.D. 2017
: Argued: March 8, 2018
Philadelphia Parking Authority :
BEFORE: HONORABLE ROBERT SIMPSON, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION
BY JUDGE SIMPSON FILED: April 13, 2018
Z&R Cab, LLC, Zoro, Inc., Ronald Blount, and Debra Bell
(collectively, Licensees) appeal from orders entered May 31, 2017 and July 3, 2017
in the Court of Common Pleas of Philadelphia County (trial court). Initially,
Licensees appealed from the May 31, 2017 decision as a final order (No. 828 C.D.
2017). Thereafter, Licensees became uncertain of the finality of that order. As a
precaution, therefore, Licensees sought and obtained the July 3, 2017 order
certifying the matter for immediate interlocutory appeal. They then filed a second
appeal (No. 938 C.D. 2017). The two appeals have been consolidated for
disposition.
Licensees brought a class action under 42 U.S.C. §1983 (§1983),1
seeking refunds of all fees and assessments paid to the Philadelphia Parking
1
§1983. Civil action for deprivation of rights
Every person who, under color of any statute ... of any State ...
subjects, or causes to be subjected, any citizen of the United States or
Authority (Authority) beginning in 2004, under a state law this Court later declared
unconstitutional. On the Authority’s motion for summary judgment, the trial court
denied Licensees’ refund claims. However, the trial court directed the Authority to
provide a specified review process for putative class members to follow in
challenging fees and assessments made under the unconstitutional statute.
Upon review, we quash the interlocutory appeal at No. 938 C.D. 2017.
We reverse and remand in the appeal at No. 828 C.D. 2017.
I. Background
Prior to 2004, the Pennsylvania Public Utility Commission was
responsible to regulate taxicab and limousine operations in Pennsylvania. See MCT
Transp. v. Phila. Parking Auth., 60 A.3d 899 (Pa. Cmwlth.) (en banc), aff’d per
curiam, 81 A.3d 813 (Pa. 2013). In 2004, however, the General Assembly
transferred some regulatory responsibility to the Authority in Chapter 57 of the
Parking Authority Law, 53 Pa. C.S. §§5701-5745. Id.
The Authority derived its operating revenue from fees and assessments
charged to regulated taxicab and limousine companies. MCT. Under Section
5707(b) of the Parking Authority Law, 53 Pa. C.S. §5707(b) (Former §5707(b)), the
Authority set its own budget and fee schedule by March 15 of each year. Id. The
budget and fee schedule became effective automatically unless either the House of
other person within the jurisdiction thereof to the deprivation of any
rights, privileges, or immunities secured by the Constitution and laws,
shall be liable to the party injured in an action at law, suit in equity, or
other proper proceeding for redress ....
2
Representatives or the Senate adopted a disapproving resolution by April 15 of each
year. Id. Licensees had no legal mechanism to challenge the Authority’s fee
schedule. Id.
In 2012, several taxicab companies sued the Authority in this Court,
challenging the constitutionality of Former §5707(b). Id. This Court declared
Former §5707(b) unconstitutional on two bases. First, by failing to establish
statutory standards directing the Authority in setting its budget and fee schedule, the
General Assembly impermissibly delegated its legislative authority to the Authority.
Doing so violated the constitutional mandate of separation of powers among the
branches of government. Id. Second, because licensees could not challenge the
Authority’s fees and assessments, Former §5707(b) violated constitutional due
process requirements. Id.
The General Assembly subsequently amended the Parking Authority
Law in an attempt to cure its constitutional infirmities. The amendments provided
legislative oversight and an administrative process for challenges to the Authority’s
fees and assessments. See 53 Pa. C.S. §5707 (Amended §5707). In a recent
decision, Germantown Cab Company v. Philadelphia Parking Authority
(Germantown Cab), 171 A.3d 315 (Pa. Cmwlth. 2017), this Court determined that
Amended §5707 was also an unconstitutional delegation of legislative power
because it still failed to provide sufficient standards, guidance, and limits for the
Authority’s exercise of the delegated power.
3
In Germantown Cab, this Court did not expressly invalidate the new
remedy provision, 53 Pa. C.S. §5707.1 (§5707.1), as a denial of due process.
However, given this Court’s invalidation of Amended §5707, the remedy provision
in §5707.1 is ineffective unless the legislature further amends the statute to correct
the constitutional infirmities of Amended §5707.
In 2013, following this Court’s decision in MCT, Licensees filed a civil
rights class action in the U.S. District Court for the Eastern District of Pennsylvania,
under §1983.2 Z&R Cab, LLC v. Phila. Parking Auth., 22 F. Supp. 3d 498 (E.D. Pa.
2014) (Z&R I). Licensees asserted claims on behalf of themselves and a putative
class consisting of taxicab owners and drivers, taxicab medallion owners, and other
members of the taxicab industry. In Z&R I, the federal district court held that this
Court’s decision in MCT must be applied retroactively to provide a meaningful
remedy to aggrieved parties. However, the federal district court declined to exercise
jurisdiction over the determination of the appropriate remedy, deferring instead to
Pennsylvania state courts.3 See id.; see also Z&R Cab, LLC v. Phila. Parking Auth.,
2
Presumably, Licensees brought their action under §1983 because there was no statutory
retroactive remedy available to them under Pennsylvania law. See Dunn v. Bd. of Prop.
Assessment, Appeals & Review, 877 A.2d 504 (Pa. Cmwlth. 2005) (a taxpayer may not seek a
refund under §1983 where there is an adequate state law remedy). As discussed above, Former
§5707(b) did not provide any mechanism to challenge the Authority’s fees and assessments, either
before or after the Authority imposed them each year. The addition of §5707.1 created a
prospective administrative challenge process, but did not offer retroactive relief to those aggrieved
under Former §5707(b).
3
In Z&R I, the federal district court found it lacked subject matter jurisdiction over the
remedy determination. On appeal, the Third Circuit Court of Appeals found the district court had
subject matter jurisdiction, but remanded for a determination of whether principles of comity
dictated abstention. Z&R Cab, LLC v. Phila. Parking Auth., 616 F. App’x. 527 (3d Cir. 2015)
(Z&R II). On remand, the district court abstained in reliance on comity principles. Z&R Cab,
4
No. 13-6173 (E.D. Pa. July 22, 2015), 2015 U.S. Dist. LEXIS 189537 (Z&R III).
Accordingly, Licensees brought this state court action to pursue remedies under
§1983.4
In their complaint in this litigation, Licensees requested that the trial
court grant the following relief:
a. To order that this action may proceed as a class action in
which [Licensees] act as the class representatives and
[Licensees’] counsel act as class counsel.
b. To assess, in advance, against the … Authority all costs
of class notice.
c. To enter a declaratory judgment that all sums paid to (or
to the use of) the … Authority under authority of the provisions
of [Former] §5707(b), from and including 2004 until the
present, were paid in violation of the Constitution of the United
States and in violation of 42 U.S.C. §1983, and are due and
owing to [Licensees] and to each class member.
d. To enjoin the … Authority from assessing or collecting
payments from [Licensees] and the class members under
authority of the provisions of [Former] §5707(b).
e. To award [Licensees] and each class member all sums
paid to (or to the use of) the … Authority under authority of the
LLC v. Phila. Parking Auth., No. 13-6173 (E.D. Pa. July 22, 2015), 2015 U.S. Dist. LEXIS 189537
(Z&R III).
4
Licensees commenced this action in the Court of Common Pleas of Philadelphia County.
The common pleas court transferred the action to this Court in the belief that the action lay within
this Court’s original jurisdiction. Reproduced Record (R.R.) 33a-42a. This Court determined that
jurisdiction properly lay in the common pleas court, and accordingly quashed the transfer. R.R.
44a-50a.
5
provisions of [Former] §5707(b), from and including 2004 until
the present, together with both pre- and post-judgment interest.
f. To award [Licensees] costs of this action and reasonable
attorneys’ fees.
Reproduced Record (R.R.) 119a-20a.
In 2016, Licensees moved to certify the class. Original Record (O.R.),
Item #24. The Authority opposed the motion for certification. O.R., Item #27.
While the motion to certify the class was pending, the Authority filed a motion for
summary judgment. O.R., Item #26. The trial court granted the Authority’s
summary judgment motion and entered judgment in the Authority’s favor on
Licensees’ refund claims. R.R. 53a-54a.
The trial court never held a certification hearing, and never ruled on the
certification motion. Licensees were therefore the only plaintiffs throughout the
pendency of this action in the trial court. Nonetheless, in its ruling on the Authority’s
summary judgment motion, the trial court directed the Authority to provide
administrative relief to additional persons and entities, as follows:
It is further ORDERED and DECREED that the [Authority]
shall provide the putative class members with the following
administrative protest procedure:
1. On or before August 1, 2017, the [Authority] shall issue
Notices of Assessment (‘Notices’) to the members of the
taxicab industry to whom it charged assessments and fees from
July 16, 2004 to July 9, 2013.
2. The Notices shall contain an itemization of the
assessments and fees charged and paid, as well as information
regarding the … §5707.1(b) petition process.
6
3. The Notices shall give the recipient sixty (60) days in
which to file a single petition challenging all or any of the 2004-
2013 fees on the grounds set forth in … §5707.1(b).
4. Within thirty (30) days thereafter, the [Authority] shall
provide a … §5707.1(b) hearing to any such petitioner.
5. Within thirty (30) days thereafter, the [Authority] shall
issue its Order, including a decision and detailed findings.
6. Within thirty (30) days after the [Authority] issues its
Order, the petitioner may appeal it to the Court of Common
Pleas of Philadelphia County as provided in 53 Pa. C.S.
§5705(d).
R.R. 53a-54a (boldface type in original; underlining added). Although it expanded
the timetable applicable under §5707.1(b), the trial court essentially directed the
Authority to afford the putative class members, retroactively, the review process
created by the enactment of §5707.1(b).
Licensees appealed to this Court. The Authority did not cross-appeal.
II. Issues
On appeal,5 Licensees characterize their issues as follows:
1. Having dismissed all existing claims, did the trial court
err by proceeding to create … a new administrative procedure
5
This Court’s review of a trial court order granting summary judgment is limited to
determining whether the trial court erred as a matter of law or abused its discretion. Berwick Twp.
v. O’Brien, 148 A.3d 872 (Pa. Cmwlth. 2016). This Court examines the record in the light most
favorable to the non-moving party, accepting as true all well-pled facts and reasonable inferences
to be drawn from those facts. Id.
7
that purports to bind an entire class, in violation of the political
question doctrine?
2. Is the trial court’s administrative procedure
constitutionally infirm because it is based upon an
unconstitutional statute that continues to lack standards to
guide the [Authority’s] fee assessments?
3. Did the trial court err by failing to address lack of fee-
setting standards, the most significant due process violation?
4. By relying on … a vacated district court opinion did the
trial court err in holding that [Licensees] and putative class
members were not entitled to recover money damages under 42
U.S.C. §1983, which awards monetary relief for constitutional
violations?
5. Was the trial court’s May 31, 2017 order, which
dismissed all claims of the parties but which nevertheless
continued to bind the [Authority], a final order under [Pa.]
R.A.P. 341?
Br. for Appellants at 5.
III. Discussion
A. Finality of the Trial Court’s May 31, 2017 Order
As a threshold matter, addressing Licensees’ last issue first, this Court
must determine the source of its appellate jurisdiction in this matter.
Licensees initially appealed the trial court’s May 31, 2017 decision as
a final order under Pa. R.A.P. 341. However, Licensees became concerned that the
trial court’s order might be interlocutory because it included a directive requiring the
Authority to provide administrative review that would necessarily occur after the
date of the trial court’s judgment. In Licensees’ view, the trial court’s decision
continued to bind the Authority after entry of judgment, so it could be construed as
8
not disposing of all parties. Therefore, Licensees requested that the trial court certify
its summary judgment decision for immediate interlocutory appeal. The trial court
complied, and Licensees filed a second appeal. This Court must determine which of
the two appeals is properly before it.
This Court directed the parties to discuss in their principal briefs
whether the summary judgment order was final or interlocutory. However, neither
party cited any applicable authority or offered any analysis of the issue. Licensees
merely suggested “it seems safer to assume” the trial court’s May 31, 2017 order
was interlocutory, because the Authority’s request for a stay of its duty to comply
with the order suggested the order may not have disposed of all parties. Br. for
Appellants at 35. In opposition, the Authority offered a bare assertion that the order
was final because it “disposed of all claims between the parties,” in that the trial
court entered judgment on Licensees’ refund claims. Br. for Appellee at 60.
This Court is aware of no instance in which an otherwise final order
was rendered interlocutory because it required one party to take some action after
entry of judgment. To the contrary, Pennsylvania courts regularly treat orders as
final for appeal purposes, even where they mandate conduct necessarily occurring
after the entry of the judgments. See, e.g., In re Petition to Compel Cooperation with
Child Abuse Investigation, 875 A.2d 365 (Pa. Super. 2005) (order compelling
submission to a home visit during investigation of child abuse allegations was final
and appealable); Sutton v. Miller, 592 A.2d 83 (Pa. Super. 1991) (appeal from a final
decree in equity compelling replacement of a fence).
9
The trial court’s order left no request for relief pending. When the trial
court entered a final order without ruling on the motion for class certification,
Licensees’ requests concerning class certification and notice became moot.
Similarly, once the trial court denied Licensees’ refund claims, their related claims
concerning costs, attorneys’ fees, and the source of funding for the requested refunds
also became moot.
Thus, the trial court’s May 31, 2017 order was final, in that it disposed
of all claims and all parties. Consequently, the trial court lacked authority to certify
the decision for immediate interlocutory appeal by permission.6 We therefore quash
the appeal at No. 938 C.D. 2017.
B. Licensees’ Arguments on Appeal
1. The Trial Court’s Authority to Fashion Equitable Relief
Licensees assert that the trial court exceeded its authority by fashioning
a remedy not requested by either party. They point out that their claim requested
full refunds of all fees and assessments paid under Former §5707(b). Neither
Licensees nor the Authority requested any alternative relief. However, the trial
court, while denying Licensees’ refund claims, ordered alternative relief in the form
of an administrative review process in which Licensees and putative class members
could challenge the fees and assessments before the Authority. Licensees contend
any alternative remedy was beyond the trial court’s authority. The arguments
posited by Licensees are addressed separately below.
6
Moreover, Licensees did not seek this Court’s permission for an interlocutory appeal
pursuant to 42 Pa. C.S. §702(b).
10
a. Purported Mootness of the Alternative Remedy
First, Licensees argue the trial court ended the case when it denied their
refund claims in the first part of its order. Licensees contend the trial court then had
no further jurisdiction over the case that would allow it to formulate an alternative
remedy as part of its decision. Licensees cite no authority for this assertion and do
not otherwise develop it. Therefore, it is waived. Irey v. Dep’t of Transp., 72 A.3d
762 (Pa. Cmwlth. 2013) (en banc).
Further, this argument facially lacks merit. By logical extension of
Licensees’ reasoning, the trial court could have entered the alternative relief, had it
done so earlier in its decision. Under Licensees’ suggestion, the trial court’s
jurisdiction to order relief would depend on the order in which it grouped the
holdings in its decision.
We reject Licensees’ argument that the trial court lacked jurisdiction to
order relief in its order granting the Authority’s motion for summary judgment.
b. Absence of Class Certification
Second, Licensees contend the trial court’s decision should be reversed
because it denied due process to the putative class members, by purporting to bind
them without first certifying the class. Licensees again fail to cite any authority or
develop this argument. Therefore, they have also waived this argument. Irey.
11
Further, Licensees misstate the nature of the trial court’s error. Unless
and until the trial court certifies a class, only the named plaintiffs may participate in
the action as parties. Pa. R.C.P. No. 1710(e); Silver Spring Twp. v. Pennsy Supply,
Inc., 613 A.2d 108 (Pa. Cmwlth. 1992). The trial court lacks personal jurisdiction
over putative class members prior to certification of the class. Silver Spring. Thus,
any judgment issued before certification of the class binds only the named parties.
Pa. R.C.P. No. 1715; see also Pentlong Corp. v. GLS Capital Inc., 72 A.3d 818 (Pa.
Cmwlth. 2013) (citing Konidaris v. Portnoff Law Assocs., 953 A.2d 1231 (Pa.
2008)) (unless a party has requested or a trial court has issued a special order under
Pa. R.C.P. No. 1715(a), any judgment entered prior to class certification benefits or
hinders only the named parties; putative class members cannot rely on the judgment
to avoid the statute challenged in the action).
For example, in Edward M. v. O’Neill, 436 A.2d 628 (Pa. Super. 1981),
the plaintiffs sought expungement of juvenile criminal fingerprint and photograph
records. They requested certification of a class, which the trial court denied.
However, the trial court then issued a cease-and-desist order requiring the police
department to stop its practice of fingerprinting and photographing juveniles. This
was essentially class-wide relief, which the Superior Court held was improper in the
absence of class certification. Id.
Awarding class relief without certification of a class would improperly
circumvent the requisite class action procedure. Marks v. Bell Tel. Co., 331 A.2d
424 (Pa. 1975). Moreover, it would unfairly impact defendants: “If the plaintiffs
succeeded on the merits and the relief were granted, the defendants would be bound
12
by the broad injunction. However, should the defendants be successful in the
litigation, the verdict in their favor would have no res judicata effect upon persons
not a party to the suit.” Id. at 429.
Here, Licensees are incorrect in suggesting the trial court’s decision
deprived putative class members of due process rights. Rather, the trial court lacked
personal jurisdiction over the putative class members. Therefore, its order, while
binding on the named parties, was ineffective to the extent it purported to prescribe
the nature of the relief available to the putative class members. Canulli v. Allstate
Ins. Co., 462 A.2d 286 (Pa. Super. 1983).
We therefore reject Licensees’ argument that the trial court’s order
violated the due process rights of putative class members.
c. Judicial Legislation
Third, Licensees argue the trial court engaged in improper judicial
legislation by substituting or rewriting an unconstitutional statute in order to create
an administrative remedy. This argument lacks merit.
As explained above, one reason this Court declared Former §5707(b)
unconstitutional in MCT was that there was no mechanism to challenge the
Authority’s fees and assessments. Licensees assert that only the legislature can
provide standards for remedying that infirmity in the statute. In fact, the legislature
attempted to do so after this Court’s decision in MCT. See 53 Pa. C.S. §5707.1.
13
However, the legislature did not purport to adopt a retroactive procedure to remedy
past constitutional infirmities resulting in denials of due process.
The judicial history of this litigation has provided extensive analysis
that now constitutes the law of this case. The federal due process violation mandates
a retroactive remedy to Licensees. Z&R I. The federal court abstained in favor of
allowing the state judiciary to determine what kind of retroactive remedy to provide.
Z&R III; see also Z&R I. Thus, under the law of the case, the trial court was
authorized to fashion a remedy, subject to appellate review, at least as to Licensees
(though not as to the putative class members, as explained in the previous section).
Accordingly, we reject Licensees’ argument that the trial court could
not fashion a judicial remedy.
d. Relief Not Requested by the Parties
Fourth, Licensees contend the trial court erred by establishing a new
administrative remedy not requested by either party. There is merit in this argument.
A court may grant equitable relief broader than that specifically
requested, if the plaintiff’s complaint includes a general prayer for relief. Annenberg
v. Commonwealth, 757 A.2d 338 (Pa. 2000); Ridley v. Ridley Arms, Inc., 494 A.2d
870 (Pa. Cmwlth. 1985), vacated on other grounds, 531 A.2d 414 (Pa. 1986).
However, such relief must be appropriate to the case as pled and proven. Ridley.
Here, Licensees’ complaint included no general prayer for relief. It is
also doubtful that the relief fashioned by the trial court related to anything pled or
14
proven in the case. The trial court created a remedy not raised or addressed by either
party, and did so at the summary judgment stage, without any hearing or other input
from the parties on the issue.
In Edward M., discussed above, the Superior Court observed that
neither party requested the relief ordered by the trial court. Id. Moreover, no hearing
was conducted before ordering that relief. Without a class certification, only the
expungement requests were before the trial court. Thus, the court lacked authority
to order different relief. Id. The Superior Court’s analysis in Edward M. is
persuasive.
Here, Licensees sought refunds of the fees and assessments they paid
under Former §5707(b). Without a class certification, only Licensees’ request for
refunds of their own payments was before the trial court.
Licensees are therefore correct in arguing that the trial court lacked
authority to order relief different from what either party requested, particularly
where it did so without a hearing.
e. The Trial Court’s Characterization of Licensees’ Claims
Fifth, Licensees argue the trial court improperly recharacterized their
§1983 claims as refund claims. Inasmuch as Licensees are seeking refunds, albeit
under §1983, the point of this argument is unclear. Although not well developed, it
appears to be related to Licensees’ prior arguments. That is, Licensees appear to
assert that the trial court was not free to ignore their rights under §1983 by denying
15
their refund request. This argument adds nothing persuasive to Licensees’ previous
arguments. We therefore reject it.
2. Constitutionality of the Ordered Relief
Licensees next assert that the administrative remedy created by the trial
court was constitutionally infirm. Licensees point to Germantown Cab, in which
this Court held that Amended §5707, like Former §5707(b), is an unconstitutional
delegation of legislative power, in that it still fails to provide adequate standards,
guidance, and limits on the Authority’s exercise of delegated power. Licensees
contend that the administrative process set forth in §5707.1 must also be
unconstitutional. Licensees reason that without adequate legislative controls, the
purported administrative remedy is illusory because the Authority is not required to
generate financial information sufficient to allow a party asserting a fee challenge to
prove the fee is excessive or otherwise improper. Licensees therefore contend that
the administrative remedy imposed by the trial court is likewise unconstitutional,
because it is illusory. They argue that there is no way for them to demonstrate that
the fees and assessments at issue were excessive.
This argument has some facial appeal. However, based on this Court’s
decision in Germantown Cab, it lacks merit.
In Germantown Cab, the plaintiff argued the Authority failed to
produce records sufficient to permit calculation of its actual costs. Like Licensees
here, the plaintiff in Germantown Cab asserted that without such information, it
could not effectively challenge the Authority’s assessments. The Authority
16
countered that Amended §5707 only required it to produce copies of the budget
documents it submitted to the General Assembly. This Court did not need to resolve
this issue, in light of its conclusion that Amended §5707 was still unconstitutional.
However, this Court observed that under Amended §5707, “[t]he Authority is
required to maintain and make available for inspection records of the costs incurred
in connection with its regulation of taxicabs … and of the manner in which it
determined the assessment ….” Id. at 333. This Court concluded that the required
information went beyond mere budget submissions. Id.
This Court’s reasoning in Germantown Cab suggests that a claimant
asserting a fee challenge would have a right to compel production by the Authority
of cost information needed to support the challenge. Therefore, Licensees are
apparently incorrect in arguing that they cannot obtain such information.
Accordingly, we reject Licensees’ argument that they would have no
means to ascertain the propriety of the amounts of Authority’s fees and assessments.
3. The Authority’s Purported Lack of Fee-Setting Standards
Next, Licensees assert that the trial court ignored Former §5707(b)’s
unconstitutional failure to provide standards and limits for the Authority’s exercise
of legislatively delegated power. This assertion is incorrect. Further, contrary to
Licensees’ suggestion, the trial court did not determine that no retroactive remedy
was required. Indeed, the trial court ordered the Authority to provide Licensees (and
putative class members) with a retroactive procedure to challenge fees and
assessments going back to 2004. Therefore, we reject this argument.
17
4. Licensees’ Entitlement to Monetary Damages
Licensees contend the trial court erred in declining to award monetary
damages. Licensees argue the trial court improperly fashioned an equitable remedy
in reliance on speculation by the federal district court in Z&R I as to what retroactive
remedy Licensees would be entitled to recover. Licensees appear to be correct in
surmising that the trial court tried to follow the federal court’s guidance in fashioning
a remedy. However, that in itself does not necessarily constitute error by the trial
court. The federal court observed that state courts have discretion in fashioning
retroactive remedies. See Z&R I.7
Nonetheless, Licensees insist the trial court erred in fashioning an
equitable order, because no remedy other than a refund was appropriate. Licensees
assert that in Z&R Cab, LLC v. Philadelphia Parking Authority, 616 F. App’x 527
(3d Cir. 2015) (Z&R II), the Third Circuit Court of Appeals found that monetary
damages are the only remedy available to Licensees. This assertion is misleading.
The Third Circuit did suggest that monetary damages would be the correct remedy.
However, the holding of the Third Circuit’s decision was that it remanded to the
district court for a determination of whether to exercise or decline jurisdiction based
on principles of comity. Thus, the Third Circuit’s analysis of what remedy would
ultimately be appropriate was not necessary to its decision and was not part of its
holding. Rather, the Third Circuit discussed the issue of monetary damages only in
the context of analyzing how the nature of the available remedy might affect the
district court’s comity analysis on remand.
7
However, as discussed above, that discretion is constrained by the parties’ pleadings and
prayers for relief.
18
In context, the Third Circuit actually observed:
Before describing the comity doctrine in some
detail to illustrate why I believe applying it to this case would be
a mistake, I stress that only one remedy is possible here:
damages. The case before us concerns a procedural due process
violation…. Although procedural due process is a flexible
standard, the remedies for violations of it are straightforward:
equitable relief where appropriate ([Licensees] concede their
request for such relief is moot), and damages if [Licensees] can
prove, consistent with ordinary tort principles, that they in fact
suffered compensable injuries.… [I]f [Licensees] lost money
specifically because they lacked an opportunity to challenge the
rates the [Authority] set, they can recover that amount of
money…. The extent of the damages is open to debate;
[Licensees] demand all the fees paid to the [Authority] over a
decade, but it is not clear from the record before us that they will
be entitled to nearly that amount of money. The causal
relationship between the due process violation and the amount
[Licensees] paid has yet to be established, and I note that any
recovery may be affected by Pennsylvania’s two-year statute of
limitations for §1983 actions.
Z&R II, 616 F. App’x at 532 (citations omitted).
Thus, although the Third Circuit did suggest monetary damages would
be the proper remedy in Licensees’ §1983 action, the court also posited that recovery
would be limited to the amount, if any, that exceeded what would have been paid if
not for the constitutional violation, and also potentially subject to a two-year statute
of limitations.
Licensees focus only on the Third Circuit’s observation on the propriety
of monetary damages, ignoring the rest of the discussion in Z&R II concerning the
limitations on that remedy. Licensees insist the trial court was required, as a matter
19
of law, to award them a full refund of all fees and assessments they paid from 2004
to 2013.
We have substantial doubt regarding Licensees’ entitlement to the full
refund they demand. In McKesson Corporation v. Division of Alcoholic Beverages
& Tobacco, 496 U.S. 18 (1990), the U.S. Supreme Court set forth permissible
retroactive remedies for parties burdened by unconstitutional tax statutes. The tax
statute at issue in McKesson improperly discriminated between different groups of
taxpayers in interstate commerce. One available remedy was to refund the
difference between the tax paid and the tax that should have been assessed had
unconstitutional distinctions not been made. Id. Stated differently, one possible
remedy was a refund “of the excess taxes paid by petitioner ….” Id. at 51. Also, the
Supreme Court in McKesson observed that states may avail themselves of a variety
of procedural protections against any disruptive effects of a tax scheme’s
invalidation, such as “enforcing relatively short statutes of limitation applicable to
refund actions.” Id. at 50. Notably, the Third Circuit’s observation in Z&R II
concerning the available remedy in this case was consistent with the U.S. Supreme
Court’s analysis in McKesson.
Similarly, in Locust Lake Village Property Owners Association v.
Monroe County Board of Assessment Appeals, 940 A.2d 591 (Pa Cmwlth. 2008),
this Court discussed the principles applicable to determining the appropriate length
of time for granting retrospective tax refunds. This Court concluded that the tax
assessment challenge in that case entitled the successful claimant to a refund only of
excess tax payments, not the entire tax paid. Further, this Court observed that
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retrospective relief may be limited in time, because the revenue base of taxing bodies
should not be left open indefinitely to retrospective claims. Id.; accord Nextel
Commc’ns v. Commonwealth, 171 A.3d 682 (Pa. 2017) (determining the
appropriate remedy for a tax overpayment required balancing the taxpayer’s interest
in relief against the taxing entity’s interest in protecting the public pocketbook).
Licensees argue that McKesson and similar cases are inapplicable here
because those cases concerned tax statutes that impermissibly discriminated between
taxpayer groups, rather than due process violations. However, Licensees offer no
persuasive reason to apply the analysis in McKesson so narrowly.
Although we will not decide this issue now, by analogy to McKesson,
and consistent with Z&R II, Licensees could be entitled to recover only the portion,
if any, of their fees and assessments that exceeded the amount the Authority would
have assessed had it been subject to constitutional standards, guidance, and limits
imposed by the General Assembly.
The determination of the proper measure of damages is a matter for
more complete argument by the parties and analysis by a court at a later point.
Suffice it to observe now that this appears to be one of the most important points of
disagreement between the parties.
IV. Conclusion
The trial court apparently concluded that a full refund was not the
appropriate remedy for Licensees, and it tried to formulate an administrative process
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that would allow Licensees to seek properly limited retroactive relief. However, as
discussed above, the trial court lacked authority to impose the remedy it created in
this action. As to the putative class members, they were not parties to the action,
and the trial court’s decision could not affect them. As to Licensees, they did not
request relief other than a refund, and they did not plead a general prayer for relief
that would have allowed the trial court to grant relief different in kind from what
Licensees sought.
Summary judgment was not appropriate in this case, because fact issues
remain to be determined. The trial court’s formulated remedy itself anticipated fact
determinations during the administrative review process; this demonstrates that
questions of fact remain concerning the amount of any refunds Licensees may
receive. There are also unresolved issues of mixed fact and law concerning how far
back in time Licensees can reach in seeking relief.
By simply denying all refund claims and directing an administrative
review, the trial court abdicated its duty to resolve Licensees’ claims under §1983
and sought to transfer that responsibility to the Authority. In so doing, the trial court
committed an error of law. Further, the trial court erred by creating and imposing
its own remedy without notice to or input from the parties. Cf. PPG Indus. v. Bd. of
Fin., 790 A.2d 261 (Pa. 2001) (describing the extensive input from the parties
considered by the court in developing an appropriate retroactive remedy).
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Accordingly, we reverse the trial court’s grant of summary judgment in
the Authority’s favor, and remand for further proceedings consistent with this
opinion.
ROBERT SIMPSON, Judge
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IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Z&R Cab, LLC, Zoro, Inc., :
Ronald Blount and Debra Bell, :
Appellants :
: No. 828 C.D. 2017
v. : 938 C.D. 2017
:
Philadelphia Parking Authority :
ORDER
AND NOW, this 13th day of April, 2018, the appeal at No. 938 C.D.
2017 is QUASHED. The order of the Court of Common Pleas of Philadelphia
County is REVERSED. This case is REMANDED for further proceedings
consistent with the foregoing opinion.
Jurisdiction is relinquished.
ROBERT SIMPSON, Judge