Title Hospital Council of Western Pennsylvania v. City of Pittsburgh
Date 1991
By Alito
Subject Misc
Contents
Page 1
LEXSEE 949 F.2D 83
THE HOSPITAL COUNCIL OF WESTERN PENNSYLVANIA, Appellant v. CITY OF PITTSBURGH, COUNTY OF ALLEGHENY, CITY OF ERIE and CITY OF JOHNSTOWN, Appellees
No. 91-3035
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
949 F.2d 83; 1991 U.S. App. LEXIS 26880
June 13, 1991, Argued
November 15, 1991, Filed
PRIOR HISTORY: **1
On Appeal from the United States District Court for the
Western District of Pennsylvania; D.C. Civil No. 90-
00621.
DISPOSITION:
Vacated and Remanded
LexisNexis(R) Headnotes
COUNSEL:
SEYMOUR J. SCHAFER, ESQ., MARKEL, SCHAFER and MEANS, PC, Pittsburgh, Pennsylvania, DAVID L. McCLENAHAN, ESQ. (Argued), DAVID R. COHEN, ESQ., KIRKPATRICK & LOCKHART, Pittsburgh, Pennsylvania, Attorneys for Appellant, The Hospital Council of Western Pennsylvania.
HOWARD J. SCHULBERG (Argued), Assistant City Solicitor, MARY K. CONTURO, City Solicitor, Attorneys for Appellee, City of Pittsburgh.
JAMES J. DODARO, County Solicitor, IRA WEISS, Deputy County Solicitor, GEORGE M. JANOCSKO (Argued), Assistant County Solicitor, CAROLINE LIEBENGUTH, Assistant County Solicitor, ALLEGHENY COUNTY LAW DEPARTMENT, Pittsburgh, Pennsylvania, Attorneys for Appellee, County of Allegheny, GERALD J. VILLELLA, ESQ. (Argued), Erie, Pennsylvania, Attorney for Appellee, City of Erie.
JUDGES:
Becker and Alito, Circuit Judges and Huyett, District
Judge.
OPINIONBY:
ALITO
OPINION:
*85 OPINION OF THE COURT
The Hospital Council of Western Pennsylvania ap- peals from an order dismissing its complaint on two al- ternative grounds: lack of associational standing and ab- stention under **2 Middlesex County Ethics Committee v. Garden State Bar Association, 457 U.S. 423, 73 L. Ed.
2d 116 , 102 S. Ct. 2515 (1982). We will reverse. I.
The Council filed a complaint in the United States District Court for the Western District of Pennsylvania asserting federal constitutional claims and pendent state claims against the City of Pittsburgh, the County of Allegheny, the City of Erie, and the City of Johnstown. The complaint alleged that the Council is "a Pennsylvania nonprofit corporation which functions as a membership organization that represents, assists and speaks for its members in matters where joint action is appropriate." The complaint stated that the Council has ninety-four members, including all of the private nonprofit hospitals within the governmental units named as defendants.
The heart of the complaint was the allegation that the defendant governmental units had attempted and were at- tempting to "coerce" or "force" tax-exempt member hos- pitals to make payments in lieu of taxes by "indicating that those hospitals which did not agree to such pay- ments and/or agreements 'in lieu of taxes' would have their tax exempt status challenged, would be likely to run into difficulties in **3 obtaining zoning approvals, and would not be offered the opportunity to provide services to the taxing authority." The complaint alleged
949 F.2d 83, *85; 1991 U.S. App. LEXIS 26880, **3
Page 2
that members had been harmed and were immediately threatened with harm as a result of the defendants' ac- tions. The complaint also specified agreements reached between the defendants and various hospitals within their jurisdictions.
Count One of the complaint asserted that the defen- dants had violated the Council members' right to equal protection by discriminating against those who refused to make payments in lieu of taxes. Count Two alleged that members were being deprived of property without due process. Count Three repeated essentially the same con- stitutional claims as Counts One and Two. Finally, Count Four asserted pendent claims under the Uniformity Clause of the Pennsylvania Constitution, art. 8, sec. 1, and other state laws. The complaint sought declaratory and injunc- tive relief, *86 but it did not request damages for any past violations.
On motion by the defendants, the district court dis- missed the complaint. The court held that the Council did not meet two of the three requirements for associa- tional standing set out in Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 53 L. Ed. 2d 383
, 97 S. Ct. 2434 (1977). **4 First, the court found that "there is no injury, real or threatened, which is fairly traceable to defendants' allegedly unlawful conduct." The court wrote that none of the members had lost its tax ex- emption, that any payments made in lieu of taxes were purely voluntary, and that any alleged threat was "purely hypothetical and conjectural." The court also concluded that the Council lacked associational standing because
"the claims asserted and the relief requested . . . would require the participation of the individual hospitals in this lawsuit."
As an alternative ground for dismissal, the court held that abstention was required under Middlesex County Ethics Committee. The court noted that the defendants had challenged the tax exemptions of several member hospi- tals in state administrative proceedings and that "any con- stitutional challenges to defendants' taxing practices im- plicate important state interests." The Council appealed.
II.
"An association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and
(c) neither the **5 claim asserted nor the relief re- quested requires the participation of individual members in the lawsuit." Hunt, 432 U.S. at 343. "When standing is challenged on the basis of the pleadings," as it was here, we must "'accept as true all material allegations of the complaint and . . . construe the complaint in favor of the
complaining party.'" Pennell v. City of San Jose, 485 U.S.
1, 7, 99 L. Ed. 2d 1 , 108 S. Ct. 849 (1988), quoting Warth v. Seldin, 422 U.S. 490, 501, 45 L. Ed. 2d 343 , 95 S. Ct.
2197 (1975). Under these standards, the complaint in this case should not have been dismissed for lack of standing. n1
n1 Our review of the district court's decision on standing is plenary. Roe v. Operation Rescue, 919
F.2d 857, 863 (3d Cir. 1990).
A. Standing of individual members
The district court held -- and the County of Allegheny and the City of Pittsburgh argue on appeal -- that members of the Council lacked standing because they did not suffer injury in fact. The meaning of injury in fact was set out
**6 in Whitmore v. Arkansas, 495 U.S. 149, 110 S.Ct.
1717, 1723, 109 L. Ed. 2d 135 (1990) (footnote omitted):
Injury in fact must be concrete in both a qualitative and temporal sense. The complainant must allege an injury to himself that is "distinct and palpable." Warth, supra at
501, as opposed to merely "abstract," O'Shea v. Littleton,
414 U.S. 488, 494, 38 L. Ed. 2d 674 , 94 S. Ct. 669
(1974), and the alleged harm must be actual or imminent, not "conjectural" or "hypothetical." City of Los Angeles v. Lyons, 461 U.S. 95, 101-02, 75 L. Ed. 2d 675 , 103 S. Ct.
1660 (l983). Further, the litigant must satisfy the "causa- tion" and "redressability" prongs of the Art. III minima by showing that the injury "fairly can be traced to the chal- lenged action," and "is likely to be redressed by a favor- able decision." Simon v. Eastern Ky. Welfare Rights Org.,
426 U.S. 26, 38, 4196 S.Ct. 1917, 48 L.Ed.2d 450 (1976);
Valley Forge Christian College v. Americans United for
Separation of Church and State, Inc., 454 U.S. 464, 472,
70 L. Ed. 2d 700 , 102 S. Ct. 752 (1982) . The litigant must clearly and specifically set forth facts sufficient *87 to satisfy these Art. III standing requirements.
The complaint in this case met these requirements. First, the complaint **7 alleged injury that is "concrete in both a qualitative and temporal sense." The complaint alleged a classic form of qualitatively concrete injury -- direct financial harm. The complaint alleged that members had been subjected to and were threatened with discrimination in the initiation of tax exemption challenges, the handling of zoning matters, and the awarding of public contracts. n2 It is obvious that discrimination of this type is likely to cause direct financial harm to the victims.
n2 In its brief on appeal (at 12), the City of Erie states:
949 F.2d 83, *87; 1991 U.S. App. LEXIS 26880, **7
Page 3
**8
A dubiously tax exempt hospital . . . should not ex- pect a warm welcome when it requests a legislative favor of rezoning or any other favorable treatment in the zoning areas.
Nor should such hospitals expect to find lo- cal officials eager to contract with them. Appellees have the right to utilize certain types of leverage to convince institutions with dubious tax exemptions to compromise or capitulate. Of course, there is a limit to the types of pressure which can legitimately be brought to bear.
431 U.S. 171, 172, 52 L. Ed. 2d 219 , 97 S. Ct. 1739 n.2
(1977); Golden v. Zwickler, 394 U.S. 103, 109, 22 L. Ed.
2d 113 , 89 S. Ct. 956 (1969). In this case, by contrast, the complaint unequivocally alleges that member hospitals have **10 been threatened with imminent harm. We do not think these allegations may be termed "hypothetical" or "conjectural."
We also believe that the complaint meets the "cau- sation" requirement. This requirement means that the in- jury for which redress is sought must be traceable to the challenged actions of the defendants, not to "injury that results from the independent action of some third party not before the court." Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 26, 41-42, 96 S.Ct. 1917, 48 L.Ed.2d
The complaint also alleged harm that was temporally concrete, i.e., that member hospitals were immediately in danger of sustaining injury. See City of Los Angeles v. Lyons, 461 U.S. 95, 102, 75 L. Ed. 2d 675 , 103 S. Ct.
1660 (1983); Roe v. Operation Rescue, 919 F.2d 857, 864
(3d Cir. 1990). The complaint alleged that "it had been indicated that member hospitals not agreeing to make payments in lieu of taxes will have their exempt status challenged, will be likely to run into difficulties obtaining zoning approvals, and will not be offered the opportu- nity to provide services to the taxing authority" (App. at
8a). The complaint further alleged that member hospitals
"have either been subject to, or are being immediately threatened with challenges of their tax exempt status or are either being treated unfavorably with regard to zon- ing matters or are under the shadow or threat of such unfavorable treatment" (App. at 11a (emphasis added)). These allegations are far more concrete than those found to be "hypothetical" or "conjectural" in cases such as City of Los Angeles v. Lyons, supra, and O'Shea v. Littleton, 414 U.S. 488, 38 L. Ed. 2d 674 , 94 S. Ct. 669
(1974). **9 In Lyons, a man who was allegedly sub- jected to a chokehold by the police during a past arrest sought an injunction against continued use of the choke- hold except under extreme circumstances. The Court held
(461 U.S. at 101-110) that this individual lacked stand- ing to seek injunctive relief because it was speculative that he would again be arrested and subjected to a choke- hold. Similarly, in O'Shea, the Court held that residents of a town lacked standing to seek injunctive relief against a magistrate and judge whom they claimed were engaged in a pattern and practice of illegal conduct in criminal cases. The Court held (414 U.S. at 493-99) that it was specu- lative and conjectural that any of the plaintiffs would be charged with criminal conduct and subjected to the ille- gal conduct alleged. See also, e.g., Whitmore, 110 S.Ct. at 1724-25; Diamond v. Charles, 476 U.S. 54, 66, 90 L. Ed. 2d 48 , 106 S. Ct. 1697 (1986); Ashcroft v. Mattis,
450 (1976). Here, it seems clear that the alleged injuries for which the Council seeks redress -- the various forms of discrimination noted above -- are directly traceable to the defendants. Both the County of Allegheny and the City of Pittsburgh argue that their *88 actions in chal- lenging the tax-exempt status of property cannot cause harm because they can only seek but cannot alone effect the revocation of tax exemptions. This argument over- looks the risk and litigation expense that may be caused by retaliatory challenges, even if ultimately unsuccessful. Moreover, this argument completely ignores the allega- tions in the complaint regarding discriminatory treatment in zoning matters n3 and in the awarding **11 of public contracts.
n3 The County points out that it lacks zoning authority, but it does not deny that it awards poten- tially valuable contracts.
The complaint likewise satisfies the "redressability" requirement. Should the plaintiffs prevail, the district court could enjoin the discriminatory practices about which they complain. The County and the City of Pittsburgh argue that the "redressability" requirement can- not be met because legitimate challenges to tax-exempt status cannot and should not be enjoined. While this is true, retaliatory challenges may be enjoined, as may dis- crimination in zoning and contracting.
We also conclude that the facts needed to establish standing are set out with sufficient specificity. The County points out that the complaint "does not indicate what ser- vices, if any, Council members sought to provide to Allegheny County, when they sought to provide such ser- vices, whether such services were competitively bid or the response by the County to an expression of interest in providing such services." **12 The County has not cited any authority indicating that this level of specificity is necessary to avoid dismissal of a complaint for lack of
949 F.2d 83, *88; 1991 U.S. App. LEXIS 26880, **12
Page 4
standing, and we believe that the County has exaggerated the meaning of this requirement. See Pennell, 485 U.S. at
1, 7-8. At the present stage, in our view, the clear allega- tions of past and threatened discrimination are sufficient. Thus, the complaint adequately alleges that members of the association suffered injury in fact.
B. Germaneness.
The complaint sought to protect interests that are ger- mane to the purposes of the Association. The complaint alleged that the Council "functions as a membership orga- nization that represents, assists and speaks for its members in matters where joint action is appropriate or is designed to resolve common problems." Clearly the interests that the Council seeks to protect here -- the financial interests of members -- are germane to the organization's broad purposes.
Although the district court did not rely on this prong of the associational standing test, the County and the City of Pittsburgh contend that this prong is not satisfied. They argue that the complaint's description of the **13 purposes of the Council is so broad that it is essentially meaningless, but they cite no authority indicating that an association cannot satisfy the "germaneness" requirement unless its purpose is narrow or specific. We have likewise found no such controlling authority. On the contrary, in Pennell, 485 U.S. at 7 n.3, the Supreme Court held that the germaneness requirement was met because the asso- ciation was "'organized for the purpose of representing the interests of the owners and lessors of real property in San Jose in this lawsuit.'" We see no relevant basis for distinguishing the stated purpose of the Council here from that of the association in Pennell.
The County also suggests that the interests that the Council seeks to promote are adverse to those of some of its members, since some members may wish to ben- efit from the favorable treatment allegedly given to in- stitutions entering into agreements to make payments in lieu of taxes. We recently addressed a similar question in Contractors Association v. City of Philadelphia, Nos.
90-1295 & 1296 (3d Cir. Sept. 30, 1991). In that case, an association of contractors filed suit claiming that the Equal Protection **14 Clause was violated by a lo- cal ordinance that set goals regarding the percentage of city contracts awarded to minority-owned businesses. We held that *89 the association had standing to assert this claim even though some of its members were minority- owned businesses and therefore had interests adverse to those advanced by the association in its complaint. We wrote (slip op. at 13):
The association's position in this litigation is not con- trary to the interests of a majority of its members, and
there is nothing on this record indicating that it failed to follow its own internal rules before joining this litiga- tion.
By the same reasoning, we cannot hold that associational standing is lacking in the present case because of a con- flict between the interests of Council members who have entered into agreements to make payments in lieu of taxes and those who have not. Moreover, we have no basis at this juncture for concluding that those Council members who have entered into such agreements do not feel that the relief sought in this case was beneficial. While it is certainly possible that such member hospitals may prefer to continue making payments in exchange for favorable treatment **15 by the defendant jurisdictions, it is also possible that they may prefer to stop making the pay- ments even if that also means relinquishing the favorable treatment.
C. Participation by individual members.
The district court held -- and the County and the City of Pittsburgh argue on appeal -- that associational stand- ing is improper because "the claims asserted and the relief requested require the participation of the individual hos- pitals in this lawsuit." We disagree.
It is clear that the Council's request for declaratory and injunctive relief case does not require participation by individual members. The Supreme Court has repeat- edly held that requests by an association for declaratory and injunctive relief do not require participation by indi- vidual association members. Pennell, 485 U.S. at 7 n.3; UAW v. Brock, 477 U.S. 274, 287-88, 106 S.Ct. 2523,
91 L.Ed.2d 228 (1986). The Court has distinguished such requests from requests for individualized damages for as- sociation members. Warth, 422 U.S. at 515-16. Neither the district court nor the defendants have explained why the declaratory and injunctive relief sought by the Council in this case would have **16 required participation by individual Council members. Consequently, we hold that relief sought by the Council does not preclude associa- tional standing here.
Nor do we believe that associational standing is fore- closed by the nature of the claims asserted in this case. In the third prong of the test first set out in Hunt, 432
U.S. at 343, the Supreme Court stated that associational standing is inappropriate if the claim or request for re- lief requires "the participation of individual members in the lawsuit." Viewed alone, this language could be inter- preted to mean that associational standing is not permitted if participation by any members of the association would be necessary. This language, however, appears to para- phrase a more detailed statement first made by the Court
949 F.2d 83, *89; 1991 U.S. App. LEXIS 26880, **16
Page 5
in Warth and repeated in later cases. In Warth, 422 U.S. at 511 (emphasis added), the Court wrote:
So long as the nature of the claim and of the relief sought does not make the individual participation of each injured party indispensable to proper resolution of the cause, the association may be an appropriate representative of its members entitled to invoke the court's **17 jurisdic- tion.
The Court quoted and relied upon this statement in Hunt,
432 U.S. at 343, and Brock, 477 U.S. at 282. Accordingly, it appears that an association may assert a claim that re- quires participation by some members.
Here, the claims asserted by the Council would require some participation by some Council members. This case, unlike many prior associational standing cases, does not involve a challenge to a statute, regulation, or ordinance, but instead involves a challenge to alleged practices that would probably have to be proven by evidence regarding
*90 the manner in which the defendants treated individ- ual member hospitals. Adjudication of such claims would likely require that member hospitals provide discovery, and trial testimony by officers and employees of member hospitals might be needed as well. Nevertheless, since participation by "each allegedly injured party" would not be necessary, we see no ground for denying associa- tional standing.
III.
As an alternative ground for dismissal, the dis- trict court held that abstention was required under Middlesex County Ethics Committee v. Garden State Bar Association, supra, **18 a decision that grew out of a line of abstention cases including Younger v. Harris,
401 U.S. 37, 27 L. Ed. 2d 669 , 91 S. Ct. 746 (1971). Under the abstention doctrine developed in these cases, abstention is proper "only if (1) there are ongoing state proceedings that are judicial in nature; (2) the state pro- ceedings implicate important state interests; and (3) the state proceedings afford an adequate opportunity to raise federal claims." Schall v. Joyce, 885 F.2d 101, 106 (3d Cir. 1989). In this case, it is apparent that the third re- quirement is not met, n4 and thus we need not consider the other requirements.
n4 We review the district court's decision to ab- stain for abuse of discretion. Schall v. Joyce, 885
F.2d at 106.
The district court stated that "any constitutional chal- lenges to defendants' administration of its taxing system" could be fully raised in proceedings before the state boards of assessment." n5 But even assuming that any member hospital whose tax exemption is challenged by **19 a defendant in proceedings before a board of assessment would have an adequate opportunity in those proceedings to raise the claim that the challenge was retaliatory or dis- criminatory, it seems clear that other key federal claims asserted by the Council in this case could not be raised in those proceedings. As previously noted, the complaint also asserts claims concerning discrimination in zoning matters and in the awarding of public contracts, but nei- ther the district court nor the defendants have explained how the state boards of assessments could entertain such claims. Thus abstention was not proper in this case.
n5 Under Pennsylvania statute, taxpayers may appeal a local tax assessment to the appropriate local assessment board. 72 Pa. Cons. Stat. Ann.
§ 5020-511 (1991). See also § 5341.14 (appeal to Board of Revision of Taxes in Counties of the First Class), § 5452.10 (appeal to Board of Property Assessment, Appeals, and Review in Counties of the Second Class), § 5349 (appeal to Board of Assessment and Revision in Counties of the Third Class), §§ 5453.701, 5453.702 (appeal to Board of Assessment and Revision of Taxes in Counties of the Fourth through Eighth Classes). Thereafter, the taxpayer may appeal from the decision of the appropriate board to state court. 72 Pa. Cons. Stat. Ann. § 5020-518.1 (1991). See, e.g., Filbern Manor Apartments v. Board of Assessment Appeals, 138
Pa. Commw. 660, 589 A.2d 279 (Pa. Commw. Ct.
1991).
**20
We will vacate the order of the district court dismiss- ing the complaint, and we will remand for further proceed- ings. Although the defendants have urged us to affirm the district court's decision on the ground that the complaint fails to state any claim on which relief may be granted, we decline to reach this question, which the district court has not yet addressed. Nothing in our opinion should be interpreted to express any view on this question or on the truth of the Council's allegations.
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