Germantown Cab Co. v. Phila. Parking Auth.

206 A.3d 1030

GERMANTOWN CAB COMPANY, Bucks County Services, Inc., Concord Limousine, Inc., Dee Dee Cab Company and MCT Transportation, Inc., Appellees

v.PHILADELPHIA PARKING AUTHORITY, Appellant

Germantown Cab Company, Bucks County Services, Inc., Concord Limousine, Inc., Dee Dee Cab Company and MCT Transportation, Inc., Appellees

v.Philadelphia Parking Authority, Appellant

No. 14 EAP 2018

No. 15 EAP 2018

Supreme Court of Pennsylvania.

Argued: December 5, 2018

Decided: April 26, 2019

Michael Casey, Esq., Dennis Gerard Weldon Jr., Esq., Philadelphia Parking Authority, for Appellant.

Brett Adam Berman, Esq., Andrew Stephen Console, Esq., Fox Rothschild LLP, for Germantown Cab Company, Appellee.

Andrew Stephen Console, Esq., for MCT Transportation, Inc., Concord Limousine, Inc., Bucks County Services, Inc., Dee Dee Cab Company, Appellees.

SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

OPINION

JUSTICE WECHT

With the enactment of Act 94¹ in 2004, the General Assembly transferred regulatory authority over Philadelphia taxicabs to the Philadelphia Parking Authority ("Authority"). Act 94 also created a budget submission process for the Authority to follow, and prescribed a formula that the Authority uses to ascertain assessments imposed upon Philadelphia taxicabs. In 2013, the Commonwealth Court found certain portions of Act 94 to be unconstitutional. See MCT Transp. Inc. v. Phila. Parking Auth. , 60 A.3d 899 (Pa. Cmwlth. 2013). The General Assembly then enacted Act 64² to cure the constitutional shortcomings identified by the Commonwealth Court. Partial rights taxicab owners in Philadelphia challenged the new scheme on constitutional grounds. The Commonwealth Court granted relief, finding that Subsection 5707(c) of the Parking Authorities Law, 53 Pa.C.S. § 5707(c), violates the substantive due process rights of partial rights taxicab owners. Additionally, the Commonwealth Court found that the budget submission process prescribed in 53 Pa.C.S. §§ 5707(a) and 5710 constitutes an unconstitutional delegation of legislative power.

This Court granted allowance of appeal in order to consider these two constitutional holdings. We conclude that the Commonwealth Court erred in both respects. Subsection 5707(c) does not impair the substantive due process rights of partial rights taxicab owners. Nor do Subsections 5707(a) and 5710 amount to unconstitutional delegations of legislative power. Accordingly, we reverse.

I. Background

Prior to 2005, the Pennsylvania Public Utility Commission ("PUC") regulated taxicabs in Pennsylvania. In March 2005, the General Assembly enacted Act 94, which amended Chapter 57 of the Parking Authorities Law to transfer regulatory and oversight authority for taxicabs operating in Philadelphia (the "City") from PUC to the Authority. See Act of July 16, 2004, P.L. 758, No. 94 ; 53 Pa.C.S. §§ 5701 -45; see generally Germantown Cab Co. v. Phila. Parking Auth., 993 A.2d 933, 934-35 (Pa. Cmwlth. 2010). There are two types of taxicabs subject to Authority regulation: medallion taxicabs, which have city-wide transportation rights, and partial rights taxicabs, which provide transportation in limited areas of the City. The PUC retained authority to regulate taxicabs operating outside the City and in the remainder of the Commonwealth. Consequently, Act 94 created a system of dual regulation by PUC and the Authority for partial rights taxicabs. While in the City, partial rights taxicabs are subject to Authority regulations. Outside the City, they are subject to PUC authority.

This legislative change reflected the General Assembly's finding that "[t]he health, safety and general welfare of the people of this Commonwealth" benefit from "the development of a clean, safe, reliable and well-regulated taxicab and limousine industry locally regulated by" the Authority. 53 Pa.C.S. §§ 5701.1(1), (2).³

Initially, the version of Subsection 5707(b) enacted by Act 94 created a process by which the Authority would establish a budget and fee schedule according to what was "necessary to advance the purposes of this chapter," and would submit this budget and fee schedule to the Appropriations Committees of the Pennsylvania Senate and the Pennsylvania House of Representatives by March 15 of each year. 53 Pa.C.S. § 5707(b) (2004). Unless the Appropriations Committees adopted a disapproval resolution by April 15, the Authority's budget and fee schedule would become effective.

In MCT Transportation , the Commonwealth Court held that this process constituted an unconstitutional delegation of legislative power because it granted the Authority the power to formulate its own budget and fee schedule without restriction or guidance from the General Assembly. See MCT Transp. , 60 A.3d at 914-15. In this respect, the Commonwealth Court rejected the argument that the legislative mandate to spend whatever was "necessary to advance the purpose of this chapter" limited the Authority's creation of its budget and fee schedule. 53 Pa.C.S. § 5707(b) (2004); see MCT Transp ., 60 A.3d at 914. Similarly, the Commonwealth Court found that the Appropriations Committees' power to disapprove of the Authority's budget did not suffice to pass constitutional muster under the non-delegation doctrine.

Finally, the Commonwealth Court contrasted the procedure established by Subsection 5707(b) with the constitutionally-mandated state agency budget process. See MCT Transp ., 60 A.3d at 906-10 ; Administrative Code of 1929, 71 P.S. § 230. This process commences when the Governor submits a proposal to the General Assembly for enactment. PA. CONST. art VIII, § 12. Pursuant to the Administrative Code of 1929, the General Assembly responds to the Governor's proposal by promulgating an appropriations bill, obtaining bicameral consideration and approval, and, ultimately, submitting the legislation for the Governor's signature. See MCT Transp. , 60 A.3d at 907 ; 71 P.S. § 230. Because Subsection 5707(b) did not adhere to this process, the Commonwealth Court found that it could not survive a constitutional challenge. See MCT Transp. , 60 A.3d at 914 ("[O]ur Constitution provides for an elaborate budgeting process that requires ‘inquiries and investigations’ by the Governor before a budget request is even submitted to the legislature for its review....").

In July 2013, the General Assembly enacted Act 64 to amend the Parking Authorities Law in response to MCT Transportation . In particular, Act 64 established a new process for setting the Authority's budget and fee schedule and for calculating the individual taxicab assessment that is central thereto by amending Sections 5707 and 5708 and adding Sections 5707.1 and 5710 to the Parking Authorities Law.

Section 5707 outlines the budget submission process, the Authority's obligation to keep its records open to inspection, and the calculation of assessments. Subsection 5707(a) requires the Authority to submit a proposed budget and fee schedule to the General Assembly, through the Governor, pursuant to the Administrative Code of 1929.⁴ This proposal will consist of amounts "necessary for the administration and enforcement of this chapter" for the next fiscal year. 53 Pa.C.S. § 5707(a)(1). The proposed budget must include a fee schedule for items such as vehicle inspections and bounced checks. Id. The Authority's appropriation will be from two funds established by Section 5708 : the Philadelphia Taxicab and Limousine Regulatory Fund ("Regulatory Fund"), and the Philadelphia Taxicab Medallion Fund ("Medallion Fund"). The Regulatory Fund is the Authority's primary operating fund, and consists of assessments, fees, penalties, and other payments the Authority collects. Id. § 5708(a). The Medallion Fund consists of revenue and fees earned from the sale of medallions and is also used by the Authority to administer and enforce taxicab regulations. Id. § 5708(a.1). After submitting its proposed budget, the Authority may appear before the Governor and the Appropriations Committees of the Senate and House of Representatives and defend its proposal.

To develop its proposed budget, the Authority must estimate the "expenditures necessary to meet its obligation to administer and enforce" Chapter 57. Id. § 5707(a)(2). From that amount, the Authority subtracts the estimated fees it will collect during the fiscal year,⁵ money remaining in the Regulatory Fund, and money budgeted from the Medallion Fund. Id. § 5707(a)(2)(i)-(iii). The remainder is the "total assessment." Id. § 5707(a)(3). The total assessment is allocated among and paid by the three utility groups that the Authority regulates: taxicabs, limousines, and dispatchers. Id. § 5707(a)(3).

Relevant to this case is the assessment allocated to the taxicab utility group, which is established in Subsection 5707(c)(1).⁶ The taxicab utility group consists of medallion taxicabs and partial rights taxicabs. Id. § 5707(c)(1)(i).⁷ The portion of the total assessment allocated to the taxicab utility group is divided among the taxicabs that will be operating in that fiscal year. Each taxicab, regardless of kind, pays the same assessment. The amount of this individual assessment will depend upon the number of taxicabs that will operate in the City during the relevant fiscal year.

The number of medallion taxicabs that will be operating in the City during the fiscal year is easily ascertainable by the Authority, because each medallion is granted to a specific taxicab. While the statute permits 1,600 individual medallion taxicabs, it permits only six certificates of public convenience for partial rights taxicab owners. Id. § 5711(c)(2.1). Each partial rights taxicab owner operates a fleet of vehicles, and may operate an unlimited number of taxicabs under its certificate of public convenience. Moreover, owners are free to decide from year to year how many partial rights taxicabs will provide service in Philadelphia (and will thus be subject to the Authority's regulations and assessment), and how many...