Landlord Serv. Bureau, Inc. v. City of Pitt.

317 A.3d 986

LANDLORD SERVICE BUREAU, INC.; Michelle Williams; Collyer Realty Company, d/b/a Galasso Real Estate Services; Santo Policichio; Crown Real Estate and Management Services

v.The CITY OF PITTSBURGH and Council of the City of Pittsburgh

Realtors Association of Metropolitan Pittsburgh, a Pennsylvania Corporation Not for Profit

v.The City of Pittsburgh

Apartment Association of Metropolitan Pittsburgh, a Pennsylvania Corporation Not for Profit

v.The City of Pittsburgh, a Home Rule City

Appeal of: The City of Pittsburgh and Council of the City of Pittsburgh

No. 15 WAP 2023

Supreme Court of Pennsylvania.

Argued: April 9, 2024

Decided: June 18, 2024

Appeal from the Order of the Commonwealth Court entered March 17, 2023, at No. 1026 CD 2021, reversing the Order of the Court of Common Pleas of Allegheny County entered August 17, 2021, at No. GD 15-023074.

ORDER

PER CURIAM

AND NOW, this 18th day of June, 2024, the matter before the Court having become moot by the City of Pittsburgh’s wholesale replacement of the 2015 Residential Housing Rental Permit Program Ordinance (Rental Ordinance), which is the subject of the underlying consolidated ac- tion, with a new ordinance (Ordinance 2022-0270) that does not contain the Rental Ordinance provisions that the Commonwealth Court below found to violate Section 2962(f) of the Home Rule Charter and Optional Plans Law, 53 Pa. C.S. § 2962(f), such that the City now seeks merely an advisory opinion, it is hereby ORDERED that the Commonwealth Court’s Order, dated March 17, 2023, is VACATED, the appeal before this Court is DISMISSED, and this matter is REMANDED to the Court of Common Pleas of Allegheny County to dismiss the complaints in the consolidated action. See In re Gross, 476 Pa. 203, 382 A.2d 116 (1978) (observing that legal question can become moot on appeal due to intervening change in ordinance or statute); Salisbury Twp. v. Sun Oil Co., 406 Pa. 604, 179 A.2d 195 (1962) (holding challenge to ordinance moot on appeal due to expiration of ordinance); N. Pa. Pwr. Co. v. Pa. Pub. Util. Comm’n, 333 Pa. 265, 5 A.2d 133 (1939) (holding constitutional challenge to statute moot on appeal due to intervening amendment enacted by legislature), overruled on other grounds, York v. Pa. Pub. Util. Comm’n, 449 Pa. 136, 295 A.2d 825 (1972); see also Mt. Lebanon v. Cnty. Bd. of Elections of Allegheny Cnty., 470 Pa. 317, 368 A.2d 648 (1977) (holding that "court should not offer advisory opinions" on proposed legislation not in effect).

Justice Wecht files a dissenting statement in which Justice Donohue joins.

JUSTICE WECHT, dissenting

The Majority dismisses this case as moot because the Pittsburgh ordinance that engendered this litigation was displaced during the pendency of this appeal by a new ordinance, rendering any decision we might offer as to the former ordinance advisory. I agree that the underlying case technically is moot, but I believe nonetheless that we should review this case under the well-established "public-importance" exception¹ to the mootness doctrine. Accordingly, I respectfully dissent.

This dispute concerns the breadth of the City of Pittsburgh’s authority, as a home-rule municipality, to regulate individual and corporate landlords in its residential rental market. In 2015, the City passed a "Rental of Residential Housing Ordinance" ("the 2015 Ordinance").² It explained the impetus for the ordinance as follows:

The City of Pittsburgh recognizes the need for a registration program for residential rental units located within the City in order to ensure rental units meet all applicable building, existing structures, fire, health, safety, and zoning codes, and to provide an efficient system for compelling both absentee and local landlords to correct violations and maintain, in proper condition, rental property within the City. The City recognizes that the most efficient system is the creation of a program requiring the registration of residential rental units within the City as defined in this Chapter, so that an inventory of rental properties and a verification of compliance can be made by City officials. The City intends to use a portion of the funds generated by the registration fee for property inspection purposes.³

In furtherance of its stated goals, the City imposed various obligations upon owners seeking to rent their properties out as residences. The 2015 Ordinance:

• mandated registration of residential rental units in Pittsburgh;

• provided that no rental unit could be leased, rented, or occupied without a permit from the City and the designation of a "responsible local agent";

• instituted an annual fee for rental permits assessed per unit;

• directed the City’s Department of Permits, Licenses, and Inspections ("DPLI") to inspect each registered rental unit periodically;

• directed DPLI to create an online database giving public access to information related to registered properties and their inspections; and

• further directed DPLI to create a "manual of good landlord practices," a "landlord academy," and to provide sundry related, but non-mandatory resources for landlords.

This action arose from the consolidation of suits filed by the Landlord Service Bureau, the Apartment Association of Metropolitan Pittsburgh, and the Realtors Association of Metropolitan Pittsburgh, among others (collectively, "Landlords"), all of which challenged the 2015 Ordinance as violative of the business exclusion to municipal authority granted by the Home Rule Charter and Optional Plans Law ("Home Rule Law").⁴ The Home Rule Law provides that "[a] municipality which has adopted a home rule charter may exercise any powers and perform any function not denied by the Constitution of Pennsylvania, by statute or by its home rule charter."⁵

However, the Home Rule Law also imposes numerous limitations upon homerule authority. At issue in this case is what we call the "business exclusion," which cabins home-rule municipalities’ regulation of business activities as follows:

A municipality which adopts a home rule charter shall not determine duties, responsibilities or requirements placed upon businesses, occupations and employers, including the duty to withhold, remit or report taxes or penalties levied or imposed upon them or upon persons in their employment, except as expressly provided by statutes which are applicable in every part of this Commonwealth or which are applicable to all municipalities or to a class or classes of municipalities. …⁶

The question here isn’t whether the 2015 Ordinance "determine[s] duties, responsibilities or requirements placed upon businesses." Plainly it does. Rather, as is often the case with business exclusion challenges, the question is whether a particular generally applicable statute or statutes provide the necessary authority to overcome the business exclusion’s application.⁷ The Allegheny County Court of Common Pleas granted the City judgment on the pleadings in part, concluding that the 2015 Ordinance was a permissible exercise of the City’s home-rule authority. On Landlords’ appeal, the Commonwealth Court disagreed and threw out the 2015 Ordinance in its entirety, raising the specter that the City’s rental market would effectively go unregulated.⁸

During the course of this litigation, ostensibly as a hedge against the City’s rental market becoming a free-for-all in the absence of any directly governing ordinance, the City enacted in 2023 a much diminished "Residential Housing Rental Permit Program" ("the 2023 Ordinance").⁹ The 2023 Ordinance required rental-unit registration, but dispensed with, inter alia, the requirement that landlords appoint a responsible local agent; DPLI’s duty to publish information regarding ownership and inspection of rental units to an online database; and other obligations that had engendered most of Landlords’ challenges to the 2015 Ordinance.

Meanwhile, the City sought, and this Court granted, our discretionary review.¹⁰ But now the Majority cites the 2023 Ordinance as having rendered any consideration of the 2015 Ordinance moot and therefore unreviewable. By the Majority’s implication, the City had two choices. The City could accept the risk that the Commonwealth Court’s ruling invalidating the 2015 Ordinance would be upheld, leaving the City with no rental regulation whatsoever—or the City could hedge against that outcome by passing a more limited ordinance that might not incur litigation by Landlords or other local business interests. It chose the latter, and now, allegedly, it must be denied review of the 2015 Ordinance.¹¹

To be sure, our general approach to rnootness is clear: "It is well established in this jurisdiction that this Court will not decide moot questions. … [A] legal question can become moot on appeal as a result of an intervening change in the facts of the case."¹² Equally clear is that Pennsylvania courts recognize three circumstances under which technical mootness may be overlooked as a prudential matter: "1) the case involves a question of great public importance, 2) the Question presented is capable of repetition and apt to elude appellate review, or 8) a party to the controversy will suffer some detriment due to the decision of the [lower] court"¹³

As to the "public-importance exception," the Commonwealth Court has explained:

Although rarely Invoked, both [the Commonwealth] Court and our Supreme Court applied the public importance exception to permit review in a number of cases. See, e.g., Jersey Shore Area Sch. Dist. v. Jersey Shore Educ. Ass’n, 548 A.2d 1202 (Pa. 1988) (involving legality of teachers’ strike); Lutz v. Tanglwood Lakes Cmty. Ass’n, Inc., 866 A.2d 471 (Pa. Cmwlth. 2005) (implicating future governance of nonprofit corporations); In re Gen. Election, Nov. 8, 1988, 560 A.2d 260 (Pa. Cmwlth. 1989) (Involving over 4,700 voters who failed to mail registration applications before deadline); Mifflin Cnty. Sch. Dist. v. Stewart, 503 A.2d 1012 (Pa. Cmwlth. 1986) (involving issue of whether

...