March 2016

Sadly, the City that gave birth to the Constitution repeatedly runs rough shot over the liberties it affords individuals and businesses.  In the latest rebuke to the City of Philadelphia’s malfeasance towards the Constitution, the United States District Court for the Eastern District of Pennsylvania, has ruled that the City’s publicly owned gas utility, Philadelphia Gas Works, violated landlords’ due process rights by slapping liens against properties for unpaid gas service debts incurred by tenants.

In a Memorandum decision dated March 17, 2016, Judge Curtis Joyner ruled that PGW’s process of filing liens against residential and commercial properties did not afford landlords adequate process to challenge the liens before the lien was filed.  As Judge Joyner rightly pointed out, it is well settled that before the government can deprive an individual or business of property, it must afford an adequate opportunity for an individual or business to challenge the proposed property deprivation.  Simply put, the Court found that PGW had not done this when it placed liens on landlord’s properties.

In the past few years, the Eastern District has been a staunch defender of the Constitution from City’s assaults on it. The decision striking down PGW’s unconstitutional lien scheme follows several similar cases involving the City of Philadelphia, including:

  • Bullard v. City of Philadelphia, 847 F.Supp. 711 (E.D. Pa. 2012).  In a case handled by my firm, the Eastern District granted summary judgment to a real estate developer whose property was demolished without affording the developer to contest the decision to demolish the property.  The Court ruled, like in the PGW case, that the City had violated the developer’s due process rights.
  • Sourovelis v. City of Philadelphia, 103 F.Supp.3d 694 (E.D. Pa. 2015).  In this case the Eastern District allowed to proceed a claim that the Philadelphia District Attorneys Office’s civil asset forfeiture program violated the due process rights of individual property owners.
  • Cradle of Liberty Council, Inc. v. City of Philadelphia.  In this highly publicized case, a federal jury returned a unanimous verdict against the City for violating the freedom of association rights of the Boy Scouts.  The City was required to pay the attorneys fees that the Boy Scouts incurred and also damages to the Boy Scouts.

If violating the Constitution is not bad enough, the taxpayers of the City of Philadelphia (which is already broke) are left on the hook to pay the attorneys fees that the City incurs in defending these actions and in paying settlements. Maybe the City will eventually learn that following the Constitution is free.

WHYY is reporting that affordable housing advocated in the City of Philadelphia are demanding that City Council impose an impact fee of $4.80 a square foot on all new market rate developments and rentals that would go towards funding the City’s Housing Trust Fund.  The story reports that City Council members and Mayor Kenney have committed to considering the impact fee for expanding the Housing Trust Fund.

If City Council were actually foolish enough to pass such legislation, it would hopefully face a constitutional challenge.  Under established Supreme Court precedent, the demanded impact fee there has to be a nexus between the new construction and affordable housing.  In other words, the City would have to show that new construction is causing a decrease in affordable housing options in the City.  Moreover, the demanded fee would have to bear some proportionality to the impact it seeks to mitigate.

While leftist politicians and affordable housing advocates frequently complain that new developing is pricing long time residents out of certain neighborhoods,  like all straw man arguments, there is little to no empirical evidence to support such a claim.  Furthermore, the story does not mention how the affordable housing group arrived at the $4.80 figure it asks Council to impose and whether it bears any proportionality to the alleged impact on affordable housing that new development causes.

terminatorIn the Terminator movie franchise, the government develops a software system called Skynet.  The purpose of Skynet is to prevent human error in starting a nuclear holocaust. Instead, Skynet becomes self-aware and when programmers try to shut it down it perceives the human race a threat and tries to exterminate us and then it creates a bad-ass cyborg that looks like Arnold Schwarzenegger to help do that.

Registered Community Organization (RCO’s) are like Skynet less cyborgs and actual intelligence (artificial or otherwise). Like Skynet, the government (Philly City Council) created RCO’s for altruistic purposes.  However, rather than preventing nuclear war, RCO’s were created to prevent real estate developers from developing projects inconsistent with the character of the surrounding neighborhood (which, ironically, many RCO’s often treat like a nuclear apocalypse). Just like Skynet, the originally well intended RCO’s have taken on a life of their own and often terminate many job creating construction projects.

The out of control nature of RCO’s was recently on full display at a community meeting in Point Breeze where members of the RCO hurled anti-Semitic remarks towards developers proposing a project in the neighborhood.  In response, Councilman Kenyatta Johnson, whose district covers Point Breeze, contacted the Human Relations Commission (which is a public body that handles complaints related to discrimination in housing and employment but who the Councilman — perhaps not surprisingly — thinks are the thought and speech police).  He also said he would be introducing a bill establishing an RCO “code of conduct.”   

Councilman Johnson’s decision to reign in RCO’s is ironic because he has been a chief antagonistic in stoking the anti-gentrification flames through the RCO’s.  Only now, those same RCO’s have gotten out of control and threaten to kill their creators.  In fact, he recently joined with the very RCO he is now chastising, Concerned Citizens of Point Breeze, in appealing a project located in Point Breeze.  Essentially, he wants to kill the monster he has created.

Irony aside, real estate developers should cheer Councilman Johnson’s bill, however probably not for the reasons he thinks.  Apparently, the Councilman has now gone on record that RCO’s “have an official relationship with the City of Philadelphia, so we must ensure that they operate with a level of decency and order.”  This is good to know because as state actors or agents of the government both the United States and Pennsylvania Constitutions would apply to them and so do fun things like procedural and substantive due process rights (to name a few).  (I note that if the Councilman reported a group for making anti-Semitic remarks to a Commonwealth agency, I doubt he spends much time thinking about the Constitution).  When those two minor documents apply, RCO’s can then be sued and held liable for violating the rights contained in those documents.

Alas, the Councilman’s bill might not get too far.  The problem – ironically – the pesky Constitution.  The same document that provides for procedural due process rights also prevents the government from regulating the speech related conduct of organizations like RCO’s.  Unless of course Councilman Johnson’s bill wants to clarify that RCO’s are indeed official government organizations.  In that case, regulate away.