Stevens & Lee Appellate Team Saves Pennsylvania City $50 Million With Unanimous Commonwealth Court Victory

Led by Hon. Thomas I. Vanaskie (Ret.), a team of Stevens & Lee attorneys received a unanimous decision from the Commonwealth Court of Pennsylvania en banc, reversing the Court of Common Pleas of Lackawanna County’s grant of peremptory judgment in mandamus to a group of taxpayers that will save the City of Scranton, a home rule municipality, more than $50 million. In St. Fleur v. City of Scranton, the plaintiffs contended that Scranton illegally collected non-property taxes since 2015 in excess of the aggregate tax revenue limitation imposed by Act 511, the Local Tax Enabling Act. Hon. James A. Gibbons’ opinion ordered Scranton to set aside approximately $10 million per year and to reduce certain tax rates going forward.

The trial court’s reasoning had the potential to cause severe financial consequences to approximately 17 other municipalities throughout the Commonwealth that are home rule municipalities and/or currently classified as distressed municipalities. As such, Scranton received amicus support from numerous Commonwealth and municipal partners.

The Commonwealth Court held that Scranton is not subject to Act 511’s aggregate cap because it is a home rule municipality, and home rule municipalities are not subject to Act 511’s limitations. Scranton was previously a city of the Second Class A, but elected home rule status in 1974. Under Pennsylvania’s Home Rule Law, 53 Pa. C.S. § 2901, et seq., a home rule municipality is no longer subject to the limitations of its former municipal classification, but it can still utilize the statutory powers granted to municipalities in its former class.

Further, the Commonwealth Court explained that, while the power of home rule municipalities to impose tax rates can be limited by “statutes which are applicable in every part of this Commonwealth,” 53 Pa. C.S. § 2962(c)(2), Act 511 is not applicable “in every part” of Pennsylvania because Act 511 only applies to specific categories of municipalities, and does not include home rule municipalities. Therefore, home rule municipalities are not subject to Act 511’s aggregate tax revenue limitations.

The Stevens & Lee team consisted of attorneys from various practice groups including appellate, litigation, tax, municipal finance and government affairs, allowing Stevens & Lee to handle all aspects of the appeal internally without the need for outside consultants. Along with Judge Vanaskie, Marianne Gilmartin of the Litigation group and Peter Adonizio, Jr. of the Litigation and Appellate practice groups devoted considerable time to the appeal. Stevens & Lee has assembled an elite team of appellate practice specialists, led by Judge Vanaskie, to assist clients, on a national basis, with all appellate challenges they may face. To learn more, visit our website or contact Judge Vanaskie at 570.969.5360.