RFRA - 1st Amendment - free exercise - for-profit corporation

Conestoga Wood Specialties Corp. v. Secy. of HHS – 3d Cir. – July 26, 2013

http://www2.ca3.uscourts.gov/opinarch/131144p.pdf

Appellants Conestoga Wood Specialties Corporation , Norman Hahn, Elizabeth Hahn, Norman Lemar Hahn, Anthony Hahn, and Kevin Hahn appeal from an order of the District Court denying their motion for a preliminary injunction.

In their Complaint, Appellants allege that regulations promulgated by the Department of Health and Human Services, which require group health plans and health insurance issuers to provide coverage for contraceptives, violate the Religious Freedom Restoration Act, 42 U.S.C. § 2000bb,  and the Free Exercise Clause of the First Amendment of the United States Constitution.

The District Court denied a preliminary injunction, concluding that Appellants were unlikely to succeed on the merits of their claims.  Appellants then filed an expedited motion for a stay pending appeal with this Court, which was denied.  Now, we consider the fully briefed appeal from the District Court‘s denial of a preliminary injunction.

Before we can even reach the merits of the First Amendment and RFRA claims, we must consider a threshold issue: whether a for-profit, secular corporation is able to 1 The Complaint also alleges that the regulations violate the Establishment Clause, the Free Speech Clause, the Due Process Clause, and the Administrative Procedure Act.

While the District Court‘s opinion addressed some of these additional claims, Appellants have limited their appeal to whether the regulations violate the RFRA and the Free Exercise Clause. engage in religious exercise under the Free Exercise Clause of the First Amendment and the RFRA.

As we conclude that forprofit, secular corporations cannot engage in religious exercise, we will affirm the order of the District Court.

 

immigration - City of Hazleton case - MD Pa. affirmed by 3d Cir.on remand from US SCt

Lozano et al. v.City of Hazleton – 3d Cir. – July 2013

http://www2.ca3.uscourts.gov/opinarch/073531p.pdf

OPINION OF THE COURT

__________
McKEE, Chief Judge.

This case is before us on remand from the United States Supreme Court. The City of Hazleton previously appealed the District Court‟s judgment permanently enjoining enforcement of two Hazleton ordinances that attempt to  prohibit employment of unauthorized aliens and preclude them from renting housing within the City.

 In a precedential Opinion and Judgment filed on September 9, 2010, we upheld the permanent injunction. Thereafter, the Supreme Court granted Hazleton‟s petition for a writ of certiorari and remanded this case so that we could reconsider our analysis in light of Chamber of Commerce v. Whiting, 563 U.S. __, 131 S. Ct. 1968 (2011). See City of Hazleton v. Lozano, 563 U.S. __, 131 S. Ct. 2958 (2011).

Subsequently, the Court also decided Arizona v. United States, 567 U.S. __, 132 S. Ct. 2492 (2012). Both Whiting and Arizona address the extent to which federal immigration law pre-empts various state laws pertaining to the treatment of unauthorized aliens. On remand, we asked for supplemental briefing on whether either of those decisions alter our original analysis upholding the District Court‟s injunction.

Having thoroughly considered the additional submissions of the parties and the Court‟s decisions in Whiting and Arizona, we again conclude that both the employment and housing provisions of the Hazleton ordinances are pre-empted by federal immigration law. Accordingly, we will again conclude that both the employment and housing provisions of the Hazleton ordinances are pre-empted by federal immigration law. Accordingly, we will again affirm the District Court‟s order enjoining enforcement of these provisions.

"Purely charitable organization" - affordable housing and counseling - evidence about other properties - institution as a whole

Alliance for Building Communities v. County of Lehigh Board of Assessment Appeals – Cmwlth. Court – July 22, 2013

http://www.pacourts.us/assets/opinions/Commonwealth/out/1150CD12_7-22-13.pdf?cb=1

Alliance for Building Communities, Inc. (Taxpayer) appeals the order of the Court of Common Pleas of Lehigh County denying Taxpayer tax exempt status as an “institution of purely public charity” under Article VIII, Section 2(a)(v) of the Pennsylvania Constitution. The trial court affirmed the determination of the Lehigh County Board of Assessment Appeals that Taxpayer failed to establish that it qualified for an exemption as a purely public charity.

Taxpayer argues that the trial court erred by focusing only on Taxpayer’s operation of 20 rental properties it owns in Allentown rather than the charitable nature of Taxpayer’s entire organization. We agree and, therefore, vacate and remand.

______________________________

Taxpayer is a Pennsylvania non-profit corporation that is tax exempt under Section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. §501(c)(3); Taxpayer is also exempt from Pennsylvania sales and use tax. Its charitable mission is to provide affordable housing and counseling services to low-income persons. To that end, Taxpayer manages approximately 420 individual rental units, of which it owns 90 units. At issue in this case are 36 rental units on 20 real properties located in the City of Allentown. In July 2010, Taxpayer filed applications for real estate tax exemption for these 20 properties, and the Lehigh County Board of Assessment Appeals denied the applications. Taxpayer appealed to the trial court, which consolidated the 20 tax appeals.

Of the 20 properties at issue, 16 are leased to low-income tenants pursuant to a contract between Taxpayer and HUD under its Section 8 rental subsidy program. Those 16 properties contain 25 rental units. The other four properties, comprised of 11 rental units, are leased to mostly low or moderate income tenants at rents that are below market rates for the area.

In Hospital Utilization Project, 507 Pa. 1, 487 A.2d 1306, the Pennsylvania Supreme Court established a five-part test for determining whether an entity qualifies as a “purely public charity” under the Pennsylvania Constitution. The so-called HUP test provides:

[A]n entity qualifies as a purely public charity if it possesses the following characteristics.

(a) Advances a charitable purpose;
(b) Donates or renders gratuitously a substantial portion of its services;
(c) Benefits a substantial and indefinite class of persons who are legitimate subjects of charity;
(d) Relieves the government of some of its burden; and
(e) Operates entirely free from private profit motive.

Here, in applying the HUP test, the trial court committed the same error as the trial court in Alliance Home of Carlisle, PA v. Board of Assessment Appeals, 591 Pa. 436, 919 A.2d 206 (2007).  The trial court sustained the School District’s objection to the testimony of Taxpayer’s CEO about the other properties Taxpayer operates. This prevented Taxpayer from offering the necessary evidence on the institution as a whole. Because the trial court limited the testimony to the 20 Allentown properties, and did not make findings of fact or conclusions of law as to the entire institution, this Court cannot perform meaningful review. Couriers-Susquehanna, Inc. v. County of Dauphin, 645 A.2d 290, 294 (Pa. Cmwlth. 1994) (noting that trial court’s lack of critical finding of fact precluded this Court’s meaningful review).

For this reason, we vacate and remand this matter to the trial court to conduct further proceedings necessary to determine Taxpayer’s tax exempt status at the institutional level and then, if necessary, for a review of the 20 properties.

Contracts - 3d party beneficiary

McGaffic v. City of New Castle – Cmwlth. Court – July 22, 2013

http://www.pacourts.us/assets/opinions/Commonwealth/out/396CD12_7-22-13.pdf?cb=1

Third-Party Beneficiary Law in Pennsylvania

The general rule is that a contract must express an intention to confer standing on a third-party beneficiary. Scarpitti v. Weborg, 530 Pa. 366, 370, 609 A.2d 147, 149 (1992). In Marsteller Community Water Authority v. P.J. Lehman Engineers, 605 A.2d 413 (Pa. Super. 1992), for example, it was held that a contract between a redevelopment authority and an engineering firm to upgrade a water system owned by a water authority expressed an intention to make the water authority a third-party beneficiary of the contract.9

9 What constitutes an “express intention” varies. In Johnson v. Pennsylvania National Insurance Companies, 527 Pa. 504, 594 A.2d 296 (1991), our Supreme Court held that a taxicab passenger was an intended third-party beneficiary of the taxicab owner’s insurance policy and, thus, bound by the policy’s requirement to arbitrate a claim for uninsured motorist benefits. Id. at 508, 594 A.2d at 298. The taxicab passenger was not named in the policy nor a party to the contract. In Keefer v. Lombardi, 376 Pa. 367, 102 A.2d 695 (1954), our Supreme Court found unnamed citizens and property owners to be third-party beneficiaries of a contract between a municipality and a contractor by which the contractor assumed liability for any damages caused by the construction. Id. at 369-70, 102 A.2d at 696. The Supreme Court found that “the drafters of the contract … include[d] as beneficiaries the inhabitants of the city for which they acted.” Id. at 372, 102 A.2d at 698. An express intention to create third-party beneficiaries does not require, even in the context of a government contract, that the beneficiaries be specifically named.

In Guy v. Liederbach, 501 Pa. 47, 59-60, 459 A.2d 744, 751 (1983), our Supreme Court adopted Section 302 of the Restatement (Second) of Contracts (1979), which allows a third-party to enforce a contractual promise even though the contract does not explicitly express that intention. Section 302 states:

Intended and Incidental Beneficiaries

(1) Unless otherwise agreed between promisor and promisee, a beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and either

(a) the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary; or

(b) the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance.

(2) An incidental beneficiary is a beneficiary who is not an intended beneficiary. 10

RESTATEMENT (SECOND) OF CONTRACTS §302 (1979) (emphasis added).

Our Supreme Court has explained that under Section 302 a party becomes a third party beneficiary only where ... the circumstances are so compelling that recognition of the beneficiary’s right is appropriate to effectuate the intention of the parties, and the performance satisfies an obligation of the promisee to pay money to the beneficiary or the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance....  Scarpitti, 530 Pa. at 372-73, 609 A.2d at 150-51 (emphasis added) (citations omitted). Stated otherwise, the “compelling circumstances,” or first prong, “sets forth a standing requirement,” and the second prong defines the type of claim to be presented by a third-party beneficiary. Id. at 371, 609 A.2d at 150. Notably, the named promisee’s inability or lack of incentive to enforce a contractual promise will support the third-party’s standing to enforce the promise. Id.

In sum, whether a contract contemplates enforcement by third-parties is a matter of contract construction. Parties may explicitly state that a contract provision is intended to create third-party beneficiary rights and identify, by name, the holder of those rights. Parties may explicitly state that a contract is not intended to create third-party beneficiary rights or identify the specific persons who do not hold these rights, as noted in Section 302(1) of the Restatement (Second) of Contracts. Most contracts are not explicit, and in that case the principles set forth in Section 302 are employed to ascertain the intention of the parties.

UC - drug testing - sec. 402 (e.1) - hearsay

Rutkowski v. UCBR – Cmwlth. Court – July 17, 2013 – unreported memorandum decision

http://www.pacourts.us/assets/opinions/Commonwealth/out/2199CD12_7-17-13.pdf?cb=1

The Court reversed the UCBR and held that claimant was not ineligible under 43 PS sec.  802(e.1), because the employer did not present evidence to qualify a drug testing report (Report) as a business record under 42 Pa. C.S. 6108(b).  Claimant objected to the Report as hearsay during the hearing.

Employer’s witnesses offered no testimony about the testing procedures followed by the Laboratory, such as the equipment used for the test, the testing process, the technician’s qualifications, quality control safeguards, the drug levels tested or the Laboratory’s accreditation. Rather, the witness simply stated that Claimant tested positive for marijuana, and that he was discharged based upon that test.

The Report, a one-page document, is not notarized or verified and contains no information relating to the Laboratory’s testing protocols, nor any statement as to the steps taken by the Laboratory to safeguard the samples. There is no evidence in the Report concerning the reliability of the oral testing method employed in this case, nor any information correlating the concentration of marijuana in the sample to the time elapsed since its ingestion. Put simply, the document does not contain enough indicia of reliability on its face to be admitted as an exception to the hearsay rule.

Employer did not provide sufficient information that would “justify a presumption of trustworthiness of the [Report]” and allow for it to be admitted as part of the record. Id. Without the Report, there was insufficient evidence to support the Board’s conclusion that Claimant failed the drug test.

________________________________________

The opinion, though not reported, may be cited "for its persuasive value, but not as binding precedent." 210 Pa. Code § 67.55. Citing Judicial Opinions.

 

UC - backdating claims - sickness/death of family member - 34 Pa. Code 65.43a

Falcone v. UCBR – Cmwlth. Court – July 9, 2013

http://www.pacourts.us/assets/opinions/Commonwealth/out/2092CD12_7-9-13.pdf?cb=1

Claimant was entitlede to backdate his application and claim weeks by two weeks, because of the undisputed serious medical issues of three family members, as authorized by 34 Pa. Code sec. 65.43a (d) and (e), which state that "If a claimant fails to file a claim for compensation within the time allowed….for a reason listed in subsection (e), the time for filing the claim is extended for the number of weeks indicated in subsection (e). . . . .Sickness or death of a member of the claimant’s immediate family or an act of God….2 weeks."

The Court rejected the UCBR's argument and interpretation of the regulation that the sickness must have prevented the claimant from filing.

However, the Court rejected claimant's argument that he was entitled to 6 weeks of backdating under 34 Pa. Code sec. 65.43a (h), because that regulation required that the claimant i) have two or more of the listed reasons for backdating, and that ii)  those reasons did prevent claimant from filing in a timely manner.  In the instant case, there was no adequate proof that claimant was so prevented.

PTFA - no private right of action - 9th Cir.

In a case of first appellate impression, the Ninth Circuit issued a decision in Logan v. U.S. Bank, No. 10-55671, on July 16^th.  NHLP, joined by many HJN members, had filed an amicus brief in the case in support of the tenant's claim to an implied right under PTFA.

Affirming the dismissal of a complaint seeking damages and injunctive relief against a bank that filed an unlawful detainer action against the tenant in foreclosed property, the Ninth Circuit panel held that there is no private right of action under the Protecting Tenants at Foreclosure Act (PTFA) of 2009.

The court also held that, despite the bank’s voluntary dismissal of the unlawful detainer action, the appeal was not moot because the bank did not show that it was absolutely clear that the allegedly wrongful eviction could not reasonably be expected to recur.

Agreeing with the Third Circuit, the court also held that, contrary to the ruling of the District Court, abstention under Younger v. Harris, 401 U.S. 37 (1971), from the exercise of jurisdiction over the claim for injunctive relief was not warranted, because the state eviction action did not implicate important state interests. The decision emphasized that the mere involvement of traditionally state-oriented subject matter is not enough to show the implication of important state interests. Rather, Younger abstention also requires involvement of a state’s direct interest in the enforcement of its laws, or a question regarding the operation of the state judicial system itself. Since this was simply a “garden-variety” civil dispute between two private parties, neither concern was implicated.

The main holding was that the tenant did not have an implied right of action to affirmatively enforce the PTFA. In the court's view, the PTFA does not, either explicitly or by implication, evince a congressional intent to create a private right of action. This conclusion was based upon the language and structure of the statute, especially its focus on the obligations of the “successor in interest” as the regulated party, rather than on the rights of the tenant as beneficiary. Under the court's view, this weighed against a finding of “especial” benefit and an implied right. (This is surprising, in light of the fact that, despite the directives focused on the regulated party, tenants are the only beneficiaries of PTFA's notice and continued occupancy provisions.) Any significance of the title of the PTFA was dismissed as being insufficient to “control the plain meaning of [the] statute.” The panel also justified its conclusion by pointing to Congress' inclusion of an express right of action in another section of the overall Helping Families Save Their Homes Act (of which PTFA was one title), which had amended to Truth in Lending Act's notice requirements and its express right of action. For the court, this was evidence that Congress did not intend a private right of action for the PTFA. Finally, the court pointed to Senator Kerry’s statements emphasizing compliance by landlords and lenders as evidence of an intent to focus only the regulated party, finding nothing to support a right or remedy for tenants, as well as to Congress' silence on the right of action issue, in the face of a few adverse trial court opinions, when amending the PTFA in 2010. 

The court has thus relegated tenants to asserting PTFA as a defense in state court eviction proceedings, with any of the deficiencies of that trial and appellate process. (Indeed, Ms. Logan's pro se state court demurrer (motion to dismiss) in the eviction action had been overruled by the state court.)

attorney fees - offer of judgment - FRCivP 68

Interfaith Community Organization v. Honeywell Intl. – Third Circuit – July 9, 2013

http://www2.ca3.uscourts.gov/opinarch/113813p1.pdf

Offers of judgment pursuant to Fed. R. Civ. P. 68 may be made in the context of attorney‟s fee disputes under the provisions of a fee-shifting statute.

Footnote 7 has atty. fees charts for a) legal services and b) US Attorney.

UC - ability to work, suitable work - existing work v. other work

Anthony  v. UCBR – Cmwlth. Court – July 3, 2013 – unreported memorandum opinion

http://www.pacourts.us/assets/opinions/Commonwealth/out/2256CD12_7-3-13.pdf?cb=1

Claimant, a truck driver, held able to work and eligible for UC benefits, because

            - Employer did not introduce any evidence that Claimant’s high blood pressure or failure to pass the physical examination was caused by his conduct or inaction, and

            - No evidence was presented that Claimant suffered from any medical restriction other than high blood pressure or that he was restricted from any work that did not require driving.

The Board’s conclusion that Claimant was ineligible for benefits under Section 401(d)(1) of the UC Law, was unsupported by the record and contrary to law. Section 401(d)(1) requires only that the Claimant be “able to work and available for suitable work.” 43 P.S. § 801(d)(1). “Suitable work” is not limited to the particular type of job at which the claimant was previously employed. Rohde v. UCBR, 28 A.3d 237, 243 (Pa. Cmwlth. 2011); Hower & Son v. UCBR, 509 A.2d 1383, 1386 (Pa. Cmwlth. 1986); Davy v. UCBR, 392 A.2d 330, 332 (Pa. Cmwlth. 1978); see also Section 4(t) of the Unemployment Compensation Law, 43 P.S. § 753(t) (defining “Suitable Work” as “all work which the employe is capable of performing”). A claimant is “able to work and available for suitable work” under Section 401(d)(1) if he is capable of doing and available for some kind of paid work. Rohde, 28 A.3d at 243; Hower & Son, 509 A.2d at 1386; Davy, 392 A.2d at 332. “The law does not require that the employee be available for full-time work, for permanent work, for his most recent work, or for his customary job, so long as the claimant is ready, willing, and able to accept some suitable work.” Rohde, 28 A.3d at 243.

While the burden is on the claimant to prove availability for suitable work, Rohde, 28 A.3d at 243; Hower & Son, 509 A.2d at 1386, Claimant’s failure to appear at the Referee’s hearing did not prevent him from satisfying that burden.  

Claimant’s registration for unemployment compensation created a presumption that he is able to work and available for suitable work, and that presumption satisfies his burden of proof, unless it was rebutted by the evidence before the Board. Penn Hills School District v. UCBR, 496 Pa. 620, 625, 437 A.2d 1213, 1216 (1981); Rohde, 28 A.3d at 243; Hower & Son, 509 A.2d at 1386.

There was no evidence before the Board that suggested or would support any inference that Claimant had restricted the hours that he could work, that he was not seeking work or that he was disabled from working. The only evidence of any limitation on Claimant’s employability was that he had a level of high blood pressure that prevented him from obtaining a commercial driver’s license. This showed only that he could not work at his existing job as a truck driver or do other work that required driving. That is not sufficient to overcome the presumption that Claimant was able and available to work. The mere fact that a claimant has a medical condition that disables him from working at his prior job and other jobs requiring driving does not make him unable to work or unavailable for suitable work. Hower & Son, 509 A.2d at 1386 (claimant held eligible for benefits despite failure to appear at referee hearing because evidence that claimant suffered seizure and that doctor had restricted him from jobs requiring driving did not negate that he was able to work and available for suitable work).

_____________________________

The opinion, though not reported, may be cited "for its persuasive value, but not as binding precedent." 210 Pa. Code § 67.55. Citing Judicial Opinions.