                                 [J-14-2017]
                  IN THE SUPREME COURT OF PENNSYLVANIA
                              MIDDLE DISTRICT

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


VALLEY FORGE TOWERS                        :   No. 49 MAP 2016
APARTMENTS N, LP; MORGAN                   :
PROPERTIES ABRAMS RUN OWNER                :   Appeal from the Order of the
LP; KBF ASSOCIATES, LP; GULPH              :   Commonwealth Court at No. 1960 CD
MILLS VILLAGE APARTMENTS LP; AND           :   2014 dated 9/10/15 affirming the order
THE LAFAYETTE AT VALLEY FORGE LP           :   of the Montgomery County Court of
                                           :   Common Pleas, Civil Division, at No.
                                           :   2014-09870 dated 10/9/14
                                           :
             v.                            :
                                           :   ARGUED: March 8, 2017
                                           :
UPPER MERION AREA SCHOOL                   :
DISTRICT AND KEYSTONE REALTY               :
ADVISORS, LLC                              :
                                           :
APPEAL OF: MORGAN PROPERTIES               :
ABRAMS RUN OWNER LP; KBF                   :
ASSOCIATES, LP                             :




                                      OPINION


CHIEF JUSTICE SAYLOR                                          DECIDED: July 5, 2017


      This appeal raises the question of whether the Uniformity Clause of the

Pennsylvania Constitution permits a taxing authority to selectively appeal only the

assessments of commercial properties, such as apartment complexes, while choosing

not to appeal the assessments of other types of property – most notably, single-family

residential homes – many of which are under-assessed by a greater percentage.
                                    I. Background

      The appeal derives from a complaint that was dismissed on a demurrer.

Accordingly, the facts as recited below are drawn from it and developed favorably to

Appellants, and we assume the truth of all well-pleaded allegations. See Small v. Horn,

554 Pa. 600, 608, 722 A.2d 664, 668 (1998).

      The Upper Merion Area School District (the “School District”), is a taxing district

in Montgomery County (the “County”), where the most recent countywide assessment of

real property occurred in 1996. Since then, the market value of many of the parcels in

the County, including properties within the School District, have changed, leading to

significant discrepancies and a wide range of assessment ratios.1 The School District

contains commercial, industrial, and single-family residential properties. Many of the

residential properties have an assessment ratio below that of many of the commercial

properties.   In addition, 80 percent of the single-family homes in the district have

assessment ratios below the County’s common-level ratio (“CLR”).2

      The School District decided to appeal the assessments of some of the properties

within its boundaries. To this end, it retained Keystone Realty Advisors (“Keystone”), a

private firm, to advise it as to which properties should be targeted for appeal. On

Keystone’s recommendation, the School District concentrated solely on commercial


1
 A parcel’s assessment ratio is the ratio of its assessed value to its market value. See
BLACK’S LAW DICTIONARY 140 (10th ed. 2014).

2
  The CLR, a countywide figure, is “the ratio of assessed value to current market value
used generally in the county as last determined by the State Tax Equalization Board”
(the “STEB”). 72 P.S. §5020-102; see 71 P.S. Part I, Ch. 8, Cmty. & Econ. Dev.
Enhancement, Ch. 15. The STEB computes the CLR as an unweighted average of the
assessment ratios for all arms-length real estate sales (except outliers) occurring in a
particular calendar year. See 46 Pa. Bull. 4037 (July 23, 2016). During the relevant tax
years, 2011 and 2012, the County’s CLR was approximately 60 percent.


                                    [J-14-2017] - 2
properties, including apartment complexes.       They did so because these properties’

values were generally higher than those of single-family homes, and hence, raising their

assessments would result in a greater tax-revenue increase than doing the same with

under-assessed single-family homes, including those which were under-assessed by a

greater percentage. Another alleged factor motivating the decision was that most such

homes are owned by School District residents who vote in local elections, and it would

be politically unpopular to appeal their assessments.3

       Appellants own apartment complexes in the School District.           Per the above

strategy, and believing Appellants’ properties were under-assessed, the School District

filed administrative appeals, see 53 Pa.C.S. §8855 (giving taxing districts the same right

as taxpayers, under the Consolidated County Assessment Law,                     to pursue

administrative appeals), which were denied by the County’s Board of Assessment

Appeals (the “Board”). The district appealed the denials to the common pleas court.

See id. §8854(a) (providing the parties to an administrative appeal with the right to seek

judicial review of a decision by the Board).

       While those individual cases were pending, Appellants filed the present

complaint, seeking declaratory and injunctive relief against the School District on the

theory that it had violated the state charter’s Uniformity Clause, see PA. CONST. art. VIII,

§1 (“All taxes shall be uniform, upon the same class of subjects, within the territorial

limits of the authority levying the tax, and shall be levied and collected under general



3
  Although the values of industrial properties also would likely exceed those of single-
family homes, the complaint does not suggest any rationale for the School District’s
failure to target industrial properties for appeal. Still, it does clearly allege that the
district’s appeal decisions were motivated by property type, see Complaint at 8, ¶29,
and the status of the taxpayers as residents or non-residents of the school district. See
id. at 13, ¶53.


                                      [J-14-2017] - 3
laws.”), by systematically appealing only the assessments of commercial properties.4 In

their complaint, Appellants acknowledged that the School District’s appeals of their

assessments were proceeding in the county court. However, they averred they lacked

an adequate remedy at law because the uniformity violation which they asserted could

not be cured via the statutory appeals process – and hence, they were not required to

exhaust statutory remedies. In particular, they reasoned, their claims were directed to

an overall strategy on the part of the School District to discriminate against commercial

properties as a group by targeting them for administrative appeals while ignoring lower

assessment ratios among single-family homes. See Complaint at 20-21, ¶¶103-105.

Appellants therefore sought a declaration that the School District’s actions comprised an

unconstitutional application of Section 8855, as well as an injunction preventing the

district from continuing to engage in the alleged pattern of selective and discriminatory

application of that statute.5

       The School District filed preliminary objections, including demurrers to the

individual claims, as well as one objection alleging a failure to exhaust statutory

remedies and another alleging a lack of jurisdiction due to such failure.      As to the

demurrers, the district proffered that it had a statutory right to appeal property

assessments, and that selective appeals do not violate the Uniformity Clause as a

4
  Tax uniformity incorporates equal protection precepts, and this Court has observed
that “[o]ur analysis under the Uniformity Clause . . . is generally the same as the
analysis under the Equal Protection Clause of the United States Constitution.” Clifton v.
Allegheny Cnty., 600 Pa. 662, 686 n.20, 969 A.2d 1197, 1211 n.20 (2009) (citation
omitted). One difference, discussed below, is that the Uniformity Clause is more
restrictive in that it does not allow the government to engage in disparate tax treatment
of different sub-classifications of real property, such as residential versus commercial.

5
  The complaint also included claims against Keystone which Appellants later
abandoned. Because Keystone remains in the caption, we will nonetheless refer to the
School District’s brief as the Brief for Appellees.


                                     [J-14-2017] - 4
matter of law. See Defendants’ Preliminary Objections at 6, ¶¶29, 30. With regard to

the exhaustion and jurisdictional preliminary objections, the district forwarded that the

constitutional claim Appellants raised in their equity complaint could be raised and

adjudicated in their individual administrative appeals. See id. at 4-5, ¶¶20, 25.

         The common pleas court sustained the preliminary objections and dismissed the

complaint. The court indicated Appellants’ claims failed as a matter of law because the

School District was not the entity that set assessments, and Section 8855 gave it a clear

statutory right to appeal tax assessments set by the County. See Valley Forge Towers

Apts. N, L.P., v. Upper Merion Area Sch. Dist., No 2014-09870, slip op. at 3 (C.P.

Montgomery Jan. 2, 2015). In rejecting Appellants’ argument relating to discriminatory

treatment, the Court indicated that “[t]he filing of selective appeals does not result in a

uniformity violation, and it is not deliberate discrimination.”             Id. at 6 (citing

Weissenberger v. Chester Cnty. Bd. of Assessment Appeals, 62 A.3d 501, 508-09 (Pa.

Cmwlth. 2013) (en banc)).         In this regard, the court ultimately concluded, more

generally, that “the Uniformity Clause does not require equalization across all sub-

classifications of real property.” Id. at 7 (citing In re Springfield Sch. Dist., 101 A.3d 835,

849 (Pa. Cmwlth. 2014)).6

         The Commonwealth Court affirmed in a published decision. See Valley Forge

Towers Apts. N, L.P., v. Upper Merion Area Sch. Dist., 124 A.3d 363 (Pa. Cmwlth.

2015).     It first considered Appellants’ assertion that Springfield had misquoted

Downingtown Area School District v. Chester County Board of Assessment Appeals,

6
  The court did not independently address administrative exhaustion or jurisdiction as
such. Instead, it observed that the complaint is not a class action, and that, because
Appellants were raising a novel constitutional issue (i.e., one without support in the case
law), that issue could be aired during their individual assessment appeals. On this
basis, the court characterized Appellants’ action as “seeking to avoid the statutory
procedures established for the adjudication of tax assessment appeals.” Id. at 4.


                                       [J-14-2017] - 5
590 Pa. 459, 913 A.2d 194 (2006), and had, therefore, mischaracterized the relationship

between the federal Equal Protection Clause and the Uniformity Clause. Consistent

with the common pleas court, the Commonwealth Court rejected this contention. It

reasoned that its pre-Springfield decision in Weissenberger v. Chester County Board of

Assessment Appeals, 62 A.3d 501 (Pa. Cmwlth. 2013), had addressed the same

argument and clarified that equalization is not required across all property sub-

classifications. See Valley Forge, 124 A.3d at 367 (quoting Weissenberger, 62 A.3d at

506-09). Turning to the present case, the court recognized that the School District had

allegedly created a sub-classification of properties (commercial ones) which it treated

differently from other property sub-classes. The court concluded, however, that no

suspect or sensitive classification was thereby formed, and hence, the classification was

constitutionally permissible as long as it satisfied the deferential rational-basis test.

That test was met, the court held, because, according to Appellants’ averments, the

School District’s purpose was to increase revenues sufficiently to justify the costs of

appealing. See id. at 368.

      The court additionally acknowledged Appellants’ allegation that the School

District opted not to appeal the assessments of single-family homes for political

reasons. See id. at 367. Somewhat inconsistently, it later stated that Appellants did not

make any such allegation because they also averred that: (a) Keystone was the party

deciding which properties to target for appeals, see id. at 368, and (b) the School

District and Keystone were both motivated by economic gain. See id. at 370.7




7
  The court apparently did not consider that Keystone only acted in an advisory capacity
or that the School District could have been motivated by two factors (economic gain and
the avoidance of political accountability), each of which provided an independent
incentive to appeal only commercial-property assessments.


                                     [J-14-2017] - 6
       Finally, the intermediate court observed that, to bypass statutory remedies and

justify the pursuit of an equity action in court, taxpayers must, inter alia, raise a

substantial constitutional issue.    The court recognized that such an issue can be

predicated solely on the manner in which the government applies the tax legislation in

question. See id. at 371-72 (citing Beattie v. Allegheny Cnty., 589 Pa. 113, 907 A.2d

519 (Pa. 2006)). Still, it stated that Appellants failed to raise a substantial constitutional

challenge to the manner in which any tax statute was applied. In this respect, the court

found Appellants’ constitutional claim insubstantial because: (a) under Weissenberger,

taxing districts may select properties for appeal based on financial considerations; and

(b) the complaint did not implicate an “underrepresented group.” Id. at 372 & n.4. The

court noted, further, that, pursuant to the Consolidated County Assessment Law,8 the

party that appeals to court from a decision of the Board may allege a uniformity

violation. See id. at 371 (quoting 53 Pa.C.S. §8854(a)(9)(ii)). 9

       We granted review to consider whether the Uniformity Clause permits the School

District, pursuant to its statutory right to appeal individual property assessments, to

concentrate solely on commercial properties while foregoing appeals as to single-family

residences which may have even lower assessment ratios. See Valley Forge Towers


8
  Act of Oct. 27, 2010, P.L. 895, No. 93, §2 (as amended 53 Pa.C.S. §§8801-8868) (the
“Assessment Law”). The law is a recodification of several prior acts relating to various
classes of counties. It applies to, inter alia, counties of the second class A, as well as
counties of the third through eighth classes. See 53 Pa.C.S. §8801(b). At all relevant
times, Montgomery County was a county of the second class A.

9
  That provision states: “Nothing in this subsection shall: . . . (ii) Be construed to
abridge, alter or limit the right of an appellant to assert a challenge under section 1 of
Article VIII of the Constitution of Pennsylvania.” Id. It is not immediately clear that this
applies to Appellants since they were the appellees in the School District’s individual
appeals to the county court. Also, the provision does not purport to limit the fora in
which uniformity challenges may be brought.


                                       [J-14-2017] - 7
Apts. N, L.P., v. Upper Merion Area Sch. Dist., ___ Pa. ___, 135 A.3d 1017, 1017-18

(2016) (per curiam). The questions before us involve whether the School District’s

method of exercising its rights under Section 8855 is constitutional, and whether the

common pleas court appropriately sustained the School District’s preliminary objections.

Both are issues of law as to which our review is de novo and plenary. See Kowenhoven

v. Allegheny Cnty., 587 Pa. 545, 555, 901 A.2d 1003, 1009 (2006).


                         II. Exhaustion of statutory remedies

       In its brief and in a separate motion to quash the appeal, the School District

raises a preliminary issue relating to the exhaustion doctrine, which it claims prevents

us from reaching the substantive tax-uniformity question on which review was granted.

The district recasts and rephrases its argument in a number of different ways, which can

be summarized as follows: Appellants failed to exhaust their statutory remedies; they

waived any right to argue that an exception to the exhaustion requirement presently

applies by not challenging the Commonwealth Court’s failure-to-exhaust holding when

they petitioned this Court for allowance of appeal; that being the case, they are

precluded by res judicata from suggesting reasons why the common pleas court could

properly have exercised its equity jurisdiction to entertain their complaint; they have now

raised their uniformity argument as a defense in the School District’s individual appeals,

thereby rendering the uniformity question moot; because the issue is moot this Court’s

opinion will only be advisory in nature; although Appellants are precluded from

forwarding any relevant advocacy, this Court can nonetheless speak to the topic since it

involves subject matter jurisdiction, which can be addressed sua sponte; and (via

supplemental briefing) our recent decision in City of Philadelphia v. Lerner, ___ Pa. ___,

151 A.3d 1020 (2016), reinforces the position that the common pleas court could not

properly have exercised equity jurisdiction.

                                     [J-14-2017] - 8
       Regardless of the number of ways it is characterized, the School District’s

position reduces to two essential contentions: Appellants have waived the issue of

whether equity jurisdiction was properly invoked, and the common pleas court correctly

determined that it was not properly invoked. Both contentions lack merit. 10

       The School District’s waiver argument rests on the premise that the

Commonwealth Court issued an alternative holding relating to jurisdiction, and this

holding independently supported its affirmance order. We disagree. The intermediate

court recited that two elements must be satisfied for the common pleas court to properly

exercise its equity jurisdiction: the existence of a substantial constitutional issue and

the lack of an adequate administrative remedy. See Valley Forge Towers, 124 A.3d at

371. It then repeated its prior conclusion that Appellants’ constitutional argument lacked

merit (and was, therefore, insubstantial). As such, the court expressly refrained from

any inquiry into the adequacy of Appellants’ administrative remedies. See id. at 372

n.4.   Notably, if Appellants prevail here on their constitutional argument, the

Commonwealth Court’s discussion on this point will be fatally undermined. Therefore,

the Commonwealth Court did not issue an alternative holding which will remain effective

and dispositive regardless of our resolution of the constitutional issue presented. See

generally Tarubac v. INS, 182 F.3d 1114, 1120 n.5 (9th Cir. 1999) (“An alternative

holding is only adequate to support the result if it is separate from and independent of

any other basis for the decision.” (emphasis added)). That being the case, Appellants




10
   We consider whether such jurisdiction was properly invoked – rather than whether it
existed – because “the requirement of administrative exhaustion is a judge-made rule
and does not pertain to the existence of subject matter jurisdiction, but to whether such
jurisdiction is properly exercised.” Beattie, 589 Pa. at 124 n.5, 907 A.2d at 526 n.5
(emphasis added).


                                     [J-14-2017] - 9
were not required, on pain of waiver, to challenge the Commonwealth Court’s

exhaustion analysis (such as it was) in their petition for allowance of appeal.

       Nor did the common pleas court suggest any valid reason why its equity

jurisdiction was improperly invoked. In terms of its observation that this is not a class-

action complaint, see supra note 6, we fail to see the relevance. The court did not

reference any authority suggesting that a lack of class-action status is dispositive of the

jurisdictional issue. Furthermore, class-action status was also absent in Clifton, and yet

Clifton endorsed the exercise of equity jurisdiction to entertain the plaintiffs’ as-applied

uniformity challenge to an assessment statute. In particular, Clifton held that the trial

court’s equity jurisdiction was properly invoked “because appellees’ claim that the base

year system results in mass, systematic, non-uniform assessments raises substantial

constitutional issues, which a county board of assessment appeals would be unable to

adequately redress.” Clifton, 600 Pa. at 683 n.17, 969 A.2d at 1209 n.17; cf. Borough of

Green Tree v. Bd. of Prop. Assessments, Appeals & Review of Allegheny Cnty., 459

Pa. 268, 281, 328 A.2d 819, 825 (1974) (plurality) (approving the exercise of equity

jurisdiction where, although not a class action, the complaint challenged the

constitutionality of certain provisions of the governing assessment statute).

       Clifton’s unable-to-adequately-address litmus comports with the explanation in

Kowenhoven that courts look to a number of factors to determine whether a complaint is

appropriately filed directly in the common pleas court. These include: the adequacy of

the legal remedy that can be afforded for the claimed violation; whether legal issues

other than the proper valuation of the subject properties have been raised; whether the

governmental policy in question is generally applicable to all properties; whether the

administrative process has little to contribute to the resolution of the constitutional

question raised; and whether, as a result, strict adherence to the statutory appeal


                                     [J-14-2017] - 10
process would lead to piecemeal litigation in the form of many individual de novo

appeals to the trial court – all of which could be avoided through a single judicial

proceeding aimed at reviewing the constitutionality of the challenged government

actions. See Kowenhoven, 587 Pa. at 556-60, 901 A.2d at 1010-12.11

      Notably, the adjudicatory process undertaken by the board of assessment

appeals is solely directed at ascertaining the subject property’s value and applying a

ratio to that value. The board is not given statutory power to alter this procedure, or to

refuse to determine the proper assessment per the legislative directive, based on a

uniformity claim relating to a taxing district’s alleged scheme of selectively targeting a

particular sub-classification of properties. See 53 Pa.C.S. §8844(e); see also Del., L. &

W. R. Co. v. Luzerne Cnty. Comm’rs, 245 Pa. 515, 519, 91 A. 889, 890 (1914)

(acknowledging a similar limitation on the board’s powers under an earlier property

assessment statute); Clifton, 600 Pa. at 712, 969 A.2d at 1227 (observing the individual

appeals process is inadequate to address claims of pervasive inequities); cf. City of

Lancaster v. Lancaster Cnty., 143 Pa. Cmwlth. 476, 499, 599 A.2d 289, 300 (1991) (en

banc) (“To force every aggrieved taxpayer to assume the task of appealing, when the

larger question can be expeditiously and efficiently resolved in a single action, would be

unnecessarily burdensome on both property owners and the judicial system.”).

      The statutory appeals process is also not designed to provide the declaratory or

injunctive relief Appellants seek, and moreover, strict adherence to it would implicate

many of the concerns highlighted in Kowenhoven pertaining to piecemeal litigation and


11
   The governmental actions referred to in Kowenhoven were those of the board of
assessment appeals. Given the jurisprudential concerns involved, there is no reason in
logic why these same principles should not apply when the government entity is the
taxing district exercising a generally-applicable method of deciding which property
assessments to appeal.


                                    [J-14-2017] - 11
the inadequacy of the statutory remedy.         This undermines any suggestion that the

present controversy is an inappropriate one for the exercise of equity jurisdiction. Cf.

Fry v. Napoleon Cmty. Schs., 580 U.S. ___, ___, 137 S. Ct. 743, 754 (2017) (holding

that exhaustion was not required under a federal education statute where the gravamen

of the complaint was not that the plaintiff had been denied the type of education the

statute guarantees, and hence, the relief sought was not available through the statutory

appeals process).

       As for our recent decision in Lerner, that matter has little bearing on the present

case. Lerner did not speak to the basis for equity jurisdiction to entertain a uniformity

challenge. Indeed, it did not involve a uniformity challenge, but a claim that the income

tax liability imposed by the city on a specific taxpayer lacked evidentiary support. As the

taxpayer failed to include such assertion in his Rule 1925(b) statement on appeal from

the city’s collection action, this Court held that the issue had been waived. See Lerner,

___ Pa. at ___, 151 A.3d at 1024. The Court added, apparently in dicta, that, in any

event, the taxpayer had failed to exhaust his administrative remedies. See id. at ___,

151 A.3d at 1024-25.        In doing so, the Court recited the general rule requiring

exhaustion and declined to endorse an exception for a claim of inadequate evidentiary

support as to a single taxpayer.       Such precepts have little relation to the present

dispute.

       Nor has the School District demonstrated that the constitutional issue is now

moot.12 For a matter to become moot, some change in the facts or applicable law must

occur so that, although the plaintiff had standing at the outset of the litigation, there is no

longer a live controversy. See In re Gross, 476 Pa. 203, 209-10, 382 A.2d 116, 119-20


12
  The School District’s argument that this will be an advisory opinion is a reframing of,
and dependent upon, its contention that the issue is moot.


                                      [J-14-2017] - 12
(1978). Here, the School District advances its mootness argument by asserting that, in

the context of the district’s individual appeals to the common pleas court, Appellants

have now raised – as new matter in responsive pleadings – the same constitutional

claim they assert here. See Application to Quash at 19. Those responsive pleadings,

however, were filed before the present action was commenced in May 2014.                    See

Upper Merion School Dist. v. Montgomery Cnty. Bd. of Assessment Appeals,

Intervenor’s Answer and New Matter dated March 8, 2013, at ¶¶8-15, reprinted in

Application to Quash at Exh. A. They therefore cannot have caused litigation that once

involved a live controversy to become moot.          Finally, there is no suggestion in the

record or in the parties’ briefs that, since the filing of the present appeal, the common

pleas court has resolved the merits of Appellants’ constitutional claim.

       For the reasons given above, we reject the School District’s various contentions

that the trial court could not have entertained the complaint in its equity jurisdiction, and

we deny its motion to quash the appeal. Accordingly, our ability to assess the merits of

Appellants’ Uniformity Clause challenge – the only issue accepted for review – remains

unimpeded by any threshold question the School District has raised.


                                     III. Tax Uniformity

       As reflected above, an important aspect of this dispute involves the manner in

which the Commonwealth Court has understood this Court’s pronouncements regarding

the comparative tax-fairness requirements of the Uniformity Clause and the federal

Equal Protection Clause. Appellants forcefully argue that, in a series of decisions, the

intermediate court has misconstrued our analysis and holding in Downingtown. Thus, it

is helpful to first review the relevant facets of that opinion and clarify their significance.

       The Downingtown Court recited the foundational and longstanding principle that

“a taxpayer is entitled to relief under the Uniformity Clause where his property is

                                       [J-14-2017] - 13
assessed at a higher percentage of fair market value than other properties throughout

the taxing district.” Downingtown, 590 Pa. at 466, 913 A.2d at 199 (citing In re Harleigh

Realty Co., 299 Pa. 385, 388, 149 A. 653, 654 (1930)); see Appeal of F.W. Woolworth

Co., 426 Pa. 583, 587, 235 A.2d 793, 795 (1967) (recognizing that “uniformity has at its

heart the equalization of the ratio among all properties in the district”), quoted in

Downingtown, 590 Pa. at 468, 913 A.2d at 200. The Court explained, further, that “[t]his

precept is based upon the general principle that taxpayers should pay no more or less

than their proportionate share of government.” Downingtown, 590 Pa. at 466, 913 A.2d

at 199 (citing Deitch Co. v. Bd. of Prop. Assessment, Appeals & Review of Allegheny

Cnty., 417 Pa. 213, 220, 209 A.2d 397, 401 (1965)). The Court continued:

      While every tax is a burden, it is more cheerfully borne when the citizen
      feels that he is only required to bear his proportionate share of that burden
      measured by the value of his property to that of his neighbor. This is not
      an idle thought in the mind of the taxpayer, nor is it a mere speculative
      theory advocated by learned writers on the subject; but it is a fundamental
      principle written into the Constitutions and statutes of almost every state in
      this country.
Id. at 466, 913 A.2d at 199 (quoting Del. L. & W. R. Co.’s Tax Assessment, 224 Pa.

240, 243, 73 A. 429, 430 (1909)).

      Thus, traditionally a taxpayer was able to prove non-uniformity – and thereby

have the subject property’s assessment lowered – through evidence, often in the form

of expert testimony, relating to the assessment ratios of comparable properties in the

same neighborhood, or more generally, in the taxing district at large. This is because all

realty is a single class entitled to uniform treatment. See id. at 467, 913 A.2d at 199

(citing In re Brooks Bldg., 391 Pa. 94, 101, 137 A.2d 273, 276 (1958); Keebler Co. v.

Bd. of Revision of Taxes of Phila., 496 Pa. 140, 142, 436 A.2d 583, 584 (1981)).

      One of the primary issues in Downingtown arose due to an amendment to the

State Tax Equalization Board Law, see 71 P.S. §§1709.1500-1709.1521 (formerly 72

                                    [J-14-2017] - 14
P.S. §§4656.1-4656.17), pursuant to which the STEB was required to calculate the CLR

annually for each county in Pennsylvania. The issue was whether that provision should

be understood to displace the traditional method, summarized above, for a property

owner to demonstrate a disproportionately high assessment ratio as compared to other

properties in the taxing district. See Downingtown, 590 Pa. at 468, 913 A.2d at 200

(“This legislative revision raised the question of whether the traditional expert-witness

approach to proving non-uniformity was still viable.”).        The availability of a state-

provided countywide CLR could potentially be seen as eliminating the need for, or

relevance of, evidence of the assessment ratios of comparable properties.

       Downingtown rejected that premise and clarified that, regardless of the CLR as

calculated by the STEB, property owners may nonetheless be entitled to relief in a

judicial or quasi-judicial proceeding if they can show their parcels are over-assessed as

compared to other, comparable properties.        Further, in this setting taxpayers could

make such a showing without having to include all types of properties in their analysis.

The Court’s recognition that such methodology remained viable notwithstanding the

1982 legislative change rested on the dual observations that the federal Equal

Protection Clause guarantees this level of protection to property owners, and it also sets

the constitutional “floor” for the protection of property owners’ rights under the Uniformity

Clause. See id. at 469-70, 913 A.2d at 200-01; see also id. at 475 n.17, 913 A.2d at

205 n.17 (explaining that, because the Equal Protection Clause sets the floor for state

protections, “federal [equal protection] principles are incorporated into state uniformity

doctrine”).

       Notably, Downingtown never suggested that the government could divide the

realty within a taxing district into multiple sub-classifications and either apply disparate

assessment ratios to the different sub-classifications, or otherwise systematically treat


                                      [J-14-2017] - 15
them differently. Indeed, long before the decision in Downingtown was announced, it

was an established feature of Pennsylvania uniformity jurisprudence that “all real estate

is a constitutionally designated class entitled to uniform treatment and the ratio of

assessed value to market value adopted by the taxing authority must be applied equally

and uniformly to all real estate within the taxing authority’s jurisdiction.” Westinghouse

Elec. Corp. v. Bd. of Prop. Assessment, Appeals & Review of Allegheny Cnty., 539 Pa.

453, 469, 652 A.2d 1306, 1314 (1995) (citing McKnight Shopping Ctr., Inc. v. Bd. of

Prop. Assessment, Appeals & Review of Allegheny Cnty., 417 Pa. 234, 209 A.2d 389

(1965)); see also Clifton, 600 Pa. at 686-87, 969 A.2d at 1212 (“[T]his Court has

consistently interpreted the uniformity requirement of the Pennsylvania Constitution as

requiring all real estate to be treated as a single class entitled to uniform treatment.”).

While this may at first seem incongruous, it is the inevitable result of the circumstance

that the Uniformity Clause views all property as a single class and simultaneously

incorporates federal Equal Protection guarantees as a constitutional floor.

      Upon review of the manner in which the Downingtown decision has since been

applied, it appears that the following passage has led to some controversy:

      [W]hile . . . this Court has interpreted the Uniformity Clause as precluding
      real property from being divided into different classes for purposes of
      systemic property tax assessment, we do not find that this general
      uniformity precept eliminates any opportunity or need to consider
      meaningful sub-classifications as a component of the overall evaluation of
      uniform treatment in the application of the taxation scheme. Indeed, this
      would represent an impermissible departure from federal equal protection
      jurisprudence, which sets the floor for Pennsylvania’s uniformity
      assessment.
Downingtown, 590 Pa. at 469, 913 A.2d at 200. Read against Downingtown’s facts, the

above principle relates to the scope of evidence an aggrieved taxpayer may adduce

during an assessment appeal, and concomitantly, the scope of evidence a court should


                                     [J-14-2017] - 16
consider in determining whether the taxpayer is entitled to relief in the form of a reduced

assessment.     See generally Chartiers Valley Indus. & Commercial Dev. Auth. v.

Allegheny Cnty., 963 A.2d 587, 592 (Pa. Cmwlth. 2008). The observation that these

types of proofs are relevant was intended to maintain the longstanding protection of

taxpayers from high assessment ratios as compared with those of comparable

properties, and to promote harmony with equal protection principles, not as a means of

empowering the government to systematically engage in disparate treatment of sub-

classifications of property.

       The Commonwealth Court has evidently understood the pronouncement in the

latter, incorrect, way.    In Weissenberger, the Commonwealth Court relied on the

passage for the position that a taxing district could, in deciding which assessments to

appeal, engage in differential treatment of various sub-classifications of property as the

district embarked on a years-long program of appealing assessments by property

subgroup on a rotating basis. See Weissenberger, 62 A.3d at 506-07. Thus, the court

found that the district’s policy of concentrating only on apartment complexes during the

relevant year did not give rise to a potential uniformity violation.

       Springfield made this interpretation of Downingtown explicit, stating that “[t]he

Uniformity Clause ‘does not require equalization across all sub-classifications of real

property.’” Springfield, 101 A.3d at 849 (quoting Downingtown, 590 Pa. at 469 n.9, 913

A.2d at 201 n.9). In fact, however, the Downingtown footnote quoted in Springfield had

only characterized the federal Equal Protection Clause in such terms. It never indicated

that the Uniformity Clause permits the government to sub-classify properties since, as

even Springfield acknowledged, “[u]nder the Uniformity Clause, all real estate must be

treated as a single class entitled to uniform treatment.” Id. at 847 (citing Clifton, 600 Pa.

at 686-87, 969 A.2d at 1212).


                                      [J-14-2017] - 17
      Relatedly, the Springfield court also addressed the standard for determining the

permissibility of a government program which, in its operation, treats different property

sub-classifications in a disparate manner. It acknowledged Downingtown’s explanation

that the Uniformity Clause entails a “prevailing requirement that similarly situated

taxpayers should not be deliberately treated differently by taxing authorities.”

Downingtown, 590 Pa. at 470, 913 A.2d at 201 (emphasis added). In this respect,

Downingtown explained that, “[i]n this context, the term ‘deliberate’ does not exclusively

connote wrongful conduct, but also includes any intentional or systematic method of

enforcement of the tax laws.” Id. at 470 n.10, 913 A.2d at 201 n.10 (emphasis added).

Inexplicably, Springfield referenced this portion of Downingtown as indicating that “[t]he

term ‘deliberate’ in this context connotes ‘wrongful conduct,’” Springfield, 101 A.3d at

847 (emphasis added) – the opposite of what Downingtown had actually said.13

      In view of the above, we find it useful to summarize two principles articulated in

Downingtown and Clifton which are presently relevant. First, all property in a taxing

district is a single class, and, as a consequence, the Uniformity Clause does not permit

the government, including taxing authorities, to treat different property sub-

classifications in a disparate manner. See Clifton, 600 Pa. at 686-87, 969 A.2d at 1212;

accord Westinghouse, 539 Pa. at 469, 652 A.2d at 1314.          Second, this prohibition

applies to any intentional or systematic enforcement of the tax laws, and is not limited

solely to wrongful conduct. See Downingtown, 590 Pa. at 470 n.10, 913 A.2d at 201

n.10 (citing Beattie, 589 Pa. at 119-20, 907 A.2d at 523).

13
   Our disapproval of Springfield’s interpretation of this Court’s precedent should not be
equated to disagreement with the result it reached. In Springfield, the property owners
challenged a school district’s policy of using of a monetary threshold to decide which
properties to appeal. See id. They did not allege a scheme involving disparate
treatment of property sub-classifications drawn according to property type or the status
of its owner as a resident or non-resident of the taxing district.


                                     [J-14-2017] - 18
       Here, Appellants argue that the School District has undertaken an approach

which systematically treats commercial properties differently from other types of parcels,

most notably single-family homes. They assert that, while 80 percent of such homes in

the district are under-assessed – and that the assessment ratio of many of those homes

departs from the CLR by an even greater percentage than the assessment ratios of

Appellants’ properties – the School District has chosen, for financial and political

reasons, to ignore single-family homes and concentrate only on commercial properties.

See Complaint at 10-13, ¶¶42-44, 52-53 (reflecting allegations to this effect).

Appellants indicate that, even though the appeals are aimed at conforming their

assessments to the CLR, uniformity is harmed when appropriately assessed properties

bear the tax burden for under-assessed properties.

       To the extent enhanced tax revenue is a driving motivation, Appellants proffer

that the School District has neutral, non-discriminatory ways of increasing revenue,

including appealing assessments proportionally by property type rather than only

targeting commercial properties, raising the millage rate, or pressuring the County,

through litigation if necessary, to undertake a countywide reassessment. See, e.g., City

of Lancaster, 143 Pa. Cmwlth. at 499-500, 599 A.2d at 301 (ordering a countywide

reassessment in response to a complaint by taxing districts).

       Several economics professors, as amici supporting reversal, add that the School

District’s strategy results in a higher effective tax rate for apartment complexes than for

single-family homes, which they say is regressive because at least part of the increased

tax burden is passed on to renters, who are generally poorer than single-family

homeowners. See Brief of Amici Dr. Jesus Fernandez-Villaverde, et al., at 4-6. In a

similar vein, another amicus supporting reversal discusses alleged instances where

raised assessments – agreed to in settlement by the property owner so as to avoid


                                     [J-14-2017] - 19
additional litigation costs notwithstanding a favorable ruling by the board of assessment

appeals – led to higher rents which, in turn, forced poorer residents out of the

apartments. See Brief of Amicus Pennsylvania Apartment Association, at 2-3.14

       The School District responds that its practice is constitutionally permissible

because the sub-classification it has created is neither arbitrary nor capricious, but is

based on reasonable economic and financial objectives involving the raising of public

revenue and the prospect of recouping its appeal costs. That being the case, the

district continues, Appellants’ allegations do not give rise to a uniformity violation as a

matter of law.15

       The School District additionally forwards an absurd-results argument, indicating

that if it is prevented from taking these financial considerations into account when

deciding which assessments to appeal, it would have to appeal every under-assessed

property in the district, which is impossible as a practical matter and, thus, cannot have

been what the Legislature intended when it enacted the Assessments Law. Separately,

the district maintains Appellants have requested the wrong relief, as they have asked for

an injunction to prevent it from exercising its rights under Section 8855 rather than

seeking a countywide reassessment.

       Several amici favoring affirmance observe that assessment appeals, whether by

a taxing authority or an individual property owner, always enhance uniformity by

lowering the coefficient of dispersion (the “COD”) – that is, the average variance from

14
   Additional amicus briefs favoring reversal have been submitted by King of Prussia
Associates, Pennsylvania Retailers’ Association, Brandywine Realty Trust, and several
business associations led by the Pennsylvania Chamber of Business and Industry.
They argue that targeting commercial properties results in economic harm to the region.

15
  In making this argument the School District relies on various Commonwealth Court
decisions. While we may consider those decisions, they do not bind us. See Six L’s
Packing Co. v. WCAB (Williamson), 615 Pa. 615, 630, 44 A.3d 1148, 1157 (2012).


                                     [J-14-2017] - 20
the common assessment ratio in a district. See Beattie, 589 Pa. at 131 n.7, 907 A.2d at

530 n.7 (“A low [COD] . . . indicates that the parcels under consideration are being

assessed at close to an equal rate.”).        They conclude Appellants’ complaint was

deficient because it did not aver that the School District’s actions would increase the

COD.    See Brief of Amicus Pennsylvania Economy League at 7; Brief of Amici

Crestwood Area School District, et al., at 18, 27; see also id. at 5-13 (arguing that all

assessment appeals enhance uniformity, and hence, it is a failure to appeal which

perpetuates any non-uniformity extant in a taxing district).16

       Initially, we reject the School District’s suggestion that the only alternative to its

alleged course of action is to appeal all property assessments in the district. There are

other, nondiscriminatory, methods of deciding which properties to appeal. Insofar as

the School District argues Appellants were required to demand a countywide

reassessment or nothing at all, the district grounds this concept on the ruling in Smith v.

Carbon County Board of Assessment Appeals, 10 A.3d 393 (Pa. Cmwlth. 2010). Smith

– which in any event is not binding, see supra note 15 – is not directly apposite to the

present matter. It pertained to a single property and did not involve any allegation along

the lines of that made by Appellants here regarding intentional, systemic disparate

treatment of a sub-classification of properties.

       More centrally, we are not persuaded that the conventional rational-basis

standard advanced by the School District, a common feature of equal protection


16
   Other school districts have also filed amicus briefs favoring affirmance, as has the
Pennsylvania School Boards Association. These amici generally emphasize the
importance of upholding taxing districts’ Section 8855 right to appeal assessments as a
means of ensuring the availability of adequate revenues. One group of school districts
also dispute the concept that a higher assessment will lead to raised rents. They argue
that rents are determined by market forces alone. See Brief of Amici Allentown School
District et al., at 2.


                                     [J-14-2017] - 21
jurisprudence, applies in a dispute such as this.              In Clifton the Court initially

acknowledged the General Assembly’s power to classify, even in matters of taxation, so

that a taxpayer generally must demonstrate that the classification “is unreasonable and

not rationally related to any legitimate state purpose.” Clifton, 600 Pa. at 685, 969 A.2d

at 1211 (citing Wilson Partners, L.P. v. Bd. of Fin. & Revenue, 558 Pa. 462, 471, 737

A.2d 1215, 1220 (1999)). Importantly, the Court then cautioned that property taxes are

“different” because “real property is the classification,” id. at 686, 969 A.2d at 1212

(emphasis in original), with the consequence, stated above, that all real estate in a

taxing district is constitutionally entitled to uniform treatment. See id. at 686-87, 969

A.2d at 1212 (“[T]his Court has consistently interpreted the uniformity requirement of the

Pennsylvania Constitution as requiring all real estate to be treated as a single class

entitled to uniform treatment.”); id. at 707, 969 A.2d at 1224 (reaffirming that “all

property must be taxed uniformly, with the same ratio of assessed value to actual value

applied throughout the taxing jurisdiction”).

       Clifton recognized the above-quoted passage of Downingtown as suggesting this

Court has “retreated from such an absolutist approach” eschewing subdivision in all

contexts, id. at 688, 969 A.2d at 1212-13 – and, indeed, the School District interprets

that aspect of Clifton as having opened the door to governmental sub-classifications.

See Brief for Appellees at 23. As we read Clifton, however, it properly understood the

limited significance of the “meaningful sub-classifications” phraseology in Downingtown

as relating solely to evidence which a court may consider in the context of an individual

assessment appeal. To the extent any other interpretation can be gleaned from Clifton,

it is dicta, as Clifton itself found a uniformity violation where a facially constitutional law,




                                       [J-14-2017] - 22
as applied, gave rise to differing assessment ratios for different sub-classifications of

property. See Clifton, 600 Pa. at 702-03, 969 A.2d at 1221-22.17

       From the two Downingtown/Clifton precepts we have discussed – that all real

estate in a taxing district forms a single collective class to be treated uniformly, and that

systematic disparate enforcement of the tax laws based on property sub-classification,

even absent wrongful conduct, is constitutionally precluded – it follows that a taxing

authority is not permitted to implement a program of only appealing the assessments of

one sub-classification of properties, where that sub-classification is drawn according to

property type – that is, its use as commercial, apartment complex, single-family


17
   In a separate portion of the Downingtown opinion, the Court found a statutory
provision unconstitutional because, in its operation, it led to two groups of properties
being subject to different assessment ratios. The Court indicated that the distinction
was “arbitrary” because it was not based on any “legitimate distinction” between the
targeted sub-class and all other properties. Downingtown, 590 Pa. at 475, 913 A.2d at
205. The School District presently seizes on this language as supposedly engrafting
onto uniformity jurisprudence a new rule whereby sub-classifications are permitted so
long as they are not “arbitrary.” See Brief for Appellees at 22, 40, 42.

As Appellants argue, the School District’s position reflects a substantial misreading of
Downingtown. Downingtown correctly stated a standard emanating from the Equal
Protection Clause – the precepts of which, again, are incorporated into the Uniformity
Clause – and held that the statute failed that standard. It would be improper to infer that
that holding as stated somehow overrides the established principle that the Uniformity
Clause precludes all sub-classifications of real estate within a taxing district. Drawing
such inference, as the School District attempts to do here, is directly contrary to the
remainder of the Downingtown opinion, which affirmed that equalization of the
assessment ratio of all property within a district was “of the essence of equalization, and
thus, uniformity.” Downingtown, 590 Pa. at 468, 913 A.2d at 200 (citing Woolworth, 426
Pa. at 587, 235 A.2d at 795). Indeed, this latter precept is consistent with long-
established uniformity jurisprudence, see, e.g., In re Lower Merion Twp., 427 Pa. 138,
143, 233 A.2d 273, 276 (1967) (clarifying that “real estate as a subject for taxation may
not validly be divided into different classes”); see also id. at 143-47, 233 A.2d at 276-78
(developing that this constitutional tenet has been in place since 1909 and reaffirmed by
this Court on multiple occasions), and this Court plainly had no intention of discarding it.


                                      [J-14-2017] - 23
residential, industrial, or the like.   We do not overlook that Section 8855 gives the

School District a statutory right to appeal assessments; our point is that this alone

cannot justify an action which the Uniformity Clause prohibits.18          The restrictions

imposed by that aspect of our organic law limit the manner in which otherwise legitimate

statutory powers may be utilized in practice. See Downingtown, 590 Pa. at 474-75, 913

A.2d at 204 (confirming that demands of uniformity take precedence over statutory

requirements (quoting Brooks Building, 391 Pa. at 101, 137 A.2d at 276)); see also Alco

Parking Corp. v. City of Pittsburgh, 453 Pa. 245, 254-55, 307 A.2d 851, 856 (1973)

(reciting that the Commonwealth and its political subdivisions are subject to uniformity

requirements when they exercise their taxing powers), rev’d on other grounds, 417 U.S.

369, 94 S. Ct. 2291 (1974); Del. L. & W. R. Co., 224 Pa. at 243-44, 73 A. at 430 (noting

that tax uniformity principles, which require substantial tax equality, apply to the

Legislature, the courts, and taxing authorities).

       As noted, some of the School District’s amici proffer that Appellants’ pleadings

were insufficient in that all assessment appeals reduce the COD and, in that sense,

enhance uniformity.      This argument overlooks that the Uniformity Clause can be

independently harmed by a systematic course of disparate treatment relative to a

18
   To illustrate, Appellants offer that, notwithstanding the right embodied in Section
8855, the School District could not constitutionally exercise its statutory authority to
systematically appeal only the assessments of properties owned by racial minorities, or
by persons who have criticized the school board. See Brief for Appellants at 37. These
examples involve wrongful conduct, unlike differential treatment for economic reasons.
Indeed, the only averment in the complaint of a similar nature is the allegation relating to
an improper political motivation on the part of the School District. Regardless, these
examples highlight that, although Section 8855 may be facially valid, that alone does
not shield the government from as-applied challenges. In this regard, we reject the
suggestion that there is a constitutionally meaningful distinction between the authority to
set or revise assessments, and the statutory right to appeal assessments. See Valley
Forge Towers, No 2014-09870, slip op. at 3; see also Valley Forge Towers, 124 A.3d at
367 (quoting Weissenberger, 62 A.3d at 508-09).


                                        [J-14-2017] - 24
particular sub-classification of property. See, e.g., Lower Merion Twp., 427 Pa. at 146-

47, 233 A.2d at 277-78; City of Lancaster, 143 Pa. Cmwlth. at 495, 599 A.2d at 299.

Although the aim of every such appeal is to conform the property’s assessment with the

CLR, the members of the sub-class are aware that they alone have been targeted for

scrutiny solely due to their membership in the sub-class; moreover, they alone must

bear the costs of defending against the appeal and of any follow-up litigation in court –

costs which the School District and its amici take pains to emphasize are quite

substantial. See Appellees’ Supplemental Brief Regarding the Applicability of Mount

Airy #1, LLC v. Pennsylvania Department of Revenue, at 8-9; Brief of Amici Crestwood

Area School District, et al., at 29 (enumerating appeal costs such as appraiser fees,

expert witness fees, filing fees, and attorney fees).

       Further, the alleged political motivation, being an assertion of fact, contra Brief for

Appellees at 37 n.20, must be accepted as true for present purposes. It should go

without saying that the Uniformity Clause prohibits disparate treatment of sub-

classifications of property in order to avoid political accountability.       See generally

Downingtown, 590 Pa. at 470, 913 A.2d at 201 (recognizing the potential for

“discrimination by local officials among similarly situated property owners who are

underrepresented in the general population”).           It bears emphasis that there is no

evidentiary record and, hence, no indication that the School District has, in fact,

discriminated on this basis.      As well, such motivation may be difficult to prove.

Regardless, it is alleged in the complaint and, if demonstrated, would establish a

uniformity violation. Therefore, Appellants are entitled to an opportunity to prove it.

       We pause at this juncture to clarify that nothing in this opinion should be

construed as suggesting that the use of a monetary threshold – such as the one

challenged in Springfield – or some other selection criteria would violate uniformity if it


                                      [J-14-2017] - 25
were implemented without regard to the type of property in question or the residency

status of its owner.19 Such methodologies are not presently before the Court.

       Finally, we observe that the limitations on disparate treatment imposed by the

Uniformity Clause are not merely formal or abstract in nature. Although using public

funds wisely and obtaining needed revenues are important objectives, salutary

governance also requires attention to other substantive aims. The government must be

concerned with ensuring a rough equalization of tax burdens under a structure in which

taxes are imposed, adjusted, and collected equitably. Thus, as “every tax is a burden,”

Del. L. & W. R. Co., 224 Pa. at 243, 73 A. at 430, it is important that the public has

confidence that property taxes are administered in a just and impartial manner, with

each taxpayer contributing his or her fair share of the cost of government. This lends

legitimacy to the property-tax system in the eyes of the public which, in turn, tends to

suppress both the desire to evade taxes and the tendency to embark upon protracted

litigation – which, itself, consumes large quantities of societal resources. Where there is

a conflict between maximizing revenue and ensuring that the taxing system is

implemented in a non-discriminatory way, the Uniformity Clause requires that the latter

goal be given primacy. Cf. Clifton, 600 Pa. at 713, 969 A.2d at 1228 (indicating that

rough uniformity in property assessment may not be submerged to the “legitimate

governmental interest in creating and preserving a stable and predictable local real

estate tax assessment system”).        Notably, however, the two objectives do not

necessarily conflict.

19
   In Springfield the school district only appealed properties for which a recent sales
price was at least $500,000 greater than its implied market value, defined as the
assessed value divided by the CLR. Thus, with a CLR of, say, 83%, a parcel assessed
at $1,000,000 would have an implied market value of $1,204,819 ($1,000,000 divided
by 0.83). The school district would appeal the $1,000,000 assessment if the property
had recently sold for at least $1,704,819 – the implied market value plus $500,000.


                                     [J-14-2017] - 26
       The particular appeal policy employed by a taxing district lies within its discretion.

Our task is limited to enforcing the constitutional boundaries of any such approach, and

our holding here is limited to the conclusion that the appeal policy Appellants have

alleged – in terms of its classification of properties by type and/or the residency status of

their owners – transgresses those boundaries. Accordingly, Appellants’ complaint sets

forth a valid claim that the School District’s appeal policy violates the Uniformity Clause.


                                      IV. Conclusion

       For the reasons given above, the School District’s preliminary objections should

not have been sustained.       The order of the Commonwealth Court is accordingly

reversed and the matter is remanded for further proceedings.



       Justices Baer, Todd, Donohue, Dougherty, Wecht and Mundy join this opinion.




                                      [J-14-2017] - 27
