          IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Hon. Russell M. Nigro,                 :
Hon. Alan K. Silberstein,              :
Robert N. C. Nix III, Esquire, and     :
Wayne A. Johns,                        :
                   Appellants          :
                                       :
             v.                        : No. 249 C.D. 2017
                                       : Argued: October 17, 2017
City of Philadelphia                   :


BEFORE:      HONORABLE P. KEVIN BROBSON, Judge
             HONORABLE MICHAEL H. WOJCIK, Judge
             HONORABLE DAN PELLEGRINI, Senior Judge


OPINION BY
SENIOR JUDGE PELLEGRINI                               FILED: November 21, 2017


             The Honorable Russell M. Nigro (Nigro), the Honorable Alan K.
Silberstein (Silberstein), Robert N. C. Nix III, Esquire (Nix) and Wayne A. Johns
(Johns) (collectively, Commissioners), current and former members of the Board
of Revision of Taxes (BRT) of the City of Philadelphia (City), appeal from the
order of the Court of Common Pleas of Philadelphia County (trial court) entering
judgment against them after a bench trial on stipulated facts.
                                              I.
              The BRT was created by statute in June 19391 to assess the value of
real property in Philadelphia, examine tax returns and hear appeals from
assessments.2 However, in December 2009, the Philadelphia City Council adopted
the Reorganization Ordinance to abolish the BRT and replace it with the Office of
Property Assessment, which would make initial and revised property assessments,
and the Board of Property Assessment Appeals (Board of Appeals), which would
hear appeals from assessments. By its terms, the Reorganization Ordinance would
come into effect on October 1, 2010, but only if the electorate ratified it at the May
2010 primary election.3 In the meantime, on April 22, 2010, the Philadelphia City

       1
        See the First Class County Assessment Law, Act of June 27, 1939, P.L. 1199, 72 P.S.
§§ 5341.1–5341.21.

       2
         See Sections 7, 8, 11 and 14 of the First Class County Assessment Law, 72 P.S. §§
5341.7, 5341.8, 5341.11 and 5341.14.

       3
        See Sections 2(c)&(d) of the First Class Home Rule Act (Act), Act of August 26, 1953,
P.L. 1476, as amended, 53 P.S. §§ 13132(c)&(d), which provide:

              (c) Subject to the provisions of the Philadelphia Home Rule
              Charter and the First Class City Home Rule Act of April twenty-
              one, one thousand nine hundred forty-nine (Pamphlet Laws 665),
              the Council of the City of Philadelphia shall have full powers to
              legislate with respect to the election, appointment, compensation,
              organization, abolition, merger, consolidation, powers, functions
              and duties of the Sheriff, City Commissioners, Registration
              Commission and Board of Revision of Taxes or its successor, with
              respect to the making of assessments of real and personal property
              as provided by act of Assembly. The provisions of Section 1-
              102(2) of the Philadelphia Home Rule Charter are hereby validated
              and the power of Council to act thereunder is hereby confirmed.

              (d) Legislation adopted by the Council of the City of Philadelphia
              under the authority of subsection (c) of this section shall not be
(Footnote continued on next page…)

                                              2
Council adopted the Salary Reduction Ordinance,4 which reduced the annual
salaries of the BRT chair from $75,000 to $50,000 and the secretary from $72,000
to $45,000. It also eliminated all other remaining BRT members’ annual salaries
of $70,000 and substituted in its place a per diem compensation of $150, subject to
a $40,000 annual maximum. (Joint Stipulation of Facts for Trial, Reproduced
Record (R.R.) at 522a-523a.)




(continued…)

              effective until approved by the electorate of the City of
              Philadelphia in the same manner as amendments to the Home Rule
              Charter under the First Class City Home Rule Act.

       4
         Bill No. 100212, commonly referred to as the Salary Reduction Ordinance, sets forth
the amendments to Section 20-304 of the Philadelphia Code, entitled “Compensation for
Members of Board, Commissioners, Committees and Councils.” (R.R. at 75a.) “[Brackets]
indicate matter deleted.” (Id.) “Italics indicate new matter added.” (Id.) As pertinent, the
Salary Reduction Ordinance provides:

              (7) Board of Revision of Taxes. [Each member of the Board of
              Revision of Taxes shall receive an annual salary of seventy
              thousand ($70,000) dollars.] The Secretary of the Board of
              Revision of Taxes shall receive an annual salary of [seventy two
              thousand ($72,000)] forty-five thousand dollars ($45,000). The
              Chairman of the Board of Revision of Taxes shall receive an
              annual salary of [seventy five thousand ($75,000)] fifty thousand
              dollars ($50,000). Each remaining member of the Board shall
              receive one hundred and fifty dollars ($150) as compensation for
              each day the member attends a Board meeting or hearing or both,
              or such higher amount as required by law, but in no case more
              than forty-thousand dollars ($40,000) per year. (Id.)




                                             3
             When the Salary Reduction Ordinance was adopted, three of the four
plaintiffs involved in this appeal – Nigro, Silberstein and Nix – were serving six-
year terms ending in 2013.


             On June 15, 2010, the BRT and its members, individually and in their
official capacities, filed a petition for review in this Court’s original jurisdiction
challenging the Reorganization Ordinance and the Salary Reduction Ordinance,
which had already reduced the BRT members’ salaries. After a hearing, on July
16, 2010, this Court dismissed BRT’s petition for lack of jurisdiction and
transferred the matter to the trial court. Choosing not to appeal that transfer order,
on July 26, 2010, those petitioners filed an appeal with our Supreme Court seeking
the exercise of its King’s Bench power to grant them various forms of relief.


             Ultimately, our Supreme Court took jurisdiction over issues involving
the Reorganization Ordinance but refused to exercise jurisdiction over the Salary
Reduction Ordinance.      Our Supreme Court then held that the Reorganization
Ordinance was valid insofar as it reassigned the function of making assessments to
the newly-formed Office of Property Assessment, but invalid insofar as it
eliminated the BRT’s quasi-judicial appellate function and replaced it with the
Board of Appeals. Under our Supreme Court’s decision, the BRT retained – and
continues to retain – jurisdiction to hear appeals from those assessments. See
Phila. Code § 2–305; Board of Revision of Taxes v. City of Philadelphia, 4 A.3d
610, 624–27 (Pa. 2010).




                                          4
               Because our Supreme Court refused to review the Salary Reduction
Ordinance, the matter proceeded below in the ordinary course. Nigro, Silberstein
and Nix were all parties to that dispute.


                                               II.
               Following various filings, on September 7, 2011, the trial court
entered summary judgment in favor of Nigro and another plaintiff, holding that
“the Salary Ordinance insofar as it attempts to reduce the salary and emoluments
of the Members of the BRT during his or her term of office, is found to be in
violation of Art. III § 27 [of the Pennsylvania Constitution5] and unconstitutional
and invalid.” See Meade v. City of Philadelphia, 2012 WL 359524 (Pa. Com. Pl.
Philadelphia County, No. 0258, January 17, 2017) (emphasis and footnote added).
The City appealed that decision and we affirmed because “[we] must agree with
the common pleas court that Article III, Section 27 prohibits the reduction in salary
in the middle of the terms of Nigro and [another BRT member].” See Meade v.
City of Philadelphia (Meade), 65 A.3d 1031, 1040 (Pa. Cmwlth. 2013) (emphasis
added).


               Subsequent to Meade, the City paid, among others, Nigro, Silberstein
and Nix6 for the period from April 22, 2010 (the enactment of the Salary Reduction


       5
        Article III § 27 of the Pennsylvania Constitution states, “No law shall extend the term of
any public officer, or increase or diminish his salary or emoluments, after his election or
appointment.” Pa. Const. art. III, § 27.

       6
        While the City made payments to Nigro and Silberstein in 2013, the City did not pay
Nix backpay until compelled to do so by order dated January 2, 2014. Following an appeal by
(Footnote continued on next page…)

                                                5
Ordinance) until the end of their six-year terms in 2013. Once their new terms
began in 2013, the City reduced their salaries in accordance with the Salary
Reduction Ordinance. As for Johns, because his first appointment to the BRT
occurred on May 21, 2011, after the Salary Reduction Ordinance’s enactment, his
salary began at the reduced level.


                The City then continued paying the Commissioners a reduced salary
up until the adoption of the Salary Restoration Ordinance on March 27, 2014.7
That ordinance restores the annual salaries of all BRT members to their pre-Salary
Reduction Ordinance amount and provides, in pertinent part:

                Amending Chapter 20-304 of The Philadelphia Code,
                entitled “Compensation for Members of Boards,
                Commissions, Committees and Councils,” by repealing
                Bill No. 100212, thereby returning the compensation
                for members of the Board of Revision of Taxes to the
                level existing prior to the passage of that bill; all under
                certain, terms and conditions.

                WHEREAS, Bill No. 100212, which was enacted into
                law on April, 22, 2010, was intended to substantially
                decrease the compensation for all members of the Board
                of Revision of Taxes; and

                WHEREAS, City Council voted to enact Bill No. 100212
                based on the assumption that members of the Board of


(continued…)

the City, this Court affirmed. See Meade v. City of Philadelphia, (Pa. Cmwlth., 1309 C.D. 2014
and 1332 C.D. 2014, filed December 30, 2015).

       7
           Bill No. 140017.




                                              6
Revision of Taxes were not public officials under the
Pennsylvania Constitution, and that their salaries would
be reduced immediately upon passage of legislation; and

WHEREAS, Bill No. 100212 was passed in reliance on
the laws that existed on April 22, 2010, that would have
abolished the Board of Revision of Taxes and eliminated
all duties of the members of the Board as of October 1,
2010; and

WHEREAS, After the enactment of Bill No. 100212, the
Pennsylvania Courts found the ordinance, approved by
the voters of Philadelphia, that purported to abolish the
Board of Revision of Taxes to be unconstitutional in part,
so that the Board remains in existence to date, fulfilling
its appellate responsibilities; and

WHEREAS, The Pennsylvania Courts subsequently held
that Bill No. 100212 was also unconstitutional if applied
as intended, and therefore, the compensation of the
sitting members of the Board was not immediately
reduced as intended; and

WHEREAS, It was never the intent of Bill No. 100212:
to apply the compensation reductions solely to future
terms of members of the Board of Revision of Taxes;
now, therefore

THE COUNCIL OF THE CITY OF PHILADELPHIA
HEREBY ORDAINS:

SECTION 1. In reliance on the Commonwealth Court
decision, issued on March 20, 2013, (Meade[] v. City of
Philadelphia, 65 A.3d 1031), affirming the ruling of the
Philadelphia [County] Court of Common Pleas decision
that provisions in Bill No. 100212 violated the
Pennsylvania Constitution, Article III, § 27, by
attempting to reduce the compensation of members of the
Board of Revision of Taxes during their term of office,
Council hereby amends Section 20-304(7) of The
Philadelphia Code by repealing and abrogating Bill
No. 100212, and reverting to the compensation as set


                            7
                  forth in Section 20-304(7), immediately preceding
                  April 22, 2010.


(R.R. at 78a-79a) (emphases added).


                  On May 18, 2015, the Commissioners served the City with a
complaint contending that Meade held that the Salary Reduction Ordinance was
not only invalid as applied, but also void in its entirety ab initio.                            The
Commissioners asserted that they should have been paid their original, pre-
reduction salary when they began their new terms and their salary should be equal
to the pre-reduction amount for the entirety of their terms because the Salary
Restoration Act applied retroactively.8


                  Following a bench trial on stipulated facts, the trial court found
against the Commissioners, concluding that the Salary Reduction Ordinance
remained valid for any terms that commenced after its adoption and that the Salary
Restoration Ordinance was not intended to be applied retroactively. This appeal
followed.


       8
         In their Joint Stipulations of Facts for Trial, the parties state that the difference between
compensation actually provided to the Commissioners under the Salary Reduction Ordinance
and the compensation that would have been provided had it not been in effect would be:

                  Nigro – $12,500
                  Silberstein – $74,333
                  Nix – $29,250
                  Johns – $173,583

(R.R. at 526a.)




                                                  8
                                       III.
            On appeal, the Commissioners once again contend that the Salary
Reduction Ordinance is unconstitutional in its entirety and that the Salary
Restoration Ordinance must be applied retroactively. However, before we may
reach the merits, the City contends that each of the Commissioners must be
estopped from seeking backpay.


                                       A.
            The City first contends that Nigro, Silberstein and Nix’s challenge to
the Salary Reduction Ordinance is barred by res judicata because it was already
litigated in Meade.      However, res judicata is inapplicable because the
Commissioners are not seeking an additional judgment or modification but, rather,
the declaration and/or enforcement of our decision in Meade. In other words, there
is no new issue or claim that the Commissioners can be barred from pursuing. In
any event, we have explained:

            Res judicata encompasses two related . . . principles:
            technical res judicata and collateral estoppel. Technical
            res judicata provides that where a final judgment on the
            merits exists, a future lawsuit on the same cause of
            action is precluded. Collateral estoppel acts to foreclose
            litigation in a subsequent action where issues of law or
            fact were actually litigated and necessary to a previous
            final judgment.


J.S. v. Bethlehem Area School District, 794 A.2d 936, 939 (Pa. Cmwlth. 2002)
(emphases added). Here, Meade took place prior to John’s first term and before
the other Commissioners began serving their current terms. Because this appeal



                                        9
pertains to a reduction of salary at the outset of new terms which was not involved
in Meade, both the cause of action and issue litigated are not identical and res
judicata cannot apply.


                                        B.
            The City also contends that Johns must be barred from asserting
retroactive application of the Salary Reduction Ordinance because he is guilty of
laches. According to the City, this is because it took four years for Johns to bring
this action, despite knowing from the start of his term that he was accepting a
reduced salary. We have explained:

            Estoppel by laches is a time-honored doctrine “that bars
            relief when a complaining party is guilty of want of due
            diligence in failing to promptly institute an action to the
            prejudice of another.” Stilp v. Hafer, 718 A.2d 290, 292
            (Pa. 1998). A party asserting laches must establish two
            essential elements:      (1) a delay arising from the
            complaining party’s failure to exercise due diligence and
            (2) prejudice to the asserting party resulting from the
            delay. Id. Whether the complaining party acted with due
            diligence depends upon what that party might have
            known by use of information within its reach, and
            prejudice may be found where some change in the
            condition or relation of the parties occurs during the
            period the complaining party failed to act. Id.


In re Estate of Leitham, 726 A.2d 1116, 1119 (Pa. Cmwlth. 1999).


            The City contends that Johns is guilty of laches because he received a
reduced salary for four years prior to commencing this action, which constitutes a
lack of due diligence, and this delay prejudiced the City because it continued to


                                        10
balance and prepare its budget while, unbeknownst to it, it purportedly owed Johns
$174,000. In support of its position, the City directs us to our Supreme Court’s
decision in Taggart v. Board of Directors of Canon-McMillan Joint School System,
185 A.2d 332 (Pa. 1962), where a school teacher’s delay of five years in bringing a
claim for extra compensation was a bar to recovery because school budgeting and
financing processes would be prejudiced by such procrastination. Johns, in turn,
has offered no response justifying his delay.


             Upon review, we agree with the City that the reasoning in Taggart is
directly on point. As our Supreme Court explained:

             It would be inequitable to impose on taxpayers the extra
             amounts claimed by the plaintiff when he was indifferent
             to their rights by his inattentiveness to his own claims.
             Where public moneys are concerned, budgets are
             prepared and tax levies instituted based on current
             obligations. The reaching back to present invoices five
             years overdue could work havoc to any plan for financing
             so vital and yet so delicately balanced a program as the
             administration of the public schools of the
             Commonwealth.


Taggart, 185 A.2d at 336. Because Johns failed to act with due diligence resulting
in a four-year delay that now may compromise years of budgeting and planning, he
is estopped from pursuing his claim under the doctrine of laches.




                                         11
                                          IV.
             As to the merits, the Commissioners assert that Meade held the Salary
Reduction Ordinance unconstitutional in its entirety and, therefore, contend they
are entitled to their pre-reduction salary levels for the entirety of their new terms.


             Constitutional challenges are of two kinds: facial challenges or as-
applied challenges. Lehman v. Pennsylvania State Police, 839 A.2d 265, 275 (Pa.
2003). “[A]n as-applied attack . . . does not contend that a law is unconstitutional
as written but that its application to a particular person under particular
circumstances deprived that person of a constitutional right.” Weissenberger v.
Chester County Board of Assessment Appeals, 62 A.3d 501, 505 (Pa. Cmwlth.
2013) (quoting United States v. Mitchell, 652 F.3d 387, 405 (3d Cir. 2011)).
Moreover, an as-applied challenge will not necessarily invalidate a law given that a
law “may operate in an unconstitutional way as to one particular individual or
company, as to which it may be declared void, and yet may, as to others still be
effective.” Pennsylvania R. Co. v. Driscoll, 9 A.2d 621, 632 (Pa. 1939) (footnote
omitted).


             As already explained, the salary reduction involved in Meade took
place during the terms of certain BRT members, and those members challenged the
ordinance as applied to them because Article III, Section 27 of the Pennsylvania
Constitution prohibits laws from diminishing a public officer’s salary or
emoluments after election or appointment. Given the limited facts of Meade, it is
not surprising that the trial court in that case held the Salary Reduction Ordinance
unconstitutional “insofar as it attempts to reduce the salary and emoluments of the



                                          12
Members of the BRT during his or her term of office.” Meade v. City of
Philadelphia, 2012 WL 359524 (No. 0258, January 17, 2017) (emphasis added).
On appeal, we affirmed that determination, because “Article III, Section 27
prohibits the reduction in salary in the middle of the terms of Nigro and [another
BRT member].” Meade, 65 A.3d at 1040 (emphasis added).


               Given that the holding in Meade was limited to prohibiting a
reduction in the middle of a term, Meade did not invalidate the Salary Reduction
Ordinance in its entirety, ab initio.


                                               V.
               The Commissioners also contend that by “repealing and abrogating
[the Salary Reduction Ordinance] and reverting” compensation to pre-reduction
levels (R.R. at 78a), the Salary Restoration Ordinance retroactively increased BRT
members’ salaries since April 20, 2010 – when the Salary Reduction Ordinance
took effect.     In support of this contention, the Commissioners also point to
language contained in the Salary Restoration Ordinance’s preamble, which
indicates that the reduction ordinance was passed under the assumption that it
would become effective immediately to all BRT members so that even the salaries
for current-term members would be reduced.9

       9
         Section 1924 of the Statutory Construction Act of 1972, 1 Pa.C.S. § 1924, provides that
“The title and preamble of a statute may be considered in the construction thereof.” Section
1926 of the Statutory Construction Act of 1972, 1 Pa.C.S. § 1926, states that “No statute shall be
construed to be retroactive unless clearly and manifestly so intended by the General Assembly.”
These provisions have been held to apply equally to ordinances. See Appeal of Sawdey, 85 A.2d
28 (Pa. 1952); see also Pleasant Hills Construction Co. v. Borough of Rankin, 707 A.2d 639, 641
(Pa. Cmwlth. 1998).



                                               13
               Upon review, we find nothing in the Salary Restoration Ordinance
indicating an intent for retroactive application.         First, contrary to the
Commissioners’ contention, there is nothing in the Salary Restoration Ordinance’s
preamble indicating an intent of retroactivity. Instead, the preamble consistently
makes clear that because the Salary Reduction Ordinance failed its purpose of
reducing current-term salaries immediately and was never intended to apply “solely
to future terms of members of the Board of Revision of Taxes,” it was being
repealed. (R.R. at 78a-79a). Second, and more to the point, the Salary Restoration
Ordinance does not explicitly state that it retroactively applies. In fact, while a
previous draft of the ordinance contained a retroactivity clause stating, “This
Ordinance shall be effective retroactively to April 20, 2010[,]” no such language is
contained in the final version of the ordinance. (R.R. at 532a.) Given this lack of
clear and manifest language, the Salary Restoration Ordinance fails to demonstrate
an intent of retroactivity as required by Section 1926 of the Statutory Construction
Act of 1972.


               Accordingly, because our decision in Meade did not invalidate the
Salary Reduction Ordinance in its entirety and because the Salary Restoration
Ordinance does not retroactively increase the Commissioners’ salaries since April
20, 2010, we affirm the trial court’s order.



                                        ___________________________________
                                        DAN PELLEGRINI, Senior Judge




                                          14
          IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Hon. Russell M. Nigro,                :
Hon. Alan K. Silberstein,             :
Robert N. C. Nix III, Esquire, and    :
Wayne A. Johns,                       :
                   Appellants         :
                                      :
             v.                       : No. 249 C.D. 2017
                                      :
City of Philadelphia                  :




                                     ORDER


             AND NOW, this 21st day of November, 2017, it is hereby ordered that
the order of the Court of Common Pleas of Philadelphia County entered on January
24, 2017, is affirmed.



                                      ___________________________________
                                      DAN PELLEGRINI, Senior Judge
