PHILADELPHIA – A real estate firm has brought a class action lawsuit against the City of Philadelphia and its Department of Licenses and Inspections, claiming the defendants attempt to generate additional revenue for the City by issuing excessive fines on a daily basis.
Tunskai Properties, LLC filed suit in the U.S. District Court for the Eastern District of Pennsylvania on Aug. 17 versus the City of Philadelphia and the Department of Licenses and Inspections (L&I). All parties are of Philadelphia.
“The Philadelphia Department of Licenses and Inspections has long been infamous for its systematic corruption, incompetence and chronic underfunding, all of which tragically combined in the 2013 Salvation Army building collapse, killing 6 and injuring 13. That tragedy was supposed to usher in major changes, and many hoped that the once notoriously dysfunctional department would be subject to better oversight, properly managed, and that the safety of the citizens of Philadelphia would be its primary concern,” the suit states.
“That, however, never happened. Instead, the Department merely entered a new chapter of exploitation, with a primary focus on generating revenue by assessing excessive fines, facilitated by a vague and open-ended city ordinance. That law provides L&I the opportunity to improperly generate tens if not hundreds of millions of dollars of revenue by any means necessary – often by extorting unsuspecting victims and doling out fines as a punitive and retributive weapon.”
The suit says that L&I, which is responsible for issuing construction permits, ensuring building safety and conducting inspections, has disregarded the Salvation Army building tragedy and continued to place its own interests above the safety of Philadelphia residents by “charging unconstitutional, hefty fines backed by only an ‘open-ended and vague’ provision of the city code and geared only to generate additional revenues at the expense of alleged violators.”
According to the lawsuit, Philadelphia is authorized by the Pennsylvania Legislature to impose a $300 to $2,000-per-day fee for each offense of the city code. But the plaintiff says each day an apparent violation continues counts as a completely separate offense, with no maximum cumulative fine in place despite the per-day cap.
Tunskai Properties is a Florida-based developer which claims it was fined $7,200 per day and ordered to pay the City of Philadelphia more than $2 million in penalties, after it was cited by the defendants on Dec. 20, 2017 for an alleged violation of Section A-601 of the Philadelphia Administrative Code.
The plaintiff says that it and other business cannot remedy the issues for which they have been fined because they are not able to obtain permits and licenses from the L&I until the fines are paid.
“In doing so, L&I has created a lucrative scheme using the daily accruing fine provisions of the Philadelphia Code as a way to extort vast amounts of money. Upon information and belief, in just the last four years alone, L&I has generated at least tens of millions of dollars from this criminal enterprise,” the suit states.
For counts of violating the Excessive Fines Clause of the 8th Amendment to the U.S. Constitution, violating the Excessive Fines Provision of Article I, Section 13 of the Pennsylvania Constitution, violating due process under the 14th Amendment to the U.S. Constitution, violating due process under Article I, Sections 1, 9 and 11 of the Pennsylvania Constitution, unjust enrichment/disgorgement through creation of a common fraud and a preliminary and permanent injunction to stay and set aside execution and open all judgments under the All Writs Act, the plaintiff is seeking a long list of reliefs:
• An order certifying the Class and the Sub-Class and appointing plaintiff as representative of the Class, and appointing the law firm representing plaintiff as counsel for the Class and the Sub-Class;
• A writ issuing preliminary injunctive relief staying all execution proceedings against Class Members pending resolution of this matter;
• A declaration that Philadelphia Code, Sections 1-109(1), 1-109(2), 1-109(3), and/or Philadelphia Administrative Code, Section A-601.1 (Title 4) is invalid on its face and as applied by the Defendants pursuant to 28 U.S.C. Section 2201;
• A declaration that Philadelphia Code, Sections 1-109(1), 1-109(2), 1-109(3), and/or Philadelphia Administrative Code, Section A-601.1 (Title 4) be revised to reflect a reasonable cap that does not deprive property owners of their entire property or otherwise infringe on the rights granted individuals pursuant to the U.S. Constitution and the Pennsylvania Constitution;
• A writ issuing permanent injunctive relief setting aside all execution proceedings against Class Members;
• A writ issuing permanent injunctive relief opening all judgments entered against Class Members;
• An order requiring a refund to the Class Members of all fines, fees and charges collected by defendants on account of the Code Provisions;
• An order requiring disgorgement of all of the ill-gotten gains derived by the defendants from its aforementioned misconduct into a common fund for the benefit of plaintiff and the Class Members;
• Pre-judgement interest at the maximum rate permitted by applicable law, attorney’s fees pursuant to applicable law, contract, and/or equitable principles; such other relief as deemed just and proper, plus a trial by jury.
The plaintiff is represented by Matthew P. Faranda-Diedrich and Joshua Upin of Royer Cooper Cohen Braunfeld, in Philadelphia.
The defendants have not yet secured legal counsel.
U.S. District Court for the Eastern District of Pennsylvania case 2:20-cv-04004
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com