The Pennsylvania Supreme Court has agreed to take up a case that has left SEPTA outside the purview of the city of Philadelphia’s anti-discrimination ordinances.

The court granted allocatur in SEPTA v. City of Philadelphia nearly two years after an en banc panel of the Commonwealth Court ruled the regional transportation authority was a state agency that fell under the Pennsylvania Human Relations Act rather than the Philadelphia Commission on Human Relations.

The Supreme Court will address whether Philadelphia has the power to protect its residents from discrimination by SEPTA given the state discrimination law expressly states that nothing within it should be deemed to supersede any municipal anti-discrimination measures, according to the allocatur grant issued April 11.

The city also asked the court to address whether the Commission on Human Relations, rather than the Commonwealth Court, should have first addressed SEPTA’s challenges to the commission’s jurisdiction.

The Commonwealth Court ruled 6-1 in favor of SEPTA in April 2011.

"It is true that Section 7 of the [Pennsylvania Human Relations] Act allows the [Pennsylvania Human Relations Commission (PHRC)] to share its workload with local agencies, since the local agencies have sufficient expertise to investigate discrimination complaints," Judge Johnny J. Butler said for the majority. "However, the act does not expand a local agency’s geographical jurisdiction to include cases outside of its geographic boundaries, and it does not expand the subject-matter jurisdiction of local agencies."

Butler said the Southeastern Pennsylvania Transportation Authority is a state agency for purposes of discrimination cases covered by the Pennsylvania Human Relations Act.

He said the PHRC’s enabling legislation gives it, and not the Philadelphia Commission on Human Relations, jurisdiction over state agencies when it comes to discrimination. There is no comparable grant of explicit jurisdiction for the Philadelphia Commission on Human Relations, which enforces civil-rights regulation in the city, Butler said. And if there were such a grant of power, it would conflict with the PHRC’s enabling statute, Butler said.

Butler’s opinion reversed a trial court decision sustaining the city commission’s preliminary objection and denying a SEPTA request for declaratory relief.

Butler also reversed the trial court’s dismissal of SEPTA’s complaint on the basis that it failed to exhaust all of its administrative remedies. While Butler said the state’s courts have repeatedly refrained from intervening in jurisdictional questions until administrative remedies are exhausted, that doesn’t apply in this case.

In "situations where jurisdiction is clearly given to the PHRC over commonwealth agencies like SEPTA, there is no need to litigate discrimination cases before the [Philadelphia] commission as a means of exhausting administrative remedies before a determination as to jurisdiction may be made," Butler said. "Here, the issue of jurisdiction is not unclear. The act gives the PHRC jurisdiction over SEPTA, thereby rendering it appropriate for this court to ‘interfere’ with the administrative action."

Judge Dan Pellegrini, who has since become president judge of the court, wrote a lengthy dissent in response to Butler’s opinion.

Pellegrini dissented as to the majority’s finding that SEPTA is a state agency under the facts of this case.

Even though SEPTA’s enabling statute says that it "’exercise[s] the public powers of the commonwealth as an agency and instrumentality thereof,’" Pellegrini said, "that does not make it part of the commonwealth for all purposes, or for that matter, any purpose."

Pellegrini said that language simply means SEPTA is a separate and distinct entity and not part of the governmental entity that formed it. He further argued that, even if SEPTA were considered a state agency, the Philadelphia commission still has jurisdiction over it.

Pellegrini said to hold otherwise would frustrate the General Assembly’s legislative scheme of giving concurrent jurisdiction to both state and local human relations commissions. On the other hand, if SEPTA is found to fall under the Philadelphia commission’s jurisdiction, its mission of providing public transportation would not be frustrated, he said.

The reason for the delay in granting allocatur was that the Supreme Court had held the petition pending its decision in Goldman v. SEPTA, which dealt with whether SEPTA was a state agency immune from Federal Employers Liability Act claims in state court.

In December, the high court ruled SEPTA is not an arm of the state and therefore does not have 11th Amendment sovereign immunity from railroad workers’ state claims under FELA.

Gino Benedetti of Dilworth Paxson represents SEPTA in the discrimination cases.

Benedetti said Goldman and SEPTA are "apples and oranges."

"It’s the reach of a federal statute over a commonwealth agency as opposed to a city ordinance," he said, noting Goldman dealt with 11th Amendment immunity claims that are not at issue in his case.

Benedetti said it is "pretty well settled" law that local ordinances cannot apply to commonwealth agencies, and SEPTA is a state agency in this case. He said the city’s laws go further in their protections than do the state or federal anti-discrimination laws.

"SEPTA operates under 200 municipalities," former SEPTA General Counsel Nicholas Staffieri said when the Commonwealth Court ruled. "We cannot have all these municipalities trying to exercise some kind of control over SEPTA."

Eleanor N. Ewing of the Philadelphia Law Department represents the Philadelphia commission. She did not return a call for comment.

The case stems from seven separate discrimination complaints filed against SEPTA by both employees and passengers between 2007 and 2009, claiming violations of the Philadelphia Fair Practices Ordinance. SEPTA claimed the Philadelphia commission lacked jurisdiction. The Philadelphia commission denied SEPTA’s dismissal requests and SEPTA sought a declaratory judgment from the Philadelphia Court of Common Pleas alleging the ordinance could not be enforced against SEPTA. The trial court found in favor of the Philadelphia commission.

Gina Passarella can be contacted at 215-557-2494 or at gpassarella@alm.com. Follow her on Twitter @GPassarellaTLI.