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Doherty Lawsuit

Doherty Lawsuit

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Paul A. Kelly, Jr., Esquire Attorney ID No.

50248 City of Scranton Municipal Building 340 North Washington Avenue Scranton, PA 18503 Phone: (570) 348-4105 Facsimile: (570) 348-4263

CHRISTOPHER A. DOHERTY, Mayor of the City of Scranton, 340 North Washington Avenue Scranton, Pennsylvania 18503, Plaintiff

IN THE COURT OF COMMON PLEAS OFLACKAWANNACDUNTY

v.
JANET EVANS, Scranton City Councilwoman, FRANK JDYCE, Scranton City Councilman, PATRICK ROGAN, Scranton City Councilman, JDHN LOSCDMBE, Scranton City Councilman, All in their Official Capacities, 340 North Washington Avenue Scranton, Pennsylvania 18503, And .SCRANTON CITY CDUNCIL, 340 North Washington Avenue Scranton, Pennsylvania 18503 Defendants NDTICE TO DEFEND You have been sued in Court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned judgment may be entered against you by the Court without further notice for money claimed in the Complaint or any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TD YDUR LAWYER AT .oNCE. IF YDU DO NDT HA VB A LAWYER DR CANNDT AFFORD .oNE, GO TD OR TELEPHDNE THE .oFFICES SET FDRTH BELDW TO FIND .oUT WHERE YDU CAN GET LEGAL HELP.

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Northern Penn Legal Services Suite 200, Scranton Electric Building 507 Linden Street Scranton, Pennsylvania 18503 (570) 342-0184

Lawyer Referral Service Lackawanna Bar Association 338 North Washington Avenue, 3rd Floor Scranton, Pennsylvania 18503 (570) 969-9600

Date

Paul A. Kelly, Jr., Esquire Attorney ill No. 50248 City of Scranton Municipal Building 340 North Washington Avenue Scranton, PA 18503 Phone: (570) 348-4105 Facsimile: (570) 348-4263

CHRlSTOPHER A. DOHERTY, Mayor of the City of Scranton, 340 North Washington Avenue Scranton, Pennsylvania 18503, Plaintiff

IN THE COURT OF COMMON PLEAS OF LACKAWANNA COUNTY

v.
JANET EV ANS, Scranton City Councilwoman, FRANK JOYCE, Scranton CityCouncilman, PATRICK ROGAN, Scranton City Councilman, JOHN LOSCOMBE, Scranton City Councilman, All in their Official Capacities, 340 North Washington Avenue Scranton, Pennsylvania 18503, And SCRANTON CITY COUNCIL, 340 North Washington Avenue Scranton, Pennsylvania 18503 Defendants COMPLAINT AND NOW comes the Plaintiff, Christopher A. Doherty, in his capacity as the Mayor of the City of Scranton, by and through his counsel, Paul A. Kelly, Jr., Esquire, and avers as follows: THE PARTIES 1. Plaintiffis Christopher A. Doherty, the Mayor of the City of Scranton, an adult individual

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with a business address of340 North Washington Avenue, Scranton, Lackawanna County, Pennsylvania 18503.

2. Defendant is Janet Evans, President of Scranton City Council, an adult individual with a .business address of 340 North Washington Avenue, Scranton, Lackawanna County, Pennsylvania 18503. 3. Defendant is Frank Joyce, Vice President of Scranton City Council, an adult individual with a business address of340 North Washington Avenue, Scranton, Lackawanna County, Pennsylvania 18503. 4. Defendant is Patrick Rogan, Council Member of Scranton City Council, an adult individual with a business address of340 North Washington Avenue, Scranton, Lackawanna County, Pennsylvania 18503. 5. Defendant is John Loscombe, Council Member of Scranton City Council, an adult individual with a business address of340 North Washington Avenue, Scranton, Lackawanna County, Pennsylvania 18503. 6. Defendant is Scranton City Council, the legislative branch of city government as defined by the City of Scranton's Home Rule Charter and it consists ofa five member panel. 7. The fifth Council member, Robert E. McGoff, Jr., is not named a Defendant as he voted to accept the Mayor's Budget, voted negative in Council's override of the Mayor's veto on the budget, and moved to introduce the Revised Recovery Plan for councilmanic vote. JURISDICTION AND VENUE 8. Jurisdiction in the Court exists pursuant to 42 Pa.C.S.A. §931. 9. Pursuant to 42 Pa.C.S.A. §931 (c), _venue in this Court is proper in that the actions complained of herein have occurred in Lackawanna County, and both Plaintiff and Defendants maintain places of business within Lackawanna County.

10. Pursuant to Pennsylvania Rule of Civil Procedure 1092( c), venue in this Court is proper in that the actions complained of herein have occurred in Lackawanna County and both Plaintiffs and Defendants maintain places of business within Lackawanna County. FACTUAL AVERMENTS 11. The City of Scranton, a City of the Second Class A, is a political subdivision of the Commonwealth of Pennsylvania and governed by a Home Rule Charter ("Charter") adopted in 1974. A true and correct copy of the Charter is attached hereto and incorporated herein as Exhibit "A". 12. In strict compliance with Section 902 of the Charter, Mayor Doherty submitted a budget to City Council on November 15,2011. A copy of the Mayor's Budget (hereinafter referred to as "Mayor's Budget") is attached hereto and incorporated herein as Exhibit

"B".
13. As part of the Mayor's Budget, a real estate tax increase of twenty-nine percent (29%) was included to guarantee that the City would have adequate revenue to cover its expenditures for calendar year 2012. 14. The Mayor's Budget (which included the real estate tax increase) was calculated based on historical and empirical data by the City Business Administrator. 15. The Business Administrator, in compliance with the Financially Distressed Municipalities Act, 53 P.S. §1l701.101, et seq. ("Act 47"), sought and received input and approval from the Commonwealth of Pennsylvania Department of Economic and Community Development (hereinafter referred to as "DeED") and the City's Act 47 coordinator, the Pennsylvania Economy League (hereinafter referred to as "PEL"), prior to submitting the Mayor's Budget to Council on November IS, 2011.

16. On December 13,2011, Defendants, as members of City Council's "supermajority", exercised their power under Section 905 of the Charter and presented their amendments to the Mayor's Budget. A copy of Council's proposed amendments to the Mayor's Budget are attached hereto and incorporated herein as Exhibit "C-1" and "C-2". 17. Included in these proposed amendments, City Council proposed a massive tax decrease and submitted its own version of funding the City'S 2012 Operating Budget, relying heavily on borrowing monies from the lending community. 18. On December 21,2011, the Mayor vetoed Council's amendments pursuant to Section 609(4) of the Charter. A copy of the Mayor's veto message is attached hereto and incorporated herein Exhibit "D". 19. At its December 27, 2011 meeting, City Council voted to override the Mayor's veto by a vote of four (4) to one (1), with Mr. McGoff voting no. 20. As a result of the override, Council's amendments became the 2012 Operating Budget for the City of Scranton (hereinafter referred to as "Council's Budget"). A copy of the override of the Mayor's veto is attached hereto and incorporated herein as Exhibit "E". 21. As a result of Council's overriding the Mayor's veto, Council's Budget became law pursuant to Section 905 of the Home Rule Charter. A copy of Council's Budget is attached hereto and incorporated herein as Exhibit "F". 22. An integral part of Council's Budget relies on borrowing for Unfunded Debt in order to balance its 2012 Operating Budget. See page 25 of Exhibit "F". 23. Pursuant to Council's Budget, on January 26,2012 the Honorable Jerome Cheslock, S.J., entered an Order authorizing the City to seek Nine Million Eight Hundred Fifty
I

Thousand ($9,850,000.00) Dollars in Unfunded Debt. A copy of Judge Cheslock's Order is attached hereto and incorporated herein as Exhibit "G". 24. Inunediately after procurement of Judge Cheslock's Order, City Business Administrator Ryan McGowan began seeking lenders to fund the $9,850,000.00. 25. As a result of Business Administrator McGowan's efforts, the only lending institution which agreed to process a loan was M&T Bank. 26. Throughout the loan application process with M&T Bank (hereinafter referred to as ''the Bank"), the Bank advised the Business Administrator that a mandatory contingency on loan approval is the passage of a Revised Recovery Plan for the City of Scranton. 27. In an effort to secure the Unfunded Debt, City administration officials met with Defendants on several occasions in an attempt to create a Revised Recovery Plan which would be acceptable to the Bank. 28. Despite said meetings, Defendants unilaterally ceased communication with administration officials. 29. In an effort to comply with the Bank's mandatory contingency, City administration officials, the City's Act 47 Coordinator (PEL) and DCED expended countless hours in developing a Revised Recovery Plan based on historical and empirical data. 30. As part of the Revised Recovery Plan, the Business Administrator, PEL, and DCED incorporated several requests made by Defendants in developing the final version. 31. On May 24,2012, the administration forwarded legislation to approve the Revised Recovery Plan to City Council. A copy of the proposed ordinance and a copy of the attached Revised Recovery Plan are attached hereto and incorporated herein as Exhibits

"_H", "I" and "J-l" respectively.

32. At its regularly scheduled weekly meeting on June 7, 2012, Councilman McGoff sought councilmanic approval to introduce the legislation. 33. Although Mr. McGoff received a second to introduce the legislation, the motion failed as a result of a deadlocked 2-2 vote. A copy of the pertinent June 7, 2012 minutes is attached hereto and incorporated herein as Exhibit "J-2". 34. Immediately after Council's June 7, 2012 meeting whereby introduction of the legislation to approve the Revised Recovery Plan failed, the Bank notified Business Administrator McGowan that it no longer would participate in making the loan for Unfunded Debt. 35. The Business Administrator's efforts to procure interest from the lending community

have been unsuccessful due to the fact that the City does not have a Revised Recovery Plan. 36. Defendants have a duty to take the necessary action to follow its 2012 Operating Budget. 37. To date, Defendants have refused to take any legislative action on the passage and/or amendment to a Revised Recovery Plan. 38. As a result of Defendants' refusal to act, the City is now in a position whereby it cannot procure financing for the Unfunded Debt, a necessary component of Defendants' Operating Budget pursuant to Section 905 of the Home Rule Charter. 39. Further, as a result of Defendants' refusal to act, the City is in dire fmancial straits and has amassed accounts payable in excess of Three and A Half Million ($3,500,000.00) Dollars as of June 20, 2012, and still cannot fund the debts as requested in its Petition for Permission to Fund Unfunded Debt. 40. As a direct result of the City's inability to meet its financial obligations, the City has been notified of the following:

a Blue CrosslBlue Shield of Northeastern Pennsylvania has notified the City that it
will terminate its Administrative Services contract with the City for nonpayment. As a result, the City's employees will be billed for any health care services . .These costs will passed along to the City, as it is required to provide health care coverage to its employees, eligible retirees, and their eligible spouses and dependents. A copy of Blue Cross' letter advising of same is attached hereto and incorporated herein as Exhibit "K"; b. Dunmore Oil, the provider of gasoline and diesel fuel for the City's fleet of Department of Public Works vehicles, Scranton Fire Department vehicles, and Police Department vehicles has advised that unless payment is made it will no longer provide goods and services to the City, which will result in the grounding of said fleets, seriously imperiling the health, safety and welfare of all City residents. A copy of Dunmore Oil's letter advising of same is attached hereto and incorporated herein as Exhibit "L"; c. Keystone Landfill has advised the Business Administrator's Office that the City

has continuously been delinquent in its payment for landfill services, further Keystone advises that if a delinquency pattern persists the City will be placed on a prepayment schedule. In the event the City is unable to prepay for landfill services, a health risk catastrophe will ensue as garbage will pile up in the streets, thus .creating a public emergency. A copy of correspondence from Keystone Landfill is attached hereto and incorporated herein as Exhibit "M"; d. Pennsylvania American Water has advised that unless payment in full is received from the City, it will shut off water, which will result in the following:

I. 11. 111.

City Hall from being operational; City Police Headquarters from being operational; Fire Bureau Headquarters and all firehouses located throughout the City from being operational

IV.

Department of Public. Works Building from being operational; and

v. All parks and recreational facilities, including Weston Field and Nay Aug Park, from being operational. COUNT I SPECIAL RELIEF CHRISTOPHER A. DOHERTY, PLAINTIFF, V. JANET EVANS, JOHN LOSCO:MBE, FRANK JOYCE, PATRICK ROGAN, AND SCRANTON CITY COUNCIL, DEFENDANTS

41. Paragraphs 1 through 40 above are hereby incorporated as though the same have been set forth herein at length. 42: Actions seeking special relief are governed by Pennsylvania Rule of Civil Procedure 1531. 43. Based upon the foregoing, Plaintiff believes and therefore avers that a Permanent Injunction is necessary to prevent immediate irreparable harm that cannot be adequately compensated by damages. See Summit Town Centre, Inc. v. Shoe Show of Rockey

Mount, Inc. 573 Pa 637, 828 A.2d 995 (Fa 2003). 44. Immediate and irreparable harm will be sustained by the City as stated in Pa.R.C.P. 1531 and case law cited herein as the City's daily basic operating functions will be seriously compromised and/or terminated, thus placing the City's residents in immediate peril and undermining their health, safety and public welfare.

45. Defendants' refusal to act has seriously jeopardized the public's health, safety and welfare, resulting in immediate and irreparable harm. WHEREFORE, Plaintiff respectfully requests that this Honorable Court enter an Order granting the City's request for Special Relief, by implementing the Revised Recovery Plan prepared by the City administration and approved by the Act 47 Coordinator and DeED. COUNT II ACTION IN MANDAMUS CHRISTOPHER A. DOHERTY, PLAINTIFF V. JANET EVANS, JOHN LOSCOMBE. FRANK JOYCE, PATRICK ROGAN AND SCRANTON CITY COUNCIL. DEFENDANTS

46. Paragraphs 1 through 45 above are hereby incorporated as though the same have been set forth herein at length. 47. The elements of a Complaint seeking an action in mandamus are governed by Pa.R.C.P. 1095, which states: The plaintiff shall set forth in the complaint: (1) the name and description of the plaintiff and defendant; (2) the facts upon which plaintiff relies for the relief sought; (3) the act or duty the defendant is required to perform and the refusal to perform it; (4) the interest of the plaintiff in the result; (5) the damages, if any; (6) the want of any other adequate remedy at law; (7) a prayer for the entry ofa judgment against the defendant commanding that the defendant perform the act or duty required to be performed and for damages, if any, and costs.

48. A Plaintiff is entitled to mandamus where there is a clear legal right to the plaintiff, a corresponding duty of the defendant, and there is no other adequate remedy. Equitable Gas Co. v. City of Pittsburgh, 488 A.2d 270 (pa. 1985); Council of the City of Philadelphia v. Street, 856 A.2d 893 (pa. Commw. Ct. 2004). 49. The interest of Plaintiff in the case sub judice is to protect and advance the public's health, safety and welfare and to ensure that the City's financial status in the lending community is not severely prejudiced. 50. In the event Defendants continue to refuse to act, the City of Scranton will incur catastrophic damages, to wit, the public's health, safety and welfare will be seriously imperiled, the City may face the devastating potential of filing for Chapter 9 Bankruptcy, and the City's future ability to procure funds in the lending community and/or bond market will be severely impaired. 51. Plaintiff has no other adequate remedy at law. WHEREFORE, Plaintiff respectfully requests this Honorable Court to enter an Order compelling Defendants to take immediate action regarding the passage of the Revised Recovery Plan which was presented to City Council on May 24,2012.

Respectfully Submitted,

VERIFICATION T, Christopher A. Doherty, duly elected Mayor of the City of Scranton, hereby state, subject to the penalties contained in 18 Pa.C.S. §4904 related to unsworn falsification to authorities, that I am authorized to make this verification on behalf of the City of Scranton, and that the facts set forth in the foregoing are true and correct to the best of my knowledge, information and belief.

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Christopher A. Doherty, Mayor

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