U.S. District Judge Joy Flowers Conti today ruled that the city of Pittsburgh's challenge to UPMC's tax exemption should be heard in common pleas court, not in federal court.
UPMC had moved the case, originally filed by the city in the Allegheny County Court of Common Pleas, to federal court. The hospital system argued that its constitutional rights were at risk because the city was violating due process and singling it out because of its international reach.
The city countered that UPMC's exemption was clearly governed by state law.
"UPMC is currently subject to the exemption that it seeks to challenge, which makes no distinction among entities that conduct business both in and outside the state," Judge Conti wrote. "Indeed, the payroll tax at issue in the present case actually imposes a burden on those local entities that employ people within the City by requiring payment of the payroll tax."
The judge remanded the case to common pleas court and then closed the federal case.
The decision does not affect UPMC's related but separate federal lawsuit against the city, the mayor and other entities accusing them of violating its civil rights.
Rich Lord: email@example.com, 412-263-1542 and on Twitter: @richelord.