Pittsburgh wants UPMC lawsuit aired in state court

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UPMC benefits from taxes paid by others, and the fight over its nonprofit status and tax liability should be heard in state court, the city of Pittsburgh argued in a legal motion filed Monday.

The filing came in the city's lawsuit challenging UPMC's tax exemption and seeking six years worth of payroll taxes. The health system last month transferred the case from state to federal court.

"Any sort of new, discriminatory tax scheme would certainly result in substantially less money -- not more -- that the City would receive and, while satisfying to some, would be bad public policy resulting in many unintended consequences," UPMC spokesman Paul Wood wrote in response to questions.

The city wants a judge to find that UPMC is not an "institution of purely public charity" under state law. UPMC has contended in court filings that the effort raises federal, constitutional issues.

Not so, wrote attorney E. J. Strassburger, retained by the city to handle the litigation with UPMC. He wrote that the city's argument is rooted entirely in state law, and "UPMC has attempted to remove this case based on [its] affirmative defenses, and weak ones at that."

He went on to write that UPMC is "one of the greatest beneficiaries of the taxes paid by other local enterprises," because its employees rely on the city to get to, and complete, their jobs.

"UPMC provides far, far more in charity care and other community benefits to easily offset the public services used and the tax exemptions that have been legally and appropriately extended to UPMC's hospitals," Mr. Wood wrote.

UPMC separately sued the city in federal court, claiming that by singling it out, the city violated UPMC's civil rights.

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Rich Lord: rlord@post-gazette.com or 412-263-1542.


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