UPMC sues Pittsburgh, Mayor Luke Ravenstahl

Complaint argues Ravenstahl 'initiated a campaign to target and damage' health care giant

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Suggesting that it has been singled out, publicly scolded, taken for granted and invited to join a city task force only to be hit up for money, UPMC on Friday sued the city of Pittsburgh and Mayor Luke Ravenstahl in federal court, claiming its civil rights have been violated and demanding recompense.

The health care giant filed a 16-page complaint responding to a March 20 lawsuit by the city and accompanying news conference by Mr. Ravenstahl. The city's lawsuit questioned UPMC's tax-exempt status and sought to compel payment of six years of back payroll taxes. The mayor justified the challenge based on what he said were the system's vast workforce, nearly $10 billion in operating revenue and international scope.

The city and mayor "have initiated a campaign to target and damage UPMC under the pretext of a state court civil action ... and by other means," according to UPMC's complaint.

Attorney William Pietragallo, representing UPMC, wrote in the complaint that the city's lawsuit was "announced and instituted in total disregard of state and local law and in gross violation of the constitutional rights of UPMC and its supported organizations, including their right to equal protection under the law, and procedural and substantive due process, as well as in contravention of Congress' power to regulate interstate commerce."

But can a health care titan be a victim of unconstitutional bullying?

"My understanding is that the Constitution applies to any person, and a person would include a corporation," said Adrian Roe, a civil rights attorney unconnected to the city or UPMC.

According to UPMC's lawsuit, the city has not challenged the status of other large nonprofits institutions, including insurer Highmark, West Penn Allegheny Health System or the universities.

"We don't believe that we violated their due process rights or their equal protection rights," said city solicitor Dan Regan, adding that a point-by-point defense would have to wait until city lawyers and outside counsel had studied the allegations fully. He said the lawsuit wasn't a complete surprise. "We definitely felt like ... it was possible they would take this action."

"The [city's] argument's going to be, I would think, that a municipality can reform one step at a time," and isn't obligated to act against every large nonprofit at the same time, said Mr. Roe. Under federal law's "rational basis test," the city needs only to show that its action wasn't "utterly and completely illogical," he said.

The mayor in December wrote to UPMC president Jeff Romoff, inviting him to join a city task force on nonprofit community support, according to UPMC's complaint. And as recently as March 1, when Mr. Ravenstahl abandoned his re-election bid, the mayor cited the Pittsburgh Promise scholarship program -- funded largely by UPMC -- as one of his administration's biggest accomplishments.

Even then, according to UPMC's chronology, the city was plotting. Exhibit A: The March 5 "privileged and confidential" letter the administration later released, describing a months-long probe of UPMC's status, which the city "intentionally distributed and posted ... for the unlawful purpose of defaming and demeaning UPMC," the complaint said.

The complaint said that in suing UPMC, the city ignored procedures in the Local Taxpayer Bill of Rights Act and the Local Tax Enabling Act.

"Rather than follow the law, a new, illegal process was concocted to be applied only to UPMC," said UPMC spokesman Paul Wood, in a statement posted online.

UPMC demands a monetary judgment against the city. By late Friday, four attorneys from Pietragallo, Bosick & Gordon had entered appearances on behalf of the system. W. Thomas McGough Jr., a UPMC senior vice president and its chief legal officer, had not entered an appearance.

Also Friday, UPMC moved the city's lawsuit from state to federal court. Mr. Regan said the city may file motions to move it back.

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Rich Lord: rlord@post-gazette.com, 412-263-1542 or Twitter @richelord. Bill Toland contributed.


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