Pittsburgh, PA

The Legal Intelligencer

(by Michael Korns and Anna Hosack)

Last spring, the Pennsylvania Supreme Court addressed the question of who is entitled to standing in matters before a municipal zoning hearing board, and more importantly, who has standing to file an appeal from a board decision.  In South Bethlehem Assocs., LP v. Zoning Hearing Bd. of Bethlehem Twp., 294 A.3d 441 (Pa. 2023), the Pennsylvania Supreme Court held in a three-two decision that while the Municipalities Planning Code, 53 P.S. § 10101 et seq., (the “MPC”), allows the Board wide latitude to grant party status, a grant of standing by the Board does not automatically convey appellate rights absent a finding that the party is entitled to judicial review under the Local Agency Law, 2 Pa.C.S. § 105 et seq., only if they qualify under the “aggrieved party” standard, which requires that they had suffered a harm to an interest that the law is intended to protect.  However, this was a narrow decision, and the dissenters would allow any grant of party status by the Board to also grant appellate standing.  The result would be a dramatic relaxation of appellate standing requirements in zoning hearing board cases.

In South Bethlehem Assocs., the Applicant, a hotel owner, applied to the Zoning Hearing Board of Bethlehem Township (“ZHB”) and requested a dimensional variance.  At the public hearing before the ZHB, counsel for a business competitor of the Applicant appeared and claimed party status by signing in on the provided form as an objector.  The Applicant objected to the Objector’s participation because the Objector’s hotel was outside of the four-hundred-foot radius required for formal notice of the hearing.  The Applicant argued that the Objector was only appearing as a business competitor to oppose the construction of a nearby hotel and therefore the Objector lacked standing to oppose the requested variance.

In ruling on the objection, the ZHB relied upon an opinion of its Solicitor claiming that the Objector became a party of record when its counsel entered his appearance on the objector sheet.  Notably, the Solicitor stated that per the MPC, even if the objector’s property was on the other side of the Township, he could still be a party of record if so designated by the Board.  The Objector did not call any witnesses but did cross-examine the Applicant’s witnesses and provide oral argument in opposition to the variance at the close of the hearing.  The ZHB ultimately issued a unanimous written decision granting the requested variance.

Following the grant of the variance, the Objector appealed the decision to the Court of Common Pleas.  The Applicant intervened in the matter and argued that the Objector lacked standing.  The trial court concluded that the Objector had standing to appeal, as it had timely appeared before the ZHB as an objector and opposed the decision of the ZHB.  However, the trial court also affirmed the Board’s decision on the merits.  The Objector appealed to the Commonwealth Court, which affirmed the trial court’s order on the grounds Objector lacked standing, as the only “aggrievement” it could show was that it would suffer business competition.  The Commonwealth Court reasoned that zoning appeals may not be utilized solely as a method to deter free competition.

The Pennsylvania Supreme Court granted allocator and limited its review to whether the Commonwealth Court erred in holding that the Objector lacked standing to seek judicial review.  At the local zoning hearing board level, the MPC grants the board significantly wider latitude for standing than in most legal proceedings.  Section 908(3) of the MPC states: “The parties to the [zoning board] hearing shall be the municipality, any person affected by the application who has made timely appearance of record before the board, and any other person including civic or community organizations permitted to appear by the board.  The board shall have power to require that all persons who wish to be considered parties enter appearances in writing on forms provided by the board for that purpose.” 53 P.S. § 10908(3) (emphasis added).  The majority noted that this “any other person” language is quite broad.  What, if any limitations on the Board’s discretion should be under this standard were not before the Court.  The Court would only decide if the ZHB could grant standing for appellate review.

In finding that the local standard and the appellate standard could differ, the Court reasoned that a policy goal of the broader MPC standard is to allow for a range of views for and against the relief sought without regard to aggrievement, so as to fully inform the board on the merits of the proposed variance.  Alternatively, a policy goal could have been to avoid the need for mini hearings on aggrievement causing delays before local zoning hearing boards.  Either way, the Majority found that there are legitimate rationales for having a local standard that is more lenient than the appellate standard.

However, the Court reasoned that the legislature’s intent could not be to do away with the need for aggrievement as a predicate to an appeal to a court of law, whose jurisprudential interest and procedures are not identical to those of a local administrative body.  The Court noted that standing exists as a jurisprudential doctrine to protect the courts and the public from the burden of plaintiffs who have no legally enforceable interest affected by the matter.  The Court acknowledged that the Objector’s interest in preventing the Applicant’s hotel two blocks away is not an interest the law recognizes as enforceable in court.  Public policy protects market competition, not competitors from said competition.  The Court held that it remains a valid policy objective to prevent the zoning appeals process from being misused for the sole purpose of hindering market competition.

It was undisputed that the Objector’s sole source of impact, and entire motive for its participation in the case, was to oppose a variance that would have allowed a competitor to operate.  Therefore, the majority found that the Objector did not have standing to appeal the ZHB’s decision.

Given that this was a three-two decision, it is notable that the dissent advocates for a radical change in Pennsylvania appellate standing in cases of this type.  Notably, the Dissent authored by Justin Donahue and joined by Justice Wecht asserted that a party sufficiently establishes that they have party standing automatically by grant of party status before a ZHB where the party is aggrieved by an unfavorable ruling by the board.  The dissent argues that the question of standing for judicial review requires only two conditions be met (1) that the Board properly allowed Appellant to appear and participate at the hearing; and (2) Appellant did not prevail before the Board.

Should this position become the majority position, the standard to establish standing for appellate review of zoning hearing board matters will be dramatically decreased.  Not only could this significantly increase costs for municipalities, but it would also frustrate local zoning goals, policies, and initiatives.  Furthermore, a technical reading of the MPC shows that Section 908(3) of the MPC only applies to zoning hearing boards, not Municipal governing bodies, and therefore municipal conditional use hearings, which otherwise apply very similar standards and procedures as ZHB special exception hearings, would provide radically different appellate rights, further adding complexity to local land use policies and incentivizing municipalities to minimize use of their zoning hearing board.

Michael T. Korns is senior counsel at Babst Calland Clements and Zomnir, P.C. and focuses his practice primarily on municipal permitting, planning, subdivision and land use, and zoning issues.  He is also a member of the firm’s Energy and Natural Resources group.  Contact him at 412-394-6440 or mkorns@babstcalland.com.

Anna R. Hosack is an associate at the firm and focuses her practice primarily on municipal and land use law.  Contact her at 412-394-5406 or ahosack@babstcalland.com.

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Reprinted with permission from the February 12, 2024 edition of The Legal Intelligencer© 2024 ALM Media Properties, LLC. All rights reserved.