McGuireWoods recently obtained a favorable ruling in a lawsuit brought on behalf of two coal producers that challenged several ordinances enacted by a municipality in western Pennsylvania.
The municipality enacted an ordinance that declared corporations and other limited liability entities would not be considered “persons” within the municipality, and therefore would not have the constitutional and other legal rights usually afforded to corporations. The municipality also enacted an ordinance that prohibited corporations from engaging in any mining activity within the municipality. If enforced, this ordinance would have prohibited the plaintiffs from mining a large coal reserve located partially within the municipality.
The municipality enacted another ordinance that permitted the municipality to require any corporation to identify all of its related entities, and then identify every instance in which the corporation and its related entities had actually violated, or were merely alleged to have violated, any law. If a corporation or any of its affiliates had committed three or more actual or alleged violations of law over the last 20 years, the ordinance purported to ban the corporation from doing business within the municipality.
McGuireWoods prepared and filed a complaint against the municipality that asserted numerous constitutional claims, including claims for violation of the contracts clause, violation of the commerce clause, and a takings claim. The complaint also sought a declaration that the ordinances were unconstitutional and unenforceable. The complaint asserted that the anti-mining ordinance was preempted by state law that placed exclusive jurisdiction over mining operations in the hands of statewide agency.
The municipality responded to the complaint by filing a motion to dismiss, arguing that the plaintiffs lacked standing to challenge the ordinances because one of the ordinances provided that these corporate entities were not “persons” who possessed constitutional rights and therefore could not sue.
McGuireWoods successfully defeated the motion to dismiss, then filed a motion for judgment on the pleadings. The court granted the motion for judgment on the pleadings in its entirety, and declared that the challenged ordinances were void and unenforceable. The team included partner Len Marsico; associates Kevin Batik and Matthew Monsour; and paralegal Anne Muhl (all Complex Commercial Litigation, Pittsburgh).