In Darrell Clarke’s push to support neighborhood groups in developer lawsuits, an unlikely ally emerges

City Council President Darrell L. Clarke won a surprising new ally in his drive to secure municipal legal protections for neighborhood groups.

The Building Industry Association (BIA), which represents residential developers in Philadelphia, initially opposed the idea, arguing that it would increase development costs by empowering nuisance lawsuits.

But at a City Council hearing Tuesday, BIA president Gary Jonas testified in favor of the bill. He said the trade group had altered its position after Clarke amended the legislation to make clear that it would offer protection only to registered community organizations (RCOs) that are sued by developers for participating in the city-mandated zoning process.

“Indemnifying RCOs against third-party lawsuits makes sense as long as it doesn’t encourage RCOs to use the process to appeal every project to try to prevent reasonable developments,” Jonas said in testimony before council’s Committee on Law and Government.

The amended bill passed the committee unanimously and will now go to the full Council.

The legislation is meant to deter so-called SLAPP suits — “strategic lawsuits against public participation” — in which deep-pocketed interests sue smaller actors to deter them from opposing a project or to punish them for criticism. Neighborhood groups and other local activists often don’t have the resources to fight such actions and can face substantial legal and insurance bills if they are sued.

Neighborhood leaders argue that they should be given some legal protections by the city government against lawsuits from vengeful developers or other businesses — especially given that the city requires community input in the zoning process.

When the city of Philadelphia rewrote its zoning code in 2012, it created a designation for neighborhood groups involved in land use regulations, dubbing them RCOs. The new code required developers going to the Zoning Board of Adjustment to first meet with their designated local organization. But neighborhood activists feared that developers could use legal threats to bully local groups into silence.

“Developers have sued or attempted to sue RCOs fulfilling their responsibilities,” said Catherine Blunt, of the 46th Ward Democratic Committee, which serves as an RCO in part of West Philadelphia. “It is now clear that we are … continually, but unintentionally, placing ourselves and our families in jeopardy.” Members of RCOs can be sued as individuals, putting them at risk of incurring significant legal costs.

The idea has been debated in City Council for years, with members such as former Councilmember Bobby Henon advancing their own proposals to provide a legal shield to neighborhood groups. But the efforts were never enacted, in part because Mayor Jim Kenney’s administration feared large legal costs.

Because almost any group, or even an individual, can declare themselves to be an RCO, the administration worried that some organizations could act in unscrupulous or foolish ways that could invite legal scrutiny — which the taxpayer shouldn’t have to pay for.

The Kenney administration is opposing Clarke’s initiative, too.

“If the city did, with the original language in the legislation, accept the indemnification and defense obligations of RCOs, the legal and financial burdens placed on the city would be significant and potentially extreme,” Rob Dubow, the city’s finance director, and Eleanor Sharpe, director of planning, said in written testimony.

While they allowed that the amendments could ease some concerns, the Kenney administration officials argued that the legislation as written could still be preempted by state law.

They also continued to argue that RCOs are too little regulated to be granted uniform protection. (The BIA made the case for such reform in its testimony.) Clarke himself acknowledged as much after having the bill introduced, noting that individual disgruntled people could declare themselves an RCO despite having no actual constituency.

But any changes will have to wait for the new administration and the next Council president, as Clarke will retire at the end of this session. If his proposal passes before the end of this term, it would be placed on the ballot during the primaries next April for voters to decide on — thus ensuring that his priority is enacted even if he isn’t around to enforce it.

“We require that the RCOs participate in the zoning variance process, [but] we don’t give them any support,” Clarke said at the hearing. “We don’t give them money for fliers. We don’t give them money for the use of space. And, most importantly, we don’t provide any protections in the event that … a particular applicant comes after that particular RCO with some sort of litigation.”