Scholarship dispute goes back to court

The Mayor's Scholarship suit and controversy continued yesterday as the case was re-argued for an unprecedented third time in Commonwealth court. The case was argued in front of a panel of seven judges, also known as en banc. Each side was given approximately 15 minutes to argue its case in front of the court. Michael Churchill, a lawyer for the Public Interest Law Center of Philadelphia, said he was pleased with the results of today's court proceedings. "I think it went quite well," Churchill said. "The court clearly understood what was at stake. They're having difficulty deciding what to do. They gave it serious and thorough attention." University General Counsel Shelley Green and University outside counsel Arthur Makadon were equally enthusiastic about yesterday morning's proceedings. "I thought the argument went well and will wait for the judges to decide," Green said. The dispute over the Mayor's Scholarship agreement between the city and the University has been in litigation for the last three years. According to an agreement signed in 1977, a set number of scholarships are to be awarded to Philadelphia residents by the University in exchange for rent-free land. PILCOP sued the University in 1991, claiming that the 1977 agreement provided for 125 scholarships per year, for a total of 500. The University, however, contends the total should be set at 125. A judge ruled in favor of the University in February 1993, but also stated the University must provide complete support for scholarship recipients, which could not include loans. In December 1993, PILCOP appealed the decision by Common Pleas Court Judge Nelson Diaz. Diaz ruled that PILCOP did not have the proper legal standing in the case. The case was heard again by a three-judge panel in Harrisburg. The Commonwealth court of Pennsylvania moves between Philadelphia, Harrisburg and Pittsburgh. In May 1994, an oral re-argument was held in the Commonwealth court in Philadelphia before seven judges. Thomas Gilhool, the PILCOP lawyer who argued the case yesterday, said the contract between the University and the city made quite clear that 500 scholarships had to be provided by the University to city residents. He also argued that PILCOP, as a third party, had standing in the case because it represents the interests of Philadelphia students. Judge Dan Pellegrini said PILCOP could only litigate for themselves, and not University students. "You can't settle for anyone else but who you represent," Pellegrini said. Gilhool alleged that the University increased the number of scholarships because they had a $12.9 million deficit in 1977 and could not afford to buy more land. Mayor Frank Rizzo took the initiative to get more scholarships due to the University's financial difficulty, he added. Judge Sandra Newman said she researched how the 1977 agreement was handled by the press. She said there was nothing in the press about the quadrupling of the number of Mayor's Scholarships from 125 to 500. And she questioned why past mayors have not been concerned about the issue. President Judge James Colins asked Gilhool if graduate students were eligible for Mayor's Scholarships because the ordinance does not specifically exclude them. Gilhool explained the ambiguity of the agreement in answer to Colins's query. Makadon argued that the City of Philadelphia is the only party who can pursue litigation against the University in this matter. He added that the city has always sided with the University in the suit. And Makadon discussed the publicity surrounding the initial agreement, saying it does not make the "slightest bit of sense" that there was no publicity on the ordinance. "This is a silly argument by the plaintiff's counsel," Makadon said in court. "This ordinance is a commonplace mortgage contract, nothing more, nothing less." During and after the hearing, several judges sided with the University, questioning the ambiguity of the agreement. After Makadon finished his argument, Colins said he "made a very good summation." And, throughout the hearing, Judge Dan Pellegrini insisted that the contract was ambiguous. Gilhool, given the opportunity to rebut Makadon, said the third party beneficiary -- namely, PILCOP --should have standing in the case. "The plaintiffs here are schools concerned with people and children," Gilhool said. Michael Eichert, chief deputy city solicitor and co-counsel with Makadon, said the court must have questions about the suit to be listening to a third re-argument. The court composition has changed since the last re-argument in May. Two judges, Colins and Newman, heard the re-argument for the first time yesterday. Eichert said there was no definite timetable for a decision by the judges. "The decision could take anywhere from a month to a year," Eichert said. Daniel McGinley, president of the Philadelphia Association of School Administrators, said he thinks both sides presented good arguments in court yesterday. "I thought that both sides made excellent presentations of their cases," McGinley said. He added that it is unusual to have a case re-argued three times in Commonwealth court. "It seems to indicate division on how they feel on this matter," McGinley said. "There were questions by the judges that could be interpreted as being favorable to both sides. "The outcome of this case could have profound implications for the students at the University now," McGinley said. "I'm encouraged by the University's move to give full scholarships. I'm glad we personally have intervened in this matter." According to Churchill, Colins was asked to recuse himself from the Mayor's Scholarship case because of his close relationship with the mayor. Colins was also the co-chairperson of the mayor's committee on on riverboat gambling and is on several University alumni committees, Churchill added. Colins' recusal was denied by the court.

Please note All comments are eligible for publication in The Daily Pennsylvanian.