City Government
12:26 pm
Tue July 29, 2014

With Lawsuits Dropped, Peduto Says Negotations Between City, UPMC Ongoing

The aura of tension around Pennsylvania’s largest employer is slowly dissipating, as the city of Pittsburgh announced Friday that it is dropping its lawsuit against UPMC.

The lawsuit, filed in March 2013, charged UPMC with violating state rules related to its nonprofit status, and claimed that UPMC should not be exempt from an estimated $20 million in payroll and property taxes a year. An Allegheny County Court of Common Pleas judge ruled in June that the city could not go after UPMC as a whole, because its more than 62,000 employees actually work for 37 subsidiaries, not for the parent company UPMC. The city declined to appeal the decision.

“UPMC in turn had a federal lawsuit against the previous administration and two other … parties,” Pittsburgh Mayor Bill Peduto said Tuesday, referring to UPMC’s counter-suit, which alleged that the city lawsuit violated the health care giant’s constitutional rights. UPMC on Monday informed the city that it was dropping its counter-suit.

“Negotiating for the bigger things with guns pointed against each other’s heads didn’t seem like the most prudent way to go about it,” Peduto said.

Peduto said the recent actions free both parties up to negotiate on how UPMC can increase its financial contribution to the city. The mayor said, because many UPMC facilities are located in his former City Council district, it is a continuation of a conversation he’s been having for more than a decade.

“There’s no blue ribbon panel or any committees that have been created,” Peduto said. “This is simply myself and my chief of staff, Kevin Acklin, working with … Mr. Romoff and his executives.”

However, Peduto was quick to point out that dropping the suit against UPMC does not rule out future legal action against the health care giant, or any other nonprofit “if we feel that they’re running a for-profit operation.”

“At the same time, we were hoping it would be a show of good faith to UPMC that we’re willing to negotiate,” Peduto said.

Reverend John Welch of the Pennsylvania Interfaith Impact Network, vocal opponents of UPMC, said Peduto has been a leader in keeping UPMC accountable to the residents of Pittsburgh.

"Good jobs with worker protections, access to affordable healthcare and paying a fair share are not gifts to Pittsburgh; they are what Pittsburghers expect from our city's largest employer, healthcare provider and landowner," Welch said in a written statement. "With sufficient money to pay millions to executives, to buy corporate jets and to set aside in profits, UPMC can and must do more to strengthen our families and our city and lead the way for others to do likewise."