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Judge orders PGW to stop dunning landlords for deadbeat tenants

A federal judge has ordered Philadelphia Gas Works to stop dunning landlords for their tenants' unpaid gas bills until a long-term solution to the city's unconstitutional collection method can be sorted out.

A federal judge has ordered Philadelphia Gas Works to stop dunning landlords for their tenants' unpaid gas bills until a long-term solution to the city's unconstitutional collection method can be sorted out.

U.S. District Judge J. Curtis Joyner, in an order filed Thursday, enjoined the city-owned utility from filing liens on any residential or commercial properties except those where the property owner is the delinquent PGW customer. That is a broad group of customers that would include rental properties.

Joyner's interim injunction came at the behest of landlords in whose favor he ruled March 18, when he declared that the city-owned utility's system of placing liens on landlord properties because of deadbeat tenants violated due process and was unconstitutional.

The landlords argued that PGW's practice of slapping liens on rental properties without adequate notice leaves property owners scant recourse to defend themselves or to pressure their tenants to pay.

An attorney representing the landlords told Joyner at a hearing Tuesday that the city had made no effort to settle since the court's March 18 decision.

"The city is in a state of denial as to what's happened here," said Irv Ackelsberg, of the law firm Langer Grogan & Diver.

The city says it is appealing.

Five landlords are seeking class-action status, which could dramatically expand the lawsuit. There are about 24,000 active gas liens totaling $27.6 million on residential rental properties, and 4,300 liens totaling $7.5 million on commercial rental properties, according to testimony.

PGW officials testified Tuesday that the utility collects $500,000 a month from liens placed on properties owned by somebody with a different name than the utility customer. If PGW were prevented from dunning landlords, it could need to collect the money from other customers through higher rates.

Joyner has scheduled a hearing for July 26 on the landlord's request for a permanent injunction, including a declaration that all existing gas liens on landlords are null and void.

"We hope that today's ruling prompts the city to take immediate steps to change its system," said John Grogan, an attorney for the landlords. "We have long believed that his problem can be corrected, and we hope the city will work with us to eliminate the problems."

amaykuth@phillynews.com

215-854-2947@maykuth