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Posted by on Mar 2, 2018 in Civil, Statutory Interpretation, UTPCPL | 17 comments

Danganan v. Guardian Protective Services: UTPCPL violation need not be in Pennsylvania

The Pennsylvania Supreme Court ruled unanimously in Danganan v. Guardian Protective Services that a violation of the Unfair Trade Practices Consumer Protection Law need not have occurred in Pennsylvania to be cognizable under the statute. This case was certified to SCOPA from the Third Circuit, meaning that the Third Circuit asked SCOPA to settle an unsettled question of Pennsylvania law so that the Federal Court could adjudicate the dispute. This case represents a relatively rare look into a unique aspect of our federalist judicial system.

Danganan hired Guardian Protective Services, which is a home security company based in Lancaster, Pennsylvania (home of relatively lax home defense) to monitor his house in Washington, D.C. (home of the world’s most secure house). The contract, which contained a choice of law clause for Pennsylvania, and which required an aggrieved party to file suit in the other party’s home jurisdiction, ended up going sour after Guardian refused to terminate it when Danganan moved to California in the middle of the contract. Danganan filed a putative class action against Guardian in Pennsylvania, and Guardian removed the case to federal court based on diversity jurisdiction. (More on this in the conclusion, below). The Third Circuit certified the question to SCOPA of whether the UTPCPL governs conduct outside of Pennsylvania.

Majority by CJ Saylor: The UTPCPL prohibits unfair trade practices wherever they occur

Writing for the unanimous Court, the Chief Justice rules that the UTPCPL (which desperately needs a better acronym) holds that there is “no geographic limitation or residency requirement” in the text of the UTPCPL. In addition, the UTPCPL is “remedial legislation”—that is, legislation addressed to a perceived problem which the legislature hopes to curb. The law’s purpose is “fraud prevention,” and “equalizing the bargaining power of the seller and consumer, ensuring the fairness of market transactions, and preventing deception and exploitation.” The majority finds nothing in the law to limit the geographic reach of the statute, nor requiring some “sufficient nexus” between the plaintiff and the Commonwealth. The Supreme Court rejects Guardian’s argument that this holding will result in suits anywhere in the world against them based on UTPCPL, finding that “other legal precepts” such as jurisdiction and choice of law rules will limit the holding sufficiently.

With this conclusion, the Court declines to reach the second certified question from the Third Circuit—the interpretation of the choice of law provision of the contract. The question is mooted, and the case is returned to the Third Circuit.

Conclusion: How is this case in Federal Court?

This case will have a tremendous impact on future litigation, as it is now clear that the UTPCPL may be alleged against a Defendant where Pennsylvania law governs a contract, regardless of where the suit is actually brought, and regardless of where the acts giving rise to the claim occurred. Indeed, major companies may wish to carefully consider the wisdom of choice of law provisions naming Pennsylvania in future contracts.

The case has a jurisdictional curiosity of another type, however: the introduction mentions that Guardian removed the case to federal court based on diversity jurisdiction after being sued in Pennsylvania, where it is “headquartered.” This doesn’t make any sense, as 28 U.S.C. § 1441(b)(2) disallows removal based on diversity where any defendant is sued in its home state. Perhaps this will be explained in the ultimate holding of the Third Circuit or District Court in this matter—but it is not clear as to how any Federal Court has Subject Matter Jurisdiction over this case.

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Posted by on Feb 26, 2018 in Civil, Constitutional Provisions, Elections | 22 comments

League of Women Voters v. Commonwealth: The “Free and Equal Elections” Clause Prohibits Gerrymandering

League of Women Voters v. Commonwealth: The “Free and Equal Elections” Clause Prohibits Gerrymandering

EDIT: The map has been released as promised by the Court, along with a brief opinion on February 19, re-outlining the views of the Court. We have included it here for ease of reference.

Ever since the Pennsylvania Supreme Court issued an expedited order in League of Women Voters v. Commonwealth, ordering the Commonwealth Court to proceed with discovery and findings of fact, many have speculated as to whether the Court would really rush out in front of the Supreme Court of the United States on the issue of gerrymandering and issue a decision attempting to proscribe the practice. In January, the Court not only did so, but in a 5-2 decision, required the legislature and governor to come to terms on a new congressional map before this year’s primary elections. The Court also ruled that Pennsylvania’s current congressional map violates the “Free and Equal Elections” clause in Article I, section 5 of the Pennsylvania Constitution.

Gerrymandering has a long and defiant history in the political systems of the United States—indeed, the practice is named after one of our founding fathers, who himself was hardly its first practitioner. Scholars, politicians and courts have proposed a number of solutions, but to date, none has proven to be particularly successful in curtailing the practice. Some argue that gerrymandering is the inescapable result of the political system, and that the power to draw lines is the natural spoil of the sport.

The Supreme Court of Pennsylvania’s opinion may be the most aggressive ever issued on gerrymandering, and it has sparked a political battle between the branches of the Commonwealth’s government. From the perspective of a judiciary-watcher, the case—and this opinion—have been entertaining. Not only has the case drawn national press attention, but it has invoked the more obscure tools of Pennsylvania’s flexible appellate judiciary, relied on the precedence of Pennsylvania’s constitution, fleshed out an Article I right that has lain dormant until now, highlighted the uniqueness of Pennsylvania’s federalist structure, and tested the limits of SCOPA’s powerful jurisdiction. This may be one of the greatest test of SCOPA’s power in the Pennsylvania political structure to date. Only one other state (Alaska) has ever found protections against gerrymandering in a state constitution, and Pennsylvania takes an enormous step in this area of law in holding that the congressional map “clearly, plainly and palpably violates the Pennsylvania Constitution.”

Majority by Todd: Districts must be compact, contiguous, and maintain the integrity of political subdivisions

In her 5-2 majority opinion, Justice Todd holds that Article I, section 5’s “free and equal elections” clause requires that the districts drawn by the legislature be 1) compact, 2) contiguous, and 3) maintain the integrity of political subdivisions. “Our founding document is the ancestor, not the offspring, of the federal Constitution,” the Court explains, which is significant in part because the traditional grounds for federal suits against state gerrymandering are grounded in the 14th Amendment—written long after the Pennsylvania Constitution’s Article I.

The provision at issue here reads as follows: “Elections shall be free and equal; and no power, civil or military, shall at any time interfere to prevent the free exercise of the right of suffrage.”

The Court delves into some of the most notable scholarship on the Pennsylvania Constitution’s development, finding that the “free and equal” provision was a response to the restrictions on the right of political minorities to vote, and that an election is not free and equal if individuals’ votes are targeted for dilution for political purposes. Such targeting robs the voter of his voice, and is antithetical to the democratic process.

The Court includes a great deal of discussion on the scientific and mathematical model findings of several expert witnesses, which support the Court’s ultimate ruling that this plan fails to satisfy the three overarching goals of the free and equal elections clause.

Finally, the Court gives a defense of its decision to rewrite the congressional map if the democrat Governor finds the Republican legislature’s plan unacceptable (which happened yesterday). The Court cites proudly to a Scalia decision from SCOTUS in Growe v. Emison, 507 U.S. 25 (1993), which ruled that federal courts should exercise Pullman abstention where a state court was redistricting the legislative map in an attempt to comply with federal law. (Scalia also called this a “highly political task” in that same opinion—the Court spends relatively little time in this opinion on justiciability or political question doctrine, which have traditionally prevented these suits).

SCOPA also argues that its powers derive from the legislative codification of SCOPA’s King’s Bench authority (SCOPA may “enter a final order or otherwise cause right and justice to be done.” 42 Pa.C.S. § 726). Of course, whether this King’s Bench authority allows the Court to usurp a traditional legislative function is a somewhat different question, which the Court does not address.

Concurrence by Baer: These criteria have no basis in the Constitution

Justice Baer concurs in the result, but would have waited to order a new map until after the primaries. Baer alleges that the lack of time to formulate a new map may even represent due process concerns for the parties to the case. He also has concerns about the clarity of the criteria developed by the Court—criteria which have no basis in the text of the Constitution. “I am unwilling to engraft into the Pennsylvania Constitution criteria for the drawing of congressional districts when the framers chose not to include such provisions despite unquestionably being aware of both the General Assembly’s responsibility for congressional redistricting and the dangers of gerrymandering. It is not this Court’s role to instruct the Legislature as to the ‘manner of holding elections,’ including the relative weight of districting criteria.”

Dissent by Saylor: improvident use of extraordinary jurisdiction

Chief Justice Saylor dissents, arguing that the Court should have awaited the “anticipated guidance from the Supreme Court of the United States,” particularly in light of how long the challengers waited to challenge the 2011 congressional map. The Chief Justice views the matter as inherently political, and would leave greater deference to the political branches.

Saylor also argues there is no “right to an equally effective power of voters in elections,” and that a voter’s diluted vote is part of the democratic process. Citing to a SCOTUS concurrence by Justice O’Connor, Saylor suggests that the “prophylactic” rule created here could have a chilling effect on even legitimate considerations (such as giving racial minorities greater pull in elections). Saylor also notes that the power to draw districts is left by the Federal Constitution’s Article I, section 4, to the legislatures of the states.

Dissent by Mundy: Stare Decisis and lack of constitutional mandate compel a different result

Justice Mundy dissents, arguing that the state constitution provides no clear guidance on how congressional maps are to be created, and criticizing the Court for “these vague judicially-created ‘neutral criteria,’” which “are now the guideposts against which all future congressional redistricting maps will be evaluated, with this Court as the final arbiter of what constitutes too partisan an influence.” Mundy also points to Erfer v. Com, 568 Pa. 128 (2002), in which the Court had previously considered and declined arguments to rule that gerrymandering violated the state constitution. Justice Mundy also discusses the SCOTUS caselaw cited by the majority, discussing how none of these cases dealt with the elections clause of the Federal Constitution’s Article I, section 4.

Conclusion: The political dispute becomes legal; but will the legal become political?

To say there are differing opinions on the validity of the Court’s judgment here is an understatement. The longshot appeal to SCOTUS—denied on February 5—argued that SCOPA had usurped the role delegated to the legislature by the Federal Constitution in Article I, section 4. The argument is that the Federal Constitution gives to certain branches of the state government specific jobs to do which may not be reviewed or impinged by other branches of the state government in order to ensure that certain necessary tasks within our federal system are left outside of state politics. If you recall, this was the argument embraced by a concurrence in Bush v. Gore in overruling a state court’s interpretation of its own laws, and instead accepting the state legislature’s prescribed process for vote counting. This argument may yet come back, depending on how SCOPA draws the congressional map.

But the biggest gripe which opponents of the decision have is that the Court has entered the political fray and rendered political disagreements justiciable. There will be hew and cry when a democratic map is upheld, or vice versa, and there will never be peace. The Court’s bold move may usher in calls for reining in the Court’s power, or even for a constitutional convention. When the political becomes legal, there is a danger that the legal will become political, subject to whims and passions. Law is a science, or so we lawyers like to think, separate and apart from the politicians’ arts. Now SCOTUS will have its turn; will its ruling be as bold? Or will SCOTUS dodge again on justiciability grounds? With League of Women Voters, the Pennsylvania Supreme Court takes a bold step into the fray. History will judge whether the step was wise or ill-considered.

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Posted by on Feb 14, 2018 in Appellate Procedure, Civil Procedure | 19 comments

Shearer v. Hafer: Interlocutory Appeal unavailable for civil pretrial dispute over right to counsel at psychological examination

In Shearer v. Hafer, the Supreme Court of Pennsylvania rules 6-1 that an interlocutory appeal was not appropriate in a pretrial discovery dispute over whether a plaintiff has the right to counsel at a psychological examination because the right involved was not important, and would not be lost on appeal.

The case arises out of a personal injury action. The Defendants asked for a psychological exam pursuant to Pa.R.C.P. 4010, and Mrs. Shearer insisted on having her attorney present. Mr. Hafer and his codefendant had a doctor who alleged that having anyone else present during the examination could result in the introduction of bias and distortion of the data, and refused. After the Court ruled for the Defendants, Shearer asked for certification of interlocutory appeal pursuant to Pa.R.A.P. 313, which allows appeal if 1) the issue is “separable from and collateral to the main cause of action; 2) the right involved is too important to be denied review; and 3) the question presented is such that, if review is postponed until final judgment in the case, the claim will be irreparably lost.”

Both parties agreed that this case was appropriate for interlocutory appeal—but such an appeal is jurisdictional, and while SCOPA retains King’s Bench authority to step into any case at any time, it prefers to see jurisdictional bars as actual bars to its authority to step in.

Majority by Todd: Right to counsel at pretrial examination is not of constitutional importance, will not be lost on direct appeal

In a 6-1 decision, Justice Todd and the Court hold, sua sponte, that the appeal fails to meet the last two of the three prongs of the interlocutory appeal rule, and the case must be remanded without reaching the merits. The majority takes a long look at the history of interlocutory appeals in the Federal Courts, and notes that Pennsylvania is more permissive than the Federal Courts on granting such appeals. (The Court does not discuss this, but this difference in policy might be due in part to Federal Jurisdictional rules, which are not a concern for courts of general jurisdiction, i.e. state courts).

The Court recites the three-part test for interlocutory appeals, and finds that the present appeal fails on the latter two prongs. While the appeal is separable from the main cause of action, and therefore satisfies the first prong, the alleged right to counsel at a psychological examination is not the type of constitutional interest or interest deeply rooted in public policy which “would go unprotected without immediate appeal” such that it overrides the “efficiency interests served by the final order rule.”

Furthermore, the plaintiff’s right to counsel at such an examination will not be irreparably lost if the matter waits until final appeal for adjudication. Although Mrs. Shearer will have to sit through an examination without counsel, she can ultimately prevail on appeal, obtain a new trial, and have counsel at the examination which will be used in the subsequent new trial. Thus, her rights will not be lost.

Concurrence by Wecht: Non-delegation doctrine should prohibit the rules invoked here

Justice Wecht reiterates the concerns that gave rise to Protz v. WCAB last year, detecting “a palpable risk that reliance upon standards written by nongovernmental organizations, such as the APA . . . may run afoul of the non-delegation doctrine.” By incorporating guidelines promulgated by the National Academy of Neuropsychology into its code of conduct, the State Board of Psychology (let’s take a moment to consider why it’s a “State” board, and not a Commonwealth board, by the way) may have promulgated unenforceable ethical rules in this respect. Wecht emphasizes that the issue is not presented in this appeal, but that agencies should be careful in this respect.

Dissent by Mundy: “Importance” prong is not limited to matters of constitutional importance, and right to counsel may be essentially lost on direct appeal in this case

 Justice Mundy would not interpret the “importance” prong as referring only to constitutional matters. “Rule-based rights may well be significant relative to the final order rule and be deeply rooted in public policy.” Mundy also expresses her concern that the passage of time may render a subsequent psychological exam prior to a new trial may indeed cause the rights at issue to be lost.

Conclusion: Interlocutory Appeals Disfavored

The holding in this case demonstrates that interlocutory appeals are disfavored. Even where both parties and the lower court agree that an appeal is appropriate and will save time in the action, the appellate courts can refuse to hear it. I expect that this decision may limit the interlocutory appeals asked for, taken and resolved on the merits in the future.

Additionally, Justice Wecht’s concurrence invites future challenges to AMA and NAN guidelines making their way into the law. Attorneys would be wise to keep an eye out for challenges to these types of statutes in the future.

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Posted by on Dec 20, 2017 in Attorney Discipline, Civil, Contract | 0 comments

SCF Consulting, LLC v. Barrack, Rodos and Bacine: A contract action against a law firm alleging an unethical fee-sharing agreement should be allowed to proceed

A divided Supreme Court of Pennsylvania agreed that a lawsuit against a law firm based on a breach of a contract should be allowed to move forward, even though the alleged contract would have been in violation of the fee-sharing rules of professional conduct. The Court was divided on the reason, and remanded for further proceedings “without present guidance from this Court.”

SCF Consulting filed a civil complaint against Barrack, Rodos & Bacine, a law firm on Market Street in Philadelphia (where Benjamin Franklin performed many of his electricity experiments). SCF alleges that Barrack Rodos failed to make contracted for payments to a consulting firm based on a percentage contingent recovery. Barrack Rodos denied the existence of such a contract and filed preliminary objections arguing that, even if such a contract existed, it would be void under the Rules of Professional Conduct.

The trial court dismissed the complaint via preliminary objections.

Opinion by CJ Saylor: We don’t agree on this case, but it should be allowed to go forward

The Chief Justice, joined by Justice Dougherty, lays out the compelling arguments on both sides, and rules 4-3 for the whole Court that the breach of contract action must be allowed to go forward. The question presents a Scylla and Charybdis: a per se rule in favor of dismissal may put lay and legal parties on notice that fee-sharing contracts are unenforceable and thus discourage their formation, but it would also reward unscrupulous attorneys, who are already in a powerful bargaining position with non-lawyers, and result in a windfall to the unethical attorney.

The Rules of Professional Conduct purport not to affect any substantive law, but rather only govern the conduct of attorneys. Should the disciplinary board be a client’s only remedy when an attorney agrees to an illusory contract, or should the client be able to resort to the courts for a remedy?

Saylor and Dougherty “would hold only that the contract cause of action is not per se barred by the purported infraction on [the law firm’s] part and, accordingly, the county court’s bright-line approach to the unenforceability of the alleged consulting agreement should not be sustained.” However, the majority is only willing to agree “that the present contract action should not have been dismissed.” Accordingly, “the dismissal will be overturned” and remanded for further proceedings “without present guidance from this Court” as to the ultimate underlying issue.

Conclusion: A case to watch

The Court’s internal divisions on this matter give both parties a second bite at the apple, and the arguments developed before the Court of Common Pleas and in subsequent appeal will be interesting to watch. You can be almost certain that this will be back before the Court again soon.

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Posted by on Dec 5, 2017 in Civil, Constitutional Provisions | 0 comments

Scarnati v. Wolf: Press Releases aren’t “Proclamations”

In Scarnati v. Wolf, the Supreme Court of Pennsylvania rules 6-1 that a press release does not satisfy the Pennsylvania Constitution’s requirement of veto by proclamation under Article IV, Section 15.

In 2014, two appropriations bills passed the House and Senate, and were presented to the Governor for his signature. The House adjourned upon passing the bill, and the Governor vetoed the bill, returning it to the parliamentarian of the House. Unlike under the Federal Constitution, where the President’s veto back to the House would be the end of the matter if the House had adjourned, the Pennsylvania Constitution requires the Governor to issue a “proclamation” announcing his veto. The Governor, in this case, issued a press release announcing and explaining his veto. The House and Senate challenged the veto in court as invalid.

Two issues were presented in this appeal: first, what is an “adjournment” under this clause? Since the House adjourned, and the Senate did not, was the body adjourned such that the onus lay on the Governor to issue a proclamation, or on the House to re-consider the vetoed provisions of the two bills?

Majority by Wecht: The House was Adjourned, and Notice by Proclamation Was Required

The majority, speaking by Justice Wecht, held that the General Assembly did stand adjourned when the vetoed provisions of the bills were returned to the House parliamentarian, and that the Governor’s failure to publish a proclamation of his veto was fatal to the rejection of the bill. Discussing the overlap and distinctions of the Federal Government’s constitutionally prescribed procedure, the Court discussed the underlying goals of the “filing and proclamation” provisions of Article IV, Section 15. Paramount among these is public notice of the struggle between political branches, and the current status of a proposed bill.

The Court had little trouble dispensing with the “ambiguity” about when the legislature actually adjourned. There had been some discussion that the House had impermissibly adjourned without the Senate’s approval, but given that both houses had entered their adjournments upon their journals without any note of objection, the Court concluded that the presumption was in favor of constitutionality.

Given, then, that the House prevented the return of the Governor’s veto by its adjournment, the Court noted that the
The Court acknowledged that the parliamentarian is charged with receiving vetoes from the Governor during the regular session, but went on to reject the Governor’s argument that the parliamentarian was an “agent” of the House designated to accept “service” of vetoes. “We reject the Governor’s argument that the procedure utilized for the return of a bill during a legislative session somehow dictates the procedure to be used during an adjournment of the General Assembly.” The Court goes on to note that, even if the parliamentarian could be designated an agent for the House, there is no evidence that he was ever so designated.

Thus, the Court was constrained to consider whether the Governor appropriately followed the “filing and proclamation” protocol to finalize his veto. Although the Governor appropriately filed his objections with the Secretary of State, his issuance of a press release did not satisfy the requirements of the Constitution. The Supreme Court of Pennsylvania rejected Governor Wolf’s argument that changing technology made the press release or even a tweet a sufficient form of notice to all citizens. “Formality is a critical tool in distinguishing political rhetoric and advocacy in its myriad forms from public notice of a constitutionally or legally significant declaration. Such formality cannot be abandoned.”

Historically, proclamations in Pennsylvania have followed a very precise format. While that format need not be followed precisely, at least some of the “indicia” or “hallmarks” of formality needed to be included. These included the Governor’s seal, and most importantly, the proclamation had to include explicit language demonstrating that the Governor was following the “filing and proclamation” procedure under the Constitution. Thus, his “informal communication to the public via mass media” was insufficient to sustain a veto.

Conclusion: Budget Finality…For the 2014 Budget

This case demonstrates the importance of having constitutional scholars on staff in political offices. It is fairly important that the Governor’s staff gave little or no thought to the procedure for properly vetoing a bill under the circumstances, and only after the fact did they give thought to how to spin the situation to show that they had complied with the rules. As the old saying goes, it’s best to measure twice so you have to cut only once.
The precise definition of a “proclamation” may now come under fire in future cases. The Court offers a general form that has sufficed in the past, and the Governor’s office would be wise to use that form in future cases.
It is unfortunate that a case like this takes three years to reach a final ruling at SCOPA. Meanwhile, provisions of the budget laws have been under fire and in limbo. Now, at least, there is finality on the budget from three years ago.

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Posted by on Dec 1, 2017 in Civil, Justiciability | 0 comments

In re 2014 Allegheny County Grand Jury: Mootness ruling must be based on facts

In an unusually brief, unanimous opinion, Chief Justice Saylor ruled that the Superior Court erred in finding a dispute between two parties moot where the facts of record did not clearly demonstrate mootness.

WPXI, a television station, sought access to certain sealed grand jury documents about a sex scandal at a local school on the basis of Pennsylvania’s common law right of public access to judicial documents. The Commonwealth fought the disclosure of the documents based on the need for privacy in grand jury proceedings. The trial court ruled the documents could not be disclosed, and the Superior Court dismissed the matter completely on WPXI’s admission that the documents had been leaked by another juror and were available on the internet. Both parties agreed the dispute was live, but the Superior Court did not.

The Supreme Court of Pennsylvania reversed. A court should not make a mootness determination unless the facts make clear that the controversy is in fact of no effect. In this case, a news agency has a stronger interest in obtaining documents “from the source” than other litigants might, and it is not clear that its concerns are satisfied by the disclosure of the documents from a third party.

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