00:01 - Good morning, everyone.

00:03 - Welcome to the first day of our spring argument session

00:06 - here in Pittsburgh, as you know, because I say it all the time.

00:11 - The Pennsylvania Supreme Court is the oldest appellate court in North America.

00:16 - Our roots date back to William Penn's provincial court of 1684,

00:22 - and we were formally established as the Pennsylvania

00:25 - Supreme Court in 1722.

00:29 - Pursuant to the Judiciary Act of 1722, in 2022,

00:34 - we celebrated our 300th anniversary in Philadelphia.

00:39 - And we are very proud of our rich history.

00:42 - We sit today in Pittsburgh, City-County building

00:46 - a 1917 Granite art

00:49 - Deco building, which was designed by renowned

00:52 - local architect Henry Horncastle.

00:57 - The City-County Building houses executive, legislative and judicial offices

01:02 - for both the City of Pittsburgh and Allegheny County.

01:06 - Architect Edward B Lee was responsible

01:10 - for the design of this magnificent courtroom The wooden oblong,

01:14 - the fluted columns and the bench and bar are all mahogany ini.

01:19 - Behind the bench is a beautiful mural of the state's coat of arms.

01:24 - That same coat of arms is carved into the justices chairs

01:28 - and individual elements are represented in wooden dalliance on the bench,

01:32 - specifically a ship carrying the state's commerce

01:36 - to the world, a plow working our rich natural resources,

01:40 - three golden sheaves of wheat, representing our state's fertile fields

01:45 - and our citizens wealth of human thought and action.

01:50 - And finally, an American bald eagle

01:52 - demonstrating Pennsylvania's loyalty to the United States.

01:57 - The murals in this room were all painted by local artist Edward Trumbull.

02:03 - On the ceiling, you will see the three great law

02:06 - givers all framed by gilded plaster.

02:10 - Furthest from the bench is the Byzantine emperor Justinian,

02:15 - famed for the Reformation and codification of Roman law.

02:19 - In the center is Moses seated and holding the Ten Commandments.

02:23 - And finally closest to the bench is the English King Edward,

02:27 - the first who spent much of his reign reforming the common law.

02:32 - To the left of the bench, you will see a mural

02:34 - depicting William Penn, founder of Pennsylvania.

02:38 - And to the right, William Pitt, the first Earl of Chatham,

02:41 - who was held in high esteem by the American colonists

02:45 - after publicly supporting many of their positions.

02:49 - The city of Pittsburgh, as you know, is the namesake of William Pitt.

02:53 - It is truly an honor for our Supreme Court

02:56 - to sit in three beautiful courtrooms in Philadelphia, Harrisburg

03:01 - and Pittsburgh before we hear the first case.

03:05 - I would like to remind counsel of just a few things.

03:08 - Appellant's counsel please approach the podium when your case is called.

03:13 - I will then give a short summary of the case.

03:16 - You may then begin by stating your name and the party

03:19 - you represent, and please introduce your co-counsel to the Court.

03:24 - The Justices are familiar with your cases,

03:28 - so I ask that you avoid any unnecessary

03:30 - recitation of facts or procedural history

03:34 - and instead focus on the main issues on which we granted.

03:37 - Review.

03:39 - Counsel is welcome to rely on the briefs for any particular issues.

03:44 - Please remember that in this court we do not permit rebuttal

03:48 - in cases in which there are multiple

03:50 - parties represented by separate counsel.

03:53 - You should avoid repeating the same arguments as your prior counsel.

03:58 - Also, please try to not interrupt the justices when they are asking you

04:02 - a question.

04:04 - A justices question is not meant to trip you up.

04:07 - Rather, it indicates there are particular issues we wish to explore further.

04:12 - While there's no set time limit for argument, I will advise counsel

04:16 - when the court is satisfied that all of its questions have been answered.

04:20 - And at that time, I ask that you conclude your argument.

04:25 - Welcome to the Pittsburgh

04:26 - courtroom of the Pennsylvania Supreme Court for oral arguments

04:31 - in the court's April 2024 arguments list.

04:35 - I'm Emily Moller, a lawyer and partner

04:38 - with Margolis Adelstein in Pittsburgh.

04:41 - I'm joined today by my colleague Josh Bloom,

04:44 - a labor attorney in Pittsburgh.

04:47 - There is no general right to appeal to the Pennsylvania Supreme Court.

04:52 - The court receives hundreds of petitions for allowance of appeal each year,

04:58 - but only grants a small fraction

05:01 - of those cases for hearing.

05:03 - The court reviews said matters of broad public policy

05:07 - interest and matters of first impression.

05:11 - The process begins with the parties filing

05:14 - briefs in support of their respective positions.

05:18 - Today, we're here for oral arguments.

05:21 - In those selected cases,

05:24 - the court will hear its first argument today

05:27 - in the case of Gustafson versus Springfield.

05:32 - The Gustafson

05:33 - case involves a challenge to the protection of Lawful

05:38 - Commerce in Arms Act, or the p l CAA.

05:43 - On constitutional grounds,

05:46 - the CAA is a federal statute

05:50 - which limits the extent to which firearms, arms manufacturers and distributors

05:55 - may be held liable for the actions

05:58 - of third parties.

06:02 - The United States

06:04 - has intervened in this case

06:06 - and states that the law was based upon Congress's determination

06:11 - that holding firearms manufacturers

06:14 - and distributors liable for harm

06:18 - solely caused by a third party

06:21 - is an unreasonable burden on commerce.

06:26 - The underlying facts of this case are tragic.

06:30 - Plaintiffs are the parents of a minor child

06:33 - who was shot and killed by another minor in 2016.

06:38 - Plaintiffs sued the gunman who fact her

06:42 - and defendants argue that the lawsuit

06:44 - was barred by the CAA.

06:49 - The shooter was

06:50 - alleged by plaintiffs to have intentionally

06:54 - pulled the trigger of the firearm while it was pointed at their child.

06:59 - They have also alleged that the shooter believed

07:02 - that the firearm was unloaded because the magazine had been removed,

07:08 - even though a live round was in the chamber.

07:12 - The firearm in question in this case

07:15 - was manufactured by defendant Springfield

07:18 - and sold by defendants a limb.

07:22 - Plaintiffs claim that the subject pistol was effectively designed

07:26 - because it did not have a magazine disconnect safety,

07:32 - an affected loading chamber indicator

07:36 - and internal locking system

07:39 - or any other safety system that would prevent it

07:42 - from being unintentionally fired by a child.

07:49 - In this case,

07:50 - the defendants filed preliminary objections

07:53 - on the grounds that the action was barred by the CAA.

07:58 - The trial

07:59 - court sustained the preliminary objections, concluding that

08:03 - the PLL CAA does in fact bar this case

08:08 - and that the CAA is constitutional.

08:12 - Plaintiffs appealed to the Superior Court,

08:16 - which reversed

08:19 - and this appeal followed.

08:21 - The questions raised in this case are whether a claim for damages

08:26 - against the manufacturer and seller of a firearm

08:30 - that was criminally or unlawfully misused by a third party may constitute

08:36 - a prohibited qualified civil liability action

08:40 - pursuant to the CAA.

08:45 - The second question is,

08:47 - is the CAA a permissible exercise of the power of Congress

08:53 - pursuant to Article one, Section eight of the United States Constitution,

08:59 - or does it instead violate the 10th Amendment

09:02 - and principles of federalism?

09:06 - The position

09:07 - taken by the appellants in this case,

09:10 - the gun manufacturer and the seller,

09:13 - is that the action is barred by the CAA,

09:17 - and thus the preliminary objections were properly sustained.

09:23 - The appellants argue that Congress,

09:25 - properly executed, exercised

09:28 - its power to enact a statute prohibiting cases

09:32 - against the firearms industry

09:37 - that seek damages based upon

09:39 - the criminal use of firearms by third parties.

09:45 - In passing the appeal,

09:47 - CAA, Congress considered the fundamental principle

09:52 - that products of any kind should be reasonably safe

09:56 - to use by creating an exception for cases where the alleged harm

10:01 - was caused by a defect in design or manufacture of the firearm.

10:07 - The exception does not apply,

10:09 - however, in cases where the discharge of the product

10:13 - was caused by a volitional act that constituted

10:17 - a criminal offense.

10:23 - The appellants

10:24 - also argue that every appellate court

10:27 - to have analyzed the CAA

10:31 - has found that it's constitutional, that it is constitutional

10:35 - and does not violate the 10th Amendment and principles of federalism.

10:42 - The appellate position in this case

10:45 - is that the shooter's actions did not constitute a disqualifying

10:50 - criminal offense or volitional act

10:53 - as required under the peace p l caa.

10:58 - To grant immunity.

11:01 - The appellees also assert

11:04 - that the CAA impermissibly intrudes

11:08 - upon the state's lawmaking authority and is thus unconstitutional.

11:13 - Under the 10th Amendment to

11:16 - the United States of America.

11:18 - Intervened in this matter to defend the constitutionality of the CAA.

11:24 - Despite President Biden's call for its repeal.

11:29 - The US noted in its briefing

11:31 - that the question of constitutionality is distinct

11:35 - from whether the CAA remains good policy.

11:42 - Let's watch and listen to oral arguments

11:45 - of Gustafson versus Springfield before the Supreme Court.

11:51 - Madam Chief Justice,

11:52 - Members of the Court, Thank you for allowing me to be here today

11:56 - as the Court announced.

11:57 - My name is Christopher and Julie.

11:59 - I'm here on behalf of Springfield Armory and Salem Department Store.

12:03 - Now, as far as this oral argument is concerned,

12:06 - I will be presenting that portion of the of the oral argument, which concerns

12:11 - the applicability of the Protection of Lawful Commerce of Firearms Act, PELKE.

12:16 - While Laura Myron from the Department of Justice on my left

12:20 - will be presenting the portion of the argument concerning

12:23 - the constitutionality of the CAA on behalf of the intervenor, the United States.

12:29 - So we start with the ACT.

12:31 - Qualified Civil Liability Act may not be brought in any state

12:34 - or federal court, regardless of whether those claims may otherwise

12:39 - be valid pursuant to state law.

12:42 - In this case, the Commonwealth, in enacting the LCA Congress, clearly stated

12:47 - its intent was to alter the federal state balance by prohibiting

12:51 - the institution of a qualified civil liability actions

12:55 - that were other otherwise valid valid pursuant to State law.

13:00 - Congress made that determination.

13:02 - The criminal misuse of a qualified product

13:07 - is the sole proximate cause of any resulting damages,

13:11 - and they changed the law to give the effect to this view.

13:15 - There is clear intent in the statute to intrude

13:19 - upon the Commonwealth's authority to hear these actions.

13:23 - Congress mandated, quote, They may not be brought in any federal or state case.

13:29 - All that the court

13:30 - needs to do is determine if the allegations in the complaint

13:34 - constitute a qualified civil liability action.

13:38 - There's no reason and there's no basis to read the statute

13:42 - narrowly to not preempt state law.

13:46 - It's operative express provisions are clear.

13:51 - Congress sought to prohibit prohibit qualified civil liability actions.

13:55 - Counsel is just us here with us.

13:58 - Congress has permitted statutory based lawsuits

14:02 - in these circumstances, but not common law.

14:05 - Does that not infringe upon our sovereignty as a state?

14:10 - And is that not a violation of federalism?

14:13 - Thank you, Justice.

14:15 - If we look solely at the exceptions,

14:19 - three of the exceptions are statutorily based.

14:22 - Three of the exceptions are common law based.

14:25 - So the statutory statutory based

14:28 - exceptions is the first exception that allows an action

14:33 - against the manufacturer so that convicted of violating 18 U.S.C.

14:37 - 1924.

14:39 - The third action.

14:40 - The third exception.

14:41 - It's where it's a predicate exception,

14:44 - where a manufacturer sell a violated state or federal statute

14:48 - applicable to the sale or marketing of firearms.

14:50 - And the sixth exception

14:52 - is for the attorney general to enforce provisions of the Gun Control Act.

14:55 - However, the common law claims

14:58 - show up in to the second exception negligent and trust me, negligence per

15:03 - se, both of which are common law claims negligence.

15:07 - Trust.

15:08 - It uses the statute to set the standard of care.

15:11 - But it's still a common law claim.

15:14 - Although the CAA defines negligence,

15:16 - trust me, it does not create a cause of action.

15:19 - It just sets certain limits on common law claims to the fourth and the fifth.

15:24 - Also a common law.

15:26 - When you look at 7901, I believe it's 87.

15:29 - Let me use the language that Congress clearly expresses,

15:33 - quote unquote, do not represent a bona fide expansion of the common law.

15:36 - Then it rails against, quote unquote, maverick, just judicial officers.

15:41 - Why are we not to glean that this is a biased nurse or reflects Congress's

15:46 - reflects, say, Congress's hostility towards the way Pennsylvania chooses

15:52 - to apply its law, recognizing both common law and statutory law?

15:56 - Well, I don't think it I don't think that's what you're saying.

15:59 - I think that's the case.

16:00 - I think Congress looked at what was going on, looked at this litigation

16:04 - that was going around around the country and made a determination in their findings

16:09 - that these types of lawsuits were crippling an industry

16:12 - and putting it into bankruptcy.

16:14 - So they looked at it.

16:15 - They they we may not like it.

16:18 - We factually declare bankruptcy as a result of this lawsuit

16:23 - of top of my head.

16:23 - I can't think about it.

16:24 - But, Your Honor, I was involved personally with over 35

16:27 - different types of lawsuits that impacted the CAA.

16:31 - And I can tell you,

16:32 - with all due honor and respect, it cost these companies a lot of money.

16:37 - And it's not like insurance policies would cover that.

16:40 - It was crippling this industry.

16:42 - So what? Yes, ma'am.

16:43 - So what?

16:44 - I mean, if that's the cost of doing business.

16:47 - I'm just interested in your thought process on this.

16:52 - What much of what you just said now

16:55 - is hearkens back to the debate that we had in Pennsylvania

17:02 - a couple of decades ago about medical malpractice cases.

17:06 - Physicians are moving out of this state.

17:09 - It's a crisis for our people.

17:11 - Insurance carriers are going under, etc., etc., etc..

17:15 - On if Congress made those same findings

17:20 - and decided that the health of insurers

17:25 - was essential to interstate commerce, could Congress

17:29 - abrogate medical malpractice law in the Commonwealth of Pennsylvania?

17:35 - We all know that Congress has very, very broad power.

17:38 - Well, I'm asking you to do that because that sort of sort of frames

17:42 - the discussion that we're having here, which is the

17:46 - universality of their ability

17:49 - to abrogate tort law within the state.

17:53 - And I believe that they do.

17:55 - And, Your Honor, the the constitutionality

17:58 - of what Congress did here is going to be

18:01 - addressed by the government here.

18:05 - But I could I do, Julie, address that.

18:07 - However, I do think that the powers of broad

18:11 - and there are other immunity statutes out there

18:15 - that are similar to this type that have been found constitutional.

18:19 - Communications Decency Act, the National Childhood

18:22 - Vaccine Injury Act, General Aviation Revitalization Act.

18:26 - And there's plenty of others in the in the

18:29 - the in the papers.

18:31 - So. So where do we go from here?

18:35 - The product defect exception going right to the heart of the matter.

18:38 - The language of it is super important, right?

18:41 - It says an action of death, physical injuries

18:43 - or property damages resulting directly

18:46 - directly from a defect in the design or manufacture of a qualified product.

18:51 - Congress found that the intent was to preclude

18:56 - was to preclude cases where the

19:00 - the cause was not directly from a defect in design.

19:04 - It had other parts to it, like

19:07 - criminal offenses, volitional acts that constitute criminal offenses.

19:11 - They found that proximate cause is with the person

19:15 - who did the volitional act that constituted a criminal offense.

19:21 - So the the plaintiffs take issue with the use of the term volitional act.

19:26 - And that spent a lot of people was on volitional act.

19:28 - What is a volitional act?

19:31 - They claim that the volitional act,

19:35 - the shooting was not closed by volitional act

19:37 - because the juvenile thought the pistol was unloaded.

19:43 - There is no legal support for that.

19:46 - So in your view, the Volitional act is the pulling of the trigger.

19:50 - It's chief justice.

19:51 - It's much more than that.

19:53 - The volitional act was going into the bedroom.

19:55 - The volitional act was going under the mattress.

19:57 - The act was taking out the gun.

19:59 - The volitional act was messing with the fire on the volitional act

20:02 - was going back out in the room.

20:04 - The volitional act was putting that firearm up to another

20:07 - child's head, and the volitional act was pulling the trigger.

20:10 - The volitional act does not have to be.

20:12 - He wanted to kill him and nobody thinks he wanted to kill him.

20:16 - That's the volitional act.

20:18 - Counsel Doesn't the discharge have to be volitional?

20:22 - Absolutely not, Your Honor.

20:24 - It does not have to be volitional.

20:26 - The volitional act must constitute a criminal offense.

20:29 - The volitional act is pulling the trigger.

20:32 - And everything that I just went through.

20:33 - You don't have to have a gun under the mattress and then dropped it,

20:38 - and it went off accidentally and hit the other

20:42 - child is out of a final act.

20:44 - Well, that's a different set of facts.

20:46 - Obviously, he did not.

20:48 - He did not pull the trigger.

20:50 - There is some case law out there,

20:54 - the Ryan versus Glock case up in in the Commonwealth of Massachusetts,

20:58 - where just having the firearm in his hand of a convicted felon

21:02 - was found to be a volitional act.

21:06 - So under those circumstances, I would think probably not.

21:09 - I don't have all the facts in front of me, but probably not.

21:12 - Could that be a traditional product

21:14 - liability case that Congress wants to make clear would be preserved?

21:18 - Assuming there's no no criminal conduct, it could certainly fall within that,

21:21 - Your Honor.

21:25 - So the cases and none in the Commonwealth.

21:27 - If there were, we may not be here, but the cases that looked

21:31 - at this exact issue of a volitional act, a domestic associate.

21:36 - Supreme Court of Illinois is directly on point

21:39 - all fours with this case right down to the claims in the complaint.

21:44 - Two young boys playing with a firearm,

21:47 - one shoots the other.

21:50 - In that involuntary manslaughter charge.

21:52 - Juvenile delinquent.

21:54 - And the court dismissed this Traverso versus Glock

21:59 - out of Arizona district court.

22:02 - Same issue.

22:03 - Children in a car.

22:05 - One young lady has the gun in front of her.

22:09 - She pulls the trigger.

22:09 - She shoots the fellow that's in the driver's seat.

22:12 - Same thing.

22:13 - So as to those cases, what was the alleged defect?

22:17 - What was the alleged defect?

22:20 - they were same exact cases.

22:21 - I mean, the defect in this case goes directly to the

22:26 - whether or not the discharge was volitional.

22:30 - What was the defect in the cases you're talking about?

22:32 - In some of those cases, it's

22:33 - the same exact defect that's alleged here because some of the same counsel are

22:37 - before you today, same type of issue in magazine disconnect,

22:41 - which we have in this case, which

22:44 - which could make the firearm less safe.

22:48 - Issues about more, more pronounced loaded chamber

22:51 - indicators, issues about smart gun technology, which doesn't exist.

22:56 - Those were some of the claims in that case.

22:59 - The one in Ryan also concerning the container,

23:01 - that would just be what is being put into.

23:04 - So those cases, including the Ryan case

23:09 - and there was a brand new case that came down.

23:12 - It's not part of the papers.

23:14 - it just came out in late March.

23:16 - It's Camacho versus the City of Providence and it's 2024.

23:21 - Will Westlaw 1198275.

23:25 - It's another case not from the Commonwealth,

23:29 - but where a law enforcement officer shot someone

23:33 - and the court there looked at the penal

23:38 - CAA and said although the officer was not prosecuted,

23:43 - it was still dismissed on grounds

23:48 - based upon the exception to the exception.

23:52 - So the other issue that's before the court,

23:55 - other than the Volitional Act, is the criminal offense.

23:59 - And my adversaries say

24:02 - that the discharge did not constitute a criminal offense

24:05 - because the shooter was a minor and was charged as a juvenile delinquent.

24:11 - Now, the exception

24:13 - to the product defect exception only states

24:16 - that the discharge of a firearm must be must have been caused

24:19 - by a volitional act that constituted a criminal offense.

24:23 - Here we clearly have a criminal offense.

24:28 - There's no limitation requiring the shooter

24:32 - to have been convicted of a crime or charged with the crime,

24:35 - or even that the shooter was capable of being charged with a crime.

24:38 - Counsel, in your judgment, do you are you saying a volitional act

24:42 - is a question of law or a question of fact or a combination of both?

24:45 - Question of law Clearly, a question of law in the complaint in this case is clear.

24:51 - I don't think we disagree on the facts.

24:53 - I think everyone agrees on the facts what the volitional act was

24:57 - as we've gone through before. No, no question.

25:00 - That's on the law.

25:02 - So there's no requirement.

25:04 - Could you remind me, counsel, what was the juvenile charged

25:08 - with involuntary manslaughter?

25:12 - And although he was charged as a juvenile, it's the same

25:17 - you have it's the same definition of involuntary

25:20 - manslaughter, Right.

25:24 - Unlawful or lawful act

25:27 - in a grossly negligent manner

25:30 - caused the death of another person.

25:34 - Whether or not it comes into the juvenile court or the standard courts.

25:38 - It makes no difference.

25:40 - They still fall within the exception to the exception

25:44 - of volitional act constituting a criminal offense.

25:48 - And the Congress has found out when is determined

25:52 - that when that happens, that is considered the sole proximate cause of the damages.

25:57 - It's the criminal offense.

26:01 - So pursuant to Pennsylvania law,

26:04 - it makes no difference that it was a juvenile.

26:08 - Its treat was treated as an adult and we look to the language of the statute here.

26:14 - Counsel, is it is it also a criminal offense

26:16 - in Pennsylvania to point an unloaded gun at someone?

26:21 - I'm sure it is, Your Honor.

26:22 - Yes, absolutely. Okay.

26:24 - So does it matter, in your view, from a statutory construction perspective,

26:29 - whether

26:33 - what the charges were versus

26:35 - whether simply the volitional act in this case?

26:38 - The point even if you assume,

26:41 - which I think is actually stipulated, that he that the juvenile

26:44 - did not know, believe, believe that the gun was unloaded, that the pointing

26:48 - of an unloaded weapon at somebody is still a criminal offense in Pennsylvania.

26:53 - It sure is.

26:54 - But to to get over the exception to the exception, it has to be a discharge.

26:58 - So just pointing it is not enough to get over the exception.

27:01 - It has to be a volitional act.

27:02 - The discharge was caused by a volitional act that constituted a criminal offense.

27:07 - Well, the volition is also manifested is it not, by the

27:12 - the plea,

27:13 - the adjudication, the agreed adjudication

27:17 - to the delinquency corrector that involves every manslaughter.

27:21 - And that's right in the complaint.

27:22 - Yeah.

27:23 - He plead he he committed involuntary

27:30 - manslaughter.

27:33 - This truly is an immunity statute.

27:38 - Congress came out and said

27:40 - any cases filed must be dismissed immediately.

27:44 - Congress clearly came out and said, you cannot file these in the future.

27:47 - It's not it's not the very instructive case.

27:52 - Again, not in the Commonwealth anymore.

27:55 - Cases in the Commonwealth is in re academy out of the Texas Supreme Court.

28:01 - This is not a preemption statute case.

28:04 - This case is about immunity may not be brought

28:07 - in any state or federal court now.

28:10 - So could I just get back a moment to where Justice Donahue was a while ago

28:16 - on analogizing this to the med mal crisis?

28:20 - If the federal government can regulate

28:24 - this industry within Pennsylvania, where is the line?

28:28 - Where do you draw the line?

28:29 - What principal basis is there for saying

28:32 - you can't you can't regulate other industries

28:36 - and other actions that are part of Pennsylvania law?

28:41 - Well, Congress can certainly

28:44 - regulate other areas of Pennsylvania law and,

28:47 - you know, has to comport with their commerce clause, etc.,

28:51 - which is going to be addressed by by the government shortly.

28:54 - But we see that all over the country, not just Pennsylvania,

28:57 - but around the country.

28:59 - This statute is not geared towards Pennsylvania here.

29:02 - This is geared nationally.

29:04 - I understand that, But it's certainly impacting Pennsylvania

29:08 - and it's impacting the country.

29:10 - Thus, commerce Clause is is is is at issue here.

29:15 - Well, isn't your answer, counsel, that

29:19 - if somebody has a problem with that, they have a problem with SCOTUS?

29:21 - Because SCOTUS said all Congress needs is a rational basis, correct.

29:27 - So, you know,

29:29 - can if they're sufficiently irrational,

29:32 - then presumably they'd run afoul of that. But

29:37 - Congress has power to do a lot of things.

29:39 - They do very little as it happens right.

29:43 - So, okay, I'm going to abstain from that one,

29:46 - but point well taken. Yes.

29:48 - That could address differences between the medical malpractice right there.

29:54 - The medical malpractice

29:56 - action example that you are given by my colleagues

29:59 - is the fact that here the LCA specifically references

30:04 - the importance of the Second Amendment several times in its drafting.

30:09 - You know, and maybe that's a question for the other counsel.

30:12 - Sorry.

30:14 - No, that's that's, that's fine for me too.

30:16 - Yeah.

30:17 - We may not like maybe some folks don't like the way Congress

30:21 - came about this,

30:23 - but as long as they had a rational basis, a reason for it,

30:26 - as long as they determine

30:27 - that, well, then we have to abide by that, its primacy clause issues, etc..

30:32 - But the findings were that this was it did infringe

30:37 - upon the Second Amendment

30:39 - because if there are no firearms out there for people to purchase,

30:42 - well then they can't exercise their Second Amendment rights,

30:46 - not to mention what it was doing for the industry.

30:49 - Yeah, Counsel Really

30:53 - not necessarily a fine point.

30:55 - What Congress is regulating is litigation,

30:59 - correct?

31:01 - What they're doing is regulating litigation in this in this context.

31:05 - Yes. So, so the activity that they are regulating

31:09 - is litigation, not the gun industry.

31:14 - Well, they're regulating when

31:17 - when under certain circumstances, people cannot bring actions into this courtroom.

31:23 - So, yes, and that has a profound effect upon the firearms industry.

31:28 - But does that not make Congress almost virtually limitless

31:32 - in what they can do if they're permitted to restrict or prohibit

31:38 - any form of litigation, which is within the power of the sovereignty of the state?

31:43 - Well, they're not saying you can't bring a firearms case in the Commonwealth.

31:47 - They're not saying that.

31:48 - They're saying a short, small, narrow

31:50 - type of case cannot be brought here, as they've done in many other entities.

31:54 - Prevent them from doing that.

31:56 - If they say you're not allowed to prosecute firearms

31:59 - because it violates the Commerce Clause, the Supreme Court,

32:03 - the Supreme Court

32:04 - to be the ultimate arbiter there if Congress overstepped its bounds

32:08 - and then the Supreme Court would would, I assume, at some point

32:11 - be the arbiter of that?

32:13 - We can't, but not the the the difficulty here is

32:18 - this is sort of a bird's eye view of the world,

32:20 - worm's eye view of the bird situation.

32:21 - One can look at it as regulating litigation at the state level.

32:25 - One can also look at it is regulating an industry.

32:28 - It's not like the fire was.

32:29 - Industry is unregulated at the federal level.

32:32 - And and

32:32 - part of that regulation is to give immunity.

32:36 - If we don't recognize the power of Congress to grant immunity

32:41 - in the area of of an industry that they regulate,

32:46 - we're going to have problems with other immunities as well.

32:49 - I mean, argue vaccine manufacturers are immune

32:52 - from suits.

32:54 - Is that a regulation of litigation in the state courts

32:58 - or is it an exercise of the Commerce Clause power of Congress?

33:04 - Yeah, it's an exercise of the the Commerce Clause power of Congress.

33:08 - And could every immunity action at every instance where Congress grants

33:12 - immunity from civil lawsuits be viewed as a regulation of litigation?

33:17 - It could be looked at in that, yes, if you just take a very narrow

33:21 - look at it, of course.

33:22 - Is it your position, let's say that litigation in

33:28 - the is or is not commerce?

33:29 - What's your position? Litigation is commerce.

33:32 - Litigation is commerce on it. Okay.

33:35 - And maybe this is for your co-counsel, but

33:40 - and and you would you would say that

33:43 - rational basis analysis is applied to

33:50 - litigation as the industry

33:52 - being controlled as opposed to the gun industry.

33:55 - I've got to leave that for for for the government There, Your Honor.

34:01 - So. So so where are we?

34:03 - We don't have a lot of case law here in the Commonwealth.

34:05 - We have case law from around the country, which all as far as the applicability

34:10 - portion of this, this this, these issues before your honors,

34:15 - there is no contrary case law.

34:18 - In fact, the court below in dicta understood in dicta 72 found that appeals

34:24 - CAA is applicable and should prevent this suit from going forward.

34:30 - And any other questions?

34:32 - Let's hear from your co-counsel then. Thank you.

34:34 - Thank you, Madam Government.

34:36 - As it.

34:45 - Thank you,

34:46 - May, please The Court Laura Myron, for the United States,

34:49 - I'd like to clarify a little bit how the questions under the Commerce

34:52 - Clause and the 10th Amendment or federalism work together.

34:55 - So the way that the courts have understood these questions is where

34:59 - Congress exercises its enumerated power in a lawful manner.

35:03 - It only violates the 10th Amendment

35:06 - if it is an action that constitutes commandeering.

35:10 - So that's cases like Prince and York in which the Supreme Court

35:13 - of the United States found that there was commandeering in cases

35:16 - like Hodel and Garcia, in which the Supreme Court clarified

35:20 - that there isn't a pool of state sovereignty on which Congress intrudes

35:25 - when it is engaging in a lawful act under its enumerated powers.

35:29 - So what you have here is a lawful

35:33 - enactment

35:34 - under the Commerce Clause, under enumerated power by Congress.

35:37 - Every state and federal appellate court to have considered the question

35:41 - has concluded that this is a lawful enactment

35:44 - under the Commerce Clause because it regulates private conduct.

35:48 - It regulates.

35:48 - And and I would note that this is expressed in the statute.

35:52 - It only affects suits brought against

35:55 - manufacturers and sellers who engage in interstate commerce.

35:58 - And it only concerns the kinds of suits

36:00 - that arise related to products that have traveled in interstate commerce.

36:04 - So very clearly limited to those kinds of suits and those kinds of actors.

36:10 - It demonstrates that Congress thought that certain kinds of suits

36:14 - posed an unreasonable burden on the interstate,

36:18 - on interstate commerce, particularly for firearms sellers and manufacturers.

36:23 - As noted, there are and I believe this is at least one of the amicus briefs,

36:28 - quite a few instances in which there were significant judgments against actors

36:32 - in the interstate market for firearms and manufacturers that threatened their

36:37 - their ability to continue participating in the market.

36:40 - And Congress enacted this particular statute in response,

36:43 - in response to and also a patchwork of different jurisdictions

36:47 - having different rules to provide a substantive rule of liability

36:51 - under the circumstances outlined in the statute before us.

36:55 - I'm happy to address the court's questions on the Commerce Clause

36:58 - or also briefly address the the commandeering question.

37:02 - The State Counsel.

37:03 - Can I just ask that you've raised an interesting point.

37:06 - So if if if I were a single state,

37:11 - small gun manufacturer and I didn't sell my, you know, offering,

37:16 - you know, offer for the guns in interstate commerce,

37:19 - sold them at my own shop,

37:22 - even though I would have to be federally licensed, I assumed to do that.

37:25 - Which begs the question,

37:26 - if I'm only doing it in state, how do I have to be federally licensed?

37:30 - Are you saying that that if I if I only engage in intrastate commerce,

37:36 - this law doesn't apply

37:38 - my understanding of the statute and that is this is in 7903

37:42 - and the definition of a qualified civil liability action and also in

37:45 - the definition of a qualified product is that there is a requirement

37:48 - in both of those provisions that, one, the seller and manufacturer

37:52 - be one that engages in interstate commerce, and to that

37:55 - the product be a product that has traveled into interstate commerce.

37:58 - So the seller to the seller here

38:00 - is the seller here who sold the gun here, engage in interstate commerce.

38:05 - We haven't taken a position on the applicability of the statute here.

38:08 - So I think I would be appropriately addressed to to co-counsel.

38:12 - But as a constitutional matter,

38:15 - Congress has limited the particular actions that it's targeting

38:18 - under this provision to those in which the manufacturer and seller

38:22 - has engaged in interstate commerce

38:24 - and where the product has traveled in interstate commerce.

38:26 - And and I bring that up because that makes this an easy case

38:30 - for the proposition that Congress has acted pursuant

38:33 - to its authority under the Commerce Clause,

38:36 - and because it has done so, that also renders

38:39 - the 10th Amendment question limited to whether or not

38:42 - the Congress has engaged in commandeering by enacting the statute.

38:46 - And it has not because the statute does not direct

38:50 - or prohibit the state from engaging in any particular lawmaking.

38:54 - It has a substantive rule of liability for manufacturers

38:58 - and sellers against particular kinds of lawsuits outlined in the statute.

39:03 - And the Supremacy clause dictates that where Congress has done so pursuant

39:07 - to a lawful exercise of its enumerated authority,

39:11 - that state law is preempted by the federal law.

39:15 - And that is not a 10th Amendment problem.

39:17 - That's the Supreme Court's case in Murphy.

39:20 - It makes very clear that preemption where the statute regulates

39:23 - private conduct, is sort of bread and butter of the supremacy clause and

39:28 - and there's no 10th Amendment problems there.

39:31 - What is the United States position with regard

39:34 - to 7903 five?

39:37 - It's five a subsection three

39:41 - at which it says an action in which a manufacturer or seller

39:44 - of a qualified product knowingly violates a state or federal statute.

39:48 - What's your position?

39:49 - And do you believe this authorizes states to enact statutes

39:53 - that would otherwise be prohibited under our common law?

39:58 - I don't.

39:58 - The United States

39:59 - has not taken a position on the scope of the knowing statutory violation.

40:03 - I understand that that's a question of some debate in various courts.

40:08 - The United States has said, and I will say,

40:10 - you know, as relevant to the 10th Amendment question, that

40:13 - nothing in the enactment of an exception for a knowing statutory violation

40:19 - provides any sort of commandeering, creates any sort of

40:22 - commandeering problem in the statute, because states are free to create whatever

40:27 - common law causes of action or statutory causes of action that they like.

40:31 - Some of those causes of action

40:32 - are preempted by the federal enactment, some of them are not.

40:36 - And that's not a 10th Amendment problem.

40:38 - That's that's simply an exercise of the supremacy clause on certain

40:43 - kinds of state, either statutory or common law actions,

40:48 - and and does not give rise to any problems under the Constitution.

40:54 - All right.

40:55 - Any other question?

40:57 - Thank you very much.

40:58 - Thank you.

41:05 - May plea may please the Court.

41:07 - Madam Chief Justice, my name is Jonathan Lowy, appearing

41:10 - on behalf of the appellees Mark and Leah Gustafson

41:13 - individually and as representatives of the estate of their late son, James.

41:18 - Robert Gustafson, also known as J.R..

41:21 - With me is my co-counsel, Kelly Iverson

41:25 - of the Lynch Carpenter law firm here in Pittsburgh.

41:29 - Your honors, There are five

41:31 - paths, independent paths, for this court to affirm

41:36 - the decision below and allow the assistance case to go forward.

41:40 - The three questions that the court has presented,

41:44 - two of them having sub parts and if the court finds in favor

41:49 - of the consistency in any one of those five grounds,

41:54 - the lower court's decision should be affirmed.

41:59 - One applying the plain statement rule.

42:02 - And this is critical.

42:04 - The plain statement of rule in Bond and Gregory

42:08 - governs the interpretation of PLACA

42:11 - in applying the plain statement rule.

42:14 - The substance case does not satisfy the initial definition

42:19 - of a qualified civil

42:21 - liability action because and this is the plain statement rule

42:25 - Congress did not unmistakably and clearly

42:30 - in the language of placa state, an intent

42:36 - to prohibit traditional

42:38 - or common law cases like this where one cause of harm

42:44 - was gun industry, gun company misconduct

42:48 - and another cause of harm was criminal from lawful misuse.

42:54 - Therefore, we don't satisfy

42:56 - the first initial definition in 70 9035a

43:02 - second.

43:03 - Even if this case satisfies that general definition

43:07 - of qualified civil liability action, the case would be allowed

43:11 - under PLAC its product defect exception

43:14 - for two separate reasons.

43:17 - One, Congress did not state

43:20 - clearly and unmistakably

43:23 - its intent to prohibit cases like this

43:26 - involving an unintentional discharge of a gun.

43:31 - The use of the word volitional is not an indication

43:35 - that it intended to prohibit cases like this.

43:40 - Three.

43:41 - But, Counselor, I don't mean to cut you off,

43:43 - but under its findings and purpose, it indicates

43:46 - that they want to stop outrageous litigation

43:49 - from maverick judicial officers.

43:52 - So it's not as they're trying to stop this type of fluff,

43:55 - but that particular concern, it's that they're stopping litigation.

44:01 - How does that play into your argument?

44:03 - Well,

44:04 - and when we get to the constitutional argument,

44:06 - Your Honor, I do think that the court that the Congress is biased against

44:10 - the courts is significant and ultimately renders placa unconstitutional.

44:15 - But in construing the statute, what Congress said in the language of

44:20 - placa is one, it didn't want

44:25 - expansions, novel expansions of the common law.

44:30 - It didn't say it wanted to eliminate common law, said

44:33 - it want to eliminate theories without foundation.

44:37 - And in hundreds of years of the common law that doesn't touch what's the defect?

44:42 - You just

44:45 - you just

44:46 - made an argument concerning the defect exception I missed.

44:50 - What's the defect in this gun?

44:53 - The defect is that there was a feasible

44:58 - alternative design of the gun

45:02 - which would have prevented the death of J.R., and that is to include a number.

45:06 - Any one of a number of safety features, including a magazine disconnect.

45:10 - Safety would have prevented this gun from firing.

45:13 - This was invented over 100 years ago to prevent shootings exactly like this.

45:19 - Any court in this country held that the absence of

45:23 - that is a design defect within the meaning of the statute.

45:26 - Yes, Your Honor. In Smith, Ft.

45:29 - Braco, New Mexico Court of Appeals upheld a case very similar.

45:35 - Almost identical facts.

45:37 - It was a magazine defect.

45:39 - Hersey Glock in New Jersey upheld another virtually identical case.

45:44 - They didn't get to jury, I don't think.

45:46 - But this was the court's holding that these are legitimate

45:50 - product defect claims.

45:52 - We also have a negligent design and marketing claim.

45:55 - Were those cases were those cases where somebody

45:58 - took out the magazine, pointed the gun at somebody's head and pulled the trigger?

46:03 - I don't know where they pointed, Your Honor,

46:05 - but the fact patterns and I don't remember every instance,

46:09 - the facts, but they're virtually identical adolescent, adolescent boys.

46:12 - One of them thinks that the gun is unloaded,

46:16 - the magazine is out of the gun.

46:18 - And because it is open, it sort of matters, though, right?

46:21 - Because I mean, if if if the facts are that the adolescent boys,

46:26 - one thinks the the the gun is unloaded and plays

46:30 - with the gun randomly or drops the gun or something like that,

46:33 - and it goes off and kill someone, that's different from literally taking a

46:37 - unloaded, allegedly unloaded gun and pointing at somebody somebody

46:41 - and killing them.

46:42 - Well, I believe, Your Honor, in those cases, the boy

46:47 - who thought that the gun was unloaded, pointed it and pulled the trigger.

46:52 - And to be clear, those cases were before.

46:55 - Those are not pocket cases, but they're you know,

46:58 - you were asking what the underlying defect is.

47:00 - Those cases support the underlying defect.

47:03 - That is it your position that

47:06 - that the

47:09 - the plea to a violation of the crimes code

47:12 - resulting in a stipulated adjudication to delinquency.

47:16 - Involuntary manslaughter carries

47:19 - neither volition nor mens rea.

47:23 - Is that your position

47:24 - that there's no volition encapsulated in the juvenile's

47:28 - plea to the violation of the crimes code that there is?

47:33 - I believe that there is no admission

47:36 - that the discharge of the gun

47:39 - was caused by a volitional act.

47:44 - And that's what's necessary under the statute.

47:46 - And again, to be clear, I think the appropriate question

47:50 - for the court to be asking about whether this case satisfies

47:53 - the product defect exception is

47:57 - did Congress state unmistakably

48:02 - and clearly in the text of the statute

48:08 - that it intended to prohibit cases involving

48:12 - unintentional shootings by juveniles?

48:15 - That's the question. And that's have to be.

48:18 - Well, you added a bunch of things in there,

48:21 - particularly the word juveniles.

48:24 - Didn't Congress make then Congress make an express finding, dealing

48:28 - with product defects and the idea that if if you have a product defect claim.

48:35 - But the the discharge was the result of a volitional criminal act

48:39 - that that shall be considered the cause and and not the product defect.

48:44 - That's yes, Your Honor.

48:46 - That's what what Congress says now is that.

48:48 - How much clearer could they to Congress?

48:50 - I mean, we have to be careful about, you know, Monday morning legislative

48:54 - writing here.

48:55 - How much clearer could they have been?

48:58 - Much clearer.

48:59 - I mean, for one,

49:02 - you know, Congress, let's talk about the word criminal.

49:04 - There are two elements here that have to be satisfied.

49:07 - One is volitional.

49:08 - One is criminal.

49:09 - If you talk about criminal, Congress, in the initial definition of qualified

49:14 - civil liability action, uses the phrase criminal or unlawful misuse.

49:19 - Now, in the product defect exception, it cuts out

49:22 - the unlawful misuse language and makes it a criminal offense.

49:28 - So it's code violation to which you stipulated

49:31 - is, per se, a criminal offense.

49:34 - I mean, it's not an adult court, but it's an adjudication of a violation

49:38 - of the crimes code and therefore a criminal offense, is it not?

49:43 - Well, I believe

49:44 - that that juvenile proceedings

49:47 - and criminal proceedings are separate in Pennsylvania.

49:51 - So a juvenile proceeding is not a criminal offense.

49:56 - Now, the act in a different set of

49:59 - set of scenarios could have constituted a criminal offense, but it did not hear.

50:05 - And the question is what?

50:06 - Confused by that argument because we only have one crimes code

50:09 - and the same statute applies

50:13 - if an adult is charged or if a juvenile is charged.

50:17 - You're getting then to the into the proceedings that if it were a juvenile,

50:21 - you had to look at what court he was in and what he's ultimately

50:25 - adjudicated delinquent of.

50:28 - But the basic crime, the basic offense is exactly the same,

50:33 - whether it's a juvenile or an adult, isn't it?

50:37 - Well,

50:38 - Your Honor, yes, there is some of the same.

50:41 - You can have the same acts.

50:43 - That is true.

50:43 - The question is, what did Congress intend in the product defect exception

50:49 - by only excluding criminal offenses

50:53 - and allowing

50:56 - unlawful misuse

50:59 - that did not constitute a criminal offense.

51:02 - And that has to mean something.

51:04 - Well, unlawful can encompass all sorts of violations of civil statutory

51:10 - law or common law, civil offenses and common law.

51:14 - Right Unlawful can mean all sorts of things.

51:17 - But your position that a violation of the crimes

51:21 - code is not a criminal offense because the disposition

51:25 - is governed by a different regime, namely the one for juveniles, is a

51:31 - peculiar argument, I think.

51:33 - Setting aside your argument that this is non volitional.

51:37 - Well, Your Honor, again,

51:39 - the question is what should Congress intend by the term criminal

51:45 - in the productivity exception?

51:46 - But I think if I'm understanding you're you're saying Congress needed

51:49 - to specifically say criminal offenses committed by adults or juveniles

51:55 - otherwise were to assume they only meant adult crimes.

52:00 - I think there are other ways you could have done it, but that is

52:02 - that is one I think that the presumption, again,

52:04 - why should we assume why should we assume a narrow intent by the general?

52:09 - I mean, if you want to

52:09 - if you want to cover a broad swath, you say criminal offense.

52:13 - If you want to narrow it, you say criminal offense by adults.

52:16 - You want to narrow it to juveniles, a criminal offense by juveniles.

52:18 - You're saying they needed to say adults and juveniles.

52:21 - They need to add more to make it broader.

52:25 - You're on the the why do you have to

52:29 - use this narrow construction

52:31 - is because both the United States Supreme Court

52:34 - and Bond Gregory Medtronic

52:36 - and this court in Dunner versus

52:41 - de Donato and Miller vs SEPTA

52:44 - state that you must

52:47 - apply a presumption against preemption.

52:50 - You must demand that Congress clearly and unmistakably state.

52:56 - I understand the principle of the case.

52:57 - Just trying to understand your statutory construction argument.

52:59 - You're saying when when there's criminal offense, it exclusively means adults.

53:04 - Right. That's what you're saying.

53:07 - I'm saying in this context, Your Honor, Congress is here.

53:11 - Litigate is legislating over product

53:14 - liability actions involving firearms.

53:17 - Now, there are only a few types of those cases.

53:21 - One of the most common is this factual scenario

53:24 - that's been happening for decades, if not over a century,

53:27 - where children, usually young boys playing with a gun,

53:32 - think that the guns unloaded

53:33 - precisely is fact pattern and they're judged as juvenile offenses.

53:37 - Now against that landscape.

53:39 - And when you apply the plain statement rule

53:41 - and you apply the presumption against preemption, then yes,

53:44 - if Congress wants to hear the case, they should specify juvenile. So.

53:48 - So the answer is criminal offense should be construed to be a

53:52 - criminal offense by only.

53:54 - What if the juvenile is charged as an adult?

53:58 - Well, I think that may be a harder case.

54:02 - And if it's a criminal offense of juvenile

54:03 - commits a criminal offense, that would that would be a harder case.

54:07 - Isn't this case, though, in this case is unquestionably

54:12 - a juvenile offense, unquestionably unintentional,

54:18 - and which weighs in on the volitional aspect and also the the criminal aspect.

54:24 - But again, when you order if you the recklessness or gross

54:27 - negligence required for our crime is involuntary manslaughter,

54:32 - in your judgment, are immaterial to the volition calculus.

54:37 - The fact that he pled to involuntary manslaughter,

54:41 - which requires reckless or grossly negligent conduct resulting in death,

54:47 - that doesn't play into the volition calculus.

54:50 - I think it is largely immaterial to the determination

54:54 - of what did Congress intend in the drafting of PLACA,

54:58 - which is really the only question before the court in construing Placa.

55:03 - Just follow up briefly on that.

55:05 - In doing that, because you mentioned several times

55:09 - the effort to discern Congress's

55:12 - intent in to the to the extent

55:16 - to the extent we need to search for that

55:19 - beyond the terms of 7903,

55:23 - don't we find that

55:27 - in great profusion in 7901

55:31 - where Congress listed its findings and its purposes?

55:37 - I think the court

55:38 - certainly should use the findings and purposes of Plaka and what those say.

55:44 - The number one purpose that

55:46 - that is stated in 70 901b1

55:51 - is to prohibit cause of action.

55:53 - I'm skipping a few words for the harm solely

55:58 - caused by the criminal

56:00 - or lawful misuse of firearms products solely

56:03 - and that word solely was inserted by Congress

56:08 - when Placa did not pass in the previous session.

56:12 - So not only does the court have to pay attention to that word,

56:16 - but particularly where it was one of the last additions to to enable

56:21 - a placa to be passed solely and that solely is repeated again

56:25 - in that particular provision.

56:26 - Counsel that you just read to us, a part of it to us

56:31 - speaks of when the product

56:33 - functioned as designed and intended,

56:37 - though it resulted in a horrible tragedy.

56:39 - Didn't this product function exactly as it was designed

56:43 - and intended?

56:47 - In a sense, I mean, it was not intended

56:49 - to mislead users that the gun is unloaded when it actually was loaded.

56:55 - So in that sense, I would quibble with that.

56:58 - I mean, that and that's really get get to the gist of the defect is that

57:02 - if you included a loaded chamber indicator, if you included in magazine

57:06 - disconnect safety included other safety features and warnings,

57:09 - then you could have a gun that alerts people

57:13 - that there is a round in the chamber just like you're alerted that you're

57:17 - you need to fill up your gas tank

57:20 - so that this can be done and the technology is out there

57:23 - and that gets the defect.

57:24 - But the key point in that purpose and by the way, it's

57:28 - repeated in the finding 79 to 1 a six solely caused.

57:34 - It was just what Congress is saying to Congress later

57:36 - define what solely caused is on the product defect issue.

57:40 - Don't they say that where there's a volitional criminal offense

57:44 - that will be considered the sole cause?

57:48 - Didn't Congress say that? That's exactly right.

57:49 - So consistent with their stated intended purposes in the same statute,

57:53 - they later defined what sole cause was from a product defect perspective.

57:58 - Yes, Your Honor.

57:58 - Except you don't even get to the product defect

58:02 - if you don't satisfied

58:04 - the general definition of qualified civil liability action. So.

58:08 - So to be prohibited, you need to prove

58:12 - two elements from the gun companies to prove two elements.

58:16 - First, that the case needs to satisfy the general definition,

58:20 - which is in 70 9035a

58:24 - next.

58:25 - If you satisfy that, then you have to prove that none of these exceptions

58:31 - are satisfied.

58:32 - And so in our view, we don't even satisfy Section

58:37 - five A, because in that

58:41 - that prohibits liability for harm resulting

58:45 - from criminal or unlawful misuse.

58:46 - That should be read consistently with Congress's stated purpose,

58:51 - which is to only prohibit

58:54 - nontraditional common law actions that are where there

58:58 - the harm was solely caused by criminal misuse.

59:01 - If you read those terms consistently, as you should with any statute,

59:05 - then we don't satisfy that first element because here one of the causes was

59:10 - criminal or unlawful misuse, and another cause was the the defective

59:17 - design.

59:21 - And I would like to,

59:23 - of course, answer other questions about the the statutory definition.

59:29 - But do you want to get to the constitutional argument?

59:31 - But I want to make one other point about

59:34 - the defendant's appellant's construction of volitional.

59:39 - Imagine

59:42 - if the gun manufacturer

59:45 - were to market a firearm

59:49 - saying to the public,

59:51 - this is one of those old time guns

59:54 - where when you pull the trigger, a little flag pops out of the barrel.

59:59 - 999 Okay, that's the advertising.

01:00 - 05.101 Now, in fact,

01:00 - 08.304 when the 14 year old picks up the gun, he pulls the trigger

01:00 - 11.641 expecting the flag to pop out a bullet,

01:00 - 15.778 fires and kills his friend.

01:00 - 18.615 Now, under as I understand,

01:00 - 22.919 appellant's view of the term volitional,

01:00 - 26.823 that would have been a volitional

01:00 - 28.758 act that caused

01:00 - 31.961 the discharge of the gun and that manufacture

01:00 - 36.165 that was intentionally engaged in this deceptive marketing

01:00 - 40.169 would have immunity from suit.

01:00 - 44.340 And I don't see any way around that interpretation.

01:00 - 49.612 And so and I do think if you look at their construction

01:00 - 53.950 of volitional and I think their arguments on both sides, we can

01:00 - 55.818 of what volitional means.

01:00 - 58.321 But if you look at their view,

01:00 - 02.525 volitional has virtually no meaning in the statute.

01:01 - 05.828 And I think if you put their construction of criminal and volitional together,

01:01 - 10.033 the product defect exception does nothing.

01:01 - 11.968 It does not exempt

01:01 - 14.904 any product liability cases.

01:01 - 18.007 It simply says it's allowing cases.

01:01 - 20.777 And then with the exclusion, takes away those cases.

01:01 - 27.450 And it was with which is why I wouldn't allow a

01:01 - 30.820 a gun that has a faulty safety,

01:01 - 33.723 a faulty manual safety that isn't engaging.

01:01 - 36.592 And someone went to engage the safety

01:01 - 39.595 and the gun went off and hit something and killed somebody by accident.

01:01 - 40.930 Not that they pointed it to it,

01:01 - 43.933 but they were manipulating the safety, not the trigger.

01:01 - 45.134 And the gun went off.

01:01 - 46.869 You're saying that that would be preempted.

01:01 - 49.806 That would not be under

01:01 - 53.342 as I understand that, Your Honor, that would not be a criminal or unlawful

01:01 - 56.679 misuse, which would not even be prohibited in the first place.

01:01 - 58.781 Right. Exactly.

01:01 - 01.250 There'd be no need for the product liability exception.

01:02 - 04.687 My point is that are there construction of volitional and criminal

01:02 - 08.725 there is no purpose whatsoever

01:02 - 12.261 for the product defect exception, except that

01:02 - 17.900 what what Congress has said is that when you have a product defect

01:02 - 24.006 and a volitional act that is a criminal offense,

01:02 - 24.707 we are going

01:02 - 28.678 to make the criminal offense solely the cause.

01:02 - 31.380 And you can't have a product case.

01:02 - 31.948 That seems to me

01:02 - 35.918 what Congress is saying is that it's a it's a sole cause determination.

01:02 - 40.356 But if there's no underlying criminal or unlawful misuse of the gun,

01:02 - 44.360 this case is not governed by plac at all.

01:02 - 49.866 And so then there's no need for the exception.

01:02 - 52.168 If I could

01:02 - 55.138 briefly talk about the

01:02 - 58.307 constitutional flaws and happy to, of course,

01:02 - 02.879 answer additional questions about the statutory construction.

01:03 - 05.348 But going back to the question

01:03 - 08.351 about would it be constitutional to prohibit

01:03 - 11.788 mad mal cases, for example,

01:03 - 16.225 Placa actually has much greater

01:03 - 19.295 constitutional problems than that

01:03 - 22.765 because there are two independent reasons

01:03 - 26.836 why as unconstitutional. One,

01:03 - 29.939 there was no permissible commerce

01:03 - 36.279 clause authority for PLACA and that gets to your met. Now

01:03 - 38.281 questions

01:03 - 41.184 because Placa does something that

01:03 - 45.454 a Congressional act has never done before,

01:03 - 49.826 which is simply regulate litigation.

01:03 - 53.830 Just do just does that every other case

01:03 - 58.467 and every other statute that the United States mentions.

01:03 - 01.437 And that appellant's mention involves

01:04 - 04.740 some regulation of commercial activity.

01:04 - 08.911 And then as a consequence of, that regulation,

01:04 - 13.382 conflicting state actions are preempted.

01:04 - 15.718 Placa, of course, does not regulate

01:04 - 18.921 the gun industry in way whatsoever.

01:04 - 22.859 It simply regulates

01:04 - 25.928 litigation and state lawmaking.

01:04 - 30.166 Importantly, the benefit of the gun owners,

01:04 - 31.234 right?

01:04 - 33.302 It regulates litigation.

01:04 - 37.573 But to the impact, to the benefit of the gun, the gun owners,

01:04 - 40.843 I would say to the detriment of gun owners because I'm sorry,

01:04 - 44.313 but but to the benefit of gun manufacturers.

01:04 - 49.819 Yes, but but to the detriment of the gun owners and their families

01:04 - 53.089 as this case

01:04 - 54.624 shows.

01:04 - 58.461 But so that but that gets to the Commerce Clause problem.

01:04 - 03.065 And Your Honor's asked for what is that the the limit of Commerce

01:05 - 03.933 clause authority.

01:05 - 07.703 But my part to help does thinking about what you just said,

01:05 - 08.604 very interesting point.

01:05 - 10.706 I think

01:05 - 13.042 does the commerce

01:05 - 16.946 in Article one afford Congress the power

01:05 - 20.650 to legislate immunities?

01:05 - 23.786 Well, the only and I would point the court to immunize

01:05 - 29.392 to immunize sectors or industries or people or anything.

01:05 - 33.195 Well, it's it there is authority to immunize

01:05 - 36.198 government officials,

01:05 - 39.635 not I, I don't believe arising at the Commerce Clause authority.

01:05 - 44.874 It has never been done where it simply where a statute simply gives

01:05 - 49.178 legal protection to a gun industry without regulating it again.

01:05 - 52.248 But are you saying that if Placa would have amended

01:05 - 57.353 the Gun Control Act of 1968 or the National Firearms Act of 1934,

01:05 - 58.754 Placa would be fine.

01:05 - 02.692 It's because it's a standalone statute not tied to the two federal acts

01:06 - 04.894 that regulate firearms.

01:06 - 05.995 Well, but

01:06 - 09.832 Your Honor, Congress does not in placa

01:06 - 13.202 preempt actions that conflict

01:06 - 16.272 with the Gun Control Act.

01:06 - 18.541 In fact, it allows it one.

01:06 - 23.412 It allows actions that conflict if there's a violation.

01:06 - 25.614 Understand, I'm trying to understand your point. Your point.

01:06 - 30.786 You set up placa as a grant of immunity for a non-regulated industry.

01:06 - 32.088 That was sort of your point,

01:06 - 35.925 that the firearms industry is heavily regulated by the federal government.

01:06 - 39.895 My, my point was that in preemption,

01:06 - 43.799 what preemption does is it sets federal standards

01:06 - 46.869 and then either expressly or impliedly

01:06 - 49.705 tells states you can't conflict

01:06 - 52.808 with this federal scheme, this federal regulatory scheme.

01:06 - 58.614 And that already I mean, and looking, you know, one of their purposes they state

01:06 - 02.985 in the in the 79 to 1 B is to prevent the use of such lawsuits

01:07 - 07.923 to impose unreasonable burdens on interstate and foreign commerce.

01:07 - 11.427 Thinking about that and thinking about your your arguments

01:07 - 15.831 here, I wonder if necessarily

01:07 - 19.235 if your argument is vindicated here,

01:07 - 23.139 that that means that

01:07 - 28.010 all of the federal drug crimes, for example, must come down?

01:07 - 29.912 I mean, you're going to be a lot of assistant U.S.

01:07 - 31.614 attorneys without work.

01:07 - 36.786 I don't know how your argument doesn't extend to

01:07 - 40.790 striking down on is beyond the reach of the federal commerce power.

01:07 - 45.628 A whole net whole array of federal

01:07 - 49.165 of Title 18 offenses.

01:07 - 49.565 Right.

01:07 - 51.100 Well,

01:07 - 54.036 Your Honor, I mean, this is

01:07 - 55.838 I mean, the Supreme Court

01:07 - 01.744 has never indicated that federal

01:08 - 03.145 gun laws

01:08 - 07.283 or drug laws are inconsistent with with,

01:08 - 11.654 you know, proper congressional authority has dropped Title 28.

01:08 - 12.855 Sorry. Okay.

01:08 - 16.058 You know, has drawn the line when you got to prints

01:08 - 20.963 background check law Lopez gun free schools and law

01:08 - 24.834 said that that's where the Supreme Court has drawn the line.

01:08 - 30.773 So I don't think that this reading puts puts any of that in in peril.

01:08 - 34.176 What Supreme Court has also said is that

01:08 - 36.011 state

01:08 - 39.482 authority over tort law

01:08 - 42.751 is almost

01:08 - 47.523 exclusively authority over over state tort law is almost exclusively

01:08 - 51.460 a state issue, an issue of state sovereignty.

01:08 - 54.797 And and this gets to the 10th Amendment issue,

01:08 - 57.867 which I think is is, you know, critically important.

01:08 - 02.404 And it's the the the most serious constitutional problem

01:09 - 05.608 with Placa and this goes to justice.

01:09 - 08.844 DA To you, you mentioned early on today

01:09 - 15.117 that what does is it says to states

01:09 - 19.522 you can impose all the liability you want on the gun industry.

01:09 - 23.459 So as a matter of fact, they're not protecting the gun industry.

01:09 - 26.762 You could have unlimited liability on the gun industry.

01:09 - 31.200 In fact, you can have unlimited liability and have any theory of liability

01:09 - 35.804 you want, as long as it involves a violation,

01:09 - 41.944 knowing violation of a statute under the predicate exception.

01:09 - 46.115 And so what what Congress has done in that,

01:09 - 49.518 and that's reinforced it in the findings,

01:09 - 54.857 just as you already mentioned, that show this bias against the judicial branch.

01:09 - 58.994 What Congress has done is it's told Pennsylvania

01:09 - 02.765 how it can make law.

01:10 - 04.266 You can't make

01:10 - 06.869 excuse me, but hasn't the Congress done

01:10 - 10.539 that same

01:10 - 14.043 format previously, for example, in the area?

01:10 - 19.515 And I think it was mentioned earlier this morning with vaccines, the preempted

01:10 - 21.450 Congress has preempted Your Honor, but

01:10 - 24.453 Congress has never

01:10 - 27.923 told states what branch of government

01:10 - 32.795 it is of state government it may use to make state law

01:10 - 36.599 that has never been tried by Congress

01:10 - 39.802 and it's never been blessed by the U.S.

01:10 - 41.303 Supreme Court.

01:10 - 43.839 And that's what this that's what it does.

01:10 - 47.076 What how does that matter for purposes of this case?

01:10 - 51.080 Because this is a concern.

01:10 - 51.981 Why do we have

01:10 - 55.851 to look at that provision, which no one is arguing that

01:10 - 58.921 that provision or maybe you are arguing that provision is unconstitutional.

01:10 - 02.424 But even if we did that, we we blew line that out.

01:11 - 05.928 I don't know what I don't know what what what bearing that has.

01:11 - 08.664 But you've you've kind of you've kind of missed justice.

01:11 - 12.501 Monday's question, which is which is,

01:11 - 16.038 under your theory, the immunity granted to the vaccine

01:11 - 19.508 manufacturers is unconstitutional,

01:11 - 22.211 a violation of the 10th Amendment?

01:11 - 24.947 No. With all due respect, Your Honor, no.

01:11 - 28.684 And for one, we are making a facial challenge of plaka

01:11 - 32.621 to You cannot blue line out the predicate exception because one of the reasons

01:11 - 35.624 it passed the placa passed was because

01:11 - 39.094 you had this carve out for legislation.

01:11 - 40.195 So you can't sue.

01:11 - 44.967 It's it's not appropriate for the court to to rewrite the statute.

01:11 - 48.037 And so it is it is unconstitutional.

01:11 - 51.573 And the immunity to the vaccine

01:11 - 54.743 companies, just like there's been preemption

01:11 - 00.015 of all sorts of actions from medical device suppliers and others.

01:12 - 05.354 All of that is in a context of regulation of commerce

01:12 - 08.390 and Chief Justice Roberts

01:12 - 11.193 stated in Sebelius,

01:12 - 15.030 the Affordable Care Act case, that Commerce clause, and I'm

01:12 - 20.602 paraphrasing here, but he basically said Commerce Clause authority

01:12 - 25.641 implies regulation of commerce.

01:12 - 29.845 And that was the problem of the that the chief justice had

01:12 - 34.450 with the mandate in the Affordable Care Act.

01:12 - 38.821 And importantly, when the United States

01:12 - 41.990 refers to other cases that have upheld

01:12 - 44.993 the constitutionality of Placa,

01:12 - 49.431 those cases, almost all were

01:12 - 53.469 handed down before the three most important Supreme Court cases.

01:12 - 58.340 And these issues, one of those is is Murphy versus NCAA,

01:12 - 01.343 where the Supreme Court made clear that

01:13 - 06.582 a federal statute can violate the 10th Amendment

01:13 - 09.685 even if it doesn't force the state to do anything.

01:13 - 13.422 But if it tells the state what it cannot do,

01:13 - 18.260 in that case, it said in New Jersey, you can't authorize gambling,

01:13 - 21.130 just like here, it's saying Pennsylvania courts.

01:13 - 23.599 You can't impose civil liability.

01:13 - 27.269 But here. But to be a Sebelius problem,

01:13 - 28.837 the statute would have

01:13 - 33.509 to force it would have to force people to litigate claims against their

01:13 - 37.146 will to fall within the Sebelius problem you're talking about.

01:13 - 39.748 Right. So how is that analogous?

01:13 - 41.183 It's analogous, Your Honor.

01:13 - 43.385 Clearly doesn't it doesn't do that.

01:13 - 48.090 But it's analogous because

01:13 - 49.792 there

01:13 - 53.729 what Supreme Court said was Chief Justice Roberts said is it doesn't matter

01:13 - 57.166 that what Congress is doing impacts

01:13 - 01.437 a lot of interstate commerce, that, of course, it imports.

01:14 - 05.808 If somebody doesn't buy insurance, it impacts the interstate insurance industry.

01:14 - 07.376 That's not good enough.

01:14 - 12.247 You need to be regulating existing commercial activity.

01:14 - 15.350 And so the just Chief Justice Roberts was talking about

01:14 - 19.221 there is that Congress, well, then he ultimately taxed power.

01:14 - 22.491 But that that the

01:14 - 25.494 Congress with respect to Commerce

01:14 - 28.497 Congress was trying to regulate people doing nothing.

01:14 - 31.633 And he said they can't do that.

01:14 - 32.434 That's not

01:14 - 35.437 that doesn't seem to me to be your case.

01:14 - 41.477 I agree that that was more extreme in that respect.

01:14 - 44.546 But I do think the central point was

01:14 - 50.486 you have to be regulating activity, and that's all the Commerce clause cases

01:14 - 55.390 that are that are cited involve regulation of commercial activity.

01:14 - 56.692 What is plaka do?

01:14 - 57.960 Well, there's nothing to the gun industry,

01:14 - 59.695 but if you're going back, you're going back to that.

01:14 - 02.498 But there's there are that's what I'm saying.

01:15 - 06.268 So if they would have amended the existing firearms regulation statutes

01:15 - 09.271 to include the immunity instead of having a separate act,

01:15 - 12.274 you wouldn't be making this argument.

01:15 - 13.709 It's the fact that it's a it's

01:15 - 16.845 separate from all the other federal regulation of the firearms.

01:15 - 18.680 With all due respect, Your Honor, No, it's not.

01:15 - 21.583 Simply where is the statute placed in the U.S.

01:15 - 22.784 code? That's not that.

01:15 - 23.886 The problem is.

01:15 - 26.822 What it does is it does two things.

01:15 - 30.092 One, it tells state courts

01:15 - 34.596 when you're construing, by the way, Pennsylvania common law,

01:15 - 35.497 you shall

01:15 - 39.801 determine that the sole proximate cause is a volitional criminal act.

01:15 - 42.971 In this case, this is a Penn State common law case.

01:15 - 44.540 It's not converted into federal case,

01:15 - 46.575 but that's what the Congress is ordering there.

01:15 - 52.047 There Plaka is telling Pennsylvania, if you want to impose liability in a case

01:15 - 56.251 like this, use your legislative branch because we don't trust the judges.

01:15 - 58.720 Congress. That's Congress again before.

01:15 - 01.723 But General Assembly in Pennsylvania and Congress

01:16 - 06.128 very often will enact legislation because they don't like something

01:16 - 07.195 that the courts have done.

01:16 - 09.598 I mean, that's that's a very motivating factor.

01:16 - 12.167 That's a matter of that choice.

01:16 - 14.636 The state gets to choose.

01:16 - 17.506 Congress does not get to pick for Pennsylvania.

01:16 - 19.975 Well, we don't we don't branch of government legislators.

01:16 - 23.011 We don't we don't legislate the General Assembly legislate.

01:16 - 28.350 So when Congress says we're we're preempting, I'm

01:16 - 31.153 this case is very complicated, I think, by a lot of the arguments.

01:16 - 33.355 But but if you could answer one more question for me.

01:16 - 36.325 How do we how how do we avoid,

01:16 - 40.462 like all of the other immunity statutes

01:16 - 44.232 under without if we adopt your theory

01:16 - 46.868 that this is a regulation of litigation

01:16 - 51.173 and not a regulation of the firearms industry that grants immunity,

01:16 - 57.312 how do we avoid calling into question all of the other immunity provisions

01:16 - 01.283 which prohibit common law causes of action in the Commonwealth of Pennsylvania?

01:17 - 06.288 The the easiest way to avoid it is to rely

01:17 - 08.857 when the court could do it entirely

01:17 - 11.460 on the 10th Amendment problem.

01:17 - 15.330 Just assume arguing no that there's Commerce Clause authority.

01:17 - 21.136 However, as in New York, New York versus United States and Murphy versus NCAA,

01:17 - 22.571 even if there's legitimate

01:17 - 25.574 congressional authority, if it violates 10th Amendment, it's unconstitutional.

01:17 - 29.011 So that would be the easiest way you avoid all those problems.

01:17 - 33.882 Now, assuming this court agrees with your position, the question

01:17 - 39.921 or concern I have is what is the remedy that you are seeking this procedurally?

01:17 - 44.693 This was preliminary objections which were sustained.

01:17 - 47.295 So what is it that you're asking us to do?

01:17 - 50.465 We're asking the Gustafson

01:17 - 52.668 case to go forward

01:17 - 57.472 and that they are entitled to pursue their civil justice claim.

01:17 - 02.611 And that can be done through either you do it backwards.

01:18 - 07.916 One holding that placa is unconstitutional and is effectively a nullity,

01:18 - 13.722 so it does not bar this action to

01:18 - 16.858 this case does not satisfy the general definition

01:18 - 22.831 of qualified civil liability action under 70 9035a

01:18 - 27.335 because it wasn't the sole cause of harm, was not

01:18 - 29.604 the criminal or unlawful misuse.

01:18 - 33.408 Three it comes under the product

01:18 - 37.479 defect exception, and any of those grounds allow the case to go forward.

01:18 - 39.247 And that's the remedy we're seeking, Your Honor.

01:18 - 41.283 And what is the product defect here?

01:18 - 44.619 The product defect was one failure

01:18 - 48.857 to include a reasonable alternative,

01:18 - 53.562 feasible design safety features such as magazine disconnect, safety

01:18 - 57.733 loaded chamber indicator, other technology warnings,

01:18 - 01.203 and also there's also a negligent design and warnings claim.

01:19 - 02.137 Let me ask you this.

01:19 - 05.540 When an individual purchased a firearm such as this,

01:19 - 08.910 are they provide it with notice that it does not have

01:19 - 13.715 a safety lock in that a bullet will be lodged in the chamber?

01:19 - 15.550 Well, the short answer

01:19 - 20.155 is that's not in the record, right, Because we're just

01:19 - 23.291 we're at the stage where it's just the allegations in the complaint.

01:19 - 27.095 But even assuming that there were

01:19 - 32.234 those sorts of warnings, the duty of the manufacturer

01:19 - 37.105 course is to design reasonably designed to prevent

01:19 - 41.676 foreseeable use and misuse and where it's foreseeable

01:19 - 45.847 that the gun is going to be stored,

01:19 - 49.251 where it's accessible to children, and it's foreseeable

01:19 - 53.755 that children and adults, by the way, will be deceived by the design

01:19 - 54.656 so that they will

01:19 - 58.627 think that the gun is unloaded when in fact there's round in the chamber.

01:19 - 01.096 Then it's an obligation of the manufacturer

01:20 - 03.765 to try to minimize that risk of harm.

01:20 - 08.336 Just as if you're designing a car, you've got to assume that people

01:20 - 12.941 are going to get crash and do the best you can to make the car crash worthy.

01:20 - 14.009 That's astonishing.

01:20 - 20.482 I suggest we get back for a moment to the regulation of litigation issue,

01:20 - 22.217 which I happen to think they sense,

01:20 - 27.823 but I'm actually not quite convinced that Congress can do that.

01:20 - 31.226 And so me ask you this question,

01:20 - 33.895 as I understand your position,

01:20 - 38.033 it's because of the

01:20 - 39.634 position of Congress,

01:20 - 43.905 which is essentially taken against common law causes of action, i.e.

01:20 - 49.044 court created causes of action that creates an issue with this statute.

01:20 - 50.545 Is that correct?

01:20 - 52.047 That's one there.

01:20 - 54.349 That's one of the flaws.

01:20 - 56.218 But the 10th Amendment flaw, it's not the Commerce clause.

01:20 - 00.188 Well, let me let me just take that to conclusion in my own mind.

01:21 - 05.193 So if we conclude that there is as much regulation

01:21 - 09.731 of statutory and common

01:21 - 12.200 causes of action

01:21 - 14.769 within this act

01:21 - 17.005 and we get over that problem,

01:21 - 20.609 your 10th Amendment issue,

01:21 - 21.977 tell me what else is wrong

01:21 - 27.048 with regulating litigation by Congress?

01:21 - 29.651 Well, so that gets to the Commerce Clause problem.

01:21 - 29.985 Okay.

01:21 - 32.988 Which which is that's why I'm still starting

01:21 - 37.325 struggling with why Congress can't do that.

01:21 - 43.765 Well, the precedent that we have in this Supreme Court case law or in

01:21 - 47.636 federal statutes, as I said, is

01:21 - 53.208 where there's actual federal regulation

01:21 - 57.746 and that preempts conflicting state actions,

01:21 - 01.416 including conflicting state tort actions.

01:22 - 04.286 We've never had a case

01:22 - 08.823 or statute say that Congress can simply

01:22 - 11.359 say litigation affects interstate commerce.

01:22 - 14.696 Therefore, Congress can do whatever it wants with that.

01:22 - 16.631 And if that were right, just one final point, Your Honor.

01:22 - 20.702 If if the United States position is correct,

01:22 - 24.005 which is that so long as a product

01:22 - 28.009 is involved in interstate commerce, Congress

01:22 - 32.914 has basically unfettered authority to regulate litigation,

01:22 - 38.186 that means, in my view, that literally the speaker of the House every morning

01:22 - 40.822 could pull up the docket

01:22 - 44.526 of trial courts in Pennsylvania and every other state.

01:22 - 49.264 And as to those cases involving interstate product,

01:22 - 54.035 just order, you know, this one wins, this one loses.

01:22 - 56.871 I mean, essentially

01:22 - 59.541 they've they've done that.

01:22 - 02.711 Granted, with different parts of Article one power.

01:23 - 05.080 They've done that with immigration laws.

01:23 - 07.549 They've done that with intellectual property.

01:23 - 12.120 You know, they they get to do that now here in the commerce power

01:23 - 15.123 area, as I say, they don't do that much.

01:23 - 17.225 But when they do it,

01:23 - 18.994 SCOTUS rarely.

01:23 - 21.162 I mean. Lopez Maybe it was a high watermark.

01:23 - 24.165 Look, SCOTUS rarely

01:23 - 25.900 strikes it down and I don't

01:23 - 29.104 I guess we ask you this.

01:23 - 30.805 I want to understand your

01:23 - 35.310 your argument about discrimination against common law.

01:23 - 40.548 If if the Congress

01:23 - 42.083 preempts the field

01:23 - 45.653 under Article six, the Supremacy clause,

01:23 - 49.924 why is it not free to

01:23 - 53.061 to preempt the field as to state common

01:23 - 57.198 law claims, but not as the statutory claims, be they federal or state?

01:23 - 01.002 Why are they not afforded that power under the supremacy clause?

01:24 - 01.803 I don't follow that.

01:24 - 05.774 Well, Your Honor, I believe that

01:24 - 09.077 if Placa were broader than it

01:24 - 14.616 is, if there were no predicate exception,

01:24 - 15.383 it would.

01:24 - 17.285 I'm not saying it would be constitutional,

01:24 - 19.788 but it would be more constitutional than it is today.

01:24 - 21.923 You wouldn't have that 10th Amendment problem

01:24 - 25.727 because Congress can preempt the field.

01:24 - 29.397 Congress can in all sorts of ways say,

01:24 - 33.635 you know, Pennsylvania, you can't regulate this industry.

01:24 - 37.972 You and that includes you can't impose liability on it.

01:24 - 40.408 Congress can do that in a proper way.

01:24 - 44.646 And there's a number of cases cited where Congress has done things like that.

01:24 - 48.516 But Congress can't do even though it's narrower,

01:24 - 51.586 Congress can't do it the way it did it here,

01:24 - 56.958 where it's telling Pennsylvania, you have to make law the way

01:24 - 01.496 we Congress tell you to the way we like you.

01:25 - 04.432 If you want to impose

01:25 - 09.003 product liability in this case, let's assume we lose product defect argument.

01:25 - 12.040 The way to do it is your legislative branch

01:25 - 13.908 has to pass a law,

01:25 - 19.013 but that Congress has absolutely no authority or no

01:25 - 24.385 and no legitimate business telling states how they make their law.

01:25 - 28.957 And I would say, Your Honor, I'm not aware of any statute,

01:25 - 34.596 and there's been none that's been cited where Congress has

01:25 - 38.166 dictated has simply dictated winners and losers

01:25 - 41.936 in civil litigation the way it does in Plaka.

01:25 - 47.142 And so I do not think there's authority for, for example,

01:25 - 49.244 my hypothetical where the speaker of the House,

01:25 - 51.646 which I do think would be permissible under the U.S.

01:25 - 53.848 view of the constitutional

01:25 - 55.917 the speaker of the House

01:25 - 57.986 decides

01:25 - 00.488 which cases, you know, which are going to be dismissed,

01:26 - 00.955 which well,

01:26 - 04.392 you're saying the speaker of the House, that elected legislative body, elected

01:26 - 06.294 by the people of the United States, I mean to say

01:26 - 10.265 is the speaker of the House is is a little you know, not really.

01:26 - 13.468 I mean, it's it's the legislative body under the U.S.

01:26 - 16.271 Constitution that can pass a law and it's subject to people

01:26 - 17.605 being voted in, voted out.

01:26 - 19.240 It's subject to getting the majority vote.

01:26 - 21.109 It's subject to a presidential veto.

01:26 - 22.343 It's subject to a lot of things.

01:26 - 23.711 So I think you're speaker of the House

01:26 - 29.317 thing is a little curt and it's subject to the 10th Amendment,

01:26 - 30.552 to the principles of federal.

01:26 - 31.019 Can you

01:26 - 33.288 can you explain and I have gone back to this

01:26 - 36.090 a couple of times, and I'm not sure I got an answer.

01:26 - 39.027 How is the vaccine immunity statute

01:26 - 43.464 constitutional under your theory in this one is a

01:26 - 45.033 what?

01:26 - 46.868 And I admit to not

01:26 - 50.471 being fully familiar with the entirety of that statute.

01:26 - 51.206 I understand.

01:26 - 54.576 Should be you should be by now, because it was raised in the superior court.

01:26 - 58.012 So you should be aware that that's the comparison that's being made.

01:26 - 01.482 But my know, my understanding of that of that statute

01:27 - 05.320 is that it was part of a

01:27 - 09.057 regulation of commercial activity.

01:27 - 14.195 It was not simply,

01:27 - 15.730 you know, if you

01:27 - 20.802 so in negligence, if you engage, you've made product defect,

01:27 - 23.371 nobody can touch you, which is what what

01:27 - 26.374 plaque A you know, under their reading that's basically what Plaka does.

01:27 - 29.911 So it's not that what's the what's the what is it.

01:27 - 36.584 It's what is what is the additional thing in that statute that makes it not plaka

01:27 - 37.118 because it

01:27 - 40.888 was and again, I don't want to be inaccurate to the court.

01:27 - 41.689 I don't have that.

01:27 - 44.726 The every aspect of the statute in my head.

01:27 - 48.663 But my, my recollection of the statute is that it is

01:27 - 52.500 part of a regulatory scheme

01:27 - 57.872 to protect the vaccine industry, to enable them to develop vaccines

01:27 - 02.977 which are necessary to for, you know, all sorts of illnesses.

01:28 - 07.849 And you're saying there's no federal regulatory scheme for the

01:28 - 12.820 for the licensing sale manufacturer of federally.

01:28 - 15.957 The PLAKA can be tied to that.

01:28 - 18.960 There is no regulatory scheme

01:28 - 25.466 that is tied to the protection that that Plaka provides.

01:28 - 27.302 That is correct.

01:28 - 28.836 It is. It is.

01:28 - 32.140 You know, again, if if

01:28 - 34.375 Pennsylvania can undo

01:28 - 37.812 plaka in the talk that plaque as an immunity law, well,

01:28 - 42.850 there's never been a law that where states can unimmunized as

01:28 - 44.686 said, it's lack of the preemption law.

01:28 - 49.924 There's never been a statute that states can un preempt, which can happen.

01:28 - 52.226 Pennsylvania legislature can pass

01:28 - 56.998 all sorts of laws that completely undoes this protection.

01:28 - 00.268 And and they could do that.

01:29 - 03.504 I still don't understand how that divests them, them

01:29 - 08.776 being Congress of the power to preempt state tort law, assuming commerce power.

01:29 - 11.446 When they do that, they preempt state tort law.

01:29 - 13.214 There are areas where they've done that.

01:29 - 16.517 But but that's without interfering with state lawmaking.

01:29 - 21.723 What Congress does when they preempt is they're saying,

01:29 - 23.958 as states

01:29 - 25.860 cannot interfere

01:29 - 30.932 with a federal scheme, federal regulatory scheme,

01:29 - 33.534 what they cannot do and what they've never done

01:29 - 37.772 is regulate how states govern.

01:29 - 42.877 That's that's the 10th Amendment problem that is unique

01:29 - 45.913 to and the Supreme Court has said over and over again,

01:29 - 48.916 Congress can only basically treat states

01:29 - 51.919 as states.

01:29 - 52.687 Okay, Mr.

01:29 - 53.388 Lowey,

01:29 - 57.959 I think we're going to wrap this up unless any justices have other questions.

01:29 - 58.459 Thank you.

01:29 - 01.996 Well-argued on behalf of all. Thank you.

01:30 - 03.931 The next case is elite Care,

01:30 - 08.236 our ex versus premier comp solutions at all.

01:30 - 10.738 In Pennsylvania, there are types of disputes

01:30 - 14.242 where private parties must file their claims or appeals

01:30 - 18.513 within administrative agencies and not the courts.

01:30 - 22.517 This is the case for many issues, particularly within the employment

01:30 - 26.954 context, such as unemployment compensation,

01:30 - 29.657 labor management disputes

01:30 - 34.729 and discrimination and harassment claims, to name a few examples.

01:30 - 39.834 The Pennsylvania Workers Compensation Act provides, with very few exceptions,

01:30 - 43.838 that employees may only file claims against their employers

01:30 - 47.809 for lost wages and medical bills resulting from work injuries,

01:30 - 52.713 with the worker's compensation Board rather than the county courts.

01:30 - 56.417 In other words, the Workers Compensation Board generally

01:30 - 02.056 has exclusive jurisdiction to adjudicate work injury disputes.

01:31 - 06.894 In this case, the league corrects a billing agent for medical providers

01:31 - 12.200 seeking pet payment for medication liens prescribed to injured employees.

01:31 - 15.303 Filed claims against the employers, insurance companies,

01:31 - 20.107 Premier Comp solutions and others in the Court of Common Pleas of Allegheny

01:31 - 23.778 County for declaratory relief, fraud,

01:31 - 27.515 Civil conspiracy and unjust Enrichment.

01:31 - 32.019 Premier Comp solutions filed preliminary objections claiming

01:31 - 37.792 that elite care Our access complaint must be dismissed because the claims

01:31 - 43.197 were barred by the exclusive jurisdiction of the Workers Compensation Board.

01:31 - 44.065 The County Court

01:31 - 48.436 denied Premier comp solutions, preliminary objections, and ruled that elite care

01:31 - 52.306 our access claims were not subject to the exclusive jurisdiction

01:31 - 58.145 of the Workers Compensation Board and permitted the claims to move forward.

01:31 - 00.982 Premier Comp Solutions and the other insurance companies

01:32 - 05.820 filed an appeal to the Superior Court, which affirmed the lower court's ruling.

01:32 - 09.891 However, it was a split 2 to 1 decision.

01:32 - 15.096 Premier Comp Solutions filed the instant appeal, relying upon the Pennsylvania

01:32 - 20.568 Supreme Court's earlier decision in Cooney versus PMA Insurance Company.

01:32 - 23.604 In that case, the court held that an employee's claim

01:32 - 28.476 that his employer's worker's compensation insurance carrier committed fraud

01:32 - 31.746 when denying his work injury claims were within

01:32 - 35.917 the exclusive jurisdiction of the Worker's Compensation Board.

01:32 - 39.420 Elite Care Hour X is claiming that the Worker's Compensation

01:32 - 44.191 Act is not an exclusive remedy in this case because the bar to file

01:32 - 48.062 a civil suit only applies to an injured employee

01:32 - 52.033 and not claims made by medical providers or their building agent.

01:32 - 57.104 And further, it claims that it did file a claim with the worker's compensation fee

01:32 - 02.910 review Office, which declined jurisdiction and refused to hear its claim.

01:33 - 06.247 Let's tune in and watch the oral argument between Elite Care

01:33 - 11.719 Rex and Premier comp solutions at all in the Supreme Court.

01:33 - 13.287 Thank you, Madam Chief Justice.

01:33 - 14.589 If it pleases the Court, Bradley

01:33 - 17.592 and Green here on behalf of Brook Street Mutual Insurance Company.

01:33 - 21.729 Also appearing is Audrey Copeland on behalf of Premier Solutions

01:33 - 25.833 acting attorney, questions specifically directed towards premier solutions.

01:33 - 29.904 As was indicated, the question presented Can

01:33 - 33.908 this Worker's Compensation Act be circumvent it to have a direct action

01:33 - 38.746 be instituted in the Court of Common Pleas to seek payment for medical bills?

01:33 - 43.217 The exclusive provision of the Workers Compensation Act is the quid pro quo

01:33 - 47.421 that was given in exchange for a no fault liability

01:33 - 52.026 so that employers insurance carriers cannot be sued civilly.

01:33 - 54.261 That provision provides that the liability of an employer

01:33 - 55.563 under the Worker's Compensation Act

01:33 - 00.034 shall be exclusive and in place of any and all other liability to the employee,

01:34 - 04.305 but also as to anyone otherwise entitled to damages in any action at law.

01:34 - 07.642 Otherwise, on account of that injury, that's exactly what's being sought here.

01:34 - 10.878 The purported medical provider is asking

01:34 - 14.548 that the issues be addressed outside the Worker's Compensation Act.

01:34 - 17.718 And I say purported medical provider because this isn't a matter

01:34 - 21.622 of the pharmacy that filled the prescription seeking to be reimbursed.

01:34 - 26.027 There's actually a billing agent now, this is a billing agent of the pharmacy.

01:34 - 27.061 It's a different story.

01:34 - 30.331 But what we have here is a billing agent of the actual medical provider

01:34 - 33.067 who wrote the prescription and who's seeking to collect here.

01:34 - 38.406 And there's no action here by an employee or on behalf of an employee, correct?

01:34 - 39.073 Excuse me.

01:34 - 42.076 There's no action here underlying this

01:34 - 45.212 by an employee or on behalf of an employee.

01:34 - 45.613 Correct.

01:34 - 50.151 This was all instituted by the billing agent for the medical provider

01:34 - 51.118 on their own behalf.

01:34 - 55.089 And in fact, the employee was not damaged

01:34 - 59.193 because the employee actually already received the medications, correct?

01:34 - 00.428 That is correct.

01:35 - 00.828 All right.

01:35 - 05.566 But what about elite care's argument that that because as you

01:35 - 09.637 just told the chief justice, it's not between the employer and the employee,

01:35 - 12.673 It should be amenable

01:35 - 15.476 to Common pleas adjudication,

01:35 - 18.979 that it still arises out of everything that flows from the work related injury.

01:35 - 24.618 There's an exclusive forum to address this that is the worker's compensation forum.

01:35 - 25.519 Therefore, any issues,

01:35 - 27.788 relative relative to liability of the worker's compensation

01:35 - 30.791 claim that need to proceed in the worker's compensation form, you can, you could

01:35 - 34.595 hypothetically have a situation where you have an injury to a knee or a back.

01:35 - 37.732 And also we get bills submitted for a shoulder.

01:35 - 39.233 We're not paying the medical provider.

01:35 - 41.268 So now the medical providers can institute this action

01:35 - 43.537 on its own outside of worker's compensation.

01:35 - 46.507 Are they now litigating the extent of the injury on behalf of the employee

01:35 - 48.409 without the employee being part of the process?

01:35 - 50.611 They say you're just giving them a rope a dope

01:35 - 54.749 because they say you objected when you objected

01:35 - 58.686 when they were in front of the fee review officer saying you didn't belong there.

01:35 - 01.255 That basically you're saying

01:36 - 01.922 according to

01:36 - 05.760 elite care, that they're not allowed to collect anywhere.

01:36 - 07.027 Is that is that true?

01:36 - 09.196 That's not exactly true. So here's what happened.

01:36 - 12.333 They're actually citing to a case with a different defendant

01:36 - 15.870 that that was actually laundry Owners Mutual and the counsel for laundry

01:36 - 19.073 and which Mutual was actually following the law in 2011.

01:36 - 21.742 You have to close your chest, your case.

01:36 - 23.844 And then in 2014 you the selective case.

01:36 - 26.380 And back then the courts were saying

01:36 - 27.915 the only issue that could be brought in front of the fee

01:36 - 30.885 review officer is the issue of timeliness of payment

01:36 - 32.920 and amount of pain that you couldn't get into.

01:36 - 35.289 Is this party supposed to be getting paid?

01:36 - 38.826 That change in 2019 with the Commonwealth Court

01:36 - 42.596 having written the armor pharmacy decision, which they allow

01:36 - 46.267 the Court, the fee review officer specifically to address the issue

01:36 - 49.236 of is this an entity that's entitled to payment?

01:36 - 54.175 If you look at the actual transcript, the counsel for the defendant in the case

01:36 - 56.677 cited in the brief actually said to the of

01:36 - 00.347 you after we believe you should be able to decide this issue under armor pharmacy,

01:37 - 03.684 we always thought this was the case, but the law said differently.

01:37 - 06.120 But now the law is armor pharmacies out there.

01:37 - 09.123 We agree you should be able to address this at that point,

01:37 - 13.127 Elite care was the party that said, no, no, no, we want to pursue this civilly.

01:37 - 16.263 And obviously the reason why is they're not happy with the damages.

01:37 - 19.300 That could be one of the reasons why, because now they can pursue

01:37 - 22.469 punitive damages in the court of Common Pleas, whereas they're limited

01:37 - 26.707 to basically a 10% statutory interest if they prevail in the fee review form.

01:37 - 28.742 So you're saying you ever wanted excuse me?

01:37 - 30.477 That's all they ever wanted.

01:37 - 34.348 I mean, they're in the court of Common Pleas seeking punitive damages

01:37 - 37.818 because your client doesn't like their business model.

01:37 - 41.188 I mean, when they they prevailed

01:37 - 44.892 before the fee review Officer Correct?

01:37 - 47.528 No, the fee review Doctor did not say that they were entitled to payment.

01:37 - 52.099 The fee review officer here ignored Armor Pharmacy and said

01:37 - 52.666 the fee

01:37 - 55.936 review officer said, we can't hear this

01:37 - 58.806 for the Kate the for the laundry owner of mutual case

01:37 - 02.042 but every other case that's come on then what should they have done then

01:38 - 05.379 They should appeal to the Commonwealth Court, just like the was done

01:38 - 10.651 by several other carriers or pharmacies or billing agents or pharmacies after ARM

01:38 - 14.688 Pharmacy, PMA Management Corp versus Harburg Medical Sells, Armor Pharmacy

01:38 - 18.959 versus Wegmans 700 pharmacy versus Workers Comp Security Fund.

01:38 - 20.494 All those cases,

01:38 - 24.365 the courts remanded back the fee roster saying you have to decide this issue.

01:38 - 27.401 So there was a remedy they elected not to pursue that remedy

01:38 - 28.269 to appeal this further.

01:38 - 31.972 The Commonwealth Court of Appeal could also correct we weren't,

01:38 - 33.607 you know, aggrieved by that one.

01:38 - 36.176 Yeah, we want we, we weren't we weren't aggrieved.

01:38 - 42.049 You didn't you didn't disagree with their choice of forum.

01:38 - 44.919 You agreed that they should have been before

01:38 - 48.856 the fee review officer with that claim.

01:38 - 49.290 Correct.

01:38 - 50.124 And they should have appealed it

01:38 - 52.159 and it would have been remanded back to the fee review officer.

01:38 - 54.161 And the theory was officer would have decided the issue.

01:38 - 57.164 And I would note there's one case out there.

01:38 - 01.302 It's not binding case law because it's an unpublished decision

01:39 - 04.772 and also is reversed on other grounds, are saying that the review officer

01:39 - 08.142 that was Judge Torrey, this is the prescription partner's case,

01:39 - 11.645 he actually decided the issue and he's the foremost expert on pension

01:39 - 14.515 worker's compensation and wrote the treatise on worker's compensation.

01:39 - 18.686 And he noted in that case there was an unenforceable assignment

01:39 - 22.189 that's under Section 318 of the Workers Compensation Act that says that no right.

01:39 - 26.727 The benefits under that article, which is article three, which also applies

01:39 - 27.928 to the payment of medical bills,

01:39 - 32.032 which is Article three, Section 306, shall be assignable.

01:39 - 33.934 So what you have here is you have the pharmacy

01:39 - 36.337 that's already been paid by the medical provider.

01:39 - 40.507 The provider that actually writes the script, sends a script to prescription

01:39 - 44.578 patient director X and patient direct or X gets paid immediately

01:39 - 48.849 by the medical provider, assigns the right to payment to that medical provider.

01:39 - 52.653 And then there's a separate contract with elite care

01:39 - 55.189 who do the billing on behalf of the medical provider.

01:39 - 58.492 So each medical provider that is writing these scripts

01:39 - 01.595 actually is profiting from the prescriptions they're writing.

01:40 - 03.697 And that's also another thing that was brought up about

01:40 - 05.099 is this a preemptive self-referral?

01:40 - 07.901 I just interrupt you for saying you're really getting into the weeds.

01:40 - 11.038 Sure. The real issue here,

01:40 - 15.175 as I understand it, is are they a provider?

01:40 - 19.613 Because if if whoever is seeking the payment from your client

01:40 - 21.682 is not a provider,

01:40 - 25.519 they are not entitled the payment of the Worker's Compensation Act, period.

01:40 - 26.253 Correct.

01:40 - 30.190 And then the question is, who

01:40 - 33.827 determines whether someone who is seeking payment

01:40 - 37.998 under the Worker's Compensation Act is a provider?

01:40 - 39.366 And the courts have addressed that.

01:40 - 40.667 There's two ways that could be accomplished.

01:40 - 42.870 One is now through the fee review process,

01:40 - 45.873 through the armor pharmacy or through a utilization review process.

01:40 - 48.675 Utilization review deals with reasonable assessing a treatment.

01:40 - 53.380 No, but you could you could you could adjudicate

01:40 - 56.150 the question of whether a health care provider provided

01:40 - 59.553 the service has been adjudicated in the context of you are proceedings?

01:40 - 01.021 I don't believe so.

01:41 - 03.624 I believe that only addresses the reasonable necessity of treatment there.

01:41 - 07.861 So that's solely a limited purpose for a utilization review under the.

01:41 - 11.865 But but but I guess the question is, is there a primary jurisdiction argument

01:41 - 16.036 here to be made? Is there is there

01:41 - 17.271 where where

01:41 - 20.808 they go to the court of Common Pleas, which they have done?

01:41 - 23.677 Worker's comp has primary jurisdiction to determine who is

01:41 - 27.481 and who is not a provider under the Worker's Comp Act,

01:41 - 29.716 the worker's comp office, you go through the appeals

01:41 - 32.653 and the only issue decided is they are a provider.

01:41 - 33.520 Okay.

01:41 - 36.890 Common Pleas court says, okay, their provider, your action is dismissed,

01:41 - 40.594 you or we're going to transfer it over the Worker's Compensation bureau.

01:41 - 43.931 Forget about all the tort claims that they're raising because the tour claims

01:41 - 46.934 are based on their entitlement to payment under the statute.

01:41 - 49.369 If they are entitled, if they are not entitled to payment

01:41 - 52.606 under the statute, the common law claims go away.

01:41 - 52.940 Correct.

01:41 - 54.541 That's why I'm saying there has been no establishment

01:41 - 56.844 that they're entitled to payment under the worker's compensation law.

01:41 - 59.847 They're trying to establish that outside the worker's compensation.

01:41 - 04.451 My question is, why isn't it your disputing their provider status?

01:42 - 05.385 Right.

01:42 - 08.288 Everybody wants a decision as to whether they're a provider.

01:42 - 08.589 Correct.

01:42 - 10.791 Or if there's a non enforceable assignment or prohibited self.

01:42 - 12.826 Well, but that's part of the determination of whether the provider

01:42 - 15.829 those are sub issues or, you know, whether whether there's an improper assignment.

01:42 - 18.031 But the question is who decides that?

01:42 - 21.768 Is it a matter of exclusive jurisdiction within the worker's comp system?

01:42 - 25.105 Or if you are claiming they are not a provider

01:42 - 28.475 and they go to Common Pleas court, is the proper remedy for Common

01:42 - 32.179 Pleas court to stay the matter and allow the Worker's Compensation

01:42 - 36.049 Bureau to decide whether they're a provider or not.

01:42 - 38.018 It should all be pursued in the worker's comp form.

01:42 - 41.355 But the problem that you'll see and what will be addressed by the

01:42 - 44.358 appellate is they don't have a direct remedy

01:42 - 47.728 to file a petition to review to get this in front of a worker's compensation.

01:42 - 49.296 Well, and that's where arm or pharmacy came in

01:42 - 53.200 where where they sort of said yeah, the fee review officer can't do it.

01:42 - 56.436 But a hearing officer can write a fee review

01:42 - 59.406 all certain hearing officer the same thing if they're both for service.

01:42 - 01.642 But it's a working class worker's compensation.

01:43 - 05.179 Judge But also a worker's compensation judge can address this issue

01:43 - 06.346 and that was done.

01:43 - 08.515 Somebody has to be able to address it, I guess.

01:43 - 12.386 But my point is, just because it's I mean, even if the Common Pleas court addresses

01:43 - 16.790 it, it's it's a pretty simple inquiry in the sense of if they are a provider,

01:43 - 20.294 if I rule, if I'm a Common pleas court judge and I say, okay, they're a provider,

01:43 - 22.896 go to the worker's comp section, I'm dismissing your claims

01:43 - 23.997 or they're not a provider,

01:43 - 25.699 you're not a provider, you're not entitled to worker's comp.

01:43 - 27.067 I'm dismissing your claims either way.

01:43 - 30.837 The claims get dismissed in Common Pleas Court It's a little more complicated.

01:43 - 31.738 There's several issues.

01:43 - 36.443 I think if you look at the league brochure versus fresh grocer case,

01:43 - 36.877 if the

01:43 - 39.913 court upon pleas came to decide what the amount of payment is due

01:43 - 40.514 on a medical bill,

01:43 - 43.517 that has to be an exclusive jurisdiction of the fee review officer.

01:43 - 46.153 As I discuss, there are two cases, New

01:43 - 49.823 Alexandria Borough, as well as Derry Township supervisors.

01:43 - 53.827 That's where a claimant actually brought the action in a penalty petition

01:43 - 57.331 against the carrier because bills weren't getting paid for.

01:43 - 01.068 I think it was the group that entered into a joint venture agreement

01:44 - 04.338 with another

01:44 - 07.641 physical therapy company so that whenever the injured worker

01:44 - 09.209 went to treat the one company, they were considered

01:44 - 11.745 employees of the other one so that they could bill on their behalf.

01:44 - 12.913 And that was something that was found

01:44 - 16.617 to be a proper before a worker's compensation judge, this joint venture.

01:44 - 18.318 So even though the treatment

01:44 - 19.953 provided by one physical therapy company

01:44 - 23.023 was billed by a different physical therapy company, they were still found to be

01:44 - 27.261 the provider and payment was ordered from IS elite.

01:44 - 29.096 Care cannot bring that action on their own.

01:44 - 32.099 They need to have the injured worker bring that action on their behalf.

01:44 - 35.602 But there is still a remedy. Counsel,

01:44 - 36.770 help me follow this.

01:44 - 39.039 This is my understanding of the procedure.

01:44 - 44.177 There was a Stallman or a negotiated install.

01:44 - 46.980 You guys indicated elite's exclusive remedy

01:44 - 51.018 was through the application for fee review elite files.

01:44 - 55.756 But for the viewers, medical fee review at which time you object to that

01:44 - 59.359 and you contend that it lacked jurisdiction over the issue,

01:44 - 02.629 the hearing officer agreed with you guys and told them to pursue

01:45 - 03.730 remedies elsewhere.

01:45 - 05.799 A.K.A the Court of Common Pleas.

01:45 - 08.635 Tell me how judicial stop should not apply here.

01:45 - 12.339 Okay, first off, that may have happened prior to 2019,

01:45 - 15.909 but if you look at the actual facts of the case provided the defendant

01:45 - 19.279 was advising the court and the FT or fee review officer specifically

01:45 - 24.851 that they had jurisdiction to decide the issue of should elite care be able

01:45 - 28.088 to present this, that they've standing to bring this as the medical provider.

01:45 - 31.191 It was elite care that argued night night

01:45 - 34.828 the defendants at that point in time that they should be able

01:45 - 37.798 to perceive that to be able to proceed to a decision on that issue.

01:45 - 38.865 Because the court's

01:45 - 42.135 the problem is that the law has been changing through the courts.

01:45 - 42.969 Originally set in

01:45 - 47.140 2011, 2014, you had the Chester Crosier case,

01:45 - 52.346 you had the selective insurance case that said only issue to be decided

01:45 - 52.879 in front of the fee

01:45 - 56.883 review officer is amount of payment to be paid for the prescription.

01:45 - 58.719 And was it timely paid?

01:45 - 00.787 They weren't allowing any other issues.

01:46 - 04.324 Specifically, is this a provider that has standing to be here?

01:46 - 09.062 Even if you had a case where you had a utilization review or you had a settlement

01:46 - 12.132 that basically said you weren't liable to pay for the treatment,

01:46 - 15.102 you can have the fee review officer can't apparently under this section

01:46 - 15.836 address that.

01:46 - 20.841 What is it that you guys how do you think elite should collect their money?

01:46 - 22.909 They should have pursued this through a fee review.

01:46 - 26.012 And right now whenever they argue,

01:46 - 27.814 we did not they they're the ones that raised the issue

01:46 - 28.882 said that they shouldn't be there.

01:46 - 31.451 It wasn't the employers that may have happened

01:46 - 34.388 are the carriers that may have happened prior to armor pharmacy.

01:46 - 37.724 But ever since armor pharmacy since Laws said that

01:46 - 40.160 the issue of provider status

01:46 - 43.096 can be decided by fee review officer We've always taken the position

01:46 - 45.499 that that's something the fee review officer should pursue.

01:46 - 47.634 They have not found the reviews on all these cases.

01:46 - 51.338 Yeah, but Counsel the fee review officer in this case

01:46 - 55.242 rendered its decision after Armor pharmacy.

01:46 - 58.678 When you say this case, I think you're that's, that's a lower court case.

01:46 - 00.814 There's four different carriers here this that was the carrier

01:47 - 03.817 laundry owners mutual who's no longer part of the carrier

01:47 - 06.653 are part of the litigation With regards to Brick Street.

01:47 - 10.557 I believe there's 111 different injured workers.

01:47 - 13.326 You may have over a thousand different prescriptions.

01:47 - 16.296 And not all these cases have gone to they've not filed

01:47 - 17.864 fee reviews on these cases.

01:47 - 20.167 To have that issue be decided or presented.

01:47 - 23.170 So they have not pursued their appropriate statutory remedies

01:47 - 24.905 by filing the petitions for fee review.

01:47 - 31.111 They just followed the ruling of another fee review officer.

01:47 - 33.313 They filed. They followed. This is not right.

01:47 - 37.217 They followed the ruling of a fee review officer in not the case lodged

01:47 - 38.585 by the Commonwealth Court.

01:47 - 41.288 They said they were happy with the fee roster, saying I can't do this

01:47 - 42.255 as opposed to the Commonwealth Court.

01:47 - 44.257 That said, the fee roster could do it.

01:47 - 46.159 So that's where the problem lies here.

01:47 - 46.927 Should they have filed

01:47 - 49.996 an appeal to the Commonwealth Court to get this remanded, an exhausted

01:47 - 51.398 or administrative remedy? That's about it.

01:47 - 52.632 But the bottom line is so

01:47 - 56.570 so every every worker's comp claim, a specific is specific to a claimant.

01:47 - 57.170 Correct.

01:47 - 59.573 The claimant claims that are here in the sense

01:47 - 03.677 that the prescriptions for the particular claimants here

01:48 - 05.712 that were prescribed to the claimants

01:48 - 09.983 that they're seeking recovery for have never gone through the fee review process.

01:48 - 11.585 Some of these may have, some may not.

01:48 - 13.987 If if the fee review process in some of the cases,

01:48 - 16.089 the fee review officer may have actually ordered payment

01:48 - 17.791 if that was the case and I'm talking about the ones that are

01:48 - 20.827 the subject of the Common Pleas court action, correct.

01:48 - 23.396 Those have never been ordered payable by any fee review.

01:48 - 25.398 They have have any fee review.

01:48 - 27.334 Petitions have been filed with regard to the claims

01:48 - 28.935 that are subject to the Common Pleas court action.

01:48 - 30.737 There may have been some, but not on all.

01:48 - 34.841 So there may be a few where they filed an appeal to the theory officer.

01:48 - 39.179 Fee roster may not have decided the issue, but then, you know, there's a thousand,

01:48 - 43.216 maybe there's 100, but there's not every single case has had, you know,

01:48 - 45.118 a proceeding to free for fee review.

01:48 - 48.154 And then if there was an adverse decision by a fee review officer

01:48 - 49.923 and that was never pursued any further,

01:48 - 54.127 that meaning, meaning adverse to the alleged or purported provider.

01:48 - 55.095 Correct. Okay.

01:48 - 57.197 So they didn't it would have been their appeal

01:48 - 00.033 because it would have been adverse to that. Correct. Okay.

01:49 - 00.834 So that was not

01:49 - 04.137 so if they if their Common Pleas action went away and they filed fee

01:49 - 05.705 review petitions for every one of these

01:49 - 09.910 prescriptions, tomorrow you would litigate under arm of pharmacy.

01:49 - 11.545 The issue of whether they're a provider

01:49 - 14.814 as well as litigate the issue of whether it was an unlawful assignment.

01:49 - 17.050 Well, you also didn't have a problem about the timeliness.

01:49 - 20.120 They're supposed to be doing that within 90 days of submission of the bill

01:49 - 23.123 or within 30 days of receipt of the denial of the bill.

01:49 - 24.491 So you do have an issue there.

01:49 - 26.259 Also at this point in time,

01:49 - 29.296 since they did not pursue their administrative remedies as well.

01:49 - 31.932 You have an issue you have an issue there about whether the law was in flux,

01:49 - 32.499 whether they were

01:49 - 34.568 you know, whether they had sufficient notice. And there's

01:49 - 36.736 there's some equitable principles that would have to be applied there.

01:49 - 39.172 I'm sure you're sure.

01:49 - 41.408 But you're not going to sit here and argue that if they file

01:49 - 44.711 fee review petitions tomorrow, you would argue you would say that

01:49 - 48.782 the fee review office and workers comp do not have jurisdiction to do that.

01:49 - 52.285 You you you might do that, right, that ability.

01:49 - 54.054 Well, no, that's not that's not jurisdiction though

01:49 - 55.922 Not assigned ability is it's an improper claim.

01:49 - 57.290 It should be denied. But whatever the basis.

01:49 - 01.194 But isn't your point that assuming

01:50 - 04.598 all of that that their remedy in that circumstance

01:50 - 09.736 is to go to Commonwealth Court on an appeal from supposed.

01:50 - 13.640 Suppose it goes that way and, and you make all these arguments

01:50 - 17.043 in front of the fee review officer

01:50 - 19.646 is it isn't your point

01:50 - 23.316 that you might be wrong, the fee review officer might be wrong,

01:50 - 26.786 but it has to go to Commonwealth Court rather than this outside

01:50 - 29.789 the system avenue to common Pleas is isn't that the point?

01:50 - 30.457 That's correct.

01:50 - 32.559 That would be that would be the way this procedure

01:50 - 32.993 was it

01:50 - 33.727 to be a direct appeal

01:50 - 36.963 from the fee review officers decision to the Commonwealth Court is how

01:50 - 39.866 the process is for handling fee review disputes.

01:50 - 42.669 That's assuming we agree with our pharmacy, correct?

01:50 - 43.570 That's correct too.

01:50 - 46.139 What what what do you see happening?

01:50 - 51.311 Best case scenario for you at the end of this case?

01:50 - 52.779 Best case scenario, I mean,

01:50 - 56.216 ideally you'll see there's problems with the medical cost and regulation.

01:50 - 59.085 So I think that's what what do you want us to do?

01:50 - 02.656 They went to the superior Court that was the you went to the Superior Court.

01:51 - 03.857 That was the appropriate

01:51 - 08.228 intermediate appellate court to approach with the issue that you faced.

01:51 - 12.298 And so now that superior court decision is before us,

01:51 - 15.702 what would you like us to do simply to find that there's no jurisdiction

01:51 - 19.305 to pursue the civil claims outside the worker's comp form?

01:51 - 22.308 Worker's compensation form is the exclusive form

01:51 - 25.979 to establish liability for work related injuries.

01:51 - 27.480 And that's exactly what's being sought here,

01:51 - 30.917 is they're trying to establish there's liability for these prescriptions.

01:51 - 32.886 They're arguing we filed a prescription.

01:51 - 36.556 Are we we send a prescription to the injured worker and we weren't paid.

01:51 - 37.223 That's not enough.

01:51 - 39.025 There's there's additional requirements

01:51 - 40.994 to prove liability under worker's compensation.

01:51 - 42.562 And that's not even true.

01:51 - 45.198 The pharmacies were paid. Correct.

01:51 - 48.368 So so the they just weren't paid by the employer.

01:51 - 49.602 In the insurer,

01:51 - 53.106 they were paid by the medical provider that actually submitted the prescription.

01:51 - 56.209 Injured worker has not

01:51 - 57.410 The injured worker's never harmed.

01:51 - 59.112 They're always they always get the prescription.

01:51 - 59.913 They always get there.

01:51 - 02.615 So you're going to be you're going to pay me cards on the table.

01:52 - 04.384 You're going to be assuming you win.

01:52 - 06.853 And they have to go to the Commonwealth Court paradigm.

01:52 - 09.589 You're going to be arguing these providers are out of luck.

01:52 - 13.760 They adopted a business model or a constructed business model

01:52 - 18.064 that even if it flies in other states, it ain't going to fly in Pennsylvania.

01:52 - 19.999 That's where you're headed, isn't it? Correct. Correct.

01:52 - 21.668 And then maybe they could change their business model.

01:52 - 24.170 I mean, if the pharmacy itself submits the prescription,

01:52 - 25.839 if the if the pharmacy gets the prescription

01:52 - 28.007 medicine itself, they get paid.

01:52 - 33.813 Our argument there is that that suppose suppose that's going forward over there.

01:52 - 38.017 And and, you know, the Commonwealth Court will have to wrestle

01:52 - 40.186 with that and their challenge to that

01:52 - 43.022 and then ultimately it could come back to us, correct?

01:52 - 43.957 Correct.

01:52 - 46.726 The reason why this all came to light was we're getting,

01:52 - 49.529 you know, we're seeing the patient direct. Our ex is the pharmacy.

01:52 - 50.430 That's and also

01:52 - 52.532 we're getting the bill from a here and they're not even submitting the bill

01:52 - 55.401 a billing agent where the payment goes to the pharmacy.

01:52 - 57.170 It's going to their own tax I.D. number.

01:52 - 00.173 And then, you know, once you get into the weeds a lot more and see that

01:53 - 03.810 there's they're going to split the profits with the medical provider,

01:53 - 06.346 that they don't tell you what that is because that's

01:53 - 06.880 prohibited.

01:53 - 10.083 That's their

01:53 - 11.918 business model that they wanted to disclose.

01:53 - 16.089 But there is each each each prescription is going to the financial benefit

01:53 - 19.058 of the medical provider that writes the prescription.

01:53 - 21.494 And so there's a there's a beneficial relationship,

01:53 - 25.498 let's just say, because the doctor, the physician, the the pharmacy company

01:53 - 28.668 gets paid X cents on the dollar for the prescription because then they

01:53 - 30.737 they don't have to go through the fee review process. Correct.

01:53 - 32.972 I mean, if you look, there's a recent case that just came out in

01:53 - 35.041 from the Commonwealth Court in January.

01:53 - 37.877 That was the

01:53 - 39.279 Federated Insurance versus Summit.

01:53 - 40.780 And I think it's actually pending with petition

01:53 - 44.083 for allowance of appeal to this court where the Commonwealth Court struck down

01:53 - 48.388 Red Book as being the source for paying prescriptions.

01:53 - 50.123 And then it gave an example in that case

01:53 - 52.525 where Prozac, if you look at the Red Bull price and they

01:53 - 56.496 they likened that to like a sticker price on a car, it's $2,000.

01:53 - 59.065 So you pay 110% of average wholesale price.

01:53 - 02.769 So for that prescription Prozac, you're paying $2,200.

01:54 - 07.707 In reality, if you look at Nafdac, the National Drug acquisition cost,

01:54 - 10.777 they actually survey all the drug manufacturers.

01:54 - 15.548 And that prescription for Prozac, what's being paid by the pharmacy is $9.

01:54 - 19.652 So the profit on the prescription is almost 20 $200.

01:54 - 24.591 So in order to guarantee more prescriptions flowing through

01:54 - 25.792 patient direct or X,

01:54 - 28.127 they enter into agreement with the medical provider to say,

01:54 - 29.395 hey, we'll give you a portion of this,

01:54 - 31.598 because a lot of there's a lot of profit here to be made.

01:54 - 35.401 So we'll catch you in for a part of this so we get more volume coming our way.

01:54 - 37.470 So then the question becomes, is that proper?

01:54 - 39.739 I mean, it's just beyond the scope of this particular appeal.

01:54 - 40.506 But, you know,

01:54 - 43.676 the self-referral provisions say that a provider may not refer a claimant

01:54 - 47.046 for certain treatment or services if the provider has a financial interest

01:54 - 49.549 with the person or entity receiving the referral.

01:54 - 52.318 So once again, you get into problems of, you know, this sort of creates

01:54 - 55.221 that appearance of impropriety. Are these doctors

01:54 - 56.656 prescribing these medications because it's

01:54 - 00.493 what's best for the patient or is this because it's their own financial interest?

01:55 - 03.796 So that's another question of should these bills actually be payable

01:55 - 05.598 under the the self-referral provisions?

01:55 - 09.936 In addition to the Section 318, which is the anti assignment provisions?

01:55 - 12.939 And as I indicated, the only case where that was actually decided, Judge Torey

01:55 - 15.975 indicated that a medical provider should not be able proceeded in fee review

01:55 - 18.378 if they're the ones that in the assignments of the write the benefits.

01:55 - 21.547 Your point is all of these issues, all of these issues

01:55 - 24.550 are set forth in the worker's compensation statute itself

01:55 - 27.153 and if we allow this to happen in this case,

01:55 - 30.156 you're going to have common pleas, court judges and superior court

01:55 - 33.893 deciding what how the Worker's Compensation Act actually operates

01:55 - 35.061 because everything is grounded.

01:55 - 37.363 Your defenses are grounded in the Worker's Compensation Act.

01:55 - 39.933 Their claim for payment is grounded in the worker's compensation. Correct.

01:55 - 42.969 And if you'll see, even though they'll say probably the 700 pharmacy

01:55 - 47.640 where there was a insurance carrier, brought an action against some

01:55 - 50.376 medical provider saying they had a financial interest in the pharmacy

01:55 - 51.945 as that were

01:55 - 54.380 filling the compound claims and that got dismissed.

01:55 - 58.084 That's because the insurer that was actually on

01:55 - 59.986 summary judgment as opposed to primary objections,

01:55 - 03.489 and that's because they can't produce evidence sufficient to prove their claims.

01:56 - 04.691 But even in that case,

01:56 - 07.794 the court, the trial court said, look, we don't have jurisdiction over issues

01:56 - 11.664 of whether or not this was addressed through a utilization review.

01:56 - 14.567 If there's a utilization review that says Treat was not reasonably necessary,

01:56 - 16.336 we're not obligated to pay for that treatment.

01:56 - 19.806 Likewise, there may be some of these cases where there was a settlement reached

01:56 - 24.177 and a nurse prescriptions still filled for a couple visits after the settlement.

01:56 - 26.079 So once again, we may not have liability

01:56 - 29.349 under the Worker's Compensation Act for such prescriptions.

01:56 - 32.051 Those are separate apart from the issue of is this a provider

01:56 - 33.286 that's actually entitled to payment?

01:56 - 35.688 So you have all these other sub issues that are going

01:56 - 37.523 to have trials within trials here.

01:56 - 40.560 As I indicated, just looking to be over 100 different claimants.

01:56 - 43.096 And then like I said, probably a thousand different bills.

01:56 - 46.666 And some of those bills may be payable as being before a settlement,

01:56 - 48.101 some may not be those after which.

01:56 - 49.602 So there's a ton of issues and the

01:56 - 53.306 worker's comp system has been established as the exclusive forum for this,

01:56 - 57.243 and they have experience in addressing all these issues rather than going

01:56 - 00.313 before the Court of Common Pleas and a jury to address these issues

01:57 - 02.949 which are outside their typical experience and purview.

01:57 - 03.883 All right.

01:57 - 06.386 Does anyone have any other questions for Mr.

01:57 - 07.754 Andre?

01:57 - 08.121 Thank you.

01:57 - 20.867 Thank you, sir. We'll hear from Mr. Wolfe. Mr. Weiss,

01:57 - 23.403 Madam Chief Justice May please the court.

01:57 - 24.771 My name is Aaron Weiss.

01:57 - 26.039 I'm with the law firm of Zimmer.

01:57 - 31.010 Coons and I represent the appellate in this matter, Elite Care LLC.

01:57 - 34.113 This is not a worker's compensation claim.

01:57 - 37.917 This is a declaratory judgment and civil action to confirm

01:57 - 41.220 elite care status as a licensed billing agent

01:57 - 44.290 and right to collect on behalf of health care providers.

01:57 - 48.895 For over six years, the appellants have denied any cares bills

01:57 - 53.666 based on agency failed to pay anyone for the medications provided,

01:57 - 58.204 challenged the jurisdiction of the workers compensation, and now the civil courts,

01:57 - 01.641 and refused to address the merits of elite care's claims.

01:58 - 04.277 What about what about

01:58 - 08.247 what would you say to an argument

01:58 - 14.420 by inference, I guess arises from the briefing of that that

01:58 - 17.423 elite care

01:58 - 18.858 entered this market

01:58 - 24.097 and ventured its business model here at its own risk.

01:58 - 26.165 In other words,

01:58 - 29.168 it it sought to construct something

01:58 - 34.407 that it that you want to that you want to take it avenue into our civil court

01:58 - 41.047 into our complete system with that Pennsylvania law forces you to

01:58 - 45.017 have a go in our in our Commonwealth court paradigm,

01:58 - 47.820 which is a unique paradigm of the Commonwealth Court.

01:58 - 49.589 There's no court like the Commonwealth Court.

01:58 - 53.359 So what about the

01:58 - 56.028 what about the point is that,

01:58 - 58.965 okay, Leigh, care, if you want to have this

01:58 - 03.402 interesting business model, fine, but take your shot

01:59 - 06.639 in the Commonwealth court system rather than

01:59 - 12.145 creating a sort of a balkanized system where we've got the Commonwealth Court

01:59 - 17.450 doing all these worker's comp things over here, but now

01:59 - 19.886 the providers can do these assignments

01:59 - 24.790 and we'll let these get litigated over in Superior Court and please courts.

01:59 - 27.727 Your Honor, I think a lot of your question and even some of the language

01:59 - 30.163 seems to hearken back to the Keystone case.

01:59 - 34.400 It was decided recently by this court, a large distinction between that case

01:59 - 37.703 and this case is there there was a utilization review filed

01:59 - 40.706 and it was determined that the treatment was unreasonable, unnecessary.

01:59 - 43.142 That's a worker's compensation issue.

01:59 - 46.746 That's not why these bills were denied to elite care.

01:59 - 49.582 It was solely an agency principle.

01:59 - 50.850 And so it's an entirely

01:59 - 54.654 different situation than what arises out of the worker's compensation

01:59 - 55.855 excuse me, Realm,

01:59 - 00.293 whether that be is it work related, is it timely and a reasonable amount?

02:00 - 02.228 Wasn't reasonable unnecessary treatment.

02:00 - 05.531 Those are the issues that belong in worker's compensation.

02:00 - 08.467 But in this case, that is not our factual record.

02:00 - 12.438 Are you saying are you saying liability is not part of the worker's comp system?

02:00 - 15.274 I'm saying that that's not what's being challenged here.

02:00 - 17.376 They're not liable to you because you're not a provider.

02:00 - 20.646 Well, Your Honor, so I was concerned when I looked at the briefing in this case

02:00 - 23.683 that they seem to suggest that now Lilly care as an agent

02:00 - 27.019 could be entitled to payment, but there's liability concerns.

02:00 - 30.156 And if we look at the very limited record that we have in this case,

02:00 - 33.226 there's even admissions in there that liability has already

02:00 - 35.561 been established in the worker's compensation forum.

02:00 - 39.532 Specifically, if I can cite you to page 192 of the record, a paragraph,

02:00 - 44.870 for the only reason that the bills were challenged was based on elite care agency.

02:00 - 46.939 Right? Because whether you're a provider.

02:00 - 47.440 Correct,

02:00 - 50.109 you're only liable in the Worker's Compensation Act to pay providers.

02:00 - 52.345 It's whether you're an agent of a provider honor.

02:00 - 55.448 And then if you look further to page 195, paragraph

02:00 - 59.185 eight B in that insurer's argument,

02:00 - 02.588 it admitted and I quote, Liability has been established.

02:01 - 05.992 And then I reiterate, cited by the hearing Officer Pickens

02:01 - 09.695 in the column in opinion at page one, 99, paragraph 14 B

02:01 - 12.999 So we do not have any of these regular worker's

02:01 - 16.435 compensation issues that my client is trying to litigate in civil court.

02:01 - 19.472 This device by this device, which is I guess

02:01 - 24.443 fairly novel in Pennsylvania, although apparently not in much of the country,

02:01 - 29.282 this agent provider distinction.

02:01 - 31.117 Why is why is this

02:01 - 37.556 not something that needs to run up the chain via the Commonwealth Court

02:01 - 39.425 in the first instance here?

02:01 - 40.926 Your Honor, two reasons.

02:01 - 44.163 First, I'll address why I believe it's proper in civil court.

02:01 - 48.601 But second, because we have tried to go the route of the fee review forum

02:01 - 51.203 because we were told that was our exclusive remedy

02:01 - 55.041 by the appellants in this case, which, by the way, I believe it's a misstatement

02:01 - 57.443 when they say they were consistent with Pennsylvania law.

02:01 - 58.778 The letter that they wrote,

02:01 - 03.416 pages 20 and 21 of the record predates Arbor Pharmacy by 12 months.

02:02 - 07.119 So they told us that our exclusive remedy was to go to fee review pre

02:02 - 10.856 former pharmacy challenged that jurisdiction sometimes pre

02:02 - 13.993 and sometimes post after pharmacy and then lost on that issue.

02:02 - 17.930 It was my client's contention the whole time that the ultimate

02:02 - 22.401 basis of this case is agency and statutory interpretation.

02:02 - 24.337 That is a regular matter

02:02 - 29.375 that is handled by civil courts throughout the state of Pennsylvania.

02:02 - 31.911 And I don't want to preempt I don't want to preempt your answer to justice.

02:02 - 34.113 WETMORE I'm trying to

02:02 - 37.750 the issue here is whether you're entitled to payment as a provider,

02:02 - 41.320 because if you're not a provider, they don't have to pay,

02:02 - 41.787 Your Honor.

02:02 - 43.389 And I want to make sure I'm understanding your question.

02:02 - 45.691 But we're not arguing that we are a provider.

02:02 - 47.493 We are the agent. So I understand.

02:02 - 51.797 But but your their duty to pay is not because of your agency.

02:02 - 54.367 Their duty to pay is the Worker's Compensation Act.

02:02 - 54.734 Correct.

02:02 - 57.636 But there's been no challenge to the reasonableness. Necessity.

02:02 - 59.405 We're not talking about reasonableness in necessity.

02:02 - 03.542 I'm just saying that the Worker's Compensation Act only requires employers

02:03 - 10.816 and insurers to pay medical expenses on behalf of claimants

02:03 - 13.419 to health care providers, period.

02:03 - 17.056 So if you are not a provider, you're not entitled to anything.

02:03 - 21.260 Well, Your Honor, under 77, Section 530 11i.

02:03 - 25.431 The definition of a health care provider expressly includes its agents.

02:03 - 28.534 I understand, but but the point being is that's in the worker's

02:03 - 29.902 compensation statute.

02:03 - 30.770 It is your own right.

02:03 - 33.773 So you're asking a common pleas court

02:03 - 37.343 to decide whether you are

02:03 - 40.613 a health care provider is defined by the Worker's Compensation Act.

02:03 - 41.113 Correct?

02:03 - 43.449 Your Honor, pursuant to a declaratory judgment

02:03 - 46.952 and you're in you don't think that the worker's compensation scheme

02:03 - 50.556 has is where that decision should be made?

02:03 - 54.427 Correct, Your Honor, because there's no remedy for my client to do so.

02:03 - 57.430 But but, I mean, apropos of that, that

02:03 - 00.199 that's the point is suppose the fee.

02:04 - 04.069 Suppose that line goes through and you're told you have no remedy.

02:04 - 08.407 There's no there's no bar that for you not to raise that issue

02:04 - 13.112 in Commonwealth Court and then come back to us with the same argument

02:04 - 16.849 is there, Your Honor, I think we'd be right where we are now,

02:04 - 20.553 which is they're going to say that there is no remedy in that forum

02:04 - 23.756 for this type of an issue, which is statutory interpretation.

02:04 - 27.860 Courts of Common Pleas regularly interpret the Worker's Compensation Act.

02:04 - 29.929 You're not just seeking statutory interpretation.

02:04 - 32.698 So that's why I was getting to my primary jurisdiction argument.

02:04 - 36.435 I could see if you brought a deck judgment just simply to have a common

02:04 - 40.573 pleas court judge decide whether you are a health care provider under the act,

02:04 - 47.847 because if you are, then your remedy is fee review, right?

02:04 - 48.581 Well, Your Honor, if

02:04 - 52.451 we're deemed to be a provider, then I think that would end the issue.

02:04 - 55.821 That's an issue in this case, and we would be entitled to payment and rate.

02:04 - 56.889 But not but not.

02:04 - 58.224 That's my point is your common pleas.

02:04 - 00.659 Action is not just a declaratory judgment action.

02:05 - 03.829 I mean, you're not saying, you know, court, we have nowhere to go.

02:05 - 04.730 There's nothing in the Worker's

02:05 - 08.667 Compensation Act that tells us who decides whether we're a provider.

02:05 - 11.437 We need you court to decide whether we are provider.

02:05 - 14.406 Okay, so you follow DAC Action and Common Pleas court on

02:05 - 17.743 on the single question, single statutory construction question.

02:05 - 19.778 Are we a health care provider?

02:05 - 22.248 Common Pleas Court says Yes.

02:05 - 23.182 Declaratory judgment.

02:05 - 25.017 I hereby declare you're a health care provider.

02:05 - 26.252 Now go with God.

02:05 - 29.255 You know, file your fee, review, get your claims, whatever you want to do.

02:05 - 30.656 But you want more than that.

02:05 - 31.690 You want to be declared

02:05 - 34.727 your health care provider and you want to pursue common law.

02:05 - 38.631 Civil remedies to get payment for these prescriptions.

02:05 - 41.901 You're out that that's where I'm having the challenge

02:05 - 44.937 because the Workers Compensation Act is where you get payment.

02:05 - 45.437 Sure.

02:05 - 47.840 And let me pass it out, because I want to be clear,

02:05 - 52.011 the entire purpose of our declaratory judgment action is to do precisely

02:05 - 53.345 what you're suggesting

02:05 - 56.048 we should have asked for, which is to declare

02:05 - 58.884 that this is the business model, it is legitimate,

02:05 - 02.054 and then we can proceed to submit the bills.

02:06 - 05.224 If they're denied, then the reason they're denied,

02:06 - 07.560 then determines what the appropriate action is.

02:06 - 08.627 Because if they're denied,

02:06 - 10.863 I'm looking at your complaint, your complaints a lot brought.

02:06 - 12.531 Your complaint is a lot broader than I just want it.

02:06 - 16.368 We just wanted declaratory judgment action as to whether we're a provider or not.

02:06 - 18.671 Your Honor, what I'm basing it on is the fact

02:06 - 23.075 that if the reason the bills were denied is solely based on agency.

02:06 - 26.145 So from what everything my clients been provided with,

02:06 - 27.746 there's no liability dispute.

02:06 - 30.182 Again, I cited two portions of the record that confirm.

02:06 - 31.450 I agree that, but that doesn't mean

02:06 - 35.387 the Common Pleas Court has jurisdiction to award you payment.

02:06 - 38.223 That that's that's the problem is I,

02:06 - 42.294 I can I can think about the idea and the notion

02:06 - 47.766 that armor pharmacy is perhaps wrong that that the Commonwealth Court created this.

02:06 - 51.337 I, I would even be open to the possibility that the cases before

02:06 - 53.806 I'm or pharmacy that said fee review can't determine

02:06 - 55.474 whether someone has standing to deliver a fever.

02:06 - 57.009 I can go either way on that.

02:06 - 00.846 But even if I could wrap my head around the fact that you can go to Common

02:07 - 01.413 Pleas court

02:07 - 05.551 simply to get an answer to the question of whether your provider or I'm struggling

02:07 - 08.921 with the idea that that also gives the Common Pleas Court judge

02:07 - 14.226 the jurisdiction to award you payment because clearly the worker's

02:07 - 19.665 Compensation Act encompasses orders of payment to providers.

02:07 - 20.199 And Your Honor,

02:07 - 24.003 I think we're getting cart before the horse, because the first issue

02:07 - 27.439 and it seems like we may even agree on the fact that the potential

02:07 - 31.110 of getting a declaratory judgment to confirm agency,

02:07 - 34.013 maybe even in your mind appropriate for civil courts.

02:07 - 36.048 And then we'll let the trial court determine

02:07 - 38.517 what are the appropriate remedies in cleaning up with the trial.

02:07 - 41.520 It doesn't have to determine that because the Workers Compensation Act

02:07 - 45.891 says what the remedy is for a provider who has not been paid once they've built.

02:07 - 46.258 Right.

02:07 - 50.029 But regularly courts of Common Pleas are asked to interpret Worker's

02:07 - 50.896 Compensation Act.

02:07 - 53.732 For example, statutory employer defenses.

02:07 - 58.871 And we cited in our brief the case of a young in the Superior Court in 2019.

02:07 - 02.007 The Superior Court does not simply transfer matters

02:08 - 05.277 to the Court of common three or a quarter of Commonwealth Court

02:08 - 09.348 excuse me, simply because it involves a worker's compensation question.

02:08 - 11.450 So here it is. So how much?

02:08 - 15.554 How much how far do I mean, again, all I had was your complaint.

02:08 - 18.257 Your complaint sought money, damages.

02:08 - 20.659 It didn't seek a declaratory.

02:08 - 21.393 I see.

02:08 - 25.197 I wrap the agency principles in whether you're a provider.

02:08 - 26.699 I wrap it all together.

02:08 - 29.968 So are you saying that you're withdrawing

02:08 - 32.971 your request at the Common Pleas court?

02:08 - 34.873 Enter, order them

02:08 - 37.876 to pay you and enter a damages award.

02:08 - 39.244 Withdrawn that from your complaint.

02:08 - 40.279 No, Your Honor, I'm not with.

02:08 - 43.148 Under what circumstance can a Common pleas court then?

02:08 - 46.752 If the Common Pleas court determines you are a provider, under

02:08 - 51.890 what circumstance can a Common Pleas court then proceed to adjudicate

02:08 - 55.327 your claim to entitlement of payment

02:08 - 58.297 under the worker's compensation in order that payment?

02:08 - 02.201 Your Honor, I think it's under the interpretation of the Act.

02:09 - 05.838 Act language is clear that if you're a provider, you're entitled to the payment.

02:09 - 09.608 If we are deemed to be an agent, then we qualify for that.

02:09 - 11.877 And if there is a legitimate reason

02:09 - 15.948 in worker's compensation realm that's provided by for certain

02:09 - 20.552 individual employees at issue, then if they've been timely providing

02:09 - 24.156 notice of those issues and you don't view the fee review process

02:09 - 27.893 as the exclusive mechanism for a provider to get paid?

02:09 - 30.929 No, Your Honor, all the fee review process does

02:09 - 34.099 is provide for amount and timeliness.

02:09 - 35.534 Those are the only two things.

02:09 - 37.102 Those are the two issues that are adjudicated.

02:09 - 40.339 But a fee review officer orders the payment.

02:09 - 43.375 If there's been a challenge to those two things, correct?

02:09 - 44.743 I agree with that, Your Honor.

02:09 - 47.913 But here we don't have a challenge to amount or timeliness,

02:09 - 51.150 so there's no reason to be before a fee review.

02:09 - 54.686 The only reason that the bills were denied is my client's agency.

02:09 - 56.989 I'm not sure I counsel if I.

02:09 - 00.425 If I understand your argument,

02:10 - 03.495 you're asking for a declaration

02:10 - 06.899 regarding a matter of statutory interpretation,

02:10 - 10.202 and then based upon facts of record,

02:10 - 13.539 you are then asking for payment.

02:10 - 17.209 Assuming that you establish statutory,

02:10 - 21.713 you get the statutory interpretation that you're

02:10 - 22.548 requesting.

02:10 - 25.050 That was a much more articulate way of phrasing what I was.

02:10 - 26.919 Hopefully it's all you're asking for.

02:10 - 31.123 I mean, as far as fraud and punitive, Your Honor, that hearkens

02:10 - 35.661 back to the language of physical therapy instituted by the Commonwealth in 2015.

02:10 - 38.130 And again, that was the Commonwealth Court itself

02:10 - 42.234 that said specifically and I quote, Should either party believe

02:10 - 46.004 the other is affecting a fraud, if you pursue a claim in legal action

02:10 - 48.006 such as a declaratory judgment action.

02:10 - 50.175 Page 960, as well as footnote five.

02:10 - 53.679 So we're following the precise remedy that even the Commonwealth Court

02:10 - 55.747 has set forth for us in order to do so.

02:10 - 59.952 And in that regard, would those would those remedies

02:10 - 01.587 that the Commonwealth Court was mentioning in

02:11 - 06.859 that case have been susceptible to litigation in Commonwealth Court,

02:11 - 07.626 Your Honor,

02:11 - 11.063 in that situation prescription partners,

02:11 - 17.169 I believe that they had adjudicated and let me look at my notes.

02:11 - 17.970 I apologize.

02:11 - 21.006 In other words, there's no disability in the Commonwealth Court to adjudicate

02:11 - 24.009 such claims, if they arise, is not true.

02:11 - 27.546 There is to adjudicate the claims of the agency.

02:11 - 28.914 Yes, that's correct, Your Honor.

02:11 - 30.182 That's precisely our point.

02:11 - 33.485 And such other such other common law claims as might have arisen.

02:11 - 34.319 Correct.

02:11 - 35.587 And in that regard,

02:11 - 39.491 I did want to ask you this, because your brief is excellent, superb.

02:11 - 42.761 I appreciate, and so is the appellant's brief.

02:11 - 44.096 But I noticed I didn't.

02:11 - 45.497 Or maybe I missed it.

02:11 - 49.801 You didn't mount a robust defense of a very what

02:11 - 55.274 I found to be a very curious assertion made by the Superior Court

02:11 - 57.109 about this time immemorial

02:11 - 01.213 argument that that this idea that

02:12 - 04.049 that common law causes of action

02:12 - 08.053 that predate the 1915 Workers

02:12 - 12.691 Comp Act are somehow

02:12 - 14.693 all carved out

02:12 - 18.463 from the whole worker's comp system.

02:12 - 21.400 And I, I,

02:12 - 26.505 I'm not aware that that of any case that that says

02:12 - 31.276 you know whether or not a tort law claim is barred by the exclusive remedy

02:12 - 35.047 provision turns on you know whether it was something

02:12 - 39.484 that Blackstone recognized

02:12 - 41.787 you know or Holmes

02:12 - 43.922 I mean what is this 1915 magic?

02:12 - 45.357 Are you standing by that?

02:12 - 48.727 Your Honor, the reason that I don't address it, particularly at length,

02:12 - 51.997 is it's really not my issue as far as I see it.

02:12 - 55.400 The issues that my client has raised, agency, statutory

02:12 - 58.737 interpretation fall outside of the worker's compensation realm.

02:12 - 03.041 So we're not seeking to suggest that any claim under any circumstance

02:13 - 06.044 that broadly that falls pre 1915

02:13 - 08.947 doesn't come within the worker's compensation at all.

02:13 - 10.082 We're see and again,

02:13 - 11.883 as we set forth in section four of our brief,

02:13 - 15.420 if this court has concerns over the breadth of the Superior Court

02:13 - 20.392 decision, it's free to quell that by limiting that holding in such a way

02:13 - 24.129 that would certainly establish our ability to proceed forward in this matter.

02:13 - 28.200 The reason that we have our claims, both, as Your Honor pointed out as well

02:13 - 32.004 for punitive damages, is based on the fraud and facts

02:13 - 35.640 that are alleged for the particular harm that's been presented in this case.

02:13 - 40.412 And a lot of that has to do with the separable conduct of post

02:13 - 45.350 litigation regularly flipping between which location has jurisdiction

02:13 - 49.087 inconsistent with the case law at the time that again, we've cited,

02:13 - 51.757 based on the record, CITES

02:13 - 53.725 For a final example of that,

02:13 - 58.397 in the substituted reply brief before the Superior Court on page six,

02:13 - 02.534 at that point in time, the appellant said, and I quote in its complaint, Elite

02:14 - 05.137 care correctly states that the defendants have alleged

02:14 - 08.440 that they are not required to pay because the billing entity, Elite

02:14 - 11.977 Care, was allegedly not a health care provider as defined by the act.

02:14 - 15.881 This is in fact the issue at the heart of this case.

02:14 - 20.452 And then what I saw in the briefing in this situation at page 25 is

02:14 - 24.456 they can see that elite care can qualify for payment as an agent of a provider.

02:14 - 28.927 But the issue seems to be hypothetically, what if there was a utilization review

02:14 - 32.631 or what if there was a challenge to a worker's compensation matter?

02:14 - 36.368 So it's changing to suit the ends of whichever jurisdiction

02:14 - 38.236 they're in to flip the matter.

02:14 - 41.239 We're six years post bringing this issue up.

02:14 - 45.277 All my client wants to do is get to the heart of is it a self assignment

02:14 - 49.147 or is it an improper referral, which again at pages 174

02:14 - 53.151 through 179 we vehemently dispute they raise those issues.

02:14 - 54.152 The preliminary objections

02:14 - 57.155 at the trial court overruled those preliminary objections.

02:14 - 02.094 But what we've done for six years is avoid a merit based hearing on this issue.

02:15 - 04.329 That's what they do. That's what they do.

02:15 - 06.932 But their argument is that that we're allowed to do that.

02:15 - 09.034 And if you want to hang us for it,

02:15 - 11.002 you got to hang us in the Commonwealth Court.

02:15 - 11.870 That's their argument.

02:15 - 15.874 I'm not aware of any legal principle that shenanigans vest jurisdiction, please.

02:15 - 22.180 Court Well, Your Honor, it goes back to the judicial

02:15 - 22.881 perhaps, that this

02:15 - 25.884 court wants to carve it, and in this case we can cite it moving forward.

02:15 - 29.254 But for this matter, we have a legitimate

02:15 - 32.958 judicial estoppel argument that Judge Daugherty hinted at.

02:15 - 36.228 It's not just the one settled party to this case.

02:15 - 39.364 Every single one of these appellants has challenged

02:15 - 41.466 the fear of his jurisdiction and succeeded.

02:15 - 44.836 And all of those matters are cited in our brief at page 60.

02:15 - 48.974 So therefore, the fee review officers held that they lacked jurisdiction

02:15 - 49.908 over this matter

02:15 - 53.945 that my client had brought a civil claim and that those matters can proceed.

02:15 - 55.447 Hearing on powerful doctrine.

02:15 - 56.314 But is it power of

02:15 - 01.319 is judicial estoppel powerful enough to divest the subject matter jurisdiction?

02:16 - 02.020 Objection.

02:16 - 03.088 I believe it is, Your Honor.

02:16 - 06.458 Specifically, if you look at black, the Superior Court in 2010,

02:16 - 10.128 there there was a matter where in the worker's compensation forum

02:16 - 14.633 someone was deemed to or charged with potentially being an employee employer.

02:16 - 15.400 Excuse me.

02:16 - 18.703 And there the employer said, we're not an employer.

02:16 - 20.805 We can't be bound by worker's compensation.

02:16 - 23.074 And they found, all right, you're right, you're not an employer.

02:16 - 26.511 Then they file a civil suit and then the person says, wait a second,

02:16 - 30.081 we are an employer and we're immune by worker's compensation.

02:16 - 33.151 That's exactly what the Superior Court said in 2010 is

02:16 - 36.488 you can't flip flop in each forum to suit your own ends.

02:16 - 38.223 And that's precisely what we have here.

02:16 - 41.293 And precisely the concern that I heard when Justice Robson said

02:16 - 43.662 So if they go back to fear review, what's going to happen?

02:16 - 46.698 Are you going to challenge timeliness of the fee review?

02:16 - 49.701 And I didn't hear an unequivocal no to that answer at all

02:16 - 53.471 But furthermore, even if we go back to fee review and the merits of our entire

02:16 - 56.474 argument is we don't belong in a fee review.

02:16 - 01.880 Fee review per this court in Crosier is a very narrow scope amount and timeliness.

02:17 - 06.518 A fee review hearing officer can be a nurse, someone that has no rights

02:17 - 11.823 to decide a legal issue as to agency and statutory interpretation.

02:17 - 16.328 That's why we brought a declaratory judgment under section 7533.

02:17 - 19.064 I think that's your I think that's probably your best argument.

02:17 - 21.733 It's just that your Common Pleas action goes further than that.

02:17 - 27.439 And, you know, that's that's where that's where I'm struggling is is I

02:17 - 30.742 I'm not sure why you wouldn't accept us saying

02:17 - 33.979 the Common Pleas court can decide the narrow questions of whether you are

02:17 - 38.049 a health care provider for purposes of pursuing the worker's comp remedies,

02:17 - 41.820 but not give you the relief that you can only get through worker's comp remedies.

02:17 - 42.687 I mean, Your Honor,

02:17 - 46.891 if you make that decision, then we'll certainly live with it and do what we can.

02:17 - 52.063 But my concern then is that we have a court of common

02:17 - 54.699 pleas to go through discovery, to apply the facts

02:17 - 57.869 and to determine, Well, it's a statutory well, it's it's a mixed question.

02:17 - 00.338 In fact, the law is your business model. I understand that.

02:18 - 05.010 But in terms of what you're entitled to payment of, that's what I'm talking about.

02:18 - 07.145 And you're saying that's not an issue.

02:18 - 07.912 Right? Right.

02:18 - 08.647 What you're entitled.

02:18 - 11.516 Well, then you don't then you don't need a judgment on that question.

02:18 - 14.419 Well, but I do, because they're not going to pay

02:18 - 16.087 if we don't get a judgment.

02:18 - 17.656 But that happens to providers all the time.

02:18 - 21.559 And if somebody doesn't pay it, you go through the fee review process.

02:18 - 26.831 I think we have a disagreement as to the breadth of the fee

02:18 - 27.799 review process

02:18 - 32.570 and the theory process is solely for the amount and the timeliness, so forth.

02:18 - 34.439 But that's the defense.

02:18 - 36.508 That's how the fee review process works.

02:18 - 39.277 You don't get paid, you file a fee

02:18 - 42.480 review petition, you say, you say this is how much we build.

02:18 - 44.149 This is, you know, all this evidence.

02:18 - 47.419 They're the ones that Ray raised those issues, correct.

02:18 - 49.387 They may not raise those issues, in which case

02:18 - 51.756 you get a favorable order of ordering the payment.

02:18 - 53.425 And that's what we did in this case.

02:18 - 57.195 And then when they challenged, they said, no, I understand the shenanigans argue,

02:18 - 57.996 but I'm just I'm saying

02:18 - 01.666 you keep saying that the fee review issues are only limited to those two issues.

02:19 - 03.301 The fee review process is limited.

02:19 - 06.304 Those two issues, if the employer and the insurer raise them.

02:19 - 08.740 Otherwise, you get a favorable fee reward.

02:19 - 12.310 If the if timeliness and whatever is not at issue, you get paid.

02:19 - 16.114 If those two things then become not an issue hypothetically in the future. Yes.

02:19 - 19.851 I mean, that's how I see this model moving and have to live with that in any event.

02:19 - 21.586 I mean, you could have you could have appealed

02:19 - 25.357 to Commonwealth Court, right, Your Honor, in that situation, if you look at pages

02:19 - 30.028 126 through 128 of the record, we agreed with the fee review

02:19 - 33.198 hearing officer's decision, the sole reason set forth in our brief

02:19 - 37.268 we even went to see review was to confirm exhaustion of administrative remedies.

02:19 - 40.271 So as soon as we went there, they challenged jurisdiction.

02:19 - 42.707 We said we agree, we don't think we belong here.

02:19 - 44.275 We want to file in civil court.

02:19 - 48.713 But it seems as if you've let your opposing counsel dictate

02:19 - 53.385 where your jurisdiction was over this time. But.

02:19 - 56.888 Well, Your Honor, to address that, we have said from day one

02:19 - 59.958 that we believe it's appropriate in the court of Common Pleas.

02:20 - 03.661 The only time that arguably, potentially

02:20 - 07.599 the fee review process has been expanded is Armor pharmacy,

02:20 - 12.137 which again, in our brief and I know we're getting away from a bit, was limited

02:20 - 16.608 to someone who is a putative provider very different than an agency

02:20 - 17.842 that we have here.

02:20 - 21.246 So in that regard, we have always been of the opinion

02:20 - 25.083 that we belonged in court of Common Pleas and going to fee review

02:20 - 30.288 confirmed in the record on those pages, 126 to 128 was simply to confirm

02:20 - 31.689 that there was an exhaustion

02:20 - 35.126 of those administrative remedies, if applicable, which they were not.

02:20 - 39.697 And once they took that position and succeeded on their arguments,

02:20 - 43.535 they cannot now do the same thing and bar the same case

02:20 - 47.338 in the inverse and essentially relegate elite care with nowhere to go.

02:20 - 49.307 They've been kicked out of the workers compensation

02:20 - 53.144 forum there in the Court of Common Pleas on a declaratory judgment action.

02:20 - 57.015 And if they're relegated back with maybe various arguments about timing,

02:20 - 00.919 maybe whether or not armor pharmacy expands that scope,

02:21 - 04.522 it it leaves way too much up in the your it's interest.

02:21 - 06.191 It's an interesting point you're raising.

02:21 - 09.160 You're saying there was no agreed party

02:21 - 12.230 to fee review determination where there was no aggrieved party

02:21 - 16.000 because they got the fee review petition dismissed, which is what an insurer wants.

02:21 - 17.202 And you got to go.

02:21 - 19.838 You and your mind got to go to Common Pleas, which is what you wanted.

02:21 - 21.773 So there was nobody aggrieved to make an appeal

02:21 - 25.810 as that's why we did not appeal, just to make sure we're on the same page.

02:21 - 30.815 As far as a judicial estoppel argument, I believe that it confirms for them

02:21 - 34.252 that they cannot now switch and suit their own ends in the inverse.

02:21 - 36.721 So we're aggrieved in the sense that we did not have the ability.

02:21 - 39.557 But that's only with regard to that claim,

02:21 - 42.360 with regard to the workers comp is claim specific.

02:21 - 45.630 So whatever claim was the subject of that adjudication is,

02:21 - 47.131 is who is judicially to stop.

02:21 - 50.268 Not every claim going forward can rely on a fee review officers

02:21 - 52.003 on appeal determination of jurisdiction.

02:21 - 54.639 Well, Your Honor, I disagree with that, because that's the whole point,

02:21 - 56.774 is it's the same issue in every single one of these cases.

02:21 - 58.977 The fee review, the fee for vary officer

02:21 - 03.481 decisions do not get to you do not get reclusive, affect you.

02:22 - 04.782 They're not binding.

02:22 - 06.885 There's no judicial rest.

02:22 - 09.487 You court estoppel principle that applies to a few of you.

02:22 - 11.689 Officer Termination is Your Honor.

02:22 - 14.826 I think it is in the sense of a judicial estoppel argument

02:22 - 16.194 because it's the same issue.

02:22 - 19.764 So why would we file hundreds of the same issue

02:22 - 20.899 to get the same result

02:22 - 22.834 when we've confirmed that it doesn't have jurisdiction,

02:22 - 24.869 which we've been saying all along, by the way?

02:22 - 29.107 So as soon as we get that confirmation from a from a non lawyer fee review

02:22 - 33.578 officer, you're saying that that has some sort of judicial estoppel effect,

02:22 - 35.647 even though they're not a judicial officer at all?

02:22 - 38.049 Not even quasi judicial correct, Your Honor, because all they've

02:22 - 39.984 they've confirmed exactly like we're saying.

02:22 - 42.453 It's not an appropriate issue for them to consider.

02:22 - 45.156 It's outside the scope of what they can do.

02:22 - 49.294 And so for that reason, gladly, I'm glad we've got the decisions of those

02:22 - 52.063 those non-lawyer nonjudicial

02:22 - 55.266 nurses and and physicians who I'm sure are doing a great job.

02:22 - 56.868 But I'm not sure they are the experts

02:22 - 00.605 in what is or is not subject to the Workers Compensation Act.

02:23 - 04.075 But, Your Honor, what I'm saying is that they're confirming

02:23 - 06.878 that they don't have the ability to make that decision.

02:23 - 09.347 We're not accept that up to Commonwealth Court.

02:23 - 11.015 No, Your Honor, because.

02:23 - 14.719 Sorry, you could not appeal that to Commonwealth Court.

02:23 - 15.954 Yeah, although.

02:23 - 17.488 But he could have. But you could have.

02:23 - 18.222 You could have.

02:23 - 20.325 But, but Your Honor, we've,

02:23 - 24.128 we've been since day one that we don't belong in that remedy.

02:23 - 27.932 That's why we pursue the civil action and the civil action

02:23 - 29.467 that's in that we're entitled to.

02:23 - 33.905 By the way, a opposing counsel hinted to the 700 pharmacy

02:23 - 38.009 opinion that in that matter, the Superior Court in the Court of Common

02:23 - 42.213 Pleas has already considered a lot of these same issues with rules

02:23 - 46.884 in verse, where there it was the insurer who was suing various entities,

02:23 - 51.422 including billing agents or managers, and go ahead, just finish your sentence.

02:23 - 51.823 Certainly.

02:23 - 55.593 And in that matter, they said that all of those same issues that violated

02:23 - 59.497 the Workers Compensation Act, you know, brought up these issues.

02:23 - 03.167 And there the court did, on the merits, decline a summary judgment.

02:24 - 06.704 Section six of the brief of the appellate is in that matter said

02:24 - 09.941 this court's free to just dismiss and say they don't have jurisdiction

02:24 - 11.943 this matter because it's worker's compensation.

02:24 - 12.677 Okay, Mr.

02:24 - 16.848 Weiss, I think we understand I have turned my lamp off,

02:24 - 19.751 which is a good indication that I've heard enough.

02:24 - 20.918 I'm sorry.

02:24 - 24.689 My eyes were focused over there more. I didn't even see it.

02:24 - 27.925 Regarding well-argued and, well, brief.

02:24 - 30.328 Thank you both.

02:24 - 32.697 The next case before the court

02:24 - 36.367 is the matter of the estate of Peter Caruso.

02:24 - 41.339 The question presented in this case is whether a nonparty to a partnership

02:24 - 45.410 agreement may step into the shoes of a party

02:24 - 48.579 to enforce contractual rights.

02:24 - 52.884 This case involves a 1983 partnership agreement

02:24 - 56.821 governing a family real estate business.

02:24 - 00.058 Marianne, the mother of John and Peter

02:25 - 04.729 Caruso, entered into an agreement with her two sons

02:25 - 10.201 with respect to the operation of the family business.

02:25 - 12.403 John married Geraldine

02:25 - 15.406 and passed away in 2003.

02:25 - 17.809 Peter married Margaret and had one

02:25 - 21.112 daughter, Sandra Caruso.

02:25 - 25.683 Peter passed away in 2015.

02:25 - 28.052 The wives,

02:25 - 31.389 neither the wives of John or Peter

02:25 - 36.227 Caruso were included as parties and interest in the agreement.

02:25 - 38.830 Nor did the agreement mention

02:25 - 43.000 the wives by name or as potential heirs.

02:25 - 46.270 The agreement did not include any terms

02:25 - 49.207 indicating that it bound or ignored

02:25 - 55.046 to the benefit of any heirs, successors or assigns.

02:25 - 57.281 In 1997,

02:25 - 00.084 Marianne sold her interest in the family

02:26 - 03.888 business to Peter and John, with each

02:26 - 07.859 retaining a 50% interest in the business.

02:26 - 11.129 After John's death in 2003,

02:26 - 16.334 Peter had sole operational control over the business.

02:26 - 19.403 Peter and Geraldine, John's widow,

02:26 - 23.775 formed a new partnership whereby Geraldine received

02:26 - 27.945 a stream of income from the Hayes Land Company.

02:26 - 30.248 No written partnership agreement

02:26 - 33.684 existed between Peter and Geraldine.

02:26 - 36.788 After Peter's death in 2015,

02:26 - 40.858 Geraldine sought to exercise a buyout provision

02:26 - 44.996 in the 1983 Partnership Agreement,

02:26 - 48.332 whereby in the event of a partner's death,

02:26 - 52.370 the surviving partner could buy out the deceased partners

02:26 - 58.142 interest at net book value, as opposed to market value

02:26 - 00.244 in the amount of one that

02:27 - 06.951 $117,762.50.

02:27 - 07.919 Sandra.

02:27 - 11.556 Peter's heir took the position that the partnership

02:27 - 16.060 should have been wound up according to the agreements terms

02:27 - 20.631 with profits distributed to Geraldine and Peter's estate.

02:27 - 25.036 She rejected Geraldine's efforts to enforce the buyout.

02:27 - 28.506 Geraldine commenced a lawsuit and asked the court

02:27 - 32.710 to order a specific performance of the buyout provision.

02:27 - 37.315 Selling Peter's interests to Geraldine at book value

02:27 - 42.887 and acknowledging assignment of Peter's interest to Geraldine.

02:27 - 45.122 Summary judgment was granted

02:27 - 48.125 by the Allegheny County Orphan's Court.

02:27 - 52.063 The Court found that Geraldine failed to meet her burden

02:27 - 58.836 of establishing her rights under the 1983 Partnership Agreement.

02:27 - 03.040 The Pennsylvania Superior Court reversed that decision,

02:28 - 08.512 ruling that Geraldine had established a genuine issue of material fact

02:28 - 11.582 as to whether the 1983 agreement

02:28 - 15.653 still governed the partnership.

02:28 - 18.656 The case was remanded to the trial court,

02:28 - 23.828 which concluded that Geraldine had stepped into the shoes of her late husband

02:28 - 27.665 with respect to the 1983 agreement

02:28 - 33.371 and must be accorded all rights of the agreement, including the buyout.

02:28 - 38.175 The superior Court affirmed that decision,

02:28 - 43.281 and in this appeal, the appellant claims that the superior Court's

02:28 - 48.352 decision undermines fundamental principles of contract law

02:28 - 53.024 and ignores the concept of contractual privity

02:28 - 58.095 by inviting non parties to assert rights without consideration

02:28 - 02.833 of the actual intentions of the contracting parties.

02:29 - 06.570 Contract law provides that non parties to a contract

02:29 - 12.677 may only enforce in limited circumstances.

02:29 - 16.213 Appellant states that non parties should not be permitted

02:29 - 20.751 to step into the shoes of the contracting party

02:29 - 23.554 and asserts that there is no legal support

02:29 - 27.024 for this finding by the Superior Court.

02:29 - 31.028 Appellee argues that the appellant mischaracterizes

02:29 - 34.498 the dissolution and provisions of the agreement

02:29 - 39.303 and that the agreement as to dissolution is conditional,

02:29 - 44.041 meaning it is not automatic and was not elected by Peter.

02:29 - 47.845 Upon John's death in 2003,

02:29 - 48.412 appellant

02:29 - 53.417 argues that there was no termination of the agreement at that time

02:29 - 57.955 and thus no buyout of John's share.

02:29 - 00.191 Appellee further argues

02:30 - 05.296 that the parties course of dealing following the death of John demonstrates

02:30 - 09.233 that Geraldine did in fact step into John's shoes

02:30 - 12.236 after his death.

02:30 - 13.838 Let's listen to the arguments

02:30 - 17.241 before the Pennsylvania Supreme Court.

02:30 - 19.176 Good afternoon and thank you all.

02:30 - 20.544 If I may, please the court.

02:30 - 21.946 My name is Morgan Hanson.

02:30 - 24.949 I am here joined today by my co-counsel, Connor Saez,

02:30 - 29.620 and we have the privilege of arguing on behalf of the estate of Peter J.

02:30 - 33.257 Caruso and its executrix, Sandy Caruso.

02:30 - 36.327 The issue that this court accepted for review

02:30 - 40.364 was whether a nonparty to a partnership agreement

02:30 - 44.935 who is not a signatory to the agreement and not a third party beneficiary thereof,

02:30 - 48.205 and where the partnership agreement does not permit assignment.

02:30 - 51.909 Whether the Court's review is necessary to clarify the circumstances

02:30 - 55.312 where a nonparty could be permitted to step into the shoes of a party,

02:30 - 58.315 to an agreement, to enforce contractual rights as

02:30 - 01.919 if that individual were a party to the agreement.

02:31 - 05.656 I recite this only to start because the appellate

02:31 - 10.194 plaintiffs, Geraldine Caruso, has felt it necessary to revise this question

02:31 - 13.497 that the Court has accepted to add two additional clauses

02:31 - 16.801 that I think are very meaningful, that we should address and clarify

02:31 - 19.804 from the beginning that may have led to why we are here

02:31 - 23.407 in the first place with the confusion in the Superior Court.

02:31 - 26.510 First, Geraldine Caruso has revised this Court

02:31 - 32.583 question to identify the nonparty as an executrix of a party's estate.

02:31 - 35.920 Now, Geraldine Caruso was most

02:31 - 39.190 definitely an executrix to a party's estate.

02:31 - 41.625 That would be John D Caruso.

02:31 - 45.229 However, she has not brought this claim

02:31 - 48.265 as an executrix of a party's estate

02:31 - 51.268 or in any form of representative capacity

02:31 - 55.940 of anyone who was a party to this agreement. But

02:31 - 58.976 she has brought it in her individual capacity and you need to look

02:31 - 04.482 no further than the caption to determine in what capacity she's bringing it.

02:32 - 08.185 So this is an important clarification because we're not talking about

02:32 - 10.554 a claim being brought in a representative capacity.

02:32 - 11.822 We're talking about a claim

02:32 - 15.993 being brought in an individual capacity as a rights holder.

02:32 - 17.661 We understand that.

02:32 - 22.133 Second, they've inserted a course of conduct into their question

02:32 - 27.037 whether a nonparty can step into the shoes by course of conduct to enforce rights.

02:32 - 30.774 Well, that's that's where I have a question initially.

02:32 - 36.380 Does Geraldine need to step into the shoes to

02:32 - 38.983 have her rights discussed here,

02:32 - 44.488 or is she actually through a course of conduct, acting as a partner?

02:32 - 47.024 Well, this is a fundamental distinction

02:32 - 50.494 that I think has confused the courts up and down the line.

02:32 - 53.464 Her ability to act as a partner

02:32 - 56.901 is not the same as her ability to enforce

02:32 - 02.940 a previously existing written partnership agreement, to which she is not a party

02:33 - 06.043 and to which there is no evidence that she was

02:33 - 09.046 ever made a party to that agreement in which.

02:33 - 10.381 Why not, though?

02:33 - 11.415 Why not? Because.

02:33 - 12.683 Because isn't.

02:33 - 17.421 Isn't it true that a partnership agreements can change,

02:33 - 23.394 can evolve, can assume a new form over time?

02:33 - 23.894 It is

02:33 - 27.698 true that a partnership is, first of all, a status.

02:33 - 28.566 It is not.

02:33 - 31.835 It is a relationship between two individuals,

02:33 - 36.207 and that is any two individuals who have chosen to do business together

02:33 - 39.710 and not incorporate themselves under the Uniform Partnership Act.

02:33 - 44.081 Both the predecessor that was in place when this occurred and our current one

02:33 - 46.417 have the status of partners.

02:33 - 51.222 But the evidence necessary to prove that you are a partner with a person

02:33 - 55.192 is different than the evidence that you need to prove,

02:33 - 59.096 to show that you have rights to enforce a preexisting

02:33 - 02.099 written agreement to which you're not a party.

02:34 - 04.802 We believe, at least since the last

02:34 - 10.040 150 years or not longer, you in the Commonwealth of Pennsylvania,

02:34 - 15.946 you need to prove, offer acceptance, consideration, privity.

02:34 - 18.115 Absolutely.

02:34 - 18.916 With.

02:34 - 21.919 Actually, Justice Wecht had started to ask a question mark.

02:34 - 22.152 All right.

02:34 - 27.057 At Justice. Yes.

02:34 - 29.593 This question right

02:34 - 30.794 there, you re better now.

02:34 - 32.229 I hear you just fine, sir.

02:34 - 34.732 What's the what's the alleged consideration?

02:34 - 38.736 Well, as the superior court notes, there is not

02:34 - 44.208 that there is no consideration necessary in this particular scenario

02:34 - 49.413 by which a nonparty can somehow gain the same rights as a party.

02:34 - 52.549 We obviously disagree with the superior court's statement

02:34 - 55.152 that you can form a contract without considering misunderstood

02:34 - 55.753 what I was asking.

02:34 - 57.554 I wasn't asking what your consideration was.

02:34 - 00.090 Generally, I'm asking in this particular case,

02:35 - 03.294 what did Geraldine allege was the consideration that she paid

02:35 - 06.363 to quote unquote step into the shoes of her deceased husband?

02:35 - 09.667 She has not made any such allegation.

02:35 - 10.834 Counsel Let

02:35 - 15.939 me get down to like a basic proposition that's suggesting that what happened here.

02:35 - 21.245 But would you agree that true course of conduct,

02:35 - 26.950 Geraldine, and the surviving partner could have formed a new partner

02:35 - 29.987 under the same terms and conditions

02:35 - 34.024 as the preexisting partnership, A new partnership?

02:35 - 39.029 However, I would agree, and I believe it is undisputed,

02:35 - 44.468 Your Honor, that Peter and Geraldine entered into some form of partnership

02:35 - 48.939 after the death of John de Caruso, because for the next 12 years

02:35 - 55.012 Peter rented properties and he provided 50% of the money to Geraldine.

02:35 - 58.682 However, what is entirely lacking from

02:35 - 04.054 this record is the any evidence that would suggest that that partnership

02:36 - 09.026 was governed by the 1983 Partnership Agreement, to which she was not a party,

02:36 - 11.729 that she had been given rights.

02:36 - 15.032 The Superior Court, Your Honor, has given her rights

02:36 - 19.103 that no person in the Commonwealth has ever received before,

02:36 - 22.206 which is the ability to specifically enforce

02:36 - 24.608 a written agreement to which they're not a party.

02:36 - 26.310 Well, okay.

02:36 - 29.113 I think I think the problem is the question sort of puts the rabbit

02:36 - 34.818 in the hat by referring to the 1983 agreement and the 1983 agreement.

02:36 - 35.953 As I understand it,

02:36 - 40.057 I think Justice Wecht was going to be going in this direction was,

02:36 - 45.596 according to the 1983 agreement, when

02:36 - 48.699 Marianne withdrew,

02:36 - 52.403 the partnership was dissolved.

02:36 - 53.404 Can I respond?

02:36 - 57.007 Well, you can respond by telling me how paragraph

02:36 - 00.544 12 of the partnership agreement doesn't say that when a partner withdraws,

02:37 - 03.614 the partnership is dissolved because paragraph 12

02:37 - 06.850 says that the parties may continue,

02:37 - 11.021 expressly says that the parties may continue the business of the partner.

02:37 - 13.490 That's not the same as continuing the partnership.

02:37 - 18.328 Continuing the partnership business is not the same as continuing the partnership.

02:37 - 21.832 So so I mean, I'm just reading the language

02:37 - 24.902 and you have to read them together because they're in the same provision, right?

02:37 - 28.872 So on one hand, the partnership dissolves and on the other hand,

02:37 - 31.809 the surviving partners can continue the partnership business.

02:37 - 34.044 And that could happen here. Correct.

02:37 - 37.548 When will when Marianne, the mother of John De Cruz

02:37 - 39.883 and Peter Caruso, sold her interest,

02:37 - 44.488 she sold it pursuant to a written agreement between the three of them,

02:37 - 47.958 which expressly said that the partnership was going to continue

02:37 - 50.594 and that the partnership agreement was going to continue.

02:37 - 51.462 Well, so that's different.

02:37 - 54.031 So you can then this kind of goes to the point

02:37 - 57.334 the surviving partners could have agreed

02:37 - 01.405 that even though the partnership under the 1983 agreement was dissolved,

02:38 - 05.542 we're going to continue the partnership under a new partnership business.

02:38 - 08.979 But we are going to adopt the provisions of the agreement.

02:38 - 09.813 Absolutely.

02:38 - 12.015 But that's so that's a new partnership agreement,

02:38 - 15.752 the terms of which are the 1983 partnership.

02:38 - 16.453 Absolutely.

02:38 - 20.958 My question also as to what occurred upon the death

02:38 - 26.263 of the remaining partner and frankly, reading this agreement,

02:38 - 29.600 I don't know how you come to the conclusion that that partnership

02:38 - 34.671 was not dissolved on the death of the sole remaining partner.

02:38 - 36.440 There was only one person.

02:38 - 38.208 The other partner passed away.

02:38 - 41.311 There's no one with whom someone can be a partner.

02:38 - 45.349 I mean, you have Geraldine as the executor, executrix

02:38 - 49.520 of the estate of the deceased partner, but that doesn't make her a partner.

02:38 - 51.889 That makes her the executor to accept the estate.

02:38 - 55.692 I mean, this partnership was never wound up.

02:38 - 59.062 So I would actually agree with all of what you've said just.

02:38 - 03.634 Donoghue Which is that upon the death of John de Caruso,

02:39 - 07.104 we were left with one partner, one remaining partner

02:39 - 11.308 who had any rights at any point under the 1983 agreement,

02:39 - 15.412 and that was Peter Caruso, but without complying with the buyback provision.

02:39 - 19.583 Pete for this case is long on facts and short on why.

02:39 - 21.818 Because Peter Caruso died

02:39 - 24.922 and there is no writing that explains what their intentions are.

02:39 - 25.622 And the dead

02:39 - 29.893 man statute then bars Geraldine Caruso from providing competent testimony.

02:39 - 34.865 So we know the facts of what happened, but the why each of these people did

02:39 - 38.502 what they did will forever remain a mystery, at least to this court.

02:39 - 43.040 So the question though, is, at that point in time, what

02:39 - 46.076 what did Geraldine and Peter?

02:39 - 47.344 Peter. Peter Right.

02:39 - 48.211 I am Peter. Yes.

02:39 - 50.747 No, no, I am representing Peter.

02:39 - 51.248 I understand.

02:39 - 55.018 So what did Geraldine and Peter you can call me Kevin now.

02:39 - 57.654 I'm just getting

02:39 - 58.589 what did,

02:39 - 02.726 what did Geraldine and Peter what was their meeting of the minds

02:40 - 06.863 in terms of the term of their new partnership.

02:40 - 09.600 What was because it could in

02:40 - 10.634 your best argument

02:40 - 11.401 were a lot of these questions

02:40 - 15.105 we're asking you, we should probably be asking the other side. But

02:40 - 17.674 their first official act was to disavow

02:40 - 20.143 the buyback provision of the 1983 agreement.

02:40 - 23.013 So if it was their intent to be governed by that,

02:40 - 25.349 they didn't comply with it from the get go?

02:40 - 26.883 That's correct.

02:40 - 27.784 That's correct.

02:40 - 29.252 So from our perspective,

02:40 - 34.257 this is what happened as a matter of law, applying the law to the facts.

02:40 - 37.594 Geraldine Caruso was the executrix as an executor, correct?

02:40 - 41.999 She stepped into the shoes of for her deceased husband,

02:40 - 44.701 stepping into the shoes is a limited concept,

02:40 - 47.304 and it's an exception to the common law rule

02:40 - 50.741 that only individuals can enforce the rights that they possess

02:40 - 54.044 and only individuals can defend the obligations that they have.

02:40 - 57.914 But as a matter of equitable principles and in certain instance, statutory

02:40 - 00.884 principles, we've decided as a matter of law

02:41 - 02.786 that incapacitated people,

02:41 - 06.790 whether they are deceased, mentally incapacity under some kind of guardianship

02:41 - 10.994 or legally incapacitated can have another individual step into their shoes

02:41 - 14.564 to represent them on a purely representative basis.

02:41 - 20.704 She did so as executrix, which gave her the right to sue Peter J.

02:41 - 24.474 Caruso for failing to honor the buyback position.

02:41 - 27.711 But the buyback provision of paragraph 14, she could have sued him.

02:41 - 31.415 She could have said, buy my interest out at net book value assisting,

02:41 - 34.184 assuming that that was part of their agreement. Right.

02:41 - 38.221 But I think our problem here is we don't know what their agreement was

02:41 - 42.459 because there's no evidence of offer, acceptance, consideration,

02:41 - 43.727 definitive terms.

02:41 - 45.762 All we know for sure

02:41 - 49.332 is that the buyback provision of this agreement was not honored

02:41 - 52.335 and that they rented properties for 12

02:41 - 54.938 for 12 years and they divided the rents.

02:41 - 58.608 So in closing, you win and we see

02:41 - 01.211 83 partnerships gone,

02:42 - 04.214 but there was some sort of partnership

02:42 - 06.516 that that came into existence

02:42 - 10.821 subsequently between Peter and Geraldine.

02:42 - 13.890 We just don't know

02:42 - 17.994 what the terms of that partnership are, if any, and,

02:42 - 22.032 and on remand that can be litigated.

02:42 - 25.736 Would that be in appropriate an inappropriate disposition?

02:42 - 27.304 Well,

02:42 - 31.408 I believe that the facts such as they are have already been developed in that

02:42 - 34.978 there is no additional there's nothing new under the sun here that we would be

02:42 - 38.281 remanding to determine Peter's estate owes nothing to.

02:42 - 38.982 No, no, no.

02:42 - 41.418 But that's not let me answer that question.

02:42 - 44.020 So the

02:42 - 47.624 what this is really about and what this has always been about

02:42 - 49.526 is whether Geraldine has the right

02:42 - 52.796 to buy out the estate of her brother in law at Net book value,

02:42 - 56.433 or whether the partnership that they've established should be dissolved,

02:42 - 00.203 the property sold and each of them receive their fair market value.

02:43 - 02.038 That's all this has ever been about.

02:43 - 05.242 And I have not appraised each of these properties.

02:43 - 07.911 I know they are mostly in the Hayes area.

02:43 - 12.115 I suspect ultimately we're talking about maybe a couple hundred thousand dollars

02:43 - 13.416 difference between what

02:43 - 17.287 the fair market value of this is and what the net book value of this is.

02:43 - 20.991 If you were to find that a nonparty cannot

02:43 - 24.795 enforce rights under a contract that were never granted to them

02:43 - 27.764 and there's no evidence where ever given to them,

02:43 - 30.233 then all that would happen here, Your Honor,

02:43 - 33.503 is that the partnership would be dissolved, properties would be sold,

02:43 - 38.108 everybody get their half, and that's because it defaults to the UPI.

02:43 - 39.342 Absolutely. Right. So.

02:43 - 43.713 So but but I don't I am struggling with your point about this.

02:43 - 46.483 I don't like this phraseology of this issue.

02:43 - 50.320 Can a non party enforce rights to a previous agreement

02:43 - 51.688 to which they were never a party?

02:43 - 55.492 I think the answer to that is yes, they cannot.

02:43 - 58.094 The real question in this case is what were the terms

02:43 - 02.332 of the partnership agreement between Geraldine and Peter?

02:44 - 05.368 Or answer me this, what's your position?

02:44 - 10.874 Pursuant to paragraph 13, I think the use of the word shell, does that buy back it?

02:44 - 15.011 Does that become a mandatory obligation upon the death as a result of the word

02:44 - 19.115 shell, or is just the death of a partner a precondition

02:44 - 23.220 qualifying for the obligation to buy back?

02:44 - 27.424 I would say it is a mandatory obligation, which is in line with the Uniform

02:44 - 31.094 Partnership Agreement that was in place at the time, which said that if a partner

02:44 - 34.064 died, it triggered the dissolution of the partnership.

02:44 - 37.400 So yeah, so what happened here is Peter J.

02:44 - 41.738 Caruso breached that agreement and Geraldine chose not to enforce it,

02:44 - 46.243 that there was a, there was a mandatory obligation for which did not occur.

02:44 - 50.413 Therefore, the 1983 agreement is dissolved.

02:44 - 53.917 It's a legal nullity at this point after

02:44 - 57.120 Peter had an obligation to buy her out mandate

02:44 - 00.523 or not to buy her own sorry, Peter, an obligation to buy his brother's

02:45 - 03.526 interest in the partnership, although he did not do so.

02:45 - 04.628 That is undisputed.

02:45 - 08.164 It was a mandatory obligation to do so.

02:45 - 09.432 But your question and

02:45 - 10.333 I want to just real quickly,

02:45 - 14.504 your question assumes that Peter and John agreed to be bound by the 1983

02:45 - 17.874 agreement going forward after the withdrawal of their mother. Yes.

02:45 - 22.579 Yes. That's even assuming is that as stipulated in get to what?

02:45 - 27.350 We have a written agreement that purports to amend the 1983

02:45 - 31.588 partnership agreement to take Mary and the mother out.

02:45 - 34.524 And so the working assumption in this case has always been

02:45 - 39.062 that the night that the written amendment, which complies with Article 18

02:45 - 43.266 of the partnership agreement was sufficient to at a minimum

02:45 - 46.970 re and reinvigorate this partnership agreement,

02:45 - 50.040 what we don't have is anything similar

02:45 - 54.311 to that dealing with whatever Peter and Geraldine decided,

02:45 - 58.481 but that isn't necessarily the only way the agreement

02:45 - 02.385 could be changed or a new agreement could be reached, is it?

02:46 - 05.789 It's not the only way a new agreement potentially could be reached.

02:46 - 09.192 It is the only way this particular agreement can be amended,

02:46 - 13.663 because the parties to the original agreement chose to limit its ability

02:46 - 18.435 to be amended to an amendment in writing that is recorded as part of the books.

02:46 - 21.504 So I guess the only way you get from here to there,

02:46 - 26.276 Your Honor, is you would have to prove by some currently undefined

02:46 - 30.580 standard that the course of conduct is sufficient to prove

02:46 - 36.152 that they had agreed to accept this 1983 partnership agreement as their own.

02:46 - 40.991 Now, there's no testimony from either of these individuals on that issue.

02:46 - 47.197 There's no writing or email letter or otherwise that does. So

02:46 - 48.565 there's all we have in the

02:46 - 52.602 record is some tax returns which indicate that

02:46 - 56.139 that Peter complied with federal tax law.

02:46 - 59.442 We've got some perhaps inconsistent

02:46 - 02.746 admissions in other case, and that's all.

02:47 - 04.214 And we have a course of conduct.

02:47 - 10.954 Well, let me let me ask you this question about the conduct here.

02:47 - 12.756 It seemed to me what happened

02:47 - 17.160 here is after the death of Geraldine's husband,

02:47 - 20.063 the remaining partner

02:47 - 23.433 who is now a party because he's not a partner with anyone,

02:47 - 27.337 he continued the business of the partnership

02:47 - 29.672 did not participate

02:47 - 32.942 in a new partnership, but just continued the business

02:47 - 36.946 as it was conducted prior to the death of the other partner.

02:47 - 40.016 So Geraldine was getting

02:47 - 45.255 50% of the proceeds of sales? Yes.

02:47 - 47.757 Which was the manner in which the business

02:47 - 50.760 was conducted prior to the death of the partner.

02:47 - 54.898 Absent any evidence that there was an agreement

02:47 - 57.901 between the parties that that would occur.

02:47 - 59.669 That's all we have.

02:47 - 00.937 I am.

02:48 - 03.106 Am I am I missing something here?

02:48 - 04.574 Justice Donahue? You're not.

02:48 - 07.544 I mean, that's that's the canvas on which we are all painting here.

02:48 - 10.246 We have the death of a party.

02:48 - 14.417 The final partner who had any connection to the 1983 agreement.

02:48 - 19.122 We have a failure to honor paragraph 14, a mandatory provision

02:48 - 20.390 that should have occurred.

02:48 - 23.960 We have no lawsuit from the estate compelling this.

02:48 - 28.331 And then we just have a rolling forward and the base of the business

02:48 - 29.499 of the partnership.

02:48 - 33.770 But the crucial point here is that a partnership business is not

02:48 - 37.674 the partnership a partnership business is separate from it.

02:48 - 42.479 And and what's really odd about this case and the superior court's decision is

02:48 - 45.281 we are effectively giving a nonparty to an agreement,

02:48 - 49.018 someone who cannot prove, offer acceptance consideration,

02:48 - 52.055 cannot prove a meeting of the minds by which they are given rights.

02:48 - 53.223 Under this agreement,

02:48 - 56.292 we're giving them the power not only to enforce that agreement,

02:48 - 01.297 to receive their expectation damages, but to specifically enforce it.

02:49 - 04.300 There is no case law that the Superior Court cites

02:49 - 08.471 that supports this provision, this idea that non parties can do it.

02:49 - 13.076 We can't find any other case anywhere in the United States of America

02:49 - 16.079 where dawn parties are allowed to enforce agreements.

02:49 - 19.582 And what we're inventing here, if we allow the superior court opinion

02:49 - 23.052 to stay, is a breach of contract action by non parties,

02:49 - 26.089 which I struggle to even say.

02:49 - 27.157 Or do you?

02:49 - 30.426 Are you of the view that the Uniform Partnership

02:49 - 34.864 Act provides the remedy

02:49 - 37.634 as to where we are right now in this case?

02:49 - 41.204 Absolutely there because there is no agreement

02:49 - 43.873 to apply the 1983 Partnership agreement.

02:49 - 46.809 There's no evidence of that and there's no agreement

02:49 - 48.178 and she was not a party to it.

02:49 - 50.547 We default to the Uniform Partnership Act.

02:49 - 52.882 We can do the partnership is dissolved.

02:49 - 54.417 The property should be sold.

02:49 - 57.086 Everybody gets their 50. And I just unpack that for a second.

02:49 - 01.057 So you concede that there was a partnership

02:50 - 05.662 between Peter and Geraldine?

02:50 - 06.896 Yes, sir. Okay.

02:50 - 10.166 So you can see that did to Justice WEX point

02:50 - 13.603 did the did the issue

02:50 - 16.973 of the terms of that agreement

02:50 - 23.713 get a full hearing in the Common Pleas Court

02:50 - 26.482 If you read the opinions, I think both the Common Pleas

02:50 - 27.317 Court of the Supreme Court

02:50 - 27.917 Superior Court

02:50 - 28.218 sort of

02:50 - 32.322 conflated the existence of a partnership with the part with the terms of it,

02:50 - 37.827 but was there a full and fair opportunity for the parties to present their evidence

02:50 - 42.365 as to the terms of that agreement such that we have the best

02:50 - 45.635 record we're going to have or doesn't have to go back?

02:50 - 48.738 I believe there was a full and fair opportunity to present that evidence.

02:50 - 50.540 There were depositions taken.

02:50 - 54.944 There was discovery that occurred, and there was effectively

02:50 - 59.082 the case was submitted to the orphans court judge on briefs and oral argument,

02:50 - 02.652 including deposition citations and document citations.

02:51 - 06.556 But I believe, as I previously said, there's there's nothing new under the sun

02:51 - 12.595 here, nothing to be remanded to find from the deceased party from Geraldine.

02:51 - 16.966 There there was we're on year nine of this case.

02:51 - 21.271 At this point, I do not believe that a remand would bring us anything more

02:51 - 26.209 than we already know, which is and frankly, embarrassingly

02:51 - 30.346 little amount of information as to what these two actually thought should happen.

02:51 - 32.982 So where does that leave her in your in your view?

02:51 - 33.883 Where does that leave her?

02:51 - 37.720 It leaves her it leaves this court with a decision

02:51 - 41.357 that upholds the sanctity of freedom of contract in Pennsylvania

02:51 - 44.661 and doesn't allow non parties to enforce them absent

02:51 - 49.132 the fundamental contract formation principles that have existed forever.

02:51 - 51.834 And it leaves her with the ability to receive half

02:51 - 54.937 of the value of the properties in the real estate partnership.

02:51 - 55.638 That's what I was getting.

02:51 - 00.143 I think as to Geraldine, if she was not a partner,

02:52 - 04.280 had not stepped into the shoes of a partner, what was she

02:52 - 09.218 during this period of time that she was receiving the 50% of the profits?

02:52 - 12.689 Well, I think she became a partner in her own right.

02:52 - 15.892 In a new partnership, she stepped into the shoes of her

02:52 - 18.895 deceased husband to enforce whatever rights he had.

02:52 - 22.498 She chose not to enforce those rights, which would have been to compel

02:52 - 25.902 the buyout of her husband's interest under the agreement.

02:52 - 27.370 Then any other heirs?

02:52 - 28.004 Yeah.

02:52 - 31.341 Were there any other heirs besides Geraldine? Like

02:52 - 32.742 heirs to John de Caruso?

02:52 - 35.912 No. I believe she was the only heir.

02:52 - 40.016 Could you finish your answer there?

02:52 - 41.351 I can try.

02:52 - 42.885 Stepped into the shoes.

02:52 - 44.487 So she stepped into it.

02:52 - 46.556 Acted on her own in her own shoes. Correct.

02:52 - 48.324 Because and that's the issue here.

02:52 - 52.595 We don't allow people who represent people on a representative basis

02:52 - 56.532 and who assume their rights and their defense is to change shoes

02:52 - 00.536 from the representative shoe to their individual solution, not

02:53 - 04.073 because because they don't have they would have to show

02:53 - 08.111 that she had gained those rights in her individual basis

02:53 - 11.714 through offer acceptance, consideration or course of conduct.

02:53 - 15.618 I mean, well, I don't believe that there has been any case where a course

02:53 - 21.157 of conduct alone, alone substitutes for all the other contractual formalities

02:53 - 24.460 that are necessary to establish contractual rights.

02:53 - 29.232 I just returned to say that this agreement, this issue has never been about

02:53 - 33.436 whether Peter and Geraldine, at a point subsequent to the death of John de

02:53 - 38.641 Caruso, entered into a status as partners because the evidence is clear.

02:53 - 39.876 Of course they did.

02:53 - 43.513 The question has always been, does she have the right to enforce

02:53 - 46.516 an agreement to which she is not a party which she can present?

02:53 - 49.218 No evidence was amended to give her any rights

02:53 - 52.622 and which she cannot meet the contract formalities.

02:53 - 56.292 And we would respectfully say that the answer to that is no.

02:53 - 58.828 So in your in your view,

02:53 - 02.999 even if we find that she entered into a new partnership

02:54 - 07.770 and acted in her own shoes in that partnership, she has no rights

02:54 - 12.675 with respect to the previous partnership that she was not a party to.

02:54 - 13.943 Yes, that's correct.

02:54 - 17.146 The fact that a person that she entered into a subsequent partnership

02:54 - 21.918 with might have had other agreements with other people isn't relevant to her

02:54 - 26.088 unless she can prove that she gained those rights through the same contract

02:54 - 28.691 formation that everyone else does in essence, I apologize.

02:54 - 32.762 In essence, what you're saying is the buy up provision has no effect here,

02:54 - 36.766 that it goes to the fair market value of the business as we stand today.

02:54 - 37.300 Correct.

02:54 - 40.303 The 1983 agreement when when

02:54 - 44.674 it was not enforced by either party has simply melted away.

02:54 - 46.576 It's no longer a thing.

02:54 - 47.944 It hasn't been for a long time.

02:54 - 50.046 I'll tell you what I said a moment ago.

02:54 - 52.615 You said it's not relevant. It's not only that, it's not relevant.

02:54 - 55.518 It's dissolved. Correct. It's not an agreement.

02:54 - 58.154 It is a historical artifact at this point.

02:54 - 00.223 It is not a binding legal document.

02:55 - 01.023 And I agree.

02:55 - 03.793 I agree with that proposition with a caveat, though.

02:55 - 07.029 When when the decedent partner

02:55 - 10.266 passed away, he had an interest

02:55 - 13.269 in the property of the partnership,

02:55 - 18.474 which would have been part of his estate.

02:55 - 21.577 You asked me. Okay. Yes. So

02:55 - 26.415 that interest was by by

02:55 - 29.685 the manner in which this business was continued.

02:55 - 33.956 After his death, his monetary interest was transferred

02:55 - 38.261 to the partnership between Geraldine and the remaining partner.

02:55 - 39.862 Is that accurate? Absolutely.

02:55 - 40.596 Just as down here

02:55 - 44.233 we're not seeking let's be clear, we're not seeking a windfall here.

02:55 - 49.805 We're not attempting to strip Geraldine, of the rights to any of these properties

02:55 - 54.377 that made up this partnership relation and keep her from getting her 50%.

02:55 - 57.179 In fact, the party seeking the windfall here is the party

02:55 - 02.518 seeking to enforce an agreement that to which they're not a party to buy us out

02:56 - 07.056 at the net book value as opposed to giving us our fair market value.

02:56 - 09.492 Yes. Yes.

02:56 - 10.059 All right.

02:56 - 13.062 Thank you. Let's hear from

02:56 - 15.197 Mr. Kelly.

02:56 - 16.299 Thank you.

02:56 - 18.434 May it please the court

02:56 - 21.170 a few things I want to clear up.

02:56 - 24.407 The first is it was a stipulated fact

02:56 - 27.209 that when John died

02:56 - 30.780 or I'm sorry, when Marianne left the partnership and it was John

02:56 - 34.951 and Peter, they continued on as partners under the partnership agreement.

02:56 - 37.653 It's never been denied

02:56 - 39.655 mandatory obligation

02:56 - 44.894 when Peter died or I'm sorry, when John died,

02:56 - 49.332 there was that clause in the contract that says if the contract

02:56 - 53.202 is terminated as a result of the death, then you go through there.

02:56 - 56.372 So the courts, you know, the Spirit Council, it says shall not.

02:56 - 59.141 No, it says if it says if,

02:56 - 03.479 if the partnership is terminated as a result of the death,

02:57 - 07.883 then you go through this, the remaining partners shall then have the right.

02:57 - 10.653 Yes, but it starts and that's what all the courts have, you know,

02:57 - 11.921 Superior Court twice.

02:57 - 16.525 And the Common Pleas find that because that to me is a very disjointed reading.

02:57 - 19.862 There are two manners in which this partnership could have been dissolved.

02:57 - 21.464 The 1983 partnership.

02:57 - 25.401 One was the retirement of the partner, which is what happened

02:57 - 26.736 when the mother decided

02:57 - 29.438 she didn't want to be a part of this and they signed an agreement.

02:57 - 33.976 The other way to dissolve was through the death of the partner.

02:57 - 38.714 So when it says if the partnership is dissolved by the death of a partner,

02:57 - 42.551 it's just referring to the other manner in which the partnership

02:57 - 45.688 could have been dissolved, not whether the partnership

02:57 - 49.291 could be dissolved, because in this instance there was no one

02:57 - 53.095 to with whom the remaining partner could be a partner.

02:57 - 55.264 Well,

02:57 - 58.334 the partnership can continue upon the death.

02:57 - 01.237 The case decided in our free state that the partnership

02:58 - 05.107 can continue upon the death of a partner in this partnership agreement.

02:58 - 09.612 It says in paragraph three said, Partnership shall commence on the signing

02:58 - 14.216 of this agreement and shall continue until dissolved by mutual agreement

02:58 - 18.320 or the part of the parties or terminated as here and provided.

02:58 - 22.158 So it was never terminated under this agreement.

02:58 - 27.697 That's where I disagree with your interpretation

02:58 - 32.034 and apparently the interpretation of another court in this matter

02:58 - 34.203 that paragraph three indicates

02:58 - 38.474 that termination can take place as provided in the partnership agreement.

02:58 - 42.078 One is the retirement of a partner.

02:58 - 43.512 The other is the death of a partner.

02:58 - 48.350 Respectfully, just starting it doesn't say that in the agreement that it must be

02:58 - 51.754 that it shall be terminated upon the death of a partner

02:58 - 55.291 in the law provides none of the partnership agreement.

02:58 - 56.892 I thought we did have that provision.

02:58 - 57.493 We do.

02:58 - 02.798 It says if the partnership is dissolved by the death of a partner comma. Yes.

02:59 - 07.269 And it says if in that's what the Superior Court latched on to the Common

02:59 - 11.540 Pleas court, it says, If so, theoretically,

02:59 - 16.078 these parties could have agreed that when the first were no parties.

02:59 - 20.082 See, that's the problem with that interpretation of this contract.

02:59 - 24.553 If you have two partners and one of them dies, there's no one left

02:59 - 28.457 with whom you can agree to continue the partnership.

02:59 - 30.259 It's done. It's over.

02:59 - 30.960 Unless.

02:59 - 36.632 Unless I think the case law states, unless the agreement provides otherwise.

02:59 - 40.402 I think the case law is clear that unless the agreement provides

02:59 - 43.739 otherwise and this agreement provides otherwise, what is it?

02:59 - 46.842 What does it provide? What does it

02:59 - 48.978 what's the what's what's the other option?

02:59 - 53.649 If what's the other what put me to a provision in the agreement that says

02:59 - 57.853 if the remaining partners or in this case partner

02:59 - 03.893 decides to continue this partnership, this is what's supposed to happen.

03:00 - 06.195 All right. Well, here's what happened.

03:00 - 07.096 I mean, you know what

03:00 - 10.099 I'm asking for where in the agreement it gives that other option.

03:00 - 15.504 I think the agreement I've already recited, what I find in the agreement

03:00 - 18.507 and what the superior court found in the agreement to state

03:00 - 22.178 that the agreement itself states how it may be terminated.

03:00 - 22.945 Don't know.

03:00 - 23.913 You're not answering the.

03:00 - 27.416 Yeah, you're you're trying to I take it, counsel,

03:00 - 33.055 that you're trying to bootstrap a

03:00 - 36.192 a an uninvolved buyback provision?

03:00 - 39.428 I mean, there's nothing that arises from the gestalt or the flavor

03:00 - 43.866 of this agreement that put her into partnership status.

03:00 - 46.168 That's what we're asking for, I think. Right.

03:00 - 48.704 And she well,

03:00 - 51.473 so let me step back and start all over.

03:00 - 57.813 We got pigeonholed in this case into the step in this use terminology.

03:00 - 01.150 All that means in my mind, legally is an assignment.

03:01 - 06.255 And the lower court's found, as a matter of fact,

03:01 - 09.325 that the parties continued

03:01 - 13.162 upon the death of Peter under this contract.

03:01 - 18.234 So it's our position that when John died,

03:01 - 21.136 Peter cried when when Peter died

03:01 - 25.107 or I'm sorry, when Marianne was out, Peter and John continued.

03:01 - 28.210 When John died,

03:01 - 32.348 there was an assignment in assumption of that agreement,

03:01 - 36.051 the partnership agreement, legal authority for that period.

03:01 - 39.588 SIMON In assumption, assignment and assumption of a partnership.

03:01 - 42.224 But what how does that arise under law?

03:01 - 43.392 What's the authority for that?

03:01 - 46.395 Well, it arises under law.

03:01 - 51.634 In my practice, I had a lot of real estate law, and frequently in real estate law

03:01 - 55.404 you have assignments and let's take we haven't always written assignments.

03:01 - 59.608 So if you have a written assignment, otherwise it's not you're dealing

03:01 - 00.676 with statute of frauds issues.

03:02 - 03.445 Well, you can have an assignment in a business situation,

03:02 - 06.215 in a loan situation, written document in this particular.

03:02 - 07.182 No, there isn't.

03:02 - 07.850 No, there is it.

03:02 - 13.555 But the courts, the lower courts in this case, as a matter of fact, stated

03:02 - 18.861 that under the under the case of my dare and under the case of Murphy,

03:02 - 20.362 they had a partnership agreement

03:02 - 24.033 can be implied from the conduct and circumstances of parties,

03:02 - 27.670 that is to say, their manifestation of assent, of

03:02 - 31.573 assent to the existence of a partnership relationship in this case.

03:02 - 35.244 But those cases are only in the absence of a written agreement under the uniform.

03:02 - 39.715 Yes, but in this case, in this case we had a written agreement.

03:02 - 44.286 And that agreement upon the death of Peter,

03:02 - 48.524 or I'm sorry, upon the death of John, that partnership agreement

03:02 - 52.328 could have been assigned and assumed by Geraldine.

03:02 - 53.128 That's my question.

03:02 - 55.464 Where in the partnership agreement does it say that?

03:02 - 00.202 Well, it doesn't, but it doesn't say well, and so that's the that's your problem

03:03 - 00.569 you have.

03:03 - 01.570 And this goes back to Justice.

03:03 - 05.107 Donohue's point is this partnership agreement

03:03 - 09.511 specifically addresses the circumstances in the death of a partner,

03:03 - 13.515 specifically sets forth what happens in the case of a death of a partner.

03:03 - 16.151 Your argument is there was another option.

03:03 - 17.519 There was there was an assignment.

03:03 - 20.956 But but you have a partnership agreement that supposedly sets

03:03 - 24.193 forth the terms in the entire agreement between the partners.

03:03 - 27.830 You're saying there was also an agreement that upon death,

03:03 - 34.737 the partnership interest of the dead partner can be assigned to a third party

03:03 - 38.173 where I'm I'm not if you have an integrated agreement,

03:03 - 42.344 but you don't have that in there, how can we put that draft that agreement?

03:03 - 44.847 Let me walk you through justice.

03:03 - 46.181 My thinking on this.

03:03 - 48.350 You had a written agreement,

03:03 - 51.687 The statement of what was accepted by this court for consideration

03:03 - 55.224 said the partnership agreement does not permit assignment.

03:03 - 56.258 That's inaccurate.

03:03 - 59.228 The Partnership Agreement is an assignable contract.

03:03 - 01.096 There was no reason it couldn't have been assigned.

03:04 - 02.297 There's not the language

03:04 - 06.068 in the partnership agreement that says it's a non assignable agreement.

03:04 - 11.573 So we had a written agreement and then when Peter died, we went.

03:04 - 16.645 When John died, our position is

03:04 - 20.716 we didn't step into the shoes essentially that that's same language

03:04 - 26.555 as an assignment, that contract through the conduct course of conduct,

03:04 - 30.626 the parties that conduct formed another contract

03:04 - 34.663 through course a contract through the the

03:04 - 39.468 but what the parties did going forward and that is a matter of fact

03:04 - 43.439 that the lower court, the fact finders determined to be true

03:04 - 47.776 whatever that was, whatever that was, it wasn't the 1983 party.

03:04 - 51.246 It was an assignment to Geraldine

03:04 - 54.116 of John's interest in that partnership agreement.

03:04 - 58.620 Peter never agreed, but in other words you can't boost

03:04 - 02.057 Geraldine, can't boost into a party,

03:05 - 05.994 into party status of a contract, which she was not a party.

03:05 - 08.997 And I'm saying there were 2 to 2 contracts.

03:05 - 09.932 Justice worked.

03:05 - 13.569 The first contract was a written one, the second one was the assignment,

03:05 - 16.972 an assumption used here as step in the shoes.

03:05 - 18.307 And there you. Do I apologize.

03:05 - 21.176 Are you saying the second one where she's assigned

03:05 - 25.314 and stepping in the shoes is based upon the conditional clause?

03:05 - 28.117 If the partnership is dissolved by death? Is that.

03:05 - 33.222 No, I'm saying that the parties agree just as they did when Marianne stepped out.

03:05 - 37.259 The parties agreed by a course of conduct in the case,

03:05 - 40.762 the Meyer Derek case in the Murphy versus Burke case.

03:05 - 44.833 They talk about a course of conduct which involves the conduct

03:05 - 48.137 of the party, the circumstances surrounding the situation.

03:05 - 51.974 And one other very important point is

03:05 - 57.980 Peter admitted in a prior lawsuit, we're skipping over that.

03:05 - 00.382 Appellants always want to skim over that.

03:06 - 03.285 But Peter admitted in a prior lawsuit

03:06 - 06.221 that Geraldine and he were partners

03:06 - 09.224 in the 1983 partnership agreement

03:06 - 14.363 and that they going forward and then in that lawsuit,

03:06 - 18.734 we cited different provisions of the partnership agreement.

03:06 - 20.469 It was attached.

03:06 - 24.640 And appellants have stated that they specifically denied that and they did

03:06 - 28.844 not specify counsel that you're bringing in litigation that we know nothing about.

03:06 - 32.414 You're taking a variance from one litigation for which

03:06 - 37.119 we have no concept of the legal issue, and you're trying to invoke them here.

03:06 - 38.921 I personally am not buying that.

03:06 - 42.824 I have a question for you. Yes.

03:06 - 45.394 You've indicated just by your comment

03:06 - 50.632 that the original agreement, the 1983 agreement,

03:06 - 52.801 no longer exists

03:06 - 54.436 and that a new contract exists.

03:06 - 59.308 I never indicated we we believe that upon Peter's death,

03:06 - 04.313 the 1983 contract existed it as it had been assigned.

03:07 - 08.050 And that's because you want to receive them.

03:07 - 10.752 You want them to receive the net book value as opposed to the fair

03:07 - 12.921 market that yes or no, that's an honest question

03:07 - 16.024 that just starkly there's no evidence in this case,

03:07 - 20.062 none whatsoever, that if we bought out the estate,

03:07 - 24.466 it would be any different than if we did with appellants.

03:07 - 26.835 Presumably want no evidence whatsoever.

03:07 - 27.970 Why are we here?

03:07 - 31.907 I think this is playing out well because we want to exercise the

03:07 - 35.444 buyout provision, which is a net book value as opposed to the fair market value,

03:07 - 39.014 which means we're here because you want to pay them less.

03:07 - 43.151 Now, we want to we wanted to buy this entity

03:07 - 46.154 with the real estate period because we have an interest

03:07 - 49.224 in owning this real estate as we're fighting.

03:07 - 52.928 Geraldine enter into or amend the 1983 agreement

03:07 - 56.765 when she got it from with John, you can't have your cake and eat it too.

03:07 - 00.269 You can't say we want to exercise this when we couldn't.

03:08 - 03.905 We want to exercise this option, but we didn't exercise it when we jumped

03:08 - 08.143 in play. No, we joined or

03:08 - 10.812 Peter had the right to exercise the option back.

03:08 - 15.584 That Superior Court in the lower court found that that is evidence that this

03:08 - 20.789 was an ongoing concern and that they that the agreement still survived.

03:08 - 25.460 He had or I'm sorry that the if language in the buy out provision

03:08 - 30.465 indicated that it's not mandatory.

03:08 - 34.303 So so I don't think there's any dispute that Geraldine

03:08 - 37.639 and Peter had a course of dealing or even that they had a new partnership.

03:08 - 42.944 It's just the disconnect is is your view, which is the view of the lower courts

03:08 - 47.582 that that that course of dealing somehow

03:08 - 50.652 perpetuated or even resuscitated

03:08 - 53.555 the 1983 partnership, which dissolved

03:08 - 57.793 when Peter did not do the buyback, why did it

03:08 - 58.193 please?

03:08 - 01.463 The Court I don't see how it how it dissolved

03:09 - 04.900 when Peter didn't do the buyback because it says it dissolves.

03:09 - 08.203 I mean, it says if the partnership is dissolved

03:09 - 11.440 by the death of the partner at means, here's what happens.

03:09 - 15.544 Here's what happens if the partnership is dissolved by the death of a partner.

03:09 - 17.612 That's what that paragraph says.

03:09 - 19.314 Yes, it's dissolved.

03:09 - 23.785 And here's what happens, which is exactly what you're invoking here.

03:09 - 27.356 You're saying it's now dissolved.

03:09 - 28.657 We're invoking it.

03:09 - 29.691 Peter died.

03:09 - 32.160 We're invoking the buy out provision.

03:09 - 34.696 He had the ability to do it. He did.

03:09 - 39.267 What was relied upon by the other courts is the if language.

03:09 - 43.438 It didn't say upon the death, he shall buy him out.

03:09 - 47.376 It said, if upon the death it dissolves, then we go down this road.

03:09 - 50.112 Whose whose option is that?

03:09 - 53.281 So. So whose option is it to.

03:09 - 57.786 It says if the partnership is dissolved by death of a partner,

03:09 - 00.856 this shall happen right.

03:10 - 05.127 You see who has the power to make that happen?

03:10 - 08.163 It's a contractual provision that I believe either

03:10 - 11.633 party to the contract can enforce.

03:10 - 13.902 And she was not a party.

03:10 - 18.640 She party to what came after in their course of dealing.

03:10 - 22.411 But she's not a party to this in our argument is she is by assignment

03:10 - 25.414 and assumption by dealing I understand so

03:10 - 28.850 so again your

03:10 - 31.620 if I understanding your argument,

03:10 - 35.223 you're saying that when

03:10 - 39.294 Geraldine's husband passed away,

03:10 - 41.263 she did not, as a matter of terms

03:10 - 44.766 under the agreement, become a partner.

03:10 - 49.404 She was at best the personal representative of the estate right.

03:10 - 54.109 You're saying, though, at that point in time,

03:10 - 57.379 the surviving partner

03:10 - 00.449 made an unilateral election

03:11 - 04.853 not to dissolve the partnership.

03:11 - 07.155 And then in addition to

03:11 - 12.227 making that unilateral election assigned

03:11 - 17.966 and assigned the interest of a deceased partner to a living person

03:11 - 22.404 and and by virtue of doing that,

03:11 - 26.141 kept the 1983 agreement

03:11 - 31.480 and presumably partnership alive. Yes.

03:11 - 36.284 And the evidence of that assignment

03:11 - 39.654 is simply the existence

03:11 - 43.058 of a continuing business relationship in the course of dealing,

03:11 - 47.362 plus the evidence of the fact in the record there's plenty of evidence

03:11 - 51.366 that they continued on the same course and they didn't change it.

03:11 - 53.702 They filed under the same name. They filed it.

03:11 - 55.971 But that same year.

03:11 - 59.241 The question goes there, though, whether that whether that alone

03:11 - 02.277 fills out the terms of the partnership, the surviving partnership, or.

03:12 - 06.081 Well, I think, you know, our position is there was an assignment.

03:12 - 08.683 The assignment what certainly was not in writing

03:12 - 11.887 the assignment was course of dealing and the case.

03:12 - 13.488 I stop you there. Yes.

03:12 - 15.824 How do you square your argument

03:12 - 16.591 in any court?

03:12 - 18.994 Lower court, the intermediate appellate court in front of this court

03:12 - 21.997 with paragraph 18 of your own agreement that you're seeking to enforce,

03:12 - 25.233 which is a consent, an agreement which requires that any and all

03:12 - 28.770 consents and agreements provided were permitted by this agreement

03:12 - 33.275 shall be in writing and a signed copy thereof kept with the partnership books.

03:12 - 35.477 Well, I square with this.

03:12 - 38.980 I hit a lot of construction cases also infrequently.

03:12 - 40.715 The construction

03:12 - 45.053 contracts say the exact same thing and frequently owner and contractor

03:12 - 48.223 go off on a different tangent and they don't sign it.

03:12 - 51.593 And when you go into court, those things are enforceable.

03:12 - 52.961 They have a handshake deal.

03:12 - 56.164 After that, same language is in the construction contract

03:12 - 01.202 and it's enforceable only because the parties agreed to go forward this way.

03:13 - 02.704 So, Mr. Cohen, I.

03:13 - 07.375 I'm missing something here, and perhaps you could straighten it out for me.

03:13 - 10.845 There was not an instantaneous assignment

03:13 - 14.816 to Gerald Deane upon the death of her husband, was there?

03:13 - 16.618 Correct? There was not.

03:13 - 23.558 So when her husband died, the remaining partner, Peter.

03:13 - 24.793 John.

03:13 - 27.562 Peter. Peter. Sorry.

03:13 - 29.998 Who was he partners with?

03:13 - 33.768 Well, he was partners with the estate.

03:13 - 38.039 And the estate sign is sign that interest to Geraldine

03:13 - 41.743 that the estate distributed that interest to Geraldine.

03:13 - 44.312 Was there, was there a tax which was there a state tax filing.

03:13 - 45.413 Exactly.

03:13 - 46.781 Was there I'm sorry?

03:13 - 48.883 Was there an estate tax filing?

03:13 - 50.352 Estate tax?

03:13 - 53.755 I mean, I don't think she would have had to file an estate tax form in at least

03:13 - 57.192 notified the state that she was the surviving spouse and get inheritance

03:13 - 00.695 tax, inheritance tax and paying 0% If she filed inheritance tax. One.

03:14 - 03.665 I assume so. We haven't yet.

03:14 - 07.836 But Counsel, what what do you rely on for the proposition

03:14 - 11.873 that an estate of a decedent can be a partner?

03:14 - 16.845 I mean, keeping in mind, you know, that in normal partnership relationships,

03:14 - 20.281 there could be third parties out there relying on the two

03:14 - 23.284 or three or four individuals who are partners.

03:14 - 26.054 So where does this concept come from that

03:14 - 28.723 the estate of a decedent

03:14 - 32.293 can be a partner in a partnership?

03:14 - 34.062 That's a

03:14 - 34.696 well,

03:14 - 37.799 the law states something as well, if I see it.

03:14 - 38.066 Yeah.

03:14 - 44.272 I mean, there's there's a case it's the the under town case under down case

03:14 - 47.242 1924 Supreme Court case

03:14 - 51.913 that says if the partnership agreement provides otherwise and the court's below

03:14 - 57.052 latched on to that paragraph three that says the partnership shall continue

03:14 - 01.289 unless dissolved by mutual agreement or terminated as herein provided.

03:15 - 04.626 And I don't think I think the language didn't terminate it.

03:15 - 08.863 But what does that have to do with my question about decedent's estate

03:15 - 13.768 being a partner in an ongoing partnership in the Commonwealth of Pennsylvania?

03:15 - 16.071 Well,

03:15 - 19.074 I'm just saying that's how the parties proceeded.

03:15 - 21.409 Yeah, that's how the parties proceeded.

03:15 - 23.445 But they did so at their peril.

03:15 - 26.948 I in her in her in her case, at her peril.

03:15 - 29.284 And in

03:15 - 33.421 what what about the fact that this agreement

03:15 - 36.291 contains no language of

03:15 - 38.927 of other scenarios for dissolution.

03:15 - 42.964 It's got the option to purchase in paragraph 12 the purchase price

03:15 - 48.670 provision in 13 and then the buy sell on death of a partner in 14.

03:15 - 51.573 Wouldn't the inclusion of those terms

03:15 - 56.911 suggest your scenario of an unwritten,

03:15 - 00.815 unspoken assignment buy conduct be ruled out?

03:16 - 02.183 I don't believe so.

03:16 - 05.987 I think theoretically the parties could have a part

03:16 - 08.990 in the death of John.

03:16 - 13.962 Peter and Geraldine could have entered into an assignment, assumption

03:16 - 17.799 and acknowledgment or new or new written, new written partnership agreement.

03:16 - 22.103 But for this, for this hypothetical, let's assume it was a written partnership.

03:16 - 23.404 They could have done that.

03:16 - 26.574 They could have said, we're going to proceed with this partnership agreement

03:16 - 30.411 and going forward, and we could have done what we're here today to do.

03:16 - 33.848 All we're saying is that in the final fact,

03:16 - 37.619 in the lower court and the superior Court have both found that, yeah,

03:16 - 39.087 that's exactly what happened here.

03:16 - 42.724 And we're not talking about,

03:16 - 44.392 you know,

03:16 - 49.164 we're talking about a situation where after John died, until Peter died some 12,

03:16 - 54.135 13 years, it was a situation where these parties continued on.

03:16 - 56.771 Geraldine did step into the shoes.

03:16 - 58.373 I am taking that language away

03:16 - 01.576 because we've all searched high and low to find cases that say it.

03:17 - 05.580 In my opinion, stepping in the shoes is the same as assignment and assumption.

03:17 - 10.051 We're saying that there was an assignment and assumption at that point in time,

03:17 - 14.355 and then when Peter died, the contract was still in effect

03:17 - 19.594 and Geraldine could could exercise her rights under that contract.

03:17 - 19.961 Okay.

03:17 - 26.401 Any other questions or.

03:17 - 29.437 Thank you, Justice.

03:17 - 31.606 The next case is Landlord Services

03:17 - 34.609 Bureau versus the city of Pittsburgh.

03:17 - 37.745 Since the Home Rule Charter, an optional plans law,

03:17 - 41.516 the Home Rule law was enacted during 1972.

03:17 - 45.954 Over 80 municipalities and seven counties have become home rule.

03:17 - 49.190 Communities in the Commonwealth of Pennsylvania.

03:17 - 49.824 The home rule

03:17 - 54.495 law provides that home rule communities have greater ability to locally legislate

03:17 - 58.233 and enforce their police power to promote the health,

03:17 - 02.270 safety and general welfare of the residents.

03:18 - 06.341 However, Section 2962 F of the Home

03:18 - 10.345 Rule law prohibits prohibits home rule communities

03:18 - 13.181 from regulating business enterprises

03:18 - 17.185 with affirmative responsibilities in less.

03:18 - 20.622 The home rule community has been expressly authorized

03:18 - 23.691 by a separate Pennsylvania statute,

03:18 - 27.595 in this case, the city of pittsburgh, a home rule community,

03:18 - 32.433 enacted a property rental ordinance requiring landlords to,

03:18 - 35.436 among other things, obtain permits,

03:18 - 38.273 allow inspections of the rental units.

03:18 - 42.443 Designate a local property agent for out-of-town owners

03:18 - 46.247 and provide ongoing rental data to the city.

03:18 - 50.818 Landlord Services Bureau, representing a group of landlords,

03:18 - 54.589 filed a lawsuit in the Court of Common Pleas in Allegheny County,

03:18 - 58.693 claiming, among other things, that the property Rental ordinance

03:18 - 02.997 violated Section 2962 F of the home rule law

03:19 - 07.335 by requiring landlords additional affirmative duties

03:19 - 13.141 that were not expert expressly authorized by a separate Pennsylvania statute.

03:19 - 16.411 The Court of Common Pleas dismissed the lawsuit.

03:19 - 19.948 The Landlord Services Bureau filed an appeal with the Pennsylvania

03:19 - 23.885 Commonwealth Court, which reversed the lower court's decision

03:19 - 28.323 and invalidated the city's property rental ordinance.

03:19 - 31.426 The city of Pittsburgh filed the instant appeal.

03:19 - 34.996 The Supreme Court granted the city's petition for an allowance appeal

03:19 - 41.803 to determine whether the city violated Section 2962 F of the home rule law.

03:19 - 42.403 The city of

03:19 - 46.841 Pittsburgh is claiming that it maintained the authority to act its rental property

03:19 - 51.446 ordinance by three separate Pennsylvania statutes, namely

03:19 - 55.917 the second class City Code, the PA construction Code,

03:19 - 00.188 and the Pennsylvania Municipal Housing Ordinance

03:20 - 03.725 authorize authorization code.

03:20 - 06.160 Landlord Services Bureau counters

03:20 - 09.564 that the Rental property Ordinance violated the home rule law

03:20 - 14.135 because none of those statutes relied upon by the city expressly authorize it

03:20 - 19.374 to enact the specific provisions of the Rental property Ordinance.

03:20 - 23.211 Landlord Service Bureau is also claiming that the city's current appeal

03:20 - 28.182 to the Supreme Court is moot, that there isn't an actual in live controversy

03:20 - 32.153 because the city enacted a new property

03:20 - 37.091 ordinance, rental ordinance which superseded its original ordinance.

03:20 - 41.396 The city has argued that the newly enacted rental property ordinance

03:20 - 45.466 was merely a stopgap ordinance, while the current appeal is pending

03:20 - 48.970 and that it intends to enforce its original ordinance

03:20 - 53.875 ordinance if it's successful with its appeal.

03:20 - 57.211 Alternatively, the city is asking the court to take

03:20 - 00.248 what's called extraordinary jurisdiction over

03:21 - 03.251 all matters pertaining to the rental property ordinances

03:21 - 07.221 so that the relevant litigation can all be concluded.

03:21 - 10.658 Come to a final conclusion and they can begin to enforce

03:21 - 13.661 the rental property ordinances.

03:21 - 17.298 Let's watch and listen to the oral arguments in the case of Landlord Services

03:21 - 22.236 Bureau versus the city of Pittsburgh in the Supreme Court.

03:21 - 26.574 Good afternoon, Madam Chief Justice and Associate Justices

03:21 - 27.775 may please the court.

03:21 - 30.545 My name is Lawrence von Miller, representing the appellants

03:21 - 32.447 in this matter.

03:21 - 36.784 The city of Pittsburgh and Pittsburgh City Council asked that this court reverse

03:21 - 40.655 the Commonwealth Court and reinstate the decision of the trial court,

03:21 - 44.125 which found that these

03:21 - 47.762 which found that the city of Pittsburgh's rental registration ordinance

03:21 - 51.566 did not violate the business exclusion provisions of the Home Rule

03:21 - 55.536 Charter and Optional Plans law, which I'll refer to as both the business

03:21 - 00.608 exclusion and 2962 EF Throughout the argument,

03:22 - 01.742 this court can do this

03:22 - 04.745 by essentially following to different paths.

03:22 - 08.249 First, it could fine go back to the Hartman analysis

03:22 - 12.086 and find that there was no active regulation of business

03:22 - 15.189 through the enactment of the rental registration ordinance,

03:22 - 20.561 or it could delve into the EPA restaurant analysis that gets into the looking

03:22 - 25.199 for the express statutory language in the statewide statute

03:22 - 29.337 so that we could see is there a third option

03:22 - 32.340 by the third option, I guess, would be one I don't want,

03:22 - 35.543 but it could be it could be defined against us.

03:22 - 41.449 Could we dismiss this appeal as moot and vacate the Commonwealth Court's decision?

03:22 - 43.751 What I don't think under this that you can.

03:22 - 47.922 So first of the muteness argument was brought up by my colleagues

03:22 - 51.792 during briefing because the city of Pittsburgh in the interim

03:22 - 56.130 city of Pittsburgh Council did enact a new rental registration and repealed.

03:22 - 59.467 The one that you're asking us to rule is is valid.

03:22 - 02.503 But that ordinance, which is before you

03:23 - 05.506 now, was was already stricken by the Commonwealth Court.

03:23 - 08.409 So once you appealed, that was stayed pending appeal.

03:23 - 10.511 The subject to an automatic supersedes.

03:23 - 13.447 It is but because the city

03:23 - 17.985 decided to do two things in order to, you know, try to have rental registration

03:23 - 21.789 in the city for general health, safety and welfare first.

03:23 - 23.891 Of course, the appeal before this court.

03:23 - 28.963 But also they wanted to try to enact an ordinance that comports

03:23 - 33.734 with the Commonwealth Court, try to take they filed for allocator with us.

03:23 - 36.204 Correct. After you.

03:23 - 38.172 Yes, that's

03:23 - 40.541 that is the correct timing of that.

03:23 - 45.313 But so but in the muteness doctrine there are

03:23 - 46.814 which I don't concede that

03:23 - 50.084 this is moot, but there are exceptions to the muteness doctrine.

03:23 - 53.821 One, of course, is that this is an issue that can keep being repeated

03:23 - 55.723 without being reviewed.

03:23 - 58.693 Only if so. Here's my concern.

03:23 - 04.131 Yes, the city could have kept the challenged ordinance in effect,

03:24 - 07.168 or could have kept it on the books, but you repealed it.

03:24 - 09.737 You can see that there was a repeal here.

03:24 - 11.772 Yes, that's in the plain language. Okay.

03:24 - 14.242 So how is that, sir?

03:24 - 18.279 How would that if we decided this case in this context,

03:24 - 23.751 asking us to rule valid an ordinance that does not exist,

03:24 - 27.154 how does that insulate us from municipalities coming,

03:24 - 30.758 filing declaratory judgment actions and representing to us?

03:24 - 35.329 Your Honor, here, Your Honor, here is an ordinance that we would like to pass.

03:24 - 41.202 We want you to declare that it's permitted under the home rule charter.

03:24 - 45.506 How? How, how do we avoid that?

03:24 - 49.710 Which is really just asking us for an advisory opinion?

03:24 - 53.914 Well, in this case, it's not advisory because the 2962, it's

03:24 - 57.151 still very much alive in the new ordinance, because new

03:24 - 02.023 ordinance has been challenged by, you know, the clients of my colleagues.

03:25 - 05.526 And in and there's two separate lawsuits and one of them

03:25 - 09.063 they bring up 2962 of the business exclusion.

03:25 - 10.498 So it's very much alive.

03:25 - 12.199 But the ordinance is different.

03:25 - 15.369 It is different, but it is still a rental registration ordinance.

03:25 - 17.571 It does remove the provisions

03:25 - 21.342 specifically called out or does not contain the provisions

03:25 - 24.712 specifically called out by the Commonwealth Court in its opinion.

03:25 - 28.249 Yes. I also

03:25 - 29.784 posit this possibility.

03:25 - 33.554 Wouldn't it also be possible that in this in a scenario

03:25 - 37.325 where you prevailed on most or all of your issues,

03:25 - 41.729 that the City Council could then repeal the new one and reinstate the old one?

03:25 - 43.664 Is that isn't that a possibility?

03:25 - 46.100 Yes, I was going to go there next.

03:25 - 49.437 That is their intent, because there are specific provisions

03:25 - 53.007 that the Commonwealth specifically called out that they do want.

03:25 - 55.576 Is it possible they won't?

03:25 - 57.945 I Well, it even if they didn't,

03:25 - 00.715 the issue was still alive with the new ordinance

03:26 - 02.750 because you're still dealing with whether it regulates.

03:26 - 05.052 So should we examine the new ordinances, provisions

03:26 - 08.155 and ruling on your issues or the old ordinance that doesn't exist.

03:26 - 10.558 What the old ordinance would be dispositive

03:26 - 12.560 on the new one, just because it is

03:26 - 18.632 it has a more comprehensive provision, but it doesn't exist

03:26 - 19.467 at this point.

03:26 - 21.569 It would be reenacted by city council.

03:26 - 23.003 That is their intent.

03:26 - 25.373 You mean they're not going to change it at all?

03:26 - 29.210 I mean that this is the problem with advisory opinions on

03:26 - 33.614 legislation is is is you're basically telling us as a representative

03:26 - 38.152 this court that if we rule a certain way, you are guaranteeing

03:26 - 42.790 that the previous ordinance is going to be reenacted

03:26 - 46.460 as it was, as it was filed and challenged in Commonwealth Court.

03:26 - 50.998 This is an ordinance that, you know, with the exceptions to muteness,

03:26 - 54.235 it's capable of repetition and evading review.

03:26 - 56.303 In this case, we would have

03:26 - 59.306 you would have not evaded review if you didn't repeal it,

03:26 - 02.443 if you hadn't repealed it and you kept it on the books,

03:27 - 04.912 it wouldn't have evaded review.

03:27 - 06.680 That's in then.

03:27 - 08.215 That's a big problem I have in this case.

03:27 - 10.818 I think the other issues are interesting, but I'm concerned about,

03:27 - 13.854 you know, we've even had precedent where we haven't looked

03:27 - 17.525 at the Constitution, reality of ordinances that weren't just on the books.

03:27 - 20.528 We didn't even look at them unless they were being enforced.

03:27 - 22.696 I mean, we've taken it that much further.

03:27 - 24.698 You're asking us to review the Constitution.

03:27 - 25.566 You have an ordinance

03:27 - 29.503 that not only isn't it being enforced, but isn't even on the books council.

03:27 - 31.772 Can I offer this as a possibility?

03:27 - 37.044 Perhaps this is what you were thinking, that that in this circumstance,

03:27 - 40.915 this isn't just about the city of Pittsburgh, but about

03:27 - 46.520 cities around the Commonwealth in terms of the home rule, home rule,

03:27 - 51.559 municipalities at least, and their interaction with these provisions

03:27 - 54.662 and that the disposition this

03:27 - 57.998 court would enter would presumably offer guidance in these areas.

03:27 - 01.202 And secondly, that

03:28 - 06.640 where the court to dismiss this as moot,

03:28 - 08.209 in effect,

03:28 - 14.482 it would disincentivize municipalities from

03:28 - 16.984 undertaking ongoing governance efforts.

03:28 - 20.754 In other words, my understanding of what the City Council apparently did here

03:28 - 23.858 is it decided to live with half a loaf

03:28 - 28.762 pending litigation over the full loaf or my off track?

03:28 - 30.631 I think that's correct, Your Honor.

03:28 - 33.901 But and one of the exceptions to muteness is

03:28 - 37.037 a question of important public interest.

03:28 - 41.408 And this ordinance is specifically aimed at public safety

03:28 - 43.377 and basically at the safety

03:28 - 47.114 of approximately half of the residents of the city of Pittsburgh.

03:28 - 50.017 And again, if if this ordinance

03:28 - 53.020 were to be and

03:28 - 57.391 you're right, just as perhaps and I can't guarantee that city council

03:28 - 03.597 is going to enact the ordinance in the specific language, but they

03:29 - 04.598 do want those

03:29 - 07.902 provisions that the Commonwealth Court specifically called out

03:29 - 11.805 because of how important they are to public safety,

03:29 - 14.174 to the people of the city of Pittsburgh.

03:29 - 17.177 And these ordinances have been

03:29 - 19.713 the first time the city of Pittsburgh tried to pass

03:29 - 23.617 a rental registration ordinance, I believe was in 2009.

03:29 - 26.587 This ordinance was passed in 2015.

03:29 - 30.324 So this is something that multiple councils of the city of Pittsburgh

03:29 - 34.562 have struggled with and attempted to have.

03:29 - 36.597 You know, for those important

03:29 - 42.903 public safety considerations.

03:29 - 50.611 But moving on.

03:29 - 53.681 So with the Commonwealth Court opinion,

03:29 - 58.085 it sort of essentially splits the baby in half.

03:29 - 01.589 It rules, you know, in its conclusion

03:30 - 06.093 that the city can have some form of rental registration ordinance.

03:30 - 09.163 But the one that we have has provisions that go too far,

03:30 - 12.132 but it doesn't quite get into the analysis of why.

03:30 - 17.204 So in the first sentence of the conclusion

03:30 - 21.275 of the Commonwealth Court opinion, it states that as established by previous

03:30 - 25.112 Commonwealth Court precedent, that quote, requiring the registration

03:30 - 29.750 of rental units is not the problem with the rental registration ordinance.

03:30 - 32.753 And then it goes on to state it is the inspection

03:30 - 36.123 without permission of the owner, the obligation to hire

03:30 - 38.258 responsible local agents,

03:30 - 41.996 followed best practices, attend a landlord academy and have the

03:30 - 45.766 rental registration information put on a public online database.

03:30 - 51.772 So looking at those individual features that the court called out

03:30 - 54.341 first, the easy one is

03:30 - 57.578 the Good Landlord Academy is not required.

03:30 - 01.649 I'm not sure how that overly burdens business when it is purely optional.

03:31 - 05.853 It is meant to be a training course that landlords can take

03:31 - 10.257 that is a review of City of Pittsburgh requirements with regard

03:31 - 15.763 to trash collection, weed control, height of grass, that sort of thing.

03:31 - 18.932 It's meant to be informative.

03:31 - 22.136 It's mostly aimed at smaller independent landlords,

03:31 - 26.140 not the big ones who presumably already know that sort of information.

03:31 - 30.110 But any landlord who attends actually gets a break on the fee.

03:31 - 32.579 So it's sort of a carrot rather than the stick.

03:31 - 33.213 And a ribbon.

03:31 - 37.184 A ribbon too, or I think they'll take the cut in the fee.

03:31 - 39.386 That's probably good enough for most of them.

03:31 - 42.222 It's an affirmative burden.

03:31 - 43.991 They're not required to do it.

03:31 - 45.559 They can do it if they wish.

03:31 - 50.397 And if they do it and they they get a break on the fee. So.

03:31 - 52.332 So it's

03:31 - 54.835 like extra credit, essentially.

03:31 - 59.039 Yes, But it is not required. So

03:31 - 02.409 and then it goes to well, let me say this.

03:32 - 06.814 If the Commonwealth Court is fine with us having a registration,

03:32 - 10.718 then clearly they're okay with us having some form of application

03:32 - 13.554 which, you know, the city and other municipalities.

03:32 - 16.990 We have applications for anything you want, a pool pass

03:32 - 21.829 application, you want a you want to be

03:32 - 23.063 a vendor for us.

03:32 - 25.199 You have to fill out an application to submit that.

03:32 - 28.135 So applicant is

03:32 - 29.803 generally just sort of read in

03:32 - 33.841 as being a general generally accepted requirements.

03:32 - 37.745 Is the local agent designation mandatory or is that also optional?

03:32 - 40.848 That's only mandatory for landlords

03:32 - 43.851 who do not live reside within Allegheny County.

03:32 - 48.522 So because because it's interesting, when you first read this,

03:32 - 52.826 it sure looks like it's mandatory, but then you get to that later provision

03:32 - 55.729 and it has the language about an alternative

03:32 - 00.033 somewhere in Pennsylvania for accepting certified mail as service.

03:33 - 05.205 It's, you know, taken from the corporate registration type arrangements.

03:33 - 09.743 So the reason I mention it is only because up front,

03:33 - 13.981 it seems to say mandatory in that it seems to contemplate

03:33 - 18.852 people, landlords who are not going to be abiding by that.

03:33 - 20.621 And that's why there's a default.

03:33 - 21.822 Or am I misunderstanding?

03:33 - 23.290 I think that sort of

03:33 - 28.095 what we'll call kind of the default further on in the ordinance is meant for

03:33 - 28.862 There are going to be

03:33 - 32.099 people who don't comply or entities that don't comply.

03:33 - 36.036 This is how we can get to them if they don't

03:33 - 38.272 designate a registered local agent.

03:33 - 41.441 So, you know, my reading of the ordinance is that the registered local

03:33 - 45.579 agent is required if the landlord does not reside in Allegheny County.

03:33 - 46.280 No penalty.

03:33 - 49.783 In other words, not in the ordinance itself.

03:33 - 51.618 No, there's no penalty there.

03:33 - 54.955 But again, even that provision,

03:33 - 59.426 yes, it looks like an affirmative burden to hire or have a registered local agent.

03:33 - 02.462 But first, the definitions themselves.

03:34 - 05.699 And I think the Commonwealth Courts sort of got this factually wrong.

03:34 - 07.868 It doesn't have to be a realtor.

03:34 - 10.370 You don't have to hire someone with any certifications.

03:34 - 13.373 It can be anyone who's reached the age of majority.

03:34 - 17.411 So it could, you know, the landlord could designate

03:34 - 19.646 the person who does maintenance around the property,

03:34 - 22.783 which presumably would be needed if the person if the owner didn't reside

03:34 - 26.920 in Allegheny County, it could even be the tenant that's not prohibited.

03:34 - 30.290 That's something that that could be agreed to but isn't.

03:34 - 35.462 But is it the home rule court charter exception designed to avoid this

03:34 - 38.232 when it comes to business within the Commonwealth,

03:34 - 41.702 this sort of parochialism from county to county

03:34 - 44.771 where if you are doing business in one county but

03:34 - 48.342 you're not in that county, you that that you are,

03:34 - 51.478 you can be subject to a local ordinance that essentially requires

03:34 - 55.148 you to have an agent in every county in which you do business.

03:34 - 57.084 Well, you know,

03:34 - 00.787 we are empowered, you know, under state law to adopt a home rule charter.

03:35 - 05.392 And we have the city has broad powers as long as it doesn't violate

03:35 - 06.260 the Constitution.

03:35 - 09.196 No question is going to the business exception about rule.

03:35 - 14.001 What about the idea that if we read it your way,

03:35 - 16.203 it sort of contradicts the General Assembly's

03:35 - 19.406 intent to the exception to not having businesses that operate

03:35 - 23.543 in across counties, having to be subject to each,

03:35 - 26.413 you know, let's say let's say Washington County enacted

03:35 - 30.017 let's let's say all 67 counties enacted a rental ordinance that required

03:35 - 33.086 landlords to have a designated agent in those 67 counties.

03:35 - 36.790 If you did not reside in those 67 counties,

03:35 - 41.328 that would be burdensome, wouldn't it,

03:35 - 44.031 that Well, practically speaking,

03:35 - 48.368 they already have to have someone here who can manage the property,

03:35 - 52.506 someone who deals with tenant complaints, someone who shows the properties

03:35 - 57.611 to tenants, someone who they couldn't have, somebody in Westmoreland County.

03:35 - 00.647 potentially there could be a you know, they could have a service

03:36 - 01.815 that's situated there.

03:36 - 05.786 But your ordinance requires the person to be in Allegheny County.

03:36 - 10.791 And my point is, if every home rule municipality enacted that,

03:36 - 15.729 then that would clearly be a burden on businesses.

03:36 - 19.266 If this court were to read that as an affirmative burden,

03:36 - 22.803 then you could go to, you know, the what else is it?

03:36 - 26.206 Well, you don't have to admit to the which

03:36 - 29.776 I'm not saying that is I'm saying if the court were to look at that,

03:36 - 33.547 you can look at the restaurant analysis to see if this is something

03:36 - 37.918 that goes to the core function of rental registration, which is permitted.

03:36 - 41.421 Yeah, that's that's what I was going to ask you is it wouldn't work.

03:36 - 44.358 Wouldn't the the remedy, so to speak.

03:36 - 49.763 Suppose the General Assembly felt such a requirement to be an affront

03:36 - 53.633 then for the Legislature to amend 5341

03:36 - 58.538 to 1 the Municipal Housing Ordinance Authorization law,

03:36 - 59.573 which empowers

03:36 - 04.144 these home rule, which empowers these municipalities to enact and enforce

03:37 - 07.414 civil ordinances, to govern and regulate construction, etc.

03:37 - 13.487 occupation, maintenance to say, But you can't require an aging

03:37 - 15.022 county by county.

03:37 - 21.628 In other words, the the MHRA would seem to be your best bet

03:37 - 25.265 for answering a question about burdens,

03:37 - 29.169 about agents, about inspections, about what have you. Yes.

03:37 - 34.975 To say that there's the there is this specific authorization

03:37 - 38.078 that gets you around the business exclusion.

03:37 - 40.447 Yes, the. Isn't that the answer?

03:37 - 43.984 Yes, That's broad authorization under the business exclusion.

03:37 - 47.654 Additionally, under the restaurant analysis,

03:37 - 52.793 you know that this court has not required that you find for every provision

03:37 - 55.796 in the ordinance that there has to be express authorization.

03:37 - 59.232 You have to look at what's the function of the statewide statute,

03:37 - 03.070 and then does that match the function of the city ordinance

03:38 - 05.305 or the county ordinance or whatever is being reviewed?

03:38 - 09.643 So specifically, you know, under a restaurant in that case,

03:38 - 13.513 this court considered two ordinances enacted by the city of Pittsburgh.

03:38 - 17.384 One was found to pass muster. The other one wasn't.

03:38 - 18.718 The ordinance

03:38 - 22.522 that this court upheld was the Paid Sick Days Act.

03:38 - 26.893 So as authorization for that, the city of Pittsburgh had cited

03:38 - 30.997 the disease prevention law, which has some general language

03:38 - 35.102 about preventing disease within the Commonwealth and has a provision

03:38 - 39.606 that allows municipalities to adopt ordinances to further that.

03:38 - 44.077 It does it does not say that you can have a paid sick day ordinance.

03:38 - 47.781 But this court found that that statewide statute

03:38 - 51.451 was authorization for that ordinance.

03:38 - 55.889 The other ordinance, which was the the Building Act ordinance,

03:38 - 59.593 which essentially required certain training for security

03:38 - 03.763 personnel of buildings, was found not to be because the ordinances that

03:39 - 08.235 or the statute city relied upon had no provision whatsoever

03:39 - 13.573 allowing local ordinances to be adopted to effectuate the purposes of those acts.

03:39 - 18.178 So that was kind of a breaking point between the two.

03:39 - 20.180 So, you know, you have the municipal housing

03:39 - 25.118 authorization law, which I think provides the most express

03:39 - 26.786 reasoning for this,

03:39 - 31.158 but also two under the Construction Code Act, which requires municipalities

03:39 - 35.428 to adopt either the UCC, the standardized

03:39 - 39.833 building code, or and,

03:39 - 42.035 you know, plumbing code and electrical code.

03:39 - 45.605 But even the Construction Code Act, which

03:39 - 47.641 requires adoption of

03:39 - 53.046 unless a municipality opts out, which Pittsburgh did not, allows

03:39 - 57.617 the amendment of those