00:04 - The Honorable Chief Justice

00:05 - and Justices of the Supreme Court of the State.

00:11 - Oh, yeah.

00:11 - Oh, yeah. Oh, yeah. Oh, yeah.

00:14 - Sitting down on our offices through all of our services.

00:18 - Now we're just

00:20 - God saved from both ends of.

00:35 - Here we go.

00:35 - Good morning everyone.

00:37 - Welcome to the first day of our oral argument

00:40 - session here in Philadelphia for the fall season.

00:44 - As you may know, the Pennsylvania Supreme Court

00:46 - is the oldest appellate court in the in North America.

00:50 - Our roots date back to William Penn's provincial court of 1684,

00:54 - and our Supreme Court was formally established pursuant

00:57 - to the Pennsylvania Judiciary Act of 1722.

01:02 - In 2022, we celebrated our court's historic 300th

01:07 - anniversary here in Philadelphia.

01:10 - Just by way of background, in its earliest years, the court

01:14 - actually convened in private residences

01:17 - while the lower courts met in 18 houses.

01:21 - In 1707, the city of Philadelphia constructed the townhouse,

01:26 - a two story house and market which functioned as an early city hall.

01:32 - The court conducted its business at the townhouse until 1743,

01:37 - when it moved to its own courtroom in the state House.

01:41 - Now Independence Hall.

01:43 - Construction on this building began in 1871 and took 30 years to complete.

01:49 - Longer than the Great Pyramid in Egypt.

01:52 - It was designed in the French Second Empire style

01:56 - by John MacArthur Junior and Thomas Walter.

02:00 - For nearly 15 years, City Hall stood

02:03 - as the tallest habitable building in the world.

02:07 - Sitting atop our building is a bronze statue of William

02:11 - Penn, standing 37ft tall and weighing 27 times.

02:15 - Mr. Penn statue faces northeast and points to a spot

02:20 - where he signed the Treaty of Friendship with the local Native

02:23 - Americans in 1682.

02:26 - Interestingly, this building would not exist if had had not been for this court.

02:31 - The Public Buildings Commission was established

02:34 - by the state legislature and tasked with the planning

02:37 - and construction of municipal buildings, including City Hall.

02:42 - Throughout the construction of the building.

02:43 - This court resolved issues with respect to funding,

02:47 - displacement of property already on site,

02:51 - and even the constitutionality of the commission itself.

02:55 - City Hall has 700 rooms which housed

02:58 - functioning offices for all three branches of government.

03:01 - This court became the first tenant in this building

03:05 - on January 1st, 1877.

03:08 - After the official opening, reporters

03:11 - deemed this to be the most handsome courtroom in the country

03:16 - and concluded that some of the more fastidious lawyers will hereafter take

03:21 - only Supreme Court cases in order

03:24 - that they may practice in this court palace.

03:27 - So with that background, and before we begin our arguments,

03:31 - I'd like to introduce some students that are visiting the court this morning

03:35 - from Temple Law School's moot Court competition team,

03:40 - who are here with their professor and team director, Marion Bracha,

03:45 - and their appellate advocacy adjunct professor Brandon Albaugh.

03:51 - The students visit was arranged by Justice Socrates Chambers,

03:54 - and I thank him for that.

03:56 - And with the students and their professors, please stand.

04:02 - Welcome.

04:03 - We're really happy to have you.

04:04 - We hope that your legal careers are getting off to a good start,

04:08 - and that nothing that said

04:09 - here today will dissuade you from pursuing a career in law.

04:14 - Thanks for being here.

04:15 - Before we hear the first case, a couple points for counsel.

04:19 - Appellant's counsel, please approach the podium when your case is called.

04:23 - I will then give a short summary of the case.

04:26 - Please begin by stating your name and the party you represent

04:30 - and introducing your co-counsel, if any, to the court.

04:34 - The justices are familiar with your cases, so I ask that

04:37 - you avoid any unnecessary recitation of the facts or procedural history,

04:42 - and instead focus on the main issues on which we grant and review.

04:47 - Counsel is welcome to rely on their briefs for any particular issues.

04:51 - Please also remember that we do not allow rebuttal

04:56 - in cases where there are multiple

04:58 - parties represented by separate counsel.

05:01 - You should avoid repeating the same arguments as prior counsel.

05:06 - Please try not to interrupt the justices

05:09 - when they are asking you a question, even if they're interrupting you.

05:13 - A justice question is not meant to trip you up.

05:16 - Rather, it indicates that there are particular issues

05:19 - we want to explore further.

05:22 - While there is no set time limit for argument in our court,

05:25 - I will advise counsel when the court is satisfied

05:28 - that all of its questions have been answered.

05:31 - And at that time, I will ask that you conclude your argument.

05:35 - Mr. Miller, please call the first case.

05:39 - Hello, and welcome to the preview of the Pennsylvania

05:43 - Supreme Court's September session by name installation.

05:47 - Hitchcock.

05:47 - And I'm here with my colleague Kim House,

05:50 - and we are very excited to tell you about what the court is hearing.

05:56 - The first case

05:58 - is Green Analytics North, LLC

06:01 - versus the Pennsylvania Department of Health.

06:04 - This is a case that was in the original jurisdiction

06:07 - of the Commonwealth Court, and it involves the Medical Marijuana Act.

06:12 - The Pennsylvania Department of Health is putting together regulations and

06:18 - additive regulation that required

06:20 - the grower processors to have two separate laboratories

06:25 - test the marijuana once at the time of harvest and again

06:30 - at the time of processing, and for the final product.

06:34 - So in challenging this,

06:37 - the grower processors and one of the laboratories brought suit,

06:42 - saying that the Pennsylvania Department of Health did not have the authority

06:47 - to require them to use two laboratories because the statute

06:52 - on which the Department of Health relied had a statement

06:56 - that said that there would be a contract with one or more processors,

07:01 - which they argue allows them to bank the decision.

07:06 - The Commonwealth Court hearing the case on bond, agreed with the grower processors

07:11 - and the Pennsylvania Department of Health has asked the Supreme Court

07:16 - to say that it did have the authority to put in place this regulation.

07:24 - Good morning.

07:25 - Under section 740 of Pennsylvania's Medical Marijuana Act,

07:31 - medical marijuana growers and processors shall control act with one

07:36 - or more independent laboratories to test the medical marijuana produced by them.

07:42 - The Department of Health, which has regulatory and enforcement

07:46 - authority over the growing, processing, sale and use of medical marijuana

07:51 - in our Commonwealth, and act it a regulation known

07:55 - as the two lab requirement,

07:58 - which requires an approved laboratory to test medical marijuana at harvest

08:03 - and a different lab to test to test the marijuana before it is offered for sale.

08:09 - In this appeal, we must determine whether the department

08:13 - was authorized under the act to require the testing

08:17 - of medical marijuana by separate laboratories.

08:20 - Please proceed.

08:22 - Good morning, Your Honor.

08:23 - Is it may it please the court?

08:24 - Michael Fisher with the Office of General Counsel for the Department of Health.

08:29 - This case is about

08:30 - the Department of Health Regulatory Authority.

08:33 - And in looking to whether an agency has authority to promulgate a specific

08:37 - regulation, the analysis must always begin with where that authority comes from.

08:43 - Agencies do not have power to act unless the legislature gives them that power.

08:48 - We all agree on that point.

08:50 - Now, determining where that authority comes from requires

08:53 - looking at the enabling statute, assessing the scope of the authority. Did

08:58 - the legislature speak at their language or did it speak in capacious terms?

09:04 - In addition,

09:05 - it's appropriate for the court to look at the stated purpose

09:08 - of the statute where the legislator has set forth the purpose in the act.

09:13 - I'm not talking about fighting the spirit of the law

09:16 - or getting into anything that's off limits under the Statutory Construction Act,

09:20 - but where there's a stated purpose that should inform

09:23 - this court's analysis of the scope of the agency's authority.

09:27 - So having done that, the next step is to ask whether the challenge regulation

09:31 - is within the scope of that authority as a whole.

09:35 - And then finally, the last step is to look to the statute

09:38 - and see if the General Assembly has in some way

09:41 - precluded the specific regulation of the issue.

09:44 - Has it use clear terms to limit the department's authority,

09:48 - so that they cannot implement this regulation

09:51 - now applied here.

09:53 - The two lab rule is lawful.

09:56 - First, in enacting the Medical Marijuana Act,

10:00 - the legislature spoke in very capacious terms.

10:05 - It said clearly, the medical marijuana program

10:08 - shall be implemented, administered by the Department of Health.

10:12 - There are no other regulators involved, no federal regulators

10:15 - or other state regulators.

10:16 - It's a Department of Health or it's nothing.

10:19 - They also gave the department regulatory and enforcement authority

10:23 - over the growing, processing,

10:25 - sale and use of medical marijuana in this Commonwealth.

10:29 - Now, my friend has argued that that's actually a limitation.

10:33 - I think that really can't be supported within the the confines of the statute.

10:39 - In fact, actually it's quite a broad grant of,

10:43 - you know, it's everything that happens with respect to medical, medical,

10:45 - marijuana growing, processing, sale and use.

10:49 - And finally,

10:51 - the medical marijuana gives or directs the department

10:55 - to promulgate all regulations necessary to carry out the provisions of this act.

11:00 - So, given that very broad brand of authority, and particularly given

11:04 - that the legislature was clear throughout that the paramount

11:07 - goals of the program are one to protect patient safety and two,

11:11 - to give patients access to potentially beneficial treatments.

11:17 - And could I ask that you've referred at least three times to the

11:22 - broader capacious authority?

11:26 - We're here specifically about 704A

11:29 - and I'm unclear from what your remarks have been so far

11:35 - on whether it's your position that 704 A is ambiguous or not.

11:39 - Is it ambiguous?

11:41 - We have not argued the 748 is ambiguous.

11:44 - Well, then, if it's not ambiguous,

11:46 - why do you keep talking about how broad and how capacious?

11:49 - Why don't we just why don't we just begin at least with reading the actual words

11:55 - that the General Assembly passed into law?

11:59 - Wouldn't that be the place to start?

12:01 - Yes, except the the department has not contended

12:04 - that its authority for the regulation comes from section 7.4.

12:09 - That's the the important point to make.

12:12 - It comes from the department's broad authority

12:14 - to regulate medical marijuana, to protect patients.

12:18 - I think, you know, we I think we've all heard and certainly read

12:21 - in your briefs the word broad many times broad to patients, etc., but

12:27 - the, the the first sentence says grower processor, not the department.

12:32 - A grower processor shall contract with one

12:36 - or more independent laboratories to test.

12:41 - And I thought the issue in the case was

12:45 - given that the statute says one or more,

12:48 - are you allowed to require that it be more than one?

12:52 - Absolutely.

12:53 - That issue.

12:54 - That is, I would say, the trickiest issue in the case.

12:57 - Well, that's the issue.

12:58 - So I guess my question is how is it

13:02 - since the lawmakers, the lawmakers wrote one or more?

13:06 - That's a disjunction, right?

13:08 - One or more five of Trey of Donuts,

13:11 - they say take one or more.

13:14 - Would it be your position that you're not allowed to take just one donut?

13:18 - You have to take more.

13:20 - No, Your Honor, it wouldn't be.

13:21 - But how do you get the authority to to require

13:25 - a minimum of two when the legislature said one or more?

13:29 - Well, in your honor scenario, that's a clear direction

13:31 - to the person being offered the donuts to make that choice.

13:35 - What's not clear in section seven

13:37 - or for A is whether the legislature thought to intended

13:42 - to give grower processors the exclusive right to make that decision,

13:47 - or whether the department could, in essence, make that for them.

13:51 - But counsel find that

13:54 - one of the arguments from the

13:55 - state is that you believe two labs were better

13:59 - for the public to protect the public from contaminants. Yes.

14:04 - And as you know, with your the deference we have to give you

14:07 - is abuse of discretion.

14:10 - I'm somewhat concerned about

14:13 - where's this public policy that the one processor or one lab

14:18 - can't confirm whether it has the same contaminants that you're alleged

14:22 - that a second facility must perform?

14:25 - So one lab could do that.

14:27 - The department reached the conclusion that having two labs

14:30 - would be better and would ensure a check.

14:33 - You know, as we say, a modest check on the process.

14:36 - The department was concerned, based in part,

14:39 - on what it had seen in other states, that that medical marijuana

14:44 - grower processors were developing close relationships with labs.

14:47 - And the result was particularly with respect to efficacy levels

14:51 - that results were being inflated.

14:54 - Share with me why this court should not believe

14:57 - that logic is an arbitrary exercise of your regulatory duties.

15:02 - Well, first of all, because we're not here on reasonableness

15:04 - review, that's the third prong of the test of any regulation.

15:08 - But but, my friend has not challenged the reasonableness of the regulation

15:12 - before this court.

15:12 - Commonwealth court did not address that issue.

15:15 - We're here simply on whether this regulation is

15:17 - within the scope of the agency's authority.

15:21 - And second, the

15:24 - the Department was well within its discretion to conclude that

15:28 - having a modest check, which is to say you need, you know,

15:31 - we're going to have another lab do the second test just to ensure

15:35 - that there's nothing kind of shady going on, just to make sure that the first lab,

15:39 - you know, doesn't offer,

15:40 - you know, doesn't bend over backwards to keep your business or doesn't

15:43 - fudge the tests, or maybe just to make sure that, you know,

15:47 - there isn't a, methodological issue with the way the first lab does it.

15:50 - But a second lab could could see evidence to support that concern.

15:55 - Evidence.

15:56 - I mean, in in

15:57 - the background of this industry that the one lab system wasn't working.

16:02 - Well, the department

16:03 - reported that it had received numerous complaints from patients

16:07 - that the reported levels of THC in their medical

16:11 - marijuana was inflated, and that was what they were trying to address.

16:15 - And also, there are reports of issues at other states where there were

16:18 - in some ways, I think, scandals with with laboratories.

16:22 - So you didn't come up with this out of whole cloth?

16:25 - Well, in we do not identify the issue out of whole cloth.

16:28 - I think perhaps the too lab requirement was a novel way of resolving it,

16:33 - but it was built in suspenders, and we may have finished just a second.

16:38 - Was there also

16:38 - a concern about one lab monopolizing the market?

16:42 - Yes, that's another issue.

16:44 - I mean, we have,

16:44 - you know, according to the pleadings in the case, the lead petitioner

16:49 - represents 60% of the medical marijuana testing in Pennsylvania.

16:52 - And I think having having a monopoly, particularly on something like testing,

16:58 - you know, could be very dangerous because it could shut out other

17:01 - potential competitors.

17:03 - It could actually ultimately

17:04 - increase prices for medical marijuana grower processors.

17:08 - And also stepping back, I mean, it's important to remember

17:10 - this is a program that was created only in 2016.

17:15 - This is the first comprehensive set of final recommendations,

17:19 - a final regulations of the department it issued.

17:22 - So it's not the case that every single provision

17:25 - in those regulations needs to be a response to a specific problem

17:30 - that has been identified by the department.

17:32 - It's certainly possible for the Department to try to get ahead of problems

17:36 - and say, okay, we we're concerned that this could be an issue in the future.

17:40 - So we're going to act now and impose again a really modest requirement

17:45 - to see to it that there isn't a problem where nobody's saying

17:50 - nobody's saying that the drug is unreasonable.

17:52 - That's hard. Jockey three.

17:54 - We're here on tire Jockey one.

17:56 - This, this.

17:57 - We could stipulate this is reasonable.

18:00 - We could say that that it would be best practice.

18:04 - That.

18:05 - Boy, that darn legislature sure should have said

18:08 - what you wanted them to say.

18:10 - But we're here on tire jockey one, and the law says one or more.

18:14 - And it it really appears that that

18:19 - the department just doesn't want to take no for an answer.

18:22 - I mean, why why is why aren't you required to go back to the General Assembly

18:27 - and lobby them and tell them our experiences, telling us

18:30 - legislators that you got to get rid of the one

18:33 - and you got to say more than you got to change the law to more than one.

18:37 - I don't I'm not satisfied that you're you're you're addressing

18:41 - tire jockey one, as opposed to trying to show us that you're reasonable.

18:46 - We know you're reasonable.

18:48 - Certainly.

18:49 - So first of all, under tire jockey one,

18:52 - it's still necessary to look at the regulatory structure as a whole.

18:57 - So the question with respect to 704 A is

19:00 - within the broader structure of the Medical Marijuana Act.

19:04 - Did the legislature intend that this provision gives grower processors

19:09 - the right, not the obligation, but the right to choose?

19:13 - I want to contract with only one.

19:17 - I think I think laboratories,

19:19 - I think you might have the test a little bit backwards

19:23 - in in Pennsylvania,

19:25 - at least as I understand Pennsylvania law,

19:28 - for an agency to have to have the authority,

19:31 - the authority must be conferred in clear and unmistakable language.

19:36 - You seem to be suggesting that for the grower processor

19:39 - to have the ability to make this choice, the General Assembly had to make it in

19:43 - clear and unmistakable language.

19:47 - I'm not sure where that being the test.

19:49 - I think just this question to you is fairly straightforward,

19:54 - which is when the General Assembly said one or more,

19:57 - where is the clear and unmistakable delegation to the department

20:01 - to decide whether it is one or more or more than what?

20:05 - So that is why I began the discussion with the broader regulatory authority.

20:09 - But that's where it comes from.

20:11 - The broader regulatory authority

20:13 - that is standard regulatory language that is given to agencies.

20:17 - I mean, you can take the language that you have in this statute

20:20 - and compare it to other statutes that say,

20:25 - agency X shall promulgate

20:27 - regulations necessary and proper to carry out the enforcement of the act.

20:31 - That's it's a pretty boilerplate language.

20:35 - The question here is conflict

20:38 - is it's really a question of conflict.

20:40 - If the regulation conflicts with the statute,

20:44 - then the agency lacks the authority to promulgate it.

20:46 - Do you agree with that?

20:47 - Absolutely. Okay.

20:48 - So why isn't there a conflict here?

20:50 - There isn't a conflict here because

20:53 - section 7 or 4 does not

20:56 - make clear that it is the grower processor

21:00 - that has the sole right to choose whether to contract with one or more.

21:04 - A grower processor who who complies with this regulation

21:08 - or who complies with the two lab rule will contract with to labs

21:13 - and therefore will be in compliance with the statutory authority.

21:16 - We're not requiring grower processors to violate the statute.

21:22 - And on the broader picture,

21:24 - I think the two lead opinions in the Marcella Shell case sort of address

21:28 - this, that once you've established those broad authority, then

21:31 - what we need to look for is, is there specific evidence

21:35 - that the Department or the General Assembly intended to preclude

21:40 - the department from regulated in the way that it chose to?

21:43 - And, here, I mean, I704 it's

21:49 - we can argue about what the legislature intended to do when it made the change.

21:53 - 704 but clearly it did not intend to limit the department's authority

21:58 - because you had language in there that said, a girl processor shall contract

22:02 - with a and

22:04 - and edit laboratory, and they change it to one or more independent laboratories.

22:07 - They did that knowing that the department was pushing this to lab role.

22:12 - Well, and the language is necessarily inconsistent.

22:15 - One or more could

22:18 - encompass at least two.

22:20 - Absolutely.

22:24 - I'm sorry that the chief asked the same question.

22:27 - I was thinking which is if that's your argument,

22:28 - then why didn't the General Assembly just say two or more?

22:31 - Well the General Assembly I think could have spoken.

22:35 - The General Assembly could have been clearer

22:36 - in either direction if the General Assembly wanted to preclude

22:38 - they knew this was coming.

22:40 - If they wanted to preclude it, they could have said that that kind of

22:44 - undermines your argument, because your argument is that at the time

22:46 - of this particular legislation was passed, the General Assembly knew

22:49 - that you were pushing for two or more, yet they independently chose one or more.

22:54 - So doesn't that undermine your entire argument?

22:56 - No, because as before, then it was clearly one.

23:01 - And you know what?

23:03 - That that's what it said.

23:05 - But in neither case did it say that the,

23:08 - that the grower processor had the right to make that decision in all cases.

23:12 - And, it's not as

23:15 - if grower processors were prevented

23:18 - from entering into contracts with laboratories.

23:22 - It's not like they they needed that grant of authority.

23:24 - So what did the legislature do when it changed the one to, you know, on

23:29 - a credit independent laboratory to one or more independent laboratories?

23:33 - Well, I think at the very least, it sort of eliminated

23:36 - the argument that the department couldn't mandate

23:39 - a two lab or because of the use of the singular.

23:43 - Well, if I could, I could come up with another hypothetical,

23:46 - which is basically telling,

23:49 - grower processors that they that they aren't limited to contracting

23:52 - with one, they can contract with more, which actually would be a good thing

23:55 - for the grower processor, particularly if there's a supply issue,

23:59 - if there's one lab that does have predominant market share

24:02 - and they can't get their testing done timely, they have a list

24:05 - of approved labs that they can go to to get their product tested,

24:10 - so they can get it to market quicker.

24:12 - That would be the reason to give them authority to contract with one or more,

24:15 - or you that

24:18 - I would argue that what it does

24:21 - is it gives me the option of,

24:25 - requiring independent

24:27 - testing by two different inspectors.

24:31 - But okay, so now if you're in,

24:34 - I know the what happens if there can't be?

24:38 - Well,

24:38 - if there's if there's ambiguity,

24:39 - then the court can look to

24:40 - the other factors set forth in the Statutory Construction Act.

24:44 - We're not arguing ambiguity.

24:45 - We're not getting into to Chevron or that whole world.

24:50 - What we're saying is that when you read 704 A

24:53 - in the broader context of the entire act,

24:57 - where the legislature said, among other things, that safety is paramount

25:01 - and that the way to protect patients safety is through careful regulation,

25:05 - doesn't make sense to read 700 for a to say

25:09 - in this one narrow, very narrow area, we are going to preclude the Department

25:15 - from regulating and give grower processors the right to resist regulation.

25:20 - Well, well, again, you you

25:24 - you're resorting to arguments

25:28 - outside the

25:28 - text and you've conceded it's not ambiguous.

25:31 - And if if you are a grower processor

25:34 - and you read the law that's been enacted,

25:39 - are you not entitled to stand on

25:42 - and rely upon the enacted law which says that you grower

25:47 - processor shall contract with one or more?

25:51 - It could be one.

25:52 - It could be a thousand.

25:53 - It could be a million independent laboratories to test

25:56 - the medical marijuana.

25:59 - My I guess let me just ask one more time.

26:01 - How does this sentence give that a

26:03 - because the departments I mentioned in that sentence, it's mentioned

26:06 - in the next sentence in a different context.

26:11 - How does that sentence give you the the,

26:15 - the department, the authority to say

26:18 - no, general Assembly, we know better than you.

26:22 - So we're going to get rid of this one option and mandate more than one.

26:27 - How do you get the authority to do that.

26:30 - We don't from that sentence, but it doesn't preclude it.

26:33 - That's the question.

26:34 - It says shall contract with one or more.

26:37 - The department has simply made that choice and said,

26:40 - and the exercise of our judgment, it is better for the program as a whole

26:44 - if we require to laboratories.

26:49 - So let me let me ask you another question.

26:51 - Is the your position given the right grant of authority

26:55 - when whether that's given to everyone else, you know, it isn't really the point.

26:59 - You have bribe granted the authority here.

27:02 - Is it your argument that any limitation

27:05 - on that authority needs to be explicit? Yes.

27:09 - If we're talking about regulations that are otherwise within the

27:13 - scope of the authority and that further the purpose of the statute.

27:16 - But and I think that was the relevant question.

27:18 - And then Marcellus Shale, to some extent in the Gilligan horse

27:21 - racing case that that we cite,

27:24 - if there's a broad grant of authority, then

27:26 - then once you reach that step,

27:30 - you know, statutory language needs to preclude regulations.

27:32 - If I guess you if that's true, I mean, if that's the law,

27:37 - then the clarity of this first sentence,

27:40 - assuming that it is clearly is not

27:45 - an express limitation on the Department.

27:49 - Absolutely.

27:50 - Now, the I mean, the legislature, I'll be candid, could have limited

27:54 - the department's authority in sort of a roundabout way by saying,

27:56 - you know, a grower processor shall have the right to choose

27:59 - whether to contract with one or more. But it didn't use that language.

28:02 - It said, shall contract with one or more.

28:04 - The department hasn't required grower processors to violate that.

28:08 - They have simply said we're going to make that choice.

28:11 - But a grower process

28:14 - I mean, this is this is an an interesting

28:17 - twist on concepts of regulation, right?

28:23 - Because what you're arguing is that when the General Assembly

28:26 - gives a general grant of authority, it also is

28:30 - an explicit an express grant

28:34 - to make choices where the General Assembly has remained silent.

28:39 - Are you

28:40 - do you have any kind of case law or any anything to back that principle up?

28:45 - Because because it does seem to be a little bit contrary to the idea that the

28:49 - if the General Assembly is going to to say X or Y

28:55 - and you're in the department and you're saying the department

28:58 - now has the option to choose X or Y,

29:01 - the law that I'm familiar with would be

29:04 - the General Assembly would have to explicitly

29:06 - say the department can choose X or Y, but you're saying no.

29:09 - The general grant of boilerplate authority is adequate.

29:14 - Or I'm concerned about how this principle would apply

29:18 - going forward in a broader sense.

29:20 - Well, so as an initial matter, any grant of regulatory

29:24 - authority has to be within constitutional limits.

29:26 - It can't, you know, it can't be so ambiguous that it would let

29:29 - the the agencies act as sort of roving legislatures. But

29:37 - subject to that limitation, where

29:41 - the scope and purpose of

29:44 - the regulatory authority are set forth, where the scope is very broad

29:48 - and the purpose is clear here, it's, you know, patient safety and efficacy.

29:52 - It's not making life easier for grower processors.

29:56 - Or if the, if the General Assembly wants to limit

30:02 - that authority and prevent otherwise valid regulations,

30:06 - then it should speak in clear terms, because implicit in that question,

30:10 - I think, is that if seven for A didn't exist.

30:16 - The department probably would have this authority.

30:18 - This regulation would be fine.

30:19 - We wouldn't be here talking about it.

30:21 - So, well, if the if all the if all of the,

30:24 - if the, if the statute had said

30:27 - grower processors shall contract

30:30 - with a minimum number of laboratories as determined by the Department,

30:34 - we wouldn't be here.

30:36 - Absolutely.

30:36 - But the statute and that is an express, clear,

30:40 - unmistakable delegation of authority to the agency.

30:44 - But the statute doesn't say that.

30:46 - And I guess I'm saying what is the equivalent

30:49 - of this language that I just said, that is in the statute that provides

30:52 - a clear express delegation of authority to the department to choose

30:56 - whether to allow grower processors to use one lab

31:01 - or require them to have a minimum of two, where is the equivalent of that language

31:05 - that isn't there.

31:06 - So if, I mean, if the if we look at 7 or

31:10 - 4 A in isolation, we can't get the authority from there.

31:13 - We haven't tried.

31:14 - And, you know, I think this is where Commonwealth Court

31:18 - essentially began this, excuse me and end of its analysis is a

31:21 - just look at 7 or 4 and said, does this give you the authority.

31:25 - And it we're conceding it does not.

31:29 - But there is a broad grant of authority.

31:31 - And I think the Marcellus Shale, the two lead opinions in that case

31:36 - really do go through a very similar analysis,

31:38 - recognizing there's a broad grant of authority.

31:40 - And in that case, actually, it was a, you know, a more specific delegation

31:44 - to the department and the Environmental Quality Board to take certain steps.

31:48 - And the question was,

31:50 - had they exceeded the limits of that more specific delegation

31:55 - by bringing in things that were arguably outside the scope of

32:00 - of what they were and the court, Justice Donoghue

32:04 - in the plurality opinion, Justice Wecht relied on the fact that

32:08 - the legislature had spoken capriciously,

32:11 - and the court respected that decision by the legislature to say,

32:16 - we are going to give the Department or the the board, in that case, the authority

32:21 - to regulate, as it believes, necessary to effectuate the purposes of this act.

32:26 - And, I agree the legislature could have been clear no matter what.

32:32 - No matter which way you're arguing in passing act 44,

32:36 - they could have used clearer language if they wanted to either

32:39 - prohibit the two lab rule or if they wanted to mandate it.

32:43 - Marcellus shale is

32:44 - a little different because in this case,

32:47 - we're focused on the language

32:51 - that says the grower processor shall contract with one or more.

32:56 - No reference to the to the department

33:00 - in the provisions that do spell out in,

33:05 - in 301, the, the

33:07 - the department's authority or the department's mandate,

33:12 - you're instructed as the department to develop

33:14 - a four hour training course developed for two hour course.

33:17 - Would would it be your view?

33:19 - Similarly, since your authority so broad that you could have said,

33:23 - well, thanks, General Assembly, for telling us we have to develop

33:26 - a four hour course for these people and a two hour course for those,

33:30 - but we're going to make it a five hour course and a three hour course

33:34 - or a or a three hour course in a one hour course,

33:37 - since you think you can vary the one or more to more than one.

33:41 - So I think

33:43 - that presents a different

33:45 - question that is more analogous to the Marcelo's

33:48 - Marcellus Shale analysis, because there the question was where you've got

33:52 - a subsequent more specific delegation to the department.

33:56 - What are how does the language of the more specific delegation

34:01 - perhaps limit the general, the authority of the general delegation?

34:06 - Here, 7 or 4.

34:08 - A the first sentence doesn't mention the department.

34:11 - So to read it as a limitation on the department's authority,

34:14 - you really need to sort of see it as a, as kind

34:17 - of an indirect way of giving the grower processors a right.

34:20 - That's the only way you get there.

34:22 - You have to read shall as,

34:25 - shall and in their own discretion

34:28 - may choose to or, you know, essentially something that isn't in there.

34:34 - Seems to me to be contrary

34:36 - to the whole purpose of the the statute

34:40 - that allows the department to, develop regulations.

34:44 - There's nothing in any of the statute or terms that allows the growers

34:49 - to develop regulations. Absolutely. Yeah, yeah.

34:51 - And that is I mean, we haven't argued.

34:54 - 704A is ambiguous,

34:56 - but we do think that it needs to the interpretation of it needs

35:00 - to be informed by looking at the statute as a whole, looking at the structure

35:05 - and looking at what the legislature was trying to accomplish.

35:08 - You know, here you you think it's ambiguous.

35:10 - Well, if it if it were just 7

35:13 - or 4 by itself, we might say it's ambiguous, but it's not.

35:17 - It's seven or for eight as part of the Medical Marijuana Act.

35:20 - That also sounds like a federal statutory construction application

35:24 - as opposed to how we interpret statutes under Pennsylvania,

35:28 - because we we look at the we we look at the plain language

35:32 - to determine the intent first and then only if it's ambiguous

35:35 - do we look at the broader aspects of of the statute.

35:39 - We don't take this holistic approach to avoid plain language of statute.

35:44 - Well, I would maybe disagree a little, a little bit, which is that where,

35:49 - you know, I'm just saying look at the the plain

35:52 - language of the rest of the statutes in conjunction with 704.

35:55 - So look at the plain language of the stated purpose of the act.

35:59 - Look at the plain language of the direction

36:03 - to the Department to regulate medical marijuana.

36:07 - Look at the repeated emphasis on patient safety and product efficacy.

36:12 - So look at the plain language of all of those provisions.

36:15 - And then plug 704 A into that.

36:17 - And as the Chief Justice was was alluding to,

36:21 - it simply doesn't make sense to say that in the middle of this act where you know

36:25 - all about patient safety, all about efficacy, all about regulating this,

36:30 - this industry, which continues to be illegal under federal law.

36:33 - The department would say, okay, well, we're going to we're going to

36:36 - hamstring the department, this one very narrow area and give

36:39 - grower processors the unrestricted right to make this decision.

36:43 - They're allowed to do things that don't make sense.

36:45 - They're elected.

36:46 - They do all sorts of things that

36:48 - everybody in this room may think, well, that does not make sense.

36:50 - But that's why they stand for election every couple of years.

36:55 - And if they use the word one,

36:58 - I, I just struggle with how the department

37:02 - gets to delete or nullify the word one.

37:06 - The department has, you know, in our view, one is a floor

37:10 - and the department has decided that it is going to require

37:15 - more than the mere minimum in the statute.

37:19 - It does not set a ceiling by the plain terms of the statute.

37:22 - And the Department has said, we think that testing with two

37:26 - is the way we can exercise our authority.

37:29 - Under that, we can perform our statutory obligation

37:32 - to regulate this program, to protect patient safety.

37:36 - So that's a great idea given that it's a disjunctive sentence.

37:40 - So so that's a that's a that's a great answer to that question.

37:44 - And this goes to my my last question about the creep of this case,

37:49 - which is if the General Assembly

37:51 - sets a minimum floor for something, let's say the General Assembly

37:55 - set a minimum floor for an environmental standard of some kind.

38:00 - And says, you know, your, your the discharge of your pollutant shall be,

38:04 - you know, or I can't even I'm not smart enough to come up with one on the fly.

38:08 - So let's say they set a minimum standard,

38:11 - and then they have a general grant of regulatory authority

38:14 - to an agency to promulgate regulations to implement the statute

38:17 - as necessary, through the agency.

38:20 - Under your principle, the agency could promulgate a regulation

38:23 - that resets the minimum, as long as it's not lower than the floor.

38:28 - So, yes, but subject to two important caveats.

38:32 - One, it would have to be reasonable.

38:34 - Reasonableness review is always an option for anyone

38:36 - challenging a regulation, not from a conflict perspective.

38:40 - There's no there's no conflict there.

38:42 - If the General Assembly says minimum of X, as long as the agency has a general

38:46 - grant of authority, they can set the minimum of X plus something.

38:49 - And you're saying that's within their authority? Yes.

38:52 - But it's also within the the power, obviously, of the legislature

38:56 - to limit that authority.

38:57 - And the General Assembly,

38:59 - certainly has plenty of experience

39:00 - dealing with agencies they think have gone too far

39:03 - and rating those agencies in through legislation.

39:06 - So I don't think the risk of creep here is as great,

39:10 - where the General Assembly has the tools at its disposal to limit what AG does.

39:15 - I mean, I keep coming back this, but if the agency wanted to stop

39:19 - the two lab rule in its tracks, it could have done that.

39:22 - It didn't do that. Clearly.

39:25 - And that's why the

39:29 - C. Again, I'm disagreeing with you on the

39:30 - on the way regulation works in Pennsylvania.

39:33 - It's it's it's if you if it's if you wanted

39:37 - to have that authority that same argument could be

39:40 - you needed to go to the General Assembly and get it. It.

39:45 - And not that the General Assembly has to stop you.

39:48 - Well.

39:50 - The scenario is where the General Assembly has already made a choice

39:53 - already, given the agency the broad authority.

39:56 - And I think while I understand there are some boilerplate,

40:01 - grants of authority, they're not all the same.

40:04 - I mean, I think if you look at some of the cases

40:05 - involving the the Public Utility Commission that my friend cited,

40:10 - they involve narrow grants of authority where the, the court, this court and,

40:16 - has found that there wasn't the broad, capricious grant of authority.

40:19 - But if you look at a case

40:20 - like Gilligan, which is the horse racing case, this court said, well,

40:26 - and the General Assembly has chosen to give agency

40:29 - a very broad grant of authority, and we are going to honor that choice.

40:33 - So if if the goal of statutory interpretation,

40:36 - which it is, is to honor the

40:40 - to the intent of the legislature,

40:43 - that requires respecting a choice to give an agency broad authority,

40:46 - as well as respecting a choice to clearly limit that authority,

40:50 - I hope follow up on

40:54 - is this dual inspection protocol that, the Department has enacted.

41:00 - Is that part of its enforcement powers

41:04 - to be certain that all of the,

41:08 - the products that come from

41:11 - testers meet certain specifications?

41:13 - Exactly.

41:14 - Yes, absolutely.

41:15 - Yeah.

41:15 - I mean, what one key purpose of the testing is to ensure

41:18 - that there are no prohibited impurities, for instance,

41:22 - I mean, you have a specific branch of the authority, and you.

41:25 - 3018 involved enforcement procedures.

41:31 - I mean, I, I, I'm, I'm struggling

41:33 - with this notion as to

41:37 - why the legislature would have to be specific

41:40 - as to this one enforcement procedure

41:45 - as well, partly because I think this isn't just about enforcement.

41:49 - I mean, it is related to enforcement, but it goes beyond that.

41:54 - For instance, it involves the labeling

41:56 - of of medical marijuana that's offered for sale.

42:00 - So this one means that what, based upon the tests. Yes.

42:05 - But the department I mean, the department again, isn't

42:07 - you know, we're not a party to those tests, though.

42:10 - Those are, you know, the our process as a private entity.

42:13 - The lab is a private entity.

42:14 - So the department doesn't always have total insight into what's going on there.

42:18 - It's using the tools at its disposal. And

42:22 - and if we wait sort of until we get to the enforcement

42:25 - stage, oftentimes it's too late.

42:30 - And that's why you know, again,

42:32 - the department acted

42:35 - essentially before the problem that it's all was

42:38 - was, was likely to develop actually did occur.

42:42 - I'm not sure I understand your answer because it it seems to me that Justice

42:46 - Donohue was throwing out an old term and also

42:50 - an alternative life.

42:53 - You are you are reluctant to grab on.

42:56 - So, that's because that's because he he knows

42:58 - enforcement happens after a violation, not before a violation.

43:01 - That's I, I apologize for that.

43:04 - I mean, I, I think I mean, there are I mean, I want to say this the department

43:09 - could it could justify this authority in a number of different ways.

43:12 - I think it could tie it to enforcement.

43:15 - It also I mean, it's interesting

43:18 - green analytics

43:19 - here has argued actually they've gone further than Commonwealth court.

43:22 - They've argued the department doesn't have authority

43:24 - to regulate testing, except for a few specific areas.

43:27 - But one of those areas is accreditation.

43:30 - So could the department adopt this regulation

43:33 - as a condition of accreditation, say, to a lab,

43:36 - you get to only test one company's medical marijuana at one stage,

43:40 - and we're not going to we're not going to recognize you, perhaps.

43:43 - I mean, the department does have different specific sources of regulatory authority

43:47 - in the case, though, if you've set a regulation that says

43:51 - you have to have two labs, then,

43:54 - you can use, defiance of that as a reason not to accredit it.

43:59 - Right? Yes. Sorry.

44:01 - I was just saying, as a belt and suspenders,

44:03 - there are other places in the statute where where the department

44:06 - could derive the authority as well for this regulation, just as, just

44:10 - Justice Donohue is pointing to the enforcement provision

44:13 - as a as a possible way of bolstering the department's authority here.

44:19 - This is an otherwise illegal activity. Yes.

44:24 - Yeah.

44:25 - And and this is one of the few, if only areas where Pennsylvania

44:29 - is regulating, inactivity, such as this

44:34 - medicinal purpose, marijuana.

44:38 - Yes. I'm not aware of any other area where

44:41 - Pennsylvania regulates something that's illegal under federal law,

44:44 - where Pennsylvania regulates and allows it to to be used.

44:50 - All right.

44:50 - Any other questions for Mr. Fisher?

44:52 - Thank you very much. Thank you, Your Honor.

44:54 - Attorney Cosell.

44:56 - And have I pronounce your name correctly?

44:59 - Judith. Castle. Castle.

45:01 - Thank you.

45:02 - Also with me is my my partner, co-counsel.

45:10 - If it please court,

45:13 - I think I can answer some of the questions and also respond to

45:17 - what my co-counsel on my opposing counsel has said here.

45:21 - Right.

45:22 - This case is about the Department of Health seeking to replace

45:26 - the General Assembly's policy decisions in the Medical Marijuana Act with its own.

45:32 - This it cannot do

45:34 - under the Mayoral Marijuana Act.

45:37 - DOJ has regulatory authority

45:40 - over specific activities, but

45:43 - section 301 and 704 limit

45:46 - the department's authority when it comes to testing and laboratories,

45:51 - specifically under 704.

45:54 - As this court has noted, it provides that grower

45:57 - processors contract with one or more labs

46:02 - due to lack requirement mandates two

46:06 - and only two labs.

46:10 - The issued this two lab requirement.

46:12 - Despite members of the General Assembly, the House Health Committee,

46:17 - members of the industry and even ERC expressing serious doubts as to

46:22 - whether the department had the authority to mandate

46:26 - this to lab requirement.

46:29 - We went to the Commonwealth Court and we asked them

46:31 - to rein in the department's overreach.

46:35 - And it did, and we respectfully ask this court

46:38 - to affirm that Commonwealth court's decision.

46:42 - Now, you've noticed that

46:43 - the Department has basically argued two things.

46:47 - First, that has broad blanket authority over testing in laboratories.

46:51 - And second of all, that should a lab be able

46:55 - to test a single lab, test both the plant and the final product,

46:59 - somehow that makes the program completely on safe,

47:03 - neither or true.

47:05 - Taking to the department's first argument that they have broad

47:08 - regulatory authority over testing in laboratories,

47:13 - and they cite 2301301 says that the department

47:18 - will have regulatory authority over growing,

47:22 - processing, sale and use.

47:24 - Notably missing in that list is testing.

47:30 - It is unlike Marcellus Shale.

47:32 - It is unlike Gilligan when the stat when the General Assembly provided a list,

47:38 - it also said that the agency could include, but not be limited

47:42 - by, that list and or

47:45 - they shouldn't be prohibited from the broader powers.

47:48 - Previous expressed.

47:50 - In this case, none of those words exist.

47:53 - There is a straight list of an activities under which the General Assembly thought

47:58 - the Department had regulatory authority, plain and clear.

48:03 - Now, do you may argue

48:06 - that testing should be subsumed in growing?

48:11 - The problem with that is

48:13 - if 301 was silent on testing, that might be believable.

48:18 - However, as you all know later down in section 301A44,

48:24 - it specifically gives the department

48:26 - the task the obligation of monitoring

48:31 - the department trivializes monitoring.

48:35 - Monitoring is the way that all other states

48:39 - who have passed medical marijuana use for regulatory oversight over their labs.

48:44 - The department even cited

48:47 - to an article in their brief that they say stands

48:51 - for the proposition, the impetus of the two lab requirement.

48:57 - Do you know what that article recommends?

49:00 - It recommends monitoring over the labs

49:02 - as the form of regulatory oversight.

49:06 - As for us attached to the offer,

49:09 - we attached an affidavit from a former Maryland

49:13 - commissioner under the medical marijuana program

49:15 - who was specifically tasked with coming up with the regulations in Maryland.

49:19 - She also attests, yes, monitoring counsel, are you suggesting that the department,

49:24 - if we were accept your argument that one lab was allowed

49:27 - for both the testing at both points, harvesting and point of sale,

49:31 - are you suggesting that the department has the ability and the right to monitor

49:35 - the actual testing itself with their own independent experts? I do

49:40 - I do would not effectuate the same exact concern of patient

49:43 - safety and product efficacy that department kind of raised,

49:47 - if I heard you correctly, what that protect

49:49 - I mean, the department has raised its particular two lab requirement

49:52 - is promoting patient safety and product efficacy.

49:56 - If the department has the ability to monitor actually the testing itself

49:59 - with one lab at the harvest as required and at the point of sale is required,

50:04 - wouldn't that alleviate the department's concerns?

50:06 - Absolutely.

50:07 - We not only agree to that, we want to promote that.

50:10 - We think that is what should be done for that.

50:14 - Well, under our proposal, it would be the labs that would,

50:18 - with all of us, permit.

50:20 - No one paid for a generic inspector.

50:24 - Is that is that the problem?

50:26 - I mean, I'm I'm groping for why the opposition?

50:29 - Oh, great. Thank you for the question.

50:32 - No, it's because,

50:34 - we and I don't want to get into the third prong under tire jockey.

50:37 - I'm not trying to do that, but I am trying to answer your question.

50:41 - From the inception of the program,

50:44 - many grower processors picked a single lab, right?

50:47 - They picked a single lab,

50:48 - because if you do more business with that lab, you get volume discounts.

50:51 - They can pass those volume discounts onto patients.

50:54 - Right.

50:54 - So there's a there's a financial incentive for both the labs

50:57 - who can have more business and the growers who can save money.

51:00 - But truly, how it's done in the business is if I'm a grower processor

51:05 - and I want to grow plants to make into pills,

51:09 - and I want to grow plants to make into vapes, right?

51:13 - I use the one laboratory

51:16 - for all of it sometimes, but sometimes I use the one

51:19 - laboratory to test the plants and the final product here.

51:23 - But then I'll use another laboratory to test the plants on the final product here.

51:26 - And I'll and I'll do another lab to test the plants and the final product here,

51:31 - because this lab might have expertise in testing pills,

51:35 - this lab might be expertise in testing vapes.

51:38 - And this one might have expertise in testing suppositories.

51:42 - Right.

51:43 - The thing and the reason I want one lab is so that if I had the same people,

51:48 - same processes, same equipment, testing this plant,

51:51 - then it goes through the process and they test the final product.

51:55 - Just like all of our biology classes

51:57 - in high school, you try to keep all the factors that you can constant.

52:00 - That's what the that's what the grower processor is trying to do.

52:03 - Because if something is amiss between these two,

52:07 - you had just 10% THC here.

52:09 - And when you had the final product, it was only ten.

52:11 - You've used the same laboratory.

52:13 - So the difference the the mess up

52:16 - is in your process and you can look at it and go back and fix it.

52:19 - They really, really want one lab testing both

52:22 - ends of that, scenario so they can they can know.

52:26 - Let's think about it.

52:26 - If you're using one lab that uses these people,

52:28 - these are quite different processes to test a plant.

52:31 - And then you you use another lab to test the final product.

52:35 - How would you compare this to results.

52:36 - What sense what they meant.

52:37 - You're testing two different products with about five different variables.

52:40 - And they they don't want that chaos in the market.

52:43 - They want some consistency between the products.

52:44 - They want to be able to make sure the hits make safe products

52:48 - and what happens, which isn't explained in any of the regs.

52:51 - What if those two different testing labs that were forced to use

52:54 - come up with different results?

52:56 - Well, that's a that's a good argument.

52:58 - And I don't remember much from eighth grade biology,

53:01 - but that didn't make sense to me about keeping the the constants. But

53:06 - you're arguing in that sense

53:09 - that the regulation was unreasonable.

53:14 - Not that the department didn't have the initial authority

53:17 - to enact that regulation.

53:18 - Are those two different things? Absolutely.

53:20 - And I tried to preface that in the beginning

53:23 - that that's really the reasonable prong.

53:24 - Yeah, of the jargon.

53:25 - But it does help

53:26 - kind of set the stage, like, why would anyone want to use more than one?

53:30 - Why wouldn't anyone mind using two?

53:32 - I just kind of wanted to give a little bit of the the backdrop of that

53:35 - in our briefs. I liked it. Okay, how about junior high?

53:38 - All right.

53:38 - Well, you were responding to a question.

53:40 - I didn't, but but, let me let me bring it back to the actual statutory

53:45 - language, because I think that's what we're here about.

53:48 - And in this first sentence of 704, a the General

53:53 - Assembly chose, it may have been silly, it may have been stupid.

53:56 - We're not here to argue about that.

53:58 - They chose to give you

54:02 - the opportunity

54:03 - and the responsibility to contract the grower process,

54:08 - or show contract with one or more independent

54:12 - laboratories to test.

54:15 - Isn't your argument that you're entitled to stand on that language?

54:18 - And they said it to be one or more.

54:20 - So if you choose one, then it's one, and if you choose more, then it's more.

54:25 - And that's the Department of Health doesn't get to come in and make a rule

54:29 - that says it must be more than one. Isn't that the whole argument?

54:32 - Absolutely, 100%.

54:33 - What the department can under this,

54:36 - the department can control which labs you can pick

54:39 - in terms of certification of labs.

54:43 - I'm not sure that it can.

54:44 - And it has it.

54:45 - It doesn't.

54:46 - The present

54:47 - the rest of that section talk about labs certified by the department,

54:50 - a laboratory certified by the Department of Health

54:53 - in the second sentence in 704.

54:54 - Yeah. Second term, 2 to 704.

54:56 - It's really talking about

54:58 - how testing results are reported that the department is given the task

55:02 - of determining the manner in which a lab reports testing results.

55:07 - That's a little different.

55:08 - But back to your first sentence.

55:09 - You're right, it doesn't.

55:11 - The department is not in that first sentence.

55:13 - And the obligation is about contracting, not the number.

55:17 - It's always been the case, even in the regulations

55:20 - as well as the statute, that before any testing results can happen.

55:24 - And that's why sentence one and sentence two are temporarily.

55:26 - So when it says the department shall approve a laboratory under this

55:29 - subsection, what what is the department approving or disapproving?

55:33 - Well, a laboratory applicant will come to the department,

55:36 - and the department will review their standard operating procedures

55:39 - and ensure ISO certification, which is differ.

55:42 - Well, that's what you said.

55:44 - No I'm saying so the so you have to use a department approved lab.

55:48 - You have to.

55:48 - Oh I'm sorry I didn't catch that which I apologize. You have to approve.

55:51 - I said certify maybe I was using the wrong term,

55:53 - but you but you but the department you can't just contract with any laboratory.

55:58 - You have to contract with a department approved laboratory.

56:00 - And presumably the department

56:01 - is only approving laboratories that are going to be safe to the public.

56:05 - I assume they're not going to approve unsafe labs.

56:08 - So you don't disagree that you have the contract

56:11 - with an approved laboratory, correct?

56:14 - I'm sorry if I'm not. Yes.

56:15 - And that's important because I started to say it's a different time.

56:19 - The first sentence happens at a different time than the second sentence.

56:22 - So due to completion of both, those don't really work.

56:25 - It really is about a grower process or entering into a contract.

56:29 - They have to do that before any testing is done, right.

56:32 - But they can only contract with department,

56:34 - approve only contract with approved ones.

56:36 - And the rigor that the department puts a lab through is extensive.

56:42 - These labs are not just anybody wants to be a lot.

56:44 - As you have pointed out, these are, labs that have gone through.

56:47 - I said certification, by the way, is, we're a third party accredited

56:51 - accreditation service actually comes in and just goes through the lab

56:56 - with a fine tooth comb.

56:57 - Could the department, as part of its approval regime,

57:01 - approve labs for testing, pre-processing and approve labs

57:07 - for testing, post-processing that would be far outside the statute.

57:12 - There is no provision that the first sentence doesn't

57:15 - have the department in it.

57:16 - It talks about the grower processors obligation to enter into a contract.

57:20 - No, I understand, but

57:21 - but I'm just saying I mean, it was this is going to one of the arguments

57:24 - that was raised, which I thought was an interesting argument.

57:26 - Could the department say,

57:28 - we believe that the, you know,

57:31 - we have the authority to decide which labs are approved for testing.

57:35 - And we believe that, there are certain that that,

57:40 - this is the regime to get approved for pre pre processing testing.

57:43 - And this is the regime to be approved for post.

57:45 - You can apply for both, but we may not approve you for post.

57:48 - We may only approve you for pre.

57:50 - I would argue that they don't have the authority to do that

57:52 - because the act is really specific when it's talking about

57:55 - who gets permitted for what, and it's really specific to be better.

57:57 - If you just said

57:58 - that's not in front of us right now, that's not in front of us because,

58:02 - because if,

58:02 - because if the department loses this case, plan B might be Justice

58:06 - Robson's approach, because that would be a much that would be

58:10 - a much stronger case for that, wouldn't we hope he's not allowed to come back up.

58:13 - Wouldn't wouldn't you agree that they'd be on firmer ground as well?

58:16 - I suppose. I, I haven't looked at that in this court.

58:19 - Isn't looking at that.

58:20 - I would argue that because of the, the 50 examples in the statute

58:26 - that require and dole out to the department exactly what permits

58:29 - they can and cannot issue

58:31 - might be a problem for them, even if they came back with that.

58:34 - I mean, yet I'm sorry,

58:37 - why are we looking at where we're being asked to interpret a statute?

58:42 - Our review is, you know, the

58:44 - correct

58:46 - definition.

58:47 - They would be prosecuted.

58:50 - It's our that's our

58:52 - we are stuck with the arguments that were,

58:57 - developed as to interpreting the statutory language.

59:01 - I agree with you, Justice Dunham.

59:03 - I really agree with you.

59:04 - And that's why I kind of started

59:05 - to answer the question, even though it's technically

59:07 - not before the court, because everything's before the court.

59:09 - The whole act and the whole regulations are,

59:13 - you know, for review.

59:13 - We're being asked to interpret the language of the statute.

59:17 - Yeah, a blank slate.

59:20 - Right now, what we don't have, though, is we don't have a regs be very interesting.

59:25 - If we had a rag from Doe which said

59:28 - menu A is the test the list of approved that we

59:33 - the department have approved this list of labs for harvesting

59:37 - and testing and this list and then this separate list

59:41 - is those we've approved a test for final processing.

59:44 - And guess what there is there the Venn diagram doesn't intersect.

59:48 - So you you you you

59:51 - they have gotten around in that scenario, the one part of the one or more you see.

59:55 - But but we don't have that scenario if.

59:58 - All right.

59:59 - 531 They have proposed that they could do that.

01:00 - 04.133 They could conceivably they could do that.

01:00 - 06.035 But that's not this. Want me to argue that?

01:00 - 07.704 But I know because I can argue that too.

01:00 - 10.607 If you I'm taking you on a frolic and detour, I'm sorry.

01:00 - 11.874 I've enjoyed it. Okay.

01:00 - 17.547 More questions are should I resume with my presentation?

01:00 - 19.182 Are there any other questions?

01:00 - 22.051 I think you could conclude we understand your argument.

01:00 - 26.723 Okay, if I if I'm not, I just want to say that I just a quick recap.

01:00 - 30.026 301 really only provides the specific activities.

01:00 - 32.328 Three and one later provides for monitoring.

01:00 - 34.998 Almost everything else is in section 704.

01:00 - 37.867 But I would argue that 74

01:00 - 40.870 lays out a very comprehensive testing,

01:00 - 45.508 scheme and laboratory scheme that section 74 is titled laboratories.

01:00 - 47.644 And that's where the General Assembly

01:00 - 50.647 found fit to put all of the testing in the laboratories.

01:00 - 52.615 We all know about the one or more.

01:00 - 57.120 And we talked about the permitting process, the manner in which testing

01:00 - 00.623 results are required to be reported by DHS, also very extensive.

01:01 - 01.891 I will skip that for now.

01:01 - 04.260 But the one point I really, really would like

01:01 - 06.162 to talk

01:01 - 10.099 about is the line where it says grower processors should contract

01:01 - 14.971 with one or more labs to test the medical marijuana.

01:01 - 18.941 It produces

01:01 - 19.942 medical marijuana.

01:01 - 22.812 It's a statutorily defined word.

01:01 - 27.717 It literally means both the plant and the final product.

01:01 - 31.921 That sentence literally reads that a grower processor can contract

01:01 - 36.192 with one lab to test both the plant and the final product

01:01 - 39.962 that literally foreclose this DHS interpretation of the act

01:01 - 44.100 that says, well, we can just get rid of a lab

01:01 - 47.770 because we can have two labs test both the plant and final product.

01:01 - 50.273 That's not what the General Assembly is saying here.

01:01 - 54.277 The general same Senate is saying we're passed this contract with one,

01:01 - 58.347 and that lab can do both the plant and the final product.

01:01 - 59.882 That is significant.

01:02 - 02.719 Defining terms are important.

01:02 - 03.152 Okay.

01:02 - 05.955 Thank you, thank you, thank you, Mr. Fisher.

01:02 - 08.891 And this task,

01:02 - 11.160 the next case is Winnik

01:02 - 14.397 versus the Philadelphia district attorney.

01:02 - 18.167 In this case, the question arises

01:02 - 22.472 about the sovereign immunity under the Wiretap Act.

01:02 - 26.943 The Wiretap Act says that it abrogate sovereign immunity,

01:02 - 30.580 but it is silent about other forms of immunity.

01:02 - 34.717 In this case, a wife recorded her husband

01:02 - 38.121 and then used those recordings

01:02 - 41.491 to have him arrested and prosecuted.

01:02 - 44.560 Ultimately, the charges were dropped,

01:02 - 47.563 but he brought suit against the prosecutors,

01:02 - 51.868 alleging that their acts, including disclosing the contents

01:02 - 55.438 of what he contends were illegally made recordings,

01:02 - 58.441 violated the Wiretap Act.

01:02 - 02.545 The Philadelphia Court of Common Pleas held that the district attorney

01:03 - 08.017 was immune for his prosecution, and therefore dismissed the case.

01:03 - 11.654 The Commonwealth Court affirmed.

01:03 - 15.324 The Commonwealth Court held that the statute in question

01:03 - 19.695 did talk about sovereign immunity, but did not talk about

01:03 - 23.166 high public, official, or prosecutorial immunity,

01:03 - 29.505 and therefore that it was not possible for him to bring this suit.

01:03 - 35.178 That decision conflicts with the decision of the Pennsylvania Superior Court

01:03 - 39.081 and the Supreme Court has granted allocator

01:03 - 42.785 in order to determine which court is correct.

01:03 - 48.324 That's the.

01:03 - 49.625 Good morning, Your Honors.

01:03 - 51.527 Good morning.

01:03 - 53.696 And this appeal by allowance.

01:03 - 54.430 I'm sorry, Your Honor.

01:03 - 57.767 I have my, partner, Casey Green is my co-counsel.

01:03 - 58.301 All right.

01:03 - 00.436 Thank you, thank you. Welcome.

01:04 - 04.106 In this appeal by allowance, we consider whether prosecutors

01:04 - 08.077 who, in the course of their prosecutorial functions

01:04 - 13.683 used and disclosed recordings which were obtained in violation

01:04 - 17.553 of the Pennsylvania Wiretapping and Electronic Surveillance Act,

01:04 - 20.790 were protected from civil suit for damages

01:04 - 23.793 by high public officials or prosecutor,

01:04 - 27.864 high public official or prosecutorial immunity.

01:04 - 32.268 Despite the express waiver of sovereign immunity.

01:04 - 34.437 Please proceed. Thank you. Your Honors.

01:04 - 38.641 The question presented

01:04 - 41.677 is whether law enforcement officers are immune from civil

01:04 - 45.615 suits under section 5725 of the Wiretap Act.

01:04 - 50.019 And we respectfully submit that the answer to that question is no.

01:04 - 54.624 I begin my argument with this court's

01:04 - 57.693 pronouncement in 1991,

01:04 - 00.930 in the case of Commonwealth versus Hashem,

01:05 - 04.333 in which the Wiretap Act was interpreted,

01:05 - 07.336 and the court, this court stated,

01:05 - 12.108 and I quote, no violations of any provisions of the act

01:05 - 17.880 will be countenanced, nor will the failure of prosecutors to diligently follow

01:05 - 22.018 the strict requirements of the act be lightly overlooked.

01:05 - 27.690 And then in, Becker versus MC Lich, decided

01:05 - 31.160 by this court in 1993, the court stated,

01:05 - 34.363 because the Wiretap Act, quote,

01:05 - 37.366 is in derogation of a constitutional right,

01:05 - 41.671 the right of privacy, it must be strictly construed.

01:05 - 44.006 End quote. Now.

01:05 - 50.079 In 1978, the General Assembly

01:05 - 55.418 enacted what is known as Acts of Act 152,

01:05 - 59.655 and in act 152,

01:05 - 02.658 the general, the General Assembly stated.

01:06 - 07.163 When the General Assembly shall specifically waive sovereign immunity,

01:06 - 11.267 a claim against the Commonwealth and its officials and employees

01:06 - 15.071 shall be brought only in such manner and in such court,

01:06 - 19.775 and in such cases as directed by the provisions of title 42.

01:06 - 21.944 One week later.

01:06 - 24.480 One week later, in 1978,

01:06 - 29.251 the Wiretap Act was enacted, and the Wiretap Act,

01:06 - 33.823 apparently following act 152, specifically stated

01:06 - 37.593 in section 5725, be

01:06 - 42.832 to the extent that the Commonwealth and any of its officers, officials,

01:06 - 45.968 or employees would be shielded from liability

01:06 - 49.238 under this section by the doctrine of sovereign immunity.

01:06 - 54.443 Such immunity is hereby waived for the purposes of this section,

01:06 - 57.480 so we know we have a waiver of sovereign immunity.

01:06 - 58.814 No question about that.

01:07 - 02.852 The next question is,

01:07 - 06.255 is there a waiver or abrogation of the doctrine of common

01:07 - 09.258 law immunity?

01:07 - 16.632 We do not.

01:07 - 19.902 I'm not talking

01:07 - 22.738 this is a political discussion

01:07 - 25.741 between local government and.

01:07 - 29.845 Governmental.

01:07 - 33.449 Entity.

01:07 - 35.985 That is the Commonwealth

01:07 - 40.589 and many government offices that are employed is that it is private.

01:07 - 43.626 There is no way for

01:07 - 46.629 governmental community in wiretap

01:07 - 50.666 years for the de.

01:07 - 57.273 Waiver of of and so,

01:07 - 01.644 I'm I'm struggling

01:08 - 04.880 I mean.

01:08 - 11.320 Sovereignty here,

01:08 - 14.323 that, we well,

01:08 - 17.660 your Honor, thank you for the question.

01:08 - 18.227 Your honor.

01:08 - 23.032 We took the position that because the defendants in this case,

01:08 - 26.102 represented the Commonwealth of Pennsylvania

01:08 - 29.071 as five prosecutors.

01:08 - 31.340 Okay.

01:08 - 32.007 Hold on.

01:08 - 35.010 Let me just give.

01:08 - 38.380 You, a document.

01:08 - 44.386 Not by looking.

01:08 - 47.656 For one

01:08 - 49.024 at this very moment.

01:08 - 49.792 But what do you.

01:08 - 55.998 And we may for

01:08 - 59.835 exactly. One.

01:09 - 07.676 35 and for the of.

01:09 - 10.212 Well, that

01:09 - 13.249 matter. For.

01:09 - 19.054 I, I heard a little bit from our case here

01:09 - 22.925 and that is we're we're not.

01:09 - 27.163 I could never get to, the line a lot.

01:09 - 31.200 Okay, well, I'll try to answer the question, Your Honor.

01:09 - 34.837 And, by addressing the specific language

01:09 - 38.207 in the Wiretap Act.

01:09 - 43.779 Section 5702 defines person

01:09 - 47.850 as any employee or agent of the United States

01:09 - 53.589 or any state or political subdivision thereof, and any individual,

01:09 - 56.725 partnership, association, stock, joint

01:09 - 59.728 stock, company, trust or corporation.

01:10 - 05.701 Our position is that the defendants in this case clearly fall

01:10 - 12.641 within that definition of persons, because they are employees of a state

01:10 - 15.744 or political subdivision thereof,

01:10 - 18.747 and they're also individuals.

01:10 - 34.763 On all of.

01:10 - 43.772 55 5725.

01:10 - 49.245 And I'm just looking at it now.

01:10 - 55.751 Set you back 40.

01:11 - 06.362 And you.

01:11 - 08.130 Well,

01:11 - 11.133 I again, your honor, our argument is that,

01:11 - 16.238 the language of the statute does allow a claim

01:11 - 20.376 for civil damages under 5725 against

01:11 - 25.080 the defendants who were named in this case because they are agents or employees

01:11 - 28.417 of a political subdivision of the Commonwealth.

01:11 - 32.388 Expected the legislature to add,

01:11 - 37.293 after the words sovereign immunity.

01:11 - 40.596 They're local government immunity, high public

01:11 - 43.599 official immunity, and prosecutorial immunity,

01:11 - 47.236 so that it was clear that they were abrogating these common law immunity.

01:11 - 51.874 Well, they they certainly could have done that, Your Honor, but they didn't do it.

01:11 - 55.711 And our position is that does not mean that there was no intent

01:11 - 59.348 to abrogate the doctrine of of sovereign immunity.

01:11 - 02.351 And if I can, a bit of I'm sorry I interrupted.

01:12 - 05.120 We understand they waive sovereign immunity.

01:12 - 07.523 But my question is

01:12 - 10.893 if they were going to waive other immunities

01:12 - 15.464 which had stood in, in some cases, a common law for a long, long time,

01:12 - 19.301 wouldn't we want and in fact, wouldn't we require,

01:12 - 22.471 given our precedent that they make that waiver clear?

01:12 - 26.108 It certainly would have been better to make the waiver clear.

01:12 - 29.111 But based on the provisions of the Wiretap Act,

01:12 - 32.548 it's clear to us our position is that

01:12 - 36.018 the act does

01:12 - 39.655 require a waiver of the doctrine of common law immunity.

01:12 - 40.989 And it's like more on that.

01:12 - 43.992 Yeah, I could go through the provisions, said

01:12 - 47.663 the doctrine singular of sovereign immunity.

01:12 - 51.166 Do you maintain that there are there are no.

01:12 - 55.437 And were no other doctrines of immunity, plural,

01:12 - 00.843 like the common law, high public official immunity, prosecutorial immunity?

01:13 - 04.146 Long recognized that common law,

01:13 - 07.049 as well as the statutory, local government immunity.

01:13 - 09.451 I think the Justice Donnelly was referring to.

01:13 - 12.421 Do you maintain those are not other doctrines,

01:13 - 15.391 or do you have some other reason why?

01:13 - 18.827 They were subsumed within this referral reference

01:13 - 20.863 to the singular doctrine of sovereign immunity?

01:13 - 22.998 I think it's a separate doctrine, Your Honor.

01:13 - 25.000 The doctrine of common law immunity.

01:13 - 29.605 And it just was not expressly abrogated by the General Assembly.

01:13 - 33.242 But my argument is that there are other provisions in the Wiretap

01:13 - 36.345 Act that reveal that the General Assembly

01:13 - 40.482 did intend to abrogate or waive the doctrine of common law immunity.

01:13 - 43.285 And I was going to go through those sections, if I may,

01:13 - 47.489 kind of

01:13 - 50.893 as I mentioned earlier, we have law students here in the courtroom.

01:13 - 55.831 Could and it may be confusing to them as well as to us at times.

01:13 - 59.535 The differences between sovereign immunity,

01:14 - 04.907 government, government, high government, official immunity, prosecutorial immunity.

01:14 - 07.910 And you refer to common law immunity.

01:14 - 10.078 Could you clarify?

01:14 - 11.146 Sure.

01:14 - 11.980 Students benefit.

01:14 - 14.983 Yes. A sovereign immunity is a doctrine, at least in

01:14 - 17.986 Pennsylvania, has been created by statute.

01:14 - 23.292 Common law immunity has not been created or established by a statute.

01:14 - 27.196 It's a matter of common law that goes back a long time.

01:14 - 29.798 That's the main difference, as I understand it.

01:14 - 32.468 And in our case,

01:14 - 35.471 our position is if you look at the

01:14 - 39.942 language of the statute, various provisions, it makes it clear,

01:14 - 44.880 we think, that the General Assembly, in enacting the Wiretap Act,

01:14 - 48.817 did intend to abrogate and waive the doctrine

01:14 - 52.754 of common and common law immunity, irrespective of sovereign immunity.

01:14 - 55.691 And that's what I'm going to get to. Thank you.

01:14 - 56.592 Thank you, Your Honor.

01:14 - 00.829 So I provided the definition of person

01:15 - 04.733 in 5702 of the Wiretap Act.

01:15 - 09.872 And then we have,

01:15 - 13.108 the definition of investigative or law enforcement officer

01:15 - 16.178 also in 5702,

01:15 - 21.216 which says in relevant part, any officer of any state

01:15 - 24.720 or political subdivision thereof, or of the Commonwealth

01:15 - 29.057 or political subdivision thereof, or any attorney authorized by law

01:15 - 33.629 to prosecute or participate in the prosecution of such offense.

01:15 - 36.932 So if you look at the Wiretap Act.

01:15 - 41.470 Law enforcement officers fall within the definition

01:15 - 45.974 of both person and law enforcement officer.

01:15 - 48.911 They can be, and they are both.

01:15 - 52.080 And there's a reason why the legislature

01:15 - 54.983 separated them.

01:15 - 58.053 And that is when the legislator specifically mentioned

01:15 - 02.424 investigative or law enforcement officers and other sections of the act.

01:16 - 08.897 It was to proscribe unlawful conduct on their part, not to give them any immunity.

01:16 - 13.302 But, for example, in 57, 1757,

01:16 - 18.507 1357, 13.1 and 57.26,

01:16 - 21.743 the sections are limited to conduct

01:16 - 25.414 of law enforcement officers, not persons in general,

01:16 - 30.052 of which law enforcement officers are included within that category.

01:16 - 36.925 Now important to this

01:16 - 39.928 appeal is also 5717.

01:16 - 42.864 Investigative

01:16 - 46.768 disclosure or use of contents of wire, electronic

01:16 - 50.138 or oral communications or derivative evidence.

01:16 - 54.076 And in 5717 A

01:16 - 56.478 the statute says

01:16 - 59.481 any investigative or law enforcement officer

01:16 - 02.784 who under subsection A1, B, B1

01:17 - 06.021 or C has obtained knowledge of the contents

01:17 - 09.691 of any wire, electronic or oral communication,

01:17 - 14.763 or evidence derived therefrom, may disclose such contents or evidence

01:17 - 18.333 to another investigative or law enforcement officer,

01:17 - 23.538 to the extent that such disclosure is appropriate to the proper performance

01:17 - 27.576 of the official duties of the officer making or receiving the disclosure.

01:17 - 31.113 So. So here we have a section

01:17 - 33.248 that only permits

01:17 - 36.284 law enforcement officers to disclose

01:17 - 39.421 intercepted communications

01:17 - 42.391 to other law enforcement officers.

01:17 - 46.561 Disclosure beyond that scope would be a violation of the act.

01:17 - 49.765 That's what this court said in the Karoly case.

01:17 - 52.534 That's what this court found in the Becker case.

01:17 - 53.468 And that's what the,

01:17 - 55.771 Superior

01:17 - 58.774 Court determined in the child's case.

01:17 - 02.878 In all of those cases, the defendants who are law enforcement officers,

01:18 - 06.314 went beyond the scope of 5717 A

01:18 - 10.085 and disclosed contents of it

01:18 - 13.822 lawfully, in some cases, intercepted communications

01:18 - 18.226 beyond the scope of law enforcement to other law enforcement officers.

01:18 - 23.665 And if I may submit, that's what the Commonwealth Court in this case got wrong.

01:18 - 29.438 The Commonwealth Court conflated conflated the use and disclosure

01:18 - 33.542 provisions of section 57.17,

01:18 - 37.646 section 57.17, when it said.

01:18 - 44.820 By carving out

01:18 - 49.191 these acceptable use and disclosure provisions for law enforcement

01:18 - 52.594 officers, the General Assembly specifically excluded

01:18 - 58.100 law enforcement officers from liability under the Wiretap Act when their use

01:18 - 02.070 or disclosure is done in the performance of their official duties.

01:19 - 04.206 End quote. Incorrect.

01:19 - 08.777 Your honors as to the subject of disclosures, correct

01:19 - 13.582 as to the subject of use, but as to disclosures, a law enforcement

01:19 - 18.587 officer cannot disclose to anyone other than another law enforcement officer.

01:19 - 23.191 That's clear in the statute, and it's clear in the case law by this court.

01:19 - 27.028 And also the child's case in this particular case,

01:19 - 30.932 how does that apply to what occurred in the and the Philadelphia DA's office?

01:19 - 33.068 Thank you, your Honor, to intercept.

01:19 - 36.004 And they disclose that information in a court proceeding.

01:19 - 37.105 Thank you for the question.

01:19 - 39.441 I mean, let me back up a little bit because I'm I will

01:19 - 41.743 I will be in a different posture than my colleagues here.

01:19 - 45.413 But the Wiretap act to me seems pretty straight, straightforward

01:19 - 48.984 wiretaps are only conducted under a court order by law enforcement officials.

01:19 - 52.587 And if there's a carve out here and a law enforcement official who misuses

01:19 - 56.458 the wiretap or misuses the information divulged of it,

01:19 - 00.495 this specific act requires that that person or provides

01:20 - 04.132 that that person can be found liable for that particular conduct.

01:20 - 07.035 Right? Yes. Your Honor, this is what this is going to happen.

01:20 - 09.871 Hold on, hold on. I'm sorry. So I'm familiar with the facts.

01:20 - 13.275 So in this particular case, you have not a law enforcement officer,

01:20 - 18.380 a private person who intercepts another person's conversation, right? Yes.

01:20 - 20.482 Gives it to the DEA. Yes.

01:20 - 23.151 And the DEA uses it in a court proceeding,

01:20 - 25.921 right? Yes.

01:20 - 27.789 So why don't we go into how that.

01:20 - 31.159 Well, here's advisor how it's actually not protected or is protected.

01:20 - 34.262 Okay. Here's what happened.

01:20 - 37.132 The defendant's

01:20 - 40.135 publicly filed

01:20 - 42.504 documents, motions and responses

01:20 - 47.175 to motions, which included quotations from these embarrassing

01:20 - 53.348 intercepted recordings, public filings not under seal, not confidential.

01:20 - 56.384 They were on the record, and they did so without going to the court

01:20 - 58.620 beforehand and saying, we have intercepts.

01:20 - 00.121 And here's how they were intercepted.

01:21 - 02.090 And we filing a motion and eliminate.

01:21 - 04.860 We want to know if we can use them or not, because they would have done that.

01:21 - 06.294 They would have been acting under a court order

01:21 - 08.964 which is actually provides them with immunity. Right.

01:21 - 10.165 But they didn't do that.

01:21 - 11.967 They just want to make sure we're all clear on that.

01:21 - 15.937 Yes, they filed everything publicly, not under seal.

01:21 - 19.808 And the reason I make a point of this, Your Honor, and emphasizes that,

01:21 - 24.212 is that this court and Karolyi specifically

01:21 - 29.751 commented on that conduct, specifically commented on a situation

01:21 - 35.423 where a prosecutor publicly files intercepted communications

01:21 - 40.295 and the court and Karolyi said, and this was in 2013.

01:21 - 50.372 It is not, quote, apparent why the motion to disqualify

01:21 - 55.277 and supporting brief could not have been filed under seal in the first instance,

01:21 - 58.346 or how filing these items under seal

01:21 - 01.549 might have impeded their effective law enforcement use.

01:22 - 03.084 And quote.

01:22 - 05.520 That's at page 312.

01:22 - 08.390 The Karolyi Court went on to say, quote,

01:22 - 12.594 the plainly confidential nature of the conversation itself

01:22 - 16.831 would appear to have made it apparent that their unsealed filing

01:22 - 21.603 could lead to a broad public disclosure that would be inconsistent

01:22 - 25.473 with the limitations appearing in 5717 A

01:22 - 30.512 and with the Act's broad objectives relating to the protection of privacy.

01:22 - 33.448 Also at page 312.

01:22 - 36.451 Furthermore, the Karolyi Court said, quote,

01:22 - 40.155 in the present context, the most obvious manner

01:22 - 43.825 of accomplishing the appropriate investigative

01:22 - 47.662 and law enforcement use of the intercepted communication

01:22 - 51.099 would have been to file the motion and brief under seal.

01:22 - 54.602 The failure to do so, as all parties acknowledged,

01:22 - 59.607 caused the intercepted conversation to become a matter of public record.

01:22 - 01.109 And so, counsel,

01:23 - 04.646 yes, Your Honor, matter that in Karolyi they were seeking a removal

01:23 - 07.549 from office. Yes. And not a civil action. Yes.

01:23 - 12.120 So share with us why we should not distinguish this from the facts. Yes.

01:23 - 15.924 That language would be applicable to a case

01:23 - 20.362 brought under either 57, 25 or 5726.

01:23 - 22.831 And let me try to distinguish the two,

01:23 - 26.935 the two provisions of the act, if I may.

01:23 - 33.575 5726 is not an exclusive remedy.

01:23 - 37.846 It is a remedy

01:23 - 41.516 that can be sought, as it says, in 5726 A

01:23 - 45.420 against any investigative or law enforcement officer,

01:23 - 49.958 public official or public employee to have them removed from office.

01:23 - 53.328 Okay, now.

01:23 - 57.866 The reason

01:23 - 02.971 why the General Assembly had valid reasons for providing a separate definition

01:24 - 08.076 of investigation, and law enforcement officer in 5726

01:24 - 11.079 versus 5725, is that.

01:24 - 14.582 It could not have used

01:24 - 17.485 the phrase any person to identify

01:24 - 20.488 potential defendants under 5726,

01:24 - 23.491 because individual who are not public employees

01:24 - 27.562 or public officials cannot be removed from office.

01:24 - 31.399 So that would appear to be why in the statute, the General Assembly

01:24 - 36.438 limited it to an action seeking removal from office of a law enforcement officer.

01:24 - 37.772 Beyond that, Your Honor,

01:24 - 41.042 there's another reason

01:24 - 44.045 why 5726

01:24 - 47.048 should not be regarded as an exclusive or,

01:24 - 50.585 in all cases, an adequate remedy for an aggrieved plaintiff.

01:24 - 53.988 And that is what happens

01:24 - 56.891 if a law enforcement officer

01:24 - 02.397 intentionally violates the Wiretap Act by making a disclosure

01:25 - 06.167 such as what happened in this case and what happened in Karoly?

01:25 - 10.438 And then that law enforcement officer resigns from office,

01:25 - 16.144 resigns from office before someone can bring an action under 5726

01:25 - 19.848 or is terminated or is laid off,

01:25 - 21.483 there's no remedy.

01:25 - 23.351 Well, I mean, counsel, I think the answer to that

01:25 - 26.788 if if the Commonwealth court's opinion stands, is that's an issue

01:25 - 29.791 for the General Assembly to deal with. But,

01:25 - 32.293 you spent a lot of time

01:25 - 35.263 establishing whether there was a violation here or not.

01:25 - 39.501 I haven't really gone into questioning in my mind whether there's a violation.

01:25 - 43.371 The the issue is when you have someone who enjoys

01:25 - 48.877 not sovereign immunity, but is enjoys high public official immunity

01:25 - 52.347 or local governmental immunity or prosecutorial immunity.

01:25 - 58.253 The question is, did the General Assembly waive that immunity

01:25 - 02.524 for purposes of the civil damage consequence?

01:26 - 03.725 It's not a question of whether

01:26 - 07.195 it's not a question of whether they're subject to the law.

01:26 - 10.532 They're certainly subject to the law, and they can commit a violation of law.

01:26 - 13.568 We're talking about whether they can be sued in the court

01:26 - 16.638 in a, in a, in this action. So

01:26 - 19.807 let's if we could go back to the point of.

01:26 - 22.810 Did the General Assembly

01:26 - 25.980 explicitly waive sovereign,

01:26 - 29.784 prosecutorial immunity, local government official immunity,

01:26 - 31.186 high public official immunity?

01:26 - 33.922 Did they did it. Did it sorry.

01:26 - 35.723 Did it expressly do that?

01:26 - 39.060 Because I think our our precedent requires an express waiver.

01:26 - 44.532 Well, it the Wiretap Act does not say we hereby waive

01:26 - 47.869 the doctrine of common law or high prosecutorial immunity.

01:26 - 52.974 Our argument is that when you look at the provisions of the Wiretap Act,

01:26 - 57.679 the entire act, there are many provisions that show

01:26 - 01.716 that there was there was an intent on the part of the General Assembly.

01:27 - 03.184 And I appreciate I appreciate that.

01:27 - 06.955 I think you've I think you've laid out a fairly, I think you've laid out

01:27 - 10.592 a good argument as to as to piecing that all together.

01:27 - 13.261 I'm asking you, under our law,

01:27 - 16.764 is that kind of piecing together little parts without an express

01:27 - 19.934 clear waiver enough?

01:27 - 21.402 Yes, Your Honor, I think it is.

01:27 - 24.839 I that's what the the even in this case, the Commonwealth Court

01:27 - 28.676 looked at the entire act to see whether there was a

01:27 - 32.614 and if not an express waiver, an implicit waiver.

01:27 - 38.386 And in one of the cases that I cited and I just can't recall which one it is now,

01:27 - 42.890 but I'm sure it was cited in the brief, the same thing happened.

01:27 - 46.094 So when you look at the definition of person

01:27 - 49.163 under 5702.

01:27 - 51.633 And then when you look at

01:27 - 56.371 the provisions of 5725, a cause of action,

01:27 - 01.576 any person whose wire, electronic or oral communication is intercepted,

01:28 - 04.779 disclosed or used in violation of this chapter

01:28 - 09.284 shall shall have a civil cause of action against any person

01:28 - 14.455 who intercepts, discloses, or uses, or procures any other person

01:28 - 18.926 to intercept, disclose or use such communication, and shall be entitled.

01:28 - 23.564 Recover from any such person and then it lists actual damages.

01:28 - 26.768 Putative damages, and reasonable attorney's fees.

01:28 - 28.536 And one more point, Your Honor.

01:28 - 31.539 If we look at 5713,

01:28 - 35.009 which deals with emergency situations

01:28 - 38.379 and 57 13.1,

01:28 - 41.249 which deals with emergency hostage

01:28 - 45.320 and barricade situations in both of those sections,

01:28 - 48.189 the General Assembly

01:28 - 51.926 has included language that allows a claim

01:28 - 55.229 to be brought against the law enforcement officer under

01:28 - 58.333 5725 counsel, counsel.

01:28 - 02.970 Procedurally, we're here because a demurrer was granted, correct?

01:29 - 03.971 I'm sorry.

01:29 - 07.775 We're here because a demurrer was sustained. Yes.

01:29 - 11.579 And your request is not for us to decide on the merits.

01:29 - 14.582 It's to decide whether this case should go

01:29 - 17.552 back to the Common Pleas Court for your recommendation.

01:29 - 19.787 Why don't you go argue that position?

01:29 - 22.290 Because it seems to you you're going off into the far field

01:29 - 24.125 regarding a merit analysis.

01:29 - 27.128 And that's not before this court. Right.

01:29 - 30.665 Then I'll go back to,

01:29 - 34.369 my original point, your honor,

01:29 - 37.772 the case should go back

01:29 - 40.808 to the trial court

01:29 - 43.978 because

01:29 - 48.549 looking at the provisions of the Wiretap Act.

01:29 - 52.920 It is clear that the general

01:29 - 56.023 and the General Assembly intended

01:29 - 00.161 that there would be no common law

01:30 - 04.799 or high prosecutorial immunity for law enforcement officers.

01:30 - 09.470 That's the specific answer to the question raised by this court

01:30 - 12.974 when it granted the petition for allowance of appeal.

01:30 - 15.243 That's the answer.

01:30 - 16.944 Thank you

01:30 - 19.046 for the fact that you displayed that to me.

01:30 - 21.549 Community.

01:30 - 23.851 I mean, when you're talking about common

01:30 - 27.922 law immunity here, immunity was within the purview of our court

01:30 - 31.993 to define in your graph an application and things of that nature.

01:30 - 35.863 But the you know, the General Assembly,

01:30 - 39.467 established two different meeting.

01:30 - 43.104 Yes. Typically

01:30 - 46.908 I said here that one is the sovereign immunity.

01:30 - 50.077 Immunity?

01:30 - 52.680 Provision would be waived.

01:30 - 54.549 And to be certain.

01:30 - 56.884 But they didn't say that

01:30 - 00.922 about the other 43, that

01:31 - 04.759 that would apply to 35.

01:31 - 05.993 How do we ground that?

01:31 - 08.362 I don't have

01:31 - 11.032 you at the, court.

01:31 - 14.202 I do not know that.

01:31 - 17.972 And you

01:31 - 20.575 I do have problem.

01:31 - 22.910 You talk about that legislature

01:31 - 25.913 therapy, maybe, or or your decision here

01:31 - 30.418 that it was going to waive sovereign immunity, but not government.

01:31 - 31.786 Right?

01:31 - 32.487 That.

01:31 - 35.122 Well, as Your Honor pointed out, there, there

01:31 - 38.125 they are two separate and distinct concepts.

01:31 - 41.329 And even if the court were to sign that

01:31 - 43.631 sovereign immunity,

01:31 - 47.635 as you said in your initial question, does not apply to the defendants

01:31 - 51.372 in this case, the doctrine of common law immunity clearly does.

01:31 - 53.207 And that goes back to my initial point.

01:31 - 58.179 If we look at the specific provisions in terms of the Wiretap Act,

01:31 - 01.782 we find enough language to show

01:32 - 06.420 that it was the intent of the legislature, the General Assembly,

01:32 - 10.958 to abrogate the doctrine of common law immunity.

01:32 - 13.027 So so you think there's an ambiguity?

01:32 - 15.263 I mean, specifically waive sovereign immunity.

01:32 - 18.266 But when you take a look at the act in toto,

01:32 - 22.136 there's multiple references to district attorneys, law enforcement officers,

01:32 - 25.206 assistant district attorneys, attorneys authorized to prosecute cases.

01:32 - 28.442 Our case law is rife with, with situations

01:32 - 31.546 where we've identified those individuals as high public officials.

01:32 - 35.149 So so your argument is that there's an ambiguity in the statute.

01:32 - 38.352 Well, Your Honor, that's why I said in response to the first question

01:32 - 43.124 that I think that sovereign immunity, our position is that the doctrine

01:32 - 47.828 of sovereign immunity does apply to public officials

01:32 - 50.131 or high public

01:32 - 53.100 officials, but that certainly could include prosecutors.

01:32 - 57.805 And in fact, that is saying is, in short, the legislature shorthanded it. Yes.

01:32 - 00.608 By saying sovereign immunity.

01:33 - 03.611 Why is that a better reading than

01:33 - 06.681 saying what they were doing was saying,

01:33 - 08.883 you can sue the Dow.

01:33 - 11.953 Oh, but you can't sue the people who work there.

01:33 - 17.091 I'm sorry, you're on a sovereign being in this in this context,

01:33 - 20.795 the district attorney's office,

01:33 - 24.365 I guess you could sue them under under one reading,

01:33 - 28.102 whereas you can't sue the people covered by

01:33 - 31.439 prosecutorial immunity.

01:33 - 34.241 Wouldn't there be an alternative reading?

01:33 - 39.413 Yes, but I'm looking at the definition of sovereign immunity under 5725

01:33 - 44.318 B, and it says the Commonwealth and any of its officers, officials

01:33 - 47.989 or employees would be shielded from liability under this section

01:33 - 51.158 by the doctrine of sovereign immunity, which is hereby waived.

01:33 - 52.893 That's why our

01:33 - 57.298 position is that we actually think that prosecutors

01:33 - 01.569 working for a municipality are covenants that there's no recourse around because

01:34 - 04.338 because they're Philadelphia County,

01:34 - 06.474 they they prosecute in the name of the Commonwealth.

01:34 - 06.841 Right.

01:34 - 07.708 That's it, Your Honor.

01:34 - 10.711 But do we do we give their nominal?

01:34 - 16.250 Do we give do we give preference to their nominal prosecuting posture,

01:34 - 21.756 or do we give preference to the fact that they're employed

01:34 - 25.893 by the county of Philadelphia, not by, you know, they're not deputy attorney

01:34 - 27.294 generals, for example?

01:34 - 31.565 I think that they are officers and officials of the of the Commonwealth.

01:34 - 33.267 Are they

01:34 - 35.603 did they when they prosecuted Mr.

01:34 - 38.406 Wenig, they did it on behalf of the Commonwealth of Pennsylvania,

01:34 - 41.409 but they prosecuted another county.

01:34 - 45.046 In their Philadelphia county.

01:34 - 47.348 Right. They represent the Commonwealth.

01:34 - 49.150 But that doesn't mean they are the Commonwealth.

01:34 - 53.854 I'm sorry, that wasn't a question.

01:34 - 56.257 Well, here's I'm struggling with here.

01:34 - 57.258 Here's the question.

01:34 - 00.461 Under the Political Subdivision Tort Claims Act, section 8541,

01:35 - 04.231 except as otherwise provided by except as otherwise provided by this subchapter,

01:35 - 08.536 meaning the Political Subdivision Tort Claims Act, no local agency

01:35 - 12.640 shall be liable for any damages on account of any injury to a person or property

01:35 - 16.744 caused by any act of the local agency or an employee thereof, or any other person.

01:35 - 19.714 That's the immunity you have a problem with.

01:35 - 22.850 That's that's that's the grant of immunity.

01:35 - 27.121 And expressly says no, no cause of action except as set forth

01:35 - 30.091 in the Political Subdivision Tort Claims Act.

01:35 - 33.160 So that would be that the waiver of sovereign immunity.

01:35 - 36.630 No, no, this is this is local government immunity by statute.

01:35 - 40.534 This is the General Assembly saying by statute, local agencies

01:35 - 45.072 and their employees are immune, except as set

01:35 - 48.609 forth in this act, meaning the Political Subdivision Tort Claims Act.

01:35 - 52.980 And you don't have anything

01:35 - 55.583 in the you don't have anything

01:35 - 00.521 express your argument is it's implied that although there's no express waiver

01:36 - 02.523 of governmental immunity on the political subdivision

01:36 - 05.459 towards claim back, they didn't amend that statute.

01:36 - 08.462 They don't have an express waiver like sovereign immunity.

01:36 - 12.066 You're saying it's implicit, right, that we have to look at

01:36 - 16.937 the specific, explicit terms of the entire statute?

01:36 - 21.342 Couldn't the General Assembly have intended, by not being explicit,

01:36 - 25.112 intended that there are some circumstances under

01:36 - 29.884 which you could hold a local government official liable

01:36 - 35.389 because they can't establish that they enjoy local governmental immunity?

01:36 - 38.793 Say, perhaps they acted outside the course and scope of their official duties.

01:36 - 40.861 Let's say, let's say we change the facts.

01:36 - 44.899 In this case, the prosecutor didn't just put, things in a document

01:36 - 49.069 filed with the court, but went to the media and leaked these things.

01:36 - 50.704 One could

01:36 - 53.941 argue they're not entitled to any immunity for that.

01:36 - 57.711 And you could get civil damages under the Wiretap Act against them.

01:36 - 58.879 Right. And I agree.

01:36 - 02.349 And that's what happened, Your Honor, in the Crowley case that I discussed, that

01:37 - 05.986 there was a 50 and I knew Carroll, Caroline Carroll.

01:37 - 08.923 And you're not Carol. Senator.

01:37 - 10.257 Okay.

01:37 - 12.793 Was 57, 26 case. Yes.

01:37 - 17.331 And and wouldn't the see with

01:37 - 20.868 if you look at the definitions which you cited

01:37 - 25.906 in under a 5702 investigative or law enforcement officers

01:37 - 29.910 there include of the political subdivision.

01:37 - 33.514 So that would include assistant DA's in Philadelphia County.

01:37 - 38.185 But but that gets you to 5726

01:37 - 43.591 because in 5726, you see the language about investigative

01:37 - 47.061 or law enforcement officers, tying you back to the definition.

01:37 - 47.761 Right.

01:37 - 52.533 But that still doesn't get you 5725 for damages.

01:37 - 54.869 Right? Well, that's your problem, isn't it?

01:37 - 59.974 Well, Your Honor, except that 5725 allows for a cause of action for damages

01:37 - 03.811 against any person, person and person we know

01:38 - 07.815 is defined in 5702 to include,

01:38 - 11.352 any political subdivision.

01:38 - 13.053 Right? Right.

01:38 - 14.255 All right, Mr.

01:38 - 16.056 Damage. Oh,

01:38 - 19.059 yes. Your Honor, assuming that

01:38 - 22.830 we're graph that he's back there was so,

01:38 - 26.300 waiver of governmental unity

01:38 - 30.571 as that difference between by the district attorney.

01:38 - 33.974 We can operate in here, we can walk away.

01:38 - 39.813 I mean, just take five staff rate

01:38 - 42.850 right from here.

01:38 - 43.751 Yeah, okay.

01:38 - 47.788 But I want to be in the living area.

01:38 - 51.892 Yes, yes, your honor,

01:38 - 52.860 thank you.

01:38 - 53.193 All right.

01:38 - 56.497 Thank you very much. Let's hear from Mr.

01:38 - 57.631 Marvel. Ski.

01:38 - 00.000 And did I pronounce that correctly?

01:39 - 02.970 All right.

01:39 - 09.176 Congratulations.

01:39 - 10.811 You're on the, criminal rules Committee.

01:39 - 13.781 Oh, yes, Your Honor, thank you.

01:39 - 14.648 I appreciate thank you.

01:39 - 17.451 The apologies. Maybe,

01:39 - 19.353 Well, I was just glad that the per curiam didn't have

01:39 - 22.323 any noted dissents. Oh.

01:39 - 27.661 So may it please the court?

01:39 - 30.898 My name is Dan Margolis. Ski.

01:39 - 34.568 I represent the, also the district attorney and the individuals,

01:39 - 38.072 individual assistant district attorneys, named as defendants in this case,

01:39 - 43.243 Your Honor, so this is a very straightforward

01:39 - 46.246 statutory interpretation case.

01:39 - 50.451 The, the Wiretap Act waive sovereign immunity.

01:39 - 54.455 It does not waive governmental immunity, and it does not waive,

01:39 - 58.058 high public officer immunity or any officer immunity.

01:39 - 03.731 The case law this court makes clear in, McAllen

01:40 - 08.669 in particular that assistant district attorneys, and district attorneys,

01:40 - 11.872 are high public officers who are,

01:40 - 14.608 you know, enjoy that immunity.

01:40 - 19.246 And this court's decision in Doe, also emphasizes

01:40 - 23.584 that waivers of immunity need to be done unambiguously and explicitly.

01:40 - 26.987 And here we have an explicit waiver of sovereign immunity.

01:40 - 31.925 We don't have an explicit waiver or any waiver of, of governmental immunity

01:40 - 35.396 or the high public officer immunity and the individual immunities at issue.

01:40 - 37.631 And so that just resolves this case.

01:40 - 40.567 The anybody in your

01:40 - 44.204 office, counsel, who would not be protected,

01:40 - 48.275 in this case, by those doctrines, say, a secretary.

01:40 - 51.578 So in the paralegal,

01:40 - 54.581 if I ask for clarification on that question, do you mean on the facts

01:40 - 58.118 as alleged in this case or on any facts?

01:40 - 01.121 And let's take when it when he get these tapes or whatever they,

01:41 - 04.158 these wiretaps and they're, they're released

01:41 - 07.795 by a not an year

01:41 - 11.765 but by, a secretary or paralegal in the office.

01:41 - 15.335 You're not maintaining that,

01:41 - 18.872 they would be shielded from Wiretap Act liability exposure.

01:41 - 19.306 Right.

01:41 - 22.276 So I, I agree, I think that they probably would not

01:41 - 24.912 and there are also circumstances where,

01:41 - 27.781 where I believe it's in the,

01:41 - 31.118 in the Mattson versus Margie case involving the,

01:41 - 34.688 the attorney general, and the immunity, the high public immunity,

01:41 - 36.123 the attorney general there,

01:41 - 40.260 the court recognized that there could be instances of conduct that are palpably

01:41 - 44.164 outside of that officials, even if it's a high public official,

01:41 - 47.401 probably outside their role, that they would not enjoy absolutely

01:41 - 50.437 any for or were out there, Dilworth Plaza

01:41 - 54.341 handing out transcripts of this thing that would not be, for example.

01:41 - 54.541 Right.

01:41 - 58.846 Well, so, so transcripts of a court hearing or transcripts of that or.

01:41 - 02.149 Yeah, tape of this or the audio tape rather of winning.

01:42 - 03.183 Whatever. Right.

01:42 - 07.488 We could come up with extreme examples that, that would where the individual

01:42 - 08.388 would be acting so far

01:42 - 11.391 outside of their official role that that the immunity would not apply.

01:42 - 13.460 Counsel.

01:42 - 15.429 Yeah.

01:42 - 19.500 Is there any circumstance where any employee of the district

01:42 - 23.670 attorney's office wouldn't be amenable to governmental immunity?

01:42 - 27.274 So I think, why didn't you raise governmental immunity?

01:42 - 27.941 Right.

01:42 - 31.712 So, so, I think the short answer to that, Your Honor, is that

01:42 - 34.681 that's what, in,

01:42 - 38.619 in Durham versus McCowan is what this

01:42 - 42.823 which involved the case of a basically tort claims against assistant

01:42 - 46.326 district attorneys for their conduct in the course of litigation.

01:42 - 49.496 It's I mean, directly on point in terms

01:42 - 52.499 of what establishing that

01:42 - 57.304 that this particular kind of immunity officer immunity shields.

01:42 - 58.772 Absolutely.

01:42 - 01.808 The, the in litigation,

01:43 - 05.846 official acts of, district attorneys and assistant district attorneys.

01:43 - 08.782 What if it doesn't? What if it doesn't make it to litigation?

01:43 - 10.217 Are you suggesting that this court

01:43 - 12.886 that an assistant district attorney somewhere could

01:43 - 15.856 somehow wiretap one of our phones and then leak it to the media

01:43 - 19.193 and maybe be immune from Sue because they're an assistant district attorney?

01:43 - 20.460 Not exactly, Your Honor.

01:43 - 25.532 No, it would so and that may be another example of,

01:43 - 30.737 kind of that we so, probably and manifestly outside of

01:43 - 34.174 of the official duties of the law enforcement officer

01:43 - 36.076 or the assistant district attorney at issue.

01:43 - 38.345 Where do we draw the line? What about a press conference?

01:43 - 40.814 So I yeah, I mean, where do you draw?

01:43 - 43.083 So I think, I mean, and in that particular case,

01:43 - 46.153 the Moriarty case that I was referencing involving the attorney general,

01:43 - 51.024 the attorney general there actually did send, information

01:43 - 53.860 that was allegedly libelous to the press, in addition

01:43 - 55.762 to sending it to a local district attorney.

01:43 - 59.166 And the court there found that sending it to the press in that particular instance

01:43 - 02.169 was it was within the attorney general's official duties,

01:44 - 05.439 because keeping the public informed of the conduct

01:44 - 08.942 of the attorney general was an important aspect of that office.

01:44 - 13.146 But but you want to take your specific hypothetical there about,

01:44 - 18.318 you know, a district attorney wiretapping a phone of a Supreme Court justice.

01:44 - 19.653 I mean, that that is,

01:44 - 22.222 the the

01:44 - 24.891 immunity that we're talking about here

01:44 - 27.894 in terms of public office or immunity and the district attorney's office,

01:44 - 31.198 immunity really is,

01:44 - 34.601 most is strongest and is most compelling

01:44 - 37.971 when it's, within the,

01:44 - 41.541 when it involves,

01:44 - 44.544 conduct that is intimately related to the judicial process.

01:44 - 45.212 Right.

01:44 - 48.148 So that's the similar case in the United States Supreme Court.

01:44 - 50.017 Obviously, that's not binding on this court,

01:44 - 55.522 but it's, it's the same pedigree of cases, the same sort of historical derivation.

01:44 - 59.326 You have these officer immunities that are I think you're hitting on my point

01:44 - 03.230 because my point is this we all talk about acting within the course

01:45 - 05.465 and scope of your employment as protected conduct.

01:45 - 07.601 Right? Right. So you're an assistant district attorney.

01:45 - 11.071 Your job is to investigate crimes, bring charges, prosecute criminal acts.

01:45 - 16.043 In my understanding of high public official immunity doctrine,

01:45 - 18.745 that's just nothing more than a common law recognition

01:45 - 20.647 that the government doesn't act by itself.

01:45 - 22.282 It acts through its employees.

01:45 - 23.750 So therefore, certain employees

01:45 - 27.220 who are acting within the course and scope of their employment on behalf

01:45 - 31.091 of the sovereign, sovereign immunity are in fact covered by immunity.

01:45 - 32.292 High public official doctrine.

01:45 - 34.961 Immunity right.

01:45 - 36.363 I don't think I follow exactly.

01:45 - 38.231 You don't, because I don't think to the extent

01:45 - 41.001 you're saying that, that that collapses into sovereign immunity

01:45 - 42.569 because they're acting on behalf of the sovereign,

01:45 - 43.637 it collapses into what I'm saying.

01:45 - 47.107 It's derived from sovereign immunity, most common law, that recognition

01:45 - 50.677 of sovereign immunity and the limitations on sovereign immunity, which is that

01:45 - 54.681 the government doesn't act by itself, it acts through its employees.

01:45 - 58.352 So therefore, we have to develop an immunity doctrine that covers

01:45 - 01.421 the employees acting within the course, the scope of their employment.

01:46 - 02.823 Right. So so I agree.

01:46 - 05.125 So I agree with the last part of what you said.

01:46 - 07.761 I do think that there that these are very distinct doctrines.

01:46 - 09.930 They come with different historical pedigrees.

01:46 - 13.834 They have different reasons for existing sovereign immunity versus

01:46 - 15.435 individual officer immunity.

01:46 - 19.406 But Your Honor is absolutely correct that that the the key reason

01:46 - 20.640 why officer immunities

01:46 - 24.578 exist as opposed to sovereign immunity, why individual officer immunities exist,

01:46 - 27.781 and that includes judicial immunity, high public officer immunity,

01:46 - 31.618 that is, is so that public officers can

01:46 - 35.822 fulfill their duties to the best of their ability without fear

01:46 - 39.659 of individual personal civil liability or being sued or deposed and so forth.

01:46 - 42.496 Right. So, so follow me down this path, if you would.

01:46 - 42.863 Of course.

01:46 - 44.998 Are we have an act here, the Wiretap Act.

01:46 - 48.001 Now, we all understand having because of our backgrounds.

01:46 - 51.004 Wiretaps are usually conducted by law enforcement officials.

01:46 - 53.573 Correct.

01:46 - 55.142 Exclusively. Yes.

01:46 - 55.642 Not always.

01:46 - 56.977 Not in this case, but.

01:46 - 00.247 Oh, but no, I'm just I'm not going to I'm like, not going there yet.

01:47 - 03.817 So you have an act that's specifically directed to members

01:47 - 07.788 of law enforcement, DA's prosecutors, law enforcement officials, correct?

01:47 - 12.292 No, not exactly, Your Honor.

01:47 - 14.161 So why why not? Exactly.

01:47 - 16.029 So the way the Wiretap Act works,

01:47 - 19.132 as Your Honor knows, from from your time on the Superior Court of Tours.

01:47 - 20.734 You know,

01:47 - 25.038 there's a broad prohibition in the Wiretap Act in 5703 prohibiting,

01:47 - 30.143 interceptions using and derive and, use and disclosure of interceptions.

01:47 - 34.681 That is a blanket prohibition that is wide sweeping, right?

01:47 - 38.552 It prohibits me as a law enforcement officer, a law enforcement

01:47 - 42.022 officer from doing it or, an individual civilian from doing it.

01:47 - 45.192 And then it has a list of exceptions, right.

01:47 - 48.962 And and those are and, you know, the primary or a big exception,

01:47 - 52.332 is for, you know, court work wiretaps.

01:47 - 55.569 And I've supervised a couple of court order wiretap,

01:47 - 59.239 that I think that's what your what Your Honor is alluding to.

01:47 - 01.274 That wasn't I was alluding to what I was alluding to

01:48 - 03.543 was that the wiretap act is basically generated

01:48 - 05.378 and directed towards members of law enforcement

01:48 - 08.048 community and says what you can and can't do.

01:48 - 11.251 There's a waiver provision for sovereign immunity, but there's also

01:48 - 15.121 multiple references to the individuals, law enforcement members,

01:48 - 19.359 police officers, assistant district attorneys, lawyers, prosecutors.

01:48 - 23.196 They're referenced in here as persons who are identified and subject

01:48 - 24.531 to civil liability.

01:48 - 28.301 So my point is that although the Wiretap Act has a specific reference

01:48 - 31.771 to sovereign immunity, and as you pointed out, it doesn't say

01:48 - 35.075 it also includes high public official immunity doctrine.

01:48 - 40.080 The act itself provides for liability for those high public officials acting

01:48 - 43.316 in violation of the act.

01:48 - 45.151 So I disagree, disagree with that, Your Honor,

01:48 - 47.721 I think it's important to explain what I'm trying to get at. Absolutely.

01:48 - 49.022 Why do you disagree with what I do?

01:48 - 52.025 So the act is not I don't believe the act, your honor, is geared

01:48 - 54.528 toward law enforcement officers.

01:48 - 57.931 Specifically, the purpose and structure of the act

01:48 - 01.434 is to prohibit interceptions,

01:49 - 05.005 prohibit the use and disclosure of interceptions,

01:49 - 07.140 with exceptions.

01:49 - 09.209 Some of those exceptions relate to law enforcement.

01:49 - 11.111 Some of them don't. Right?

01:49 - 14.614 I mean, technically, I mean, if you're just reading the act right.

01:49 - 20.453 We are being intercepted right now, right by the camera, by this microphone.

01:49 - 20.720 Right.

01:49 - 23.723 This is a technical means of recording my conversation.

01:49 - 27.227 It's an interception that has nothing to do with law enforcement.

01:49 - 29.996 But the Wiretap Act does regulate it.

01:49 - 31.765 It regulates it by saying this is,

01:49 - 33.700 you know, kind of the exception of all party consent.

01:49 - 36.703 But the wiretap I regulate our conversation,

01:49 - 39.773 but it does regulate any any interception of our conversation.

01:49 - 42.042 Right. Even even if done so.

01:49 - 44.611 So this this microphone is intercepting our conversation.

01:49 - 45.211 Right.

01:49 - 48.381 It's going to be republished by, you know, on YouTube or wherever.

01:49 - 49.015 Right.

01:49 - 51.751 That's the use and disclosure of an intercept,

01:49 - 54.721 under the Wiretap Act.

01:49 - 57.691 And it's, it's lawful intercept under the Wiretap Act.

01:49 - 01.761 An intercept under the Wiretap Act is specifically that definition.

01:50 - 04.798 No, it is it's and it's any.

01:50 - 07.968 So an intercept is any mechanical or includes any mechanical recording

01:50 - 11.304 of an oral communication like what we're doing right now.

01:50 - 13.473 So under the Wiretap Act,

01:50 - 16.643 recordings of our conversations are going to our intercepts.

01:50 - 19.813 They're just allowed if there's all party consent

01:50 - 22.048 confidentiality.

01:50 - 23.283 Pennsylvania's a two consent state.

01:50 - 26.453 So you can't have you can't have a nonprofit advocacy

01:50 - 30.557 group walking down into a restaurant and trapping United States

01:50 - 33.960 Supreme Court justice at dinner and recording them.

01:50 - 37.430 That would be a violation of Pennsylvania's wiretap law.

01:50 - 38.531 That's correct. Yeah. That's right.

01:50 - 40.400 And then there are some exceptions that would allow it.

01:50 - 41.968 For example, the crime victim exception.

01:50 - 43.503 That was one night.

01:50 - 45.138 We're not talking about an exception in this case.

01:50 - 48.141 We're talking about an unlawful intercept that was given to an assistant

01:50 - 50.310 district attorney. The district attorney's office.

01:50 - 53.013 Then use that unlawful intercept by putting it into pleading.

01:50 - 57.817 So so we have to accept the allegations as they come, in the complaint.

01:50 - 00.987 But the the allegations in the complaint

01:51 - 04.524 are that this was a conversation that, you know,

01:51 - 08.361 that there's a conversation it was recorded by another individual.

01:51 - 10.430 Right. And that recording was provided.

01:51 - 13.800 The district attorney's office and the district attorney's office lost,

01:51 - 17.971 in its attempts to offer that in evidence.

01:51 - 20.140 But, you know, let me back up there.

01:51 - 21.274 You can't gloss over that one.

01:51 - 25.178 It lost because it didn't seek an opinion beforehand from the judge

01:51 - 26.613 that it was allowable to be used.

01:51 - 29.516 So on the less, I mean, you could have filed a motion eliminate.

01:51 - 29.683 Right.

01:51 - 32.719 And said, judge, we've got an intercept that that the victim

01:51 - 34.921 in this particular case intercepted from her husband.

01:51 - 36.690 We intend to use it in evidence.

01:51 - 38.324 Can we seek a motion, eliminate.

01:51 - 39.859 And by the way, if you would have sought a motion

01:51 - 42.996 eliminating had a court order, you would be immunized under the act.

01:51 - 43.563 Right.

01:51 - 46.533 So I don't know that a yes or no,

01:51 - 48.234 we would be immunized in the Act.

01:51 - 50.070 We're going to be united as we are to do that.

01:51 - 51.905 You put it in a pleading

01:51 - 55.175 and you divulge the contents and the pleading, and then after the fact.

01:51 - 57.210 So we

01:51 - 01.047 we would so if this were to go to trial or go to a summary judgment,

01:52 - 03.983 past discovery, we would have vigorous factual defenses to that.

01:52 - 04.250 Okay.

01:52 - 07.320 I'm just I'm just for purposes of this particular case, as Justice

01:52 - 11.024 Daugherty pointed out of the exact here to except on well played allegations

01:52 - 12.992 and of the allegations that are pled and that's the

01:52 - 17.363 and that's one of the fundamental problems with a denial of absolute immunity

01:52 - 20.366 in this circumstance, right, is that anyone can allege,

01:52 - 24.137 so so the Wiretap Act

01:52 - 28.374 contains an exception for crime victim recordings.

01:52 - 31.311 Right. And that's going to be,

01:52 - 35.115 those recordings are all going to depend on very fact intensive questions

01:52 - 38.251 about the victim state of mind at the time of the recording.

01:52 - 42.589 The question becomes then this taping was over a seven year course period,

01:52 - 48.328 and the exception says the commission, or about to commit or other you to have it.

01:52 - 48.595 Right.

01:52 - 51.898 So that that's an issue separate than above here.

01:52 - 56.436 But I guess your office will have to determine how using an intercept

01:52 - 59.806 from seven years ago, when the person obviously didn't believe in commission,

01:53 - 03.543 or that the person was committing an act or about to commit an act,

01:53 - 07.013 is now you seven years down the line against that individual.

01:53 - 09.048 So again, that was a separate issue before. Right?

01:53 - 11.618 Those are going to be factual, factual Contestations.

01:53 - 14.420 So we have a vigorous defense on if if you ever comes to that.

01:53 - 14.721 Right.

01:53 - 16.890 The whole point of absolutely you doctrine is that it's never going to happen.

01:53 - 18.691 It should never come to that.

01:53 - 22.495 And, and and that's because in any instance

01:53 - 27.634 where an assistant city attorney is going to use or disclose recordings

01:53 - 31.538 under that, under that exception or other exceptions to the Wiretap Act,

01:53 - 36.576 in order for the interception to be lawful,

01:53 - 40.113 it's going to depend on very fact intensive questions

01:53 - 43.116 about the crime victim state of mind, right.

01:53 - 45.718 If it's an all party consent exception that we're invoking, it's

01:53 - 48.721 going to depend on fact intensive questions about who consented.

01:53 - 50.757 It's going to depend on fact intensive questions.

01:53 - 53.760 So there's an exception to interceptions for jail calls

01:53 - 57.797 right in in virtually any significant prosecution

01:53 - 01.701 where an inmate is in prison or is in custody of the jail,

01:54 - 04.904 the assistant district attorney is going to listen to hours of jail calls,

01:54 - 07.941 right, is going to try to make use of those jail calls if they're relevant.

01:54 - 10.577 In order for those jail calls to be intercepted

01:54 - 14.147 lawfully under the Wiretap Act, the prison needs to comply

01:54 - 17.183 with its own policies and procedures and needs to give written notice.

01:54 - 18.852 It needs to do all sorts of other things.

01:54 - 19.886 Goes back to justice.

01:54 - 22.088 McCaffrey's argument that you have a court order

01:54 - 23.223 so that you could do that,

01:54 - 27.093 or the fact that they're in custody and that everyone knows that there's consent.

01:54 - 30.096 So if there's if there's a

01:54 - 34.300 so the the in order for the assistant district attorney attorney

01:54 - 37.470 to even make use of the jail calls even before disclosing them publicly,

01:54 - 41.174 right, in order for them to use them for investigative leads, in order for,

01:54 - 44.143 for the district attorney to use them for impeachment,

01:54 - 45.078 right, or anything like that.

01:54 - 49.916 It needs to be established that

01:54 - 54.220 there there may be claims made by, by the defense

01:54 - 58.691 based on facts that are unknown to the Commonwealth, that, you know, that

01:54 - 03.630 the crime of victim has credibility issues that is only known to the other party.

01:55 - 03.763 Right.

01:55 - 05.498 And it comes out on cross-examination when we

01:55 - 08.201 when we offer endeavors to the weight, not the admissibility.

01:55 - 09.135 No, no, you're right.

01:55 - 11.537 It actually does go to it goes through this ability. Right.

01:55 - 12.906 If, if we had.

01:55 - 14.507 So if there is a motion in limine. Right.

01:55 - 17.277 Or if there is a suppression motion for the recordings.

01:55 - 17.944 Right.

01:55 - 21.347 And even if we don't disclose the contents of the recordings publicly, right.

01:55 - 23.883 Even if we're just arguing about whether, whether there's

01:55 - 25.218 whether they're admissible.

01:55 - 25.451 Right.

01:55 - 29.188 Because because according to the defendant, they were obtained unlawfully.

01:55 - 31.991 And according to us, we would say they're obtained lawfully

01:55 - 35.295 because the crime victim believed the violence was about to occur.

01:55 - 35.795 Right.

01:55 - 39.799 But a factual dispute, you know, I might interview the witness.

01:55 - 42.902 I might try to understand the factual situation as best I can.

01:55 - 45.338 Cross-examination happen.

01:55 - 48.341 You know, I'm going to try to offer and evidence, you know.

01:55 - 50.043 Yeah, but you're not going to cross-examine

01:55 - 52.478 somebody on, on, on a piece of an admissible evidence.

01:55 - 55.581 I mean, if there was a motion to suppress and a judge suppress something,

01:55 - 56.716 that's what you hearing.

01:55 - 59.852 Are you going to bring out the information that was suppressed or the document

01:55 - 00.520 that was suppressed?

01:56 - 01.721 I'm saying examination.

01:56 - 03.523 I'm saying a pretrial hearing, right?

01:56 - 06.492 A pretrial hearing about the admissibility of the recordings.

01:56 - 07.327 Right.

01:56 - 11.130 I'm going to try to offer evidence that it's that it's, intercepted lawfully.

01:56 - 13.666 The other side is going to offer evidence that it was unlawfully admitted.

01:56 - 14.267 Right.

01:56 - 17.103 If if the court disagrees with me and finds.

01:56 - 21.341 No, the, you know, finds a credible finds the crime victim was not credible, right.

01:56 - 23.776 Therefore, the recording was unlawful.

01:56 - 28.982 Then then retroactively, all of my uses and disclosures of that recording are out

01:56 - 31.617 the window are not just out the window, but according to.

01:56 - 33.853 And they're suppressed.

01:56 - 35.188 Can't use a trial? Fine.

01:56 - 37.957 That happens all the time, right? Suppression motions happen all the time.

01:56 - 38.925 I've won my share.

01:56 - 41.928 I've lost my share. It happens right

01:56 - 46.432 under the rule as articulated by the plaintiff.

01:56 - 52.572 However, any use of an unlawfully obtained recording

01:56 - 56.209 is gives rise to civil liability.

01:56 - 57.110 Right.

01:56 - 59.912 And I and as an assistant district attorney given you know,

01:56 - 03.649 given a recording that that I'm going to argue is lawful, right.

01:57 - 06.652 If I lose that suppression motion, it's determined to be unlawful.

01:57 - 11.391 Any use that I've made previously of it, it gives rise to civil liability,

01:57 - 14.394 including the fact that maybe I've used it,

01:57 - 18.831 to, you know, as, as part of the evidentiary as part of the

01:57 - 22.502 even has not disclosed publicly the factual predicate

01:57 - 24.270 for filing a complaint in the first place.

01:57 - 25.071 But you can, right?

01:57 - 28.508 You can litigate, you can litigate the admissibility of this particular tape

01:57 - 32.378 by talking about how it was obtained in or in violation

01:57 - 35.948 or in conformity with the act, without using the content.

01:57 - 38.184 I think that's the distinction plaintiff's making.

01:57 - 42.321 You disclose the content of an illegally and illegal intercept

01:57 - 46.325 in a court proceeding, and that was subsequently found out

01:57 - 50.096 to be suppressed by a judge by kicked out by a judge.

01:57 - 51.631 You could have litigated

01:57 - 55.401 the admissibility without litigating or without divulging the content,

01:57 - 58.905 which is what gives rise to liability under the Wiretap Act,

01:57 - 00.506 but not just the disclosure of the.

01:58 - 04.644 So the use and disclosure of the content would also give liability.

01:58 - 06.546 So you're conflating two issues.

01:58 - 09.082 It's not the use and disclosure of the tape.

01:58 - 12.151 It's the use and disclosure of the content of the tape.

01:58 - 13.152 Right right.

01:58 - 18.458 And so again, if you if it's I mean I don't want to put myself in your shoes,

01:58 - 21.360 but if I'm the D.A., I'm going to go to the court

01:58 - 23.029 and I'm going to say, judge, I've got a tape.

01:58 - 26.132 And here's how the tape was in fact obtained.

01:58 - 30.169 And I'm going to seek a court order that says the judge from the judge says

01:58 - 34.807 when or whether I can use these particular tapes or not,

01:58 - 38.811 because if the judge says you can use them, I then have a court order, right?

01:58 - 39.579 That's a court order.

01:58 - 42.748 Can we agree on that?

01:58 - 44.283 A court order is a court yes, Your Honor.

01:58 - 46.152 All right. So I now have a court order.

01:58 - 49.922 And under the Wiretap Act, the court order, Indian ises to use.

01:58 - 51.090 So the good faith,

01:58 - 53.726 the good faith, reliance on a court order would be nice to use.

01:58 - 54.560 But again.

01:58 - 57.563 But then you can if you don't have the absolute immunity at issue,

01:58 - 58.598 then you can just put.

01:58 - 01.767 Then they can just plead in a complaint that the reliance on the order was not

01:59 - 03.035 clear.

01:59 - 07.039 This up for myself anyway, setting aside the court order issue,

01:59 - 11.244 the the good faith prosecution of a case

01:59 - 15.681 by a prosecutor gives rise to immunity.

01:59 - 19.152 Whether or not we're talking about a court order, correct. The.

01:59 - 23.089 The. I'm sorry, I'm sorry.

01:59 - 25.057 I'm trying to understand this question.

01:59 - 28.828 Whether or not we're talking about a court order, the good faith

01:59 - 31.931 prosecution of a case, steps

01:59 - 35.668 taken in the prosecution of a case by a D.A..

01:59 - 41.641 That is, subject to governmental immunity.

01:59 - 45.044 So, yeah, I. Yes, Your Honor, but.

01:59 - 49.549 And even in greater than that, what, to even even beyond that?

01:59 - 50.449 Yes, Your Honor.

01:59 - 54.086 So I was just trying to get beyond limiting it to a quarter. So.

01:59 - 56.956 Because it's been absolutely. Your Honor. Yes.

01:59 - 57.623 You did not.

01:59 - 58.491 You're not you're not

01:59 - 02.061 limiting yourself to good faith scenarios because that gets into a fact issue.

02:00 - 04.063 And you're going to have to try your good faith.

02:00 - 06.566 Good faith. Right? Right.

02:00 - 08.801 This if we get back to the statute.

02:00 - 09.435 Yes. Yeah.

02:00 - 14.607 I mean, if we can get back to the statute because because that's where I live.

02:00 - 18.844 Square the, the definition,

02:00 - 22.048 I mean,

02:00 - 24.016 first of all, governmental immunity,

02:00 - 27.019 high public official immunity, and,

02:00 - 29.455 a prosecutorial immunity.

02:00 - 31.924 The three, although you all you didn't raise all of them in your demurs.

02:00 - 32.959 And we're up here on a demurrer.

02:00 - 35.962 So you didn't raise all of them, but let's just assume you did.

02:00 - 39.165 They're always subject to a qualification that you acted

02:00 - 41.867 within the course of the scope of your official duties. So.

02:00 - 42.768 So there could always be.

02:00 - 46.172 You're not saying that those are absolute concepts of immunity,

02:00 - 49.742 where you as a person couldn't be held responsible for a you

02:00 - 53.246 I mean, you conceded a factual scenario where you might intercept

02:00 - 55.581 a friend's conversation and then leak it to a newspaper.

02:00 - 56.983 You'd be violating the wiretap Act.

02:00 - 59.585 You couldn't get prosecutorial immunity, right?

02:00 - 01.420 Manifestly and palpable.

02:01 - 04.824 But the facts alleged here are all of the disclosures were made

02:01 - 06.692 in a court proceeding.

02:01 - 11.597 As as an attorney for the Commonwealth, an employee of a local official,

02:01 - 15.501 there's no allegation that there was some extraneous leak

02:01 - 18.137 whatsoever right outside that context. Okay.

02:01 - 21.140 So we assume the facts as presented in the complaint.

02:01 - 25.111 My question is, what are you asking us to do?

02:01 - 28.948 Because we understand, we know that there was an express

02:01 - 31.350 waiver of sovereign immunity. That's fine.

02:01 - 34.687 You concede that there are circumstances

02:01 - 38.491 that the immunity that you're arguing is not absolute, that that that that

02:01 - 40.359 just because you happen to be an assistant district

02:01 - 44.230 attorney doesn't mean you are forever shielded from liability of this act.

02:01 - 47.233 You concede you are a person, right?

02:01 - 49.168 So what do you want us to do?

02:01 - 51.504 Because it seems that all the immunity provision,

02:01 - 55.141 all the immunity this that you are arguing about can coexist

02:01 - 57.810 with the statute

02:01 - 01.681 that a person could argue immunity,

02:02 - 04.684 but a court say

02:02 - 08.220 you weren't operating within the course and scope of your employment is

02:02 - 10.623 what do we what do we what do we try to

02:02 - 13.025 what are we trying to do here with the Commonwealth Court's decision.

02:02 - 16.929 So so I think we should affirm the decision, reaction from the decision

02:02 - 18.064 because there's no facts.

02:02 - 21.867 There's no way, right, under the facts allege, that you could ever be outside

02:02 - 22.702 the course in scope.

02:02 - 26.472 Well, so I think course in scope is different

02:02 - 29.475 from good faith and lack of malice.

02:02 - 30.476 Right.

02:02 - 34.080 And that's where that's where I think the Mariotti case, the, the,

02:02 - 39.685 the 1950s case that recognized hyperbolic, immune hyperbolic

02:02 - 43.389 immunity of the attorney general in that circumstance recognized that,

02:02 - 47.526 that so in that

02:02 - 53.165 case, the, attorney general accused an Ada in, in some county of,

02:02 - 58.337 of being a county, a sympathizer, essentially, and wrote to the Da of that

02:02 - 02.875 county to ask that person be fired and forwarded to the press, allegedly.

02:03 - 03.609 Right.

02:03 - 08.514 That that conduct, even if it was malicious and done in bad

02:03 - 11.984 faith and based on

02:03 - 15.855 nothing but innuendo or even less right,

02:03 - 20.559 even if it was done wrongfully and would have given rise to a libel claim

02:03 - 24.730 because the because of the

02:03 - 28.501 the subject matter that it relates to

02:03 - 32.471 is a communication between the chief law enforcement officer

02:03 - 35.541 of the Commonwealth and you're saying you're saying just to cut the court,

02:03 - 38.911 you're saying that because all of the because there's no allegation of malice,

02:03 - 40.713 there's no allegation you acted beyond the scope.

02:03 - 44.683 There's no allegation of I mean, what additional things would they have to

02:03 - 48.587 have alleged that would not have triggered the immunities you're talking about?

02:03 - 50.523 So, what would they have to allege?

02:03 - 53.092 They would have to allege that it was not that it was not,

02:03 - 58.831 done, that the,

02:03 - 02.902 intercepts were not used by the Commonwealth or, sorry,

02:04 - 08.174 by the Ada's in the context of a judicial proceeding or, or

02:04 - 11.010 in anticipation of additional proceeding when they're filing a complaint.

02:04 - 14.013 Or what if the Ada just knew that it wasn't

02:04 - 17.183 to touch on justice McCowan, or if the Ada just like, was like,

02:04 - 20.986 we're never going to get this in, but I want to win this case.

02:04 - 23.722 In the case, court of public opinion, I'm going to file it

02:04 - 26.926 as an attachment to this motion that has absolutely nothing to do with it.

02:04 - 28.761 And I'm going to file it and I'm going to be done.

02:04 - 30.196 So that would be outrageous.

02:04 - 33.098 And it would be a cause for professional discipline.

02:04 - 35.534 Would it be would it be cost for personal liability

02:04 - 38.204 to have they acted outside the scope of their immunity?

02:04 - 40.940 I think that it would. I think it would not.

02:04 - 43.642 And I think that and the reason is because you

02:04 - 49.181 the allegation of malice and the and peering

02:04 - 55.421 into the high public officer's mind at the time the conduct takes place.

02:04 - 56.722 But what if they alleged it?

02:04 - 59.225 So now, if they allege it, it still doesn't.

02:04 - 02.228 It's not it's not enough because then you're then

02:05 - 03.596 what you're doing is you're

02:05 - 06.932 you're undermining the purpose of the high public officer immunity

02:05 - 07.867 in the first place.

02:05 - 13.172 The purpose of it is so that high public officers can engage in their duties

02:05 - 17.877 with and to the best of their ability and exercise their discretion

02:05 - 23.415 without fear that their motives and, and mental impressions

02:05 - 26.519 and so forth are going to be put at issue in a jury trial.

02:05 - 31.357 Based on allegations in a complaint.

02:05 - 33.692 And you can always allege malice. Right.

02:05 - 36.629 But the only remedy statutorily then is removal from office.

02:05 - 41.033 That is, removal from office is not subject to any immunity.

02:05 - 45.204 So I should probably say.

02:05 - 47.706 Is that the only. Yes. Oh, sorry.

02:05 - 50.442 Maybe it's not the only, but maybe it's a statutory no.

02:05 - 52.211 I think that is the statutory one. Okay.

02:05 - 55.514 And there may be and I'm saying there's a disciplinary proceedings for example,

02:05 - 58.517 that that may that there may be other remedies.

02:05 - 59.652 But yes.

02:05 - 01.186 I didn't mean to dispute that.

02:06 - 04.189 Counsel, let me ask you one more time.

02:06 - 07.059 It seems to me

02:06 - 11.096 that the much more straightforward, easier

02:06 - 16.435 immunity to raise here, which would apply to any employee in

02:06 - 20.940 Philadelphia County, including any employee of the district

02:06 - 23.943 attorney's office, is governmental immunity.

02:06 - 27.880 You're you're shying away from what appears.

02:06 - 31.817 Is this a matter of principle that you would prefer to have this decided

02:06 - 35.888 based upon a common law immunity, as opposed to an immunity

02:06 - 40.893 granted by the legislature and explicitly not waived here.

02:06 - 44.897 I mean explicitly not waived the waiver due to the Commonwealth,

02:06 - 46.732 but not is to local government.

02:06 - 50.269 Is there a reason we shouldn't be focusing on that?

02:06 - 53.539 No. Your and

02:06 - 56.942 I, other than the other than the fact that you didn't raise it.

02:06 - 59.545 Well, candidly, I don't know which I don't understand why

02:06 - 02.581 I, I'm really struggling with with,

02:07 - 06.018 the state of the,

02:07 - 09.021 pleadings in this case, because just to me,

02:07 - 12.091 as a former practitioner,

02:07 - 15.294 you would go for the most straightforward,

02:07 - 19.898 defense that you have in the case, which is governmental immunity.

02:07 - 20.733 We're out.

02:07 - 24.403 I mean, it would be very difficult to plead around government,

02:07 - 26.438 governmental immunity.

02:07 - 29.708 So candidly, Your Honor, I don't recall if that was raised

02:07 - 32.711 as one of the bases in the initial demurrer.

02:07 - 34.146 It it it may have been.

02:07 - 36.015 I just don't recall,

02:07 - 39.018 the court, according to what I've seen, but fair enough.

02:07 - 42.721 But if I could fall back on the agency, though.

02:07 - 44.890 I mean, that's all like a five.

02:07 - 48.961 That's not an individual.

02:07 - 52.264 You know, like analogy to the Bivins in federal court, right?

02:07 - 55.634 It's that's to the agency in the local government setting.

02:07 - 55.868 Right.

02:07 - 59.071 Well, in the and the local I read the I mean, the statutes

02:07 - 02.041 says the agency and its local

02:08 - 03.976 accrues.

02:08 - 06.679 Oh, absolutely. For the acts of the agents.

02:08 - 11.950 But the the liability runs against the entity, not its employees.

02:08 - 13.886 Am I right about that?

02:08 - 17.523 I choose your, 8542.

02:08 - 21.427 A local agency shall be liable for damages.

02:08 - 25.197 So this action couldn't be against the the DEA

02:08 - 30.402 and the individual actors within the DA's office under 85, 42.

02:08 - 30.936 Is that right?

02:08 - 33.639 I think that that I think so, Your Honor, but I think.

02:08 - 35.641 But but

02:08 - 38.977 yeah, I understand that that's not how the case has been litigated so far.

02:08 - 42.114 You are subject to the immunity.

02:08 - 42.981 I believe so.

02:08 - 47.352 And that's and that's what and that's what McClellan also holds. And

02:08 - 51.690 this is also partly because of the McClellan case in 2001,

02:08 - 55.394 where the argument made there was that the that the,

02:08 - 58.831 political subdivision,

02:08 - 01.834 act didn't abrogate the prior,

02:09 - 04.870 absolute immunity,

02:09 - 08.073 doctrine, but I don't know whether it does or not.

02:09 - 11.477 I mean, in the context of this case, I mean,

02:09 - 15.681 the fact of the matter is, you're not a Commonwealth employee.

02:09 - 20.252 That's the only, situation in which immunity was waived.

02:09 - 23.689 Forget about one abrogating the other.

02:09 - 26.692 I mean, it just it would seem,

02:09 - 31.697 that that would be a straightforward way to address this case.

02:09 - 33.632 I think it would be, Your honor.

02:09 - 37.169 I think if there's issues with respect to if there are issues with the check

02:09 - 38.470 to waiver, how are we gonna the

02:09 - 41.373 I think the the basis for the Commonwealth court's decision is,

02:09 - 42.875 oh, we didn't take it on that ground.

02:09 - 45.878 I mean, we we took it on a very simple question, which is

02:09 - 48.881 whether or not you're immune from suit.

02:09 - 50.716 I thought was a simple question.

02:09 - 52.117 Right, right.

02:09 - 54.052 Do you want to wrap up?

02:09 - 56.989 I if there are any further questions, I'm happy to answer them.

02:09 - 59.992 But yeah, I think that you've got our community.

02:10 - 02.060 Thank you. Thank you both.

02:10 - 05.998 Mr. Menor, the court is going to take a one hour lunch recess.

02:10 - 07.766 What?

02:10 - 10.769 We one hour.

02:10 - 15.808 The next case

02:10 - 20.445 that we will hear argument in is Pottstown School District versus

02:10 - 23.615 the Montgomery County Board of Assessment Appeals.

02:10 - 27.753 This appeal is brought by the Pottstown Hospital.

02:10 - 32.624 The Pottstown Hospital has been active for many years,

02:10 - 37.896 but it was acquired in 2017 by Tower Health.

02:10 - 40.899 It is under Tower

02:10 - 46.038 Health's nonprofit federal exemption, and the Pennsylvania Department of Revenue

02:10 - 49.441 has declared it exempt from sales and use tax.

02:10 - 53.145 The Montgomery County Court of Common Pleas

02:10 - 57.583 also held that it was exempt from real estate property taxes.

02:10 - 02.888 However, the Commonwealth Court said that it was not exempt,

02:11 - 06.491 and the Commonwealth Court used a test

02:11 - 09.628 that arose under article eight,

02:11 - 13.232 section two of the Pennsylvania Constitution,

02:11 - 19.338 which limits tax exemptions to institutions of purely public charity,

02:11 - 22.941 and a case Hup versus Commonwealth,

02:11 - 26.945 to find that the Pottstown Hospital

02:11 - 30.782 was not an institution of purely public charity,

02:11 - 35.287 with two basic reasons underlying its decision.

02:11 - 38.290 First, it found that

02:11 - 42.060 the hospital gave executive compensation

02:11 - 46.198 that was in part based upon the performance of the hospital

02:11 - 50.102 and therefore it was not purely charitable.

02:11 - 54.673 Secondly, it found that its parent company, Tower

02:11 - 59.544 Health, also had ways in which it was not purely charitable

02:11 - 04.816 and therefore for that reason it said that it was not a purely charitable

02:12 - 09.187 institution and was not exempt from property taxes.

02:12 - 12.758 There were four amicus briefs in this case,

02:12 - 16.695 two of them in favor of the hospital.

02:12 - 21.133 One Lehigh Valley Health Network and the other Hospital

02:12 - 24.236 and Health System Association of Pennsylvania,

02:12 - 29.274 and the other two supporting Pottstown School District,

02:12 - 32.678 one using other school districts

02:12 - 36.181 Phoenixville and Wyomissing area, and the other

02:12 - 40.319 from the Pennsylvania AfL-CIO, who pointed out

02:12 - 44.656 that health systems and mergers have often been accompanied

02:12 - 49.695 by increased prices, reduced services, and suppressed wages,

02:12 - 55.500 and they asked the court to look at a community system wide level

02:12 - 58.870 in evaluating the tax status,

02:12 - 02.274 which would include tower health in this case

02:13 - 05.010 Pottstown School

02:13 - 09.448 District, versus the cost of hospital for visiting the hospital

02:13 - 12.985 prior to the child.

02:13 - 18.724 Good afternoon.

02:13 - 23.628 In this appeal, Pottstown Hospital filed an application for charitable

02:13 - 28.033 real estate tax exemption relating to three of its properties.

02:13 - 33.271 The trial court granted the exemption, finding that the hospital satisfied

02:13 - 34.406 all of the requisites.

02:13 - 38.510 To demonstrate that it is a purely public charity.

02:13 - 42.180 Pottstown School District appealed.

02:13 - 45.884 The Commonwealth Court reversed, finding that the hospital failed

02:13 - 50.689 to demonstrate that it operated free from a private profit motive

02:13 - 54.526 due to the excessiveness of its executive salaries,

02:13 - 59.131 as well as the fact that 40% of the executives

02:13 - 04.503 bonus compensation was based upon the hospital's financial performance.

02:14 - 08.040 In so doing, the court examined the activities

02:14 - 11.209 of both the hospital and its related entity, Tower Health.

02:14 - 15.647 We granted review to examine whether the hospital demonstrated

02:14 - 20.385 that it was a purely public charity entitled to real estate tax exemption,

02:14 - 24.990 and whether the operation of entities related to the hospital

02:14 - 28.727 should be considered when examining the hospital's

02:14 - 31.730 tax exempt status, please proceed.

02:14 - 35.033 Thank you, Madam Chief Justice, and may it please the court.

02:14 - 39.104 My name is Dan Breyer and I represent Pottstown Hospital.

02:14 - 42.974 I'm joined today by my co-counsel, Carl Myers from Stevens and Lee

02:14 - 46.445 and my partner, Donna Walsh from Myers, Breyer and Kelly.

02:14 - 46.945 Welcome.

02:14 - 49.548 There are two

02:14 - 52.551 Well-Settled and

02:14 - 57.889 very structural principles that animate this appeal.

02:14 - 01.827 The first is that purely public

02:15 - 05.864 charities are permitted to have compensation plans

02:15 - 10.502 that pay their employees reasonably and at fair value.

02:15 - 13.038 And of course, they're going to the market rate.

02:15 - 14.840 Right? Correct.

02:15 - 16.174 And of course, that makes sense

02:15 - 19.177 because purely public charities don't exist in a vacuum.

02:15 - 22.514 They exist in the real world where they compete with other part.

02:15 - 26.451 Other companies, both for profit and not for profit.

02:15 - 30.388 The second fundamental principle that animates this appeal

02:15 - 34.192 is that purely public charities should not be punished

02:15 - 37.395 for attempting to operate with a positive bottom line.

02:15 - 39.397 I think these are really good points. Mr.

02:15 - 43.168 Barr, can I ask you, though, to come back to the first the

02:15 - 45.003 the constitutional words?

02:15 - 47.506 What what do you think?

02:15 - 51.042 Purely public charity

02:15 - 53.278 needs in the constitutional text?

02:15 - 56.281 And because by implication, there are then,

02:15 - 59.618 in purely public

02:15 - 03.054 charities and purely private charities.

02:16 - 04.322 And what do you think

02:16 - 08.059 the framers meant to public charity should that be on decision?

02:16 - 10.295 I think it does bear on the decision.

02:16 - 14.232 And I think what we do is we look to the Constitution of 1874.

02:16 - 17.469 And when the phrase purely

02:16 - 20.739 public charity was added to the Constitution in 1874,

02:16 - 23.775 it was to prevent the abusive legislation

02:16 - 27.412 that was being passed, to favor certain constituents.

02:16 - 30.682 So the court wanted some uniform higher

02:16 - 33.685 standard for when tax exemption is available.

02:16 - 36.888 In fact, as a great quote from a case from the late

02:16 - 40.091 1800s, that goes right to Your Honor's question.

02:16 - 43.562 The quote is that the Constitution

02:16 - 46.831 prefixes the term public.

02:16 - 47.866 I'm sorry.

02:16 - 51.836 It prefixes the term purely to intensify

02:16 - 54.839 the word public, not the word charity.

02:16 - 58.210 And that's because the notion of a charity evolves over time,

02:16 - 01.713 as we've seen in many cases, that this court has addressed

02:17 - 05.684 so purely public means it's open to the public.

02:17 - 11.489 It offers its services either gratuitously or at reduced value

02:17 - 15.227 to to the public, without just discerning who's eligible

02:17 - 19.064 for the services it provides a public charity.

02:17 - 21.600 It relieves the government of some of its burden.

02:17 - 24.903 This, of course, is the Hup test, and that it,

02:17 - 27.706 operates

02:17 - 30.709 entirely free of private profit motive.

02:17 - 33.211 This case is here today.

02:17 - 35.714 On that last crime, the Commonwealth Court

02:17 - 38.917 found that Pottstown Hospital

02:17 - 43.288 did not establish that it operated entirely free of private profit motive.

02:17 - 48.493 But we're not in uncharted waters because this court looked at that exact crime

02:17 - 51.796 in the Wilson area School District

02:17 - 54.799 versus Easton Hospital case in 2000.

02:17 - 57.836 And when it looked at that case, it was questioning

02:17 - 01.840 whether Easton Hospital, which did business with a

02:18 - 06.211 for profit affiliate, Easton Hospitals affiliate, was for profit

02:18 - 11.883 and the hospital was loaning money to the for profit entity with the expectation

02:18 - 15.854 that it would increase the efficiency of the hospital and the court.

02:18 - 20.191 This court, in looking at that, said a three part test for what it means to be

02:18 - 24.062 and to operate entirely free of private profit motive.

02:18 - 27.432 But it all boils down to this

02:18 - 31.169 are the revenues of the applicant entity here, Pottstown,

02:18 - 35.507 being used to advance the efficiency of the hospital

02:18 - 38.576 and the elements gunnery

02:18 - 41.379 principles of the hospital.

02:18 - 44.616 And guided by that, we look at the relationship

02:18 - 47.752 between Pottstown and its corporate parent, tower.

02:18 - 53.124 And the trial court made really critical findings, supported

02:18 - 57.595 by substantial evidence that should travel with the case to this court.

02:18 - 00.098 And those findings are as follows.

02:19 - 04.269 When tower acquired Pottstown

02:19 - 08.406 from a large public for profit health care company,

02:19 - 12.811 Pottstown didn't have any of the human resources

02:19 - 16.881 or the infrastructure to provide all of the core

02:19 - 20.652 essential support services that hospitals need to operate.

02:19 - 24.522 For example, it didn't have its own risk management department,

02:19 - 26.691 it didn't have its own legal department,

02:19 - 29.160 it didn't have marketing, it didn't have treasury.

02:19 - 31.696 It didn't have accounting. It didn't have billing.

02:19 - 35.333 What it did is it had 213 beds that delivered care.

02:19 - 41.306 But all of the support services that a hospital needs to function were not

02:19 - 44.776 provided, were not part of Pottstown when it was acquired by tower.

02:19 - 47.011 So what did tower do?

02:19 - 49.948 It established a centralized

02:19 - 54.152 administrative operation to support those to provide those services,

02:19 - 57.956 not just to Pottstown, but to the other four hospitals.

02:19 - 02.227 The tower purchased from the large public for profit company.

02:20 - 05.230 Pardon me, I didn't do that for a profit.

02:20 - 06.698 I'm sure

02:20 - 10.802 this tower make a profit on the provision of those services.

02:20 - 12.637 No, Your honor, in the record.

02:20 - 16.808 And this is at page two, 9782, 99 a

02:20 - 20.512 the fees that are charged

02:20 - 24.482 by tower, which is a 501 C3.

02:20 - 28.119 It's not a for profit entity, but the fees that are charged by tower

02:20 - 33.625 two Pottstown are not marked up there at cost,

02:20 - 36.895 and they're not available from the third party at a lower rate.

02:20 - 40.465 So the answer is no, it does not do that for profit.

02:20 - 43.802 Now what it does to is it

02:20 - 47.105 allocates the cost of those services

02:20 - 51.476 across the family of hospitals that it that it owns,

02:20 - 55.680 in this case, 9.58% of

02:20 - 58.683 those costs were allocated to Pottstown.

02:20 - 01.753 But the record evidence is Pottstown.

02:21 - 05.056 It couldn't have afforded those services or obtain them for less

02:21 - 08.193 elsewhere, and the parent did not mark them up.

02:21 - 13.064 So the trial court made really essential findings.

02:21 - 15.600 Just go back to that for a moment.

02:21 - 18.703 They couldn't provide those services

02:21 - 21.706 at a lower cost.

02:21 - 24.709 And what so

02:21 - 28.580 the applicant entity, Pottstown,

02:21 - 32.784 could not obtain the services at a lower cost from a third party,

02:21 - 33.985 could not obtain them

02:21 - 38.189 because their operating agreement prohibited them from doing that.

02:21 - 41.626 No, the evidence was that it was it was in the context of there

02:21 - 45.763 being no markup and that the services were provided at cost

02:21 - 49.667 to the trial court made critical findings.

02:21 - 53.838 The first one is during the three years at issue, Pottstown

02:21 - 56.975 had a net deficit of $97 million.

02:21 - 00.378 It made 12 million.

02:22 - 03.181 It had 12 million of surplus in the first year,

02:22 - 06.184 but over the three years it had a net deficit of 97 million.

02:22 - 09.187 During the same period, Pottstown

02:22 - 12.690 provided $86 million of charitable care.

02:22 - 15.493 And there's more.

02:22 - 18.229 During the same period, tower

02:22 - 21.599 provided $47 million of capital investment

02:22 - 24.736 to Pottstown Town, mostly to

02:22 - 27.739 to develop a new information technology system.

02:22 - 31.442 So I can't say it better than the trial court said it.

02:22 - 33.378 Here's what the trial court said.

02:22 - 36.447 These figures hardly indicate

02:22 - 41.853 the tower was exploiting Pottstown Hospital.

02:22 - 46.591 The net winner here in this relationship was Pottstown Hospital.

02:22 - 51.062 It could not have survived, but four Tower

02:22 - 54.933 Tower underwrote the $97 million of deficit.

02:22 - 57.302 Now there's an intercompany loan,

02:22 - 00.471 and that intercompany loan is recorded because the entity

02:23 - 04.042 still has its own balance sheet, it has its own financial statement.

02:23 - 07.679 It's regulated separately from tower.

02:23 - 09.914 It is a separate entity.

02:23 - 11.916 They don't control any of their cash flow.

02:23 - 14.018 That. Correct.

02:23 - 17.021 So the way it works, Justice Toney,

02:23 - 22.226 who is for Treasury purposes, the cash of Pottstown

02:23 - 25.430 is upstream to tower,

02:23 - 28.066 but it's recorded and there's a record of all of it.

02:23 - 32.203 And the reason it's upstream to tower is because tower has the expertise

02:23 - 36.374 and the resources to maximize the benefit of that aggregated cash.

02:23 - 38.376 Tower is also a nonprofit.

02:23 - 41.846 It is just as tight now, but I want to be very clear.

02:23 - 45.016 Tower is not the applicant here today.

02:23 - 46.751 Tower is the corporate parent

02:23 - 49.721 of Pottstown Hospital,

02:23 - 54.392 and I'm sure my colleague is going to make much about the amount of control

02:23 - 58.763 that tower had over Pottstown Hospital.

02:23 - 03.534 But in the Wilson case, the Wilson Area School District versus

02:24 - 08.373 Easton Hospital case, this court lends

02:24 - 12.410 the analysis not on the related party.

02:24 - 17.115 It didn't look at the for profit Wilson and say, oh, you're a for profit.

02:24 - 20.184 So derivative Lee the applicant loses.

02:24 - 21.753 What did it do?

02:24 - 25.657 It looked at the applicant and it said whether it was the revenue of the

02:24 - 28.660 applicant used to advance

02:24 - 31.629 the efficiency of the applicant and the environment.

02:24 - 33.631 And I knew I'd step on that word

02:24 - 37.402 elements and airy purposes of the of the organization.

02:24 - 41.706 I understand that, but if it is being used in that fashion,

02:24 - 44.709 it's because tower is using it in that fashion.

02:24 - 49.180 Just as tower is controlling the cash flow of the entity.

02:24 - 52.950 So, I mean, this isn't a

02:24 - 56.287 question of piercing corporate veils or anything of that nature.

02:24 - 02.393 This is just a function of the structural arrangement between these two entities.

02:25 - 04.529 I want to be very clear.

02:25 - 07.765 Pottstown Hospital Hospital had its own board of directors.

02:25 - 11.536 It did not have the same board of directors as Tower Health.

02:25 - 16.808 Pottstown Hospital had its own management team that ran the hospital, Pottstown

02:25 - 20.611 Hospital management team and board of directors are responsible

02:25 - 23.081 to advance the interests of Pottstown Hospital.

02:25 - 26.984 Now it is owned and a subsidiary of Tower Health.

02:25 - 31.355 But there's a difference between having the Treasury function

02:25 - 34.926 consolidated and having this notion.

02:25 - 38.029 It's I think the term in my colleague's brief is incestuous.

02:25 - 41.999 He says, oh, the relationship between Tower and Pottstown is incestuous.

02:25 - 44.469 There's nothing wrong with the relationship.

02:25 - 45.870 Exactly. It's just a question.

02:25 - 49.140 For our purposes, when we're looking at the hop test,

02:25 - 53.978 whether or not the nature of that relationship impacts the analysis.

02:25 - 57.281 And I don't ask any of these questions in the context of it being

02:25 - 59.283 a pejorative.

02:25 - 03.121 But, I mean, to me, it's important to understand this now

02:26 - 06.557 in terms of compensation.

02:26 - 10.094 Tower Health does control the compensation.

02:26 - 15.032 They're they're they're executive committee.

02:26 - 17.735 They're compensation executive committee. That's correct.

02:26 - 22.840 Which is a tower executive committee controls compensation

02:26 - 24.008 issues. That's correct.

02:26 - 28.112 Including determining whether the circuit breaker, comes into play.

02:26 - 32.183 I mean, it's a mathematical calculation or an accounting

02:26 - 36.120 calculation, but, that is the tower health function.

02:26 - 39.023 Board of tower Health sets the circuit breaker. Right.

02:26 - 42.460 The executive compensation committee of Tower Health sets

02:26 - 49.200 the compensation, and the trial court, after hearing from three experts,

02:26 - 53.504 all offered by Pottstown, my colleague

02:26 - 58.442 on the other side, his client didn't call any experts to rebut it.

02:26 - 59.544 Pottstown experts.

02:26 - 02.446 Here's what the three experts testified to,

02:27 - 07.351 that the compensation paid to the management team of Pottstown

02:27 - 11.289 Hospital was reasonable, and within fair value.

02:27 - 15.393 The compensation paid to Tower

02:27 - 18.796 executives was reasonable and within fair value.

02:27 - 21.799 But there's a really interesting

02:27 - 24.802 additional finding, and that is

02:27 - 28.472 that the compensation of the executives

02:27 - 32.076 was the result of vigorous negotiation.

02:27 - 35.313 The trial court's word and good faith

02:27 - 38.015 counsel did in the trial court also describe that particular.

02:27 - 40.318 I think if they labeled it eye popping.

02:27 - 43.654 Yes. So the trial court compensation and they said it was actually,

02:27 - 46.824 you know, that was part of the reason why the Commonwealth Court

02:27 - 49.360 hung its hat on reversing the trial court did not.

02:27 - 51.729 I'm sorry, I didn't hear the end part of the rationale bits,

02:27 - 54.232 but why the Commonwealth Court reversed the trial court's exactly

02:27 - 55.700 eye popping compensation.

02:27 - 59.337 The trial court did reference that eye popping.

02:27 - 02.306 And here's the context of eye popping.

02:28 - 03.507 Eye popping is in the

02:28 - 07.712 context of

02:28 - 10.715 leadership of a large,

02:28 - 14.085 integrated nonprofit health care system.

02:28 - 18.756 If the if the compensation at tower is eye popping,

02:28 - 21.893 it's eye popping at its peer organizations

02:28 - 25.930 across the Commonwealth, the reality is executives

02:28 - 31.502 who lead large, complicated, regulated entities earn a lot of money.

02:28 - 33.237 Somewhat gratuitous.

02:28 - 34.906 Comment by the trial court.

02:28 - 38.643 And and within the context of his overall findings, it's actually

02:28 - 40.278 running the other way.

02:28 - 44.081 Yeah, it's like a but it's like, it's kind of it's kind of gratuitous, too,

02:28 - 48.452 because for for us state salaried employees, anything's eye popping.

02:28 - 51.422 2 million, $2 million in

02:28 - 55.226 compensation is is eye popping for us, for us in the,

02:28 - 58.930 in this market that they sweat and that see that they swim in.

02:28 - 00.431 That's the market.

02:29 - 03.467 And and they didn't pull these numbers out of thin air.

02:29 - 09.340 When the executive compensation Committee of tower was establishing the salary,

02:29 - 13.344 they brought in Sullivan Cotter,

02:29 - 16.814 a large, legitimate national

02:29 - 19.951 consulting firm that analyzes

02:29 - 23.487 executive salaries at not at hospital systems.

02:29 - 26.057 And they looked at what Mr.

02:29 - 29.794 Matthews responsibilities were going to be after the merger.

02:29 - 32.330 And you're going to hear from my friend.

02:29 - 35.766 Oh, but his salary went up so dramatically after the merger.

02:29 - 39.270 It did, but so did his responsibilities.

02:29 - 43.040 He went from being the CEO of a single hospital system, Redding

02:29 - 47.044 Health System, to the CEO of a system with six hospitals.

02:29 - 52.683 So he went from 800 million in revenue to a billion, six in revenue.

02:29 - 56.220 So did his salary increase after the acquisition.

02:29 - 57.555 It sure did.

02:29 - 01.392 But the acid test again, that we're back to that language.

02:30 - 04.895 In Wilson, the acid test is whether the revenues

02:30 - 08.165 are being used to advance the charitable purposes.

02:30 - 11.702 That's why they bring in the experts from Sullivan Cotter.

02:30 - 15.272 That's in the trial. I'm sorry.

02:30 - 18.976 Oh, just before you leave the compensation issues,

02:30 - 22.747 suffering apart from the level of the compensation

02:30 - 25.750 that was set for the executives of of,

02:30 - 28.986 the hospital,

02:30 - 32.656 how does the bonuses that factored

02:30 - 36.027 from the profits of the hospital factor in?

02:30 - 39.997 When we're looking at whether or not the hospital operated

02:30 - 43.434 entirely free from a private profit motive.

02:30 - 47.138 Justice Mundy, that's the crux of the issue from the Commonwealth court's

02:30 - 48.706 analysis.

02:30 - 51.108 And here's how it factors in

02:30 - 54.211 the way these salaries were structured, is they had a base salary

02:30 - 59.717 and then they had the opportunity, the management had the opportunity

02:30 - 05.923 to earn additional compensation if the entities operated with a positive

02:31 - 09.627 bottom line, i.e., above a very narrow

02:31 - 14.065 margin of 0.4%, net operating revenue.

02:31 - 18.335 So the the executives

02:31 - 22.173 interest in earning more money

02:31 - 26.310 was perfectly aligned with the applicant's

02:31 - 30.381 interest of operating efficiently and with the positive bottom line,

02:31 - 34.151 where the Commonwealth Court went astray is that it?

02:31 - 37.955 It took the acid test of whether the revenues are being used

02:31 - 41.792 to advance the charitable purposes, and they engrafted on to it

02:31 - 45.196 this new notion that if a substantial portion

02:31 - 48.532 of the compensation is contingent on

02:31 - 51.535 the financial performance of the entity,

02:31 - 54.638 it's per se proof of private profit motive.

02:31 - 57.708 Here's the problem with that, the entered

02:31 - 02.313 the organization is evaluated as to whether it has private profit motive.

02:32 - 06.250 Is the hospital

02:32 - 10.154 not the individual working as the executive.

02:32 - 14.091 That's where the confusion comes in.

02:32 - 16.861 And we look at the cases where the court has said,

02:32 - 18.362 oh, there is private profit motive.

02:32 - 21.332 In fact, the hub case in hub,

02:32 - 24.168 the Hospital Utilization project,

02:32 - 28.305 priced all of its services to the to the companies

02:32 - 31.976 that they provided services to, with the expectation of making money.

02:32 - 36.013 And they, they they didn't give any of their services away

02:32 - 39.517 and they in fact accumulated cash reserves.

02:32 - 43.621 That is very different from the situation we're talking about here

02:32 - 46.657 with Pottstown Hospital and Tower Health.

02:32 - 49.660 So to go back to your question, Justice Monday

02:32 - 54.899 and I think this goes to the confusion that is in the atmosphere.

02:32 - 59.670 The framing of the question

02:32 - 05.209 about operating entirely free of private profit motive is that the entity

02:33 - 08.379 not and the management.

02:33 - 12.016 And by the way, these guys don't set their own salary. Mr..

02:33 - 15.953 Matthews,

02:33 - 17.555 is an employee.

02:33 - 19.890 He answers to

02:33 - 23.194 board members who serve without compensation.

02:33 - 25.863 Those board members brought in experts.

02:33 - 29.433 Those experts advised the board, and it was, as in

02:33 - 32.803 trial courts, was a vigorous in good faith negotiation.

02:33 - 36.273 So there is no,

02:33 - 41.478 misalignment between the executive having an interest

02:33 - 45.182 in operating the company efficiently to earn more money

02:33 - 49.620 and the entity operating entirely free of private profit motive,

02:33 - 54.124 counsel, in pursuit of your purely, public charity.

02:33 - 57.161 Does the organization engage in a bill collection

02:33 - 00.464 process for those who have not paid their medical bills?

02:34 - 03.500 Bardstown Hospital never sued

02:34 - 06.370 a patient who didn't pay Pottstown Hospital.

02:34 - 09.873 They write off the bad debt that gets rolled up into that

02:34 - 13.577 $86 million number that I talked about in terms of charity care.

02:34 - 16.180 So the answer is no.

02:34 - 17.448 They do not sue.

02:34 - 20.851 Now, they may have collection efforts, you know, to remind people,

02:34 - 23.487 I don't want to overstate it, but they don't they don't sue.

02:34 - 26.924 I think

02:34 - 28.125 that's not an issue here.

02:34 - 29.627 But correct.

02:34 - 34.331 I mean, we're we're we are not considering that issue or,

02:34 - 38.269 or the rate that are charged, you know,

02:34 - 41.505 in computing the amount of

02:34 - 46.577 public charitable care, I mean, whether they're insurance rates

02:34 - 48.312 or whether or not they're Medicare rates

02:34 - 51.548 or whether or not they're they're published rates that nobody else collects.

02:34 - 53.550 We're not dealing with that here.

02:34 - 57.021 You are not because you're only dealing with the fifth prong of the hub test.

02:34 - 02.192 But parenthetically, the hospital provided

02:35 - 06.263 46% of its patients discounted care,

02:35 - 09.667 and the average amount of the discount was 26%.

02:35 - 13.270 But again, that doesn't roll

02:35 - 17.174 into the fifth factor of the Hup test, the only issue before the court.

02:35 - 20.177 And this is, respectfully, what I think the Commonwealth Court got wrong.

02:35 - 24.181 The Commonwealth Court applied almost a Rorschach test

02:35 - 29.053 to the executive compensation, and they found it to be,

02:35 - 33.691 inconsistent with operating entirely free of private profit motive.

02:35 - 39.697 But they conflated the entities operating entirely free of private

02:35 - 43.434 profit motive and the executive's interest in earning more money.

02:35 - 47.504 So these organizations have to operate

02:35 - 50.507 with a positive bottom line if they're going to be self-sufficient.

02:35 - 53.577 If an organization like tower or any of the other major

02:35 - 55.312 health care systems, we're all familiar with it.

02:35 - 59.350 A nonprofit lose money year over year, over year over year.

02:35 - 01.652 The charity they provide is going to go away.

02:36 - 03.587 They can't sustain themselves.

02:36 - 05.489 That's why I went back to first principles.

02:36 - 07.324 Purely public

02:36 - 10.494 charities are entitled to operate with a positive bottom line,

02:36 - 15.466 and purely public charities are entitled to pay their executives reasonably

02:36 - 19.803 and at fair value, and not just entitled to they're required to.

02:36 - 23.574 Otherwise they're going to get unqualified people getting the job.

02:36 - 24.375 Exactly.

02:36 - 27.378 And they're competing against other organizations

02:36 - 31.081 who are interested in that experience.

02:36 - 33.784 And I'm sure my colleague is going to say, oh, but Mr.

02:36 - 35.519 Pryor overstated it.

02:36 - 39.156 Mr. Matthews never ran a six hospital system

02:36 - 43.560 before he was advanced to run Tower Health.

02:36 - 45.396 Here's what he did do.

02:36 - 49.900 He ran Redding Health System that had an $800 million revenue a year.

02:36 - 53.737 Redding Health System is the entity that decided to

02:36 - 55.372 acquire the five other hospitals.

02:36 - 58.675 The board had confidence in him and wanted to retain him.

02:36 - 00.344 So to retain him,

02:37 - 04.448 they brought in Sullivan Cotter, who said, this is what would be reasonable.

02:37 - 06.350 This is what would be fair market value.

02:37 - 10.320 It's also very critical that in two of the three years,

02:37 - 13.490 there was no incentive compensation paid

02:37 - 16.593 because the circuit breaker wasn't met.

02:37 - 21.064 So the problem with the Commonwealth court's decision, it's even more abstract.

02:37 - 24.401 It didn't look at what they earned.

02:37 - 27.805 It looked like it looked at what they might have earned if they hit

02:37 - 31.141 all of the bogeys that they would have needed

02:37 - 35.078 to hit to earn additional compensation. So

02:37 - 39.149 that's relevant because Sullivan Cotter says

02:37 - 41.852 when and Bruce Rosenblatt,

02:37 - 44.822 who testified in the trial court, said

02:37 - 48.158 they were well within what was reasonable

02:37 - 51.328 in light of the fact that they never hit those additional,

02:37 - 55.165 bogeys and,

02:37 - 57.401 so I respectfully submit

02:37 - 00.404 that this court doesn't need to modify the hub test.

02:38 - 03.006 It's perfectly flexible.

02:38 - 05.776 The Supreme Court has always dealt with these cases

02:38 - 09.246 informed by the modern realities of competition.

02:38 - 14.084 And the testimony is and we saw this in the amicus brief of hub

02:38 - 18.522 90% of integrated health care systems

02:38 - 24.461 have incentive compensation plans, 69%

02:38 - 28.866 of those health systems have some financial component.

02:38 - 32.069 That's part of the incentive compensation plan.

02:38 - 35.973 And I just unless there's questions, I'll wrap up with this like I do.

02:38 - 37.441 I have a question.

02:38 - 40.444 So there were, a couple of years,

02:38 - 43.547 in the years at issue in this case,

02:38 - 46.316 where the hospital was losing money,

02:38 - 49.820 it was bleeding a lot of money, but the company remained afloat.

02:38 - 53.023 I mean, the hospital remained afloat because of Tower

02:38 - 56.393 Health's an infusion of money into it.

02:38 - 01.698 That's a result of there being,

02:39 - 04.902 excess revenue in other hospitals

02:39 - 08.805 that they're operating as part of this integrated health care system.

02:39 - 10.107 I mean,

02:39 - 12.709 Tower Health is a not for profit.

02:39 - 18.549 Where where is the money coming from that their infusion infusing into a hospital

02:39 - 19.883 like Pottstown in the years

02:39 - 23.820 that they aren't meeting any bogies, forget about compensation bouquets.

02:39 - 26.223 They're just operating at a loss.

02:39 - 29.192 When Tower Health acquired the five

02:39 - 33.063 community hospitals from the large publicly traded institution,

02:39 - 36.400 it went out and did, tax exempt financing.

02:39 - 38.602 It took out bonds.

02:39 - 42.973 So tower had resources that Pottstown didn't have.

02:39 - 47.711 And tower was able to underwrite the losses of Pottstown

02:39 - 50.714 because it had those resources.

02:39 - 53.150 All right.

02:39 - 55.452 Go ahead and conclude if you would. Thank you.

02:39 - 56.820 Oh, sorry. Sorry.

02:39 - 00.023 In the event that this forum,

02:40 - 03.026 decides to affirm the decision of the Commonwealth.

02:40 - 07.698 What's the effectiveness, the consequences,

02:40 - 11.234 the consequence, I think, is really significant.

02:40 - 15.639 What the consequence would be is that in this highly competitive market

02:40 - 19.276 where you have for profit entities competing with not for profit entities,

02:40 - 24.147 for profit entities are going to have a massive advantage in recruiting employees

02:40 - 26.416 because for profit entities are going to be able

02:40 - 28.752 to put these financial incentives out.

02:40 - 31.622 They're going to be able to induce employees to lead that

02:40 - 33.290 for profit companies.

02:40 - 35.792 And it would have a very,

02:40 - 39.363 very deleterious effect on the delivery of health care.

02:40 - 43.300 Now, there's of course, a lot of other purely public charities,

02:40 - 46.370 not just hospitals, but what it would do is it would

02:40 - 49.539 it would make the the playing field very uneven.

02:40 - 52.743 For profit hospitals would be able to use all kinds of leverage

02:40 - 54.277 that not for profits would.

02:40 - 57.280 And the reason the court shouldn't affirm

02:40 - 00.817 is because here the acid test is that the

02:41 - 04.988 the executive compensation, at the end of the day was reasonable.

02:41 - 07.991 And within market there wasn't a word uttered.

02:41 - 12.963 The contradicted that what offended the Commonwealth Court is this notion

02:41 - 17.200 that you'd have an incentive compensation plan that's based on finances.

02:41 - 19.169 And I just think they got it wrong.

02:41 - 24.975 They they didn't they weren't faithful to the test in Wilson and they overlook

02:41 - 29.546 the basic fact that the executives were not paid excessively.

02:41 - 32.849 I just have one last point I'd like to write.

02:41 - 34.117 Can I ask a question real quick?

02:41 - 36.753 I just.

02:41 - 38.255 What for profit integrated

02:41 - 41.258 health systems exist in Pennsylvania,

02:41 - 45.429 which is the entity that these five hospitals were purchased from?

02:41 - 47.397 It's, based out of Tennessee.

02:41 - 50.500 I think it's a it's also what okay, I'm going to go again.

02:41 - 51.101 What?

02:41 - 54.504 For profit integrated health systems exist in Pennsylvania today.

02:41 - 58.975 I don't know if there's any based in Pennsylvania,

02:41 - 02.145 but it owns a bunch of hospitals in Pennsylvania.

02:42 - 03.914 They own two in Scranton.

02:42 - 09.252 And I'm keenly aware of the difference between community hospitals

02:42 - 13.290 that are owned by which are for profit and community hospitals.

02:42 - 14.991 They're owned by not for profit.

02:42 - 16.326 It's dramatic.

02:42 - 19.329 And CMS still owns significant

02:42 - 22.365 hospitals in Pennsylvania.

02:42 - 23.767 Thank you.

02:42 - 25.635 May I just add one last thing? Yes, of course.

02:42 - 30.574 The incentive compensation plan

02:42 - 34.811 was structured that if you hit the circuit breaker,

02:42 - 38.982 the executives were eligible to earn more money.

02:42 - 42.819 But it wasn't the top line money of the entity.

02:42 - 47.190 What they had the ability to do was to get a percentage of their base salary.

02:42 - 52.229 That earned a more more they get salary added to their base.

02:42 - 55.699 And the reason that's relevant is that there's

02:42 - 58.368 two components of the incentive compensation.

02:42 - 03.406 60% of it had nothing to do with the financial performance of the company.

02:43 - 05.542 What did it have to do with patient?

02:43 - 07.410 Patient care had to do with the kind of stuff

02:43 - 12.682 you and I care about patient safety, patient satisfaction, employee retention.

02:43 - 15.919 You know, gradings and scores

02:43 - 19.456 you get from regulators, that's that was just 60%.

02:43 - 22.626 The other 40% was the possibility

02:43 - 28.398 of a financial bonus based on the performance of the entity.

02:43 - 30.433 All right.

02:43 - 32.469 I think we understand your argument. Thank you.

02:43 - 33.203 Thank you.

02:43 - 34.171 Let's hear from Mr.

02:43 - 37.174 Shah.

02:43 - 48.285 May it please the court?

02:43 - 49.753 Opposing counsel.

02:43 - 52.789 I apologize for being a bit delayed in getting back.

02:43 - 54.691 It certainly wasn't intentional.

02:43 - 55.592 I'd like to introduce.

02:43 - 59.462 Here with me is, Steven Kallis, who is the solicitor

02:43 - 02.465 at Pottstown School District, a partner,

02:44 - 05.802 of mine, and Gina Lombardo, who assisted on the brief,

02:44 - 09.506 in this case, welcome.

02:44 - 14.778 The analysis and argument suggested by Mr.

02:44 - 19.382 Breyer essentially ask this court to overturn nine

02:44 - 22.686 years of decisions

02:44 - 27.090 from this court, starting with up moving through

02:44 - 30.093 numerous, numerous decisions that

02:44 - 34.564 analyze whether a charity is,

02:44 - 39.002 operating consistent with the requirement

02:44 - 43.039 of the Constitution, that it be a purely public charity,

02:44 - 46.843 on its head, the,

02:44 - 49.779 up test, specifically the fifth prong.

02:44 - 53.917 And that is the only problem that is an issue in this case, states

02:44 - 58.889 that in order to meet the criteria for exemption

02:44 - 02.759 of real estate taxes, and otherwise,

02:45 - 06.062 an entity must be entirely free.

02:45 - 09.499 So for its very full phrase, entirely free

02:45 - 14.237 of private,

02:45 - 17.540 there's a lot of cases that focus on executive

02:45 - 21.778 compensation, not just the entity that is misleading.

02:45 - 23.847 I would suggest

02:45 - 25.749 there are a lot of cases that focus on executive

02:45 - 28.752 compensation, private profit

02:45 - 32.989 and profit in a broader term than simply, did we make more money

02:45 - 36.526 this year than last year, but simply benefit to oneself?

02:45 - 38.895 Am I better off because of what I did?

02:45 - 39.863 Not to itself.

02:45 - 44.701 There are no shareholders whose executives are the how is profit

02:45 - 48.471 for the entity the same as compensation for the executives?

02:45 - 51.474 The profit used in the hop test goes to

02:45 - 55.779 the advancement or benefit of the individual receiving.

02:45 - 59.249 In this case, the money is what the executives

02:45 - 02.252 and then executives, other than having,

02:46 - 06.323 a record developed as was done here in the trial court

02:46 - 09.659 with experts testify to

02:46 - 13.630 what the market is is paying for such people.

02:46 - 18.501 Are you suggesting that that be laid aside and that instead,

02:46 - 22.138 in order to maintain nonprofit status,

02:46 - 26.343 they must, they must hire less qualified people

02:46 - 29.346 and pay them half what people are making in other institutions.

02:46 - 32.582 I don't understand that test you're advocating for.

02:46 - 35.652 It's like an artificial leveling device that,

02:46 - 39.122 that that, mandates that whatever the market,

02:46 - 44.160 whatever willing buyers and sellers in the market are taking in, getting

02:46 - 48.031 you have to just what, take some arbitrary portion of that and,

02:46 - 52.168 and have a like a, a lower class hospital

02:46 - 55.972 or a lower class of care because it looks greedy to you.

02:46 - 58.308 I just don't understand your test.

02:46 - 01.411 Yes. Justice work that has nothing to do with me.

02:47 - 03.980 Or I'm merely reciting.

02:47 - 06.750 I'm merely reciting the test that was set forth

02:47 - 09.619 by Hupp with respect to.

02:47 - 11.921 Is the entity operated

02:47 - 15.658 entirely free of private profit motive.

02:47 - 18.762 And for example, in Wilson,

02:47 - 22.132 the analysis as to Wilson,

02:47 - 24.300 the hospital's

02:47 - 28.638 entitlement to exemption, the court said yes,

02:47 - 33.910 reasonable salaries were paid to the executives in Wilson,

02:47 - 38.048 and there were no bonuses or fringe benefit

02:47 - 42.018 such that the utilization and ORS to no individual.

02:47 - 43.520 That's the language.

02:47 - 47.824 And in Wilson, Wilson set forth a three part test

02:47 - 51.261 with respect to proper utilization of

02:47 - 53.363 revenues.

02:47 - 00.303 Funds of a entity that wants to receive tax exemption one.

02:48 - 04.007 Whether the utilization of the remedied revenue is made with the expectation

02:48 - 07.410 of a reasonable return or some not a monetary benefit.

02:48 - 11.281 Whether utilization of the revenue automatically supports

02:48 - 14.317 or furthers the alien masonry and counsel.

02:48 - 17.120 We both have challenges on that word.

02:48 - 18.688 Nature of the charitable entity.

02:48 - 22.659 But then, most significantly, whether the utilization of the revenue

02:48 - 26.963 endures directly or indirectly to any private individual

02:48 - 32.168 related to the charitable entity or related organizations, individual.

02:48 - 34.704 The test,

02:48 - 37.740 the cases that are cited in the briefs

02:48 - 41.945 many, many deal directly with individuals.

02:48 - 43.113 Pinnacle health

02:48 - 47.517 executive compensation was the issue, and it's the executive compensation.

02:48 - 51.688 It's not the you know, whether the organization

02:48 - 55.592 was unfairly looking to generate a profit.

02:48 - 56.993 Let me certainly follow it up this way.

02:48 - 00.663 Then suppose, as I think happened in this case,

02:49 - 04.901 the record demonstrates that that people not

02:49 - 08.771 not compared to us, you know, on state salaries, but compared to people

02:49 - 13.076 out in that market getting hired to do these jobs, that that's

02:49 - 16.079 what that's what they're paid these days and they get bonuses.

02:49 - 20.316 And in order to attract and recruit executives, that's what they need to do.

02:49 - 23.820 What what is the test that you want?

02:49 - 30.160 I what is the test we should apply to say whether this is too much

02:49 - 33.429 or whether this smells like profit to us because

02:49 - 36.833 the compensation seems unreasonable.

02:49 - 40.270 I what is there beyond some seat of the pants?

02:49 - 45.041 What jealousy on the part of courts that these folks out in

02:49 - 48.611 the market are getting are commanding this sort of money?

02:49 - 50.580 I just it's like nailing Jell-O to the wall.

02:49 - 53.583 I just have no sense of it.

02:49 - 56.452 In other words, one more one more aspect of it.

02:49 - 57.420 It can't just be,

02:49 - 02.492 that there's incentivization.

02:50 - 06.196 Because if there's no incentivization, presumably the best

02:50 - 09.199 hospital executives are going to go where they're going to get incentivized.

02:50 - 10.934 Can you respond?

02:50 - 12.302 Sure. I'm happy to.

02:50 - 15.572 First of all, again, I am not it's not my idea.

02:50 - 20.910 Court for I believe it's now 39 years that the hub test has been around.

02:50 - 25.081 There are numerous, numerous cases that simply say

02:50 - 30.486 the compensation paid to executives cannot be of a sort

02:50 - 34.557 that is tied to or reflects individual profit

02:50 - 38.761 from the operations and revenue, of the, of the entity.

02:50 - 40.563 So counsel is is what you're saying

02:50 - 44.601 in this particular case that if the bonus was not tied to it, to a compensation

02:50 - 47.870 formula and was just given to him and his salary would have been fine, yes.

02:50 - 49.739 Simply no. It's

02:50 - 51.608 that simple.

02:50 - 53.409 Council, let me ask you this question, because this is

02:50 - 57.480 this is a test you want us to apply not just to the mammoth nonprofits.

02:50 - 00.383 It was presumably to have to be applied to any nonprofit.

02:51 - 04.153 So the rule you're asking for is you can incentivize employees

02:51 - 07.724 to to run a solid nonprofit.

02:51 - 10.727 That's your rule that you're asking for again.

02:51 - 11.561 No, no.

02:51 - 15.965 Okay, look, I understand you don't want to agree what you're arguing.

02:51 - 17.834 That's the one you're arguing for.

02:51 - 20.870 And my my question is, let's say I have an upstart nonprofit.

02:51 - 24.807 Let's say it's a soup kitchen,

02:51 - 28.478 and I don't have any money, to, to,

02:51 - 32.081 you know, other than, other than, you know, a really small amount,

02:51 - 35.351 to get this thing up and running.

02:51 - 39.289 But I know this person who writes grants and person is a really good grant writer.

02:51 - 41.224 And I go to that person.

02:51 - 43.493 I was like, I can't pay you a salary, but I'll tell you what.

02:51 - 48.131 I will give you 20% of everything you bring in as a grant writer.

02:51 - 51.634 Is that a violation of the hop test?

02:51 - 54.637 In your view?

02:51 - 58.241 That's the cases will say everything

02:51 - 01.144 turns on the overall facts and circumstances.

02:52 - 02.745 Okay, no you can't, but I'm not.

02:52 - 04.147 I'm not going to let you back council.

02:52 - 05.448 I'm not going to let you back off on that

02:52 - 08.184 because you just said in response to justice,

02:52 - 10.053 I don't know if it's doctor McCaffrey.

02:52 - 10.987 The sun is in my eyes.

02:52 - 13.990 They're both so handsome.

02:52 - 14.691 I'm not going to.

02:52 - 17.460 You just said to one of the justices at the other end of the table

02:52 - 21.230 that that yes, it was just salary, and there was no incentive whatsoever.

02:52 - 22.165 It wouldn't violate. Hup.

02:52 - 24.701 Now you're telling me it depends on the facts and circumstances.

02:52 - 28.404 So if this was a contractor, not an employer.

02:52 - 29.472 No, I'm saying it's an employer.

02:52 - 33.443 I saying it's an employee, I can't I can't pay you.

02:52 - 35.078 I don't have the money is a nonprofit.

02:52 - 37.580 But I am going to incentivize you.

02:52 - 41.084 I am going to give you 20% of every dollar you bring it.

02:52 - 44.787 I would

02:52 - 48.257 suggest that that was it's a very difficult question to answer.

02:52 - 49.892 Why is it difficult?

02:52 - 54.931 Because is that a direct from simply the money that person brings in,

02:52 - 59.702 or is this going to be taken from the overall revenues of the budget or surplus?

02:52 - 02.305 That's the only it's the only money that's coming in because

02:53 - 05.308 because we don't have any other money, we're asking you to go out and get grants.

02:53 - 08.745 A lot of nonprofits operate purely on grants, by the way.

02:53 - 10.980 So we're asking you to go out and get grants.

02:53 - 12.148 I can't pay you.

02:53 - 16.252 I am not I am not a for profit entity that can give you $60,000 a year

02:53 - 19.822 or $30,000 a year, but I can give you a percentage of what you bring in.

02:53 - 22.525 And if you're successful, I'm successful.

02:53 - 25.094 If I'm successful, I can support my mission.

02:53 - 28.931 But under under what you are advocating for today

02:53 - 32.001 and based on your response to the question from the other end of the bench,

02:53 - 33.536 that would be a violation of up.

02:53 - 37.440 In the

02:53 - 41.310 real estate exemption area of the law, I would suggest it probably would be.

02:53 - 45.982 They're paid on a percentage of the revenues that are received by the company.

02:53 - 49.519 This is looking for the trial court with what I did, trial court,

02:53 - 51.521 the law school a long time ago.

02:53 - 52.955 I remember I did answer a question with

02:53 - 55.958 I think I was promptly told that it doesn't matter what you think.

02:53 - 58.261 Maybe it's what the courts have said.

02:53 - 00.863 So I for my hesitation.

02:54 - 05.735 But the the case is actually the case closed is the Dunwoody case.

02:54 - 08.738 In fact, the trial court, in an interesting

02:54 - 12.208 insight into its reasoning

02:54 - 15.211 when it wrote its decision

02:54 - 18.714 in the case of five services had come down.

02:54 - 23.619 That was a Commonwealth court case evaluating whether a, entity that

02:54 - 28.925 was seeking exemption from real estate as a charitable entity, had.

02:54 - 32.895 Been providing part of

02:54 - 36.566 its profit, know that individuals had been receiving

02:54 - 41.571 improperly profit, if you will, or surplus from the entity.

02:54 - 43.606 And did that case to justice.

02:54 - 45.708 McCaffrey's question.

02:54 - 49.178 The incentives were 18 to 24% of the salary.

02:54 - 52.582 In other words, the possible incentive that was available

02:54 - 55.818 to the executive in that entity,

02:54 - 00.256 was 18 to 24%.

02:55 - 04.594 Of the salary

02:55 - 07.196 and usually these incentives are based off of a salary,

02:55 - 08.598 which is part of my problem, Your Honor.

02:55 - 11.601 And Justice Robson, with that question.

02:55 - 14.904 And there the court did say, well, these incentives

02:55 - 17.907 were not based on

02:55 - 19.108 profit.

02:55 - 21.744 They weren't based on income generated.

02:55 - 24.747 In fact, there are cases that have even,

02:55 - 28.651 said that pinnacle Health, where it says,

02:55 - 31.654 if the emphasis is on, marketing,

02:55 - 35.925 or things that generate revenue today or maybe next year,

02:55 - 38.928 if that's the basis for the incentive,

02:55 - 43.366 that's a financial performance benefit that, you know,

02:55 - 47.336 could well result in private profit in earnings of the individual better.

02:55 - 51.140 But to follow up on justice provisions, I'm not sure you answered his question.

02:55 - 52.241 It was cited

02:55 - 54.377 75. Yeah.

02:55 - 55.144 Yes, I think

02:55 - 56.345 I think you're

02:55 - 59.448 indirectly you're telling him you would not grant that entity and

02:56 - 02.151 you don't think our law would grant them tax exemption.

02:56 - 05.154 And you cited Dunwoody, which I think is just wrong.

02:56 - 09.091 It it's a Commonwealth Court case 20, 12 years ago.

02:56 - 12.962 But the, the the argument there by the court was that

02:56 - 17.133 this retirement community was denied a charitable exemption,

02:56 - 20.636 in part because a, quote, substantial percentage

02:56 - 25.508 of executive compensation was based upon annual performance.

02:56 - 29.979 But that that runs directly against, I think the salient example

02:56 - 36.285 justice props and gave you of an entity that ought, under the Hupp test,

02:56 - 40.356 not be denied the tax exemption merely

02:56 - 44.260 by arbitrary application of some ban

02:56 - 47.730 on incent based compensation. Right.

02:56 - 50.933 Because if if our if put it this way,

02:56 - 55.938 if our cases are trying to undercut test our trying to

02:56 - 00.977 validate,

02:57 - 05.982 non non profits,

02:57 - 09.118 on the basis of this prong,

02:57 - 12.121 no, no private profit motive.

02:57 - 16.993 But why does that turn on on

02:57 - 20.463 whether the enterprise is,

02:57 - 25.301 is being foster with some incentivization of its executives.

02:57 - 28.838 Let me give you this hypothetical and then I'll shut up and let you answer,

02:57 - 32.074 let's say, in your town,

02:57 - 35.444 there's a, there's a theater company,

02:57 - 38.447 a nonprofit theater company, which is bankrupt.

02:57 - 43.953 And there's an energetic young person who,

02:57 - 46.255 takes it over.

02:57 - 49.258 And just like, in just this broad sense example, there's

02:57 - 53.062 there's no money in the bank for there's no money in their piggy bank.

02:57 - 59.201 But this person can go to some big foundations.

02:57 - 01.070 ET cetera.

02:58 - 04.073 So you and the other board members tell him,

02:58 - 08.744 go ahead, and we'll give you 50%, 75%

02:58 - 13.883 of your compensation in the first year based upon what you can bring in.

02:58 - 16.218 And just

02:58 - 19.989 25% is this piddling salary will pay you.

02:58 - 23.693 Why does that, in and of itself defeat the,

02:58 - 26.929 fifth prong of of job?

02:58 - 29.598 The first portion of up.

02:58 - 31.200 You're on your justice. Justice work.

02:58 - 33.502 You may disagree. You may disagree with it.

02:58 - 37.707 In fact, that's the argument being presented by Pottstown Hospital.

02:58 - 42.244 I can't see the court accepting it without essentially negating

02:58 - 45.314 the fifth prong of I'm just asking, what's the private profit motive?

02:58 - 46.649 There's what I guess what I'm saying.

02:58 - 49.218 You have this nonprofit theater company,

02:58 - 53.289 this guy or gal is going out there raising money to keep it afloat,

02:58 - 57.026 keep their doors open, and you incentivize that person.

02:58 - 01.030 Where's the private profit motive

02:59 - 04.033 in the entity?

02:59 - 07.837 Well,

02:59 - 11.207 the work being done, revenue is being received by the entity

02:59 - 14.610 on some percentage

02:59 - 17.913 in order to the direct benefit of that individual council.

02:59 - 20.483 Doesn't it depend on how the revenue is used

02:59 - 22.318 and the two examples that we just got?

02:59 - 25.621 I mean, these cash sort of tied together in one way, shape or form.

02:59 - 29.358 But I mean, if what's being promised at the end

02:59 - 32.361 is 20% of,

02:59 - 35.664 what's left over after the,

02:59 - 40.436 expenses, otherwise, operating expenses of the

02:59 - 43.439 not for profit are covered.

02:59 - 46.709 That, to me, seems to be a reasonable,

02:59 - 52.548 compensation, not necessarily directly tied to private profit motive.

02:59 - 56.786 But if what happens is, if this kid brings in a hundred grand

02:59 - 01.290 and a tax cut for $20,000 handed over to the kid, and the

03:00 - 05.861 not for profit goes under that year because they're short by $20,000.

03:00 - 10.599 And, I mean, I think that was entirely for the profit of an individual.

03:00 - 12.735 Yeah.

03:00 - 16.672 Typically the case is presented as percentages of salary or potential

03:00 - 22.111 extra earnings, compared to salary, based upon what criteria?

03:00 - 25.114 Again, the test here is, is this organization

03:00 - 28.117 truly a charitable organization or in fact,

03:00 - 31.320 is it using monies that should be going to the objects

03:00 - 34.323 of charity to those who should be receiving the charity?

03:00 - 39.295 Instead, is it going to individuals who are working there?

03:00 - 43.532 And they incentivized, you know, in ways other than simply to provide

03:00 - 45.201 the charitable purpose of the entity.

03:00 - 50.239 So, Council, I think I think themselves that test has some salience

03:00 - 54.543 for a sham nonprofit, meaning I,

03:00 - 59.715 I start my own nonprofit and I solicit a whole bunch of contributions

03:01 - 03.919 and I don't buy any soup and I don't buy any soup. Yes.

03:01 - 05.855 I don't buy nor give any soup.

03:01 - 08.991 And I pay myself a salary to the point where

03:01 - 11.627 I'm not really accomplishing my charitable mission.

03:01 - 14.897 The nonprofits existence is solely to put money in my pocket.

03:01 - 17.433 I think that example,

03:01 - 20.302 that example, might be a problem.

03:01 - 23.305 I think another example could be if there was,

03:01 - 29.445 evidence that the compensation

03:01 - 32.815 structure was excessive

03:01 - 36.652 in terms of the market, that it that it was not in line,

03:01 - 40.189 that it was that, that, that, that that could be another trigger.

03:01 - 43.092 But the problem is you don't have any of that here.

03:01 - 47.196 You didn't present any evidence below, any expert testimony below.

03:01 - 51.333 I'm not an expert in executive compensation in nonprofit health systems.

03:01 - 53.035 I don't integrate health systems.

03:01 - 55.871 I don't know what is market or what is market.

03:01 - 00.209 And from the entity's perspective, in the absence of sort of self-dealing,

03:02 - 04.680 which we don't have here, and in the absence of a grossly excessive

03:02 - 10.519 salary above market, what is a court to do

03:02 - 15.157 in terms of the profit motive of this entity?

03:02 - 20.062 Because profit is income minus expenses

03:02 - 23.465 and executive compensation as expenses.

03:02 - 27.403 What are we so

03:02 - 28.103 what what's a court?

03:02 - 30.205 What are we supposed to do?

03:02 - 31.173 Justice problem.

03:02 - 34.643 What the court has always done, has done for 40 years under the help test

03:02 - 40.082 is evaluate whether the basis of this instance, under the fifth prong,

03:02 - 43.986 the basis of the compensation of the executive.

03:02 - 45.487 But whether fair or not.

03:02 - 45.788 But no.

03:02 - 47.489 Look, counsel, look,

03:02 - 50.125 I understand that you're just throwing that precedent back in our face,

03:02 - 52.594 but if it was that simple, we wouldn't be here.

03:02 - 57.099 The the the the question, the question that you have yet to answer,

03:02 - 00.302 other than pointing us to our precedent, is

03:03 - 06.809 how are we supposed to second guess the expert testimony and the fact

03:03 - 08.243 finding of the trial court here

03:03 - 12.815 in terms of this compensation and compensation structure being normal?

03:03 - 15.951 Sullivan.

03:03 - 20.022 Carter's tests are simply a comparison of

03:03 - 25.427 amounts, paid bonuses, perks, etc.

03:03 - 30.199 amongst similarly, hospital systems of similar revenue and size.

03:03 - 35.671 It says, well, x percentile make this much it's statistics.

03:03 - 38.040 You never go above 100%.

03:03 - 42.644 Actually, in one of the years at issue, not fiscal year 2019,

03:03 - 47.016 five of the Tower health executives receive compensation

03:03 - 53.022 in the not around the 95th percentile at the very top of the pay for,

03:03 - 58.260 ostensibly, according to Solomon Carter, similarly situated hospital.

03:03 - 01.196 Well, you didn't present. You presented contrary evidence, did you? Did you?

03:04 - 03.132 I didn't need to. Frankly, I didn't need to.

03:04 - 06.568 The record is full of just what was for the trial court, and

03:04 - 08.871 the trial court accepted it as credible.

03:04 - 11.073 The trial court credited the expert testimony,

03:04 - 14.076 and the trial court was also going to find in the school district's favor,

03:04 - 18.380 based upon the evidence that had been provided until the services

03:04 - 21.517 decision was decided, he said it it his opinion,

03:04 - 23.619 it was surprising.

03:04 - 25.821 It was refreshing, the trial court said.

03:04 - 30.092 Well, I was going to find in favor of the school district until

03:04 - 34.730 the Commonwealth Court of FEV services was decided by the Commonwealth Court.

03:04 - 35.998 It was provided.

03:04 - 39.768 The court got that after close of evidence after briefing

03:04 - 45.541 and in its opinion, the court said, well, then I saw field services

03:04 - 50.979 and in field services, you know, the and it was 18 to 24%.

03:04 - 55.350 And I thought that might be, controlling because it was found to be okay.

03:04 - 58.587 However, the fact in field services

03:04 - 02.291 read the Commonwealth Court had found was none of the

03:05 - 07.129 incentive compensation that was made available in field services

03:05 - 10.532 related to financial performance of the entity.

03:05 - 13.502 It had more to do with hitting certain ratios,

03:05 - 16.705 ensuring sort of being around to going forward.

03:05 - 17.940 Accounting type stuff.

03:05 - 21.477 But it wasn't based on the return,

03:05 - 26.248 or the, excuse me, revenue.

03:05 - 27.983 Did they make a surplus or not?

03:05 - 29.818 Surplus.

03:05 - 32.988 So I kind of won the court case once, but then I lost it

03:05 - 34.623 before I got that decision.

03:05 - 35.524 I didn't do it.

03:05 - 38.260 It's the citizens of Pottstown

03:05 - 41.096 come to the Commonwealth Court for services.

03:05 - 45.300 It's a 2020 case Commonwealth court.

03:05 - 49.304 And this was on bond in front of the Commonwealth Court for services.

03:05 - 52.841 So no, no, you've

03:05 - 55.711 misinterpreted you made an error of law

03:05 - 58.714 on the basis of the facts found by the trial court.

03:05 - 02.918 You know, because I suggest the hub goes to is the incentive

03:06 - 06.855 based upon revenues of the entity,

03:06 - 10.859 to the profit of the individuals,

03:06 - 15.731 or is it just in an absolute amount we use the IRS taxes.

03:06 - 16.899 You said revenue, though

03:06 - 20.669 it's incentivization based on financial performance, right?

03:06 - 22.171 So it's not revenue.

03:06 - 24.740 It's it's it could be reducing expenses.

03:06 - 28.076 You could have flat revenue, but you bring expenses down.

03:06 - 30.512 It wasn't based on purely revenue.

03:06 - 32.548 It was based.

03:06 - 35.784 Well, the the circuit breaker, which Judge Donnelly actually,

03:06 - 39.388 they didn't get any in this case, if you want, if you want to talk

03:06 - 42.391 about what this case showed and the fact of no expert,

03:06 - 46.762 I suggest to you, you know, the brief I addressed, it wasn't necessary.

03:06 - 50.365 It wasn't necessary. But,

03:06 - 53.802 you know, back to back to your question,

03:06 - 57.873 the the focus was on

03:06 - 00.409 there's a circuit breaker

03:07 - 02.844 applied, which if

03:07 - 06.081 the operating margin of power health

03:07 - 09.418 was not achieved,

03:07 - 11.553 all bonuses were off.

03:07 - 15.824 The executive compensation committee had the ability.

03:07 - 17.626 I apologize for getting dry.

03:07 - 18.460 Yeah.

03:07 - 23.332 Executive committee had the opportunity to award up to 50% of what

03:07 - 27.102 the executives would have otherwise earned,

03:07 - 28.837 and they did it,

03:07 - 33.175 but the record would show that they got bonuses during these deficit years.

03:07 - 34.676 So that's your red tower health.

03:07 - 40.682 Your red line is incentivizing based on financial performance.

03:07 - 43.352 I guess the question I have is,

03:07 - 46.121 if, if,

03:07 - 49.858 if you want if you want that to be a red line again, you want

03:07 - 53.528 if you think the law should be that, that's a red line.

03:07 - 59.167 Then you seem to be insisting that

03:07 - 02.237 that nonprofits in this space

03:08 - 05.340 or in any space, I guess, be noncompetitive.

03:08 - 09.378 And that's not what our law, that's not what our law requires.

03:08 - 12.547 We we require we have this five prong test.

03:08 - 16.351 So to comply with purely public charity, which is, you know,

03:08 - 19.554 a bit of a camera, I mean, we struggle

03:08 - 22.557 to see what that means, but this is what we've said it means.

03:08 - 26.461 And now you're saying on top of these five prongs,

03:08 - 30.365 if compensation is tied

03:08 - 33.368 in any way to financial performance,

03:08 - 37.973 that means you fail the fifth prong.

03:08 - 40.275 And that seems to me to be a,

03:08 - 44.112 a top down mandate

03:08 - 48.950 that insists on non competitiveness in the nonprofit space.

03:08 - 53.221 And I, I don't understand nonprofit to me, noncompetitive

03:08 - 56.224 because that's also a synonym for failure.

03:08 - 00.662 Saint Matthews made whatever amount.

03:09 - 02.798 And I'm not here to

03:09 - 04.399 yell and holler about that.

03:09 - 05.400 It's what it was.

03:09 - 09.237 Let's say $1 million. Yes.

03:09 - 13.809 If Tower Health or Pottstown Hospital excuse me, Pottstown

03:09 - 18.780 Hospital wanted to make sure it maintained its real estate tax exemption.

03:09 - 24.553 It could have gone somewhere and said, wow, let's look for somebody qualified.

03:09 - 26.288 And they didn't look for anybody. They just hired

03:09 - 29.358 the people they had who had no experience in multi system hospital.

03:09 - 32.661 I suggest that's certainly part of the explanation here.

03:09 - 36.031 Again, the facts of the case are due to are not supportive

03:09 - 39.901 of the theories of the experts presented by them.

03:09 - 43.138 But let's say you go to somebody, you go look, you're good.

03:09 - 44.139 And you know what?

03:09 - 48.643 We need somebody like you, here's $900,000 salary

03:09 - 53.148 and here's some incentive based upon non-economic factors.

03:09 - 57.686 No loss of exemption,

03:09 - 58.620 no loss of exemption.

03:09 - 02.791 None of the arguments from the nonprofits even suggest that if they have to pay

03:10 - 05.794 real estate taxes, it's somehow going to put them out of business.

03:10 - 09.931 Well, that's that's never that's that's not that's

03:10 - 12.768 there's no people that people that have that are trying to get the help

03:10 - 15.170 test don't have to show. And it's a burden.

03:10 - 17.806 They don't have to show that they don't. But that's the cry.

03:10 - 21.610 If you read the I read the amicus briefs, if you listen to what is being said by

03:10 - 25.247 Pottstown Hospital or Power Health, like, oh my gosh, you know, there we go.

03:10 - 28.350 You know, suggest the taxes.

03:10 - 29.418 We're approximately $1 million.

03:10 - 32.587 Look at look at the numbers and revenues flowing through this system.

03:10 - 37.392 That's the only effect of losing real estate tax exemption.

03:10 - 39.461 They still have their sales and use tax.

03:10 - 42.497 So the difference with real estate again again you have an answer.

03:10 - 46.168 Justice Weiss question what is what is the proposition?

03:10 - 48.470 You know, you just gave this thing.

03:10 - 50.739 There's no they didn't have any evidence that they went outside

03:10 - 53.108 and tried to attract somebody and everything like that.

03:10 - 57.746 Let's say they did, and they couldn't find anybody that wouldn't do it

03:10 - 02.217 if there wasn't a portion of the compensation tied to,

03:11 - 06.755 achieving a certain profit or achieving a certain margin.

03:11 - 10.058 Are they can they not hire

03:11 - 14.463 anybody without losing their top test exam under that hypothetical,

03:11 - 17.432 which has no basis in the record or the evidence?

03:11 - 20.969 If that was the case, and they just well,

03:11 - 24.706 we just have to hire somebody and give them 20% of the

03:11 - 27.075 surplus or they.

03:11 - 28.910 I mean, they could hire me.

03:11 - 31.613 I won't demand that much money, but,

03:11 - 32.981 but hire me, frankly.

03:11 - 37.118 But could they hire if if the only executives that they have found

03:11 - 40.922 that that that they feel have the experience and the expertise

03:11 - 44.192 to help them run this integrated health system all say, look,

03:11 - 47.229 everybody's doing this across the country.

03:11 - 50.966 We, you know, I want I want X number and I want,

03:11 - 55.136 a bonus structure tied to operating margin.

03:11 - 57.906 If that happened right,

03:11 - 00.408 they would lose the real estate exemption.

03:12 - 01.176 They wouldn't.

03:12 - 04.713 And the real estate exemption, that's Constitution based.

03:12 - 05.413 The real estate.

03:12 - 08.450 The difference between the real estate exemption and sales and use tax

03:12 - 12.754 or the services case dealt with a business tax

03:12 - 16.291 that wasn't going to be assessed by the City of Allentown against,

03:12 - 20.095 charitable institutions.

03:12 - 23.465 So if the fact that they may, because

03:12 - 29.371 of not being entirely free of private profit motive, not embellishing it,

03:12 - 33.308 that's the fifth prong of harm and entered into a

03:12 - 39.281 compensation plan like that with the 20% of the gross revenues or something

03:12 - 43.051 like that, on top of their salary, up to 50% of their salary, what have you,

03:12 - 47.122 that would disqualify them, you know, from

03:12 - 50.191 real estate exemption under the Constitution.

03:12 - 53.328 It would not disqualify them from sales and use tax.

03:12 - 55.931 Okay, I think we I think we've got it.

03:12 - 58.500 I'd like to wrap this up. Are there any other questions?

03:12 - 00.135 All right.

03:13 - 03.104 Thank you. Can I just very you can conclude if you'd like.

03:13 - 06.207 Just what I wanted to also illustrate is this

03:13 - 08.476 what happened?

03:13 - 10.178 It is case. It's not an accident.

03:13 - 13.782 Please refer to the brief in the Commonwealth Court. Mr.

03:13 - 16.184 Matthews and the tower health executives.

03:13 - 18.520 They were scared. They didn't want to be bought.

03:13 - 20.388 They didn't want the Philadelphia Hospital.

03:13 - 22.290 They didn't want PA, UPMC.

03:13 - 26.161 So they go like, let's buy these hospitals in this area.

03:13 - 29.564 The person who asked for the what will be the new payment

03:13 - 32.567 structure for the executives at Tower Health?

03:13 - 36.204 It was the senior executives at Sullivan Carter.

03:13 - 37.138 It's in the record.

03:13 - 39.641 I got the, you know, subpoena the records from Sullivan Carter.

03:13 - 44.913 They go, hey, what happens if we you know, if we buy this Maria system hospital?

03:13 - 47.682 What happens if the revenues go up? The revenues?

03:13 - 53.321 The chairman of Tower Hill testified under subpoena at the trial.

03:13 - 56.591 We would have never been $1.2 billion

03:13 - 59.594 if we hadn't bought these hospitals.

03:14 - 05.033 And then just read about all the vaccinations, the increases in,

03:14 - 07.135 their salaries,

03:14 - 11.673 the increases in the percentages they were making totally constructed.

03:14 - 14.776 I suggest to you by the folks at Tower Health.

03:14 - 19.014 And similarly, the question to the court had was, what about Pottstown Hospital?

03:14 - 23.551 You know, there was a similar, you know, in several plans there.

03:14 - 26.521 But as far as this sort of

03:14 - 27.822 well, you know what?

03:14 - 29.624 How do we get these people?

03:14 - 34.663 I would truly ask the justices to read what happened in this case.

03:14 - 39.601 As far as determining whether, in fact, you know, Pottstown

03:14 - 43.705 Hospital was operated by Tower Health, was really not

03:14 - 48.009 have a significant element of private profit motive.

03:14 - 48.510 All right.

03:14 - 50.779 We understand your argument. Thank you so much.

03:14 - 52.013 Thank you both.

03:14 - 55.016 Mr. minor, would you call the next case?

03:14 - 57.752 The next case the court will hear

03:14 - 01.456 is the Commonwealth of Pennsylvania versus Nathaniel Williams.

03:15 - 03.458 This is a criminal matter.

03:15 - 06.127 And when a criminal case is brought against a person,

03:15 - 09.130 the plaintiff is the Commonwealth of Pennsylvania.

03:15 - 11.032 The defendant, Mr.

03:15 - 16.204 Williams, was a police homicide unit detective charged with several crimes,

03:15 - 21.176 including unsworn falsification to authorities, obstructing administration

03:15 - 24.679 of law or other governmental function, and tampering with

03:15 - 28.683 or fabricating physical evidence and tampering with public records.

03:15 - 30.685 The charges against Mr.

03:15 - 34.756 Williams arise out of his alleged use of a restricted access system

03:15 - 37.959 to locate a woman's personal information,

03:15 - 42.030 and giving that information to his cousin, who then stalked the woman.

03:15 - 44.399 It is also alleged that Mr.

03:15 - 47.836 Williams subsequently falsified homicide investigation.

03:15 - 50.672 File in order to cover up his alleged wrongdoing.

03:15 - 53.908 When a person is charged with a crime,

03:15 - 57.112 one of the first steps in the process is a preliminary hearing.

03:15 - 01.750 At this hearing, the Commonwealth of Pennsylvania

03:16 - 05.920 must establish at least a prima facie case that a crime has been committed

03:16 - 09.257 and that the accused is probably the one that did it.

03:16 - 12.660 Prima facia is a Latin term which means at first sight,

03:16 - 16.498 and in the legal context means that there is sufficient evidence

03:16 - 19.501 to support all the elements of a certain crime.

03:16 - 21.269 The charges against Mr.

03:16 - 25.006 Williams were dismissed at the preliminary hearing stage for lack of evidence,

03:16 - 29.110 and the trial judge denied the Commonwealth's later motion to refile

03:16 - 30.445 charges.

03:16 - 33.748 The Superior Court of Pennsylvania, in a 5 to 4 decision,

03:16 - 37.218 affirmed the trial court's denial of the motion because the evidence

03:16 - 41.222 was insufficient to establish all the elements of all the crimes.

03:16 - 45.226 The Commonwealth of Pennsylvania is now seeking a reversal

03:16 - 49.430 of that decision, and contends that there is sufficient evidence that Mr.

03:16 - 51.566 Williams committed the crimes.

03:16 - 54.569 Mr. Williams denies that he committed any crime,

03:16 - 57.772 and contends that the prior court's rulings were correct.

03:17 - 04.179 Well, this is an interesting case.

03:17 - 09.150 In this case, Nathaniel Williams was charged with unsworn falsification

03:17 - 13.755 to authorities, tampering with or fabricating physical evidence,

03:17 - 16.891 or tampering with public records or information,

03:17 - 20.261 and obstructing the administration of law.

03:17 - 23.965 Following a preliminary hearing, the trial court dismissed

03:17 - 28.236 all of the charges, concluding that the Commonwealth did not present

03:17 - 33.241 sufficient evidence to establish a prima facie case on any charge.

03:17 - 38.079 The Superior Court affirmed we granted review to determine

03:17 - 42.250 whether a police interview which was transcribed

03:17 - 46.454 and then signed by the suspect, constitutes

03:17 - 51.526 a quote unquote written statement for purposes of establishing

03:17 - 56.431 a prima facie case of unsworn falsification to authorities.

03:17 - 00.668 We also granted review to determine whether the Commonwealth established

03:18 - 02.470 a prima facie case

03:18 - 06.040 with respect to any of the other charges against Williams,

03:18 - 10.778 and whether, in affirming the dismissal of the charges, the Superior Court

03:18 - 14.983 evaluated the evidence under the correct standard of review.

03:18 - 17.418 Please proceed. Thank you.

03:18 - 18.653 Good afternoon. Your Honors.

03:18 - 20.455 Andrew Gray, on behalf of the Commonwealth.

03:18 - 22.156 Here, while

03:18 - 26.327 employed as a homicide detective, defendant facilitated his cousin's efforts

03:18 - 29.697 to stalk the victim by sending her personal information.

03:18 - 34.435 After obtaining it through searches of restricted police databases,

03:18 - 38.139 he lied about doing so in a signed statement,

03:18 - 40.742 to an internal affairs investigator.

03:18 - 45.513 Then he altered a official homicide file to bolster his lie.

03:18 - 47.882 And then he falsely improved the allegations.

03:18 - 51.152 Yes, yes. So, maybe not to split.

03:18 - 54.789 I not split hairs on the first question, but, I mean, written statement.

03:18 - 58.826 This was six, you know, pieces of paper like my outline here.

03:18 - 01.262 It was written. It was a statement.

03:19 - 04.332 I mean, as far as this court determined, you know,

03:19 - 08.703 relatively recently, a statement is a representation.

03:19 - 10.405 His answers are representation.

03:19 - 13.041 So it meets written statement.

03:19 - 14.375 Was a transcription.

03:19 - 17.745 It was a transcription of an oral interview, correct? Yes.

03:19 - 19.914 So what I'm saying is this is a writing

03:19 - 23.418 and it contains statements that come from this defendant.

03:19 - 25.086 So again, maybe I'm splitting hairs, but that's

03:19 - 30.792 why in the briefing I focused on the word make the the verb does does does.

03:19 - 34.862 Participating in this oral interview being the source

03:19 - 38.299 of all of the information contained in this writing?

03:19 - 44.439 Does that constitute making the statement and all of the am I wrong?

03:19 - 45.273 He signed it.

03:19 - 45.807 He saw.

03:19 - 50.578 Yes. In in in in substantively providing that context content.

03:19 - 55.049 And then in addition, not just in issuing but signing each of the six pages.

03:19 - 58.920 And the last page, sorry, is is the one that,

03:19 - 03.458 says something to the effect of as to the best of my knowledge,

03:20 - 05.426 all of these context makes accurate reference.

03:20 - 08.429 I mean, if it was just a transcription of an oral interview

03:20 - 11.799 without any acknowledgment or signing by the suspect,

03:20 - 13.434 I think that would be very different.

03:20 - 17.505 Well, yeah, I mean, I mean, you can sort of de-emphasized

03:20 - 23.311 or you emphasize the statement itself, but isn't the for for the word making under

03:20 - 28.950 the unsworn falsification offense, the the emphasis is on the signing, isn't it?

03:20 - 30.451 Yes. Sorry.

03:20 - 33.187 I was trying to win away the things that I thought were non-issues.

03:20 - 37.025 I agree the making is is the signing. And

03:20 - 40.862 but I also want to clarify that this isn't

03:20 - 45.433 signing a pre-filled out form or, you know, checking.

03:20 - 48.569 I agree to the terms and conditions every time an app updates.

03:20 - 53.341 This is the the the statements contained within that writing that was signed.

03:20 - 56.611 It's only information that came from defendant.

03:20 - 58.346 The person who signed it.

03:20 - 59.814 So this isn't,

03:20 - 03.951 you know, pulling one over on somebody going, oh, you didn't read closely enough.

03:21 - 05.553 This, you know, form like I filled out

03:21 - 08.523 a passport application recently that was like 20 pages.

03:21 - 10.725 I checked a lot of boxes.

03:21 - 15.430 I affirm that the contents were true, but I did not fill any of that out.

03:21 - 19.801 I did not respond to open ended questions and fill in that information.

03:21 - 23.638 So the short answer is he made a written statement

03:21 - 27.575 and is not absolved from criminal liability by the fact

03:21 - 31.913 that somebody else was the was typing, the keys.

03:21 - 36.317 Unless Your honors have more questions about that.

03:21 - 39.787 That is really my argument on that as well as because,

03:21 - 44.325 you know, if your honors agree that doing so,

03:21 - 49.597 was making a written statement and therefore makes out the crime

03:21 - 52.834 of unsworn falsification in that crime

03:21 - 58.339 is the any unlawful act, that meets the, that other element

03:21 - 01.342 for obstructing the administration of law. So.

03:22 - 10.418 What do you do with then, when he was offered the opportunity

03:22 - 14.822 to go back and review each of those pages and again, not just sign at the end, but

03:22 - 20.161 each of the six pages and sign his name, that was his opportunity to correct them.

03:22 - 23.131 And of the, you know, many police interviews

03:22 - 24.966 I've seen, you know, it's not all the time,

03:22 - 28.236 but sometimes there are corrections to a word here or there.

03:22 - 31.572 Well, it's it's that that last point is very interesting

03:22 - 34.909 because apart from Sharpies, I don't know what cases are out there.

03:22 - 39.313 And and that's not even a police interview scenario, was it?

03:22 - 42.617 I'm surprised that we don't see reported

03:22 - 45.620 cases dealing with this, because they're

03:22 - 49.557 the detectives are always asking people to initial the bottom.

03:22 - 51.092 I, I'm wondering,

03:22 - 54.962 I guess these cases are brought are brought.

03:22 - 56.564 Yeah. I scuse me.

03:22 - 00.234 I don't have a reason as to why those, you know, cases might

03:23 - 03.604 not have been brought, but I would just say I too was surprised

03:23 - 06.807 that trapeze was the, closest case on point.

03:23 - 08.709 And it, you know, I, I feel like,

03:23 - 11.879 frankly, involved less substance than than what was present here.

03:23 - 14.482 Kamala,

03:23 - 17.485 your brief, you argued 49, ten to.

03:23 - 20.821 But I reviewed your docking statement, and it seems you only charged

03:23 - 23.090 them with 4910 one.

03:23 - 24.926 Yeah.

03:23 - 27.094 I argued subsection two.

03:23 - 31.032 In addition, I will admit it was an embarrassing mistake,

03:23 - 34.068 having inherited it from a previous attorney and seeing, the,

03:23 - 37.471 the, the what was argued and refile and then not being able

03:23 - 40.741 to find the criminal complaint on, on the court website.

03:23 - 45.146 Significantly, though, for both 4910

03:23 - 50.451 one and 4911, 1 or 2.

03:23 - 53.154 Either way, the common word is common.

03:23 - 55.523 Relevant word is alter.

03:23 - 58.459 And here the evidence did show that this defendant

03:23 - 01.262 made a false alteration, whether he, you know,

03:24 - 03.965 whether it also meets the definition of presented to or,

03:24 - 08.736 what have you.

03:24 - 13.274 So the error in the low in, in the Superior Court, specifically here.

03:24 - 17.311 Oh, yes.

03:24 - 21.015 It's possible.

03:24 - 24.385 And you, but,

03:24 - 29.490 for false, the. Yes.

03:24 - 34.695 The witness said

03:24 - 37.698 I am not sure.

03:24 - 38.933 Okay.

03:24 - 41.936 So he was even involved

03:24 - 44.772 for that one specific statement.

03:24 - 46.307 I'm still going to argue. Yes.

03:24 - 49.710 And that adding maybe to any answer, I'm not sure.

03:24 - 51.445 Maybe a year or more.

03:24 - 53.848 When we look at the evidence that shows within the past

03:24 - 57.084 12 weeks, they've exchanged hundreds of text messages.

03:24 - 58.386 And then if we're also going to split

03:24 - 00.554 hairs about whether that's have you spoken to?

03:25 - 04.058 They've also exchanged 20 or more phone calls.

03:25 - 06.861 And then if we're going to say that just because they were under two minutes,

03:25 - 11.332 it may have gone to voicemail that all 20 some calls went to voicemail

03:25 - 15.936 were getting way very, very unlikely that that is what actually happened.

03:25 - 17.538 And he must know

03:25 - 21.676 like like any fact at issue,

03:25 - 24.578 intent and knowledge can be inferred from circumstantial evidence,

03:25 - 28.049 which is part of what I argue that the Superior Court,

03:25 - 31.385 seemed to kind of ignore.

03:25 - 34.021 And here the circumstantial evidence shows that he,

03:25 - 37.625 he must have known that within the past 12 weeks, he had all these communications,

03:25 - 40.328 with his cousin Edwin.

03:25 - 43.297 But in addition, that's not the only statement he's asked.

03:25 - 46.200 He used three separate,

03:25 - 49.470 restricted access systems for each of those.

03:25 - 52.840 He was asked, you know, did you look up this person's information in them?

03:25 - 53.774 Yes or no?

03:25 - 54.408 He said yes.

03:25 - 56.944 And did you do it for business or personal?

03:25 - 58.412 Each one of those, he said, business.

03:25 - 00.481 Those were more false statements.

03:26 - 03.451 So he lied about the nature, frequency,

03:26 - 06.420 of communications with his cousin.

03:26 - 07.355 Were they false statements?

03:26 - 10.358 Are you alleging they're false statements and you want to get past

03:26 - 14.995 you want to get past the problem that I'll say at a prima Shasha level there?

03:26 - 18.265 Well, you know, I think I think your case is extremely circumstance.

03:26 - 20.401 You know, it's it's

03:26 - 24.271 it's I'll say it relies on many circumstantial, sorry.

03:26 - 27.141 No. Yeah, but but you're not

03:26 - 30.144 you're going to have to prove that the statements were false.

03:26 - 31.112 Correct.

03:26 - 33.280 And you're asking at the prima fascia stage.

03:26 - 36.250 You're just saying that the Superior Court put us too high of a burden of proof

03:26 - 39.253 that, at the prima facie, we should be able to draw

03:26 - 43.157 reasonable inferences that, for example,

03:26 - 47.161 I pulled the homicide file and there was only one file.

03:26 - 49.597 And the next day, I find out that there's a second file.

03:26 - 51.031 And I should assume

03:26 - 53.768 or presume for the Commonwealth should get a reasonable inference

03:26 - 57.872 that the second file didn't exist until he produced it without any evidence.

03:26 - 00.741 Yet that that is true without any,

03:27 - 03.711 like a short answer.

03:27 - 05.413 Yes. Right.

03:27 - 08.015 As with so I, I think the closest more

03:27 - 11.018 and to further explain,

03:27 - 15.322 as is often the case with conspiracy, we're never going to find a conspirator

03:27 - 18.659 admitting I agreed with this person or even,

03:27 - 21.762 like a video of a secret agreement, as the law

03:27 - 24.799 recognizes, it's

03:27 - 26.967 shown by your actions and words,

03:27 - 29.970 whether there was an agreement. So,

03:27 - 32.072 similarly, here it is.

03:27 - 35.409 It is taking all of these facts together.

03:27 - 38.412 It's it's,

03:27 - 41.048 Sorry.

03:27 - 44.351 I seem to have lost my, my place on that point, but the short answer is yes.

03:27 - 48.255 I think these are reasonable inferences looking at the totality of the evidence.

03:27 - 52.359 And I guess the only reason I wavered is it's not just the mere fact that one

03:27 - 57.031 extra file was discovered, after the other.

03:27 - 00.301 The really, really significant point here

03:28 - 03.270 is the actual content of these files.

03:28 - 04.772 So according to defendant,

03:28 - 06.707 Teresa

03:28 - 10.010 Williams, is is a person of interest in official investigation.

03:28 - 12.746 I'm just doing my job looking at all leads.

03:28 - 14.682 So I look at all the persons of interest.

03:28 - 17.451 Coincidental that my cousin was stalking her.

03:28 - 19.587 Correct. And not just that. That.

03:28 - 23.123 Oh, now that I know that there's an official investigation of my actions,

03:28 - 25.459 now that I know that my records have been pulled

03:28 - 28.462 and they can tell if I look at these databases,

03:28 - 31.699 and I've directed them to one file,

03:28 - 34.735 that I know doesn't have any of any of this information in it.

03:28 - 37.738 All of a sudden I come up with a hand written,

03:28 - 42.943 piece of paper that only has untraceable, publicly available information,

03:28 - 46.847 whereas all the other persons of interest and suspect

03:28 - 50.050 actually had their printouts from these restricted databases.

03:28 - 53.287 The reasonable inference is he knows he's under investigation,

03:28 - 56.056 and that if he goes back into these,

03:28 - 58.659 the NCI

03:28 - 01.862 s and Jane, that there will be a record of him doing so.

03:29 - 04.498 So he wrote it down because it'd be untraceable.

03:29 - 08.669 The actual information in his handwriting could all be obtained

03:29 - 12.606 from the content of the questions he was asked the previous day,

03:29 - 16.377 and he was given a copy, of his statement.

03:29 - 18.112 Okay, we get it.

03:29 - 21.115 Do you want to address the, standard of review?

03:29 - 24.885 Just just very briefly, it comes down

03:29 - 27.888 to, two big groups giving defense

03:29 - 31.325 favorable inferences and disregarding the Commonwealth's favorable inferences.

03:29 - 37.097 I think I've gone into how there's a lot more going on in the Commonwealth's favor

03:29 - 40.100 than I think was addressed in the majority opinion below.

03:29 - 43.304 And just in terms of defense, favorable inferences that the court

03:29 - 48.108 suggested that, seem to take it as fact that he was including this information,

03:29 - 52.646 about Miss Williams as part of his official role as an investigator.

03:29 - 56.784 But as I already explained, Judge Alston made all that very clear, including

03:29 - 01.622 including your initial arguments on the first issue in her dissent. Yes.

03:30 - 04.658 So if your honors have no other questions, I would just direct

03:30 - 07.661 you back to my brief on any remaining questions.

03:30 - 08.529 Thank you.

03:30 - 14.168 Your opponent.

03:30 - 16.337 Mr. Siegel, good afternoon.

03:30 - 20.341 May I please the court, Jacob Siegel, on behalf of, Nathaniel Williams,

03:30 - 26.714 as, my colleague indicated, we're here for four charges.

03:30 - 29.917 And the question is whether or not a prima facie case was made at the lower court

03:30 - 32.686 to show or establish the elements required.

03:30 - 34.755 More likely than not for those charges.

03:30 - 37.891 It's our position that the evidence presented at the lower court

03:30 - 41.595 did not meet the threshold level at a preliminary hearing.

03:30 - 45.633 More likely than not to hold the matter for court, the evidence that the district

03:30 - 50.137 Attorney's office presented at trial was insufficient to make out the charges

03:30 - 53.674 that are before the court today, and that were before the two lower courts.

03:30 - 56.677 The two independent Philadelphia judges,

03:30 - 59.747 the Superior Court panel and then the Superior Court on bond.

03:31 - 02.916 The evidence that was presented, and that's on the record, simply

03:31 - 07.154 does not make out the charges before the court today, specifically

03:31 - 11.692 with respect to 4911 tampering with public records there.

03:31 - 14.662 It's charged as a felony of the second degree.

03:31 - 17.898 As the en banc court indicated in their opinion,

03:31 - 21.969 there's an element there, Commonwealth first kitchen, that requires,

03:31 - 25.339 if it's a felony of the second degree, there's an intent to defraud,

03:31 - 30.878 there is an intent to defraud or injure, which requires a demonstration of a loss,

03:31 - 35.049 a pecuniary, a property, loss of some sort that has not been established here,

03:31 - 36.950 that was not established at the lower court

03:31 - 41.355 that charge, the burden that the Commonwealth has as more likely

03:31 - 45.225 than not, it's not beyond a reasonable doubt, does exist at the lower court.

03:31 - 48.328 And that burden was not met with the evidence that was presented

03:31 - 49.263 at the lower court

03:31 - 53.434 with respect to the charge of 4911 as a felony of the second degree.

03:31 - 55.502 There are different gradations of that charge.

03:31 - 56.203 But the charge

03:31 - 59.873 that the Commonwealth elected to pursue was a felony of the second degree,

03:31 - 03.544 which has those requirements which were not shown at the lower court

03:32 - 08.382 with respect to 4900, for unsworn falsification to authorities.

03:32 - 09.783 I respectfully disagree

03:32 - 13.253 with opposing counsel with respect to what constitutes a written statement.

03:32 - 17.057 As Justice Wecht pointed out, the one case that's on point, or

03:32 - 20.928 the one case that seems to even a little bit addressed, this issue is chirpy,

03:32 - 23.831 and there's not a lot of jurisprudence out there on this point.

03:32 - 24.498 And the question

03:32 - 28.402 of whether or not it's a written statement as required by the statute,

03:32 - 30.070 not a written statement. Generally,

03:32 - 32.973 we submit that it is not.

03:32 - 38.512 And the reason for that definition, are you contending that a common

03:32 - 43.484 submission of a written statement is different than what the statute requires?

03:32 - 46.620 I am submitting that the statute itself

03:32 - 51.325 does not allow for an oral statement, which is subsequently affirmed

03:32 - 52.226 with a signature.

03:32 - 56.597 How do you how do you argue against counsel's argument with regard to making

03:32 - 00.768 your client not participate in the making of the statement

03:33 - 05.906 from which was transcribed, reviewed, and signed and verified by your guy?

03:33 - 09.042 So the statute is narrowly constructed, 4904

03:33 - 11.011 to require the making of a false statement.

03:33 - 12.579 As the court pointed out, it's

03:33 - 16.283 our position that there are other places where the legislature has stated me,

03:33 - 20.087 making a written or oral statement where they differentiate between the two.

03:33 - 23.023 Now, here the question is, is this a written statement?

03:33 - 26.927 Is that signature a written statement as would be required to meet the burden here?

03:33 - 31.231 And it's our position that it does not suffice to establish a written statement

03:33 - 34.735 as is required by the statute, because you're articulating that they,

03:33 - 38.172 the accused, has to write his or her own statement.

03:33 - 41.842 The accused has to write something that is false

03:33 - 45.212 in order for them to be appropriately charged with this.

03:33 - 48.782 If an individual's illiterate, unable to read and or write,

03:33 - 50.851 then what?

03:33 - 54.721 Then the charge of unsworn falsification would be an apposite is my position,

03:33 - 58.659 because the written false statement language in the statute is clear.

03:33 - 01.161 Had the legislature wish to include that in there,

03:34 - 04.464 they would have, as they have done elsewhere, as was in our brief.

03:34 - 07.901 There are places where the legislature says prong one

03:34 - 09.837 makes a false written statement.

03:34 - 12.206 Prong two makes a false oral statement

03:34 - 15.776 that differentiation does not exist here in 4904.

03:34 - 19.213 Your definition of written isn't that somewhat absurd to say individuals

03:34 - 23.050 who can claim they cannot read or write should not be charged with the crime

03:34 - 26.053 when others who are blessed with an education can.

03:34 - 31.525 So under that hypothetical, if they're unable to read or write the charge of

03:34 - 35.128 if they're unable to write, then to charge them with making a false

03:34 - 38.732 written statement seems like it would be difficult to prove.

03:34 - 43.971 Can I follow up what justice this question I if is a signature or writing.

03:34 - 47.641 Yes. And did your client sign your.

03:34 - 50.644 Yes. Yeah. So,

03:34 - 56.650 the detective, presented him with a,

03:34 - 01.788 a version at least of what the defendant said.

03:35 - 02.956 Right.

03:35 - 04.858 An oral. Yeah, a transcription of that.

03:35 - 06.360 He wrote his signature.

03:35 - 08.161 He wrote it. Correct.

03:35 - 11.265 Which is a making a writing of his signature.

03:35 - 15.168 And so you're saying that,

03:35 - 19.106 that's not that doesn't constitute

03:35 - 23.043 a written if it's false, a written false statement.

03:35 - 27.881 And that's the point the the description

03:35 - 31.051 that you just gave his signature is that is the written portion of that.

03:35 - 35.022 So the question as was addressed in the on bank opinion and our brief is,

03:35 - 39.893 is that signature itself sufficient to show a false written statement?

03:35 - 41.762 It's that is the signature in conjunction

03:35 - 45.132 with the document that it coincides with, is, is that signature itself

03:35 - 50.270 a sufficient per the statute as it is written to show a false written statement?

03:35 - 51.738 It and make?

03:35 - 54.007 Let me say I don't know the answer to this. Should I?

03:35 - 57.010 Should we deciding that issue?

03:35 - 01.081 Should we try to imagine what the purpose,

03:36 - 05.052 what the detective not I mean, this particular detective detective's

03:36 - 08.956 purpose generally in having subject acts

03:36 - 14.094 signed to adopt their statements, what the purpose of that is.

03:36 - 18.732 So I would submit that the purpose there, having been a former D.A.

03:36 - 22.135 for some years, when there is a leader,

03:36 - 23.904 when the,

03:36 - 26.907 the when the person who gives that statement later recant

03:36 - 28.742 or goes back on that statement

03:36 - 31.712 to then be able to confront them with it and their signature,

03:36 - 34.548 not that they wrote that that statement

03:36 - 39.319 that is that is the Brady Lively procedure, goes to that statement.

03:36 - 42.622 Correct. It's a validation.

03:36 - 45.492 I'm not sure why that's not a prima facie

03:36 - 49.696 case for unsworn falsification, because the statement here.

03:36 - 51.331 So it's as you said initially, it's

03:36 - 53.734 the signature itself that were that's what he wrote.

03:36 - 55.869 That's the written portion of this.

03:36 - 59.940 And so the question then becomes is his signature him writing that signature?

03:36 - 04.845 Is that a statement such that it is false within the purview of the statute.

03:37 - 09.049 And the statute is narrowly written such that it only includes a false

03:37 - 09.783 written statement?

03:37 - 12.452 It doesn't go beyond that adopted, affirmed.

03:37 - 13.353 Oral statement.

03:37 - 16.356 Okay, we understand your argument and the other questions.

03:37 - 18.892 Thank you both very much. Thank you.