00:11 - The honorable, the Chief Justice and Justices

00:13 - of the Supreme Court, effectively.

00:17 - Oh, yeah.

00:18 - Oh, yeah. Oh, yeah.

00:19 - All manner of persons who say about the Republicans

00:22 - who otherwise have business up here, it is.

00:26 - God save the world.

00:27 - In the final report, we can see.

00:36 - Good morning everyone.

00:38 - Welcome.

00:39 - Welcome to the second day of our fall arguments session

00:43 - here in our magnificent Harrisburg courtroom.

00:47 - As you may know, because I say it all the time, the Pennsylvania

00:51 - Supreme Court is the oldest appellate court in North America,

00:55 - and our roots date back to William Penn's provincial court of 1684.

01:00 - Our Supreme Court was formally established pursuant

01:03 - to the Pennsylvania Judiciary Act of 1722.

01:08 - And in 2022, we celebrated our 300th anniversary

01:13 - with a special session in the Old City Hall in Philadelphia.

01:18 - We on the court are very proud of our rich history.

01:22 - Over the past 26 years, I've had the privilege

01:25 - of sitting on the bench in this majestic courtroom with these

01:29 - beautiful murals by Violet Oakley,

01:32 - a woman of incredible talent and vision.

01:36 - What a treasure. This confluence of history

01:39 - and art provides to the people of our Commonwealth.

01:43 - The Capitol Mural Project was the largest commission

01:47 - ever awarded to an American woman.

01:50 - Remarkably, Violet Oakley, a young Philadelphia artist, was

01:55 - was selected for this daunting assignment

01:59 - at a time when women could neither vote nor hold elective office.

02:04 - Miss Oakley proved to be up to the task

02:07 - already a well-regarded artist from Philadelphia.

02:11 - Oakley's work in this building made her world renowned.

02:16 - Her vision for this room was to write a book

02:20 - on the evolution of law, and the murals in this room

02:24 - will remind you of the pages in a medieval or Renaissance manuscript.

02:30 - Ultimately, she devoted 25 years of her

02:34 - life, from 1902 to 1927,

02:38 - to painting the 43 murals in our Capitol.

02:43 - I trust that no one who works here takes this gift for granted.

02:48 - While there are many things that our three branches of government

02:52 - may disagree on, I know that our judiciary,

02:55 - along with our legislature and executive branches, all agree

03:00 - that we have been blessed with the privilege of serving the Commonwealth,

03:04 - and that our lives are enriched by the beauty of these

03:08 - inspirational murals in our magnificent Capitol.

03:15 - I also wanted to mention that we marvel

03:19 - at the 52 million pound terracotta dome above the rotunda,

03:25 - a one third scale model of the dome

03:28 - of Saint Peter's Basilica in Rome, on top of which

03:32 - a 15ft gilded statue named Commonwealth stamps

03:37 - the green and gold stained glass

03:40 - dome, designed by Alfred God.

03:43 - One is one of many domes in our Capitol,

03:46 - but this is the only stained glass dome,

03:50 - and it's only visible from this courtroom.

03:54 - Architect Joseph Houston intentionally placed this courtroom

03:59 - on the fourth floor, with the legislative and executive chambers on the second,

04:04 - both to physically separate and symbolically indicate

04:09 - that the judiciary is an equal branch of government.

04:13 - This courtroom was designed in the Greco-Roman style, as indicated

04:19 - by ionic columns and the Greek grill

04:22 - wainscoting, all handcrafted.

04:25 - All of the wood in this room, including the bench, is

04:28 - mahogany imported from Belize.

04:32 - I'd also like to draw your attention to the bronze chandelier,

04:36 - which I'm told but cannot verify.

04:38 - Each weigh two tons.

04:41 - They are unique, yet different from one another.

04:44 - Under the main light in each is a statue

04:48 - dedicated to four great law givers.

04:51 - To my right are the Hebrew law givers.

04:54 - Closest to the bench is Moses and in the back as King Solomon.

04:58 - To my left are the Greeks.

05:00 - Closest to the bench is Aristotle, and in the back is Solon,

05:05 - a foundational figure in Athenian democracy.

05:09 - Solon laid the groundwork for modern democracy

05:13 - by making laws fairer and expanding political participation.

05:18 - The majesty of this courtroom is designed to remind us

05:23 - all of the seriousness and importance of the work.

05:27 - We're all here to do.

05:29 - Now, we're fortunate to have some students visiting with us today.

05:34 - First of all, we have a group

05:37 - of fourth and fifth grade students from the enrichment program of the Dawn

05:43 - Gill Elementary School and the Wellsburg Area School District.

05:48 - These students are accompanied by

05:51 - Tioga County Commissioner Mark rice,

05:54 - Tioga County Human Services Administrator Sarah

05:57 - Rice, the children's teacher

06:00 - Jen Spoor, and, Justice Mondays.

06:04 - Judicial assistant Nancy Clemons.

06:07 - Thank you, Justice Monday, for arranging their visit.

06:11 - And would the children please stand so we can acknowledge them

06:15 - and welcome.

06:22 - Glad you're here.

06:23 - You could be seated.

06:24 - And, perhaps we have some future lawyers in the group.

06:29 - Also visiting with us today are two seniors

06:33 - from Bishop McDevitt High School.

06:36 - Liam Fuller and Gabe Robson.

06:40 - They are escorted by Lauren Robson.

06:43 - And I thank Justice Robson for your

06:47 - for arranging their visit.

06:50 - Would this two students please stand?

06:53 - All right.

06:53 - Liam and Gabe welcome you.

06:57 - You may be seated.

06:59 - We're always happy to have students here.

07:01 - And it puts the pressure on the lawyers who are arguing

07:05 - not to dissuade these students from pursuing a career in law.

07:10 - All righty.

07:11 - Before we hear the first case, I would like to remind Council of a few things.

07:16 - Appellant's counsel, please approach the podium when your case is called.

07:20 - I will then give a short summary of your case.

07:23 - Please begin by introducing yourself and your co-counsel.

07:28 - And to identifying the party you represent.

07:30 - The justices are familiar with your cases, so we ask that

07:35 - you avoid any unnecessary recitation of facts or procedural history,

07:39 - and instead focus on the main issues on which we granted review.

07:44 - Counsel is welcome to rely on their briefs for particular issues.

07:49 - In cases in which there are

07:51 - multiple parties represented by separate counsel.

07:55 - Council should avoid repeating the same arguments as prior counsel.

07:59 - Please try not to interrupt the justices when we are asking you a question.

08:04 - A justice's question is not meant to trip you up.

08:07 - Rather, it indicates there are particular issues we wish to explore further.

08:12 - I remind you that we do not allow rebuttal.

08:16 - Finally, while we have no set time limit for argument, I will advise counsel

08:21 - when the court is satisfied that all of its questions have been answered

08:25 - and at that time, I will ask that you conclude your argument.

08:28 - Mr. Miller, please call the first case.

08:32 - We are now going to hear arguments

08:34 - in the case of Commonwealth of Pennsylvania versus Ricky G.

08:37 - Vance.

08:39 - This is another

08:40 - criminal matter involving a homicide conviction.

08:44 - Part of the evidence establishing the defendant's

08:46 - location at the crime scene was G.P.S.

08:49 - location. Data from Google.

08:52 - The defendant argues that the Google GPS location data

08:55 - was improperly admitted into evidence without proper authentication.

09:01 - As the good morning.

09:03 - Good morning. Thank you, Chief Justice Todd.

09:05 - And may it please the court.

09:06 - My name is Brooks Thompson.

09:08 - I represent Ricky Vance in this matter.

09:10 - Your honors, the holding that we're requesting from the court today, is simple

09:16 - but incredibly important to criminal cases arising in the modern era.

09:21 - And in the future.

09:22 - And that is to say that before the Commonwealth may introduce evidence

09:28 - generated from an electronic process, such as here, Google location information.

09:33 - To convict an individual of murder,

09:36 - it must first present some evidence

09:39 - that that electronic process is is reliable,

09:42 - that it produces accurate results, and, that it was operating correctly on the day

09:48 - in question, as well as information about how that process works.

09:52 - Counsel, could I ask you a question?

09:54 - Just the threshold. There.

09:57 - You mentioned delivered.

10:00 - Microphone.

10:02 - Pardon me.

10:03 - Counsel, you mentioned, reliability and accuracy

10:06 - and you've done so in your breathing.

10:09 - But 901 is simply

10:13 - that the, evidence is what it purports to be,

10:17 - aren't reliability and accuracy, partaking

10:20 - more of weight of the evidence issues?

10:26 - Well, justice.

10:26 - But I do agree that those issues are related.

10:30 - However, if we look at rule 901, AB9 specifically relating

10:36 - to the authentication process for,

10:39 - electronic processes.

10:41 - There is a requirement in that rule that the proponent of the evidence present,

10:48 - exactly what I just indicated some information about how that process works.

10:53 - 902 I know.

10:55 - 213 oh, that, I was referring to.

10:58 - 901B9902 13 I believe

11:01 - is the rule that says the requirements of 901 B 9th May be met,

11:06 - with the certificate rather than through testimony of a live witness.

11:10 - But under 900 1B9 those requirements are that the

11:15 - the the

11:15 - information the there be information about the process.

11:19 - That there's evidence that the process produces an accurate result

11:24 - and that the process was operating correctly on the date in question.

11:29 - I believe that those matters do go through reliability.

11:32 - And this court expressed

11:33 - concern about establishing the reliability of electronic processes.

11:38 - And it's a recent decision in Commonwealth versus Wallace.

11:42 - And the majority opinion in that court, concluded that or opined that the best way

11:47 - to do that or the process for doing that would be through authentication.

11:52 - Ultimately, obviously, that holding wasn't reaching

11:54 - a holding on authentication wasn't reached in that case because it wasn't raised.

11:58 - But here we are, and I would submit that the Commonwealth

12:02 - circumvented the requirements of, of 900 and 1B9

12:07 - or the requirement of showing any, you know, evidence of reliability

12:10 - of this electronic process for this critically important evidence,

12:14 - by admitting the evidence through the business records

12:18 - exception and the, trial court, approved that, of course.

12:23 - And then the Superior Court approved of that procedure as well.

12:27 - So you you would agree that if the, certification

12:32 - that was proffered met the requirements of 902 13,

12:37 - you'd be satisfied at 902 13 as I understand,

12:42 - that requires a description of the process that was used.

12:48 - And what it requires is everything

12:52 - that someone would have testified to if they were in court.

12:56 - It exactly just there's a way to avoid bringing in someone from Google.

13:02 - However, the certificate

13:04 - has to be detailed enough

13:08 - to give information that allows you

13:11 - the opportunity to test it in probate.

13:14 - Yes. Justice Donohue, I agree with that statement,

13:17 - and the content of rule nine of 213 is clear.

13:20 - It says that the certification offered to prove, the authenticity

13:25 - of an electronic process must contain all the information,

13:30 - that would be required if that witness were to testify, at trial.

13:35 - And in terms of the information that must be required when we're dealing

13:39 - with an electronic process, that would be that which is required by 900 and 1B9.

13:44 - So could you clear something up for me?

13:47 - Was there an objection to the Commonwealth's notice of intent

13:51 - to seek admission of the records through rule 902?

13:57 - There was an objection on the record.

13:59 - There was not an advance objection.

14:01 - It wasn't a motion and it wasn't a motion.

14:03 - And there was an objection on the record.

14:05 - There was an objection in the courtroom? Yes.

14:09 - On the transcript.

14:10 - Is it in the right?

14:10 - Yes. It is.

14:14 - It should all be at it.

14:16 - I have,

14:18 - 44 B of the reproduced record, 25 B 20,

14:22 - and then 26, 28 B, 31 B and 117 b.

14:27 - The objection was the Commonwealth sought to present the information.

14:30 - We objected first on the grounds of hearsay,

14:33 - because at that time it was unsettled whether the records were hearsay or not.

14:36 - But then we also included a second objection authenticity.

14:40 - And we argued that the certification that the Commonwealth provided

14:43 - was not sufficient, for a variety of reasons.

14:47 - But one of those reasons was that the certification,

14:49 - was produced by a mere custodian of records,

14:53 - talking about a complex process, about an algorithm

14:59 - for generating location information,

15:01 - which we submitted if the person were required to come into court.

15:04 - In other words, the appearance was an excuse.

15:06 - By 9 or 213 the person were required to come into court.

15:10 - That person, we would generally expect,

15:12 - would need to be required to be qualified as an expert to testify.

15:16 - Interviews.

15:16 - Let me interrupt you there, because that goes to the heart

15:18 - of what Justice Tania was asking you about the certification.

15:21 - In my experience, trial experience certifications that are kind of on a form

15:26 - never really substitute for proper cross examination.

15:29 - If I'm defending the case

15:31 - and I want to

15:32 - challenge the GPS location data, how would I go about doing that?

15:36 - Or how would I go about having an expert testify?

15:39 - If it's proprietary?

15:40 - In other words,

15:41 - if I can't get the information my client says to me, couldn't be me.

15:45 - I don't know what happened.

15:46 - Let's hire an expert.

15:48 - How do I challenge that?

15:49 - The admissibility of that particular information?

15:53 - Well, that's that's

15:54 - precisely one of the problems, with if if the Commonwealth were to argue, well,

15:58 - you know, we gave advance notice you didn't object to it.

16:01 - You could could have presented your own expert, to rebut this.

16:04 - We really couldn't, because even the Commonwealth expert didn't

16:08 - have knowledge about the proprietary algorithm that Google uses.

16:12 - And, what would be important in determining

16:16 - the reliability of this information would be the aggregate information

16:20 - that would only be maintained by Google as to, you know, the frequency

16:24 - with which this information is tested and how frequently is it accurate.

16:28 - Could you have subpoenaed, sir, could you have subpoenaed or why couldn't

16:32 - you have subpoenaed such a Google person?

16:35 - And then if the Commonwealth filed for a protective order,

16:39 - you could have fought that out

16:40 - in the trial court and got a ruling on Google's proprietary claim.

16:47 - I suppose that's something that we could have done justice.

16:49 - Wecht at the time, we weren't precisely sure

16:53 - what Detective Mitchell's testimony would be when he testified.

16:57 - And if in the record, you might note that when he was being qualified

17:02 - as an expert, I tried to press him on his knowledge of Google's processes.

17:06 - It became very clear during that,

17:09 - you know, section of the examination,

17:11 - I submit that he he didn't know anything about the processes.

17:14 - And then he acknowledged through his

17:16 - later testimony that

17:17 - it is a proprietary process, and Google doesn't give that information to anyone.

17:20 - So the Commonwealth couldn't get it.

17:23 - The Commonwealth is the proponent of the evidence, not the defense.

17:26 - Well, you could have been tie.

17:27 - You would have been tied up in litigation

17:28 - for a long time with Google trying to get their proprietary information.

17:31 - But I guess what I'm trying to understand is,

17:35 - are you saying that is your position that a,

17:38 - that this Google data, this GPS location data can never be authenticated

17:43 - as a business record

17:44 - or simply are we just saying that the certification here was an adequate.

17:48 - I don't believe that it can be authenticated

17:50 - as a business record, because that's correct, Justice Robson,

17:53 - and that's because it's not a business record.

17:58 - One of the requirements

17:58 - of a business record is that the record be made by a person with knowledge

18:03 - or from information, from a person with knowledge.

18:06 - Google location information is machine generated.

18:09 - It's not generated by a person.

18:12 - So it's it's that requirement of the business record exception

18:15 - cannot be met

18:16 - if it's a person that has knowledge of the algorithm,

18:19 - has knowledge of the process, has knowledge of everything.

18:22 - And they filed a certification and it says everything that we could possibly

18:27 - ever wanted to say discloses everything that you're asking it to disclose.

18:31 - You still say as a as a matter of rule,

18:35 - anything that's machine generated, which is probably 80% of what we deal

18:38 - with in society today, can never be a self authenticated business record.

18:42 - I believe it can be self authenticated under 902 1313.

18:46 - I don't believe that it can be self authenticated as a business record solely

18:49 - under 9 or 211, because 9 or 11 requires that the proponent of the evidence

18:54 - or the certification establish the requirements of 8036.

18:58 - Whereas if we again looking at the comment,

19:01 - of of

19:03 - 13 913, there's a specific notation in the Commonwealth

19:07 - that when we're talking about a certification

19:11 - for purposes of 902 13,

19:14 - the proponent of the evidence

19:15 - does not need to prove the requirements of ATO three six

19:19 - so should we adopt or should we in this case

19:22 - adopt a a rule or announce a rule

19:27 - that says for machine generated evidence can never be authenticated as a business

19:33 - record, you have to go through another self authenticating exception

19:37 - with that be acceptable and in your view, right.

19:41 - It would be. And I believe that that's

19:43 - a fair interpretation of the rules as as they exist.

19:46 - When we look at the comment as well, the comments as well.

19:50 - 2902 13 well, then I had a follow up question to justice Bob, since,

19:57 - do you think that our

19:58 - rules of evidence as they stand now are,

20:02 - insufficient to address these involving issues

20:05 - of modern technology?

20:08 - I don't.

20:11 - I don't think that there

20:14 - clear enough, I would say, as to how we deal with them.

20:16 - I don't think that they're clear enough in how they,

20:20 - you know, in the extent to which they require reliability.

20:22 - And I think that's evident

20:23 - by the fact that the trial court and the Superior Court struggled,

20:28 - you know, with and found that, well,

20:30 - the business record exception was met here with. No.

20:34 - Did anyone argue, the applicability of 902 13 no.

20:41 - And we did argue, though, I mean, I'm not suggesting that that,

20:46 - fatal, defect, but,

20:48 - it's sort of difficult to fault the Superior Court

20:52 - for not dealing with something that wasn't brought to their attention.

20:56 - Certainly we did argue, though, that the proper mechanism for authenticating

21:01 - it was through 901B9, and the reason why we did that is because

21:05 - there was no certification to comply with requirements of nine, or to 13.

21:09 - I mean, one of the reasons and, I, you know, I,

21:13 - I believe that it probably

21:14 - should have been argued by the parties and should have been at least mentioned.

21:17 - It wasn't mentioned by what was the what was the Commonwealth courts

21:21 - where the Commonwealth basis for offering the evidence.

21:23 - What what rule were they relying on this business records exception.

21:26 - Okay.

21:26 - So but as a proponent of the evidence,

21:28 - it was their responsibility to put forward the argument.

21:30 - And they didn't put forward under 13. That's correct.

21:32 - So if it's if we say it's not a business record, you win.

21:37 - I believe so, yes. Okay.

21:39 - I mean, I guess it would you agree that time will tell,

21:43 - whether or not this is sufficient to cover the situation?

21:46 - I can't believe it.

21:47 - It's not.

21:47 - This is this is drawn from the federal rules.

21:51 - I mean, this issue cannot be one of literal first impression.

21:58 - The I mean, the rule itself is really actually

22:01 - very clear in terms of authenticating, records

22:05 - that are developed through electronic processes.

22:09 - I, I agree, after having read over the rule in the comments

22:13 - a number of times, I think that maybe when when we look at them,

22:17 - just the rule and not the comment, and maybe if they're not analyzed,

22:20 - there could be grounds for conclusion.

22:21 - But I do agree, when we look at them as a whole, they are clear.

22:25 - And in 9 or 230 and especially the comment to nine or 13 to 13 makes it clear that

22:31 - there's two different certifications required for a business record

22:34 - versus, certification required to authenticate an electronic process.

22:38 - 902 13 in your appellate court.

22:41 - No, we did not.

22:42 - We did.

22:43 - We did mention, though, again, 901B9

22:47 - and it's important to note that 902 13 is essentially

22:52 - requires the same thing as 901B9.

22:55 - It just simply excuses the Commonwealth.

22:57 - And because the certification in this case didn't meet those requirements,

23:01 - they didn't have a, certification that met the requirements of 9 or 213.

23:05 - They were left with, needing to present a witness

23:08 - to, to testify to what, 901B9 requires.

23:12 - Well, I just I'm just, I guess a little bit taken back

23:14 - that we have a argument presented today.

23:18 - I know 213 where it's not cited in your brief in any manner.

23:22 - I, I agree it should have been it should have been mentioned in the brief,

23:25 - at least now.

23:25 - So do I understand you to say that 8036A

23:29 - excludes machine generated records?

23:32 - That's how I understand it.

23:34 - Justice Daugherty, let's follow your theory.

23:37 - Let's jump to 902 13, which makes a record generated by an electronic process

23:42 - or system software, then, okay, if we follow

23:45 - your definition of 80368,

23:49 - doesn't that necessarily invalidate

23:52 - 902 13 I don't believe so.

23:55 - And I think, just to start with that comes back to the comment of 902 13

24:00 - where specifically says a certification under this rule I.

24:04 - 902 13

24:07 - is not

24:07 - required to prove the requirements of 8036 so one of the requirements of 836

24:13 - is that it be, a record made by a person,

24:17 - or person from a person with knowledge.

24:20 - We don't need to establish those requirements.

24:22 - The comments.

24:23 - Rule 902 13 tells us because, it says it right in the comment.

24:28 - A certification under 913 doesn't require that.

24:31 - Where it does require it under 9 or 211, which is of course,

24:34 - for the business records exemption. So that makes sense.

24:37 - Yeah. Doesn't it.

24:38 - Not only does it not required, it doesn't permit it.

24:40 - In other words doesn't.

24:41 - That is fine.

24:42 - 902 13 you're not satisfying it.

24:44 - 036 correct.

24:45 - It says it's not required and it doesn't permit it.

24:47 - It says it right there in the comment. Yes.

24:49 - So counsel, your position in your brief is they had to bring in a witness.

24:54 - Their certificate was insufficient.

24:56 - They had to bring in a witness. That's correct.

24:58 - Yes. So I asked you the question if they had complied with.

25:04 - 902 13 yes.

25:06 - That's how we started down. That. Yes.

25:08 - But your position in this court is they had to bring in a witness

25:11 - because the certification that they produced

25:13 - was insufficient under 9 or 213, but they didn't try to get it under 902 13

25:17 - exactly my rights.

25:18 - But why we're I'm not going to hold them accountable for not satisfying.

25:23 - Oh 213 when they didn't even try,

25:25 - they were trying to get it under the business records exemption.

25:27 - And they either did or they did.

25:29 - Right? Yes.

25:30 - That's correct.

25:31 - And the trial just let it in under the business record exception.

25:34 - And that's what it went up to if they wanted to rely on on it.

25:36 - 213 it was the Commonwealth's burden to rely on it at the trial court.

25:39 - It was the Commonwealth's burden

25:40 - to present the evidence, not your burden to raise it as an alternative pathway.

25:45 - I would agree with that. Yes.

25:46 - Justice Bronson, all right.

25:48 - Would you like to conclude? Yes.

25:50 - Thank you, Your Honor.

25:50 - So we would ask that

25:52 - the decision of the Superior Court be reversed

25:53 - and that the matter be remanded for a new trial?

25:56 - Thank you. Sir. Let's hear from the follow.

26:05 - Morning.

26:05 - Your honor.

26:06 - Chief Justice Todd, justices of the Supreme Court, may it please the court.

26:10 - Adrian Jaffe from the Montgomery County District Attorney's office.

26:14 - And as you're aware, there's two issues before the court

26:16 - in this revenge induced contract killing.

26:20 - The first issue issue

26:21 - is whether the trial court properly admitted the Google GPS location data.

26:25 - And the second issue is whether Lieutenant Mitchell was properly permitted

26:29 - to testify as to as an expert regarding the Google location data.

26:35 - I would submit I'm going to start first with the second claim.

26:38 - I would submit that that claim is waived.

26:41 - The defendant did not challenge Lieutenant

26:44 - Mitchell's qualifications following the voir dire.

26:48 - After voir dire, the trial court said.

26:51 - Are there any objections?

26:53 - The other attorney, the other defense attorney said no objection, and Mr.

26:57 - Ricky Vance's attorney made no comment at all.

27:00 - So the court said the,

27:03 - lieutenant is admitted as an expert.

27:06 - It was until later on during the direct examination,

27:10 - you know, maybe ten, 12, 15 pages into the direct examination

27:15 - that when the prosecutor was showing or was moving for admission of Lieutenant

27:21 - Mitchell's report at that point, for the very first time on the record,

27:25 - is when Ricky Vance's attorney objected.

27:28 - He objected on the basis of hearsay and authentication.

27:31 - So I just want to make clear that was the very first time it was objected to.

27:36 - We gave notice of the counsel.

27:39 - As a result of that, I'll objection.

27:41 - Did the trial court allow the admission of the testimony and the in the report?

27:45 - I'm sorry, I didn't hear you.

27:46 - As a result of that objection the defense counsel made

27:49 - at the time of its request for admission,

27:50 - did the trial court overrule the objection and allow it into the record?

27:54 - Yes, Your Honor, he did overrule it. And and,

27:57 - it was introduced into the record.

27:59 - I do want to address a couple of things that were,

28:03 - raised by my opposing counsel.

28:05 - One of them is concerning the fact that he didn't, you know, object

28:10 - or file any motions and alimony at the time he got the notice.

28:15 - And I believe he stated that he wasn't aware that the lieutenant

28:19 - was going to be testifying as to this, Google GPS location data.

28:24 - I would submit that that

28:25 - is completely contradicted by the record, because by the time

28:29 - the CERT business records certifications were sent,

28:34 - the defense attorneys already had the expert reports

28:37 - of our witnesses had two expert reports of Lieutenant Mitchell,

28:41 - both of which were inundated with GPS location data.

28:45 - And each each report was approximately 3 or 400 page.

28:49 - And each report mentioned the GPS

28:53 - location data probably about 100 times.

28:56 - So defense counsel was well aware of that.

28:59 - Defense counsel was well aware of the certifications that were sent from Google.

29:04 - However, at no time were there any objections made.

29:07 - At no time were any attempts made to contact

29:10 - the person from Google whose name was in the certification.

29:13 - At no time were any attempts made to.

29:17 - I don't believe any attempts were made to get their own expert

29:20 - or regardless if I could just interrupt on that.

29:22 - I mean, putting waiver,

29:26 - putting waiver arguments aside for a moment.

29:29 - The initial burden of, of authenticating is on the proponent. You.

29:34 - So, right, how would you how would you,

29:37 - I guess what I'm what I wanted to get to is, what

29:43 - what would you offer the court by way of your take on the black box problem?

29:47 - In other words, neither Lieutenant Miller nor

29:51 - anybody else

29:51 - that was in the courtroom that day could,

29:55 - explain to the fact finder what's inside Google's little black box.

29:59 - And, this is a problem that the courts, not just us,

30:03 - but courts are dealing with on these proprietary algorithms.

30:09 - What what do you think?

30:12 - Do you think our, our current rules addressed this adequately?

30:16 - And what's your take on on that?

30:19 - Your honor, the the black box nature of some algorithms is,

30:23 - in fact a legitimate concern, but it does not render

30:27 - all machine generated evidence unreliable or inadmissible.

30:31 - The court's role is to ensure that the evidence is properly authenticated.

30:35 - And that was done in this case.

30:37 - We authenticated it under 9 to 11.

30:40 - We submitted the certification to opposing counsel.

30:44 - And I will say, even though it was done under 900 to 11, not 902 13,

30:50 - our certification was very specific, had not just

30:54 - what was required in 902, but it had the extra language that's required.

30:58 - And excuse me, not just what was required in 900 to 11, but

31:02 - it had the extra language that is required in 902 13 that specifically says,

31:08 - the it produces accurate results.

31:12 - So that extra information was in there.

31:14 - And then it was followed by language, the accuracy of Google's

31:17 - electronic processes and systems is regularly verified by Google.

31:21 - So that I took counsel.

31:22 - Let me let me take a step back to follow up, because we're

31:25 - let's let's put aside the lawyer's language for a second

31:28 - and get to the nuts and bolts of what justice works, asking you

31:31 - if I you said they didn't hire an expert, right?

31:33 - If they had hired an expert

31:35 - because we're not necessarily dealing with just this case,

31:38 - we have to promulgate a rule regarding authentic, authentic

31:41 - authentication of this particular type of information moving forward.

31:45 - If I want to hire an expert,

31:46 - I mean, everything we're talking about, you're

31:48 - talking about in that certification is a certification by some Google engineer

31:52 - that it's operating within parameters, etcetera, etcetera, etcetera.

31:55 - But we all agree and we all know it's proprietary.

31:58 - If I wanted to hire an expert, how would the expert verify that information?

32:01 - Because notwithstanding with justice an issue we all know, 80% of

32:05 - this is AI generated, or 80% of this is kind of an algorithm.

32:09 - But algorithms don't operate with independent agency.

32:13 - They basically respond to human input.

32:16 - So a human engineer, at some point,

32:18 - some software engineer creates these particular programs,

32:21 - and that algorithm operates in accordance with the human input.

32:24 - So it's telling it what to do and how to react to the information that's in there.

32:28 - If I want to hire an expert, how do I test the accuracy and reliability

32:32 - of that information?

32:36 - That's a good question, Your Honor.

32:39 - The big bucks.

32:41 - Well, I'll say this.

32:43 - I think the rules themselves are sufficient for ensuring that

32:47 - the evidence we are seeking to produce,

32:50 - whether or not whether it's GPS records or

32:53 - or regular cell phone information from cell phone carriers,

32:58 - I would submit that under the rules, as they currently exist, there's enough,

33:04 - safeguards in place

33:05 - to ensure that the, you know, with this, with the

33:09 - not only with the, self

33:12 - authentication, but with rule 901 as well.

33:16 - I would submit there sufficient information in there to ensure

33:19 - the integrity of that information.

33:22 - Other than that, I other than defense calling an expert

33:27 - in trying to what ensures and ensures the integrity of the information.

33:31 - I think that's what authenticity is,

33:33 - is the information what everybody's purporting it to be?

33:37 - Just as McCaffrey's question goes to this idea,

33:39 - you're the proponent of the evidence, right?

33:41 - And when I'm not and I'm not thinking of this in a criminal context,

33:44 - I think these rules of evidence apply, you know, in a civil context as well.

33:48 - Why should the proponents of the proponent of the of this evidence,

33:51 - this black box information, get a pass

33:55 - on proving that it's reliable?

33:58 - Why why can they just put it in?

34:00 - Because it is what it is purports to be,

34:04 - and then force the defense side, either on the civil or the criminal side,

34:08 - to have to come in and now prove it's unreliability.

34:13 - It seems to me that that is backwards.

34:15 - The proportion of the evidence

34:16 - should be able to establish the reliability of the evidence,

34:19 - not that it just is what it is, but that it's accurate that it's reliable.

34:24 - Well, I think

34:25 - the adversarial process allows both sides to probe the strengths

34:29 - and the weaknesses of these kinds of things.

34:31 - No, but you, you you got to pass. Yeah.

34:33 - You got an absolute pass

34:35 - the way the way these

34:36 - the way this authentication rule is working out now and the way

34:39 - we're developing this jurisprudence on this machine based evidence is

34:43 - we're we're getting a proponent like you who wants a pass

34:47 - that says our current rules put all of the burden on the defense,

34:52 - criminal or civil, to essentially establish that

34:56 - what you have already put in front of the jury

34:58 - or what you have already put on the record, is bunk.

35:03 - And why shouldn't you have to?

35:05 - Just like you would have to do with a witness?

35:07 - Why would you?

35:07 - Shouldn't you have to put the evidence on first to say, no, this is not only what

35:12 - it purports to be, it's also reliable.

35:15 - It's also backed by science.

35:17 - It's also there's an expert that comes in and says,

35:20 - yeah, I've looked at all of this and this is this is good data.

35:24 - Why shouldn't that be on you?

35:26 - Well, it is on us.

35:27 - And we have the rules of authentication for a reason.

35:30 - We have 901 902 for a reason that allows us to put this through

35:34 - with the certification.

35:35 - And then once we meet our requirement

35:37 - and the burden shifts pursuant to 8036, the business record exceptions,

35:41 - it's shifted the defendant well, what about the certificate?

35:43 - What occurred as with all records?

35:45 - So what about the certification?

35:47 - What is it about the certification process that deals with the black box problem?

35:51 - Why shouldn't you have to deal with the black box problem?

35:54 - Why should a defendant have to deal with it?

35:56 - Well, we deal with the two.

35:57 - We we when we bring the evidence and we question the witness

36:00 - that's coming in, and then the defendant can question

36:03 - our expert that we have to the extent that we do, in fact,

36:06 - have an expert they can call the black box.

36:08 - What did your experts say about the algorithm and how this data is calculated,

36:12 - how it's generated and don't require our expert to the the expert rules.

36:17 - Rule 702703.

36:19 - They do not require the experts to testify as

36:22 - to the proprietary algorithms that are involved in the.

36:25 - How do we know it's accurate?

36:27 - Well, I'll tell you how we know it's accurate in this case,

36:30 - because the Google location information, well, I'll tell you how

36:34 - we know it's accurate in this case.

36:35 - And in everyday life. How do we know it's accurate?

36:38 - Because millions and millions of people use GPS,

36:42 - Google data, Uber drivers, that's their default.

36:45 - They use them.

36:46 - Obviously when we call I don't I wouldn't imagine

36:49 - anyone here has plugged an address into Uber and gotten the wrong locate,

36:52 - a wrong gotten sent or delivered to a wrong address.

36:56 - When you plug in Google Maps.

36:57 - I took Google Maps here.

36:59 - It got me here.

37:00 - My colleagues took Google Maps here.

37:02 - It got me here. Millions and millions of people.

37:04 - So it behooves Google to submit accurate data

37:10 - and to verify and to check their their outputs on a regular basis.

37:15 - So that's just the millions of for consumer protection reasons.

37:18 - I humor reasons.

37:21 - And then also in this case itself,

37:24 - the data was

37:25 - reliable because much of the data that was learned either

37:29 - got much of the information or the evidence that came came in a trial

37:32 - that the detectives learned,

37:33 - that they learned through the defendant, through the defendant's significant other,

37:37 - and from cell phone, the cell tower information,

37:41 - it overlapped with or was corroborated with the GPS data here.

37:45 - Now, the GPS data had a smaller margin of error just a few meters.

37:50 - But for instance, the day of the the day of the murder,

37:54 - the two different, the one defendant that was on trial and then the other

37:57 - defendant who we were unable to bring to trial their cell phones,

38:01 - sat in a car for three hours during the time of the murder.

38:05 - So they obviously did

38:07 - not when they drove in the car to the homicide, they obviously did not,

38:11 - bring their phones with them.

38:12 - Lieutenant Mitchell testified that the one defendant's two phones

38:17 - and the other defendant's phones were a total of three phones remained

38:20 - in the area of East Gorgeous Street and Clearview Drive.

38:24 - So he knew within a several

38:26 - a few mile, a few meter radius that the phone stayed at that location.

38:30 - However, the defendant corroborated that he and the detective did not say

38:35 - the phones were in the car

38:36 - because he couldn't place them, not with that much specificity.

38:39 - But the defendant specifically told Luton or I don't recall

38:43 - Lieutenant Mitchell or another detective that his phone and the other person

38:48 - involved, and one of the other people involved in this marché, his two phones,

38:52 - remained in the car that evening for that entire three hour period.

38:57 - And Ricky Vance, the one defendant, the defendant

39:00 - who is arguing here today, he said he left the phone in the car

39:04 - for those three hours and then went to go sell drugs.

39:07 - So the defendant himself corroborated

39:09 - what Lieutenant Mitchell ascertained from the Google data.

39:13 - Look, the Google records that the phones were at this location.

39:16 - Then the day after the murder, we had testimony, testimony from the defendant

39:21 - and his significant other, both of whom said that they went to Marché.

39:26 - One of the other

39:27 - men involved went to his house the next day, purportedly to just well,

39:31 - the defendant didn't say why he went there, but it was our theory was

39:35 - it was purportedly to discuss the homicide from the day before.

39:39 - So our Google records showed them going

39:43 - to the exact location or the the area of showed vans

39:48 - going to the area of Marcia's house, driving all the way up the Schuylkill.

39:52 - Well, that was corroborated not just through the,

39:55 - the Tower Records, which

39:57 - obviously did not corroborate it with as much specificity,

40:00 - but it was corroborated by the defendant and his significant other,

40:04 - both of whom testified that they went to Marcia's house the next day.

40:09 - So it was it was corroborated during the trial itself by abundant other evidence.

40:15 - So so let's assume that,

40:19 - any ERA error in letting the, Google,

40:23 - certification in and the records that were attached to it

40:26 - with harmless error just based upon everything that you described,

40:31 - placing the defendant and others in the particular locations.

40:37 - Can I just ask you to go back

40:39 - to really the predicate issue here

40:42 - and tell me what you think?

40:45 - 901 be nine means

40:48 - when it says evidence must be offered,

40:51 - describing a process or system

40:55 - and showing that it produces an accurate result.

41:01 - 901B9 is not applicable here

41:05 - because the evidence was admitted under 902901.

41:10 - Only comes into play when something is for the sake of argument.

41:13 - We say it was error to allow that evidence in as a business record,

41:18 - and we're trying to get to really a much larger

41:22 - question here with this case.

41:26 - So I'm asking you for your opinion

41:30 - as to what 900 1B9 would require

41:36 - if you wanted to get in to evidence

41:40 - the Google

41:43 - mapping information.

41:46 - Okay.

41:46 - So that would come into play only if the defendant can establish

41:51 - that we made no credible showing that the challenged data lacks,

41:55 - or trustworthiness.

41:57 - And how do you get there?

41:59 - This is the proponent of the evidence burden.

42:03 - Right.

42:03 - And that bring in an end of the evidence.

42:06 - We would bring in extrinsic evidence, whether it's

42:10 - I don't know if it would be somebody, a witness.

42:15 - You're talking

42:16 - specifically about the Google evidence, how we would get that in.

42:19 - We would, we would

42:21 - likely get someone from Google to come in if we had to go that route.

42:24 - But in this describe the process or the system.

42:29 - Correct?

42:30 - I mean, I'm, I'm reading directly from nine 900 and 1B9,

42:34 - which to me deals with the subject

42:38 - matter that we're dealing with here,

42:41 - which is evidence about a process or system.

42:45 - And the rule is pretty clear as to what is necessary

42:50 - in order to authenticate that kind of process.

42:53 - And system.

42:55 - So would you need to bring in someone or,

42:59 - or maybe more than one person from Google

43:03 - to describe the evidence,

43:06 - to describe the processor system

43:08 - and to show that it produces inaccurate result?

43:12 - I mean, this is classic authentication, right?

43:14 - I mean, you're right. I honestly, I,

43:20 - I, I know you don't want to hear this,

43:22 - but I don't think we get there for the, for the because it's self authenticate.

43:27 - And then also because we have you either you do have

43:30 - I forget about your other evidence.

43:32 - But let's just talk about authenticating these Google records.

43:36 - You said you brought in a self authenticating document.

43:42 - Except that if you look at 902 13 and the comment two two,

43:48 - it specifically says you have to include in the certification

43:53 - that what would be necessary under 901B9.

44:02 - So that would mean

44:03 - the certification would have to describe the processor system,

44:09 - and it would have to show that that processor system produces

44:15 - an accurate report.

44:17 - You do that, give advance notice.

44:20 - That gives the defendant the opportunity to get an expert

44:24 - to say, this is bunk.

44:27 - This isn't accurate.

44:29 - This isn't how it works.

44:30 - But until until the proponent, until the proponent

44:35 - puts forth this evidence, the defendant really doesn't have anything to work with.

44:40 - Well, the

44:41 - defendant can work with the certification that we sent them and get there.

44:44 - You assume, for the sake of argument that your certification

44:48 - was not sufficient.

44:51 - So for the for this discussion,

44:54 - that we might say that the appropriate certification in the case

44:59 - that dealing with Google records or any process

45:02 - or system is 902 13

45:06 - that's not how you proceeded.

45:10 - You proceeded under the business records rule,

45:13 - as opposed to the rule dealing with, processes or systems.

45:18 - Right.

45:18 - And as the rules currently exist, we were permitted, pursuant to the rules,

45:22 - how they exist.

45:23 - Now, that was the correct method by which we were to proceed,

45:27 - because I had the notation 901B9 and 902 13

45:32 - are currently existing rules.

45:36 - Right.

45:36 - But you don't get to 901 if you have the certification.

45:40 - So that's why we never got to 901.

45:42 - We were at 902.

45:45 - The certification is

45:46 - only a method to establish authenticity.

45:49 - And through 901.

45:53 - That's all.

45:53 - That's all that your certification

45:56 - could ever do

45:59 - is establish authenticity.

46:01 - That's why you write

46:03 - what why why did why did the Commonwealth choose

46:06 - the business record exceptions as opposed to 13?

46:12 - I mean, 13 seems to be clearly on point,

46:14 - which I think is what Justice Donohue is kind of getting to.

46:16 - It's it's yeah, definitely more specific than the general business record.

46:20 - And I believe when the request was sent to Google that

46:24 - that's the reason

46:25 - they put the extra language in their certification, I would imagine,

46:30 - because they probably whose they Google when they sent

46:35 - all this that it Google's in it.

46:38 - Oh it

46:41 - I was referring to the Schulman

46:42 - that that submitted the certification, but I would imagine

46:47 - when they got the request, they, when they got what request?

46:51 - The request it got what request?

46:52 - When we sent them this, when we sent them the search warrant for the record

46:57 - and Google the search warrant, we sent Google the search warrant,

47:01 - the common practice of the agencies or the entities

47:04 - to whom we send search warrants, and they send us business records back.

47:08 - They do a certification.

47:11 - And I would imagine Google

47:14 - did the certification, added the extra language in there

47:18 - because they imagined they were doing

47:20 - a certification under 902 13.

47:24 - Well, but okay, so you didn't when you sent them some little.

47:30 - Okay.

47:30 - So the process of you sending a search warrant,

47:32 - your advanced thinking about how you're going to authenticate it

47:35 - and you've asked them, you have asked whoever is receiving the search warrant

47:39 - to sign a certification.

47:40 - I wasn't involved in the trial, so I shouldn't

47:42 - speak for the trial attorney and the lieutenant.

47:45 - However, I don't believe we specifically,

47:48 - I, I think Google, AT&T, Verizon,

47:52 - all these agencies know what to generally put in the certification.

47:56 - So I can't answer it for you.

47:58 - I mean, just

47:59 - would you agree, gentlemen, with the point though, again, I think Justice Donohue

48:02 - was raising that the business exceptions records exception is fairly general,

48:07 - whereas 13 is more specific to deal with machine generated data,

48:11 - which is really what you're dealing with here. Right.

48:13 - But there's only one extra component in this is subsection 13.

48:18 - It has the extra language about accuracy.

48:20 - And that was in the circuit.

48:21 - But the comma somewhere at the trial the Commonwealth made

48:24 - the conscious decision not to try to get this in under 13.

48:27 - And I'm trying to understand why

48:29 - I don't think it was a conscious decision.

48:32 - I think we are just used to getting records like

48:36 - call detail records and things of that nature under 900 to 11.

48:41 - I don't think it was a specific decision

48:45 - to forego going in under subsection 13

48:48 - and instead go in under subsection 11.

48:51 - That's what I surmised

48:54 - without it.

48:55 - I ask you what I asked your opposing counsel.

48:57 - Do you think our current rules of evidence are clear enough

49:03 - or sufficient to address the issues

49:06 - that we're seeing with modern technology?

49:10 - I do, Your Honor.

49:11 - Well, particularly for,

49:15 - this computer generated GPS,

49:18 - GPS data, I would submit that our rules are, in fact, sufficient

49:22 - to provide enough safeguards for this type of data.

49:28 - Now, with evolving technologies such as AI,

49:32 - perhaps, not with this case, but perhaps in the future,

49:38 - more safeguards might need to come into play.

49:42 - I know the federal rules.

49:43 - I think they're revamping rules.

49:45 - 707 and went through the judiciary already,

49:48 - and now they're in the public comment phase.

49:50 - And I think in the end of February,

49:54 - that will be done.

49:56 - So I'm curious to see what happens with that.

49:59 - But as it exists now,

50:02 - I guess perhaps a heightened, scrutiny

50:05 - for AI complexities, maybe in the future.

50:09 - Again, not for this case, because I has things like hallucinations

50:13 - in there, and it's just not as tested as things like G.P.S.,

50:19 - which I indicated that millions of people use it on a daily basis.

50:23 - Millions of people rely on it on a daily basis.

50:27 - And it just differ differs fundamentally from,

50:30 - generative AI.

50:31 - Are you suggesting that, as you noted, that the Google, G.P.S.

50:37 - information

50:38 - does not need to be authenticated because everybody relies on it?

50:42 - Oh, no.

50:42 - No, I'm saying it needs to be authenticated.

50:45 - And that's why we did authenticate it in this case. Well,

50:48 - let me go back to when for now, you keep saying

50:50 - that your certificate contain the extra language using the word.

50:56 - It is accurate.

50:58 - It is reliable, does not meet the certification

51:01 - requirement under 902 13.

51:06 - It has described that process

51:11 - and explain why it is accurate.

51:14 - It doesn't say that you could say it's reliable and accurate.

51:18 - It says describe the process.

51:25 - My reading of 902 13 does not say that.

51:29 - If you look at the note 29023, you have the note in front of.

51:33 - Yeah. Apologize.

51:36 - Well, the bottom line is we put it in under 902 11.

51:40 - The defense to the extent there,

51:43 - the defense is claiming it should have been brought in under 902 13.

51:48 - I would submit any such claim is waived

51:52 - because it was not raised in the courts

51:54 - below, and I would submit our certification as we submitted.

51:57 - It was sufficient under both 902 11 and 902 13.

52:03 - I think we get it.

52:05 - Thank you very much.

52:06 - Both of you well argued.

52:08 - And I think what I'm hearing is two experienced

52:12 - lawyers volunteering to serve on our rules of evidence.

52:18 - Thank you.

52:18 - Both left to thank.

52:20 - Would you call the next case Mr. Minor?

52:23 - The next case is Mohammed Al Sira Wan versus

52:28 - Commonwealth of Pennsylvania Department of Human Services.

52:32 - Mohammed Al Sira Wan is an adult

52:35 - with Down's syndrome and profound disabilities.

52:39 - The Department of Human Services has determined that he requires

52:42 - round the clock care to ensure his safety and well-being.

52:46 - His support plan calls for him to receive

52:49 - 133 hours per week of services.

52:53 - Mohammed seeks an exemption to the department's rule, which limited

52:57 - limits the portion of those services he can obtain from family members.

53:02 - The rule he is challenging limits family members

53:06 - to providing 40 hours per week per individual and 60 hours

53:12 - per week for any combination of family members.

53:16 - Mohammed seeks this exemption because he and his family follow strict

53:20 - Islamic principles regarding privacy, which puts significant limitations

53:25 - on who can provide care to Mohammed, particularly in his home.

53:31 - No non family women can provide care to him.

53:36 - No. Adult male

53:39 - who is not family can provide care to him that involves

53:43 - certain private functions.

53:47 - His mother cannot be present in the home

53:51 - if an unrelated male is also present.

53:55 - Given these restrictions, it has been extremely difficult

53:58 - for Mohammed to find caregivers in his home.

54:03 - The department will not provide

54:06 - Mohammed with an exemption to the 4060.

54:09 - Our family cap,

54:12 - because it says there are other alternatives available.

54:17 - Mohammed contends that the department's refusal to grant him

54:21 - an exemption is religious religious discrimination

54:24 - forbidden by the Free Exercise Clause of the First Amendment.

54:28 - He also argued below that the department's refusal refusal violates

54:33 - Pennsylvania's religious freedom Protection Act,

54:36 - which requires state and local agencies to modify applicable rules where necessary

54:42 - to avoid substantially burdening burdening an individual's religious exercise.

54:49 - The Commonwealth

54:49 - Court rejected both of Muhammad's claim,

54:52 - holding that to proceed with either claim, Muhammad

54:55 - had to show clear and convincing evidence of a substantial burden

55:01 - that is more than the loss of benefits due to him.

55:03 - Under his plan,

55:07 - the Commonwealth Court held that Muhammad must demonstrate

55:10 - his religious exercise is effectively impracticable because Muhammad's

55:16 - mother says she will care for him whether she is paid or not.

55:19 - The court below stated that there was no legally cognizable

55:23 - burden on his religious exercise.

55:27 - The department states that Muhammad must first establish that the application

55:32 - of the rule substantially burdens his free

55:36 - exercise of religion.

55:39 - They contend that there was substantial evidence presented

55:42 - in the lower proceedings to hold that

55:46 - he is not burdened by the rule,

55:49 - because an

55:50 - Islamic because Islamic law does not prohibit

55:54 - an unrelated male age from providing services to him.

55:59 - They argue that the rule is constitutional

56:01 - and enforceable because it is neutral, generally applicable,

56:05 - and rationally related to legitimate government objective.

56:09 - It is not selectively enforced or subject to discretionary enforcement,

56:14 - and it only allows for temporary exemptions in emergency situations.

56:19 - Whereas Muhammad is seeking a permanent exemption.

56:25 - Let's listen to the arguments.

56:28 - Please proceed. Good morning.

56:30 - Good morning.

56:30 - May it please the court.

56:32 - My name is Mary Catherine Roper.

56:34 - I represent Muhammad.

56:36 - I'll serve on who is here today.

56:38 - Accompanied by his mother, Akram Avari and his sister, Salam.

56:43 - Sarah Hogan and I am joined by my co-counsel, Pamela.

56:48 - As the chief justice noted, the court granted review on the question

56:52 - whether the Commonwealth Court improperly conflated the First Amendment free

56:57 - exercise analysis with the requirements of the Religious Freedom Protection Act.

57:01 - The answer to that question is very clearly yes.

57:05 - The Commonwealth Court not only applied an inappropriate, substantive

57:09 - standard, that is the requirement of a substantial burden.

57:13 - But also then imposed the statutes

57:16 - evidentiary threshold, clear and convincing evidence,

57:20 - neither of which are, burdens

57:22 - that, this First Amendment claimant should bear.

57:26 - We asked the court

57:27 - to vacate the decision below, and ordered the department to allow Muhammad

57:32 - an exception to the 4060 family cap to the extent that the department

57:36 - cannot provide religiously appropriate services for Muhammad.

57:41 - Can I counsel? Can I just interrupt you?

57:43 - That last part of it is very interesting. Yes.

57:45 - To the extent the Commonwealth cannot provide.

57:49 - Absolutely.

57:50 - Was there any evidence below

57:53 - that the Commonwealth cannot provide,

57:56 - religiously compliant services

57:59 - reimbursed for the 433 hours?

58:02 - Yes. So to begin with, at the

58:07 - before the pandemic ensued,

58:10 - Muhammad was attending a day program

58:14 - for, about 30 hours a week.

58:17 - That was did respect, the family's religious observance rules.

58:22 - And so that was not time that the family was compensated for.

58:27 - The family was compensated for the time outside.

58:30 - So of the 133 hours of of

58:36 - services to

58:36 - which he is entitled each week, the family was compensated

58:40 - for the rest of the time because there were not,

58:44 - religiously appropriate services offered.

58:48 - We can talk about the ALJ, which

58:51 - which seem to think that,

58:53 - they could themselves

58:56 - create some services, for, Muhammad.

59:00 - But to date and I will say just as an update,

59:04 - the department has now identified

59:06 - some potentially acceptable day programs.

59:10 - That would be great, but that would only take care of 30 hours a week.

59:14 - Well, this is what this is.

59:15 - I'm glad you're I'm glad you led off with this statement, because

59:19 - my concern in this case was, first of all, you didn't challenge

59:24 - the findings of the fact by the ALJ, which are then binding on appeal.

59:28 - But putting that aside,

59:31 - my concern in this case is what you is.

59:33 - You were seeking much broader relief, which was simply you want the arrangement

59:38 - that your client currently has as the exception.

59:41 - But here you're asking for something much more narrow,

59:44 - which is all you want is for the Commonwealth to provide your client,

59:49 - the Commonwealth to provide your client with the services that comply with the 133

59:54 - and your religious restriction, your client's religious restrictions.

59:57 - And that's really what you're asking for.

59:59 - 732 That is correct on this record.

01:00 - 08.571 We don't believe that there's going to be 73 additional hours.

01:00 - 10.006 No, no, I get that.

01:00 - 12.275 But I think I think it's I think it's an important distinction

01:00 - 15.945 from for me, it's an important distinction because if we would, if we would reverse

01:00 - 19.549 the Commonwealth Court and we would say,

01:00 - 24.153 your religious, your religious, your client's religious,

01:00 - 27.590 tenants have to be respected.

01:00 - 29.726 What we're looking for.

01:00 - 31.160 Right, right, right.

01:00 - 34.897 But that that doesn't mean your client necessarily gets the arrangement

01:00 - 36.666 that your client currently has.

01:00 - 40.036 If the Commonwealth can provide other services

01:00 - 43.373 that make up for the 133 hours and and your client's,

01:00 - 47.043 mother and sister, don't get that compensation.

01:00 - 47.910 You're fine.

01:00 - 49.412 That's absolutely correct.

01:00 - 50.613 Could I follow up on that then?

01:00 - 55.284 Because, just to clarify, because it's the law we're interested in.

01:00 - 58.221 But the facts here are challenging.

01:00 - 01.224 The you mentioned in, in,

01:01 - 04.093 just a few moments ago that the,

01:01 - 08.131 the center is available, or that the,

01:01 - 13.002 the service, provider outside the home is available

01:01 - 16.873 and that, that provides or is able to provide

01:01 - 19.942 the religiously compliant care.

01:01 - 24.380 In other words, I took you to mean that the,

01:01 - 29.485 this, daycare place or whatever it is,

01:01 - 33.156 is adequate for the toileting

01:01 - 36.826 and personal needs aspect of this case.

01:01 - 41.097 And and to the extent that's correct, how does that combined

01:01 - 44.600 with the 4060 not get you to the number of hours needed?

01:01 - 49.839 So, let me start with the day program that Muhammad attended

01:01 - 54.043 before the pandemic, which was then shut down during the pandemic.

01:01 - 58.715 And was not available for his use at the time of the fair hearing.

01:01 - 01.884 Did meet his religious needs

01:02 - 04.887 in that there were male, attendants

01:02 - 08.157 who could give him one on one, attention when he needed it.

01:02 - 12.662 There was a bathroom arrangement that did not require someone to

01:02 - 15.932 be, in with him while he was

01:02 - 19.202 performing intimate functions, which is part of the family's,

01:02 - 21.537 privacy prohibitions.

01:02 - 24.841 So, yes, there was a program, and there may now be another one.

01:02 - 28.177 At the time of the fair hearing, the evidence was that there was not.

01:02 - 30.313 Well, that gets me to a question.

01:02 - 32.281 I thought we were operating

01:02 - 36.185 on a presumption, or you were operating on a presumption

01:02 - 40.957 that the Commonwealth would not be able to, fulfill this function.

01:02 - 44.160 We are operating on a presumption simply

01:02 - 48.197 based on the history, right, that the Commonwealth

01:02 - 51.334 may be able to come up with

01:02 - 54.036 a, for instance, a day program

01:02 - 58.141 that's 30 hours a week that does not fill

01:02 - 01.410 all of the hours of waiver services

01:03 - 04.413 that Muhammad is currently not receiving.

01:03 - 10.219 So it does come down to going a step beyond Justice Robson's question.

01:03 - 14.423 It does come down to you're asking us to say

01:03 - 18.227 we will make an allowance for the mother

01:03 - 22.899 and sister because of the unlikelihood that the Commonwealth

01:03 - 26.636 will be able to meet the need through the agents. Yes.

01:03 - 30.072 And that exception only extends as far as

01:03 - 33.476 the Commonwealth is unable to provide services.

01:03 - 37.413 So, as we said that a day program is terrific.

01:03 - 40.483 That's about 30 hours a week that may or

01:03 - 43.486 may not satisfy the need.

01:03 - 46.022 It may or may not, but let's presume it does so

01:03 - 47.990 because there perhaps there are options available

01:03 - 50.860 now that were not available at the time of the fair hearing.

01:03 - 53.863 We're not looking for a you're not looking for permanent relief.

01:03 - 57.200 We're not looking for a declaration that the facts

01:03 - 00.670 that existed at the time of the fair hearing will never change.

01:04 - 03.773 When you are taking care of an adult with disabilities,

01:04 - 08.244 that person's needs and programing are always being reassessed.

01:04 - 12.081 And we're not suggesting that that would there would be some exception to that. So,

01:04 - 17.520 Mohammed, but you're asking us to address the question in both contingencies.

01:04 - 19.755 Yes, yes.

01:04 - 21.424 I mean, so there could be a lot of reasons

01:04 - 24.961 why these day programs would not be appropriate.

01:04 - 29.298 Perhaps they wouldn't have appropriate dietary provisions.

01:04 - 31.534 Perhaps they wouldn't have any male staff.

01:04 - 36.172 Perhaps they would not have, bathroom facilities that aren't

01:04 - 39.442 going to allow for the kind of privacy that that Muhammad's beliefs require.

01:04 - 42.511 Or perhaps they will. Right.

01:04 - 47.283 And so what we are saying is, is that it is the department's job

01:04 - 51.254 to propose services when it proposes services.

01:04 - 54.790 And, and, you know, putting aside things

01:04 - 58.694 like sending Mohammed out, wandering out into the world with a,

01:04 - 02.832 a male attendant that's never been proposed by the department.

01:05 - 06.335 Or, or,

01:05 - 12.108 requiring his mother to, leave the home for, up to 73 hours

01:05 - 15.111 a week, virtually, you know, all waking hours,

01:05 - 19.148 so that a male attendant can,

01:05 - 22.151 can be there and not provide intimate care.

01:05 - 26.222 We don't think those we think the record is clear that those things

01:05 - 30.526 are not workable and and respectful of of the religious exercise.

01:05 - 35.064 But to the extent there are services offered by the department

01:05 - 38.701 that that do meet those standards, the family

01:05 - 42.438 and the family is always free to decline services,

01:05 - 45.875 but then the family doesn't get paid for the time that those services

01:05 - 47.310 are available. That's

01:05 - 51.414 kind of like an eminently reasonable position that you're taking.

01:05 - 55.785 And I but it's it's sort of different than the way the case was teed up to us.

01:05 - 00.990 I, I apologize, I think that we did in, I was a little sloppy

01:06 - 04.260 and didn't always phrase our requests the same way, but

01:06 - 07.263 this is what we are looking for because I it seems like, you know, you know,

01:06 - 08.130 it seems like that's

01:06 - 11.367 something that you and the department should be able to sit down with.

01:06 - 13.769 And I have a hard time believing that.

01:06 - 18.240 They think if, if, if, if you were challenging the 4060 rule

01:06 - 23.012 as an unconstitutional premise in and of itself and seeking to strike it,

01:06 - 27.316 I could understand why the Commonwealth would be here fighting vigorously.

01:06 - 29.685 But if what you're saying is

01:06 - 34.790 give us 133 hours within complying with the 4060 rule, if you can.

01:06 - 38.094 But if you can't allow us to keep doing what we're doing until you can do that,

01:06 - 39.662 that seems like an eminently reasonable thing

01:06 - 41.831 that reasonable minds can come to agreement on.

01:06 - 43.766 We we think so, too.

01:06 - 45.234 And and the Commonwealth thought so.

01:06 - 46.769 And there certainly were some discussions

01:06 - 49.672 between the parties after the Commonwealth Court argument. I don't

01:06 - 53.342 I'll just say it's not resolved at this point.

01:06 - 55.911 Right. But but quite apart from that, right.

01:06 - 58.547 We've got a published opinion from the Commonwealth Court

01:06 - 01.984 that grossly misstates First Amendment jurisprudence.

01:07 - 03.085 Well, that that's. Yeah.

01:07 - 06.122 I wanted to follow up because, you're here, aren't you?

01:07 - 10.326 Because the Commonwealth Court held the record.

01:07 - 11.594 I'm quoting here.

01:07 - 14.764 The record evidence in the instant case similarly supports

01:07 - 18.167 that mother's preference rather than on a burden.

01:07 - 21.370 Burden on the free exercise of religion

01:07 - 24.707 as the reason for the permanent exception request.

01:07 - 27.209 That's why you're here, right?

01:07 - 30.713 No, Your Honor, there were the Commonwealth.

01:07 - 34.283 The court opinion said a lot of things, but the primary holding

01:07 - 37.920 by the Commonwealth Court was that Mohammed had not established

01:07 - 42.224 a substantial burden and therefore could not beat his,

01:07 - 46.395 a substantial burden on his his religious exercise,

01:07 - 50.900 and therefore could not meet a threshold requirement of either the First Amendment

01:07 - 54.136 or the Religious Freedom Protection Act.

01:07 - 57.940 The, it you,

01:07 - 01.110 Miss Albury has always,

01:08 - 03.212 said that she is seeking

01:08 - 06.182 this exemption and we are here seeking this exemption

01:08 - 09.118 for religious reasons at the fair

01:08 - 14.190 hearing, counsel for the department said to her, do you have reasons

01:08 - 19.995 other than religion for wishing to be the primary caregiver for your son?

01:08 - 23.799 And she said, yes, I have lots of reasons why I think as as

01:08 - 27.136 I think any mother would, that she, she and her family

01:08 - 30.573 provide the very best care that Muhammad can have.

01:08 - 33.609 That's that's

01:08 - 35.478 she was explicitly asked, do you have reasons

01:08 - 39.248 besides your religion why you prefer to provide his care?

01:08 - 40.716 Of course she does. She's his mother.

01:08 - 42.952 But that's not the basis on which it's your argument.

01:08 - 44.720 It's the wrong threshold burden.

01:08 - 47.790 The threshold burden imposed on you was wrong.

01:08 - 49.458 Correct. And and,

01:08 - 53.829 let me ask you, if we agree with that,

01:08 - 58.267 why should we reach the merits rather than remand it for application

01:08 - 02.071 of the correct threshold remand because, Your Honor, the

01:09 - 06.075 the test under Smith is,

01:09 - 11.881 essentially a legal one that is uncontested.

01:09 - 14.016 Right?

01:09 - 17.019 What's left of Smith.

01:09 - 19.889 So that aspect of Smith is still surviving.

01:09 - 21.190 Smith still survives.

01:09 - 25.294 And in fact, in June, the Supreme Court issued another,

01:09 - 28.497 free exercise opinion in Carson.

01:09 - 30.366 Actually, I'm thinking, Mahmood.

01:09 - 33.602 In June of 2025, the Supreme Court,

01:09 - 37.773 issued a new, free exercise decision in which it said

01:09 - 41.043 we don't need to grapple with the Smith question of whether

01:09 - 44.446 the rule in that case was generally applicable,

01:09 - 48.484 because we are going to look to an older case, Wisconsin versus Yoder,

01:09 - 53.822 and the concept of interfering with a child's religious upbringing as the basis.

01:09 - 57.026 And so that Justice Alito writing that case, simply said,

01:09 - 00.829 we didn't say Smith has gone in.

01:10 - 05.034 And in fact, in 2021, in Fulton, Smith was in full force.

01:10 - 06.368 Right. That was,

01:10 - 09.672 that was Fulton versus Pennsylvania was absolutely a Smith decision.

01:10 - 10.472 So at the moment,

01:10 - 13.876 the Smith rule and the

01:10 - 17.646 Smith rule is, first of all, it's a safe harbor, right,

01:10 - 23.452 for government policies that are, in fact, both neutral and generally applicable.

01:10 - 27.489 But when the policy is not generally applicable,

01:10 - 30.726 it falls out of the safe harbor.

01:10 - 36.465 And then the refusal to grant an exception must be justified by scrutiny.

01:10 - 38.701 How is this not generally applicable?

01:10 - 42.771 The primary reason, and we released several in our briefs.

01:10 - 46.742 The primary reason why the 6040 rule is not generally

01:10 - 49.712 applicable is that there is a,

01:10 - 53.749 mechanism for individualized exceptions.

01:10 - 58.587 The Supreme Court makes clear in Smith, as well as in Fulton,

01:10 - 02.458 that when a government policy

01:11 - 05.761 creates a path for individualized exceptions.

01:11 - 09.999 As as I'll explain that the history

01:11 - 11.967 of the procedural history of this case in a moment,

01:11 - 15.504 that opens the door

01:11 - 18.107 to picking winners and losers.

01:11 - 18.974 Right.

01:11 - 21.210 And discriminating on the basis of religion.

01:11 - 26.515 And that is why when there is this individualized discretionary decision

01:11 - 29.685 about exceptions, the denial of an exception

01:11 - 34.590 on the basis of religion must be justified by strict scrutiny. So.

01:11 - 37.793 Oh, yeah. I'm sorry. Finish your.

01:11 - 42.531 So the the primary evidence that there is a system for seeking

01:11 - 47.002 exemptions is the history in this case, as well as in the case

01:11 - 52.541 when Miss Albury first filed her initial request for an exemption,

01:11 - 55.644 the department rejected that on the grounds

01:11 - 59.915 that it had no power to give, a permanent exception

01:11 - 03.952 to the 6040 rule that got appealed up through the administrative process.

01:12 - 07.222 It got to, the Commonwealth Court, at which point

01:12 - 11.260 it was remanded for hearing on the merits of the question of the exception.

01:12 - 14.296 The Department agreed

01:12 - 18.534 that it could and would consider the merits of,

01:12 - 22.771 of Muhammad's request for an exception to the 6040 rule.

01:12 - 26.041 That is exactly what happened in the Jaleel case,

01:12 - 29.278 as the case makes reference there.

01:12 - 33.349 Two recipients in the Jaleel family.

01:12 - 35.451 One of them had been granted an exception.

01:12 - 38.387 But in the decision that came from the Commonwealth Court,

01:12 - 42.791 the other sibling was not granted an exception, but was given the same,

01:12 - 46.028 honestly followed exactly the same path initially,

01:12 - 48.997 denied out of hand, but later

01:12 - 52.434 given an opportunity to look at the merits of the question for the exception.

01:12 - 55.738 And ultimately that request for exemption was denied.

01:12 - 59.475 On on the merits of the request.

01:12 - 02.478 Not because there isn't a path, there is a path.

01:13 - 04.313 There is a mechanism.

01:13 - 10.652 Are you telling the court that there has been a permanent exception?

01:13 - 12.087 Granted,

01:13 - 15.491 there has been a permanent exception granted, and that has been stipulated

01:13 - 16.458 by the Department.

01:13 - 19.461 That stipulation is found on page

01:13 - 22.664 182 of the record.

01:13 - 23.699 But quite.

01:13 - 25.934 Is that the detailed case?

01:13 - 27.569 It is, it is not.

01:13 - 31.240 So the Jaleel case in which you have seen a decision

01:13 - 34.710 was the denial of an exception.

01:13 - 39.214 To the other sibling,

01:13 - 40.482 the first sibling.

01:13 - 43.118 There is no litigation because an exception was granted.

01:13 - 46.855 The second sibling, was denied an exception in child

01:13 - 50.993 and and that is what is is stipulated by the department.

01:13 - 54.062 But quite apart from whether there has been an exception,

01:13 - 58.066 the court in the Supreme Court of the United States in Fulton

01:13 - 01.170 versus Philadelphia is very clear that.

01:14 - 02.738 And in the

01:14 - 05.741 end, the same words appear in Smith,

01:14 - 07.810 that where there is a mechanism

01:14 - 10.813 for individualized exceptions

01:14 - 13.882 that trigger that and

01:14 - 18.086 but one is denied when an exception think, it makes your argument a little harder.

01:14 - 21.089 If there's never been evidence of,

01:14 - 23.559 the department using the discretion

01:14 - 26.562 to give out a permanent exception, but in fact it has.

01:14 - 30.265 So not only does it have a path for discretionary

01:14 - 33.669 exceptions, it's exercised that discretion and they would pass it.

01:14 - 35.003 The path is a little bit different.

01:14 - 37.172 I mean I agree that

01:14 - 40.008 I agree that that the department has granted exceptions

01:14 - 41.643 primarily as a result of litigation.

01:14 - 44.780 Seems like it's more of like a settlement kind of a thing or something like that.

01:14 - 48.517 And I'm not sure what you mean by permanent exemption and how that jives

01:14 - 51.820 with what you said beginning about sort of being a temporary fix.

01:14 - 54.890 But my question is, Fulton,

01:14 - 59.194 the policy, the written policy that was being challenged,

01:14 - 02.798 the written policy had an exception mechanism in it.

01:15 - 05.167 And I think that's what the Supreme Court was looking for is

01:15 - 08.170 if you have a rule with an exception that you don't have a rule.

01:15 - 11.907 And here I don't think the 4060 rule

01:15 - 15.110 as it's written or as it stands, includes any exception mechanism.

01:15 - 19.081 This is something that was court created or agency created that

01:15 - 23.685 maybe it was wrong, maybe, you know, it's the 46 rule and regulation.

01:15 - 25.687 It is a regulation.

01:15 - 27.022 It is a state regulation.

01:15 - 29.091 Okay. So it's an actual it's not a statement of policy.

01:15 - 30.092 It's a regulation.

01:15 - 30.993 It's a regulation.

01:15 - 34.863 It's it's also written into the waiver that the state writes the waiver,

01:15 - 36.164 the state plan okay.

01:15 - 38.734 So it's something the agency must comply with.

01:15 - 41.436 It's a binding norm.

01:15 - 44.072 It's a it's a binding rule within the agency.

01:15 - 45.140 However what.

01:15 - 49.778 But just before you do that however part, there's nothing in that binding rule

01:15 - 53.649 or that binding norm that says and the department can grant an exemption.

01:15 - 55.551 No, Your Honor, but I will.

01:15 - 56.852 I will say that,

01:15 - 01.557 in all of the history of First Amendment jurisprudence, I never make these kinds

01:16 - 02.391 of blanket statements.

01:16 - 05.827 But I will say, to the extent that the government,

01:16 - 10.232 violates the First Amendment, in practice,

01:16 - 13.602 but not de jury, does not get them off the hook.

01:16 - 17.573 No, I'm just trying to to to recreate the difference between Fulton and here.

01:16 - 17.973 Fulton.

01:16 - 20.976 The policy had an exception written into it.

01:16 - 22.110 This one.

01:16 - 24.746 The exception was post hoc. So post hoc created.

01:16 - 27.349 I'm not saying it doesn't break the dam and the water doesn't flow.

01:16 - 29.785 I'm just saying that it was a post hoc exception grant.

01:16 - 31.019 Not in the rule itself.

01:16 - 34.623 So to be clear, I believe that the exception in Fulton

01:16 - 39.761 was not written into the nondiscrimination provision that was the basis of the,

01:16 - 42.631 the city's,

01:16 - 46.168 denial of the of the exception to, to Catholic Social Services.

01:16 - 49.605 It was an exception, sort of

01:16 - 52.274 more broadly that applied within the program.

01:16 - 55.711 And so, so I don't think that distinction

01:16 - 58.580 and that is certainly not something that Smith says.

01:16 - 01.016 I don't think it's something that the Fulton says.

01:17 - 03.352 They talk about a mechanism.

01:17 - 07.322 If there is a mechanism, if there is a system in this mechanism,

01:17 - 10.525 the sort of an unwritten mechanism that came about as a result of this

01:17 - 13.562 individualized cases, it's not published anywhere.

01:17 - 17.399 Nobody but a great lawyer like you who has followed these cases

01:17 - 19.167 so closely, would even know

01:17 - 21.503 that there's an ability to seek some sort of an exemption.

01:17 - 24.172 Well, so I think anyone who practices with the department knows.

01:17 - 26.141 I just want to answer one question you had, which

01:17 - 28.810 why are we calling this a permanent exception?

01:17 - 32.648 And the reason is that the regulations actually do have

01:17 - 37.152 a set of temporary exceptions for up to 90 days

01:17 - 40.722 for various kinds of emergencies about personnel not being available.

01:17 - 42.924 And we are calling this a permanent exception

01:17 - 46.695 to distinguish it from that de jure, a

01:17 - 49.998 exception

01:17 - 53.001 regime, which is is not what we're, we're dealing with here.

01:17 - 56.271 There is a de facto

01:17 - 59.675 exception regime that is followed by the department.

01:17 - 01.710 That department,

01:18 - 06.148 come Department stipulated to the remand of these cases

01:18 - 10.485 to be considered on the merits and then held merits hearings.

01:18 - 11.553 Right.

01:18 - 15.057 That this they they system for seeking an exemption.

01:18 - 17.125 I'm hoping the next person doesn't have to go all the way

01:18 - 20.128 to the Commonwealth Court to get their fair hearing,

01:18 - 23.365 on on the merits of their request for an exemption.

01:18 - 28.303 But the hearing, assuming you're assuming you you prevail, the hearing,

01:18 - 31.306 if we side with you, would look more like,

01:18 - 37.079 you have not provided us the 133 hours or how many approved hours

01:18 - 40.549 that we're entitled to in compliance with our religious restrictions.

01:18 - 43.785 Therefore, you must allow us to provide it this way

01:18 - 47.189 until you can accommodate us some other way.

01:18 - 53.328 And that was the argument being made by Muhammad, counsel at the hearing.

01:18 - 54.996 The the ALJ,

01:18 - 59.201 I think, is not really empowered to grapple with constitutional questions.

01:18 - 03.371 But the question was raised there and at every stage.

01:19 - 04.039 Right.

01:19 - 08.043 And that question is finally grappled with in the Commonwealth Court, which

01:19 - 10.112 who's

01:19 - 12.647 who grant of review over agency decisions

01:19 - 16.184 includes determining whether they comply with constitutional rules.

01:19 - 18.954 Okay, Miss Roper, I think we get it.

01:19 - 21.723 Could we hear from your opposing counsel,

01:19 - 24.726 Miss Holland?

01:19 - 34.369 Thank you, Your Honor.

01:19 - 34.970 May it please

01:19 - 35.804 the court.

01:19 - 37.773 My name is Camille Howlett, and I represent the

01:19 - 39.674 Department of Human Services.

01:19 - 42.010 Also company at a little closer to the mic. Sorry.

01:19 - 42.511 That's all right.

01:19 - 43.411 I'm also accompanied

01:19 - 46.648 by my co-counsel, Helene Locke's of the Department of Human Services.

01:19 - 49.885 And as appellant stated, the only question at issue here

01:19 - 53.088 today is whether the Commonwealth Court completed its First Amendment

01:19 - 56.091 free exercise analysis with its disposition

01:19 - 59.728 of Penn of appellants, Pennsylvania Religious Freedom Protection Act claims.

01:20 - 02.397 And the answer to that question is no.

01:20 - 03.932 There's ample support to hold that.

01:20 - 07.135 The Commonwealth Court properly analyzed the First Amendment issue

01:20 - 09.638 by first considering, as a threshold matter,

01:20 - 13.809 whether a substantial burden was present within its First Amendment analysis.

01:20 - 15.177 The U.S.

01:20 - 18.980 Supreme Court in Hernandez held that the first, the Free Exercise

01:20 - 22.384 Inquiry, asks whether the government has placed a substantial burden

01:20 - 26.188 on the observation of a central religious belief and, if so,

01:20 - 29.524 whether a compelling governmental interest justifies that burden.

01:20 - 32.761 This language shows that the requirement for a substantial

01:20 - 36.731 burden is a threshold matter, and this court in Commonwealth v Stuart

01:20 - 40.468 recognized that a plaintiff has the initial burden of establishing

01:20 - 43.872 a substantial burden on his or her free exercise of religion.

01:20 - 47.275 Is that still the proper threshold,

01:20 - 51.279 given the, the post Smith Free exercise cases?

01:20 - 53.949 Our position would be. Yes.

01:20 - 57.152 And that's based on even as recently as 2021,

01:20 - 00.422 the Superior Court and the Third Circuit have reached similar holdings.

01:21 - 05.660 I Smith, I think, has been, superseded by statute.

01:21 - 08.864 And although it addresses the compelling interest test,

01:21 - 11.867 it does not address the burden required.

01:21 - 15.570 And, this case, I'm sorry, this court in 1997,

01:21 - 19.040 which was post Smith reached that holding regarding,

01:21 - 23.478 that the plaintiff has the initial burden of establishing the substantial burden.

01:21 - 25.480 The Superior Court and Third

01:21 - 28.950 Circuit have also reached similar holdings as recently as 2021.

01:21 - 33.288 And what about Miss Roper's, argument that the,

01:21 - 36.491 fact that your client has set up

01:21 - 39.494 this exception regime,

01:21 - 45.901 changes the game, so to speak, that you're

01:21 - 49.337 the, the,

01:21 - 52.340 the availability of discretion.

01:21 - 54.976 Displaces the paradigm

01:21 - 58.179 that would exist where there not such an exception regime.

01:21 - 02.884 So that goes to the general applicability which, as an initial matter,

01:22 - 05.887 I do think goes beyond the limited allocator granted here.

01:22 - 10.091 But notwithstanding, our position is that the rule is generally applicable.

01:22 - 14.029 Although there was one exception granted, as mentioned in JLL,

01:22 - 17.866 the record does not contain the reason for that exception.

01:22 - 23.004 The Secretary's order granting that exception did not provide an explanation.

01:22 - 25.707 So that information is not on the record here.

01:22 - 29.244 Well, that's that's terrible adjudicating, if you issue an adjudication

01:22 - 31.880 without findings of fact and conclusions of law.

01:22 - 33.682 Agreed. Right.

01:22 - 35.951 But but the fact is there are exceptions.

01:22 - 39.454 Granted, the fact is there is a mechanism, at least for that.

01:22 - 40.789 Maybe not published mechanism,

01:22 - 44.059 but a well known mechanism for seeking religious exemptions.

01:22 - 45.393 You have to agree with that, right?

01:22 - 48.396 Yes. I would not dispute that an exception was granted.

01:22 - 50.899 Whether it was religious or not.

01:22 - 53.902 Only is an exception granted, exceptions are entertained, people

01:22 - 57.405 can file applications for exemptions, and the secretary will address them.

01:22 - 58.306 Correct.

01:22 - 02.544 But I would argue based on, spivac, which was a third circuit case that

01:23 - 06.915 different categories of an exception can be

01:23 - 09.484 allowed without rendering

01:23 - 12.487 a rule not generally applicable.

01:23 - 17.225 We would I would also argue that under Jaleel, where the exception

01:23 - 21.029 was at issue, and then the sibling also requested an exception.

01:23 - 24.065 The court did not find that dispositive and did not grant

01:23 - 27.068 an exception to the sibling. So,

01:23 - 32.273 whether the exception is needed is what the substantial burden looks too.

01:23 - 36.845 I could I ask you it baffles me a little bit

01:23 - 40.081 why we're here, why you're here

01:23 - 44.252 before the Supreme Court on a question that seems to be

01:23 - 46.755 relatively straightforward.

01:23 - 52.560 And, from my perspective at this point, I'm speaking for my colleagues

01:23 - 56.398 seems to be, a reasonable request,

01:23 - 00.702 for an exception or an exemption.

01:24 - 02.771 Why? Why are we here?

01:24 - 05.874 Why could this not have just been resolved?

01:24 - 08.343 Well, sure. So, like, there were efforts,

01:24 - 12.847 and the department has offered,

01:24 - 16.518 services that it contends could meet the religious

01:24 - 19.921 needs of appeal in some extent, but then at other times, it can't.

01:24 - 20.155 Right.

01:24 - 21.122 Well, I would argue

01:24 - 24.859 there are services available, including, and especially life sharing.

01:24 - 29.431 When families want to exceed the 4060 rule, ODP

01:24 - 32.067 hears them towards the life sharing service,

01:24 - 35.070 which is a mechanism whereby individuals,

01:24 - 40.141 receive a stipend for providing services under a contract with the provider

01:24 - 44.245 and then the 46 year old is not applicable in that situation.

01:24 - 47.782 So, I also think the nature,

01:24 - 51.386 you know, we were under the impression it was seeking a permanent exception.

01:24 - 55.824 And I think there have been meetings and work with the family

01:24 - 59.060 on these practices, person centered planning.

01:24 - 02.630 So ODP does not dictate you have to take this service.

01:25 - 05.633 It can offer a service that's available at the appellant.

01:25 - 08.903 Let me ask you, you just you just you just indicated

01:25 - 11.973 that the ODP would get a provider.

01:25 - 16.044 Now, is there a provider,

01:25 - 19.547 contracted with your organization that can cater to

01:25 - 23.017 the strict religious needs of

01:25 - 26.121 your of the client?

01:25 - 29.190 So ODP I, I personally, I don't know,

01:25 - 33.361 I know there has been work with the ISP, the individual support plan.

01:25 - 34.729 Which brings me

01:25 - 38.500 interestingly, because the chief Justice just asked you a very simple question,

01:25 - 41.703 and your response is based upon

01:25 - 44.672 an unknown or an uncertainty.

01:25 - 49.577 Your argument is that we denied it because there's an exception

01:25 - 52.981 when we could get money for a provider,

01:25 - 56.618 but we don't even know if there exists the provider that cater

01:25 - 01.289 to the religious exceptions or the religious responsibilities.

01:26 - 05.260 So how can you stand up here and say we object

01:26 - 08.263 based upon a lack of information?

01:26 - 10.064 That's what you just said.

01:26 - 12.000 Sure. And let me clarify.

01:26 - 13.668 Care is

01:26 - 16.671 available, especially through that life sharing service.

01:26 - 20.208 That model was offered to the family and it was rejected,

01:26 - 23.411 because some of the,

01:26 - 26.614 I think just the payment situation was not what the family wanted.

01:26 - 31.352 So that underlies ODP, it's a lesser it's a lesser payment

01:26 - 34.856 arrangement than what they would get if you granted the exception.

01:26 - 35.590 Correct.

01:26 - 39.427 But our position would be that a financial burden does not amount

01:26 - 42.630 to a religious, substantial burden on his religious exercise.

01:26 - 43.231 That's.

01:26 - 43.698 Yeah,

01:26 - 47.035 that's I mean, I understand that argument, and I've seen that in the briefing.

01:26 - 50.505 The question I have that it

01:26 - 52.540 brings to mind for me is

01:26 - 56.978 whether that argument holds water after Carson versus making,

01:26 - 00.648 because I think the argument you just made

01:27 - 03.585 was, was

01:27 - 06.487 challenged, at least, if not fatally undermined

01:27 - 09.157 by what Scotus did in Carson versus Megan.

01:27 - 15.063 I would have to familiarize myself better with the case.

01:27 - 16.397 That's the main case.

01:27 - 18.333 Yeah, I,

01:27 - 21.135 I, I think based on what,

01:27 - 24.706 was found by the Commonwealth Court, that it was the mother's preference

01:27 - 30.345 and that any financial burden does not rise to a religious, substantial burden.

01:27 - 34.182 Because waiver services are provided for the benefit of the individual,

01:27 - 38.553 not the financial benefit of the family, that it would not be

01:27 - 41.522 a substantial burden on his religious exercise.

01:27 - 43.291 And there is care available

01:27 - 46.561 through other programs that can meet his religious needs.

01:27 - 49.664 As I stated, he's been in a day program

01:27 - 52.667 where he served by male and female staff.

01:27 - 55.036 He's able to be served by an unrelated male

01:27 - 58.039 without an impeding his religious beliefs.

01:27 - 01.442 So there are options available.

01:28 - 05.213 Because ODP practices person centered planning, there's a care team

01:28 - 09.450 that looks at providers and available options and presents that to Mr..

01:28 - 11.152 Also Rowan.

01:28 - 13.688 And he is able to deny services.

01:28 - 16.758 If he's not that's what makes these case is so difficult.

01:28 - 18.092 It's it's very fluid.

01:28 - 19.827 These are very fluid circumstances.

01:28 - 23.498 And by the time they get to us, the facts on the ground have changed. Yes.

01:28 - 27.502 If we were to issue just a I mean, tell me if this

01:28 - 30.505 somehow offends the Commonwealth, if we were,

01:28 - 34.142 if we do issue just a ruling or rule that, you know, the Commonwealth has

01:28 - 40.214 to provide a path to 133 hours of services if they want to enforce the 4060 rule.

01:28 - 42.283 That does

01:28 - 45.286 not offends the family's Muslim faith.

01:28 - 47.955 Do you have a problem with that principle?

01:28 - 50.825 I think as long as it can be done,

01:28 - 53.828 in accordance with enforcing the 46 year rule.

01:28 - 54.829 But that would be your

01:28 - 58.833 that would be your burden, your burden would have to be to provide them a path.

01:28 - 01.536 If you're going to enforce this 4060 rule

01:29 - 02.270 and you're going to say

01:29 - 05.406 it's generally applicable, which means it applies to everybody,

01:29 - 10.678 you need to create a path to getting the 133 hours of approved services

01:29 - 15.216 that both honors the 4060 rule and their religious restrictions.

01:29 - 17.418 And if we said that, would you have a problem with that?

01:29 - 21.356 No. And I think that path is available through like we have to kind of ignore

01:29 - 22.023 that because,

01:29 - 24.392 again, the facts of on the ground have changed since the age

01:29 - 26.160 when what was the adjudication here?

01:29 - 28.763 Oh, I mean like years ago. Right.

01:29 - 30.198 That adjudicated.

01:29 - 30.832 Yes. Yeah.

01:29 - 33.735 So so the facts on the ground is substantially changed.

01:29 - 36.337 But if we were just to say that simple proposition,

01:29 - 39.073 which seems to me to be I mean, I haven't formulated

01:29 - 41.509 my final thoughts on this, but it seems to be like a principle

01:29 - 43.778 that almost everybody would universally agree with.

01:29 - 45.713 Wouldn't the Commonwealth agree with that? Yes.

01:29 - 48.816 I mean, there's no contention that his needs, you know,

01:29 - 50.852 the hours are not needed to meet his needs.

01:29 - 54.389 I think the issue comes down to how the services are arranged to meet

01:29 - 58.126 those needs, and that could be sorted out when you provide your care plan.

01:29 - 59.660 If they don't like it, then they go to that.

01:29 - 00.995 You go to the bar,

01:30 - 04.031 you have a hearing, an adjudicator says whether the plan complies

01:30 - 06.534 with the religious beliefs and the 70, 40, 60 rule.

01:30 - 10.138 All that fun stuff and then it will be plan specific issue.

01:30 - 14.308 But here the facts have changed and you don't disagree with the law

01:30 - 16.444 or you don't disagree with your responsibility.

01:30 - 20.381 We may have some quibbling about the Commonwealth court's analysis,

01:30 - 23.618 but at the end of the day, everybody seems to agree on the principle.

01:30 - 25.086 I would agree, yes.

01:30 - 27.588 And if there is a change in facts, you know, I think

01:30 - 29.824 it would be something that

01:30 - 32.827 would need to be raised again through a factual hearing.

01:30 - 36.030 Because the record being what it is,

01:30 - 36.998 we're kind of.

01:30 - 41.402 Yeah, counsel, this is not on you because you were assigned the job

01:30 - 45.106 of arguing this case before us, and you've done a very nice job.

01:30 - 49.911 But, you know, the department would be well advised to try

01:30 - 54.315 to resolve these kinds of matters in a reasonable way

01:30 - 58.219 before they get to the Commonwealth Court and the Supreme Court.

01:30 - 00.888 I take that, and I do think there have been efforts

01:31 - 03.624 they just unfortunately weren't successful here.

01:31 - 07.361 I think efforts are ongoing even up to today.

01:31 - 10.932 So but is this your first argument before us?

01:31 - 11.799 Well, welcome.

01:31 - 12.200 Oh, good.

01:31 - 13.768 A very nice thank you.

01:31 - 15.570 We understand your position.

01:31 - 17.638 And this was well argued on both sides.

01:31 - 18.573 Thank you.

01:31 - 20.308 Thanks for bringing us the First Amendment case.

01:31 - 21.542 We don't get fun. One.

01:31 - 24.679 Come to us more instead of federal court.

01:31 - 27.682 You have this stuff. You can.

01:31 - 29.884 The next case for the court's consideration

01:31 - 33.988 is Federated Insurance Company versus Summit Pharmacy.

01:31 - 39.794 It's an appeal from the Bureau of Workers Compensation Fee Review hearing Office.

01:31 - 43.764 It's an important but technical case involving

01:31 - 47.435 at what price pharmacies will be paid

01:31 - 50.671 for providing medications

01:31 - 53.674 to injured workers across the Commonwealth of Pennsylvania.

01:31 - 56.477 I believe a couple of definitions of terms

01:31 - 59.847 is in order to help, understand the argument.

01:32 - 03.484 First, the term AWP, you'll hear that

01:32 - 07.088 and that is the average wholesale price of a medication.

01:32 - 10.424 Second is the term NRDC,

01:32 - 14.462 the national average of drug acquisition costs.

01:32 - 17.732 Now, that's the standard that the insurance companies want to use.

01:32 - 20.434 The third term is the Red book.

01:32 - 22.770 The Red book has been used in the,

01:32 - 24.705 Bureau

01:32 - 28.476 of Workman's Compensation as the reimbursement manual

01:32 - 33.281 for cost payment to pharmacies since about 1993.

01:32 - 37.718 And each year, in the Pennsylvania Bulletin, the bureau announces

01:32 - 41.389 that it will be using the red book as the source of that cost.

01:32 - 43.324 Pricing.

01:32 - 46.260 This case comes to the Supreme Court,

01:32 - 50.131 upon 15 separate fee review petitions

01:32 - 53.834 filed concerning 69 prescriptions.

01:32 - 59.307 The fee review hearing officer ruled in favor of the pharmacy,

01:32 - 03.077 and the matter was appealed to the Commonwealth Court of Pennsylvania.

01:33 - 07.448 The Commonwealth Court reversed, and the Commonwealth Court ruled

01:33 - 13.020 that the Bureau improperly delegated legislative authority to a private entity

01:33 - 17.258 by allowing the Bureau to use the Red book pricing method.

01:33 - 22.029 At this point, the court will consider whether the Commonwealth court's

01:33 - 26.467 determination, that the use of the Red book to set average

01:33 - 30.271 wholesale prices, or AWP, was improper.

01:33 - 32.173 Let's listen to the argument.

01:33 - 45.786 Thank you.

01:33 - 47.188 May it please the court.

01:33 - 50.391 Daniel Siegel, on behalf of, the insurance.

01:33 - 51.726 I'm an insurance company.

01:33 - 54.729 My co-counsel crystal. Hi.

01:33 - 59.867 We're here today on essentially one issue in terms of the fee

01:33 - 03.170 dispute, the fee review, which is did

01:34 - 09.910 the Commonwealth Court error by describing and in this case, in contrary to Judge

01:34 - 14.615 Saylor's opinion in the Supreme Court in Tapp, when he wrote that

01:34 - 19.020 it was an industry benchmark known as a governor in government

01:34 - 22.256 formulas, the average wholesale price,

01:34 - 27.528 which had acquired a peculiar and appropriate meaning under

01:34 - 29.830 Pennsylvania law.

01:34 - 33.134 The Commonwealth Court invalidated that improperly

01:34 - 38.139 and in doing so invalidated without saying so.

01:34 - 42.843 Other statutes in Pennsylvania also in invalidating it,

01:34 - 45.980 it took a position that is contrary

01:34 - 51.052 not only to what the AWP has meant and continues to mean

01:34 - 56.657 as a very specific term of art in pharmaceutical pricing and

01:34 - 00.961 and also contrary to the fact that 32 other states

01:35 - 04.231 use a AWP as the benchmark

01:35 - 07.334 for pricing of drugs,

01:35 - 10.171 17 of which, like Pennsylvania,

01:35 - 13.007 are up plus a certain amount.

01:35 - 18.279 The advantage and you have to understand that the AWP is a

01:35 - 21.449 an industry term used.

01:35 - 28.022 So if you try to use the regular term average wholesale price, no.

01:35 - 29.623 One Commonwealth court,

01:35 - 32.460 the insurance company,

01:35 - 36.297 no one has been able yet to really define that term.

01:35 - 40.601 And AWP is not we have virtually no.

01:35 - 45.706 AWP represents a term and has always represented a term

01:35 - 50.811 in the pharmaceutical industry that essentially means, it's the list price.

01:35 - 53.814 It's the drug price set by the manufacturer.

01:35 - 57.084 Well, let me ask you, I think that's a that's a straightforward argument

01:35 - 59.487 and a compelling one, I think.

01:35 - 04.158 But isn't this red book thing a problem? No.

01:36 - 07.828 What Trouvent analytics could change

01:36 - 11.565 these numbers tomorrow and the next day and the day after that.

01:36 - 13.501 How can the law be hostage

01:36 - 17.204 to what some outfit named Trouvent Analytics says the number is?

01:36 - 19.607 It's not a product

01:36 - 21.942 problem because profits.

01:36 - 24.812 We designated the impairment ratings

01:36 - 27.882 to a company to the AMA.

01:36 - 31.085 And essentially you had to use their guidelines

01:36 - 34.321 in this case and in pharmaceuticals.

01:36 - 38.225 All that is done is it sets a maximum price.

01:36 - 43.631 So the maximum price that can be used is 100% of the AWP.

01:36 - 47.868 It does not mean and has never meant that the provider

01:36 - 52.139 in this case Summit Pharmacy has to use that price.

01:36 - 55.810 So and this is the perfect example because Summit Pharmacy

01:36 - 02.316 dot billed at 100% of AWP, not and any other number.

01:37 - 05.319 So it's not required in profits.

01:37 - 08.455 There was no flexibility for a physician.

01:37 - 13.160 The physician had to rule exactly the way you know, it had to read the

01:37 - 17.598 the AMA guides and it had to render a decision consistent with that.

01:37 - 20.801 This merely sets consistent with other

01:37 - 24.038 cost containment regulations, a maximum.

01:37 - 28.209 So it's not designating the what the price is.

01:37 - 32.079 It's designating a cap so that beyond that number,

01:37 - 35.883 no one should be accepting reimbursement of funds.

01:37 - 41.088 But a pharmacy is free to have any number it wants to do.

01:37 - 44.458 Isn't that isn't the cap to justice Wex point?

01:37 - 47.461 Isn't the cap a policy decision that the General Assembly should make?

01:37 - 48.963 It is.

01:37 - 51.732 And in fact, in doing so,

01:37 - 56.437 they designate the AWP as in their in the statute.

01:37 - 58.172 But it's not the practice.

01:37 - 02.109 Decision is a type of problem because it's not designating

01:38 - 04.945 the actual number of pharmacy.

01:38 - 07.948 But the problem isn't with AWP as such.

01:38 - 10.384 I mean, I think you have a strong argument there.

01:38 - 14.955 The problem is what how is the AWP selected in the Bureau?

01:38 - 18.759 The bureau tells us, gives

01:38 - 21.962 them, quote, gives notice that it utilizes

01:38 - 25.900 the Red book published by Proven Health Analytics

01:38 - 30.437 to determine the average wholesale price of prescription drugs.

01:38 - 35.843 So I'm not sure how your response to either me or Justice Robson

01:38 - 39.747 resolves that problem.

01:38 - 42.750 It was the bureau puts the state's imprimatur

01:38 - 47.321 on the gold standard as proven health analytics.

01:38 - 49.757 Whoever they are.

01:38 - 53.027 Why is that any different than a government body saying

01:38 - 56.530 whatever the AMA says or, you know, whatever

01:38 - 00.701 the national, Association of Car Dealer says it's different

01:39 - 05.372 because one, it's only used when there is a in a fee dispute.

01:39 - 09.510 So in other words, if there is no dispute between the provider

01:39 - 12.513 and the insurer, it never even gets to that.

01:39 - 16.951 They could charge whatever number they want when there is a dispute

01:39 - 20.921 that goes to a fee review hearing officer, then

01:39 - 26.093 and only then do they have to do they have a cap on what they can charge.

01:39 - 28.862 So it's a different and it's not designating.

01:39 - 33.500 Plus, in this case, every year the bureau is free

01:39 - 36.837 to render any, guide at once.

01:39 - 39.340 You're free to lobby on it.

01:39 - 41.041 And in fact, that's part of the problem.

01:39 - 45.379 And why we don't even believe this case is properly before this court,

01:39 - 48.782 because that is a discretionary act.

01:39 - 51.752 And when determining whether an agency,

01:39 - 53.754 whether the

01:39 - 58.692 whether an agency declaration like that decision, a discretionary decision,

01:39 - 02.863 the only appealable issues are when the agency either acts in bad

01:40 - 06.734 faith, fraudulently, capriciously, or abused its power.

01:40 - 09.236 There's no allegation of that here.

01:40 - 12.039 And as a practical matter, in this case,

01:40 - 15.976 these hifi reviews that are appealed here were over many years.

01:40 - 20.047 And each year the agency, the Bureau of Worker's compensation

01:40 - 24.985 issues, its standard of which which book is going to be used.

01:40 - 28.422 And when it does, that's the standard.

01:40 - 32.292 So we don't even know this which year or whatever.

01:40 - 36.797 Even though the Bureau has used the Redbook as the standard

01:40 - 40.000 for many years and without complaint.

01:40 - 43.070 And it didn't have to, but it doesn't have to be regulations

01:40 - 46.774 made clear that they could use any national schedule.

01:40 - 49.143 Right? That's correct. That's absolutely correct.

01:40 - 53.113 So how do you then derive from that general,

01:40 - 56.283 authority that they have

01:40 - 02.156 some notion that there is a term of art that's been developed?

01:41 - 05.859 I mean, you certainly don't recognize it as such.

01:41 - 10.964 Well, do you use the history of the of AWP?

01:41 - 11.165 Yeah.

01:41 - 15.002 But I mean, your history is they've always used it, they've used the red book.

01:41 - 15.702 Correct. Okay.

01:41 - 18.972 But how does that make a determined FAQ that makes it the,

01:41 - 23.977 discretion, of the Commonwealth for a number of years?

01:41 - 26.146 No, it's, yeah.

01:41 - 28.315 I think we're parsing words.

01:41 - 29.650 That's what we do. Yeah.

01:41 - 31.385 No, much as I hate it, but.

01:41 - 35.656 Yes, but, the bureau is free to choose any of the standards

01:41 - 39.693 that that recognize, the wholesale price.

01:41 - 44.998 And it says in the regulation, you know, it's a national standard

01:41 - 48.335 that they use so they can choose others.

01:41 - 51.305 It doesn't mean there's one.

01:41 - 54.608 They happen to have always chosen the Red book, right?

01:41 - 55.042 Correct.

01:41 - 58.245 That's why it works against the notion that it's a term of art.

01:41 - 01.315 Well, except that you have to that

01:42 - 04.952 that doesn't take in the historical context of it.

01:42 - 09.123 Medicare, Medicaid have used up.

01:42 - 12.359 And again, it's the same term of art.

01:42 - 16.630 But many, many pharmacies don't rely on the red book.

01:42 - 19.333 Correct? I mean, the major pharmacies aren't here.

01:42 - 20.701 They didn't intervene then.

01:42 - 22.536 Nobody has an interest in this.

01:42 - 25.772 I mean, because they, as every pharmacy

01:42 - 29.276 is entitled to do, can negotiate for the price.

01:42 - 31.078 That's also in the regulations.

01:42 - 34.481 That's another reason why profits wouldn't apply, because,

01:42 - 36.884 any pharmacy

01:42 - 39.820 I my my question is this different?

01:42 - 44.491 I mean, why is it that the red book is a, a term of art?

01:42 - 48.095 I mean, the largest pharmacies don't rely on it at all.

01:42 - 52.766 Many pharmacies just negotiate.

01:42 - 55.269 The the, price.

01:42 - 58.272 Why isn't it just it says what it means?

01:42 - 01.942 Because no average folks average wholesale price.

01:43 - 02.643 Because.

01:43 - 06.713 No, if you try and Alice, you know, I could ask you,

01:43 - 10.851 but it's you can ask anyone if you say average wholesale price.

01:43 - 14.922 No one has been able to give that as it's as they've tried.

01:43 - 16.690 It's plain language meeting

01:43 - 20.627 is that the average wholesale price of the drug as dispensed.

01:43 - 24.031 Is it the average wholesale price over a period of time?

01:43 - 29.403 Well, there is an alternative, suggested I, to the, Red book,

01:43 - 33.640 in the, court below.

01:43 - 36.543 They didn't offer an alternative.

01:43 - 40.113 They merely directed the Bureau of Workers comp

01:43 - 44.318 to come up with another about the, Nasdaq,

01:43 - 48.722 which is compiled by the center for Medicare and Medicaid Services.

01:43 - 50.757 That sounds like a legitimate basis

01:43 - 53.994 for, average wholesale price for government service.

01:43 - 59.633 Except that one, the ornate act, as it's called.

01:44 - 02.569 One is not an average wholesale price.

01:44 - 06.840 It's an average acquisition cost, which is different from an average.

01:44 - 08.909 What is the wholesale price?

01:44 - 11.878 Isn't that the price at which something can be acquired?

01:44 - 16.984 If you're using the term as it's used in the vernacular,

01:44 - 21.688 if you're using it as a term of art, know it because it becomes

01:44 - 25.325 what does the industry where does this term of art come from?

01:44 - 27.628 I mean, that's what that's what I keep.

01:44 - 30.530 That's what I keep, groping for an artist.

01:44 - 31.698 An artist. Yes.

01:44 - 32.266 Thank you.

01:44 - 33.700 I thought about that.

01:44 - 36.370 Where it came from. You think of that.

01:44 - 39.573 But I thought it was trying to mention it to this fine council.

01:44 - 46.046 It's developed, but it started in the 1960s when it was used by what?

01:44 - 49.049 Much more widely used than it is now.

01:44 - 52.886 But all but even from the 60s, when Medicare and Medicaid

01:44 - 57.224 were accepting the average wholesale price, in every case

01:44 - 00.260 they were using these standards, the Red book,

01:45 - 05.532 there are other standards, is really three main compendiums.

01:45 - 06.133 Red book.

01:45 - 11.872 I shouldn't even pretend to come up with a average wholesale price in the

01:45 - 16.009 if you if you take the term as it's used

01:45 - 20.280 in the a common language. No.

01:45 - 23.250 But if you take the term as it is used

01:45 - 27.721 and the in the, for example below, both both witnesses,

01:45 - 29.690 even though the employer

01:45 - 32.693 or the insurance company witness was not accepted as credible,

01:45 - 37.564 both acknowledged that is a term of art in the pharmaceutical industry.

01:45 - 43.203 And when it's a term of art, then you have under section 19 03A,

01:45 - 47.507 you have the language that says when words are construed

01:45 - 50.711 according to their common and approved usage,

01:45 - 54.681 but technical words and phrases and such others

01:45 - 58.285 has have acquired a peculiar and appropriate meaning,

01:45 - 02.823 or are defined in this part which it's not so peculiar and appropriate.

01:46 - 03.490 Meaning.

01:46 - 07.060 That's where the AWP has always done that.

01:46 - 09.996 That's why that's what the Red book has always done.

01:46 - 14.935 The Red book has taken on a meaning, but that doesn't mean

01:46 - 20.240 that average wholesale price has taken on and meaning in the industry or trade.

01:46 - 23.577 I think getting back to my point, many pharmacies,

01:46 - 26.847 the largest of them, do not rely on the Red book.

01:46 - 29.049 Many pharmacies

01:46 - 32.853 don't use it, and it also depends on what type of pricing.

01:46 - 37.290 So every industry has different pricing in different standards.

01:46 - 41.428 So you wind up with a whole variety of different things.

01:46 - 47.033 But you need in workers comp, for example, to have a standard for the cap

01:46 - 50.637 that would allow one a price of every drug.

01:46 - 56.543 So every drug, every generic drug, even if you buy a generic Tylenol,

01:46 - 59.880 every generic Tylenol has a different

01:47 - 02.949 manufacturer number depending on who's manufacturing.

01:47 - 08.121 So you have to have an across the board standard compendium that has all of those.

01:47 - 10.323 There's very few that do.

01:47 - 16.463 Redbook does medi span does those type of entities have that type of compendium?

01:47 - 17.798 So you have that.

01:47 - 21.601 You also have to have it because in the personality scope,

01:47 - 25.405 maybe you could, correct me if I'm wrong, but

01:47 - 28.074 both experts essentially testified

01:47 - 32.145 that the red book price balancing a profit margin.

01:47 - 33.713 It does.

01:47 - 36.483 Well, why is that an average wholesale price?

01:47 - 39.786 That because it's see, that that to me

01:47 - 43.723 is just totally inconsistent with the concept of,

01:47 - 46.726 the acquisition cost,

01:47 - 49.729 the but that's that's part of the,

01:47 - 54.301 the difference and part of the passing of the language to the legislature.

01:47 - 58.004 And this is really ultimately a legislative decision,

01:47 - 03.343 not one for this quarter, the Commonwealth Court to be redefining,

01:48 - 07.214 that language, because that's the

01:48 - 09.549 is in the legislature, not Red book.

01:48 - 11.785 Red book is not in the legislation.

01:48 - 13.487 It says average wholesale price.

01:48 - 18.658 And it didn't didn't the legislature built in a profit margin of 10%

01:48 - 21.361 plus 10%.

01:48 - 24.865 Yes. But they built it in to the average

01:48 - 27.868 wholesale price, which is a term of art.

01:48 - 29.002 And if Mr.

01:48 - 32.072 Siegel, I think I think you have to

01:48 - 35.108 to answer Justice Donahue's very good questions.

01:48 - 37.911 You have to acknowledge the history of AWP,

01:48 - 40.647 which is when he was inserted into these statutes,

01:48 - 43.750 both in the Workers Comp Act and in the medical assistance statutes.

01:48 - 50.023 AWP actually was AWP on average, wholesale price was considered

01:48 - 53.026 the reasonable metric for purposes of capping

01:48 - 57.030 under medical assistance as well as as workers comp.

01:48 - 58.098 Correct? Yes.

01:48 - 02.068 And over decades, litigation has ensued across the country

01:49 - 06.306 challenging AWP because essentially pharmacy companies

01:49 - 10.010 were reporting jacked up prices that no longer resembled AWP.

01:49 - 12.078 I'm somewhere. Yes. Yeah.

01:49 - 15.448 So so where we are now is when the General Assembly passed

01:49 - 18.451 the statute and added AWP.

01:49 - 23.623 AWP actually was a term of art and actually meant average wholesale price.

01:49 - 28.128 But over time that's become not clear, which is why medical assistance

01:49 - 31.831 statutes have changed all over the country to move away from AWP.

01:49 - 33.800 But the AWP yeah.

01:49 - 35.035 Well that's true, right? Yes.

01:49 - 35.335 Okay.

01:49 - 39.573 So in fact, CMS has created Nasdaq

01:49 - 43.710 expressly to move away from AWP and have said

01:49 - 47.447 we are no longer using we're using something else, we're using Natick.

01:49 - 50.150 But the legislature in Pennsylvania hasn't said that.

01:49 - 52.352 I agree that's that's your answer.

01:49 - 53.987 That's that's your answer.

01:49 - 58.058 You have to acknowledge the uncomfortable truth that that AWP

01:49 - 03.129 doesn't capture wholesale prices anymore because it was an industry

01:50 - 06.633 driven metric that basically the industry abused.

01:50 - 10.470 And while medical assistance statutes have been amended to account for that,

01:50 - 12.739 the General Assembly has not touched the statute.

01:50 - 18.745 No. And in fact, since the original 110% of AWP statute,

01:50 - 23.683 the legislature has on multiple occasions amended those provisions

01:50 - 28.455 and still has not chosen to act

01:50 - 31.691 and to amend the AWP.

01:50 - 36.363 And as this court acknowledges, it's not its role, for it

01:50 - 40.400 to substitute its own opinions and,

01:50 - 45.071 for those of the legislature, whether I agree

01:50 - 48.541 or you agree, the legislature has had an opportunity.

01:50 - 52.045 We showed you one example in our brief where I let

01:50 - 55.148 you know they wanted to change it and it wasn't approved.

01:50 - 56.583 They've done it for medical assistance.

01:50 - 58.485 They just haven't done it for worker's comp. Right.

01:50 - 02.255 And they could they could easily tomorrow amend the statute.

01:51 - 05.825 But course that brings up just this flex price problem.

01:51 - 09.829 Because what's happened, instead of the legislature

01:51 - 12.832 doing anything to amend the statute,

01:51 - 18.271 the let the the regs have taken over and said, well, here's what it is.

01:51 - 19.239 It's the Red book.

01:51 - 20.306 Now it's always red.

01:51 - 23.710 But because you're saying it always has to be the red one.

01:51 - 25.211 No, because it waits.

01:51 - 27.013 And so it always must be.

01:51 - 32.352 Now the regs only say they have to designate a national standard, the bureau.

01:51 - 33.787 And it's in the bulletin.

01:51 - 35.989 For decades they've said Red book. Right.

01:51 - 37.924 And you're saying it has to be Red book.

01:51 - 43.296 No, I'm saying it has to be one of the standards that does AWP.

01:51 - 47.033 It could be medicine, it could be, the Red book.

01:51 - 50.970 There's one other I can't the name just looking for,

01:51 - 54.474 but there are three medi span First Data and the Red book.

01:51 - 00.747 Those are the three that are comprehensive databases that cover every NDC

01:52 - 05.552 that provide a an average wholesale price, whatever that means.

01:52 - 09.055 Well, we we know what it means from the top case from 2014,

01:52 - 12.392 except that the top case was

01:52 - 15.395 was reversed on appeal to this court.

01:52 - 19.232 And I mean, of just Chief Justice Sellers opinion, then Justice Hill was.

01:52 - 19.733 Yeah.

01:52 - 21.835 And he oh, right.

01:52 - 25.905 In the first opening paragraph said that it's known as and

01:52 - 31.111 is a benchmark in government reimbursement formulas.

01:52 - 35.849 And, you know, that's the that's the language this court adopted.

01:52 - 38.551 It's correct. It is a benchmark.

01:52 - 43.022 It may not be one that you would pick or I would pick or the lead,

01:52 - 46.025 but until the legislature acts,

01:52 - 50.730 for this court to, to, to legislate on

01:52 - 54.300 it would be just that would be acting as a super legislature.

01:52 - 57.537 And, you know, you know, in the Keystone

01:52 - 00.774 pharmacy case, a year or two, a two years ago,

01:53 - 04.410 my case, you refused

01:53 - 08.882 to lead to accept when the, Commonwealth Court

01:53 - 14.754 legislated a new process for handling, for intervening in fee reviews.

01:53 - 21.961 And you said we can't do it because we would be substituting our, our position.

01:53 - 23.863 That's correct.

01:53 - 26.132 And in fact, that

01:53 - 29.435 we never even advocated for that narrow part of it.

01:53 - 33.173 We advocated for the rest of the decision because we agreed.

01:53 - 36.676 And on this court, the Commonwealth Court,

01:53 - 40.113 whatever they think of the the,

01:53 - 44.083 I think, you know, it's partly driven.

01:53 - 47.253 We all know that pharmaceuticals are expensive.

01:53 - 49.789 No. Again,

01:53 - 52.792 I think you have to concede there's decades of litigation

01:53 - 57.397 has become incredibly unreliable, is not a is not a price point

01:53 - 00.400 that government can sustain to pay for benefits, which is why

01:54 - 03.369 CMS has said we're no longer using AWP.

01:54 - 04.470 We're moving to something else.

01:54 - 07.373 I don't I don't try to make AWP look like this.

01:54 - 08.675 Great that it's not.

01:54 - 10.710 Well, I'm I'm not saying it's

01:54 - 15.148 whatever you want to call a great thing, but it's the standard the legislature has.

01:54 - 16.916 That's your argument. That's your best argument.

01:54 - 18.484 It is.

01:54 - 21.521 Don't try to don't try to I, I'm just suggesting to you, respectfully,

01:54 - 22.422 don't try to defend it.

01:54 - 25.258 It's not it's kind of hard to defend at this point in time.

01:54 - 27.961 Well, the General Assembly can do a lot of things that are great.

01:54 - 30.930 It's just that's just what the boys. Yeah.

01:54 - 34.133 And until they change it and, you know,

01:54 - 39.472 and it's, you know, it's used in many states in workers comp programs.

01:54 - 44.777 In fact, after all the briefing was in, Optum put out a guide this year

01:54 - 48.181 which showed all the different states what they were doing.

01:54 - 51.184 And it it showed 30, 33 states

01:54 - 55.889 have continued to use AWP as their standard

01:54 - 00.093 for reimbursement because it covers so many medications.

01:55 - 01.895 It covers the gamut.

01:55 - 06.199 And, well, it's also like,

01:55 - 10.003 it's a lubricant for the machinery because it allows profit.

01:55 - 12.272 It builds in profit. Well, yeah.

01:55 - 16.843 And there, you know, it does, because if you look at, you know,

01:55 - 21.281 some of the low cost or some of the common drugs, for example,

01:55 - 25.118 you know, acetaminophen, Tylenol A9,

01:55 - 29.956 the AWP for 90 Tylenol is $3.48.

01:55 - 35.995 That plus 110% is supposed to be what the pharmacy gets, including the profit.

01:55 - 40.266 The most expensive of the 19 most common drugs

01:55 - 44.637 prescribed for workers comp claimants in Pennsylvania is gabapentin.

01:55 - 49.642 That's a 300 milligram tablet three times a day, a 30 and one month supply,

01:55 - 52.712 90 pills they make, they get $83

01:55 - 55.949 as the AWP and $8.30.

01:55 - 01.020 Yes, there are times when the AWP is higher and the profits are higher.

01:56 - 02.155 That happens.

01:56 - 05.758 It's it happens in some of the prescriptions in this case,

01:56 - 09.062 but that doesn't mean, that

01:56 - 12.031 you should be sitting here,

01:56 - 14.367 as a super legislature.

01:56 - 16.669 That's the, the difficult part.

01:56 - 21.674 And again, going back to it, it's the announcement every year.

01:56 - 26.412 And you did ask the parties to address, whether it was appealable.

01:56 - 30.783 And I think that's important that we, we do, which is yes,

01:56 - 35.388 it may have been if, if you don't accept and I believe you should,

01:56 - 39.425 it's a discretionary matter of a state agency every year.

01:56 - 43.529 And those pronouncements are not, are not reviewable

01:56 - 46.532 by courts unless there's fraud or other actions.

01:56 - 48.868 There's no allegation of that here.

01:56 - 52.672 What what issue are you saying is only reviewable for fraud or other action?

01:56 - 54.140 The discretionary,

01:56 - 58.111 acts of a legislative body.

01:56 - 00.013 We're not a legislative body. I'm sorry.

01:57 - 03.016 What discretionary act are you saying is not before us?

01:57 - 05.785 The ever the annual pronouncement

01:57 - 09.155 of the price of the of the standard, meaning

01:57 - 12.458 that the annual adoption of the Red book, red book or under tire

01:57 - 14.961 jockey that would be challenged as a reasonable regulation.

01:57 - 16.963 Excuse me, didn't under tire jockey.

01:57 - 19.999 That's a regulation and it could be challenged as unreasonable

01:57 - 24.437 if we could I I'm not familiar with that case,

01:57 - 28.374 but it's not it's not a an act where there's

01:57 - 31.210 any allegation of any impropriety or anything like,

01:57 - 33.046 but there's two there's two issues in front of us. Right.

01:57 - 35.248 One is the Red book issue, which is a title

01:57 - 38.251 which I think is a tire jockey issue, but I'm not sure they preserved it.

01:57 - 41.521 But the second issue is what does it mean

01:57 - 44.557 in the statute, which is not an issue of discretion.

01:57 - 46.592 It's an issue of law that we decide on our own.

01:57 - 54.467 I questions

01:57 - 56.035 Mr. Siegel.

01:57 - 58.938 You may have, done this and I didn't hear you,

01:57 - 01.808 but did you introduce your co-counsel to the court?

01:58 - 03.476 Yes. Crystal. Do it again.

01:58 - 05.611 Crystal. Hi.

01:58 - 06.312 Thank you.

01:58 - 07.113 All right.

01:58 - 07.613 Thank you.

01:58 - 08.448 Let's hear from Mr.

01:58 - 11.451 Goldstein.

01:58 - 15.254 Thank you.

01:58 - 16.055 May pleases the court.

01:58 - 19.025 I'm Cliff goldstein, I represent Federated.

01:58 - 21.094 Let me answer the question that Mr.

01:58 - 22.562 Siegel didn't.

01:58 - 25.731 And that question was, why is this a term of art?

01:58 - 28.901 And how come this gets to be a term of art?

01:58 - 31.104 Well, obviously it's not a term of art.

01:58 - 36.175 It's, our, attorney general for example, called it inflated, fictitious,

01:58 - 40.780 flawed, constituted common law, fraud, misrepresentation, civil conspiracy.

01:58 - 42.181 That's not my opinion.

01:58 - 44.350 That was why the attorney general sued,

01:58 - 47.920 because the average weekly wage was being interpreted as Redbook.

01:58 - 50.957 In order to be a term of art,

01:58 - 54.026 it has to be agreed to, almost universally agreed

01:58 - 57.029 to, and it has to be agreed to in the right industry.

01:58 - 01.467 There is absolutely no agreement as to what average wholesale price means.

01:59 - 04.770 Mr. Siegel conceded at several times in his argument

01:59 - 08.040 and in his brief there are, he said, there were three publishers.

01:59 - 09.609 There are actually only two.

01:59 - 12.378 The third, first out of bank, went out of business as a result

01:59 - 16.115 of the serious decision in the average wholesale price litigation in Boston.

01:59 - 18.885 But besides those

01:59 - 21.921 two sources, what's questioned, the logic of this?

01:59 - 25.558 The bureau says the regulation says you can pick

01:59 - 28.895 any of the sources for AWP that you want.

01:59 - 31.397 Paraphrasing, of course.

01:59 - 34.267 Why would it matter which one you pick if they're all the same?

01:59 - 37.136 If there's universal agreement on what average wholesale

01:59 - 40.306 price means, why does it matter which one you pick?

01:59 - 44.177 The regulator has to be a there has to be some kind of ceiling, doesn't there?

01:59 - 50.116 There is the average wholesale price, meaning the average wholesale price.

01:59 - 51.617 The literal definition.

01:59 - 54.620 That's what the courts in Pennsylvania has held, not once, but twice.

01:59 - 56.822 That's what the courts have held in Mississippi.

01:59 - 59.358 That's what the courts have held in Hawaii.

01:59 - 02.161 That's what two different federal district courts have held.

02:00 - 03.896 And that is now the law.

02:00 - 07.733 My, may I submit that is now the law in three states

02:00 - 11.537 that have abandoned and enacted Nasdaq as their.

02:00 - 14.640 Yeah, but Nasdaq is a different standard from AWP.

02:00 - 18.244 Of course, the CMS, if you look at the CMS bulletin

02:00 - 21.714 that went to Natick, yes, in 2005 or something like that,

02:00 - 25.051 they specifically said exactly what you're saying

02:00 - 28.621 is bunk now, but they say AWP is bunk.

02:00 - 31.424 Yeah. You don't say, they don't say average.

02:00 - 34.126 They they treat AWP as a term of art.

02:00 - 36.095 That equates to bunk.

02:00 - 39.865 And and so here is a term of art that equates to bunk,

02:00 - 44.704 which is why as CMS has said, we're not using it anymore.

02:00 - 48.307 They don't say we're we're creating a new AWP.

02:00 - 51.210 They say AWP itself is a pariah.

02:00 - 52.378 It's gone.

02:00 - 55.181 We're going to we're going to create this new thing called Natick.

02:00 - 00.419 But let me be clear and I'll read it if you want me to read it.

02:01 - 02.855 No, I appreciate what you're saying, Your Honor.

02:01 - 04.290 I do.

02:01 - 06.626 Nasdaq is literally

02:01 - 10.396 the national average of the acquisition costs

02:01 - 14.700 paid by pharmacies to obtain drugs at wholesale.

02:01 - 17.803 Now, his argument since day one has been

02:01 - 21.474 the words Red book don't appear in that definition.

02:01 - 23.776 Therefore, we're talking about apples and oranges.

02:01 - 26.445 Talk about splitting words and semantics.

02:01 - 30.950 The dictate of the statute is average wholesale price.

02:01 - 32.551 They could have said Red book. You know what?

02:01 - 34.120 In many states they do say red.

02:01 - 35.688 But my colleague is correct.

02:01 - 39.358 Incidentally, in those states they also place limitations on red book.

02:01 - 42.662 They say it's the lower of Red book or usual and customary,

02:01 - 45.798 or they say it's Red book, but

02:01 - 50.002 not to exceed the federal upper limits, which is the standard used by Medicare.

02:01 - 53.139 There's all sorts of programs out there

02:01 - 56.609 that define average wholesale price, but none of them define it the same way.

02:01 - 59.578 Yeah, that's a key. You could flip that argument on its head.

02:01 - 04.350 You could say that that if if they wanted to use,

02:02 - 06.052 if they

02:02 - 09.055 wanted to embrace this knee deck, they could have

02:02 - 12.325 they could have today, tomorrow, the day before.

02:02 - 17.496 Change the law to say average acquisition cost.

02:02 - 18.531 But they didn't.

02:02 - 21.534 They kept AWP in the law.

02:02 - 22.968 You're absolutely right, Your Honor.

02:02 - 26.238 And the question is, that's before this court

02:02 - 29.909 is whether we have to wait for the legislature

02:02 - 33.379 to use the words Nasdaq or some other word,

02:02 - 38.117 or whether this court is bound to determine whether the Commonwealth

02:02 - 39.318 Court errored

02:02 - 43.756 when it applied a plain language definition to average wholesale price.

02:02 - 46.892 Beyond that, you agree that Natick is not AWP?

02:02 - 48.961 No. Your honor, I have to disagree with you.

02:02 - 51.464 CMS says it's not. CMS says it's something different.

02:02 - 54.834 I, I'm I'm challenged, Your Honor, by that proposition.

02:02 - 59.905 Average act was the the Nasdaq is a survey of pharmacies

02:02 - 04.076 actually paid prices to acquire drugs at wholesale.

02:03 - 07.613 Did they use the words and therefore it is the up.

02:03 - 09.882 Maybe not I don't know your honor is probably right.

02:03 - 13.119 Maybe in 2009, a working group within the National Association

02:03 - 17.189 of State Medicaid Directors and ask the MD to convene to discuss

02:03 - 20.192 various alternatives to AWP.

02:03 - 23.329 Yes. Meaning alternatives to the Red book.

02:03 - 25.164 No alternatives to AWP? No.

02:03 - 29.068 Your honor, defined as a drug pricing benchmark utilized for covert

02:03 - 32.671 outpatient, a drug pricing benchmark utilized for outpatient

02:03 - 36.442 drug ingredient cost reimbursement by state Medicaid agencies.

02:03 - 36.942 Bingo.

02:03 - 40.045 However, this benchmark has been the subject of much scrutiny

02:03 - 44.750 and litigation over concerns that many wpp's were artificially inflated.

02:03 - 48.154 Yes, the benchmark is Redbook.

02:03 - 52.491 That's what they're referring to when they say this benchmark AWP Red book.

02:03 - 53.559 That's why we're here.

02:03 - 57.596 Does AWP always mean Redbook, or was the Commonwealth Court

02:03 - 01.333 entitled to say, you know what, that leads to a bizarre and absurd result.

02:04 - 03.736 My colleague mentioned the cost of gabapentin.

02:04 - 07.840 What he didn't tell you was it's not $8 or $12 or $80.

02:04 - 09.575 They charged $800.

02:04 - 13.045 In this case, the average charged by this pharmacy was

02:04 - 16.749 was close to 50 to 100 times higher than normal prices.

02:04 - 20.586 If you go across the street to CVS and say, I'd like to pay as much as

02:04 - 25.324 I humanly can forget for gabapentin and slap cash on the table,

02:04 - 29.261 they'd throw me out of the store if you tried to pay $800 for it.

02:04 - 33.232 It's not the cost of the drug, and it's certainly not the average cost of the drug

02:04 - 35.201 to acquire it at wholesale.

02:04 - 39.905 It's a straightforward argument, but, you know, aren't you flying in the face of

02:04 - 44.944 this court's decision 11 years ago in Tab because they're this court in an opinion

02:04 - 48.547 by then justice later Chief justice Saylor recognized

02:04 - 53.686 as a key industry benchmark and called it and called it a misnomer

02:04 - 57.289 given that it reflects the manufacturers asking price rather than any

02:04 - 59.525 actual mathematical average.

02:04 - 04.830 But but said that it's widely understood since the very early 1990s.

02:05 - 09.134 Even before the General Assembly, you know, made its changes so.

02:05 - 12.538 Well, I mean, there wouldn't for you to prevail here.

02:05 - 14.139 Wouldn't we read it?

02:05 - 19.812 Need to revisit and and and change what we've said about AWP in the past?

02:05 - 22.815 No, because Justice Robson is correct.

02:05 - 25.451 There was a time in history.

02:05 - 26.485 Oh, sorry.

02:05 - 28.754 There was.

02:05 - 30.422 Apologize to me.

02:05 - 32.525 There was a time. It happens from time.

02:05 - 33.926 There was a time in history

02:05 - 37.830 when pharmacies were honest and manufacturers were honest.

02:05 - 41.634 And when the manufacturers asked, what is your average wholesale price

02:05 - 42.301 for this drug?

02:05 - 44.403 They answered honestly.

02:05 - 46.438 But then something horrible.

02:05 - 49.642 Yeah, but that's the point, is when it was put into the statute,

02:05 - 52.845 yes, the General Assembly knew what the indexes were.

02:05 - 55.047 They knew what they were looking at and they picked it

02:05 - 59.084 because that's what medical assistance was using at the time either, said Rob.

02:05 - 00.452 Since then, the General Assembly

02:06 - 04.156 has changed statutes and regulations in Pennsylvania for medical assistance.

02:06 - 07.426 Still keeping AWP, but talking about SC and

02:06 - 11.263 whack and PD, Q, Xyzzy and a whole bunch of other different things.

02:06 - 14.099 But that's that's why isn't that the problem?

02:06 - 14.466 We have to

02:06 - 17.603 look at what the General Assembly intended when it drafted the statute.

02:06 - 17.903 Yeah.

02:06 - 22.141 And back then everybody knew what was yes and no.

02:06 - 24.843 Back then they knew that AWP was real.

02:06 - 28.247 So drug like pregabalin had an $8.

02:06 - 30.816 And what the legislature said because remember, it's a limitation,

02:06 - 33.252 not a schedule. We don't have a fee schedule on beds.

02:06 - 34.587 We have a limitation.

02:06 - 37.356 So they said either pay X,

02:06 - 40.526 but don't you ever charge more than $8 plus ten.

02:06 - 45.364 10% a real 80, average wholesale price plus 10%.

02:06 - 46.999 The problem?

02:06 - 48.400 You know, I wish that I could change a lot

02:06 - 50.436 of legislation in Pennsylvania, but we don't get that option.

02:06 - 51.637 We only get the cases

02:06 - 54.273 and the issues that are brought in front of us for resolution.

02:06 - 57.276 The issue brought in front of the Commonwealth Court for the resolution was

02:06 - 02.081 shall be a fixed, permanent meaning of Redbook.

02:07 - 04.850 Since time immemorial and forever.

02:07 - 08.554 Or does that cause a bazaar an absurd result?

02:07 - 10.322 And is a court, in this case

02:07 - 13.025 the Commonwealth Court and hopefully the Supreme Court?

02:07 - 16.495 Are you free to determine that the statute means what it says?

02:07 - 18.330 They didn't use the word Redbook.

02:07 - 21.200 You know, there are places in Pennsylvania where they do use the word right.

02:07 - 24.770 But counsel pointed to Madden's brief, but they never use

02:07 - 28.073 the phrase Redbook in worker's compensation.

02:07 - 28.974 And you know why?

02:07 - 32.044 Because remember what the genesis of this act

02:07 - 37.116 and this act, at 44, 1991, 30 years ago,

02:07 - 41.420 the reason this act was passed was to control costs.

02:07 - 44.390 It was a medical cost reduction act.

02:07 - 47.960 Justice, I think what you're arguing is that the legislature

02:07 - 52.998 intentionally imposed a Redbook standard, which would increase the price of a drug

02:07 - 53.899 100 fold.

02:07 - 57.302 You keep going to the Redbook issue, which I understand why you're doing it,

02:07 - 00.439 and I understand the somewhat linkage, but but here's the miss here.

02:08 - 04.276 Here's I think where this case is very is very difficult

02:08 - 05.277 based on what you're arguing,

02:08 - 09.348 your view is average wholesale price,

02:08 - 11.817 as the General Assembly put it in the statute, when they put it in

02:08 - 14.987 was generic, they literally meant average

02:08 - 18.624 wholesale price, which at the time was synonymous with Redbook.

02:08 - 23.762 Well, which at the time the the index is available more like

02:08 - 28.000 like justice which brought up the car prices, you know, Nadda or Bluebook.

02:08 - 31.036 The there are many indexes available that supposedly captured average

02:08 - 31.804 wholesale price.

02:08 - 35.574 And at that time, even those indexes were pharmaceutical manufacturer

02:08 - 40.512 self-reported indexes, basically mSRP or whatever they were created.

02:08 - 42.147 But they were honest.

02:08 - 43.115 Agreed? Yes.

02:08 - 47.286 But the General Assembly, when they used average wholesale price knew that

02:08 - 50.589 knew that those were the references, knew that those were the indexes.

02:08 - 54.860 Knew that how that was how it was calculated.

02:08 - 58.130 And they used AWP, they adopted it.

02:08 - 01.233 Now, what's happened since then is there's been abuses

02:09 - 03.402 by by the reporting pharmaceutical companies,

02:09 - 05.971 which caused medical assistance to go away.

02:09 - 11.210 But you want us to to actually believe that when the General Assembly said

02:09 - 15.314 average wholesale price a puppy back in 2000 or whatever,

02:09 - 17.816 or 1990, whatever, I can't remember when the statute was

02:09 - 19.918 when this amendment happened to the workers compensation.

02:09 - 23.122 Three I think 93 you want us to believe that

02:09 - 26.625 notwithstanding what was happening on the ground at that time,

02:09 - 30.496 and everybody knew what it was, it was a self-reported,

02:09 - 35.801 indexed, verifiable number because of the abuses.

02:09 - 39.772 You want us to now retroactively say, oh, no, actually means

02:09 - 42.841 average wholesale price, whatever it happens to be down in the future.

02:09 - 44.643 But that's not what was on the ground.

02:09 - 46.678 Your honor, you're missing one step.

02:09 - 49.548 You have the statute, and then you have the regulation.

02:09 - 52.284 And the regulation specifically allows the bureau

02:09 - 55.687 to pick a schedule of average wholesale price.

02:09 - 58.423 I agree with you. That's your that's your tire jockey argument.

02:09 - 02.995 Your tire jockey argument is that picking the red book is an abuse of discretion

02:10 - 05.197 or is unreasonable, which is which is done.

02:10 - 07.466 An almost annual counsel misspoke.

02:10 - 10.202 The bureau hasn't done it for a few years. God knows why.

02:10 - 13.071 They've they've ignored the decision in the Commonwealth Court.

02:10 - 14.640 They certainly didn't appeal it.

02:10 - 16.508 And they ignored it. They were told to come up

02:10 - 18.677 with a new schedule that complies with the statute.

02:10 - 21.680 But no states come up with new scheduling in those states come up with their own

02:10 - 23.816 or have so far the nada.

02:10 - 25.417 See that that's not okay.

02:10 - 30.722 We're gonna have to read this, but if you read Cms's guidance on the you, I

02:10 - 32.958 understand what you're saying.

02:10 - 34.593 Your honor, I respectfully disagree.

02:10 - 36.428 Okay, let me move on to the second.

02:10 - 38.630 I'm not right on that.

02:10 - 41.633 You're right on the on the other issue, which is a process you

02:10 - 44.970 go right on the process because we have a problem council

02:10 - 46.538 before we move on to price.

02:10 - 50.976 I mean, following the discussion, with justice Roberts.

02:10 - 57.182 And I mean, the fact of the matter is, is that the Red book no longer

02:10 - 01.453 reflects a WP if that was, in fact,

02:11 - 05.090 what the legislature intended in 1993.

02:11 - 08.260 So it may very well have been that the Red book

02:11 - 11.897 reflected AWP, but it no longer does.

02:11 - 16.869 So now we're left with the plain language of the statute for six years.

02:11 - 19.338 Average wholesale price precise.

02:11 - 25.244 We can't ignore the fact that the Red book now is no longer reflective

02:11 - 29.181 of what the legislature intended in 1993.

02:11 - 34.086 It doesn't make any difference that it reflected at the time it was enacted.

02:11 - 35.420 That was a coincidence.

02:11 - 37.489 That was a coincidence.

02:11 - 38.957 But now we don't have that.

02:11 - 44.763 We know we know from the Red book that it is not an average wholesale price.

02:11 - 49.501 I agree running public that it's not an average wholesale price.

02:11 - 53.672 It's as as some its experts said they're not even in the same city.

02:11 - 56.942 You're talking about prices that could be 100 times normal.

02:11 - 01.380 And that's required under a cost control legislation.

02:12 - 04.716 Something's gone horribly haywire.

02:12 - 07.352 And I think the answer might be price.

02:12 - 10.756 What the bureau has done is the Bureau's decided for itself

02:12 - 13.859 that average wholesale price has one meaning, and that is Redbook.

02:12 - 15.427 Forever and always has been.

02:12 - 18.196 Will be, till the day we all die.

02:12 - 21.500 And Red book is the ultimate in a price issue. Why?

02:12 - 23.669 Because it's a private company.

02:12 - 26.872 Whereas the AMA, you could argue, has some interest

02:12 - 29.875 in public good or a public health.

02:12 - 31.443 You can't make that argument for Trouvent.

02:12 - 35.580 Trouvent is owned by an offshore Cayman Island venture capital fund.

02:12 - 41.253 They publish the Red book for profit in their own explanation of Red book pricing.

02:12 - 44.356 They admit not only that it isn't an average wholesale price,

02:12 - 48.627 they they embed several elements of discretion

02:12 - 52.364 within Trouvent to pick this, pick that, pick the other thing.

02:12 - 58.203 Never tell anybody why or how they have complete jurisdiction over establishing

02:12 - 03.642 the drug price used by the Bureau to resolve disputes in Pennsylvania.

02:13 - 06.144 Workers compensation that's unlawful.

02:13 - 08.780 You can't delegate that legislative authority.

02:13 - 11.783 Almost every state other than Pennsylvania has a fee schedule.

02:13 - 14.019 If it's aspirin, the price is $4.

02:13 - 16.154 We don't we don't have a fee schedule.

02:13 - 18.890 The best we've got is proven.

02:13 - 20.692 Please use the trove in price.

02:13 - 24.396 The proven price was concocted, and I use that word deliberately

02:13 - 29.067 concocted by drug manufacturers, reported without verification,

02:13 - 34.172 without any type of guidance or assistance from the legislature,

02:13 - 38.143 and without any opportunity for supervision or veto

02:13 - 40.245 or vote by the citizens of Pennsylvania.

02:13 - 41.680 Is there a difference, Council?

02:13 - 44.282 With prods.

02:13 - 46.852 Because, that was a legislative delegation here.

02:13 - 49.855 It's a bureau at the bureau saying truth in this year.

02:13 - 52.724 And that presumably,

02:13 - 56.194 if abuses were shown, you could go to the agency

02:13 - 59.531 or to the Bureau and say, look, Trouvent is, you know,

02:14 - 02.634 out to see, well, literally in the Caymans.

02:14 - 05.837 But we want to use, you know, X, Y, or Z instead.

02:14 - 07.773 And they could change that on a dime.

02:14 - 11.143 Is that isn't that is that a I got a difference.

02:14 - 12.811 Might be without a difference.

02:14 - 15.180 I think it is a distinction without a difference.

02:14 - 16.181 And we're one level up.

02:14 - 18.550 It's not the bureau's designation that's the problem.

02:14 - 20.752 It's the Bureau regulation. That's the problem.

02:14 - 24.489 Bureau regulation says go pick any WPA you feel like,

02:14 - 30.529 whereas the Bureau interpreted that to mean proven over and over again. The,

02:14 - 35.500 the one other thing I want to say about,

02:14 - 39.204 about the,

02:14 - 42.207 the proxy issue is,

02:14 - 44.676 where and when

02:14 - 48.847 and how the AMA changes the guides, which I think is,

02:14 - 52.951 you know, it's only up to, what, eight, eight editions in 50 years or something.

02:14 - 54.152 They change it infrequently.

02:14 - 57.155 And the infraction was they can change it at will

02:14 - 00.459 without supervision or direction from the legislature.

02:15 - 03.295 And ultimately from the voters of Pennsylvania.

02:15 - 06.998 Well, pardon the pun, but this is what's on steroids.

02:15 - 12.304 This is an institution that gets we know they're making up phony numbers

02:15 - 13.371 for phony reasons.

02:15 - 16.374 God only knows how they concoct these numbers.

02:15 - 20.112 But we know they're fake, and we know we can't supervise them.

02:15 - 22.347 And we know we can't control them.

02:15 - 24.483 And we know we can't change the parameters.

02:15 - 27.719 We know God knows when they change them, or how frequently

02:15 - 30.856 or on what basis, and we're stuck with them.

02:15 - 32.991 This is this is an enormous issue.

02:15 - 36.361 I'm sure the court appreciates how enormous this issue is.

02:15 - 39.631 We're talking billions of dollars have been paid

02:15 - 42.067 over paid

02:15 - 47.072 in workers compensation because workers compensation pharmacies.

02:15 - 50.642 And I'll use that term in quotation marks, workers compensation pharmacies

02:15 - 54.212 like summit choose to charge the truth in Redbook.

02:15 - 57.182 Price. As your honor pointed out.

02:15 - 02.354 Go to a pharmacy and try to pay the truth and Redbook price the laugh.

02:16 - 03.855 You out of the store.

02:16 - 04.422 Can I ask a quote?

02:16 - 07.359 Is consumer Price index a term of our

02:16 - 10.362 consumer price index a term of art?

02:16 - 12.931 I don't know, Your Honor.

02:16 - 15.901 My gut tells me that it's not that it's defined somewhere,

02:16 - 19.504 that there's some piece of congressional or regulatory,

02:16 - 23.608 finding of how it should be determined and when it should be determined

02:16 - 26.044 and who should determine it and how it's verified and to whom.

02:16 - 30.448 It's to say, if the General Assembly had a statute that tied a certain payment

02:16 - 34.719 or increase in payment to the consumer price index, as reported

02:16 - 39.457 by the Bureau of Labor Statistics for the Baltimore Philadelphia metro area,

02:16 - 42.661 as of November or October 15th, whatever the year is.

02:16 - 45.964 And it was determined that, oh my gosh,

02:16 - 49.034 that's really not the CPI anymore. That is,

02:16 - 53.038 completely ginned up,

02:16 - 56.308 increased statistic that doesn't

02:16 - 59.311 have any validity anymore.

02:17 - 02.414 Does that transform CPI

02:17 - 05.417 into what, a normal term of art?

02:17 - 11.056 And allow or not allows the Commonwealth to create its own CPI?

02:17 - 14.426 Well, not exactly, I think there's there's two components there.

02:17 - 16.228 One is that it's the government

02:17 - 19.764 and say what you will about governments at each level.

02:17 - 23.802 There's a certain air of credibility to the concept of a number

02:17 - 27.772 being published by the government pursuant to regulations and guidelines.

02:17 - 32.911 And administrative decisions here.

02:17 - 36.881 You're talking about proven, you're talking about an offshore venture

02:17 - 40.952 capital fund determining this index that you're referring to,

02:17 - 44.589 which we know and they admit is false.

02:17 - 47.626 It has nothing to do with average wholesale price.

02:17 - 52.097 So can a state determine its own consumer price index?

02:17 - 53.031 Probably.

02:17 - 54.232 You know, there are some states

02:17 - 56.368 that determine their own average wholesale prices.

02:17 - 57.302 You can do it.

02:17 - 59.871 You just call up every pharmacy and ask how much they paid for the drug.

02:17 - 00.605 At wholesale.

02:18 - 03.608 There's only, what, 15 drugs here, six drugs here at issue.

02:18 - 06.444 Let's call up the pharmacies and ask them how much they pay for wholesale.

02:18 - 07.178 You know what Mr.

02:18 - 09.414 Siegel will never tell us. He'll die first.

02:18 - 13.218 He'll never tell us what summit paid to acquire these drugs at wholesale.

02:18 - 14.586 And you know why?

02:18 - 18.256 Because once you burst that balloon, once it becomes common knowledge

02:18 - 21.293 that they're charging prices that are 50, 100 times

02:18 - 24.963 higher than their acquisition costs, then you got to scratch your head.

02:18 - 28.300 You got to go back to the statute and say, average wholesale price.

02:18 - 33.371 Did they mean 100 times prices that you acquire drugs at wholesale?

02:18 - 35.573 Let me just make one more point.

02:18 - 36.708 I appreciate your indulgence.

02:18 - 38.910 Let me add one more point while I'm on a roll.

02:18 - 41.613 And that and that is, I wanted to address Mr.

02:18 - 44.582 Siegel's argument about an appealable decision, because

02:18 - 49.421 I've never had the privilege of serving in the capacity of having to judge a case.

02:18 - 53.491 But there is an out, so to speak.

02:18 - 56.461 I'm not sure that this is an appealable decision.

02:18 - 00.231 And I've argued in the brief why I don't think it's an appealable decision.

02:19 - 03.234 This case ended an agreement order in two directions.

02:19 - 06.638 One direction was please go back to the hearing officer and try again,

02:19 - 08.873 and the other direction was to the Bureau.

02:19 - 13.545 Please go figure out of a schedule that complies with the statute.

02:19 - 16.247 You see the bureau here.

02:19 - 18.983 Bureau didn't appeal. There's no appeal.

02:19 - 21.753 The Bureau never appealed the order to come up

02:19 - 24.723 with a new pricing schedule.

02:19 - 29.194 So I would argue that the best thing for this court to do is dismiss the appeal.

02:19 - 30.528 It's untimely.

02:19 - 34.999 Let the bureau do what it was told to do, let the case go back

02:19 - 39.037 to the hearing officer and let them apply the new schedule to the facts. Mr.

02:19 - 41.973 Siegel will tell you, well, that's a legal impossibility.

02:19 - 45.877 It's impossible for the Bureau to come up with a schedule of average

02:19 - 46.845 wholesale price.

02:19 - 50.081 That means the average cost of drugs acquired at wholesale.

02:19 - 51.616 Nonsense.

02:19 - 56.020 We can argue over the semantics, but the reality is Nasdaq

02:19 - 00.291 is a reported nationally published index.

02:20 - 03.428 A survey of actual prices

02:20 - 07.365 paid by pharmacies to acquire drugs at wholesale.

02:20 - 10.235 Does the report say average will suffice?

02:20 - 15.840 Now it says nada, a different term, but this term means it AWP doesn't.

02:20 - 17.642 AWP isn't a term of art.

02:20 - 19.711 It's an inside joke.

02:20 - 21.045 It's an inside joke.

02:20 - 23.014 The General Assembly adopted in the 1990s.

02:20 - 25.350 Well, and incidentally, it's also an independent.

02:20 - 29.254 It's an inside joke among one industry pharmacies and pharmacies.

02:20 - 34.292 Mr. Siegel's is purported that among pharmacies, he has a special meaning.

02:20 - 37.295 You know who doesn't have a special meaning to my client,

02:20 - 40.298 who for years, for decades, even in this very case,

02:20 - 44.035 paid for these drugs, not knowing and not realizing that they'd been duped,

02:20 - 47.906 that they were paying 50 times more than real average wholesale prices.

02:20 - 52.444 Even though even despite all those years since the top decision.

02:20 - 53.244 Unfortunate.

02:20 - 56.014 I guess that would connect that to this final question.

02:20 - 58.383 And they'll let you respond.

02:20 - 01.553 Is that, like listening to you?

02:21 - 05.190 Well, there's a lot of appeal to your arguments, as there were with Mr.

02:21 - 06.591 Siegel's is an interesting case.

02:21 - 09.594 I just I guess my question here now is,

02:21 - 13.298 what you're asking us to do, in one sense,

02:21 - 16.734 I think, is to change the rules of the game.

02:21 - 20.672 It may be a game that that you would view as corrupt or.

02:21 - 23.875 I don't mean criminally corrupt, you know, just,

02:21 - 26.611 and I guess I'm wondering whether

02:21 - 29.581 whether it's really for us

02:21 - 31.683 to, to, to impose

02:21 - 35.420 that change, regardless of the misnomer ask for,

02:21 - 38.456 I mean, this court put everybody on notice 11 years ago

02:21 - 41.493 that it was a misnomer, not that people didn't know, but,

02:21 - 45.563 if it's way out of whack, as you say, and it may well be,

02:21 - 48.666 isn't that really something the General Assembly needs

02:21 - 52.237 to take the reins on rather than us at this point?

02:21 - 55.607 Ultimately, yes. Shorter term.

02:21 - 59.010 The bureau was told to come up with a statutorily

02:21 - 02.180 compliant schedule and they blew the court off.

02:22 - 03.448 They didn't appeal.

02:22 - 04.516 They didn't request the stay.

02:22 - 06.584 In fact, this court denied a stay.

02:22 - 08.820 You know what they did to the court's stay.

02:22 - 10.188 They ignored it.

02:22 - 11.990 And to this day, they've done a few things.

02:22 - 14.459 One, they've refused to publish any schedule,

02:22 - 16.094 whether it complies with AWP or not.

02:22 - 17.962 They just aren't publishing it.

02:22 - 19.531 And you a vacation in the Caymans?

02:22 - 25.169 Your honor, I understand your point.

02:22 - 26.671 This is not a slam dunk.

02:22 - 30.174 This is a difficult issue, and it has an enormous important question.

02:22 - 31.743 If you were to legislature

02:22 - 35.079 and you could revise this statute, you know, how would you revise it?

02:22 - 39.717 I would revise it pretty much the way California did, and several other states

02:22 - 43.588 did, which is to say the price shall be determined as follows.

02:22 - 47.025 And then you give a list of three and and the orders to pick the lowest,

02:22 - 50.228 because the goal is cost control, one

02:22 - 53.131 Nasdaq plus a dispensing fee.

02:22 - 54.265 And that's only fair.

02:22 - 58.603 And I agree with that concept two usual and customary charge.

02:22 - 02.373 If you can go across the street to CVS and buy it for 18, don't charge the comp

02:23 - 06.177 carrier 800 and the third standard.

02:23 - 07.612 Fine.

02:23 - 09.280 Throw in red book. Be my guest.

02:23 - 13.318 The point is that it will always be the lower of the three, like in California,

02:23 - 18.022 where it's either Nasdaq plus 10% or the usual and customary charge.

02:23 - 21.159 I wish I could write a lot of legislation in Pennsylvania,

02:23 - 24.963 but I don't get that privilege and unfortunately needed your honors.

02:23 - 29.133 But you do have the opportunity here to correct a tremendous injustice.

02:23 - 32.303 All right. We understand both arguments.

02:23 - 33.171 Very well done.

02:23 - 36.174 Thank you so much. Thank you.

02:23 - 38.476 The court will now hear the case of Thomas

02:23 - 41.879 Myron versus the Delaware County Tax Claim Bureau.

02:23 - 47.051 When a property owner falls behind on their real estate taxes,

02:23 - 51.055 the real estate tax sale law gives the government the right

02:23 - 55.927 to sell the property to recover the unpaid taxes from the proceeds of the sale.

02:23 - 59.864 This case concerns what rights a mortgage

02:23 - 03.534 holder on a property has to notice of the proposed tax sale

02:24 - 04.902 here.

02:24 - 07.905 The property owner had a mortgage on the property.

02:24 - 13.077 After the mortgage was executed, the property owner became delinquent on taxes.

02:24 - 17.215 Here, the timing is important that the mortgage pre-dated

02:24 - 20.618 the issue of delinquent taxes.

02:24 - 23.354 A sale of the property was scheduled by Delaware County

02:24 - 25.590 to recover the tax payments.

02:24 - 29.560 The county provided notice to the owner and also publicized

02:24 - 33.197 the coming tax sale in newspapers of general circulation.

02:24 - 37.969 It did not provide personal service to the mortgage company.

02:24 - 42.573 The property was sold and a new owner took title to the property.

02:24 - 45.576 After paying Delaware County.

02:24 - 50.048 It is that new owner that is the party

02:24 - 53.051 opposing the position of the mortgage holder.

02:24 - 56.654 In this appeal, the mortgage holder complains

02:24 - 59.891 that it was not provided with proper notice prior to the sale,

02:25 - 04.062 arguing that it was entitled to the same notice as the owner.

02:25 - 07.231 The new buyer, however,

02:25 - 11.302 argues that the mortgage holder was not entitled to that notice

02:25 - 14.605 because the mortgage remained in place

02:25 - 17.608 because it pre-dated the tax issue.

02:25 - 21.345 The new owner argues

02:25 - 25.116 that the prior case law, which establishes

02:25 - 29.587 notice rights to mortgage holders, applies only in the situation

02:25 - 34.859 where the mortgage holder stands to lose rights in the property, in other words,

02:25 - 39.397 where its mortgage might be extinguished because that was not the case here.

02:25 - 42.800 The new owner says that the mortgage holder

02:25 - 46.003 was not entitled to the same notice as the owner.

02:25 - 50.842 The court will hear the arguments and decide the correct interpretation

02:25 - 55.747 of the real estate tax sale law, and what notice should have been provided.

02:25 - 59.751 Please proceed.

02:26 - 05.056 May please the court.

02:26 - 06.424 Good afternoon, Your Honor.

02:26 - 08.726 My name is Hans Robert Solomon Jr, my attorney.

02:26 - 11.529 Ideas 20593.

02:26 - 13.564 Oh. A Carter

02:26 - 16.567 was granted in this case with the query

02:26 - 19.704 for clarification

02:26 - 23.307 as to whether 602 requires a mortgagee.

02:26 - 27.311 Prior notice of an impending tax sale.

02:26 - 30.915 Before,

02:26 - 33.351 the sale can take place.

02:26 - 35.653 Your honor, is the,

02:26 - 38.656 the relevant section of 602,

02:26 - 41.526 relevant to this matter?

02:26 - 46.564 Is codified at 602.

02:26 - 55.139 E one

02:26 - 56.841 at least.

02:26 - 59.544 And I'll read from the statute at least 30 days

02:26 - 02.547 before the date of the sale by United States certified mail.

02:27 - 03.781 Restricted to delivery.

02:27 - 07.485 Return receipt requested postage prepaid to each owner

02:27 - 10.488 as defined by this act.

02:27 - 13.291 Owner as defined in the act

02:27 - 16.294 under section 101, it says

02:27 - 20.164 the person whose name the property is last registered,

02:27 - 22.333 if registered according to law.

02:27 - 25.203 And there's some additional language there.

02:27 - 28.339 But in the, case of first Pennsylvania,

02:27 - 32.577 included in the grant of all encounter,

02:27 - 36.013 the court there in,

02:27 - 39.650 quoted the relevant section as,

02:27 - 45.256 person whose name the property is last

02:27 - 47.491 registered, if registered according to the law,

02:27 - 51.863 and in other cases means any person an open, peaceful and notorious possession

02:27 - 54.866 of the property as apparent owner or owners thereof,

02:27 - 58.803 or the reputed owner or owners thereof in the neighborhood of the such property

02:27 - 01.472 as to property having been turned over to the Bureau

02:28 - 04.475 by any county owner, shall mean the county.

02:28 - 07.245 I've noticed in

02:28 - 10.548 in the courts, reference to that particular section.

02:28 - 13.985 They have left out the,

02:28 - 17.421 current, a part of the current section

02:28 - 20.558 of the definition of owner, which also includes,

02:28 - 26.197 if not registered according to the person whose name last appears

02:28 - 31.302 as of owner of record on any deed or instrument of conveyance

02:28 - 36.707 recorded in the county office designated for recording or your honor,

02:28 - 39.844 State of Pennsylvania has designated,

02:28 - 42.546 the office for recording under 21 deeds.

02:28 - 43.481 Mortgages.

02:28 - 44.749 Section 151.

02:28 - 47.184 The Recorder of Deeds. Now,

02:28 - 49.921 in fortunately, we have an

02:28 - 54.292 expert on on that subject on our bench of justice learning here.

02:28 - 57.328 Well, I was actually register of wills.

02:28 - 59.330 Same thing, but, same.

02:28 - 01.899 Yeah.

02:29 - 02.566 Wills.

02:29 - 03.768 Deeds. Yes.

02:29 - 06.771 And sealing wax.

02:29 - 08.239 Okay.

02:29 - 09.874 Thank you for that clarification.

02:29 - 14.011 And I will acknowledge that the last section,

02:29 - 17.815 of the, of the statute,

02:29 - 22.720 includes what the tax claim Bureau is supposed to do in the event they're

02:29 - 27.391 unsuccessful in locating an individual that would satisfy that definition.

02:29 - 31.162 And it's, quite comprehensive, down to the point of,

02:29 - 36.100 the Yellow Pages, which, are no longer published, as I understand it.

02:29 - 41.238 But, the statute requires that an exhaustive ever

02:29 - 46.544 be made undertaken in the event you are not able to communicate with,

02:29 - 50.381 an individual or corporation

02:29 - 54.418 who would satisfy the definition of owner. Now,

02:29 - 57.855 the, understanding or the

02:29 - 01.025 application of necessity in this matter

02:30 - 04.195 of notice stems from the original decision

02:30 - 07.898 by the United States Supreme Court in the Mennonite case.

02:30 - 09.900 And so before you go into the Mennonite case,

02:30 - 13.170 can can I just ask you to circle back because you're kind of jumping

02:30 - 16.140 to you're moving through a whole bunch of statutes very quickly.

02:30 - 22.113 You've never you haven't really focused on why is a mortgagee, an owner,

02:30 - 25.750 why is a mortgagee an owner? Yeah.

02:30 - 28.452 Well, under the statute, the mortgagee is,

02:30 - 31.589 specifically referenced in 2 or 3 different locations.

02:30 - 34.759 But is it referenced in the definition of owner?

02:30 - 37.361 Not necessarily as an owner, okay.

02:30 - 42.833 But as an individual who is the last name in the whose well is the last?

02:30 - 47.271 However you look at look at the statutory definition of the property

02:30 - 51.475 is let's register with person who's what person in whose name

02:30 - 55.246 the property is last registered if registered according to the law.

02:30 - 55.613 Right.

02:30 - 00.951 But that's that's my question, is what is your argument that a mortgagee

02:31 - 04.755 has a registered interest

02:31 - 08.893 or is it meets that definition because the title search,

02:31 - 12.930 in this matter would indicate that Thomas Myron was in fact

02:31 - 16.367 the name who was last registered

02:31 - 19.637 according to law against this property that's registered as.

02:31 - 21.472 What do you mean, right? Is registered as what?

02:31 - 24.475 As as an instrument of conveyance.

02:31 - 28.846 Instrument of conveyance is language that's now included in the definition of

02:31 - 32.950 you're saying a mortgage, a recorded mortgage is an instrument of conveyance.

02:31 - 36.120 Yes. And Judge Castillo, in his opinion,

02:31 - 39.824 let's see here.

02:31 - 42.827 In his opinion, delved into,

02:31 - 44.795 yeah. Here it is.

02:31 - 46.831 Pines versus Farrell.

02:31 - 49.800 That's, Supreme Court, Pennsylvania,

02:31 - 54.271 848 Atlantic second 94 Pennsylvania, 2004.

02:31 - 57.708 In this opinion, Judge Castillo indicates

02:31 - 01.512 that a mortgage is in fact a,

02:32 - 05.549 instrument of conveyance

02:32 - 09.687 for purposes of establishing a an interest in the property.

02:32 - 12.623 And what was interest is different from ownership, though.

02:32 - 15.626 I mean, there all kinds of interests.

02:32 - 19.296 I'm I'm surprised that you're you're,

02:32 - 21.332 fighting.

02:32 - 21.832 You're like,

02:32 - 25.136 fighting and dying on this hill rather than on the due process argument.

02:32 - 29.140 Is it is it the due process argument going to be your stronger argument?

02:32 - 31.242 That is the argument.

02:32 - 35.412 Well, you're you're you're trying to he never got notice of anything.

02:32 - 38.582 No I understand the point about notice I guess my point is,

02:32 - 44.088 instead of trying to cram the mortgagee

02:32 - 47.191 into owner status, doesn't it make more sense,

02:32 - 51.095 to say that,

02:32 - 54.031 his interest is being forfeit,

02:32 - 57.001 whatever that interest is?

02:32 - 00.137 Without due process

02:33 - 03.140 is, in fact, being forfeited without due process.

02:33 - 06.010 Because the the record is clear, no effort was

02:33 - 09.046 ever made by the Taxpayer Bureau here to notify him of anything.

02:33 - 09.346 Right?

02:33 - 09.947 So, I mean, what

02:33 - 14.084 what, like why are you trying to, Well, I'm not trying to challenge your argument.

02:33 - 15.786 Let me put it this way.

02:33 - 18.789 Would you agree that that,

02:33 - 22.026 the stronger challenge is the constitutional one

02:33 - 24.662 rather than the statutory one?

02:33 - 27.298 Of course it is, because the statute

02:33 - 30.234 is based on the constitutional interpretation

02:33 - 33.604 by the United States Supreme Court due process.

02:33 - 36.807 And that particular case,

02:33 - 40.778 it was a mortgagee again, who who lost the property.

02:33 - 44.815 But there was and then, part of the statute

02:33 - 50.454 that said that the tax, the upset sale wipes out, mortgages record.

02:33 - 52.890 Yeah. But council that's no that's no longer the case.

02:33 - 56.260 The section 609 amendments protect those particular gains interest.

02:33 - 59.296 So we I think we first we have to do is identify what the interest

02:33 - 00.497 we're talking about.

02:34 - 02.199 Your client doesn't have an ownership interest.

02:34 - 04.168 He's got a mortgage lean interest.

02:34 - 07.805 After the Mennonite case came out, the amended section 609

02:34 - 09.540 that protects your clients lien.

02:34 - 13.077 So your client's interest, to the extent that there was any interest,

02:34 - 15.346 is protected, is it not?

02:34 - 19.883 609 is the linchpin of the notice obligations

02:34 - 25.456 of the entirety of the statute, because what it creates is an oxymoron.

02:34 - 30.527 When the tax claim of the statute says the tax claim Bureau can,

02:34 - 33.797 or must present a deed in fee simple

02:34 - 37.067 to the successful bidder at the tax claim sale, and the opposite.

02:34 - 40.571 You cannot have a fee simple and a mortgage on top of it.

02:34 - 45.809 It's it's you don't reach that point until you get into judicial sales, okay.

02:34 - 51.482 Wherein the title to the property can be rendered alone, deal with no other claims.

02:34 - 54.184 Okay. Against it wipes out everything.

02:34 - 55.085 Even you. We don't.

02:34 - 56.253 You don't reach that here.

02:34 - 58.289 You don't take the title at an upside sale.

02:34 - 59.690 Not subject to the mortgage.

02:35 - 03.394 Yes. You take under.

02:35 - 03.727 Yeah.

02:35 - 06.664 You take it, you take it subject to the subject to the mortgage.

02:35 - 08.198 So your client's mortgage interest,

02:35 - 11.201 which is what we're talking about here, is protected.

02:35 - 14.738 It's other words, if I, if I go on to add an upset sale and I buy a property

02:35 - 18.342 for $5,000 and there's $100,000 mortgage on the property,

02:35 - 20.611 that mortgage is still a priority.

02:35 - 23.247 Lean on the property against my interest. That's correct.

02:35 - 23.681 But what?

02:35 - 27.618 What you've lost what the what the mortgagee has lost is an opportunity

02:35 - 33.023 to redeem the property, to enter into a, but it's not a payment plan.

02:35 - 36.960 And even to sell the property during that period of the periodic payment plan

02:35 - 38.295 to pay the mortgage off.

02:35 - 42.166 And for those opportunities are less, a lot less expensive,

02:35 - 45.903 a lot less product, a lot more productive, quicker, faster

02:35 - 49.707 than going through having to go through a mortgage, foreclosure proceeding.

02:35 - 51.108 I don't understand how you would go through.

02:35 - 54.611 So so you acknowledge

02:35 - 58.282 that your mortgage is still intact?

02:35 - 01.652 Yes. It's still intact. Okay. So.

02:36 - 02.753 Right.

02:36 - 08.692 So you're saying what you lost was remedies

02:36 - 14.031 that you would have had to for was was the mortgage deficient?

02:36 - 16.300 Was it being unpaid

02:36 - 18.402 mortgage is current.

02:36 - 18.736 Okay.

02:36 - 22.139 Was so so you I'm trying to figure out what you lost.

02:36 - 23.807 No valid mortgage. Right.

02:36 - 26.076 So what did you how are you? Aggrieved.

02:36 - 29.346 You're aggrieved because you have to go through a mortgage foreclosure.

02:36 - 32.182 No. You know, you said it's current.

02:36 - 33.784 Well, it's still on the records.

02:36 - 35.219 It's still a valid mortgage, right?

02:36 - 38.222 No, but you're saying that the payment, the mortgage is being paid.

02:36 - 39.189 No it's not.

02:36 - 42.359 Oh, it's not the mortgage is now the owner of the property.

02:36 - 43.827 Right. But they're not paying.

02:36 - 47.598 It was a deed in lieu issued after it was discovered

02:36 - 51.135 that this upset sale had taken place. Sure.

02:36 - 54.571 And the deed in lieu was issued pursuant

02:36 - 57.975 to the mortgage redemption rights under 609.

02:36 - 02.546 If you if your mortgage is still valid, right, valid on the books,

02:37 - 05.816 then all of your remedies under the mortgage,

02:37 - 08.252 that's still valid on the record are available.

02:37 - 13.557 That's your problem in the case you didn't lieu was filed so that now,

02:37 - 17.561 the mortgagee owns the property.

02:37 - 19.263 Okay.

02:37 - 22.232 Subject your your leave to your merely.

02:37 - 23.400 That's what.

02:37 - 26.403 That's why your case is different than Mennonite.

02:37 - 27.971 I'm sorry.

02:37 - 30.908 That's why your case is different

02:37 - 34.178 in orders of magnitude from the Mennonite case.

02:37 - 38.816 Well, that's right, because the mortgage is still intact

02:37 - 42.820 because of 609, but it forces the mortgagee

02:37 - 48.192 to have to go through all this foreclosure action, and he loses the war expedient.

02:37 - 49.660 Well, that's what I don't understand. Why?

02:37 - 52.763 Why what what's is there a default on the mortgage?

02:37 - 55.065 Is there what

02:37 - 58.068 you keep bringing up foreclosure has is the mortgage in default.

02:37 - 00.471 The mortgage is not a default.

02:38 - 02.306 So you don't have to go forward with foreclosure.

02:38 - 04.241 There's a deed in lieu already of record.

02:38 - 06.243 I understand, but you keep bringing up the idea

02:38 - 08.745 that you've lost your ability to foreclose on the mortgage.

02:38 - 10.881 How have you lost your ability to foreclose on the mortgage?

02:38 - 12.416 You have it.

02:38 - 13.717 You can still do that.

02:38 - 16.720 Okay, so what have you lost as a result of the sale?

02:38 - 20.023 What we've lost is the time and effort we've had to come to court

02:38 - 22.593 to resolve the issue. What's the issue?

02:38 - 25.128 There was no notice. Now I understand that.

02:38 - 27.331 So I I'm trying to understand.

02:38 - 31.134 Let's you want to you want to you want sort of this resolution of this

02:38 - 35.172 this general legal proposition of should mortgages

02:38 - 38.208 get notice as owners under the statute.

02:38 - 39.610 Right. Okay.

02:38 - 43.113 I'm asking you, how is a mortgagee

02:38 - 47.017 aggrieved under this statute when they don't get notice?

02:38 - 51.688 How are they agreed? Yes.

02:38 - 54.992 The five of their constitutional right to due process.

02:38 - 58.161 What right are they being deprived of it?

02:38 - 59.263 You have to in order for there

02:38 - 02.799 to be a deprivation of due process, notice an opportunity to be heard.

02:39 - 06.870 That has to happen before a right is taken away.

02:39 - 09.506 What right has been taken away by you

02:39 - 11.508 without notice and an opportunity to be heard?

02:39 - 15.212 So if you follow that line of thinking, every mortgage recorded

02:39 - 19.950 would, would, would be saved by 609 and therefore tax claim bureau

02:39 - 24.087 would never have to notify any mortgagee, including bank, what is saved.

02:39 - 27.257 Every mortgage is saved by 609 exactly.

02:39 - 32.596 But what it creates more litigation in foreclosure actions.

02:39 - 35.232 What you you keep saying what foreclosure action?

02:39 - 37.401 A foreclosure

02:39 - 40.470 action on the mortgage that still exists on the record.

02:39 - 44.341 Why are you but why are you foreclosing if your your line is good,

02:39 - 46.577 there's a new owner.

02:39 - 49.580 What's the foreclosure look? Okay.

02:39 - 52.249 There is no there is as yet no foreclosure.

02:39 - 55.419 But because we petition to set aside the tax claim step.

02:39 - 58.155 Okay, but in the meantime.

02:39 - 00.457 In the meantime,

02:40 - 03.460 the police had filed a,

02:40 - 06.597 complaint, the quiet title.

02:40 - 10.567 So that is, has become another whole all of litigation.

02:40 - 13.971 Okay, to resolve this conundrum of whether or not this.

02:40 - 16.139 Well, there's nothing this court can do to prevent people

02:40 - 19.943 from litigating, but, presumably you're going to have full entitlement

02:40 - 23.647 to litigate whatever they're trying to do down there.

02:40 - 26.850 I mean, your line is protected under the statute.

02:40 - 30.053 What I thought you were going to say in response to Justice Robson, but you didn't

02:40 - 32.522 was something to the effect of

02:40 - 35.759 the mortgagee has an interest in who the new mortgage was going to be.

02:40 - 38.895 You might not like the credit worthiness of this new buyer.

02:40 - 42.666 You might have some problem with whoever's taking title

02:40 - 46.837 and that you think you should have the chance to litigate in that mix

02:40 - 50.574 because you have a security interest that needs to be protected

02:40 - 55.712 and you'd rather have A than B or C, but that apparently is not your argument.

02:40 - 58.048 You know, I

02:40 - 01.118 don't I don't I don't follow that you have a statute here

02:41 - 05.956 that says that a mortgagee is supposed to get notice of an upset sale.

02:41 - 10.794 That didn't happen where you get pre-publication notice by mail, right now.

02:41 - 13.330 They didn't receive any notice at all?

02:41 - 16.967 No, we didn't find out that this property had been sold upside sale

02:41 - 19.803 until the buyer walked in the door and said, I'm the new owner.

02:41 - 21.972 Get that counsel. Well, it is done.

02:41 - 25.342 If you'd gotten notice, what would your client have done if it had gotten notice?

02:41 - 27.511 What did they get? No no, no.

02:41 - 32.582 What would your client have done if they had gotten the notice

02:41 - 34.951 that you're saying they should have gotten,

02:41 - 37.921 they would have gone in and paid the back taxes.

02:41 - 39.189 It's simple enough.

02:41 - 42.192 You had the right to do that under under Russell,

02:41 - 44.294 there was a redemption period there.

02:41 - 46.496 You can enter into periodic payments.

02:41 - 48.031 Wait. The mortgagee would have done that.

02:41 - 50.701 The mortgagee?

02:41 - 51.702 Yes, absolutely.

02:41 - 52.102 You don't.

02:41 - 55.105 The lender would have walked in and paid the taxes and paid.

02:41 - 57.974 They have the right to do that under the statute.

02:41 - 59.876 They have the right to do that.

02:41 - 02.979 And the statute itself, the mortgagee has the right to do a redemption.

02:42 - 08.285 Yes, because they have a instrument of conveyance,

02:42 - 12.022 an instrument of conveyance, which is protected under the statute

02:42 - 14.658 by Judge Castillo's opinion.

02:42 - 17.994 Judge Castillo says a mortgage is a conveyance.

02:42 - 22.699 So under the under that language, which is not included

02:42 - 26.603 in the first Pennsylvania and which is included, you know,

02:42 - 30.240 as of amendments and modifications of the Russell

02:42 - 33.710 that were in place at the time of the upset sale.

02:42 - 37.180 Okay. The,

02:42 - 43.787 The, mortgagee was deprived of his redemption rights.

02:42 - 47.491 He was deprived of his opportunity to go in and pay the back taxes.

02:42 - 51.862 You know, I know you really notified him until after the fee

02:42 - 54.865 simple deed had been issued, but you're making the.

02:42 - 57.934 So all the arguments you're making, though are instances

02:42 - 03.907 where as a result of the sale, someone loses an interest.

02:43 - 07.844 And and that's why particularly we're very strict

02:43 - 10.847 about the notice provisions, requirements to owners.

02:43 - 12.382 So because the owners are the ones

02:43 - 15.552 that own the O the taxes, the taxes go with the land

02:43 - 20.223 and they have a redemption right to go in here.

02:43 - 23.193 Again, back to justice wax point.

02:43 - 25.128 And I guess it's it's it would be a good argument,

02:43 - 29.032 I guess maybe a good argument if you made it that you have the right

02:43 - 32.035 to choose who your debtor is.

02:43 - 37.073 But here your client was in no different situation.

02:43 - 39.242 Presale and post sale.

02:43 - 40.844 Your client was in the exact same position.

02:43 - 42.078 The position did not change

02:43 - 45.081 as a result of the sale other than the identity of the debtor.

02:43 - 49.619 That's if you define the definition of owner

02:43 - 52.622 to a grantee on a deed.

02:43 - 54.357 And that's essentially what?

02:43 - 56.226 No, no I'm not I'm not talking about the definitions.

02:43 - 59.229 I'm saying, how did I take one more shot at this?

02:43 - 02.232 How did your client's position change

02:44 - 07.537 pre tax sale from, you know, post tax sale from Preset Excel.

02:44 - 10.540 How did your client's position change record mortgage.

02:44 - 13.510 No I'm not asking you what you are I'm asking how did your position change.

02:44 - 14.211 How does it.

02:44 - 17.214 Now we have to defend this act required title.

02:44 - 20.917 Now he has to go through a process of mortgage foreclosure.

02:44 - 22.252 But you might have had to do to justice,

02:44 - 23.820 which point you might have had to done that anyway.

02:44 - 25.455 We can't stop people from litigating on

02:44 - 27.824 why is he going through a mortgage foreclosure?

02:44 - 29.793 Because,

02:44 - 33.864 well, he will eventually, depending on how the court decides, if you set aside

02:44 - 35.298 the tax claims now,

02:44 - 39.135 he won't have to do that because he already has a deed in lieu of foreclosure.

02:44 - 40.804 But there's

02:44 - 43.039 other mortgage payments

02:44 - 46.776 that are not being made because of this conveyance.

02:44 - 48.812 I mean, you keep talking about foreclosure,

02:44 - 54.017 but I didn't understand where you said the mortgage was not being paid up.

02:44 - 57.153 The the property is rented,

02:44 - 00.690 the tenant is paying a monthly rent,

02:45 - 04.194 the mortgage he is collecting that rent.

02:45 - 04.928 Okay.

02:45 - 08.231 The mortgage is currently under court order to pay

02:45 - 11.568 into a judicial escrow.

02:45 - 15.538 The balance of the rent collected minus homeowner

02:45 - 19.175 association fees and insurance like that.

02:45 - 22.345 So even though a fee

02:45 - 25.615 simple deed was issued to the police,

02:45 - 29.152 the bidder, the successful bidders at that time,

02:45 - 32.188 they have received nothing, of,

02:45 - 35.892 in terms of rent or mortgage payments or anything like that at all.

02:45 - 38.762 It's all being paid into a judicial escrow.

02:45 - 41.698 So all this confusion is generated

02:45 - 45.568 by the fact that the courts have not upheld

02:45 - 51.241 the letter and spirit of the tax fine, but that not just presuppose or notice.

02:45 - 52.409 You keep saying that,

02:45 - 56.780 but you're continuing to presuppose that a mortgagee is the same as an owner,

02:45 - 59.316 and there's nothing in the statute to support that.

02:46 - 02.986 And you keep referring there

02:46 - 07.657 is the Judge Castillo's opinion and and the instrument of conveyance.

02:46 - 09.392 Okay. Just one second.

02:46 - 13.096 Chief Justice Castillo's opinion that I think you're referring

02:46 - 16.333 to referenced an interest in the conveyance.

02:46 - 19.536 Did it determine that he determined that,

02:46 - 23.006 a mortgage was an instrument of conveyance?

02:46 - 26.576 Yes, yes he did.

02:46 - 26.910 Counsel.

02:46 - 29.779 What's the state of that case you're talking about?

02:46 - 31.081 I'll give it to you here in a minute.

02:46 - 32.115 Okay, here it is.

02:46 - 33.817 It's,

02:46 - 36.820 Hines v Farrell.

02:46 - 41.157 It's, cited as 848 Atlantic, 94,

02:46 - 44.828 Pennsylvania, 2004.

02:46 - 46.730 The issue.

02:46 - 51.067 Well, the it's rather complicated, but if you could just read the language

02:46 - 54.437 you're referring to from Chief Justice Castillo, I'd appreciate that.

02:46 - 57.340 All right. All right, here,

02:46 - 00.343 here it is.

02:47 - 01.578 Here's what Castillo says.

02:47 - 02.679 What definitely tips.

02:47 - 06.883 The balance in this court's view, is that although a mortgage can be considered

02:47 - 08.385 a conveyance in form

02:47 - 12.355 as well as a security interest for purposes of actions involving

02:47 - 17.160 recording acts, mortgages for additionally have been treated as conveyances.

02:47 - 20.463 That's what he says. Conveyances of what?

02:47 - 23.466 I'm sorry, conveyances of what, though you're talking about a conveyance

02:47 - 27.971 of an interest, of a mortgage interest as opposed to an ownership interest.

02:47 - 30.607 There's there's that's a that's a critical distinction.

02:47 - 34.911 I think when you talk about a mortgage, a mortgage is a conveyance of an interest

02:47 - 38.381 in a financial interest, not an ownership interest,

02:47 - 41.651 because, in other words, I have a house with a mortgage.

02:47 - 44.421 The bank doesn't own my house. I own my house.

02:47 - 46.756 They've got a mortgage interest in my property.

02:47 - 49.392 You're correct.

02:47 - 51.294 But thank you, Ratzel says.

02:47 - 53.163 Instrument of conveyance.

02:47 - 57.000 Okay, so it combines both of the elements that you're talking about,

02:47 - 58.835 but it conveyance of what?

02:47 - 01.704 It's a convenience of a mortgage interest or the conveyance

02:48 - 02.972 of an ownership interest.

02:48 - 05.375 There are two distinct things. It's both.

02:48 - 08.778 It's both because it incorporates instrument of conveyance.

02:48 - 14.751 In a general sense, a mortgage is a specific lean against a property.

02:48 - 18.955 And Castillo says that it is treated, conventionally,

02:48 - 22.525 as traditionally have been treated as conveyances.

02:48 - 26.129 He uses the word specifically conveyances, and he doesn't distinguish

02:48 - 28.431 between ownership and otherwise.

02:48 - 29.599 That's the problem with the way

02:48 - 33.403 the statute is written, is reference to the last name

02:48 - 37.107 recorded against the property, and that in this case.

02:48 - 41.244 And can I, can I follow up because the, the section

02:48 - 45.515 1 or 2 definition of owner reads in pertinent part,

02:48 - 49.586 the person whose name last appears

02:48 - 54.124 as an owner of record on any deed or instrument of conveyance recorded.

02:48 - 56.326 So the it's referring back to owner.

02:48 - 58.828 In other words, you're focusing on conveyance.

02:48 - 02.432 But the statute is talking about an owner of record

02:49 - 05.702 on any deed or instrument of conveyance.

02:49 - 07.704 So the owner is still the owner.

02:49 - 12.308 The mortgagee is not magically transformed into the owner is entitled to notice

02:49 - 16.846 because he's he is, included as an instrument of good banks.

02:49 - 21.584 It is a mortgagee, the mortgagee, the word mortgagee is referenced

02:49 - 25.355 several times in the statute, specifically the first,

02:49 - 28.458 in the opening paragraphs of,

02:49 - 30.693 the creation of that nature of

02:49 - 34.364 it talks about, distributions, that,

02:49 - 38.801 let's see here,

02:49 - 40.937 it's here it is, it's,

02:49 - 45.575 section 205 four for two mortgages

02:49 - 49.179 after the sale has been conducted,

02:49 - 52.382 the tax claim Bureau has to notify

02:49 - 55.485 the mortgagee that there is an application

02:49 - 59.422 before the court to approve it for confirmation.

02:49 - 03.293 And I see the distribution, and the distribution has to be split

02:50 - 07.530 specifically include notice to a mortgagee

02:50 - 10.800 in the fourth and the fourth section.

02:50 - 12.869 Even before owners.

02:50 - 13.236 Okay.

02:50 - 16.272 Which is the only number five council.

02:50 - 20.376 I don't I don't know, I don't I don't know how that helps you

02:50 - 25.348 in the sense that the General Assembly clearly distinguish between an owner

02:50 - 28.051 and a mortgagee in other parts of the statute,

02:50 - 31.487 but when they define the owner, they didn't include in the definition

02:50 - 34.490 mortgagee, even though in the sections that you're pointing out

02:50 - 39.629 there is a difference, there may be a difference as far as you can see.

02:50 - 45.335 But as far as the way the tax Plan Act is structured, it's trying to be as broad

02:50 - 50.707 as possible to bring in any and all interests of significant property.

02:50 - 53.209 I don't see that in the owner definition at all.

02:50 - 56.212 And I'm flummoxed that your argument is,

02:50 - 01.417 is attempting to re characterize a mortgagee as an owner, instead of

02:51 - 05.855 of arguing that due process demands that you have an opportunity

02:51 - 09.626 to protect your collateral to to redeem your collateral,

02:51 - 14.163 or to take steps that you think are needed to safeguard

02:51 - 18.901 your collateral against a new owner that's going to be less creditworthy.

02:51 - 21.037 You're not making that argument at all.

02:51 - 24.540 You're making this argument about changing the word of the statute.

02:51 - 27.543 I don't I don't get in the word of the statute.

02:51 - 30.513 I'm not trying to make the mortgagee an owner.

02:51 - 34.684 I'm just saying I'm is an entity that's entitled, under the statute

02:51 - 38.388 to the notice requirements of the upset sale.

02:51 - 40.890 Now. Yeah.

02:51 - 41.357 Okay.

02:51 - 45.161 Here's one of the category of people who are entitled one through five.

02:51 - 47.163 All right. Of the distribution.

02:51 - 47.530 All right.

02:51 - 52.268 We we have heard this and I think we understand what you're asking this.

02:51 - 54.304 Okay. Let's hear I

02:51 - 57.940 pronounce your

02:51 - 00.043 if I pronounce your name wrong, sir.

02:52 - 02.011 Mark de Z.

02:52 - 02.679 Thank you. Mr..

02:52 - 05.615 Say thank you.

02:52 - 06.683 Chief Justice Todd,

02:52 - 09.686 associate justices, may it please the court?

02:52 - 11.521 Could you pull the mic down a little?

02:52 - 12.622 Thank you. Yes.

02:52 - 13.022 Thank you.

02:52 - 13.723 Good afternoon.

02:52 - 17.460 Now, we represent JC properties,

02:52 - 20.897 which is the, entity

02:52 - 24.734 that acquired the property at the subject

02:52 - 29.105 tax upset sale and was granted intervenor status by the lower court.

02:52 - 32.508 My co-counsel to my right is Donald Weiss.

02:52 - 34.677 May it please the court?

02:52 - 38.581 This appeal addresses whether a mortgage Leon Holder

02:52 - 42.185 received constitutionally adequate notice

02:52 - 44.220 of an upset sale.

02:52 - 48.257 Under Pennsylvania's real estate tax sale law and the 14th Amendment

02:52 - 52.862 Due Process Clause in a tax sale in an upset sale,

02:52 - 56.065 the Tax Claim Bureau must provide

02:52 - 59.068 three forms of notice to a record owner.

02:52 - 02.839 They are certified mail or personal service posting

02:53 - 07.243 and publication in a subset sale.

02:53 - 11.280 There is no requirement to provide notice in any other means

02:53 - 14.584 by publication to a lien holder.

02:53 - 17.286 That's that's clearly in the statute.

02:53 - 19.021 And by

02:53 - 22.024 a lien holder, you're referring to a mortgagee

02:53 - 25.094 that I'm referring to a mortgage holder, I'm

02:53 - 27.964 referring to a mortgage lead holder

02:53 - 31.200 who has a recorded mortgage leaned against the real property.

02:53 - 34.237 And then you'll see later on in the discussion,

02:53 - 38.541 they'll be also judgment lien holders, people who acquire

02:53 - 41.577 leans against real estate as a result of having a judgment.

02:53 - 48.785 This a as I'm sure

02:53 - 53.156 your justices know, the judicial sale is different from an upset sale.

02:53 - 54.557 You normally have an upset sale.

02:53 - 58.861 First, it has a certain set of requirements for who gets notified.

02:53 - 02.532 And then if that doesn't produce the sale of the property

02:54 - 06.068 and the next step would be a judicial sale.

02:54 - 09.205 In the judicial sale, the property is sold free

02:54 - 12.208 and clear all liens, encumbrances whatsoever.

02:54 - 16.412 So in that case, all notices must be given to all of the parties

02:54 - 19.649 whose liens and and mortgages you're going to extinguish.

02:54 - 22.585 And then the judicial set includes mortgage holders.

02:54 - 23.085 That's correct.

02:54 - 24.887 Okay.

02:54 - 28.591 But in the tax upset sale, the oh,

02:54 - 33.329 only the lean holders who had liens that,

02:54 - 36.432 that postdated

02:54 - 40.770 the lean of the taxes being sold, are surviving the sale.

02:54 - 43.206 They are not extinguished by the sale.

02:54 - 45.374 They they continue to have the same rights

02:54 - 48.377 before the sale, and they will have after this year.

02:54 - 53.282 So the need arises for a tax claim bureau

02:54 - 57.286 to provide extra personal service to a mortgage lien holder.

02:54 - 01.524 Only when the lean in that mortgage holder would be impaired

02:55 - 04.527 or extinguished by operation of the tax sale.

02:55 - 06.429 That's under the statute. Right?

02:55 - 07.897 That that's correct.

02:55 - 11.000 But what about the constitutional argument?

02:55 - 14.003 Could you could you see Mennonite

02:55 - 17.306 being let's say you went to Scotus on surgery from us.

02:55 - 18.975 Okay. I'm getting say you won here.

02:55 - 21.277 And they took cert to decide whether,

02:55 - 25.815 Mennonite should be extended to encompass

02:55 - 30.820 any, a scenario where the mortgagee might argue

02:55 - 34.724 as against this appellants not arguing, that

02:55 - 39.362 that they that due process would require

02:55 - 42.365 they have an opportunity to

02:55 - 47.036 to play in the arena

02:55 - 51.541 where these different potential owners are vying.

02:55 - 56.012 So if somebody comes in and they're not creditworthy, they have a bad history,

02:55 - 59.015 or whatever,

02:55 - 02.785 then the mortgagee might say, you know, I gotta I got to get involved here

02:56 - 05.988 because my interest is going to be forfeit if I don't, do you,

02:56 - 08.824 how would you address such a such an argument?

02:56 - 10.960 I would address it this way. Justice worked.

02:56 - 14.730 First of all, in the Mennonite case, clearly,

02:56 - 18.334 the mortgage lien was at risk of being extinguished as a result of the sale.

02:56 - 22.972 Okay, in the, two Pennsylvania cases,

02:56 - 26.742 the first Pennsylvania Bank versus Lancaster case.

02:56 - 31.180 Similarly, the lean the mortgage line was junior to a prior

02:56 - 34.216 tax lien, and that was at risk of being extinguished.

02:56 - 35.051 Okay.

02:56 - 36.352 In fact, in that case,

02:56 - 37.954 the remedy was not to set aside

02:56 - 41.624 the sale when it went back down and then came up in the Commonwealth Court,

02:56 - 45.528 the remedy was to reinstate the weight, because we don't need to do that here

02:56 - 49.999 because this lien never was extinguished, never needed to be reinstated.

02:56 - 51.500 I totally get that.

02:56 - 53.903 I think that's absolutely good point.

02:56 - 56.739 Okay, my only question is, and maybe I'm

02:56 - 59.909 just trying too hard here to see an argument, I maybe I shouldn't be.

02:56 - 03.846 I guess I'm just wondering, like, let's just say if you, let's just say,

02:57 - 07.683 there's a mortgagee, there's a mortgage lender,

02:57 - 12.288 and this goes to a tax sale, and they didn't find out about it.

02:57 - 16.092 And at this tax sale instead of, you know,

02:57 - 22.231 PNC Bank or Mellon Bank getting title, it's, you know, Joe Schmo

02:57 - 26.235 who somehow beats the price and gets ownership.

02:57 - 28.971 And he's, you know, he's a deadbeat from way back.

02:57 - 30.840 He's defaulted all over the place. Right.

02:57 - 33.843 And they're they're they're lien exist in law.

02:57 - 37.680 It's still the same lead, but their chances of ever

02:57 - 41.117 their chances of ever,

02:57 - 44.387 getting their, loan paid just went to nil.

02:57 - 47.323 In practical terms, keeping in mind would go to that extent,

02:57 - 49.191 you know, keep in mind extend midnight to the,

02:57 - 52.528 you know, your own justice work now because because keep in mind

02:57 - 54.964 the party who just lost the property was a deadbeat.

02:57 - 57.533 Okay. Yeah, yeah.

02:57 - 02.071 And key point and keep in mind that that the property is still there.

02:58 - 03.139 Right.

02:58 - 05.007 But that property is still there.

02:58 - 07.143 The value of the property is still there.

02:58 - 10.413 And whatever value it has, if anything, the mortgagee

02:58 - 14.083 who has the same right to foreclose before and after the sale

02:58 - 18.454 is in a better position because somebody bought the property and paid the taxes.

02:58 - 19.922 Okay.

02:58 - 22.491 I think that would not have to be addressed by the mortgagee.

02:58 - 23.626 Who's doing a foreclosure.

02:58 - 24.660 Be can't be worse.

02:58 - 26.796 You're saying it can't be worse? Well, and

02:58 - 28.664 if if

02:58 - 32.401 that were if if that were a if that were a good pass to go,

02:58 - 35.671 one would expect a record to be developed.

02:58 - 39.308 That that's what happened here, that the property was bought by a deadbeat.

02:58 - 42.645 We're now in a worse position than we were previously.

02:58 - 44.013 That's the property interest

02:58 - 47.416 that has been deprived without notice, an opportunity to be heard.

02:58 - 50.219 But there's no record like that here.

02:58 - 51.153 That's correct.

02:58 - 54.256 And the other thing is that when people buy at a tax,

02:58 - 58.127 they'll it's an unusual breed of buyer who's willing to take the risk to buy it.

02:58 - 58.961 A tax deal.

02:58 - 01.964 They typically don't get the opportunity to see the property in its condition,

02:59 - 02.932 okay.

02:59 - 07.303 And typically don't see the opportunity to see to do a title report

02:59 - 11.307 and know the condition and the priority of different mortgages and liens

02:59 - 14.043 and the amounts that are currently do on each of them. Okay.

02:59 - 15.811 So they're taking a risk.

02:59 - 18.247 So they're willing to take a risk like that.

02:59 - 19.582 There's also a risk of somebody

02:59 - 22.184 being in possession of the property after they buy it.

02:59 - 24.720 So these are all risk of people to take with it.

02:59 - 28.190 But yet there are people out there doing it and it's thousands and thousands

02:59 - 32.428 of properties being sold in tax sales for good reasons to promote,

02:59 - 36.532 you know, governments generating revenues and and having stability in the process.

02:59 - 40.736 The, I just want to continue on

02:59 - 44.173 to some of my observations, if I may, in the,

02:59 - 48.944 in upset cell, Berks County,

02:59 - 53.215 versus low case, this court extended

02:59 - 56.585 the idea that judgment creditors, judgment

02:59 - 00.422 holders are entitled in some notice, but if and only

03:00 - 03.425 if their their judgment liens were going to be extinguished

03:00 - 06.529 by a sale.

03:00 - 10.099 By contrast, here,

03:00 - 13.836 The Myron mortgage ruling

03:00 - 17.206 was not extinguished by the 2017 upset sale.

03:00 - 19.141 It survived the sale.

03:00 - 22.378 The $100,000 mortgage in favor of Miron was recorded

03:00 - 25.848 in February 2nd of 2015.

03:00 - 29.685 The upset sale took place in 2014 of 2017.

03:00 - 34.223 The upset sale was for the unpaid 20 1516

03:00 - 38.060 and 17 taxes, the statutory scheme.

03:00 - 41.096 It's quite extensive that I outlined in the brief.

03:00 - 46.802 This indicates that the earliest date when there could possibly have been a lien

03:00 - 49.805 for unpaid taxes would have been in 2016,

03:00 - 53.008 which was the year after the mortgage lien was recorded.

03:00 - 57.646 So as a consequence of that, under section 509 of the Tax Sale Act.

03:00 - 01.250 Counsel, why can I just interrupt you for a second over here?

03:01 - 04.420 Apologize.

03:01 - 05.754 I'm trying to.

03:01 - 07.523 There's a there was an allegation or a claim

03:01 - 09.625 that there's a whole bunch of litigation to quiet title

03:01 - 12.761 going on here and things like that that could have been avoided.

03:01 - 17.266 Is there is there something here that I see

03:01 - 19.635 the lender here.

03:01 - 22.938 The mortgage is an individual right

03:01 - 28.510 lender is I'm sorry, the lender here, the the the the company that's challenged the

03:01 - 32.882 the mortgagee is is an individual is who owns the line.

03:01 - 35.784 Is there some sort of a connection

03:01 - 38.220 between the, the lean holder, the mortgagee

03:01 - 41.490 and the defaulted owner on the tax side or something?

03:01 - 42.524 Is there something

03:01 - 44.226 is there something we just don't know that makes this

03:01 - 46.562 like a unique case that we should sort of know?

03:01 - 47.596 Well, there could have been, but

03:01 - 49.832 I'll be candid,

03:01 - 53.035 the issue of the validity of the deed in lieu of foreclosure

03:01 - 56.672 of the what did you pull that microphone close to talking to the issue

03:01 - 01.844 of the limited legitimacy of the deed in lieu of foreclosure?

03:02 - 06.015 It was done in 2019 after my client, Jack

03:02 - 09.018 properties, had taken a deed from the tax claim bureau.

03:02 - 10.920 That's the subject matter of the underlying

03:02 - 14.657 case, the deed in lieu of foreclosure from the prior owner.

03:02 - 18.294 That was the prior owner who no longer own the property, signed a deed

03:02 - 21.597 in lieu of foreclosure in favor of Miron

03:02 - 24.633 and the Delaware County.

03:02 - 30.239 So the former owner, after the tax sale, yes, filed a deed

03:02 - 33.509 in lieu of foreclosure of something that the prior owner no longer had.

03:02 - 34.143 That's correct.

03:02 - 38.647 Okay, so there may be something going on.

03:02 - 41.717 Yeah, there's something going on and there's an and there

03:02 - 45.187 there's, there's an issue as the validity of that deed.

03:02 - 48.691 And even if it, even if some of it is valid,

03:02 - 52.394 there's no affidavit of non merger of the deed with the fee.

03:02 - 55.764 So the reason why we're pursuing this is because the way that deed

03:02 - 00.569 in lieu of foreclosure becomes valid is if you eliminate the tax sale deed.

03:03 - 05.307 Well it's they can if they can knock out the tax they'll be the deed.

03:03 - 06.041 It's possible.

03:03 - 10.179 No. If they had foreclosed, instead of taking the track track

03:03 - 13.882 that they did, they they might have been in a different position.

03:03 - 15.517 However,

03:03 - 18.520 they're in the position that they're in, and they chose the remedy

03:03 - 23.459 and even the mortgage, even the deed in lieu of foreclosure itself, recites

03:03 - 27.363 the fact that as of its date, which was in December of 2019,

03:03 - 33.102 that it it's that the mortgage underlying it was valid and was unsatisfied.

03:03 - 36.271 So on the snapshot date of the of the sex

03:03 - 40.776 sale leading all the way up to January or December of 2019,

03:03 - 45.647 everybody knew and believed that the mortgage was not extinguished,

03:03 - 48.784 was not impaired as a result of the tax sale,

03:03 - 52.921 and that's the critical point over to the point of what happens in this litigation.

03:03 - 55.290 The mortgage is still going to be valid and he's still going to Mr.

03:03 - 59.128 Myron is still has his mortgage interest in the property.

03:03 - 00.763 He may or may not.

03:04 - 03.265 That's not before years on it, I know that, but that's

03:04 - 05.934 why I'm asking you right now, because that seems to be

03:04 - 08.937 the crux of this particular issue that we're fighting about.

03:04 - 09.972 Yeah it is, Mr.

03:04 - 12.508 Myron, have a valid mortgage interest in the property.

03:04 - 16.445 Well, look challenging that why why why, yeah.

03:04 - 17.513 Because,

03:04 - 22.117 because when I thought I had this case figured out, that's why

03:04 - 22.851 I'm wondering about.

03:04 - 27.122 Because a mortgage, a mortgage foreclosure doesn't wipe out the taxes

03:04 - 30.092 and upset sale takes, subject to the mortgage interest.

03:04 - 32.895 He's arguing he's got a mortgage interest that's literally theoretically

03:04 - 34.229 going to be wiped out.

03:04 - 34.830 Yeah.

03:04 - 39.034 His well, that's that's theoretically what he's going to bring this matter.

03:04 - 42.938 The answer to your question as to what Justice Wecht is trying to get, which.

03:04 - 46.775 Well, I think one explanation is that the mortgage,

03:04 - 50.312 the underlying obligation is time barred.

03:04 - 53.982 And if an underlying obligation of time barred, you're

03:04 - 55.350 trying to wipe out his mortgage interest.

03:04 - 58.320 That's why he's fighting the case, right?

03:04 - 01.657 Yeah.

03:05 - 03.725 Again, that's not a matter before this court.

03:05 - 05.994 You guys are engaging a lot of litigation.

03:05 - 07.529 I mean, it's it's.

03:05 - 09.798 But in front of us, the simple question is,

03:05 - 13.769 were they entitled to put aside all the

03:05 - 16.205 I won't say shenanigans, but put aside all this stuff that happened

03:05 - 20.042 post tax sale, all the litigation you're trying to do to harm him,

03:05 - 22.644 that they're trying to do to, you know, deeds and lose

03:05 - 23.679 and all this other stuff that happened

03:05 - 27.249 after the fact going back to the tax sale, which is right in front of us.

03:05 - 30.119 The question is

03:05 - 33.322 immediately pre tax sale and immediately post tax sale.

03:05 - 36.825 What was the status of the mortgage completely valid okay.

03:05 - 38.360 When in your view

03:05 - 41.463 did it become invalid such that you were able to start challenging it

03:05 - 45.167 either when the deed in lieu of foreclosure

03:05 - 50.372 came from the non owner that had no affidavit

03:05 - 55.444 of non merger reference in it, or after further after sufficient time.

03:05 - 59.915 The underlying obligation of the note securing the mortgage

03:06 - 02.618 became time barred.

03:06 - 05.621 Okay, but those are separate

03:06 - 09.892 events that occurred after the deed in lieu.

03:06 - 12.728 Both of those are not after the deed in lieu that after the tax held

03:06 - 15.731 well after the tax sale.

03:06 - 21.270 Oh, it's our position that Mr.

03:06 - 24.606 Myron had the same rights to foreclose on his mortgage

03:06 - 28.110 after the 2017 upset sale,

03:06 - 31.046 when it was purchased by Jack properties,

03:06 - 32.848 as he had against the prior owner

03:06 - 35.851 before the upset sale purchased by Jack properties

03:06 - 40.522 and as a result, he was not aggrieved by the 2017 tax sale

03:06 - 45.360 and required no extra personal notice of the tax sale.

03:06 - 46.929 Counsel, you lost me there.

03:06 - 49.431 You just said that he had the same rights before.

03:06 - 51.300 To foreclose on the mortgage is after

03:06 - 54.303 you're telling us you're challenging the validity of the mortgage.

03:06 - 55.671 Did here, didn't he?

03:06 - 58.240 I mean, when your clients bought the property, it upset sale.

03:06 - 59.942 I assume that you had a challenge.

03:06 - 02.945 Didn't happen until a year later, but I assume that the

03:07 - 06.782 the the deed referenced the mortgage it did.

03:07 - 09.418 And the upside sale. You probably also had a title report,

03:07 - 11.153 which I believe which reference the mortgage.

03:07 - 13.722 So your client took with notice of the mortgage, right?

03:07 - 14.156 That's right.

03:07 - 16.258 Okay.

03:07 - 19.261 I just want to be clear on that.

03:07 - 21.964 Now, Mr..

03:07 - 24.299 Mr. Mayor, and argued in his brief that his purported

03:07 - 28.270 right of redemption was impaired by the lack of notice.

03:07 - 32.341 But, section 1501 of the Tax Act

03:07 - 36.511 says that there's no right of redemption after an actual upset sale.

03:07 - 40.983 Section 607 gee states that there is no right of presumption

03:07 - 46.888 in information title passes and only liens that were not discharged by the sale

03:07 - 50.225 or offered the right of redemption, or to an owner.

03:07 - 53.962 And there's an alternate,

03:07 - 56.965 redemption statute under the,

03:07 - 01.536 Invisible Claims and Tax Liens Act, which offers a write off against him,

03:08 - 04.840 but also only to those people whose wins were not discharged

03:08 - 07.843 by the sale. So,

03:08 - 11.480 looking at this thing from a practical standpoint,

03:08 - 14.483 if this court were to require extra

03:08 - 19.288 personal notice to all lane holders, even if not impaired or extinguish

03:08 - 23.025 the consequences, and the collateral damage would be quite severe.

03:08 - 25.227 Looking backwards,

03:08 - 29.298 the statute of limitations to set aside an upset sale is six years

03:08 - 31.300 hundreds, if not

03:08 - 35.671 thousands of upset sales of property sold in the last six years

03:08 - 39.908 by the tax claim Bureau serving the 67 counties

03:08 - 42.911 in this Commonwealth, would be at risk of being set aside.

03:08 - 47.115 This would create nightmares of practical and financial issues

03:08 - 51.086 with buyers of properties with their subsequent buyer's tenants,

03:08 - 54.256 subsequent mortgage lenders and title companies.

03:08 - 57.726 It would also be contrary to a policy

03:08 - 01.196 that upsets sales are vital tools for local governments

03:09 - 05.667 to collect delinquent taxes and maintain municipal services,

03:09 - 09.338 maintaining the integrity and the finality of upset sales.

03:09 - 12.341 Where lean leaseholders interests are preserved

03:09 - 15.344 for tax, both the government and the property owners

03:09 - 18.380 looking forward prospectively

03:09 - 23.785 for a tax claim, Bureau service or for the group of tax claim bureaus

03:09 - 28.857 servicing 67 counties to be required to identify

03:09 - 31.860 and give personal notice to every lane holder,

03:09 - 35.964 even when the lane holder's rights are not to be impaired or extinguished

03:09 - 39.368 by an upset sale, would impose significant financial

03:09 - 44.106 and administrative burdens on the tax claim bureaus, and if upset sales

03:09 - 47.809 were routinely undone due to lack of lean, older personal notice,

03:09 - 53.415 tax titles would be destabilized, creating uncertainty, additional litigation,

03:09 - 56.985 and undermining public confidence in the tax sale process.

03:09 - 01.990 Are you telling us that you would be upset if we upset the upset?

03:10 - 09.364 I don't want to tell you what I really think,

03:10 - 13.769 because I think there might be greater opportunities if you upset the apple cart.

03:10 - 16.772 And if you did, let's put it that way.

03:10 - 18.673 Here,

03:10 - 23.945 we submit that the required statutory notice by publication of the 2017

03:10 - 28.016 upset sale given to, all mortgages

03:10 - 31.620 was constitutionally adequate because Mr.

03:10 - 37.259 Mirren's mortgage was not disturbed and no extra personal notice to Mr.

03:10 - 40.929 Marin would have changed anything when all of his rights were preserved.

03:10 - 43.965 Even after the 2017 upset sale.

03:10 - 47.302 So we respectfully request that this court affirms

03:10 - 51.406 the orders of the Commonwealth Court and the lower court, which found,

03:10 - 56.311 no basis to set aside the 2017 upset sale.

03:10 - 58.447 Thank you very much.

03:10 - 59.014 Thank you.

03:10 - 59.281 All right.

03:10 - 02.284 Thank you both.

03:11 - 07.622 The next case

03:11 - 11.760 for the Supreme Court's consideration is PSB

03:11 - 16.698 versus PD and Akron Acting Secretary, Doctor Ro.

03:11 - 20.435 A couple of definitions are important at this point.

03:11 - 23.438 PSB is the Pennsylvania School Boards Association.

03:11 - 27.509 PD is the Pennsylvania Department of Education.

03:11 - 31.713 Some terms you'll hear during the argument or idea.

03:11 - 35.317 That means individuals with disabilities Education Act,

03:11 - 39.087 LTA means local education agency,

03:11 - 43.959 and FERPA means free and public education.

03:11 - 48.230 This case commenced on July 11th of 2023,

03:11 - 53.435 when the Public Interest Law Center filed a federal court action

03:11 - 56.471 in the United States District Court for the Eastern District of Pennsylvania.

03:11 - 01.443 PD, the Pennsylvania Department of Education,

03:12 - 06.615 agreed that the individuals with Disabilities Act

03:12 - 09.718 required Pennsylvania to make a free and public education

03:12 - 13.955 available available for children with disabilities through age 21.

03:12 - 18.393 PD revised its model DEA policy.

03:12 - 22.230 In other words, the Pennsylvania Department of Education revised its model

03:12 - 26.067 individuals with Disabilities Education Act policy.

03:12 - 32.774 But in September of 2023, just two months later, September 11th of 2023,

03:12 - 37.245 the Pennsylvania School Boards Association filed a declaratory judgment

03:12 - 41.750 action under the original jurisdiction of the Commonwealth Court,

03:12 - 44.653 the Pennsylvania School Board Association,

03:12 - 49.124 that contends that the Pennsylvania Department of Education

03:12 - 55.263 Education's guidance to liaise local education authorities to provide

03:12 - 59.601 a free and public education should extend to the student's 22nd birthday,

03:12 - 03.638 rather than to the school year, where the student reaches 21

03:13 - 07.742 and believes that extension was improper.

03:13 - 12.647 On May 16th of 2024, the court found that the Pennsylvania

03:13 - 16.484 School Board Association and PD stipulated to the facts

03:13 - 20.689 the case made its way to the Pennsylvania Supreme Court, and we'll listen to that.

03:13 - 23.825 Argument concerning this important educational issue

03:13 - 26.828 in the Commonwealth of Pennsylvania. Now.

03:13 - 33.401 You know, I just want,

03:13 - 37.072 no, I think good I things you're ready.

03:13 - 41.042 This appeal concerns the Department of Education's decision

03:13 - 45.580 to increase the age at which students with disabilities become ineligible

03:13 - 49.017 to receive publicly funded education

03:13 - 54.356 for decades under the school code, department regulations,

03:13 - 59.561 and the department's federally approved state plan, students

03:13 - 02.998 who are eligible for publicly funded education

03:14 - 07.202 through the end of the school term in which they turn 21.

03:14 - 12.273 In 2023, following a federal class action settlement,

03:14 - 15.810 the department rescinded that policy and adopted

03:14 - 19.547 a new age out plan allowing students

03:14 - 23.985 with disabilities to remain enrolled until their 22nd birthday.

03:14 - 29.224 The department implemented and enforced the new policy

03:14 - 33.528 statewide without going through formal rulemaking procedures

03:14 - 38.733 under the Commonwealth Documents Law or the Regulatory Review Act.

03:14 - 43.238 The Commonwealth Court concluded that the new Age

03:14 - 47.275 old plan functioned as a binding rule, conflicted

03:14 - 51.813 with existing state law, and was not already codified.

03:14 - 56.551 Therefore, because the plan was adopted without formal rulemaking,

03:14 - 59.788 the court held it was void and unenforceable.

03:15 - 04.325 The department appealed and asks us to reverse that decision.

03:15 - 06.594 Please proceed.

03:15 - 09.597 Thank you, Madam Chief Justice, justices of the Supreme Court,

03:15 - 10.999 and may it please the court.

03:15 - 13.201 My name is Thomas Howell, deputy general counsel.

03:15 - 15.870 I represent the Pennsylvania Department of Education

03:15 - 18.840 and its acting secretary, Doctor Kerry Rowe.

03:15 - 23.545 I'm joined today by my co-counsel, Elizabeth Anzalone,

03:15 - 26.548 assistant counsel for the Pennsylvania Department of Education.

03:15 - 29.918 Your honor, is the primary issue to be addressed by this court is

03:15 - 35.090 whether the plaintiffs, the appeals here, who do not appear to disagree

03:15 - 39.160 that they must follow the requirements of federal law, may challenge the means

03:15 - 42.330 by which the department communicates those federal requirements

03:15 - 46.935 in order to allow them to discriminate against disabled youth versus

03:15 - 51.773 non-disabled youth who are entitled to educational services.

03:15 - 55.744 Under Pennsylvania law, throughout their adult lives.

03:15 - 00.281 Under federal law, however, where states make available

03:16 - 03.785 educational services to youth

03:16 - 08.790 through even adult education programs, which, by the way, are aligned with

03:16 - 12.961 Pennsylvania's standards and curriculum for primary and secondary education.

03:16 - 16.264 States may not exclude

03:16 - 19.734 disabled youth from access to similar programs.

03:16 - 25.240 In Pennsylvania, the obligation to provide special education services falls

03:16 - 29.377 first on the State Education Agency, or SCA,

03:16 - 32.847 in the parlance of the individuals with Disabilities and Education Act,

03:16 - 36.484 and second, on the local education agencies,

03:16 - 40.054 the local education agencies, which are school boards,

03:16 - 45.226 and charter schools, and others involved in primary and secondary education,

03:16 - 49.631 are the entities that receive money from the federal government

03:16 - 53.668 via Ida and its grant programs to provide those services.

03:16 - 56.671 One condition of providing of accepting

03:16 - 59.774 that money is that they provide a free and appropriate education.

03:16 - 03.178 In the terms of the Ida, to students

03:17 - 07.282 between the ages of eight and 21 years inclusive,

03:17 - 13.221 there is no debate that the Ida provides for 21 years inclusive,

03:17 - 16.791 which is the entirety of individuals 21st year of age.

03:17 - 20.261 The only debate is whether an opt out

03:17 - 24.032 provision in the Ida that had heretofore

03:17 - 30.071 been relied upon by Pennsylvania and its LEAs provides immunity

03:17 - 33.675 that allows schools to continue to to discriminate.

03:17 - 36.644 Mister, how can I just can I just jump in there for a second?

03:17 - 39.514 You say heretofore the

03:17 - 44.285 the question is, is the Commonwealth still

03:17 - 47.822 relying on the exemption

03:17 - 50.859 because the exemption still appears

03:17 - 54.162 in the Commonwealth's approved

03:17 - 57.165 ACA plan, approved by the ID,

03:17 - 00.635 approved as part of the Ida, by the feds.

03:18 - 02.203 Two points on that. You're on.

03:18 - 04.239 Well, is that true, though?

03:18 - 08.810 That is no longer the case in this this past year.

03:18 - 12.747 Submission to the United States Department of Education

03:18 - 17.685 and advance of which the department published notice in accordance

03:18 - 21.489 with all of the terms and conditions of the Ida, the department

03:18 - 26.694 submitted modifications to its state plan to the USD, which accepted that plan.

03:18 - 27.729 When was it accepted?

03:18 - 30.732 For what school year?

03:18 - 32.267 Effective what school year?

03:18 - 34.235 That plan was accepted,

03:18 - 38.072 I believe, for this current school year, but I will confirm that.

03:18 - 38.806 Okay.

03:18 - 41.142 What school year are we talking about in this litigation?

03:18 - 43.244 The 2526.

03:18 - 47.348 That's the that's the one that the new plan, the amended plan is for right.

03:18 - 48.516 That is correct.

03:18 - 48.750 Okay.

03:18 - 51.953 What school year are we talking about here in this case.

03:18 - 56.557 This case originated, I believe, during the 2324 school year.

03:18 - 59.727 So so is it fair to say then prior

03:18 - 03.598 to the 20 2526 school year, the old plan was in effect.

03:19 - 06.000 The old state plan was in effect.

03:19 - 09.837 However, the genesis of this action

03:19 - 14.108 was a challenge brought by an advocacy organization.

03:19 - 15.743 And so I'm just trying to get to understand it.

03:19 - 17.412 But the old plan was in effect.

03:19 - 19.480 So the old state plan was in effect.

03:19 - 22.617 And that's the plan contained language that indicated,

03:19 - 26.020 contrary to what was alleged by plaintiffs

03:19 - 29.057 in the federal litigation and contrary to what was the

03:19 - 33.061 the actual practice of the provision of adult education services

03:19 - 36.664 that Pennsylvania did not provide general education.

03:19 - 38.800 Now, I understand I understand the impetus of the litigation.

03:19 - 40.168 I'm just trying to understand the facts.

03:19 - 42.804 And I think you understand where I'm going here.

03:19 - 47.342 I think so can can the department can Ellie,

03:19 - 52.013 provide services,

03:19 - 55.016 have a local policy and plan and act and lay plan.

03:19 - 58.119 They don't have to adopt your model, but can they adopt their own plan?

03:19 - 58.753 Absolutely.

03:19 - 01.756 That is conflicts with the state approved plan.

03:20 - 02.790 Can they?

03:20 - 05.493 Yes, they do so at their own risk.

03:20 - 07.929 They certainly can. They can, they cannot.

03:20 - 11.199 But I'm not sure you they can adopt.

03:20 - 14.402 Okay. Can let's try this.

03:20 - 18.006 Is it lawful for them to adopt a model plan

03:20 - 21.976 that conflicts with the approved state plan by the feds?

03:20 - 23.644 It is lawful.

03:20 - 25.513 It potentially conflicts with the grant agreements

03:20 - 29.017 that are executed between the USDA, PD and the LEAs.

03:20 - 33.855 But it is it is not, as far as I can tell.

03:20 - 36.557 You don't encourage you don't encourage local school leaders

03:20 - 40.128 to adopt anything contrary to the plan, because the plan is the contract

03:20 - 42.196 with the feds to get the money. That's right.

03:20 - 45.533 And and if the law does something that is conflicting with the plan,

03:20 - 47.769 they risk not getting money. That's true.

03:20 - 50.772 And what you ask them to do when you crafted this policy, then

03:20 - 53.775 before you amended the plan, was to do something

03:20 - 58.046 contrary to the federal agreement that you had in the plan.

03:21 - 03.251 Not exactly the case, because

03:21 - 09.791 the plan was silent as to the provision of adult education services.

03:21 - 14.862 So the plan, the opt out in the plan is not an automatic opt out.

03:21 - 19.333 The opt out is a provision that allows states

03:21 - 22.336 to not provide services

03:21 - 26.841 to disabled youth, so long as they do not provide

03:21 - 29.844 any of those services to non-disabled youth.

03:21 - 32.246 And and in Rick Dole, the Ninth Circuit.

03:21 - 33.781 Well, I thought, I'm confused.

03:21 - 37.952 I thought you answered my question earlier that said that the new part

03:21 - 42.123 that that that the element that the the old plan, the old state approved plan

03:21 - 46.094 included this exemption that that the department had been applying for years.

03:21 - 50.231 The old plan included language that indicated

03:21 - 57.205 that Pennsylvania does not provide educational services to any individual,

03:21 - 01.642 disabled or non disabled, beyond the year of the the end of the school year.

03:22 - 04.645 In the years, the years that we're talking about here,

03:22 - 08.616 before you sent that policy memorandum out,

03:22 - 12.019 the leaders were complying with the plan.

03:22 - 16.958 The law were complying with PD's interpretation of state law.

03:22 - 20.027 No, no, no, the plan I'm not talking about that's not a term.

03:22 - 23.498 That's that's not a term that's used generally in the special education space.

03:22 - 26.000 Compliance with the state plan, on compliance with the state plan.

03:22 - 29.570 They were complying with the idea as implemented, interpreted by PDR

03:22 - 33.674 in the state plan, PD communicates its means

03:22 - 37.512 of applying the idea of the state plan.

03:22 - 40.014 But I mean, this is my part, I think.

03:22 - 42.583 I think you finally did the right thing.

03:22 - 43.918 I think you finally did the right thing.

03:22 - 46.921 You amended the plan with the with the feds.

03:22 - 52.527 The problem they have here is you didn't.

03:22 - 54.829 You know, we're not talking about the Commonwealth documents law,

03:22 - 56.330 because I'm talking about the plan.

03:22 - 58.733 And the plan has the idea requirements that are separate

03:22 - 01.202 from Commonwealth document law, which you actually complied with recently.

03:23 - 04.172 So I think that that's or supposedly complied with recently.

03:23 - 07.141 The issue is can the department

03:23 - 10.611 send a memo to school districts

03:23 - 14.448 basically saying, you know, we know what the plan says here,

03:23 - 17.852 but we're now we know as a result of litigation we were wrong.

03:23 - 19.687 And we're now saying, why

03:23 - 21.956 is that?

03:23 - 23.024 Can you do that?

03:23 - 24.392 The answer to that question is yes.

03:23 - 26.160 In fact, not only can the department do that,

03:23 - 30.331 the department is obligated to do that, particularly in this space where federal

03:23 - 33.534 special education requirements are are very,

03:23 - 35.803 evolving.

03:23 - 40.675 And ultimately the obligation is on PD, not just in the ID itself,

03:23 - 44.679 which requires PD to implement and advise.

03:23 - 47.548 It's law is what's the purpose of the plan?

03:23 - 49.116 I'm sorry, what's the purpose of the plan?

03:23 - 52.520 That if you if all you if all you have to do is just send a memo

03:23 - 56.057 to school districts that change the plan,

03:23 - 58.459 that, that, that, that do something different of the plan.

03:23 - 59.694 What's the purpose of the plan?

03:23 - 02.697 If the plan is the indication to the USDA

03:24 - 07.902 that PD has in place the basic frameworks of compliance

03:24 - 10.905 with the Ida's requirements and supervising its layers?

03:24 - 15.743 When we were challenged by the plaintiffs in AP, it became clear

03:24 - 19.113 that there was a lapse not only by us, but a lapse by the law.

03:24 - 22.717 They challenged the plan that exposed what they challenged

03:24 - 26.520 the model policy as reflected in the plan. So.

03:24 - 28.556 Right. It's it's but instead.

03:24 - 29.290 But you in the letter,

03:24 - 34.128 you know, you settle the litigation and instead of changing the plan

03:24 - 38.399 which there's a process to do to comply with the terms of the settlement,

03:24 - 39.800 you sent this memo

03:24 - 44.572 that sort of announced something new.

03:24 - 48.342 And that's the question we're here today is.

03:24 - 50.211 But, but, but what I wanted you to address,

03:24 - 53.414 and I've now completely monopolized this time, and I apologize.

03:24 - 56.817 There's this concern about this conflict

03:24 - 59.954 with the state plan and the memo that you sent.

03:25 - 03.524 And what is a local school district supposed to do to comply,

03:25 - 07.762 with how do they comply with both the

03:25 - 11.065 the hallmark of local education

03:25 - 15.670 is compliance with the Ida is compliance with the Ida itself.

03:25 - 19.173 That is the hallmark that the due process hearing officers is here to.

03:25 - 22.109 That is the hallmark that the IEP teams adhere to.

03:25 - 26.314 So the state plan, while it provides a framework, is not a compliance document.

03:25 - 30.318 It is not a document to be used to a judge,

03:25 - 35.289 whether law A's are executing appropriate,

03:25 - 38.559 means of compliance

03:25 - 42.096 with in the provision of services to disabled individuals.

03:25 - 47.435 It is it is a framework document that memorializes the types of programs

03:25 - 51.372 and policies that the state education agency has in place

03:25 - 55.443 to the federal government, so to say that school districts are somehow,

03:25 - 58.879 by following PD's guidance and note

03:25 - 01.916 by actually complying with the Ida,

03:26 - 04.919 are somehow violating the state plan is a non sequitur.

03:26 - 08.022 That is something that simply cannot exist, because if the state plan

03:26 - 11.692 is inconsistent with Ida, it is not a state plan at all.

03:26 - 13.994 So there is there is no real conflict.

03:26 - 15.363 There's no safe harbor.

03:26 - 15.863 Excuse me?

03:26 - 18.432 There's no safe harbor with the feds in terms of funding.

03:26 - 21.068 If they allow safe harbor with the feds in particular, there's

03:26 - 24.071 no safe harbor with respect to students who are affected by this.

03:26 - 27.408 And, you know, one of the questions that arose during,

03:26 - 29.944 briefing of this is what happens.

03:26 - 31.746 You know, what happens if this gets overturned?

03:26 - 36.417 And what happens if if this is interpretation of PD

03:26 - 39.920 is found to be incorrect? Well, as far as PD

03:26 - 42.923 is concerned, and this is the reason it's not a binding norm.

03:26 - 46.260 Nothing significant happens to PD.

03:26 - 49.930 What will happen is students across the Commonwealth will be forced

03:26 - 54.435 to challenge the failures of districts who elect to not,

03:26 - 59.573 abide by the interpretation of the Ida

03:26 - 05.813 that provides for educational services to be provided through age 21 inclusive,

03:27 - 06.747 and will

03:27 - 11.285 have to do things like, for example, pay for compensatory education services.

03:27 - 15.556 And and this is part of this, this framework and the analysis

03:27 - 17.258 that was at the genesis of this case

03:27 - 20.961 is the idea that, you know, if PD doesn't act proactively,

03:27 - 24.899 if it doesn't take steps, particularly in the AP litigation, to advise districts

03:27 - 28.068 as to its understanding of their obligations.

03:27 - 30.471 There are kids who are left catching up.

03:27 - 35.009 And, you know, we saw from Covid how difficult it is for students to catch up.

03:27 - 38.245 That's what compensatory education is, that tutoring education

03:27 - 42.216 isn't just we'll give this students three more months of school.

03:27 - 45.486 There's learning loss that occurs over that time frame that

03:27 - 50.324 arguably can never be regained by communicating in a quickly

03:27 - 53.894 and effectively and efficiently, as it did, PD was acting

03:27 - 56.897 not just in accordance with its obligation under Ida,

03:27 - 00.134 but also with its obligation under the School Code to advise

03:28 - 03.737 schools on their approach to problems that they face

03:28 - 06.974 in the implementation of all education laws.

03:28 - 10.678 Appellate arguing is contrary, and

03:28 - 14.815 ultimately the argument has

03:28 - 17.318 been one of

03:28 - 20.321 whether PD can communicate this way or that way.

03:28 - 24.225 It's of note that the initial interpretation

03:28 - 28.262 of the school code and the idea and how those interact,

03:28 - 32.967 was something that was not, in fact, regulatory in that respect.

03:28 - 36.570 This case looks looks an awful lot like the,

03:28 - 40.207 the banking cases cited in my brief, in particular, cash

03:28 - 43.344 America net of Nevada, where, you know, the department,

03:28 - 47.114 had a longstanding interpretation that is based

03:28 - 50.084 expressly on statute

03:28 - 52.019 times change law changes.

03:28 - 55.022 The department explained that to the regulated community.

03:28 - 57.992 And this court, held that, in fact,

03:28 - 02.196 departing from long standing law when law changes

03:29 - 05.332 is not a violation of the Commonwealth documents law.

03:29 - 07.034 It is not a regulatory act.

03:29 - 11.772 It does not create a binding norm, because that authority derived

03:29 - 15.276 in the banking case directly from the consumer, discount act.

03:29 - 18.746 In our case, that authority derives directly from the Ida

03:29 - 23.617 and both Pennsylvania Department of Education and the various LEAs

03:29 - 27.087 have an obligation to adhere directly

03:29 - 31.325 to the terms of that Ida and cannot,

03:29 - 35.863 when looking at individualized education plans

03:29 - 38.966 that is planned for educating disabled youth,

03:29 - 42.036 they cannot rely simply on the fact

03:29 - 47.274 that, well, PD has said for a long time that they don't think

03:29 - 51.278 that we've got to educate kids beyond the end of the school year,

03:29 - 55.683 even though the ID says that they are 20, that they're entitled to education

03:29 - 56.984 till they're 22.

03:29 - 59.286 No, the you're missing the part.

03:29 - 00.421 It's not that it's not that.

03:30 - 03.490 Anybody disagree that the Ida goes through 22.

03:30 - 07.428 The dispute is the department used to take the exemption

03:30 - 12.466 by saying that Pennsylvania because it's 222, unless there's a state policy.

03:30 - 16.203 The contrary, the change in opinion was not on through 22.

03:30 - 19.239 The change in the department's position was the exemption.

03:30 - 21.875 Everybody agreed what the Ida says.

03:30 - 25.646 It's just that the department decided based on a settlement,

03:30 - 27.881 we're no longer going to claim the exemption.

03:30 - 28.949 One correction, Your Honor,

03:30 - 31.652 the the exemption is not something that the department claims.

03:30 - 33.754 It's not checking a box. What's in the plan?

03:30 - 36.223 It it's it's in the state plan.

03:30 - 38.993 It says that we ceased providing,

03:30 - 41.662 educational services

03:30 - 44.665 at the age of the school year, in which one turns 21.

03:30 - 45.499 That's in the plan.

03:30 - 47.034 Well, that was it wasn't the old plan.

03:30 - 52.706 Well, and while that's true, that is not true for, adult education services.

03:30 - 54.141 The AP plaintiffs paid it.

03:30 - 54.508 Yeah.

03:30 - 56.076 If we're not talking about adult education

03:30 - 57.578 services, then we're talking about the school.

03:30 - 00.814 We're talking about these school districts, but they're this the same.

03:31 - 01.949 That's the issue.

03:31 - 05.352 So when the Ida examines the opt out

03:31 - 08.922 provision, when the Ida speaks of what's being referred to is the opt out provision

03:31 - 12.960 and what all of the circuits who have address this issue

03:31 - 17.197 have determined is that when public education

03:31 - 21.468 as a general term is provided

03:31 - 26.607 to non-disabled students beyond the age of 1821,

03:31 - 29.610 in Pennsylvania, frankly, anyone over the age of 17

03:31 - 33.981 that when the state makes that available in a way that it is, quote,

03:31 - 37.584 public education, the state may not deny that

03:31 - 40.654 public education to disabled you,

03:31 - 45.659 the entities in Pennsylvania that are responsible for providing

03:31 - 49.329 that public education to disabled youth are the law.

03:31 - 51.098 But that's the chip. But that's my point.

03:31 - 54.134 That's the change in interpretation that the department engaged in.

03:31 - 55.969 That's not a nobody.

03:31 - 58.972 Nobody changed their interpretation of the through 22.

03:31 - 02.076 They changed their interpretation of how the exemption

03:32 - 04.411 that the state law exemption applies.

03:32 - 07.381 The Department became aware that the you changed

03:32 - 09.917 it's it's not it's not a catch I think I think everybody agrees

03:32 - 12.653 you changed your interpretation base certainly changed our understanding.

03:32 - 15.122 And you may be right now you're probably right now.

03:32 - 17.991 And what's important about that is

03:32 - 21.128 that that interpretation,

03:32 - 24.331 became clear when it

03:32 - 28.502 became obvious that the education services for adults,

03:32 - 31.839 which are provided under the Wioa Combined State plan, which is the Workforce

03:32 - 35.809 Investment Opportunity Act, state plan, it's a it's a joint venture between

03:32 - 38.912 a number of agencies, actually requires

03:32 - 42.950 that those public education services be aligned

03:32 - 46.920 to the Commonwealth SS state plan, another state plan.

03:32 - 48.489 I apologize, there are too many,

03:32 - 51.925 but the state plan is the Every Student Succeeds Act

03:32 - 55.996 that forms the basis for primary and secondary education in Pennsylvania.

03:32 - 00.734 In essence, our entire state education standards are developed as part of Essa,

03:33 - 04.171 and the adult education programs which operate under Wioa

03:33 - 07.341 have to adhere to that very same education.

03:33 - 09.243 They have to confer the same knowledge.

03:33 - 11.612 So the assertion by the applies here

03:33 - 13.714 that adult education is something different, that it's

03:33 - 15.849 some kind of correspondence school, that it's,

03:33 - 18.819 you know, just for adults to come back and learn how to be machinists or

03:33 - 20.854 something like that. Simply not true.

03:33 - 23.857 The adult education programs referenced in the school code

03:33 - 25.526 operate under the published

03:33 - 28.328 Iowa State Plan, which is published in the Pennsylvania Bulletin.

03:33 - 30.330 It's published, at the U.S.

03:33 - 31.899 Department of Labor and Industry.

03:33 - 35.169 And it's very clear that we are obligated to provide services

03:33 - 39.706 that teach to the standards of the Every Student Succeeds Act.

03:33 - 42.976 We have to provide a primary and secondary education.

03:33 - 46.113 That education is open

03:33 - 51.318 to everyone in Pennsylvania over the age of 17 who has not attained

03:33 - 55.956 a high school diploma, that public education is

03:33 - 00.594 what was not being provided to disabled youth.

03:34 - 04.865 And while they're not provided to the same programs, non-disabled

03:34 - 08.535 adult youth use the public adult education programs.

03:34 - 12.773 Leah's, by virtue of their existence as leaders,

03:34 - 16.944 are obligated to provide educational services,

03:34 - 23.317 a free and appropriate public education to every non to every disabled youth,

03:34 - 26.753 between the ages of eight and 21 inclusive.

03:34 - 31.158 For that reason, the Commonwealth Court simply got this issue wrong.

03:34 - 32.659 This is not a binding norm.

03:34 - 37.097 This is simply the acknowledgment of what federal law already requires.

03:34 - 40.567 This rule derives directly from the Ida,

03:34 - 44.671 and there is no there was no appropriate reason

03:34 - 49.776 to and enjoin or otherwise overturn the department's issuance

03:34 - 50.978 of this guidance.

03:34 - 53.580 Subsequent to the AP litigation.

03:34 - 55.449 Do your honors, have any further questions for me

03:34 - 58.118 now? Thank you very much, Mr.

03:34 - 00.053 Hall. We'll hear from Mr. Levin.

03:35 - 03.056 Thank you.

03:35 - 08.462 Good afternoon.

03:35 - 09.696 May please the court.

03:35 - 11.031 I'm Mike Levine.

03:35 - 11.865 I represent

03:35 - 16.570 Pennsylvania School Boards Association with me as co-counsel in this case.

03:35 - 20.140 I did like to, introduce,

03:35 - 23.911 Anne Marie.

03:35 - 28.081 How you go, representing the Pittsburgh school district, Carl.

03:35 - 34.254 Ron Berger representing the Central Bucks School District, Jocelyn Kramer,

03:35 - 39.593 also representing Pittsburgh, and Tim Gills Park, representing Upper Darby.

03:35 - 44.197 And in the back somewhere, Carmine bloom,

03:35 - 48.435 chief legal counsel for the School Sports Association, brought the whole team,

03:35 - 52.539 a big team.

03:35 - 55.909 Your honor, this case is not about the policy merits

03:35 - 01.348 of extending services, to age 22 for students.

03:36 - 04.184 Reasonable people can disagree about that.

03:36 - 07.387 The question before the court is for more fundamental.

03:36 - 10.023 Who has the authority to decide?

03:36 - 14.127 And what process does law require before such change may occur?

03:36 - 18.665 By order dated November 24, 2024, this court

03:36 - 24.037 specified three issues that it wanted to hear argument on today.

03:36 - 30.077 And interestingly, none of them deal with the ID issue

03:36 - 34.915 and what ID a requires or does not require.

03:36 - 39.453 But I will have time at the end of my remarks to address the ID

03:36 - 42.689 issue, the three issues

03:36 - 46.226 that the court did ask for argument on converge.

03:36 - 50.263 Converge on a single, overriding principle

03:36 - 56.069 whether the Department of Education may rewrite Pennsylvania statutory law,

03:36 - 00.774 alter duly promulgated Pennsylvania regulations,

03:37 - 04.244 and revise Pennsylvania's federally approved ID

03:37 - 09.483 state plan through a private settlement and administrative fiat,

03:37 - 13.153 or whether the department, like every agency in this state,

03:37 - 18.125 must follow the legislative pathway, the regulatory procedures

03:37 - 23.797 and the public processes that the General Assembly and ID require.

03:37 - 27.701 And and, Madam Chief Justice, one correction

03:37 - 32.372 on your opening statement, the AP case was not a class action.

03:37 - 34.808 It was a single plaintiff.

03:37 - 37.811 Now, they threatened they were going to file a class action,

03:37 - 40.981 but it never got, a filed as a class

03:37 - 44.851 action, never certified as a class action.

03:37 - 46.720 Right at bottom.

03:37 - 50.557 This case is about the rule of law and whether the age

03:37 - 54.127 of entitlement to Pennsylvania, to public education

03:37 - 59.299 set forth in section 1301 of the school code and 22 PA code