00:18 - Morning, everyone,

00:20 - and welcome the.

00:26 - Before we proceed

00:27 - with today's on our journey

00:31 - to the member, Justice Sandra Shaw.

00:33 - Assuming the first woman justice of the Supreme Court of Pennsylvania.

00:38 - As we are here during Women's

00:41 - History Month, we honor the legacy she forged.

00:45 - Her pioneering service advance equal justice across our Commonwealth

00:51 - and open doors for those who would fall.

00:54 - Just as previously served on the Commonwealth Court of Pennsylvania,

00:59 - where her leadership and scholarship

01:01 - strengthened our appellate jurisprudence,

01:05 - Justice Newman passed on the February 2nd

01:08 - and in gratitude for her life of public service.

01:11 - The court invites a brief moment of silence.

01:20 - Thank you.

01:22 - So welcome to our advanced arguments.

01:26 - In addition to those of you who are here in our court.

01:29 - We welcome as well those who are watching the live stream

01:33 - today on the Commonwealth Court's YouTube channel

01:36 - and those who are watching the broadcast from the Pennsylvania Cable Network.

01:41 - I want to thank PCN for their recording

01:44 - and later broadcasting of our on bank arguments, which they have been doing

01:49 - for many years, enabling the public to see justice that will

01:54 - when you watch on PC, and

01:56 - you will also see an introduction to each case

01:59 - presented by attorneys in the court's Office of Chief Legal Counsel.

02:04 - I want to thank today's presenters Sam Ickes,

02:08 - Danielle Ponton.

02:12 - Unless otherwise ordered.

02:14 - Our on bank arguments are 30 minutes per case,

02:18 - with 15 minutes per side, not per litigant.

02:22 - If more than one attorney will be arguing, please

02:25 - allocate your time and advise us before you begin.

02:29 - Additionally, if any of you are arguing in the Commonwealth Court

02:33 - for the first time, please let us know.

02:37 - Petitioners and appellants, please advise

02:39 - if you wish to reserve rebuttal time.

02:42 - We know that 15 minutes is not a lot of time to discuss a case

02:47 - that is so important to your client and to you.

02:51 - However, we have spent considerable time

02:54 - reviewing the record, the briefs,

02:57 - the cases you cited, and understanding your arguments.

03:00 - So please use your time wisely.

03:02 - Jump right into your arguments.

03:05 - We are looking forward to hearing them.

03:08 - Hello and welcome to the

03:09 - Commonwealth Court of Pennsylvania's March on Bank session.

03:12 - My name is Samuel Acres and I'm joined by my colleague

03:15 - in the Commonwealth Court's office of Chief Legal Counsel, Colby Miller.

03:20 - The term on bank is French for on the bench, and refers to a special procedure

03:24 - where a panel of seven Commonwealth court judges hears argument on cases

03:28 - that the court believes implicate complex or important legal issues.

03:33 - Today, the court will hear for on bond cases.

03:36 - Colby and I will present a brief summary of each on bank case,

03:39 - followed by the broadcast of the oral argument thereon.

03:43 - With that, let's jump into the first introduction.

03:46 - In our first case, the School District of Pittsburgh

03:49 - filed a complaint and the Court of Common Pleas of Allegheny County

03:52 - seeking declaratory and mandamus relief, alleging that the Allegheny County's

03:57 - continued use of a 2012 base year property assessment system violates

04:02 - the uniformity clause under the Pennsylvania Constitution

04:05 - and the Equal Protection Clause of the US Constitution.

04:10 - The district claims that the

04:11 - outdated system caused widespread inequities in property assessments

04:15 - by harming taxpayers whose assessed real estate value is too high

04:19 - or too low relative to the actual fair market value,

04:23 - leading to significant tax refunds and financial instability.

04:29 - The trial court sustained the county's preliminary objections and dismissed

04:32 - the complaint, concluding

04:34 - that the district lacked standing and cannot sell on behalf of taxpayers.

04:38 - The trial court held that the only harm alleged having to issue

04:41 - refunds is a statutory obligation, not a legal injury.

04:46 - The trial court reasoned

04:47 - that the harm was not directly caused by the county's assessment system,

04:51 - but by broader market forces and the district's failure to raise taxes.

04:56 - Further, the trial court took judicial notice

04:58 - of the district's budgets and financial reports to assess standing

05:03 - on appeal.

05:04 - The district argues it has a direct, immediate and substantial interest

05:08 - in the assessment system, which affects its ability to budget and fund operations.

05:13 - The district argues that the harm is ongoing as systemic

05:17 - and not limited to past refunds.

05:19 - Further, the district argues that the trial court aired and relied on documents

05:24 - outside the pleadings and maintains that raising taxes is not an adequate

05:28 - remedy for a constitutionally defective system.

05:32 - The county argues that the district's harm

05:34 - is not directly caused by the county's assessment system.

05:38 - The county states that issuing refunds is a statutory

05:41 - duty, not a compensable injury.

05:43 - The county further maintains that the district lacks statutory

05:46 - authority to compel a county wide reassessment,

05:49 - and that the trial court properly took judicial notice of public financial records.

05:55 - Finally, the county argues that the district failed to exhaust

05:58 - administrative remedies and lacks a valid equal protection claim.

06:02 - With that.

06:02 - Let's listen to the argument.

06:05 - Good morning.

06:06 - Your honors may please the court.

06:07 - My name is Lee Delacour

06:09 - and I'm here on behalf of the appellant, Pittsburgh School District.

06:12 - And I would request that we reserve just two minutes for rebuttal.

06:16 - You've got it. Thank you.

06:18 - So, Your Honor, the case before you today involves a mandamus action

06:23 - to compel Allegheny County to conduct a countywide reassessment.

06:27 - The trial court sustained preliminary objections, finding the Pittsburgh school

06:30 - district does not have standing to bring this type of lawsuit.

06:34 - Therefore, your Honors, the legal issue in front of you today

06:36 - is fairly straightforward, and that is whether a taxing authority

06:40 - such as a school district has standing to challenge

06:44 - the legal adequacy of a county's basic assessment system

06:48 - and to potentially compel a countywide reassessment.

06:51 - Now, before delving into that legal issue, I want to provide you

06:54 - with just a little bit of background information on Allegheny County's specific

06:58 - 2012 base year system and why Pittsburgh School District

07:02 - felt this lawsuit was necessary in the first place.

07:05 - First, it's important to note that Allegheny County has a 2012 base

07:09 - year system, which essentially means that market values

07:13 - in Allegheny County are set at 100% of their market value.

07:19 - As of January 1st, 2012,

07:22 - a base year system is essentially a snapshot

07:25 - in time, and assessments remain in place in perpetuity

07:30 - unless there is a triggering event that will change them.

07:33 - Now, the problem with an indefinite base year system is that over time,

07:37 - property values change at different rates in wealthier, gentrified areas.

07:42 - You're going to see properties appreciate at a much faster rate

07:46 - than rate than in an economically depressed area.

07:50 - Likewise, market conditions change.

07:53 - We saw that with the Covid 19 pandemic.

07:55 - Office buildings lost a substantial amount of value as businesses

08:00 - transitioned over to work at home models and hybrid work models.

08:05 - And we want to interrupt you for a second.

08:07 - Your your claim is that you have to have you have had to provide too many refunds.

08:13 - And then that's caused uncertainty in your budget.

08:16 - That needs to be remedied.

08:17 - Aren't you protected by your ability to change the military?

08:21 - We are not, Your Honor.

08:22 - When there is an indefinite base year system.

08:25 - And the reason for that is because there is an accelerated

08:28 - and unpredictable decline to our commercial tax base.

08:33 - And not only that, there's there's I'm sorry, Council.

08:37 - Could you just explain that as you're answering judge for saying, okay

08:40 - in this question,

08:42 - I apologize.

08:42 - You're on a declining commercial tax base.

08:45 - Oh yes.

08:45 - Yes, we I'd be more than happy to provide an example of that.

08:49 - So the problem with the commercial tax base

08:52 - is that they're entitled to something known as the common level ratio.

08:56 - And as I mentioned, you have properties that are appreciating at different rates.

09:00 - The problem with the office market, for example, is

09:03 - it is now worth less in 2026 than it was worth in 2012.

09:08 - Okay. Thank you.

09:08 - I don't think you have to finish answering her question.

09:11 - Yes Your Honor.

09:11 - So there are

09:12 - there are two problems specifically with simply increasing our tax rate.

09:16 - The first is that we are, we are

09:21 - held,

09:23 - at a specific millage rate increase by the act one index.

09:27 - So there are certain limitations imposed on school districts

09:31 - that don't exist on counties or cities or municipalities.

09:34 - Allegheny County has attempted to tax their their way out of this problem.

09:40 - And we saw that last year when they increased their millage rate by 36%,

09:44 - that Mr.

09:45 - Delacour that that acts one act, that act one limitation.

09:50 - In dire

09:51 - circumstances, you can go round that and go beyond that.

09:54 - If you get the Common Pleas Court to approve that, correct?

09:58 - That is true.

09:59 - But it needs to be for,

10:02 - specific, funding purposes.

10:05 - It can't go into the general funding balance for a school district.

10:09 - And that and in judge six, opinion, he did suggest

10:13 - that had the school district increased its tax rate by about one mil,

10:19 - which is close to 10%, we could have covered the deficit.

10:23 - The problem is

10:24 - that would have exceeded the act one index by about two and a half times.

10:28 - So you can't tax your way out of the problem.

10:30 - And not only that, it's a reactive solution.

10:34 - It's not a proactive solution.

10:35 - So if you see your tax base depleting at a substantial rate

10:41 - throughout the course of the year, and you are faced with a significant

10:45 - operating deficit in the middle of the year, there are very limited options

10:50 - for how you can address that until you set your budget.

10:54 - And for and for Pittsburgh.

10:56 - We set our budget once per year in December and set the millage rate

11:00 - and impose a tax levy once per year, and then we're locked in place.

11:05 - And if we if we have a budget deficit,

11:07 - it creates significant operational harms.

11:11 - There are wage freezes, hiring freezes, deferred maintenance projects

11:16 - and ultimately the true victims of that are the children themselves who are seeing

11:21 - a decline in the scope and quality of services being provided to them.

11:26 - And in this specific case, we provided a supplemental brief

11:30 - that elaborated on the evolving harm to the school district.

11:34 - In 2024, for example, we had 172 job positions that could not be filled,

11:40 - not because we didn't have eligible candidates for those positions,

11:44 - but simply because we did not have the financing.

11:48 - And there was no easy way of rectifying that.

11:52 - I think in what you're describing, though, as your harm,

11:55 - that it relates to the a uniformity claim.

11:59 - Could you explain how it is that, you're not bringing essentially

12:04 - a claim for taxpayers who would really have perhaps

12:07 - that uniformity theme and how that relates to the firm that you're describing?

12:11 - That's that's an excellent question.

12:12 - So over time, a base year assessment system becomes less representative.

12:17 - And as you mentioned, Your Honor, that means the tax burden,

12:21 - is, distributed in an unequal matter.

12:25 - And that does seem to impact property owners more than taxing authorities.

12:29 - But what you need to keep in mind, though, is that this leads to a volatile

12:33 - and unstable tax assessment system

12:36 - that is prone to rapid decline, and that is in part

12:40 - because assessments are no longer tied to property values.

12:46 - As time goes on and you're put in a situation

12:50 - with commercial properties that make up a substantial portion

12:53 - of the tax base being entitled to large reductions.

12:56 - And just to give you a single example of how this would work.

13:00 - Say you have a $100 million office tower.

13:02 - It was assessed at $100 million in 2012 because that was its value at the time.

13:08 - But now, because of the decline in office values, it's now worth 80 million.

13:12 - Now, from a lay person's perspective, you would think, all right,

13:16 - the tax assessment for that property just needs to come down 20%.

13:19 - Back in 2012 it was worth 100 million.

13:22 - It was assessed at 100 million.

13:23 - Now it's 80 million.

13:25 - But that's not how it works.

13:27 - In reality, Your Honor, because we have something

13:29 - known as the common level ratio, which is a one size

13:32 - fits all ratio to all property types.

13:36 - And it's essentially derived from residential property values.

13:40 - And in the scenario I described, what you would do

13:43 - is you find the market value for the property,

13:46 - which would be $80 million, and then you would apply the common

13:50 - level ratio, which in 2026 is about 50% on top of that.

13:54 - So the assessment becomes 40 million.

13:56 - So the property that you're seeing, the common level ratio applies

14:00 - to commercial properties,

14:02 - even though they're probably using the income basis to set their assessments.

14:06 - Isn't that what it is? That's correct, Your Honor.

14:08 - So there are two determinations that need to be made.

14:11 - First is the market value of the property.

14:14 - And that would be arrived at using the income approach.

14:16 - But after you set the market value

14:19 - for the property, you need to apply the common level ratio.

14:23 - And in layman's terms the common level ratio is really just

14:26 - a ratio that's meant to offset any appreciation

14:30 - that's happened to real estate from the base year to present.

14:32 - So that's why the ratio comes down

14:34 - every year, because in general, property values tend to go up every year.

14:38 - Unfortunately, the ratio doesn't differentiate between

14:42 - office buildings or vacant lots or malls or residential homes.

14:47 - And it is extremely problematic and leads to a volatile

14:50 - tax base, which for the school district, as we pled in our complaint,

14:56 - led to at the time, a $10 million deficit

14:59 - that continued to snowball and eventually and later pleadings.

15:03 - We we pled to an injury of over 20 million.

15:07 - So how does a reassessment solve your problem?

15:10 - Excellent question, Your Honor.

15:11 - So it resets the base year to the current year, 2026.

15:16 - And that resets the class.

15:18 - You go with a predetermined ratio of 100%.

15:21 - So in so the problem isn't so much with the

15:27 - the countywide reassessment.

15:29 - Do you want to reset the class.

15:31 - That's what we're looking at here.

15:33 - We want accurate assessments

15:36 - on properties that reflect their current market value.

15:39 - So we can accurately predict our budget.

15:41 - But I still don't see how that's going to help you when the commercial property

15:46 - values are getting lower and lower.

15:49 - So that's that's a fair question, Your Honor.

15:52 - When you have regular county wide reassessments,

15:55 - that change from one year to the next is fairly minuscule.

15:59 - The reason why we're seeing office towers in Pittsburgh lose 60, 70,

16:03 - 80% of their assessed value overnight

16:06 - is because we've gone 14 years without an update or a correction.

16:10 - No, no, no no, that's not true though. That's not true.

16:13 - We're seeing that huge drop because downtown is a fraction

16:17 - of its office occupancy as it was before Covid.

16:20 - Isn't that your factor?

16:22 - That's absolutely correct, Your Honor.

16:24 - There are changing market conditions

16:26 - caused in part by Covid and the last countywide risk.

16:30 - Reassessment was in 2012, before those changing market conditions.

16:34 - So there are two factors. I remember that, oh, yes.

16:38 - So there are there are two factors, Your Honor.

16:41 - The first is the change to market values, which is significant.

16:44 - But then also the application of a ratio or a ratio

16:48 - that's set by residential properties but applied to all property types.

16:52 - And that is what's causing the economic, or the commercial tax base.

16:58 - So Mr.

16:58 - Dull, isn't the school district kind of in a box, though?

17:04 - Because if we order a countywide reassessment,

17:07 - if you get the relief you want, are you bumping up against the anti

17:11 - windfall provisions of the second class

17:13 - county code and second class county assessment?

17:15 - On your honor, you're right that this cannot be used for a stealth tax increase.

17:20 - But what it does provide us with is a stable and predictable

17:24 - tax base that we can budget for accurately.

17:28 - And what it also means is that we won't be giving back

17:32 - millions of dollars in refunds every year, because you have a more stable

17:36 - and accurate tax base that's more predictable.

17:39 - You can reserve sufficient funding for refunds under those circumstances.

17:44 - And just to give you a better understanding of the scope of the problem,

17:49 - the Pittsburgh Post-Gazette published an article on February 15th

17:52 - where they examined what this system is doing to taxing authorities

17:56 - in 2026 and in 2025

17:59 - alone, we saw collective refunds from taxing authorities

18:04 - of about $25 million with the biggest,

18:08 - refunds coming from Allegheny County, which was 12.9 million.

18:13 - And then the second and third biggest refunds coming from Pittsburgh

18:16 - school District and the city of, Pittsburgh at 8.4 million.

18:22 - So I understand why the county is not sitting beside you in this case.

18:27 - We all understand that.

18:28 - Why is the city not with you?

18:30 - That is a fair question.

18:32 - And they, for example, are not encumbered by the act one index.

18:36 - Pittsburgh this year increased their tax rate by 20%,

18:40 - the first increase since 2015.

18:43 - So they're attempting to tax their way out of the problem the county is.

18:47 - And they're imposing huge millage rate increases.

18:51 - And that's shifting tax liability from commercial property

18:54 - owners to residential property owners.

18:56 - Not only is that not fair for property owners, though, it's

18:59 - it just does not lead to a stable tax base for the school districts.

19:04 - And we need that to accurately predict our budgets.

19:07 - So how often are you suggesting the reassessments would be necessary?

19:12 - Your your honors.

19:14 - Right now we're not requesting, routine countywide reassessments, though

19:19 - we think if they were to occur every 3 to 5 years, that would be,

19:24 - a fair reassessment period in line with what other states do.

19:29 - Pennsylvania is the only state

19:30 - with an indefinite base year system, to our detriment.

19:34 - I'm getting twitchy, Mister Delacour.

19:36 - This is bringing back bad memories. Going

19:39 - on? No.

19:40 - This issue, was this disputed property for the long term number?

19:45 - What?

19:45 - And how was.

19:50 - So, Your Honor, we did raise the refunds.

19:54 - There is a factual averman in the pleadings that,

19:58 - we were refunding more than $10 million

20:01 - and that this was a snowballing, ongoing problem.

20:04 - And then after the fact in, follow up filings, while we didn't amend

20:09 - the complaint, there was supplemental briefing where we explained the impact

20:14 - this was having on the budget and our inability to,

20:18 - to provide services and to fill positions,

20:22 - which led to us understaffing our schools, for 172 positions.

20:27 - And we also explained how this was an ongoing problem,

20:30 - which is also reflected in the Allegheny County Certified

20:33 - Assessment rolls over the past two years.

20:36 - The tax base in Allegheny County has shrunk.

20:39 - We've had a net loss of $710

20:42 - million in assessed value over the past two years alone.

20:46 - Your honor, that should never happen in a county

20:49 - where values are appreciating and where there's new construction.

20:53 - And historically, Allegheny County's tax base has increased every year

20:58 - below that.

20:59 - The court should not take any different.

21:04 - So below,

21:06 - we we, we were concerned, because we felt maybe

21:12 - the judge didn't have enough information into how they interpret that budget.

21:16 - And our and our requested relief in the alternative was,

21:20 - if you do acknowledge the budget, please acknowledge

21:23 - all of the other extenuating circumstances surrounding that budget.

21:27 - The fact that we have unfilled positions, the fact we have declining enrollment

21:31 - and are looking at closing school buildings,

21:33 - there are other the fact that we're depleting our rainy day fund.

21:36 - There were other factors at play.

21:39 - Our concern is he would potentially look at the budget

21:44 - check to see if we were looking for a significant millage rate increase,

21:49 - and then make a determination based on that.

21:52 - And and we felt that was a very narrow view.

21:55 - We wanted a broader view of the situation.

21:58 - Thank you very, very much. And you have,

22:02 - your time.

22:03 - So we will see you on record.

22:05 - Thank you, Your Honor.

22:06 - Thank you very.

22:13 - Mayor, please.

22:14 - The court.

22:16 - Mr. Delacour, Miss Poetica.

22:18 - I'm Virginia Scott, and I represent Allegheny County and Sara in mirada.

22:22 - And speaking to the microphone.

22:23 - Sorry, Your Honor,

22:26 - we're here because the school district is,

22:29 - under Pennsylvania law, a state agency.

22:32 - It is limited to the confines of what the Pennsylvania

22:36 - legislature gives it express authority to do.

22:40 - And this is spelled out in the Pennsylvania Supreme Court,

22:43 - cited in the brief of birth at 143, a second 909.

22:49 - And it says, and I quote,

22:50 - the school district has no fundamental or inherent powers of government

22:55 - unless the action is authorized by the Constitution

22:58 - or by an act of the legislature.

23:01 - And there is no act of this legislature or in our Constitution

23:05 - that provides a school district with a legal right to compel

23:11 - a county to conduct a county wide property reassessment.

23:15 - How do you then distinguish this case from Mill Creek Township in Mill Creek?

23:20 - That issue of standing was never raised,

23:23 - so it was never directly put in front of the court.

23:26 - In fact, the the school district can cite has cited, too,

23:29 - no precedent in which this issue has ever been brought up before.

23:34 - And in the issues where we have seen other issues, where a taxpayer

23:37 - where reassessment has been ordered, it has not been raised on standing.

23:42 - There were a couple cases where one was,

23:45 - Valley Forge, where the county had argued that they had

23:50 - the executive us at a autonomy to do it on their own,

23:54 - but no one ever raised the standing or the issue of the fact that a school

23:58 - district is a state created agency, expressly limited to that authority,

24:02 - the mascot in that regard, this appears to be a case of first impression.

24:06 - Vis-A-Vis School District standing right.

24:08 - It is. I've found none.

24:11 - It is in that regard.

24:12 - But we do have a wealth of law about what constitutes standing.

24:17 - I understand, but my next question is, are you asking us for a bright line

24:20 - rule that in these instances, school districts have no standing?

24:24 - I will say that I, I would say yes, Your Honor,

24:28 - but I think you can also craft something more narrowly,

24:31 - more narrowly here that that I do stand by the proposition, as I said already,

24:36 - that when you are dealing with a school district, which is a state agency,

24:41 - the law is clear that it can only act within the confines of the legislative

24:46 - of what the Pennsylvania legislature enables it to do.

24:50 - Pennsylvania is a Dillon's Rule state.

24:53 - Period. Yes. And

24:56 - and maybe this will

24:56 - help in crafting the narrow, rule that you would like,

25:01 - but the district does have school districts.

25:04 - Do have express authority and the right to challenge individual property.

25:09 - Absolutely.

25:10 - So all they're asking would be challenging

25:14 - the assessments of all properties within the taxing jurisdiction.

25:18 - It may be encompassed by the by the authority

25:22 - to challenge individual property assessments. So

25:27 - so there cannot be and this is already embodied

25:30 - in precedential law that there cannot be a county or a assessment

25:36 - of only the properties within the City of Pittsburgh School District.

25:39 - It has to be county wide.

25:41 - And and the relief that the Pennsylvania

25:44 - legislature has decided to give to school districts.

25:47 - The city of Pittsburgh in particular, is what you just noted, Judge Dubilier,

25:52 - that they have an express right to protect their own interest

25:56 - and challenge property assessments on an individual basis,

26:00 - which is a great deal of authority that they themselves

26:03 - find that a property is under assessed and they can go to.

26:07 - Isn't that being also limited by, authority?

26:10 - Because when they try to do particular properties,

26:14 - because of the uniformity clause, it creates various issues in terms

26:19 - of how to determine which properties are under assessed

26:22 - and which ones they can afford to challenge.

26:25 - Well, there are limits on all types of things like this.

26:29 - And they just have to comply with the law, which is uniformity. So

26:34 - pardon.

26:35 - Easier said than done I would say it is.

26:38 - It is a difficulty that all governments deal with, of having to ensure

26:42 - that they meet their needs with compliance with the law.

26:45 - But the law is clear

26:46 - that you can't just cherry pick on things and you have to have a uniform.

26:49 - This would be the sort of answer to that.

26:52 - They would not be cherry picking.

26:54 - But if there has been a lack of any kind of reassessment

26:58 - in this period of time and so,

27:03 - do you disagree that the assessments

27:06 - from 2012 or whenever it was, are now

27:09 - no longer accurate in terms of property values,

27:13 - the actual property values today?

27:16 - That's not an issue in this case.

27:18 - It's we are we are at preliminary objections which were sustained.

27:23 - And and the point that we're looking at

27:25 - is whether or not the school district has standing to proceed

27:29 - and why, for a practical standpoint, is the county still using 2012?

27:36 - Because it is enabled to across the state,

27:39 - there are counties that are using property assessments from 1969 1970.

27:45 - Pennsylvania legislature has enabled counties to use a base year assessment,

27:50 - and they have the discretion to decide when a property

27:52 - assessment is necessary, when reassessment is necessary.

27:56 - Well, when a party wants to challenge the constitutionally

27:59 - the constitutional soundness of a tax system because it,

28:04 - as in the school district, bases its budget

28:07 - and millage rates on it and able to function

28:10 - to have the schools in the city of Pittsburgh properly function.

28:14 - Why does that not, a direct interest,

28:18 - which would constitute a basis for standing here?

28:21 - Well, for one, there is a difference between the a taxpayer who clearly does

28:26 - have a standing and that set forth in the uniformity clause.

28:30 - But a school district is a limited entity, so it can only act within

28:34 - the confines of what the Pennsylvania legislature has provided to it.

28:38 - And the Pennsylvania

28:39 - legislature has elected in this instance not to give it that right.

28:43 - I will bring up something that is well documented in the brief,

28:47 - but it's happening here at oral argument, and it happened throughout

28:51 - this entire court proceeding, which is that the

28:55 - the school district filed a complaint and they did not amend that complaint.

29:00 - And we are left with the well pled facts within that complaint.

29:03 - And that is it.

29:05 - So when the school district stands here in front of you

29:07 - and talks about the not being able to fill positions

29:11 - and not having money to do certain things, that is nowhere in this complaint.

29:15 - So the harm that is being alleged here by counsel

29:20 - and what we see in the don't the rules of civil procedure allow,

29:24 - the court to

29:25 - consider things outside the the fair allegations?

29:28 - It's not demurrer.

29:29 - Well, if there is a demurrer here, there is.

29:32 - But in terms of standing it will.

29:34 - No, that's jurisdictional.

29:37 - And and so there was nobody put on factual testimony.

29:40 - And the lower court noted that, that the court held a hearing and,

29:44 - and you brought in introduce some,

29:48 - there can't be budgets, etc..

29:50 - There can't be there can't be argument by counsel

29:53 - as constituting an amendment to a pleading.

29:56 - There would have had to have been sworn

29:58 - testimony that could have been cross-examined to bring up this issue.

30:01 - It's not briefs that can create amendments to a complaint.

30:05 - And that wasn't done here.

30:07 - But we're talking about issues standing though, right?

30:08 - Which is under I think it's brief.

30:11 - I actually have to help you with the civil procedure rule,

30:14 - but I believe that the courts that go beyond it.

30:17 - Oh, the court is well, the court did in fact go beyond and stated,

30:22 - holding a hearing under rule 201

30:25 - that it was going to contemplating considering additional information

30:29 - and that was budgetary information and, and

30:32 - so but that that was all that went in.

30:36 - There was no additional there was no testimony that was presented

30:40 - that would allow the the grand scope of arguments that counsel

30:43 - is trying to get this court to bring up in terms of the harm that they've suffered.

30:48 - So put another way, articulate for us what specifically

30:53 - was missing from the complaint.

30:56 - Well,

30:57 - the, the, the arguments that are being made now,

31:00 - but the like like when you read the complaint

31:04 - as a practitioner, you thought, ha ha, that's not in there.

31:07 - They didn't establish standing what was missing in the complaint.

31:11 - Well, I start with they don't have standing, period,

31:14 - because the Pennsylvania legislature has elected not to give it to them.

31:18 - But once you even get past that, they would still have to establish

31:22 - that they have a harm.

31:23 - And we don't have that here in this came up in the pleadings of the court.

31:27 - At the lower court noted, this

31:29 - first question asked of the school district was, what is your harm?

31:33 - The court had to ask that question three times

31:36 - because the school district could not articulate a harm.

31:38 - The harm that is found in the complaint.

31:43 - Is really limited as it applies to the school district.

31:46 - And you'll see it in paragraph 62 where it says that due to multiple recent

31:51 - be PA dispositions dramatically and retroactively reducing the assessments

31:55 - on high value downtown office buildings, the school district is obligated

31:59 - to issue refunds in excess of 10 million, and that it anticipates

32:04 - that there will be additional commercial property assessment appeals

32:07 - that are adjudicated or settled in the years 2000 and 2024.

32:12 - Like harm to me. Pardon?

32:14 - Sounds like harm to me. Well, it isn't harm, Your Honor.

32:16 - I respectfully because Pennsylvania Legislature has already ruled.

32:21 - I mean, it's it's set forth by statute that one of the obligations of a school

32:25 - district is to prepare a balanced budget, and that budget is required

32:30 - to include monies in reserve to issue refunds.

32:34 - And at the time that what if,

32:36 - what if their assessments are wildly off because of the assessment issue?

32:40 - Well, they're not badly off because of the assessment issue.

32:43 - And in fact, it's alleged in the complaint when the school district and we are left

32:47 - with what the well pled facts of the complaint are the school district,

32:51 - as Judge Warwick had noted, the school district specifically

32:54 - states that the commercial properties have seen regression.

32:57 - And I'm citing to the record paragraph.

32:59 - Excuse me, record 14 a complaint, paragraph 56 eight.

33:04 - And the quote is that commercial properties have seen regression

33:08 - due to a number of factors, including the after effects of Covid

33:11 - 19 pandemic, the rise of online retail, and the adoption of hybrid

33:16 - and work from home models by employers that have led to high office vacancies.

33:21 - That has nothing to do with Allegheny County's

33:24 - assessment, and it would not change by a reassessment.

33:27 - So the only way they can resolve their budgetary issues

33:30 - is to increase their tax rates.

33:34 - Fiscal soundness is always warranted.

33:37 - They are statutorily obligated to reserve enough money

33:41 - and to allocate enough funds may include millage

33:44 - increases, which they have now finally done this past year.

33:47 - They have now implemented for 2026.

33:49 - They've been to implement in the budget.

33:50 - And I mean a tax increase and that impacts the taxpayers directly.

33:56 - Their increase.

33:58 - Yeah. Everyone. Yes. Your honor, does this.

34:01 - What about what about the implication

34:04 - of this class and all this because it almost becomes

34:09 - a downward spiral that is, you know, unsustainable.

34:12 - You get a decrease in the office building from 100 million to 80 million,

34:17 - but then you apply the class and it drops to 53% of that roughly.

34:22 - I mean, the class, which is a it's

34:26 - I assume that this court knows, but the state Tax Equalization Board

34:30 - issues a new class for every year for every county in Pennsylvania.

34:35 - And it will it will always have an impact

34:39 - on on the thing that you what's the CEO what's the class.

34:43 - After a countywide reassessment, it will likely go to 100 or it will go to 100.

34:48 - It I think will go to 100. Okay.

34:50 - That's that is fine.

34:51 - It will go to 100 but it's not.

34:53 - It will change immediately thereafter.

34:56 - If we look at standing and the William Penn parking case,

35:00 - it had three requirements that one of them is that there would be

35:03 - a direct impact that there be an immediate and that there be a substantial.

35:08 - And the test on the direct is that it would have to be the court.

35:14 - Opined that

35:16 - if you look at, let's just say that the,

35:20 - the party wins and the offending law in this case,

35:24 - property assessment reassessment is done is the harm gone.

35:28 - And that's one of the elements.

35:30 - And here that does not the seal will still exist.

35:34 - The stab every single year is going to calculate a new class.

35:40 - There unfortunately might be another pandemic.

35:42 - There might be another reason

35:44 - why there will be a dramatic reduction in someone's property taxes.

35:48 - We do not know what the future holds other than death and taxes.

35:53 - And there will always be a class

35:55 - until the Pennsylvania legislature changes it. Mine.

35:58 - So when we look at the idea that it will reset, it is temporary.

36:03 - And the the case law that talks about standing requires

36:07 - that is your problem eliminated, not is it gone for a year.

36:12 - And even then if it were gone reset to 100.

36:15 - There are still instances where there will be

36:18 - the possibility of volatile, changes in the council.

36:22 - Real estate, as you put that, even the trial court

36:26 - recognized the district, said the refunds are resulting in a deterioration

36:31 - of its financial position, which enables its ability to properly fund the schools.

36:37 - Seems to me you're saying the answer is, well,

36:39 - they have to have enough money in the budget to issue refunds.

36:45 - How can you

36:45 - stand here and say that when their their position is clear,

36:49 - that they can't put money in the budget because of the tax

36:54 - base year being 2012, they're having to issue refunds?

36:58 - It just seems like a non

37:01 - sensical answer.

37:03 - Well, I apologize, Your Honor, but the fact of them

37:06 - having to issue these refunds, they admit in their pleading

37:10 - has nothing to do with the 2012 base year assessment.

37:14 - It has to do with Covid, the decline of the retail market.

37:17 - That could have happened if we had done a reassessment at that exit.

37:21 - The exact same scenario would have happened in 2020

37:24 - because there were outside factors that caused this.

37:27 - And the complaint admits this.

37:30 - So they the truth and the reality is that property

37:34 - assessment is a purchase act asking whether they have standing

37:38 - understood that direct, immediate, substantial interest in being able to fund

37:43 - properly the public schools in our city give them direct standing there.

37:49 - They're tasked with doing that and they're saying they can't do it.

37:52 - Well, they don't say that in the complaint.

37:55 - What they say in the contrary, court recognized

37:58 - they blame the refunds for resulting deterioration of its financial position

38:02 - regarding the schools. Right.

38:03 - And they rely upon this issue that they're in the downtown marketplace.

38:08 - There have been multiple,

38:11 - significant decreases in

38:12 - property value that have led to them having to issue refunds.

38:16 - The point that I would bring up, because I do see I'm running out of time.

38:19 - The school district argued here about the anti windfall provision

38:23 - and argued about the cap that they're limited to,

38:25 - unless they get court approval to go beyond that.

38:29 - There is no averman in this complaint that in fact

38:32 - the requirement that they sit with it, that they only increase their budgets

38:36 - by a certain amount, their millage a certain amount in any given year.

38:41 - It puts them at a cap of what they can do.

38:43 - The there is no averman in the complaint that that has affected them.

38:47 - And in fact, if you look at the brief that I submitted, you can see that

38:50 - if the school district had in fact

38:53 - increased its millage up to the cap, it would have eliminated any issue.

38:57 - It had.

38:58 - One glaring thing to note when you do look at their budget is that despite

39:03 - whatever increases that they've had in expenditures

39:06 - with regard to their having to issue property tax refunds,

39:10 - they pale in comparison to the absolute increase in the budget

39:13 - that the school district had had, to the tune of $80 million.

39:16 - So we're looking at being able to prevent harm and being able to budget.

39:20 - A school district is required to follow fiscal soundness at your well time.

39:24 - I have a question with the president judges indulgence,

39:28 - I'd like just to type one loose said has been gnawing at me, Mr.

39:31 - Delacour said.

39:32 - In his perfect world, he'd like to see reassessments county wide reassessment

39:38 - every 3 to 5 years.

39:40 - I won't editorialize on that for my past life.

39:43 - We'll just leave it at that.

39:44 - But what will be the effect on the county

39:48 - if we find standing here in a school district,

39:51 - whether it be the City of Pittsburgh, Fox Chapel, Upper Saint Clair, never.

39:56 - If they would bring lawsuits every 3 to 5 years

39:59 - to force a new countywide reassessment, it would be devastating.

40:03 - How so?

40:03 - Well, that the the property reassessment, as you, Your honors personally know,

40:09 - is probably the largest single expenditure a county the size of Allegheny County

40:13 - will ever undertake.

40:14 - It's in the tunes of many, many, many millions of dollars.

40:19 - It and it is it gets larger all the time.

40:22 - So the idea of a school district, we have 130 municipalities

40:26 - in Allegheny County, and the idea of one single school district

40:30 - and then a different school district

40:31 - some time later, being able to come up later and, and have standing to argue

40:36 - that Allegheny County is forced to expend this tremendous multimillion dollar

40:40 - tends only to keep in line with its responsibility,

40:44 - like you're pointing out of the school, to have the a constitutionally

40:48 - fair tax system,

40:50 - a great and a taxpayer has that authority to come in and make that argument.

40:56 - And we will deal with that argument.

40:59 - We will, do the proper assessment.

41:01 - We will do the proper review of things. But that is not this case.

41:05 - Thank you.

41:06 - Honor.

41:07 - And, I think my microphone isn't working.

41:10 - Mine is not this week.

41:12 - Buttons on here.

41:18 - Thank you.

41:21 - Make sure everybody I've been talking and

41:25 - early, I've been muted. Yeah.

41:26 - Now you can hear me.

41:28 - Okay. Thank you.

41:29 - You have your two minutes.

41:31 - Thank you. Your Honor.

41:32 - Just to address that final point, one of the benefits of routine county wide

41:37 - reassessments is that it dramatically drives down the cost of performing

41:41 - those reassessments.

41:42 - The reason why the quotes to perform the reassessment from companies

41:46 - like Tyler Technology and Saber go up every year is because

41:50 - assessments are no longer representative of market values in the county, and

41:56 - the longer you go without a correction, the more arduous task that becomes.

42:00 - A lot of that is because they don't have the proper data before them.

42:04 - In order to do a,

42:08 - a constitutional statewide tax assessment

42:12 - because they don't have current data on the properties.

42:16 - That's correct, Your Honor.

42:17 - And this is actually something that some states or some counties actually

42:20 - take in-house.

42:21 - It's something that could potentially be done

42:23 - by the Office of Property Assessments without outside firms.

42:27 - That being said, I do want to address some of the legal arguments that were raised.

42:31 - One of the arguments is there is no statute out there that expressly gives

42:36 - school districts the right to compel a county wide reassessment.

42:40 - And while that is true, as your honors have alluded to,

42:45 - there are a variety of assessment statutes in place.

42:48 - The General County Assessment Law, second class County Assessment Law,

42:52 - and consolidated County Assessment Law that allow us to appeal properties

42:57 - on an individual basis in a nondiscriminatory manner.

43:01 - And why that's relevant is taxing authorities collectively

43:05 - in Allegheny County or elsewhere, could appeal every single property

43:12 - in the entire county and perform a countywide mastery assessment.

43:16 - That way, it's not feasible because it would overwhelm the courts.

43:21 - It's fine. It would be financially devastating.

43:24 - The real reason we can't do that approach is it does not reset the base year

43:28 - and does not reset the common level ratio, but if we wanted to, we could file

43:33 - appeals on every single property in Allegheny County.

43:38 - So I think it's fair.

43:39 - Well, well, well, Mr.

43:40 - Delacour, I don't see you could file as the City of Pittsburgh school

43:44 - District appeals on properties in Upper Saint Clair.

43:49 - And it seems to me you're asking us to take that, right?

43:52 - That's written in the statute that allows taxing bodies,

43:55 - not just school districts, but municipalities can do the same to file

43:59 - individual appeals and rewrite it to give you standing,

44:04 - saying you can do a countywide reassessment, litigation as well.

44:09 - That seems to me you're asking us to legislate.

44:12 - No, Your Honor, so that that's a very,

44:15 - shrewd and fair observation regarding Upper Saint Clair.

44:19 - I'm both shrewd and fair. Thank

44:21 - very true.

44:24 - That's why I said it would have to be a collective or collaborative effort

44:28 - with all the taxing authorities to to accomplish that goal.

44:31 - But what we could do is we could appeal every single property

44:35 - within our specific taxing jurisdiction.

44:38 - Though you're correct for a county wide reassessment that does require

44:41 - a revaluing of all properties within, within the county.

44:47 - So that that is fair.

44:49 - And I see I'm over my time by about a minute, but

44:53 - if anyone has any final questions, I would be happy to address those.

44:57 - No. Well, thank you all very, very much.

45:00 - We appreciate very interesting and important case as all of our cases

45:04 - are and very well argued and briefed.

45:07 - Thank you, Your Honor.

45:08 - Thank you.

45:11 - Our next case arises from a right to know law request

45:14 - filed by the petitioner, Environmental Integrity Project.

45:18 - But the Pennsylvania Department of Environmental Protection,

45:21 - seeking access to data submitted by Shell Chemical

45:24 - regarding emissions from its Monaca petrochemical facility.

45:28 - The data in question, referred to as the flare data,

45:31 - includes detailed measurements such as vent gas composition, flow rates,

45:36 - and other technical parameters related to Shell's multi-point ground flare.

45:42 - DEP partially denied the request,

45:45 - redacting portions of the records on the grounds that they contained

45:48 - confidential, proprietary information under section 708 B11 of the right

45:53 - to no law.

45:54 - The Office of Open Records upheld the EPA's decision.

45:58 - I appeal to this court followed.

46:02 - EPA argues that the withheld flare data

46:04 - constitutes emission data under the federal Clean Air Act

46:07 - and Pennsylvania's Air Pollution Control Act, which must be publicly disclosed

46:12 - and is categorically ineligible for confidential treatment,

46:15 - is necessary to verify Shell's reported emissions, as shell uses equations,

46:20 - not direct monitoring, to calculate emissions from the flare,

46:24 - and was improperly withheld under the right to Know law

46:26 - because DEP and shell failed to meet their burden of proving

46:30 - that disclosure would cause substantial competitive harm.

46:35 - DPI agrees that emission data must be disclosed,

46:38 - but argues that the withheld data is not emission data

46:41 - because it is not used directly in emissions calculations.

46:46 - DPI asserts that the withheld data is pre emission background data

46:50 - used for internal diagnostics and compliance with net heating value

46:54 - requirements, not for calculating emissions.

46:57 - DPI further contends that the withheld data

46:59 - is confidential, proprietary information under the Right to Know law, and that is,

47:03 - disclosure could harm Shell's competitive position.

47:08 - Shell argues that the withheld data is not emission data

47:11 - because it is not necessary to determine emissions,

47:14 - and is not submitted as part of Shell's routine emissions reporting.

47:18 - Rather, the data reflects internal process parameters

47:21 - and operational diagnostics, not actual admissions.

47:26 - Shell states that disclosure would risk the possibility of reverse

47:29 - engineering and reveal proprietary processes and design elements.

47:33 - With that, let's listen to the argument.

47:37 - This morning and this is my firm.

47:38 - My name is Lisa

47:39 - Hallowell, attorney for appellant, Environmental Integrity Project.

47:42 - Your IP.

47:43 - This is my first time arguing before this court.

47:46 - Oh well welcome and we're happy to see you.

47:48 - Thank you. May it please the court

47:52 - I am here representing appellant,

47:54 - the Environmental Integrity Project, or IP, a nonprofit organization.

47:58 - I would like to reserve two minutes for rebuttal.

48:00 - You have it. Thank you.

48:02 - This is an appeal about transparency.

48:04 - The right of the public under

48:06 - our Commonwealth's right to know law and air pollution control laws,

48:10 - to know what we are breathing and how emissions from a large flare

48:14 - at the Shell Plastics plant are being calculated

48:17 - and reported to the state Department of Environmental Protection.

48:21 - The Office of Open Records Appeal Officer aired,

48:23 - and allowing the state to withhold emission data from the public,

48:27 - including the wonderful nearby residents who are in this room.

48:30 - To hear this argument today,

48:33 - the Air Pollution Control Act is unambiguous.

48:36 - Emission data

48:36 - must be disclosed to the public, regardless of whether it is confidential.

48:40 - Neither DEP nor shell can test this.

48:43 - DPS is currently withholding from the public emission

48:47 - data that is necessary to calculate levels of VOCs.

48:50 - Well, Council is the data withheld actually input data or is it background

48:55 - data that has to be compiled and modified for use in the input calculations?

49:01 - Thank you, Your Honor.

49:02 - The law requires, under the very plain language of the Clean Air Act

49:06 - regulations, that information necessary to determine emissions is emission data.

49:11 - So regardless of whether it's called pre emission background data

49:15 - or not, it is clear,

49:17 - that this information is used to calculate emissions

49:20 - and therefore must be included under that theory.

49:22 - Then every bit of data in every facility that ever might

49:26 - at some point contribute to admissions emissions would be public.

49:30 - Is that what you're saying?

49:31 - Every single part of it.

49:32 - Nothing is proprietary.

49:34 - Not that nothing is predatory, but it is very clear that the information

49:38 - at issue here is not proprietary and is used to calculate emissions.

49:42 - Can you tell us where the disclosure point ends,

49:46 - where the disclosure.

49:47 - Well, so, for example,

49:49 - EPA has long considered emission equation inputs like the flare data

49:53 - that is at issue here to be emission data that must be publicly available.

49:58 - EPA's Greenhouse Gas Reporting rule designates certain data

50:01 - as inputs to emission equations that will not receive confidential treatment.

50:06 - They expressly mention some of the data at issue here,

50:09 - like event gas volume and gas composition data.

50:14 - And EPA's air Emissions Reporting rule also states

50:18 - that emissions equation inputs, including throughput and flow rate.

50:22 - I'm not sure where you're saying the process ends.

50:25 - Then where does the disclosure point end?

50:27 - They're saying that they would be willing to include final emissions

50:31 - calculations, methodology used to calculate the emissions

50:35 - and the data inputs used in the equation to calculate the emissions.

50:39 - Why isn't that enough? Sure.

50:42 - So the record clearly establishes

50:45 - that this withheld data is emissions data.

50:49 - Shell is simply stating that they should not be required to show their work.

50:53 - That is a problem here where we have an emission source that is a flare

50:57 - where you cannot directly measure emissions at the the fire, the big flame

51:03 - emission equation inputs are required to determine emissions.

51:06 - In fact, DP's own protocol for how it measures emissions,

51:11 - which was approved by shell and this is how they report monthly

51:15 - emissions of pollutants, requires these emission inputs to be used,

51:20 - for reporting emissions.

51:23 - In addition, some of the other pollutants are required by federal regulations

51:27 - to be used to make sure that the flare is functioning properly.

51:30 - So, for example, in order to reduce

51:33 - VOCs from the flare, that the flare is required to destroy

51:38 - 98% of emissions

51:40 - of VOCs before they even get to the flare.

51:43 - So information like temperature and pressure to the flare confirm

51:47 - that the flare is working properly,

51:49 - because otherwise the calculations that shell is doing will not be accurate.

51:53 - And for example,

51:54 - the VOC emissions could be significantly higher than what they're claiming.

51:58 - So the public is entitled to get the inputs that go into those equations to

52:03 - make sure that shell is showing its work and that the emissions, are accurate.

52:08 - Their argument is that, you know, it's going way beyond that.

52:11 - Reports that they are required to do that.

52:13 - They do submit,

52:16 - to the EPA every year.

52:18 - But you're asking for a minute by minute, which they're arguing, goes into their,

52:24 - proprietary, really, shell says.

52:26 - But I'm sorry.

52:28 - My question really is why is this question

52:30 - really before us about emissions data under federal regulations?

52:34 - Shouldn't that be something the DPI should be answering

52:37 - if there's a dispute about that?

52:40 - Wasn't some of this already?

52:42 - Isn't it sitting at the EPA already at this juncture,

52:47 - DPI is tasked with carrying out the Air Pollution Control Act,

52:50 - and it needs to ensure that it conforms with the federal Clean Air Act.

52:54 - The federal Clean Air

52:55 - Act is the only place, as shell admits in its brief, where there is a

53:00 - definition of emissions emission data.

53:03 - So, it this is such an ex

53:07 - requires such a level of expertise.

53:10 - And if I understood the record part of this is before the EPA already

53:14 - I don't know what the status of that, but

53:17 - normally an agency has to exercise its job.

53:21 - And here that would be to, you know, exercise its expertise

53:26 - and deciding what submission data before it comes to this court

53:29 - to decide what is emissions data under the federal regulations.

53:33 - Normally we get something from the agency itself.

53:36 - Sure, the agency did actually disclose as emissions

53:40 - data this very type of information to EPA in previous proceedings.

53:45 - Its argument here that this is not emission data

53:49 - that needs to be disclosed, is not consistent with that

53:53 - and does not jive with the law or the facts of this case.

53:56 - EPA's or sorry Dep's factual determination.

54:00 - Neglected to note that some of these parameters are in Shell's very own

54:04 - protocol used by DEP to verify emissions, and that the net heating value,

54:10 - is required, or the net heating value calculations

54:14 - and equations require the other inputs,

54:17 - and those have to be used to calculate and verify emissions.

54:21 - So DEP is analysis was just based on facts.

54:24 - And they did not accurately understand in my opinion.

54:28 - And report and and explain

54:32 - the facts of this case.

54:33 - Could you point to where in the record,

54:36 - there is an explanation of how the flare data,

54:41 - converts into a calculation

54:44 - that establishes emission data other than the Sahu affidavit.

54:49 - Sure.

54:49 - Even without the Sahoo affidavit, the record is very clear

54:53 - that this information is emission data that is used to calculate emissions.

54:57 - The record includes the shell's very own protocol,

55:00 - which, as I said, includes flare, vent, gas composition data.

55:03 - It also includes Shell's permit, which requires the compliance

55:07 - with the regulations regarding the net heating value.

55:09 - That includes that requires emissions equation inputs,

55:13 - the other emission equation inputs to be included here.

55:17 - So the federal regulations that apply here,

55:20 - are cited in those documents.

55:23 - The Sahoo affidavit is just an attempt

55:25 - to explain these very technical issues to this court.

55:29 - And are very consistent with the broad

55:32 - disclosure policy of the right to know law, to include that here for your

55:35 - to aid in the court's understanding of how these complex processes work.

55:39 - And on that sample affidavit, I mean, there is a concern from shell

55:42 - about the timing of the disclosure or the submission of this particular affidavit.

55:47 - Could you help us understand why we waited to do so?

55:51 - Sure. Before the Office of Open Records?

55:54 - The parties all submitted their briefs and, affidavits were submitted.

55:59 - We did not have an opportunity to respond to

56:01 - what was in the affidavit of shell or DEP.

56:05 - So this was, a response to that going into the technical

56:10 - data, I think it's important to note that,

56:15 - yeah.

56:18 - Yeah, it's important to note that, the

56:23 - regardless of, you know, we shouldn't

56:25 - even get to the point where we need to to, consider the Sahoo affidavit.

56:31 - It's not the record is very clear that this is emission data.

56:35 - The case law has confirmed that,

56:38 - for example, the district court in Graff

56:42 - included soil borings on a nearby property because it determined

56:46 - that it was necessary to determine the character

56:49 - characteristics of emissions from the source.

56:52 - In addition, Shell's brief attempted to read the federal language,

56:56 - and the RSA or RSA Corporation case to narrowly exclude data

57:01 - from disclosure unless it is the only way to calculate emissions.

57:04 - That argument, and that reading of the case has been repeatedly rejected.

57:09 - In the matter of Duo Fast, the Illinois Pollution Control Board expressly rejected

57:14 - the narrow reading of RSA Corporation and stated that due to a fast

57:19 - interpretation of both the definition of emission data

57:23 - and the RSI case was incorrect, it required disclosure of information

57:28 - that was processed data, and explained that a plain reading of the Clean Air Act

57:32 - definition of emission data uses the term necessary to determine

57:36 - the identity of emissions, to broaden the scope of what is emissions data.

57:42 - In fact, the Office of Open Records just this December,

57:47 - in a submission that EPA submitted as a post

57:50 - brief submission cited to the duo first case

57:53 - and required the DEP to disclose information equation inputs,

57:56 - it was withholding for this very same shell facility.

58:00 - In that case, shell similarly argued

58:03 - that the withheld equation inputs were not emission data,

58:06 - but rather internal process data that were not submitted

58:09 - and that were not submitted as part of the routine.

58:12 - Reporting.

58:13 - I have a question with regard to,

58:16 - the necessary to determine analysis.

58:20 - Yeah.

58:20 - And I wondered if you believe that remand

58:24 - would or could be helpful,

58:27 - to allow the o r to conduct unnecessary determinate,

58:31 - to determine analysis under section 22.

58:35 - 30182I of the Federal Regulations Code.

58:40 - This court has the authority.

58:41 - The review here is to novo this court.

58:43 - I think, does not need to remand it.

58:46 - I think it's very clear that this is a mentioned data

58:48 - that is necessary because it is necessary to determine emissions.

58:52 - So I don't think remand is necessary.

58:55 - But I think that is another way you could deal with this.

58:57 - But I think given how clear the information here

59:00 - and the fact that there are no,

59:04 - credible, cases that really say otherwise,

59:07 - I think that a decision here today would be,

59:10 - a more efficient way, I guess, to move this process forward

59:13 - and get the public access

59:15 - to the emissions data so that they know what they're breathing.

59:17 - And would you say that without the, Sahoo affidavit, Sahu affidavit?

59:23 - I just based on on these cases that you're

59:26 - that the order did not apply

59:29 - or did not agree, I should say, with your interpretation.

59:34 - Yeah.

59:34 - Well, as I said, the o r in a more recent decision

59:37 - actually rejected the same arguments that shell is making here,

59:42 - contrary to Shell's argument that it need not show its work.

59:45 - The o o r citing to do o fast stated expressly

59:49 - that if the only final calculations of emissions are of available,

59:53 - that if only the final calculations are available,

59:56 - but the inputs to those calculations are confidential,

59:59 - 665 the public is left to take Shell's figures at face value and would be without.

01:00 - 04.767 Excuse me, can you just show me?

01:00 - 09.305 Is there something pending right now before the CHP or the EPA is there?

01:00 - 15.244 Yes, there are other appeals with the EPA and has withheld other of Shell's data.

01:00 - 18.514 I believe that those are stayed pending this case.

01:00 - 20.750 They were stayed pending this case.

01:00 - 23.886 Well, I think one of them was stayed pending this case and another one was

01:00 - 24.988 stayed pending.

01:00 - 28.625 Another,

01:00 - 31.628 one of the other right to know proceedings.

01:00 - 37.300 So you're saying then that those other cases aren't moving forward

01:00 - 40.670 until we resolve this case and or another case?

01:00 - 43.006 I think that that's what shell has requested.

01:00 - 46.709 I think the data is not, the same, but it is very similar.

01:00 - 49.979 We'll find that out from shell. Okay.

01:00 - 52.715 So in conclusion,

01:00 - 55.718 since I see I'm running out of time here,

01:00 - 59.589 I will note quickly that even if this were a case

01:00 - 00.757 in which it were not clear

01:01 - 03.726 that the withheld data is emission data that must be disclosed,

01:01 - 05.161 DPI has not met its burden

01:01 - 08.765 of proving the confidential exemption applies accordingly.

01:01 - 12.602 DPI is withholding emission data from the public that both federal

01:01 - 16.506 and Pennsylvania air pollution laws and the Right to Know law requires shell

01:01 - 20.910 to disclose the nearby residents, some of whom are here today, who may breathe.

01:01 - 24.480 These and the other pollutants released by this large facility

01:01 - 27.984 have a right to know what they are breathing and verify that.

01:01 - 32.088 And the law does indeed require shell the polluter to show its work.

01:01 - 35.625 We respectfully request that the panel reverse the decision below

01:01 - 38.628 and require disclosure of the withheld flare data.

01:01 - 39.896 Thank you very much.

01:01 - 44.967 Good morning.

01:01 - 45.868 May it please the court.

01:01 - 49.338 My name is Christina McKinley and I represent Shell Chemical Appalachia.

01:01 - 51.708 I am going to be sharing my time with Mr.

01:01 - 53.076 Bailey from the DEP.

01:01 - 55.978 So we would each request 7.5 minutes.

01:01 - 57.313 Okay, you've got it.

01:01 - 59.282 Thank you.

01:01 - 03.052 I think I before I get into the substantive argument,

01:02 - 06.556 I do want to address the questions about the other case that is pending.

01:02 - 09.892 In the other case, Miss Holloway is correct

01:02 - 13.362 that the O, R and DEP ruled against shell.

01:02 - 16.199 In that case, with respect to different data

01:02 - 19.202 that is currently both on appeal to this court

01:02 - 23.339 and on appeal to the FB because of this weird jurisdictional nuance.

01:02 - 26.042 It is one of those cases peculiar case.

01:02 - 27.343 Yes. Okay.

01:02 - 30.980 So as of now, that case is stayed

01:02 - 34.150 in this court pending a determination

01:02 - 39.188 by the FB of Shell's arguments with respect to that emission data.

01:02 - 40.590 You're saying the other case,

01:02 - 44.927 not this other case, is stayed pending the termination by FB?

01:02 - 47.130 Why shouldn't this be the same thing?

01:02 - 49.632 Why shouldn't we stay this case

01:02 - 53.703 to let the CHP make a decision first about what is emission status?

01:02 - 57.006 Certainly they're the recognized experts,

01:02 - 58.941 your honor.

01:02 - 01.944 We had no ability to go to the CHP in that case

01:03 - 05.248 because this arose from a right to know proceeding.

01:03 - 08.618 Shell could only intervene with respect to its data

01:03 - 12.054 if there was an action by DEP, that aggrieved shell.

01:03 - 15.958 That is why in this case, because the DEP sided with shell

01:03 - 21.164 and held that Shell's data was both not emissions data and confidential.

01:03 - 23.766 Shell could not appeal anything to the FB.

01:03 - 28.337 In the other case, the DEP held that it was emission data

01:03 - 29.138 and that it was not

01:03 - 32.275 confidential business information, and so shell exercised its right

01:03 - 33.509 to appeal to the FB.

01:03 - 39.482 In that case, so will the FBI's decision in the other case inform our analysis?

01:03 - 44.520 In this case, it could, your honor, it's different data at issue, but it could.

01:03 - 47.256 And that takes me to the merits of the emission data.

01:03 - 50.193 So I'd be happy to go there if it shed some light.

01:03 - 54.597 So I think before we before we get into what is or is not emission data,

01:03 - 57.066 I think it's important for this court to understand

01:03 - 59.402 what data is at issue in this case.

01:03 - 02.405 Miss Holloway mentioned monthly emission reports.

01:04 - 04.740 That is not an issue in this case.

01:04 - 05.241 Shell.

01:04 - 09.245 Under a negotiated consent order, an agreement with DEP produces

01:04 - 12.982 monthly emissions reports exactly what they sound like.

01:04 - 14.684 Those are unredacted.

01:04 - 16.519 If the court wants to see an example of that,

01:04 - 19.689 it can be found at page starting at page 176 A of the record.

01:04 - 23.025 Those are monthly reports of Shell's emission data.

01:04 - 26.863 The issue at that data at issue in this case arose

01:04 - 31.133 because DEP conducted an inspection of the facility.

01:04 - 36.405 Shell maintains certain data not in any usable format, but it maintains

01:04 - 40.943 this data because of regulatory issues and upon DEP request.

01:04 - 44.914 Following an inspection, shell pushes a button, collects the data, and

01:04 - 47.984 and it prints into an inspection report.

01:04 - 50.219 That is what we are talking about. In this case.

01:04 - 52.388 We're not even just looking at all the flare.

01:04 - 54.624 It does. It does, Your Honor, but it's

01:04 - 58.261 so how does that fit in with the regular monthly,

01:04 - 00.329 reports?

01:05 - 04.267 And why wouldn't that be part of the emission data?

01:05 - 07.203 Because there were emissions during the flare.

01:05 - 12.742 That is, as I understand it, different from the regular ordinary course

01:05 - 15.945 of, of, emissions.

01:05 - 19.615 So some of the parameters within the inspection report

01:05 - 22.818 are the same or similar to the monthly emissions data.

01:05 - 28.090 That is where shell and DEP have drawn that line, that when you look

01:05 - 32.628 at the statutory standard as as this court knows, it's now a regulatory standard.

01:05 - 33.496 It's information

01:05 - 37.500 necessary to determine the identity, amount, frequency, concentration

01:05 - 41.304 of any emission which has been admitted by emitted by the source.

01:05 - 44.140 We are talking about what comes out of the stack.

01:05 - 45.474 That's emission data.

01:05 - 46.275 When we talk about

01:05 - 50.680 what goes into the stack, the pre emission background data, as the P calls it,

01:05 - 54.450 or the process data as shell calls it, that is not emission data.

01:05 - 57.553 So I think this that's your disclosure point.

01:05 - 00.723 And yes, judge McCullough and I wanted to go there.

01:06 - 04.560 To your question to Miss Holloway, shell does not think

01:06 - 07.663 this court needs to adopt a bright line rule in this case.

01:06 - 10.866 And in fact, I think short of this court saying

01:06 - 14.337 what comes out of the stack emission data is emission data.

01:06 - 15.771 We're not talking about any input.

01:06 - 19.942 I think short of that sort of bright line rule, this court can't adopt a bright,

01:06 - 23.279 bright line rule because in any given case,

01:06 - 26.582 a particular input may or may not be emission data.

01:06 - 27.616 It depends.

01:06 - 32.688 And the Graf case that Miss Holloway mentioned actually says that it recognizes

01:06 - 37.426 that the regulation needs to be interpreted narrowly, and it recognizes

01:06 - 41.731 that it's a case by case analysis, because in the cooler case, isn't it?

01:06 - 45.001 Dealing with that exactly is what's going in

01:06 - 47.403 because its deterrent

01:06 - 51.774 was determined that what whatever went in was data.

01:06 - 55.711 So aren't we dealing aren't we dealing with the same issues

01:06 - 59.482 here as in the cooler case, which you say is now on appeal?

01:06 - 01.684 It's different data.

01:07 - 05.521 But tell us, can you tell us how like what's different about that?

01:07 - 10.893 Because to the naked eye, we're seeing what goes in is data.

01:07 - 13.796 What comes out is data. So you're saying is different.

01:07 - 14.830 Can you explain how.

01:07 - 17.833 So, I can try.

01:07 - 20.069 There's a lot of technical science in this,

01:07 - 25.808 but it is my understanding that what we are talking about here is flare data.

01:07 - 27.276 What comes out of the flare.

01:07 - 31.047 In that case, it relates to a specific malfunction of a furnace.

01:07 - 34.216 And so they're we're talking about different parameters,

01:07 - 38.487 but we're talking about ingredients

01:07 - 43.692 going into the furnace and coming out and then what's coming out.

01:07 - 44.026 Right.

01:07 - 48.697 So so we're looking at the same thing like the flare data going in and coming out.

01:07 - 52.468 And in that sense, if we're extrapolating to that level, I think that is true.

01:07 - 53.169 Okay.

01:07 - 57.740 I do have a question about, some concerns that you raised about disclosure of this

01:07 - 58.974 data and the consequences.

01:07 - 00.976 And I that's something to think about it.

01:08 - 05.014 I think one of the concerns you raised was that it might violate agreements, etc.,

01:08 - 08.884 but do not these agreements have, clauses

01:08 - 12.721 that suggest you need to comply if it's required by law?

01:08 - 17.126 Yes, Your Honor, and that's why we have taken every step possible to exercise

01:08 - 20.796 our rights absent a court order to refrain from disclosing that data.

01:08 - 21.664 Fair enough.

01:08 - 24.233 And I thank you for pointing to the confidential information.

01:08 - 25.334 I realize my time is short.

01:08 - 27.503 I do want to get to that piece briefly.

01:08 - 30.873 Shell has asserted at all steps of this process that the data

01:08 - 34.276 it seeks to withhold is in fact confidential data.

01:08 - 39.348 It relates to Shell's proprietary processes, to its, ability

01:08 - 43.219 to improve on those processes and efficiencies.

01:08 - 46.589 It has invested significant time and money in that data.

01:08 - 50.526 It strictly maintains a protocol to keep that data confidential.

01:08 - 55.498 When it submits that data to DEP, it does so with a confidential banner

01:08 - 59.001 on the data that is confidential, and it does so with a fine pen.

01:08 - 00.503 It doesn't just

01:09 - 04.507 willy nilly submit the data to DPI and stamp everything confidential.

01:09 - 09.645 It does so very selectively based on what it reasonably believes is confidential

01:09 - 13.682 and proprietary, versus what it believes the public can and should know.

01:09 - 15.417 If the panel

01:09 - 19.021 think it's possible that if we move forward with this case, that

01:09 - 23.092 we could create a conflict with whatever analysis that FB does in the other

01:09 - 26.195 case, I understand I'm not bound by that, but that's not my question.

01:09 - 29.131 My question is, could we create, a conflict?

01:09 - 32.568 And the reason I'm asking, just very humbly, as their expertise

01:09 - 36.972 might be more on and I don't want to have a conflict between the two.

01:09 - 41.210 So I think it is theoretically possible that it would

01:09 - 44.580 create some sort of precedent that could conflict with FB.

01:09 - 47.783 Of course, the FB would be bound by this court, but I realize that's a

01:09 - 50.553 that's putting the cart before the horse, right?

01:09 - 53.756 Although the case it's I'm sorry for you.

01:09 - 57.459 Well, actually, my next question dealt with what you asked earlier.

01:09 - 01.764 What did you think about when the president and judge asked opposing counsel

01:10 - 04.833 about whether it would be helpful to do a remand in this case?

01:10 - 08.437 I don't think it would be helpful because a remand would be to the o.R.

01:10 - 12.007 Which has no specialized expertise in interpreting.

01:10 - 15.077 What is admission data. Okay. And

01:10 - 17.913 with regard to the

01:10 - 20.916 matter before the CHB,

01:10 - 24.153 the petitioner here, the Environmental Integrity

01:10 - 29.391 Project is not that that's just DEP and shell.

01:10 - 35.664 Yes, Your Honor, so if depending what it decides, there may be no appeal to us.

01:10 - 38.667 If DEP were to

01:10 - 42.605 not find if the if the CHP went ruled in your favor,

01:10 - 46.375 for example, and DEP didn't appeal, then

01:10 - 51.180 that might our court may not ever see it.

01:10 - 56.919 And the petitioners here, would not be able to

01:10 - 00.089 you know, they're not a party. So,

01:11 - 03.926 you know, I'm not sure that the CHP route

01:11 - 07.930 would necessarily be the one that would provide

01:11 - 12.268 the court with the most information

01:11 - 15.904 that would allow the petitioners to also be able to be involved.

01:11 - 16.939 I'm smiling, Your Honor,

01:11 - 20.676 because as we have noted, this is like a civil procedure exam.

01:11 - 25.147 If we if shell prevails in the FB,

01:11 - 28.217 DEP might well not appeal.

01:11 - 31.620 However, the o r appeal from IP

01:11 - 34.823 related to the similar data is still docketed with this court.

01:11 - 37.826 So then we would have to figure out what happens to that appeal.

01:11 - 40.596 And I as I sit here today, I don't know the answer or whatever.

01:11 - 41.697 Okay. Yes.

01:11 - 44.867 Well thank you. We love challenges.

01:11 - 46.802 And I thought

01:11 - 49.772 you were smiling because your red light was blinking

01:11 - 53.609 back here.

01:12 - 02.918 Good morning.

01:12 - 04.019 My name is Jeff Bailey.

01:12 - 07.022 I'm with the, governor's office and general counsel, and I'm here today

01:12 - 10.025 representing Pennsylvania Department of Environmental Protection.

01:12 - 15.264 To go back to the question about the proceeding before the HB,

01:12 - 19.068 it's actually my understanding that the case is stayed

01:12 - 23.972 pending the decision by this court on that central issue is what is emissions data?

01:12 - 27.309 And that case, the reason the department,

01:12 - 31.280 held that some of the data was emissions data

01:12 - 34.350 because they were the department's taking the position, as we are in this case,

01:12 - 38.987 that emissions data is not just the final what's coming out of the stack, it's

01:12 - 42.624 that equation, that data needed as direct inputs into that equation.

01:12 - 46.829 And so because this issue is before the court now as to how to

01:12 - 49.932 what is the best approach to determining emissions data,

01:12 - 54.269 the HB is waiting for this court to decide which is also then

01:12 - 56.672 the second appeal before the Commonwealth Court

01:12 - 59.708 was just waiting for the FBS, which is sort of a circular.

01:13 - 02.911 So it's a Rube Goldberg machine, right?

01:13 - 03.145 Yeah.

01:13 - 06.548 It's it's yeah, we, we're kind of in a circle here.

01:13 - 10.953 So hopefully, question is who who has the level of expertise

01:13 - 14.390 to make this first decision that we should be reviewing?

01:13 - 16.125 We're reviewing it out of,

01:13 - 19.561 it is very challenging.

01:13 - 23.465 And I recognize that, the HP is in a position where

01:13 - 26.602 obviously they can do hearings and so forth, which the law in this,

01:13 - 28.570 this court can also do hearings, too.

01:13 - 32.307 But in that case, in the case we're dealing with in the HP,

01:13 - 33.776 it's a different type of data.

01:13 - 37.112 And that one there was there was a breakdown of a furnace.

01:13 - 39.715 And as part of that breakdown,

01:13 - 42.251 she was required to submit a report to the DEP.

01:13 - 43.485 And in that report,

01:13 - 46.488 they provided the emissions that were emitted during that breakdown.

01:13 - 50.359 And they also included the data uses to calculate those emissions.

01:13 - 54.763 And in that proceeding, the department determined that three of those four charts

01:13 - 59.101 that were part of that, included emissions data because it was the direct

01:13 - 02.304 inputs to calculate the emissions, as we're arguing in this case,

01:14 - 05.641 which is what what emissions data is.

01:14 - 10.279 Now, that's at the same time the that was appealed by the

01:14 - 13.882 o r because Department wanted to get the HP to decide

01:14 - 17.286 whether that's emissions data and or not before we produced the data.

01:14 - 22.591 And at the same time, EPA had appealed that to the oaj the o r.

01:14 - 26.762 So it kind of moved in two different directions, but I would not have.

01:14 - 30.699 They're not in front of the HP right now with regard to the hearings

01:14 - 33.702 or whatever else they might do in the other case.

01:14 - 34.703 That's correct.

01:14 - 36.472 They've not requested to intervene in that case.

01:14 - 39.475 So it's now show and DPI

01:14 - 42.878 and but they would be able to intervene or would that be

01:14 - 48.650 I'm not sure with what they're they I can't say whether they would meet.

01:14 - 49.785 That would be for the HP.

01:14 - 52.788 That's, that's okay.

01:14 - 54.122 But that or

01:14 - 57.826 I mean the decision from that

01:14 - 01.396 came out of that case because we are still talking the cooler case right now.

01:15 - 02.664 Or are you talking another case?

01:15 - 06.335 Well, so there's there's, there's there was two cases.

01:15 - 08.036 There's, there's this present one

01:15 - 11.073 and then there was the cooler case, which is the lower case.

01:15 - 15.077 And then there's the same data in that case is, is what's in front of the HP.

01:15 - 17.613 But that's a separate a third proceeding.

01:15 - 22.084 What do we call the e HP case is that that is shell versus the AP okay.

01:15 - 24.019 It's the same data that's in the the

01:15 - 28.390 the cooler we have cooler we have e IP which are our cases.

01:15 - 31.360 And then we have the shell case in front of the e HP.

01:15 - 35.230 I love these acronyms that may the

01:15 - 40.202 that one is waiting for our decision on what is emissions which we have to decide

01:15 - 45.274 probably in this case and maybe in cooler or maybe in both, but I concur.

01:15 - 48.377 I actually I joined with my colleague judge McCullough, but

01:15 - 52.681 I don't know that we have the expertise in front of us to decide what is emissions

01:15 - 56.718 when FB has that expertise.

01:15 - 00.188 So you understand our conundrum and that that's a choice in our tails.

01:16 - 05.060 That's a challenge with the DP because as I mistakenly stated,

01:16 - 09.131 shell can only you can only take a case the EPA, HP

01:16 - 12.301 if you've been aggrieved by a determination standing right.

01:16 - 16.972 And so in that case, shell, we issued a determination

01:16 - 21.243 at 3 or 4, three of four charts that shell had submitted

01:16 - 24.913 was emissions data need to be produced, and that gave them the basis to appeal

01:16 - 30.819 to the HP in the lower case, because it submitted a right to know law,

01:16 - 33.255 request.

01:16 - 36.792 And as part of that, we recognized three of those four documents

01:16 - 38.694 where emission standards should be public.

01:16 - 42.197 But we wanted to wait to get the HP to decide that issue

01:16 - 46.535 because it is a technical issue, but it still proceeded on through the o.R.

01:16 - 49.671 And now that case has been appealed to this court, and it's

01:16 - 54.109 that case is stayed pending the HP decision, which is status.

01:16 - 58.747 You're not arguing in front of the HP for the kind of disclosure

01:16 - 01.750 that IP is asking for

01:17 - 03.852 in this case. In this case, yes.

01:17 - 06.855 Because this case here, we're talking about,

01:17 - 10.459 data that was submitted by shell to determine compliance

01:17 - 14.162 with the federal regulation, that federal regulation is only determining

01:17 - 18.600 the net heating value of that flare, which essentially is how hot is the flare?

01:17 - 21.003 It's not telling us how much pollutants are coming out.

01:17 - 23.138 It's not telling us how much emissions are coming out.

01:17 - 25.574 It's just telling us how hot it is.

01:17 - 27.109 That data.

01:17 - 31.079 If you look at the in the record there, shell provides on a monthly basis,

01:17 - 33.582 this was part of a consent order, an agreement that they signed.

01:17 - 37.819 They have to submit to us, tell us what is the methodology, what is the equation?

01:17 - 41.189 They use to actually calculate actual emissions?

01:17 - 43.425 If you look at the

01:17 - 48.063 data that's part of that that was used that as that's been redacted

01:17 - 51.600 in this case, those don't fit into the direct inputs into that equation.

01:17 - 55.037 It's different that it's being used to calculate how hot the flare.

01:17 - 57.339 It's not calculating emissions.

01:17 - 00.375 And so did did DPI when it received that.

01:18 - 02.511 Did it release that information.

01:18 - 03.712 Or the attorney

01:18 - 07.582 for shell said that all marked certain parts of it or marked confidential.

01:18 - 11.887 How does DPI treat that when it's making a report?

01:18 - 15.257 So when we receive that.

01:18 - 17.826 So the way in this case it was an inspection.

01:18 - 19.561 It was a follow up to an inspection.

01:18 - 20.362 We did inspection.

01:18 - 24.166 It's shell as part of that they submitted us the data for that time period.

01:18 - 25.434 The inspection came in.

01:18 - 29.137 And as part of that they they had indicated a certain amount of

01:18 - 32.140 that data should be redacted because it's confidential.

01:18 - 35.377 And so, yeah, proprietary, confidential proprietary information.

01:18 - 39.247 And as part of that analysis department does is when they

01:18 - 42.284 when someone says something is confidential, we then go back

01:18 - 44.553 and then we ask for follow up information.

01:18 - 45.821 And in the record there's

01:18 - 47.189 I think there's 2 or 3 letters

01:18 - 50.192 from shell where they provide additional information.

01:18 - 51.660 This is before

01:18 - 55.297 any submitted of affidavits, but they provide additional explanations.

01:18 - 00.736 And our chief engineer, permitting engineer, reviews all that.

01:19 - 01.903 She looks back at the data.

01:19 - 04.973 She she looks at what they're saying, their basis, and determined

01:19 - 07.976 that it was confidential, proprietary, and that was not emissions data

01:19 - 11.613 because not emissions does not because it was not used.

01:19 - 13.081 And she says in her affidavit,

01:19 - 16.184 because it was not used to calculate emissions from the flare,

01:19 - 18.420 only the heat.

01:19 - 21.323 It's only used to determine if the complying with that net heating

01:19 - 26.728 value, and otherwise you've provided the other information to IP and we've.

01:19 - 27.129 Yeah.

01:19 - 30.632 And the data that was actually provide included the actual net

01:19 - 33.602 heating value that that how hot it was.

01:19 - 35.237 IP is in possession of that.

01:19 - 39.741 So they know how hot that flare is and that what they've not been provided

01:19 - 42.744 was the data used to calculate a how hot the flare was.

01:19 - 45.914 And that has nothing to do with emissions.

01:19 - 49.985 Although wouldn't there be the components of that.

01:19 - 53.655 Wouldn't that be relevant to understanding?

01:19 - 57.092 You know, whatever

01:19 - 00.428 components go into the heating of

01:20 - 04.199 of the air may also be emitted

01:20 - 07.402 as with the heat.

01:20 - 08.870 Well, right.

01:20 - 12.474 So if you look at what this calculation is it's and BTUs it's calculating

01:20 - 15.477 how hot the flare is because the flare has to meet a certain

01:20 - 19.514 BTU level in order to ensure that it's destroying enough of the pollutants.

01:20 - 23.051 But that equations that are in that regulations that they cite to

01:20 - 26.154 is not calculating how much emissions are being destroyed,

01:20 - 28.290 how much emissions end up getting out of the stack.

01:20 - 31.259 It's just saying, is it heating hot enough?

01:20 - 33.962 And if it's heating hot enough, and then the EPA says, well, then it's

01:20 - 37.432 compliant with that regulation, and we're assuming it's operating properly.

01:20 - 40.368 Sort of like when you do an emissions test in your car.

01:20 - 41.369 I don't know if you've noticed.

01:20 - 44.606 They when you when they start the car up, they're not putting any probes

01:20 - 46.942 in your tailpipe to see how much emissions coming in.

01:20 - 50.612 They're just running diagnostics on your car to see if the computer,

01:20 - 52.380 if the engine is working properly

01:20 - 55.951 and assume if it's working properly, then the emissions are going to be low.

01:20 - 00.722 And so in this case the the emission calculations, we know what they are.

01:21 - 03.925 And this data is not being used for that purpose.

01:21 - 07.762 Council had said before

01:21 - 12.567 that they used to get information similar to what they're requesting.

01:21 - 15.270 Now, has there been a change?

01:21 - 16.671 I can't speak to that.

01:21 - 20.609 There was a I think what they're discussing was some of this data

01:21 - 22.344 sometimes will be an hourly,

01:21 - 25.814 and that was part of this case here, where initially there was some discussion

01:21 - 29.117 about whether the hourly data should be confidential or not.

01:21 - 32.654 And shell decided that they were, I think, had a good faith.

01:21 - 33.889 They decided to produce it,

01:21 - 36.358 even though they probably felt that it was confidential.

01:21 - 39.728 In this case, we're talking about one minute data and 15 minute

01:21 - 43.231 that a very limited time time which those that's where you

01:21 - 46.334 when you start getting those lower intervals, that's when shells

01:21 - 50.305 when competitors can then be able to use that data when you're talking about

01:21 - 53.508 they even mentioned about they have to submit annual data based on

01:21 - 56.444 how much emissions they emit in, in their in a year.

01:21 - 58.313 You know, you can't really

01:21 - 01.016 reverse engineer when you talk about that, but when you talk about minute

01:22 - 04.319 data, you can there's a potential for be able to reverse engineer.

01:22 - 07.489 Any other

01:22 - 10.492 questions in just just a point brief. Yes.

01:22 - 13.461 So our position is we essentially heard two sides.

01:22 - 14.596 You've heard EPA,

01:22 - 17.632 which is a very broad approach, which would essentially eliminate

01:22 - 20.602 the ability for companies to be able to protect confidential data.

01:22 - 25.674 Shell is, seeking a very narrow approach which would limit the public's ability

01:22 - 27.008 to know,

01:22 - 31.346 be able to determine whether the, reports of emissions are accurate or not.

01:22 - 35.250 The department is asking for position where emissions data

01:22 - 40.655 is, the actual emissions and the direct input into the emission equations.

01:22 - 43.058 And we believe that provides a great balance.

01:22 - 46.361 It protects the companies, ensures that they can protect their information,

01:22 - 47.262 will also ensuring

01:22 - 50.899 that the public knows what emissions and what pollutants they are breathing.

01:22 - 52.434 Thank you very much indeed.

01:22 - 55.403 Go right where you're supposed to be between their two positions.

01:22 - 58.239 Yeah. If I could have a chair here, I'd.

01:22 - 00.508 And then one final. I don't think you,

01:23 - 03.912 weighed in on the,

01:23 - 07.916 request for the, Sahu affidavit.

01:23 - 09.217 So we followed.

01:23 - 12.253 We thought an answer to that and where we we argued

01:23 - 15.790 and that when we we, we obviously object to it because,

01:23 - 18.960 it hasn't provided any explanation

01:23 - 22.697 for why they didn't submit this doc, Doctor Salas report in front of the court.

01:23 - 24.833 They did, they knew what the issues are.

01:23 - 26.601 If you look at their appeal, they identify the

01:23 - 29.437 the issues, our emissions data confidentiality.

01:23 - 30.405 They could have submitted it

01:23 - 33.408 and they did submit a report from their in-house engineer.

01:23 - 35.577 They didn't do it in this case.

01:23 - 38.113 Essentially, they treated the,

01:23 - 40.915 Oh, is proceeding, as, you know, the first chance

01:23 - 42.751 to kind of put out some evidence to see if it works.

01:23 - 45.620 If it didn't, then they were going to bring something in front of this court.

01:23 - 47.956 And we believe, as this court has held,

01:23 - 51.326 a number of times in similar cases where they say

01:23 - 55.130 evidence should be brought to the O.R., they shouldn't be brought to this court,

01:23 - 57.565 because essentially the parties are taking second pie to the apple.

01:23 - 00.001 So for that reason, we disagree with the position.

01:24 - 01.336 Thank you. Just a month as

01:24 - 02.537 well.

01:24 - 05.540 So you never mind. Okay. Okay.

01:24 - 08.710 We've really thank you very much.

01:24 - 12.614 Illuminating.

01:24 - 14.249 Thank you.

01:24 - 16.885 I want to clarify a few things on rebuttal.

01:24 - 21.122 DEP is concealing data that is necessary to determine emissions,

01:24 - 24.359 regardless of the fact that they submit monthly reports.

01:24 - 28.930 This is about what was emitted during an inspection period the month.

01:24 - 32.967 So you did agree that it's just information about the heat,

01:24 - 37.305 not information about the emissions that they're not disclosing?

01:24 - 40.408 Yes, we cannot determine from the monthly data specifically

01:24 - 44.145 what was emitted during the time frame at issue.

01:24 - 48.283 In this case, this is data that's necessary to determine those emissions.

01:24 - 51.553 The cases have made clear that,

01:24 - 54.656 this is supposed to be broad

01:24 - 57.659 and it's not, if there's

01:24 - 02.197 any data that is needed to determine emissions, is emissions data,

01:25 - 05.200 even if it's able to be calculated in another way.

01:25 - 08.970 In addition, going back for a second to the end point, because I think

01:25 - 12.674 the Levitt case that opposing counsel has cited and we have cited is

01:25 - 16.644 instructive here in Levitt,

01:25 - 21.049 the court held that stockpiles of methyl bromide

01:25 - 25.120 at a manufacturer at five manufacturing facilities

01:25 - 27.188 were not emissions data, because that was not

01:25 - 28.623 those were not even the sources

01:25 - 31.092 that were eventually going to be emitting this pollutant.

01:25 - 34.095 So you could not calculate emissions using that.

01:25 - 35.463 That is very different.

01:25 - 39.300 Even a very narrow reading of necessary to determine emission data

01:25 - 42.504 here would make it clear that this is emission

01:25 - 45.507 data.

01:25 - 48.576 In addition, I wanted to clarify

01:25 - 51.579 about all of these cases because I think opposing counsel has

01:25 - 54.315 muddied the issues a little bit.

01:25 - 57.018 In all of the cases that we talking about,

01:25 - 00.855 EPA was the requester and it requested information.

01:26 - 03.024 Miss Coola is my co-counsel at IP.

01:26 - 04.192 She works with me.

01:26 - 07.695 All of these involve DEP and shell trying to,

01:26 - 10.598 failed to

01:26 - 14.769 disclose information that is needed to calculate emissions, and all of them

01:26 - 19.073 should be decided the same way the recent o r decision was decided.

01:26 - 23.878 Excuse me, but the shell versus dep matter that's in front of e fbs.

01:26 - 26.347 I p also involved in that.

01:26 - 29.517 Yes, that was in response to data that we are.

01:26 - 31.553 So are you asking those involved?

01:26 - 35.256 Are you an intervenor or are you present in front of the FB to have.

01:26 - 37.025 We have not yet intervened.

01:26 - 38.493 That's all I will say.

01:26 - 40.228 But we were the requester.

01:26 - 45.700 But you could intervene should we decide that we wanted to

01:26 - 51.272 stay this to hear from e h b

01:26 - 56.911 as to there may be more expert

01:26 - 01.849 evaluation of the arguments and then that could be appealed to us.

01:27 - 06.020 What what would be your position on that?

01:27 - 09.257 I don't think that would be necessary here, because that the data

01:27 - 12.260 and the facts of this case are so very clear.

01:27 - 16.231 What if we disagree, though?

01:27 - 18.700 That is an option that you can take.

01:27 - 21.035 I said you were the requester in that case. Yes.

01:27 - 23.871 We were requested in all of these cases. And that's what I wanted to know.

01:27 - 26.641 Are we talking apples to apples in these cases?

01:27 - 31.312 On the data at issue is slightly different and involves

01:27 - 35.683 emissions at different events at the same shell Plastics plant.

01:27 - 38.753 Okay, so would though then they

01:27 - 43.825 the EAB be also would their inquiry and evaluation

01:27 - 47.862 of the arguments for legal and factual and scientific arguments

01:27 - 51.866 in that case be also applicable to a flare?

01:27 - 57.238 Yes. The facts

01:27 - 01.142 are slightly different, but the general, you know, what is necessary to determine

01:28 - 04.345 to determine emissions is the same legal analysis

01:28 - 08.349 and DPI and shell, just to address one couple more points

01:28 - 11.653 failed to explain even here today,

01:28 - 14.822 why annual emission data is public.

01:28 - 18.593 But the hourly or sorry, but the 1 or 15 minute increments

01:28 - 21.763 of the same type of data like vent the gas composition

01:28 - 24.799 should be confidential.

01:28 - 27.568 Again, shell and you are asking you to take Shell's

01:28 - 31.673 word for it because they did not provide anything other than an affidavit,

01:28 - 35.643 no supporting documents, the licensing agreements that they claim exist.

01:28 - 39.914 They didn't provide those or any even quotations therefrom, except for one.

01:28 - 40.748 That is so broad

01:28 - 44.719 that it could swallow all of everything that has happened at the plant.

01:28 - 49.324 So the DEP has the burden of proof for showing

01:28 - 53.461 that they have the test, has been met.

01:28 - 57.899 There's a very clear test in it, and DPI has not met that burden

01:28 - 02.837 in any way, and shell has not provided any of the proof that is needed to show

01:29 - 07.375 that this is proprietary information or that they have that there is,

01:29 - 11.379 as they're supposed to prove, a likelihood of substantial harm.

01:29 - 15.950 As a result of the close, the disclosure of this, this flare data.

01:29 - 19.787 So in conclusion, we think it's clear that this is emission

01:29 - 22.023 data that should be disclosed. And we urge you to,

01:29 - 25.793 review the the record.

01:29 - 28.229 And thanks so much for your time.

01:29 - 29.731 Thank you very much.

01:29 - 31.132 You did an excellent job.

01:29 - 32.867 All council did an excellent job.

01:29 - 37.271 And I would never have guessed that that was your first time in front of us.

01:29 - 40.441 So well done.

01:29 - 43.578 Next two cases to be argued together involved the question

01:29 - 48.082 which court has the authority to hear whistleblower retaliation claims

01:29 - 51.085 when they are brought against a Commonwealth agency?

01:29 - 55.623 Appellants Jordan and Lawrence Spillane are sergeants

01:29 - 58.960 with the Pennsylvania State Police, or PSP.

01:29 - 04.932 They filed lawsuits under the Pennsylvania whistleblower law alleging that PSP

01:30 - 09.771 retaliated against them following a report of alleged misconduct within the agency.

01:30 - 14.509 Their claims describe employment related harm, including

01:30 - 18.713 loss, promotions, reputational injury, and emotional distress.

01:30 - 23.551 When the lawsuits were filed in the Court of Common Pleas,

01:30 - 27.455 PSP argued that the court lacked jurisdiction to hear them.

01:30 - 31.092 According to PSP, whistleblower, lawsuits

01:30 - 35.029 filed against a Commonwealth agency must begin in the Commonwealth Court.

01:30 - 36.831 The Court of Common

01:30 - 40.001 Pleas agreed and transferred the case to this court.

01:30 - 44.038 The Cipollone then appealed that your jurisdictional ruling.

01:30 - 48.643 The Commonwealth Court, is now asked to resolve one core question

01:30 - 53.514 the whistleblower retaliation claims against a Commonwealth agency

01:30 - 57.785 for exclusively within the Commonwealth Court's original jurisdiction,

01:30 - 01.756 or do they belong in the courts of Common Pleas under an exception

01:31 - 04.759 for claims that resemble tort actions?

01:31 - 08.696 The Spillane's contend that their whistleblower

01:31 - 12.533 claims are in substance similar to tort like employment

01:31 - 16.270 discrimination or civil rights based retaliation claims,

01:31 - 21.075 because they seek money damages for harm suffered in the workplace.

01:31 - 24.512 They argue these claims fall under a statutory exception,

01:31 - 28.850 and that the judicial code for actions in the nature of trespass,

01:31 - 32.286 meaning cases involving injuries or damages.

01:31 - 36.023 Under that exception, such lawsuits must be heard

01:31 - 39.026 in the Courts of Common Pleas, not the Commonwealth Court.

01:31 - 43.531 They point to several Pennsylvania Supreme Court decisions that treated

01:31 - 48.002 comparable employment related claims as tort like, and therefore

01:31 - 51.539 outside the Commonwealth Court's original jurisdiction.

01:31 - 55.042 PSP, on the other hand, maintains

01:31 - 59.013 that the Commonwealth Court has exclusive jurisdiction over civil actions

01:31 - 03.551 filed against Commonwealth agencies unless a narrow exception applies.

01:32 - 09.056 They argue that whistleblower claims are statutory and remedial in nature,

01:32 - 13.728 not tort based, and therefore do not fall within the trespass exception.

01:32 - 17.598 According to PSP, decades of Commonwealth

01:32 - 22.169 Court precedent have consistently placed whistleblower claims against state agency

01:32 - 25.339 within this court's original jurisdiction.

01:32 - 28.442 They also note that the legislature did not assign whistleblower

01:32 - 31.612 cases to the Courts of Common Pleas, even though it chose

01:32 - 35.216 to do exactly that for other employment related statutes.

01:32 - 38.252 With that foundation in place,

01:32 - 41.222 let's listen to the arguments.

01:32 - 44.859 May it please court.

01:32 - 45.860 My name is Lou Gardiner.

01:32 - 50.531 I represent, Lauren and Jordan Spillane in these consolidated cases

01:32 - 53.968 on appeal from a dismissal on

01:32 - 57.738 fictional grounds from the Westmoreland County Court of Common Pleas.

01:32 - 02.343 I, too, am a Commonwealth Court rookie.

01:33 - 05.179 Welcome.

01:33 - 05.913 It's nice to be here.

01:33 - 08.916 It's nice to be looking at something.

01:33 - 13.888 But we're always happy to see

01:33 - 16.958 new council counsel we've seen before.

01:33 - 19.694 It's just we we enjoy

01:33 - 20.561 seeing everybody.

01:33 - 22.630 So welcome to be here.

01:33 - 25.833 The question before you is whether a, claim filed

01:33 - 30.504 under Pennsylvania's whistleblower statute is committed to the original

01:33 - 33.608 and exclusive jurisdiction of this court.

01:33 - 37.912 Or alternatively, as we submit,

01:33 - 41.215 the exception for tort like claims.

01:33 - 42.016 It would take it.

01:33 - 44.352 Did you ask for

01:33 - 46.587 rebuttal? Sorry, I, I did not.

01:33 - 48.990 I'll take three minutes for about. Okay.

01:33 - 51.726 Thank you very much.

01:33 - 54.528 Or whether the exception for tort light claims

01:33 - 58.065 it would take it without outside the exclusive jurisdiction of this court

01:33 - 01.435 applies, to those kinds of claims.

01:34 - 04.739 Before turning the merits, I

01:34 - 07.742 feel compelled to to to note,

01:34 - 12.346 not necessarily apropos of anything, but this is not a case of forum shopping.

01:34 - 15.282 We're would would be happy to have tried the case

01:34 - 18.352 for the Commonwealth Court in the first instance.

01:34 - 23.290 The problem for us was a fear that eventually this court

01:34 - 26.293 or the Pennsylvania Supreme Court, at some point,

01:34 - 30.865 suicide or otherwise, would come to the conclusion

01:34 - 33.901 that these kinds of claims do indeed belong

01:34 - 36.871 in the courts of common Pleas.

01:34 - 42.176 And the transfer versus dismissal cases were a bit confusing.

01:34 - 45.680 So in an abundance of caution, we filed in the court,

01:34 - 48.683 in the Court of Common Pleas in Westmoreland County,

01:34 - 52.753 and as you know, they

01:34 - 56.691 they sustain the preliminary injunction objection on jurisdictional grounds

01:34 - 00.261 and then stayed the course, stayed the case pending this appeal.

01:35 - 04.532 Also, I think it's probably helpful before

01:35 - 07.535 turning to the merits to level set, the state of the law,

01:35 - 10.371 at this point in time.

01:35 - 13.908 And I'm going to start with a statement from Appellee's brief

01:35 - 17.645 in that regard, in which they say on page 14 that here,

01:35 - 21.582 for the last 30 years, this honorable court

01:35 - 24.518 has correctly ruled that whistleblower claims

01:35 - 28.656 against the Commonwealth fall within this court's original and exclusive

01:35 - 32.026 jurisdiction, as required by the statute.

01:35 - 34.862 It don't say authority for that.

01:35 - 37.665 They then say many of these cases

01:35 - 40.768 have been affirmed by the Supreme Court, and they don't say any authority for that

01:35 - 45.239 as becomes there is no authority what they have, what we all have

01:35 - 49.977 is a handful of Commonwealth court cases and one Supreme Court case

01:35 - 55.983 in which the parties have assumed and the courts have assumed,

01:35 - 57.918 that whistleblower

01:35 - 00.921 claims belong in this court.

01:36 - 04.091 I'm specifically,

01:36 - 07.695 the O'Rourke versus, Department of Corrections case,

01:36 - 10.798 which is cited by appellees.

01:36 - 14.101 Is the one Supreme Court case that we were able to find

01:36 - 17.104 where there's ever even any mention of this issue.

01:36 - 19.874 And in that case,

01:36 - 21.842 then Judge Saylor, not yet.

01:36 - 23.611 Chief Justice Saylor.

01:36 - 27.548 Justice Saylor, noted in passing at the beginning of that opinion

01:36 - 31.519 that the plaintiffs had filed a petition in the Commonwealth Court's original

01:36 - 35.923 jurisdiction alleging violations of Pennsylvania's whistleblower law.

01:36 - 38.192 That's all we said.

01:36 - 39.660 He didn't say they correctly filed.

01:36 - 41.629 He didn't even address the issue.

01:36 - 45.466 So, counsel, let's, jump, if we could, to the issue of

01:36 - 49.403 what would make it, inappropriate to have it in our court here.

01:36 - 52.873 So we have, as you see in

01:36 - 56.210 Bradley Advance and other cases,

01:36 - 59.847 had whistleblower cases in our original jurisdiction here.

01:37 - 03.651 The statute itself says court of competent jurisdiction.

01:37 - 08.022 And so then you would argue that the exception would apply

01:37 - 12.593 and that this has to be considered either an act, a tort claim

01:37 - 16.797 against the Commonwealth or a contract claim against the Commonwealth pursuant

01:37 - 19.800 to the exception stated in the judicial Code.

01:37 - 22.536 So how is it that this is a claim?

01:37 - 27.007 It's a tort like claim.

01:37 - 29.877 It's a certainly it's a statutory claim, but it's tort like claim

01:37 - 33.948 because it can't be distinguished from any of the other kinds of employment

01:37 - 36.984 claims brought under other statutes.

01:37 - 41.021 Is it is it different because of the remedy that is permitted?

01:37 - 43.324 Is it different?

01:37 - 46.627 Because, in a whistleblower claim,

01:37 - 50.431 you're seeking reinstatement and attorney's fees

01:37 - 55.035 and things that are not typical in terms of compensatory punitive damages?

01:37 - 57.438 I don't think it's different at all, Your Honor.

01:37 - 01.942 I think that, most if not all employment statutes, of which I'm aware,

01:38 - 05.312 provide for those remedies as well.

01:38 - 09.984 The bottom line in this case is in in any of the other cases that have addressed

01:38 - 15.356 the issue, including Bolshy, which is the seminal case, but also Hill,

01:38 - 19.126 is an

01:38 - 20.828 all of those remedies available.

01:38 - 24.198 This is a claim for damages, claims for reinstatement.

01:38 - 27.201 Punitive damages are available in one form or fashion,

01:38 - 31.171 in claims brought, any and under any of those statutes.

01:38 - 35.042 And so your position is that,

01:38 - 41.282 this should be considered like a 1983 action or like a tort claim action,

01:38 - 45.352 simply because damages are available.

01:38 - 47.354 That's correct.

01:38 - 50.925 In Boston involved 1983 1985 claims

01:38 - 55.262 Hill is probably the more instructive case, your honor.

01:38 - 59.099 That's a Supreme Court case in which it plaintiffs sued

01:38 - 02.503 under the following statutes Equal Employment Opportunities Act,

01:39 - 07.341 the Americans with Disabilities Act, the Rehabilitation Act of 1973.

01:39 - 10.511 All of those are federal statutes, but they do provide for

01:39 - 12.913 for concurrent federal and state jurisdiction.

01:39 - 17.017 And then also the Pennsylvania Human Relations Act for statutes.

01:39 - 20.955 And, this is what Justice Casteel said, he said here.

01:39 - 24.058 Hill's employment discrimination complaint

01:39 - 28.062 seeks monetary damages under numerous statutory provisions.

01:39 - 31.065 These statutory provisions permit Hill

01:39 - 33.701 to seek monetary damages

01:39 - 37.271 for unlawful injuries done in the employment context.

01:39 - 39.807 As such,

01:39 - 43.277 these claims are in the nature of an action in tort.

01:39 - 48.682 Therefore, original jurisdiction over Hill's complaint rests

01:39 - 52.286 with the Lycoming County Court of Common Pleas.

01:39 - 57.624 A climate of the whistleblower statute is a claim is an employment claim

01:39 - 02.863 seeking damages, and therefore we would submit is is no different.

01:40 - 07.868 Now their response to that, and I think it's on page 21 of their brief, is that.

01:40 - 08.202 Yeah.

01:40 - 12.573 But that case involved a claim under the aura.

01:40 - 16.710 And the SRA includes

01:40 - 20.514 a specific grant of jurisdiction to the Court of Common Pleas.

01:40 - 24.585 Well, that's true, but that's not what the court set.

01:40 - 29.823 Just could still did not say, hey, you got a claim here.

01:40 - 34.561 Therefore that claim and that claim has to go back to the Court of Common

01:40 - 36.997 Pleas and take all the rest of these claims with you.

01:40 - 40.200 The statements are much broader than that.

01:40 - 41.869 The rationale is much broader than that.

01:40 - 46.006 The rationale is this is a claim under an employment statute for damages.

01:40 - 49.610 So the fact that the step I'm sorry

01:40 - 52.613 for the fact that the statute refers to,

01:40 - 56.950 it being filed in a court of competent jurisdiction

01:40 - 03.323 mean that there is perhaps jurisdiction in different courts, for example,

01:41 - 07.828 with local agencies in the Common Pleas Court and the Commonwealth here.

01:41 - 09.997 I think that's a fair reading of it, Your Honor.

01:41 - 13.000 And I think appellees correctly point out

01:41 - 16.003 that claims against municipalities,

01:41 - 19.139 for example, would, would do have

01:41 - 22.142 to be lodged in the Court of Common Pleas.

01:41 - 26.280 But I don't think it says much more than that.

01:41 - 29.283 And I don't think that the I don't think the failure

01:41 - 32.886 to specify a court, this is where we where we part ways.

01:41 - 38.025 I don't think the fact that you specified the Court of Common Pleas for your claims

01:41 - 42.362 suggests that the failure to specify that in the whistleblower Act,

01:41 - 46.400 means that this court has exclusive, original jurisdiction.

01:41 - 51.505 In fact, I think there I can fathom a number of different reasons

01:41 - 55.275 why there would be, a specific

01:41 - 58.712 grant of jurisdiction in regard to claims.

01:41 - 02.282 A lot of those claims are dual filed under federal and state statutes.

01:42 - 04.551 There's an administrative exhaustion requirement,

01:42 - 09.123 so that it probably is helpful to claimants to point them

01:42 - 10.624 to where they need to go.

01:42 - 13.894 The bottom line is this is a tort like client,

01:42 - 16.897 because it's brought under an employment statute, and we're seeking damages.

01:42 - 20.767 And notwithstanding the fact that it hasn't been teed up

01:42 - 24.204 squarely for this court for quite a long time, it is now,

01:42 - 27.841 and and under the rationale

01:42 - 30.811 of Bolshie and its progeny,

01:42 - 33.213 we think the court,

01:42 - 36.984 should, remand to end of consideration.

01:42 - 38.385 Should we get to the ballot?

01:42 - 39.987 Supreme court decision.

01:42 - 43.223 When I say ballots, it's be a I let us

01:42 - 47.561 wherein the Supreme Court had before it an issue that was on appeal

01:42 - 51.198 from the Commonwealth Court, and the question was in a whistleblower

01:42 - 55.802 case, what kind of damages could the Commonwealth Court, provide?

01:42 - 59.773 And so it was just understood, it was implied.

01:42 - 01.708 So no one was expressly deciding.

01:43 - 05.913 I recognize that whether or not our court should have been dealing with

01:43 - 09.049 economic damages in a whistleblower case, it was just a given.

01:43 - 11.385 Everyone operated as if that was okay.

01:43 - 14.821 So in that case, the Supreme Court remanded it back to our

01:43 - 16.657 court for our judge to then

01:43 - 21.094 apply the certain type of economic damages.

01:43 - 22.863 So it was understood.

01:43 - 25.832 How do you respond to that?

01:43 - 28.202 Well, I think I would have to

01:43 - 33.907 to concede that the there has been an a an implicit assumption

01:43 - 37.511 for many years, both on the part of this court.

01:43 - 38.979 Well, certainly on the part of this court

01:43 - 40.814 and perhaps on the part of the Supreme Court,

01:43 - 43.817 there has been an implicit assumption,

01:43 - 46.119 that this court

01:43 - 49.122 has exclusive and original jurisdiction,

01:43 - 52.292 but it has not been squarely addressed.

01:43 - 55.729 And, again,

01:43 - 00.267 if it's an employment claim brought under an employment statute

01:44 - 04.171 seeking damages, which are no different, the remedies are no different

01:44 - 08.242 from those which are sought under other kinds of employment statutes.

01:44 - 11.678 Then it looks like a tour.

01:44 - 15.816 Sounds like a tour, acts like a tort, and it is a tort like client.

01:44 - 19.419 If we go back to just the fundamentals of considering why

01:44 - 23.123 this court would have jurisdiction over a statewide agency,

01:44 - 26.994 and we know that the whistleblower law, in addition to offering,

01:44 - 30.831 economic damages, also allows for reinstatement.

01:44 - 34.701 Do you see any issue or concern with an idea that a Court of Common Pleas

01:44 - 38.372 judge could order reinstatement for, let's say, a state trooper or,

01:44 - 42.042 someone that was employed by the Turnpike Commission,

01:44 - 44.645 which is a statewide agency.

01:44 - 48.548 I don't I don't lie not I don't know, I, I,

01:44 - 51.652 I it's an interesting question and I have to confess,

01:44 - 53.253 I haven't considered it, but I don't understand

01:44 - 57.224 why the Court of Common Pleas would not be able,

01:44 - 01.361 to offer that kind of equitable relief in an employment case.

01:45 - 05.866 Again, they do it all the time in other kinds of employment

01:45 - 10.237 with respect to claims brought under other kinds of employment statutes

01:45 - 14.341 for a statewide positions.

01:45 - 16.843 Well, not for a statewide position, I suppose.

01:45 - 19.846 I don't know the answer to that, to be honest with you, Your Honor.

01:45 - 22.382 Yeah, I but I can't think of a reason.

01:45 - 24.451 I just thought of the question myself, sir.

01:45 - 25.052 Oh, okay.

01:45 - 28.021 Well, that that is of some comfort to me,

01:45 - 30.691 but I can't think of a reason why

01:45 - 35.662 a Court of Common Pleas would not be able to offer that kind of equitable relief,

01:45 - 39.032 even in the case of a public employer.

01:45 - 43.003 Okay. So

01:45 - 47.407 we we think this sounds like tort, looks like a tort.

01:45 - 51.311 And for that reason, the court, should remand this case back

01:45 - 54.548 to the Westmoreland County Court of Common Pleas for further proceedings.

01:45 - 56.850 And you. Perfect.

01:45 - 58.752 That was your exact time.

01:45 - 00.554 It just turned red.

01:46 - 02.823 So wonders never cease. Yes.

01:46 - 06.093 And now you can, We'll see you on rebuttal.

01:46 - 08.929 Thank you. Not bad timing for a rookie. Yeah.

01:46 - 14.868 Good morning, Your Honor.

01:46 - 15.969 May it please the court.

01:46 - 18.972 Nicole Boland for the appellee, the Pennsylvania State Police.

01:46 - 22.709 Your honor, in this case, the General Assembly was intentional

01:46 - 26.480 when it chose its wording under the whistleblower law and directed

01:46 - 30.751 that all civil actions be filed in a court of competent jurisdiction.

01:46 - 34.654 The General Assembly had the opportunity and could have directed that

01:46 - 36.056 all of the actions,

01:46 - 40.293 be filed in the Court of Common Pleas, similarly as it did under the PRA.

01:46 - 41.528 But that wasn't done.

01:46 - 45.298 So under, when the General Assembly drafted this statute.

01:46 - 49.035 So the court of competent jurisdiction is certainly this court.

01:46 - 52.439 This court has the expertise on statewide issues,

01:46 - 56.143 under section 761 of the judicial Code,

01:46 - 00.113 all actions against the Commonwealth are supposed to be brought in this court.

01:47 - 02.783 Except for narrow exceptions.

01:47 - 06.486 There has been no court, as we've just been discussing over the past

01:47 - 07.621 40 years,

01:47 - 11.591 that has ever held that it's improper that a whistleblower action

01:47 - 12.692 against the Commonwealth,

01:47 - 15.228 being be brought in.

01:47 - 16.830 Commonwealth court.

01:47 - 19.232 A concern was raised, when my friend was

01:47 - 22.235 speaking saying that now that could suddenly happen.

01:47 - 25.272 That's why we're here today and that's why we have to get this resolved,

01:47 - 29.576 because there's a concern that to respond to, a court may raise this issue,

01:47 - 32.179 and it can turn out that it has been improper

01:47 - 34.981 that this honorable court has been handling those claims.

01:47 - 37.918 But respectfully, Your Honor, if that hasn't happened in the past

01:47 - 42.956 40 years, I don't believe that that's a very credible concern at this juncture.

01:47 - 47.093 And in fact, there is case law out there indicating that if the General Assembly

01:47 - 51.898 acquiesces to interpretations of the law by administrative agencies,

01:47 - 56.102 by other courts, that the courts or the agencies have it right.

01:47 - 59.339 And over the course, let's jump in for a minute and think, let's,

01:47 - 02.642 hypothetically pretend for a minute that that is what happened.

01:48 - 05.245 And down the road, one of the appellate court says, oh,

01:48 - 07.681 you should have filed that in the Court of Common Pleas to start with.

01:48 - 11.918 What do you think would happen in that scenario legally?

01:48 - 14.821 I think that we'd have a constitutional conundrum

01:48 - 17.791 at that point, Your Honor, because of the last 40 years,

01:48 - 21.995 you mentioned the case that involved a huge monetary award.

01:48 - 23.930 So I think,

01:48 - 28.134 we potentially could have a situation where we're looking backward, questioning

01:48 - 31.905 the subject matter jurisdiction over the past 40 years because,

01:48 - 35.642 subject matter jurisdiction, of course, isn't something that can be waived.

01:48 - 37.511 It can be raised at any time.

01:48 - 40.947 I think it would be certainly a constitutional conundrum for this

01:48 - 43.416 to come up years after the fact.

01:48 - 46.219 For a court to say that all of this time,

01:48 - 49.322 you never had subject matter jurisdiction over those cases.

01:48 - 53.159 So I don't have any authority on point as to what happens in that scenario.

01:48 - 54.494 I know of what I was getting at,

01:48 - 57.564 and it was a very open ended question, so I apologize.

01:48 - 01.268 I was similarly in this case where you saw a transfer, if we aren't

01:49 - 05.906 the right court to have a case, there's always the court may transfer it.

01:49 - 08.942 If the court fails to transfer it, there's always appellate rights.

01:49 - 11.912 So even though I understood what,

01:49 - 14.481 opposing counsel's concern was,

01:49 - 17.551 I think that it wouldn't leave a party without remedy.

01:49 - 21.054 That could be true, Your Honor.

01:49 - 24.157 But we're here to determine the intent of the General Assembly.

01:49 - 28.194 And in this case, when drafting the whistleblower law, they said

01:49 - 31.798 a court of competent jurisdiction for both injunctive relief and damages.

01:49 - 35.068 And what's interesting is I went back and I took a look at the pre.

01:49 - 39.105 And while we've been focusing on the fact that all civil actions are to be filed

01:49 - 40.607 in the courts of Common Pleas,

01:49 - 44.244 there was actually a 1991 amendment, I believe, to the pre,

01:49 - 48.615 which indicates that injunctive relief can be filed in Commonwealth court.

01:49 - 51.952 So the General Assembly was very specific and particular

01:49 - 55.922 in outlining the proper jurisdiction depending on the claim.

01:49 - 59.893 Oppositely, under the whistleblower law, it says injunctive relief

01:49 - 02.896 or damages in the court of competent jurisdiction.

01:50 - 05.065 So that has to mean something.

01:50 - 08.868 And of course, under section 61 you are the the court of competent

01:50 - 12.872 jurisdiction, dealing with lawsuits against Commonwealth agencies.

01:50 - 15.842 In this case, we have a lawsuit against the state police.

01:50 - 18.612 Of course, there's no dispute that we're a Commonwealth agency.

01:50 - 23.950 So the trial court ruled properly in, sustaining the preliminary objections

01:50 - 27.120 and transferring this case, to this honorable court.

01:50 - 28.955 And faced with

01:50 - 32.459 this reality, the appellants are forced to argue

01:50 - 36.363 the exception, the exception in the nature of trespass.

01:50 - 39.332 And that's really a contortion of the exception,

01:50 - 42.936 which, first of all, was put in place by the General Assembly,

01:50 - 47.273 decades before the enactment of the whistleblower law,

01:50 - 50.977 the General Assembly, in drafting that narrow exception for claims

01:50 - 55.849 in the nature of trespass, certainly didn't have the whistleblower law in mind.

01:50 - 00.654 And in fact, that, exception is very narrow.

01:51 - 05.492 We know that from looking at Bolshy and Bolshie, we have a

01:51 - 09.195 historical analysis on the different types of writs and trespass

01:51 - 11.364 and what was available in common law.

01:51 - 11.965 And of course,

01:51 - 15.568 the torts, that were brought in bolshy the false imprisonment, the false arrest,

01:51 - 19.239 those were torts that were always available under the common law.

01:51 - 22.842 Also in that case for the section 1983 claims,

01:51 - 25.111 so you're dealing with constitutional rights

01:51 - 28.448 and the section 1983 claim had to deal with the Fourth Amendment.

01:51 - 32.218 So we're talking about physical intrusions on an individual

01:51 - 35.188 that goes along with the false imprisonment tort.

01:51 - 39.092 So these claims are really in a league of their own.

01:51 - 42.128 We're dealing with, your person property or rights

01:51 - 45.165 with Bolshy, with Hill and Stackhouse.

01:51 - 49.402 The whistleblower law is completely different in many different ways.

01:51 - 53.106 First of all, it's, remedial, not punitive.

01:51 - 56.776 So while we've been discussing that the remedies are the same for torts,

01:51 - 01.715 and section 1983 claims and whistleblower law claims, that's not actually true.

01:52 - 05.218 Punitive damages are available in all of those realms.

01:52 - 08.221 But not in the sphere of the whistleblower law.

01:52 - 12.992 Additionally, as I indicated, it is just just so that I can stop you there.

01:52 - 16.663 Would would it be more significant if punitive damages were,

01:52 - 21.000 were allowed because then,

01:52 - 23.970 that would require some level of discretion.

01:52 - 27.640 That would be more appropriate before a trial court,

01:52 - 30.310 even though we would be acting as a trial court as well.

01:52 - 32.746 Is there some connection with that theory?

01:52 - 36.583 I think that you, could still handle the punitive damages.

01:52 - 39.919 I, I do think it would tip the scale possibly a little bit more in,

01:52 - 42.689 the lawsuit being in the nature of a tort,

01:52 - 46.292 because that is a classical, what was section 1983, anyway?

01:52 - 48.895 That is a classic, a remedy.

01:52 - 49.896 But we don't have that here.

01:52 - 52.999 So oppositely, that's a fact that separates

01:52 - 55.935 us even further from the tort than the constitutional claims.

01:52 - 59.973 Council, I just want to make sure I understand it over here.

01:53 - 01.875 Okay.

01:53 - 06.379 That your point is that because the, remedy

01:53 - 10.116 or the causes of action were dealt with in 1983 and 1984,

01:53 - 13.319 19, I say 85 points are,

01:53 - 16.990 were preexisting.

01:53 - 19.626 That here we have was for quote, claim, which is like

01:53 - 22.862 a new type of cause of action.

01:53 - 25.498 That is why is that what your point is?

01:53 - 27.634 I just want make sure I understand what you're trying to convey here.

01:53 - 29.102 I think it's to this distinction.

01:53 - 29.402 Okay.

01:53 - 32.472 I think it's twofold, because I think it's meaningful that under the exception,

01:53 - 35.675 under 761, because we formerly enjoyed.

01:53 - 36.442 Right.

01:53 - 41.114 Sovereign immunity because it says more than just taught, it says never formally.

01:53 - 42.515 Right. Exactly. Your Honor.

01:53 - 46.152 So I think that does count the fact that, you know, these constitutional claims

01:53 - 50.623 and tort claims have been around for a long time, decades.

01:53 - 54.961 So I think it matters in that realm, but also they're just completely different

01:53 - 55.929 when you're dealing with towards

01:53 - 00.066 and section 1983 claims, you're dealing with, your constitutional right.

01:54 - 01.968 So it's a personal property. You're right.

01:54 - 04.904 That's, not the same with the whistleblower claim.

01:54 - 09.843 The whistleblower claim is meant to reduce, governmental wrongdoing and waste.

01:54 - 13.079 Interestingly, in the definition of good faith report,

01:54 - 16.249 it actually says that the report must be made

01:54 - 19.485 without malice or consideration of personal benefit.

01:54 - 24.791 That is a giant distinction between torts and section 1983 claims.

01:54 - 28.595 Those lawsuits are intended to vindicate your personal interests.

01:54 - 30.830 So this is just a completely different animal.

01:54 - 33.333 It serves a very discreet purpose.

01:54 - 36.302 Nothing like this existed under the common law.

01:54 - 39.072 We couldn't bring any claims against the King,

01:54 - 40.840 let alone a claim saying, Your Honor, your

01:54 - 44.077 your jewels cost too much money or your moats using too much water.

01:54 - 47.380 So this is a new idea

01:54 - 50.383 under Pennsylvania law that came after 761.

01:54 - 53.553 It came after bolshie when the Supreme Court decided

01:54 - 56.556 bolshy it didn't have the whistleblower law in mind.

01:54 - 00.293 And, it's a little bit logical how or it is logical

01:55 - 04.230 how the Supreme Court analogized the constitutional claims to a

01:55 - 07.500 person,

01:55 - 10.503 right to your person, property, your right.

01:55 - 13.907 But there's nothing like that you don't without the whistleblower law.

01:55 - 15.842 You have at will employment.

01:55 - 19.479 So if you said something and said, I think we're using too many

01:55 - 23.249 paperclips here, and they said, we think, you know, you're just a little

01:55 - 27.120 too antic or something, that would be perfectly fine.

01:55 - 28.121 It's out. Well, employment.

01:55 - 32.492 So this statute creates new rights that didn't exist before.

01:55 - 37.363 And it's not the General Assembly didn't intend that a whistleblower

01:55 - 41.067 law fall within that very narrow exception to this honorable courts.

01:55 - 45.605 Exclusive jurisdiction that a whistleblower claim be treated as,

01:55 - 49.375 a torture in the nature of, trespass that

01:55 - 52.412 formerly enjoyed sovereign immunity.

01:55 - 54.180 So with that, Your Honor,

01:55 - 58.251 we ask that, the trial court be affirmed and that this court

01:55 - 01.020 maintain its jurisdiction over the whistleblower claims.

01:56 - 03.323 Thank you.

01:56 - 04.123 Any other questions?

01:56 - 07.126 Thank you very much.

01:56 - 13.466 So I just want to address real quickly the Bolshy opinion.

01:56 - 16.669 They went to great lengths to review all of that.

01:56 - 21.774 They went to the Game of Thrones reruns to review what was in the common law rich.

01:56 - 24.777 And then and then they said.

01:56 - 27.847 Characterization of actions,

01:56 - 30.850 according to these ancient writs

01:56 - 33.920 has long since been abandoned.

01:56 - 35.088 So that's that's one.

01:56 - 39.692 And the other thing, the ball she preceded the enactment of this statute by year.

01:56 - 43.262 It's cited with approval in Hill

01:56 - 48.668 by by Judge Justice Castiel in the Hill case in which he said

01:56 - 52.005 these are employment law claims seeking damages.

01:56 - 54.340 I also did not hear.

01:56 - 59.178 Well, I hear that this court has the authority to issue equitable relief.

01:56 - 03.683 And the popular claim I did not hear from opposing counsel.

01:57 - 08.621 The answer to the question as to whether the availability of equitable

01:57 - 12.925 relief in the Court of Common Pleas would somehow causes that jurisdictional issue.

01:57 - 15.294 Here it's the flip side of the coin.

01:57 - 18.698 Still, I have I have no reason to believe that that would be an impediment.

01:57 - 21.000 The fact that this court has

01:57 - 23.736 equitable has a it has a

01:57 - 28.007 has the power to issue equitable relief, and a claim

01:57 - 33.179 has nothing to do with whether or not it has exclusive and original jurisdiction

01:57 - 36.482 over claims brought under the whistleblower statute.

01:57 - 41.220 I do think the legislature just want to specifically lay out

01:57 - 44.791 the exception of the whistleblower law if it wanted to include it like

01:57 - 48.061 you're using the logic of if it walks like a duck

01:57 - 50.296 and sounds like a dog, it's probably a duck.

01:57 - 54.667 But the legislature literally created this other statute with the

01:57 - 55.802 by the other statute.

01:57 - 58.237 It created the whistleblower law.

01:57 - 00.706 It could have listed

01:58 - 03.709 in the judicial code when it was setting forth

01:58 - 07.146 our jurisdiction, and it references the trespass exception.

01:58 - 10.516 It could have also said and the whistleblower law,

01:58 - 13.886 which we know is a creation of statute and not,

01:58 - 17.056 tort.

01:58 - 20.493 I certainly wish it would have your, Your Honor, but

01:58 - 24.464 I don't think we can read too much into the failure to do so again

01:58 - 25.965 in the case of the.

01:58 - 28.968 But there is case law that literally says,

01:58 - 32.538 when we're reading a statute, we don't look at just what it says.

01:58 - 35.541 We also look at what it does not say.

01:58 - 36.809 Sure.

01:58 - 40.379 But what it says here is a court of competent jurisdiction.

01:58 - 44.117 And the question is what is a court of competent jurisdiction?

01:58 - 45.751 So I think it simply begs the question.

01:58 - 49.422 And again, I think there's a good reason for it to have said

01:58 - 54.293 for the legislature to have said a court of competent jurisdiction,

01:58 - 59.899 rather than being more specific and, and devoting 2 or 3 more paragraphs

01:58 - 04.604 in the statute itself to where you need to go if you're suing amuse municipality

01:59 - 08.708 versus where you need to go, if you're suing a state agency.

01:59 - 14.313 I also I also would note that it's not that it's

01:59 - 17.783 not the exceptions that are to be construed narrowly.

01:59 - 22.522 It's the general grant of jurisdiction that courts have held

01:59 - 25.825 should be construed narrowly, not the exceptions.

01:59 - 30.663 And finally,

01:59 - 32.431 just because it's taken

01:59 - 36.903 nearly 40 years for this question to be squarely addressed by the court,

01:59 - 41.440 doesn't mean that it shouldn't be correctly addressed.

01:59 - 45.411 And for that reason, again, we would submit that this case

01:59 - 48.414 should be remanded for further proceedings to the Westmoreland County Court.

01:59 - 49.749 Thank you.

01:59 - 52.418 Well, excellent. And thank you very much.

01:59 - 55.688 We appreciate the arguments and a welcome.

01:59 - 59.959 And we'll take this under advisement.

01:59 - 02.128 So thank you.

02:00 - 02.929 And excellent.

02:00 - 05.932 Thank you so much.

02:00 - 08.801 The last case to be argued today is about whether the Commonwealth

02:00 - 13.606 of Pennsylvania, the employer in this matter, is allowed to reduce workers

02:00 - 16.242 compensation benefits because the recipient's

02:00 - 19.845 social security payments increase due to inflation.

02:00 - 23.649 Cheryl McCartney was injured in an attack

02:00 - 27.286 by a patient in a state run medical facility many years ago,

02:00 - 31.958 and has been receiving full salary and related benefits ever since.

02:00 - 35.161 Later in life, she also began receiving

02:00 - 38.164 Social Security retirement benefits.

02:00 - 42.235 Pennsylvania law allows an employer to reduce its workers

02:00 - 46.739 compensation payments when a recipient also receives Social Security.

02:00 - 51.777 Pursuant to this law, the employer began taking 50% credit

02:00 - 55.548 based on the amount of miss McCartney's Social Security benefits.

02:00 - 59.452 Each year, Social Security gives

02:00 - 02.755 retirees a cost of living increase, or Cola,

02:01 - 06.259 so their benefits keep up with rising prices.

02:01 - 10.796 When miss McCartney's Social Security benefits went up because of these colas,

02:01 - 11.831 the Commonwealth

02:01 - 16.168 increased the amount of worker's compensation, offset it was applying.

02:01 - 19.372 Over time, this meant the Commonwealth paid less

02:01 - 22.742 and less towards her worker's compensation liability.

02:01 - 26.279 Before the Department of Labor

02:01 - 29.615 and Industry, miss McCartney claimed this wasn't fair.

02:01 - 32.718 She argued that the state could use her

02:01 - 35.855 initial Social Security amount to calculate the offset,

02:01 - 40.192 but it should not reduce her worker's compensation benefits any further

02:01 - 44.664 because of inflation related Social Security increases.

02:01 - 48.701 A worker's compensation judge agreed with her.

02:01 - 52.405 The judge said that allowing the state to take money back every time prices

02:01 - 56.342 rise defeats the purpose of the Social Security Cola,

02:01 - 00.146 which is meant to protect retirees from inflation.

02:02 - 03.382 The Commonwealth appealed and the Worker's Compensation

02:02 - 06.552 Appeal Board reversed the worker's compensation Judge.

02:02 - 10.089 The board concluded that the law is clear

02:02 - 15.428 it permits a 50% offset of old age benefits, which includes the entire amount

02:02 - 19.632 the worker receives even when it goes up each year for inflation.

02:02 - 23.169 The board said that the courts cannot create an exception

02:02 - 26.305 for Colas when the legislature did not include one.

02:02 - 28.341 Now the Commonwealth

02:02 - 31.344 Court must decide which view is correct.

02:02 - 34.814 Miss McCartney's view that the cost of living increases

02:02 - 37.817 should not reduce her worker's compensation benefits,

02:02 - 42.655 or the Commonwealth's view that the law requires a 50% offset of all

02:02 - 47.393 social security retirement benefits, including yearly inflation increases.

02:02 - 50.863 At its heart, this case asks whether workers should lose

02:02 - 54.433 part of their state provided benefits simply because Social Security

02:02 - 57.436 adjusted their retirement check to keep up with inflation.

02:02 - 00.506 Thanks for being with us today.

02:03 - 03.509 Now let's listen to the arguments.

02:03 - 05.678 May it please the court.

02:03 - 06.245 Good morning.

02:03 - 07.680 My name is Lawrence Chabon.

02:03 - 10.683 This is not my first time in front

02:03 - 12.084 to speak into the mic.

02:03 - 15.087 So we hear every word. Yeah.

02:03 - 17.189 I would reserve two minutes for rebuttal.

02:03 - 18.090 Thank you. Thank you.

02:03 - 22.862 Miss McCartney suffered a closed, severe close

02:03 - 26.799 head injury on February 27th, 1997.

02:03 - 30.302 She was paid workers compensation for that

02:03 - 33.272 and continued to be paid workers compensation.

02:03 - 37.176 She also was paid part in one.

02:03 - 41.347 So our excuse me at 530 for benefits because she worked for pork center,

02:03 - 45.718 taking care of patients and was injured

02:03 - 48.721 when she was thrown down a set of steps by a patient.

02:03 - 52.158 Would you mind leaning into the microphones on that fan really loud?

02:03 - 55.428 Yeah, I apologize.

02:03 - 00.866 So the worker's compensation benefits are then paid over to the Commonwealth.

02:04 - 02.968 So they exist.

02:04 - 04.069 She was eventually awarded

02:04 - 07.106 Social Security disability because of the severity of her,

02:04 - 09.308 injuries.

02:04 - 12.711 This eventually was converted automatically

02:04 - 15.114 to social Security retirement benefits.

02:04 - 20.252 On March 30th, 2017 or March 3rd, 2017.

02:04 - 24.023 This is an act of law because it it's

02:04 - 27.560 an accounting method that Social Security uses for its trust funds.

02:04 - 30.062 At that point,

02:04 - 34.934 under section 402 of the Act Worker's Compensation Act, the employer

02:04 - 38.804 started taking an offset for 50% of those Social Security

02:04 - 41.807 retirement benefits.

02:04 - 45.544 But since that time, the claimant is, as is required, completes

02:04 - 49.415 what is called an we call on libc 760.

02:04 - 53.786 It's a report of benefits for offset purposes listing her benefits.

02:04 - 57.957 And each year she would increase the amount because of the cost

02:04 - 02.495 of living increase that in that a person under Social Security gets

02:05 - 05.865 which she also got when she was on SSDI.

02:05 - 09.668 And then finally,

02:05 - 12.872 and this began in 2018, for the Commonwealth

02:05 - 16.275 to start taking the offset for the 50% under the statute

02:05 - 18.511 in 2023.

02:05 - 19.445 On behalf of the claimant,

02:05 - 23.182 I filed a review petition challenging the additional offset

02:05 - 27.887 that was being taken for the Cola under the Social Security Act.

02:05 - 31.991 That petition was granted by Judge Lugo

02:05 - 36.262 that said that the Worker's Compensation Act is since as the Worker's

02:05 - 39.331 Compensation Act does not provide a cost of living increase,

02:05 - 42.868 it was depriving the claimant of a federal benefit.

02:05 - 45.938 The WCA b reversed,

02:05 - 48.941 saying old age benefits or old age benefits.

02:05 - 51.410 Sort of like the last argument.

02:05 - 54.413 It's old age, it's old age, it's old age.

02:05 - 56.482 No matter the source, this was over

02:05 - 59.485 the dissent of Commissioner Krebs.

02:06 - 05.724 This case is a simple one, in our opinion.

02:06 - 12.197 It is solely a statutory construction of section 402 A

02:06 - 15.234 of the Pennsylvania Workers Compensation Act.

02:06 - 20.072 The provision at issue reads

02:06 - 23.943 50% of the benefits commonly characterizes,

02:06 - 27.580 quote, old age unquote, benefits under the Social Security Act.

02:06 - 32.051 And then there's a citation shall also be credited against the amount of payments

02:06 - 35.487 under section one, two, eight and 306,

02:06 - 38.791 except for benefits payable under section

02:06 - 43.462 360 108 as the occupational disease listings under the act.

02:06 - 46.999 Section 306 is the total and partial disability provisions,

02:06 - 50.536 and 360 is the specific loss provisions.

02:06 - 53.772 And Mr. Chairman, just so I'm clear that

02:06 - 56.275 offset does

02:06 - 59.278 not apply to Social Security disability.

02:06 - 00.479 Is that correct? Correct.

02:07 - 00.746 Okay.

02:07 - 03.115 Because Social Security disability

02:07 - 06.118 takes an offset for workers compensation benefits.

02:07 - 07.286 Right.

02:07 - 10.990 There are some states, by the way, that do take an offset for Social Security

02:07 - 11.957 on workers comp.

02:07 - 14.026 And then Social Security does not take the offset.

02:07 - 17.029 But Pennsylvania does not.

02:07 - 21.033 It's up to this honorable court to determine if the language is clear

02:07 - 26.505 and free from all ambiguity, whether there is discernible ambiguity

02:07 - 30.075 that allows for interpretation and not direct application.

02:07 - 34.380 And that was the original case I cited to an at the start of my brief.

02:07 - 36.148 That is the rule.

02:07 - 38.584 This court has to apply.

02:07 - 41.587 Does the text demand a particular result?

02:07 - 45.157 And of course we say it doesn't.

02:07 - 49.995 The ambiguity here is clear when one considers considers

02:07 - 53.766 the differing presentations that we're making versus the Commonwealth.

02:07 - 55.334 Westminster rendering is making.

02:07 - 59.672 We focus on the 50% allocation

02:07 - 03.575 or the offset, which is based upon a proportionate share.

02:08 - 06.512 The taxes paid.

02:08 - 07.980 As we all know,

02:08 - 12.017 when we receive our paychecks, there's a line that says FICA.

02:08 - 14.353 That's the figure tax.

02:08 - 17.356 That's the Social Security taxes we're paying.

02:08 - 20.793 We pay half if we're having an employer

02:08 - 25.064 and and the employer pays half.

02:08 - 30.302 And that since this is the Worker's Compensation Act and only employees

02:08 - 35.641 receive worker's compensation, this is an important, applicable provision.

02:08 - 38.444 If I were self-employed, I would never get well.

02:08 - 41.113 I would never get worker's compensation.

02:08 - 43.582 I sure don't have an employer.

02:08 - 47.019 Instead, the employer, on the other hand, focuses on the reference

02:08 - 51.523 to old age benefits as being all old age benefits,

02:08 - 56.595 which is excuse me, they subsume the cost of living increase.

02:08 - 01.867 I cited the provisions in the in my brief under the social Security Act

02:09 - 07.039 that allow for this Cola, but it is not based upon taxes.

02:09 - 11.610 And before I get to that point, I would

02:09 - 15.647 tell you, however, as I noted in my brief on pages

02:09 - 19.218 14 and 15, that this court has acknowledged

02:09 - 23.255 the basis for the offset being the taxes that are paid

02:09 - 28.961 and the cases that we cited were Sadler versus Cola at two,

02:09 - 32.264 not to 69, Atlantic 3690,

02:09 - 38.237 and Caputo versus Wcb at 34, Atlantic 3908.

02:09 - 43.375 So this court has already acknowledged the fact that the premise

02:09 - 46.478 for the offset is the percentage of taxes paid

02:09 - 49.481 by the parties.

02:09 - 53.552 To further show this, the amount of benefits is based upon

02:09 - 57.756 the earnings of the employee, based upon the primary insurance amount,

02:09 - 01.827 which is then which is considered a certain percentage

02:10 - 04.830 of the average indexed monthly earnings.

02:10 - 09.668 So the amount you get on Social Security is predicated

02:10 - 14.740 upon what you've earned over your earning career.

02:10 - 20.879 There's a extraordinarily complicated calculation that the, regulations

02:10 - 25.751 say have pages and pages of charts that allow you to try to figure that out.

02:10 - 26.118 Thank.

02:10 - 28.854 Thankfully, Social Security and the advent of the internet,

02:10 - 30.122 you can put your numbers in

02:10 - 33.926 and get a calculation now to find out what you're entitled to and you're in.

02:10 - 37.563 And your annual benefit statement you can download also tells you,

02:10 - 40.632 but that, as I point out,

02:10 - 44.570 is based upon your average indexed monthly earnings.

02:10 - 47.806 The Cola on the other hand, I'm going to jump in

02:10 - 52.911 and I want to focus on what I think for me is your biggest hurdle.

02:10 - 55.480 And I

02:10 - 58.584 very much would like if there was a legal avenue

02:10 - 01.987 to get to the result that you're trying us to get us to.

02:11 - 03.722 I just don't know if I'm with you there.

02:11 - 07.926 Okay, so I understand the humanitarian purpose of the act.

02:11 - 11.797 What I thought I understood that you were saying was the ambiguity

02:11 - 15.067 became clear when you consider both sides arguments.

02:11 - 18.904 So I was trying to interpret that to mean that you were saying

02:11 - 22.507 there must be more than one reasonable interpretation, which is evidenced

02:11 - 26.044 by the mere fact that we are arguing on both sides about this.

02:11 - 27.112 However,

02:11 - 29.281 I don't

02:11 - 33.685 think that that is necessarily the case just because we find ourselves in court

02:11 - 38.257 arguing about a specific section that that necessarily means there's any ambiguity.

02:11 - 41.293 And then I'm stuck with, I don't think that

02:11 - 44.363 we consider the humanitarian purposes of the act,

02:11 - 49.101 unless we first consider and determine that there is an ambiguity.

02:11 - 55.474 So help me understand what is unclear in the statutory language.

02:11 - 59.244 Well, the what is unclear in that was the point

02:11 - 01.647 I was going to make about the cola.

02:12 - 06.285 The cola is not based upon anything except the consumer price index.

02:12 - 10.122 It is not based upon what anyone, either

02:12 - 13.759 the employee or the employer, has paid into the system.

02:12 - 18.096 The intent is the cases unanimously

02:12 - 22.601 say, of the amendments in in in 1996

02:12 - 26.071 or 19 1996.

02:12 - 29.141 Sorry, it's a long time ago now. Anyway.

02:12 - 31.343 Acts seven

02:12 - 34.346 which added are act 44, which added these provisions

02:12 - 38.817 was to reduce the costs

02:12 - 42.087 to employers of compensation.

02:12 - 46.892 And the other argument was, so there's no double dipping.

02:12 - 49.061 That's the theory.

02:12 - 52.064 But there is no double dipping here when it's a cola

02:12 - 56.335 because it's not based upon anything out of anyone's pocket.

02:12 - 58.337 And whatever. It's not paying.

02:12 - 01.707 Oh, I'm sorry, I was just so just to confirm,

02:13 - 04.743 employer is not contributing to the Cola.

02:13 - 08.680 Nobody contributes to the well, somebody contributes as taxpayers.

02:13 - 09.381 I mean, yes,

02:13 - 11.416 the federal government gives us the kind of cost

02:13 - 14.486 some I think I think the call is still comes out of the trust fund.

02:13 - 17.923 But the fact is, is everyone right throughout the country?

02:13 - 21.159 It's not based upon the earnings or the taxes that were paid.

02:13 - 24.997 As this court has said, the percentages that were used in

02:13 - 28.000 the statute were based upon the taxes paid by the parties.

02:13 - 33.672 But everyone pays taxes on a Cola when they get it correct.

02:13 - 37.242 Now paying into this, you paying your taxes into the system,

02:13 - 41.513 the Social security taxes, the figure you pay is into the system.

02:13 - 43.715 No, but what I'm saying is that.

02:13 - 45.050 So you're what? I'm.

02:13 - 50.188 What I hear you say is because the cola is separate

02:13 - 54.459 from what an employer is, is giving to the employee.

02:13 - 56.561 Then that

02:13 - 00.565 Cola amount should not be taxed subject to tax or office

02:14 - 04.169 should not be subject to the offset to the, to the offset. Yes.

02:14 - 05.937 Under 200 for it. Yes. Okay.

02:14 - 09.041 But because what you're doing and that was the next point

02:14 - 12.477 I was getting to is you are undermining the purpose

02:14 - 15.614 of the call on the federal government is made clear

02:14 - 18.817 what the purpose of the Cola is, and it's to protect the recipients

02:14 - 23.655 from the ravages, ravages of inflation by keeping up with the cost of living.

02:14 - 23.889 Right.

02:14 - 24.823 But what I was,

02:14 - 28.293 what I was saying to you and I was trying to paint a different example.

02:14 - 28.560 Okay.

02:14 - 31.997 So for a normal salaried

02:14 - 35.067 person who gets a cola.

02:14 - 38.370 And the cola is supposed to help keep us as you said,

02:14 - 43.275 the purpose is to keep us, you know, able to pay our bills when inflation goes up.

02:14 - 46.478 But that money is added

02:14 - 52.451 to our, to a regular employer employees overall salary.

02:14 - 53.552 Correct. Yes.

02:14 - 56.588 And we have to pay taxes on that extra amount.

02:14 - 57.756 Correct. Okay.

02:14 - 00.258 But that would still be the that would still be the figure

02:15 - 03.328 that doesn't have anything to do with what the worker's compensation is doing.

02:15 - 06.932 What the Worker's Compensation Act is doing is, is they're taking

02:15 - 12.037 the monthly amount of Social Security and saying 60% of that the employer's

02:15 - 15.240 entitled to credit against the worker's compensation we're paying.

02:15 - 18.710 Therefore, we can reduce the amount of worker's

02:15 - 22.180 compensation benefits that claim those receiving so they don't get both

02:15 - 26.585 full worker's compensation and full social Security retirement.

02:15 - 28.520 Get me I see the yellow light.

02:15 - 31.456 As long as we're running out of time, I want to get back to. Just.

02:15 - 34.459 While justice was Judge Wallaces

02:15 - 38.396 question about the ambiguity, because I'm you're explaining

02:15 - 42.000 how it's all about what works from your perspective, but

02:15 - 45.303 where it is in the statute that it's what is ambiguous about the statute?

02:15 - 49.741 What is the ambiguous in the statute is what they were what is being done here?

02:15 - 54.012 The statute undermines federal policy,

02:15 - 57.782 which creates the ambiguity.

02:15 - 01.319 The employer suggested in their brief that the General Assembly

02:16 - 04.489 was aware of the color when section 204 was amended.

02:16 - 07.726 However, there is no suggestion that the intent was to rob

02:16 - 09.461 the injured worker of the protection

02:16 - 12.330 that the federal government intends the employee to have.

02:16 - 17.669 The employer is not suffering the ravages, the ravages or the compensation

02:16 - 21.706 carry the ravages of inflation that the Cola is intended to

02:16 - 27.779 And there's no mention, is there of Cola in the act?

02:16 - 28.947 It's not even mentioned.

02:16 - 29.981 That's correct.

02:16 - 33.418 Just the percentages which this court has recognized as being.

02:16 - 37.989 And you would say that it is a latent ambiguity.

02:16 - 39.090 It may not.

02:16 - 42.994 I mean, correct me if I'm wrong, but that it's a latent ambiguity

02:16 - 46.865 that doesn't necessarily appear on the face of the statute.

02:16 - 51.002 But in its application, when the

02:16 - 55.373 the use of the 50% for

02:16 - 59.110 the offset is designed

02:16 - 02.581 to approximate an employer's

02:17 - 06.751 contribution to the worker's, Social security benefits,

02:17 - 10.388 as you described before, and so giving them the offset

02:17 - 13.391 of 50%.

02:17 - 17.162 Helps sort of even that out then later on.

02:17 - 20.165 But they have no contribution to the Cola

02:17 - 24.536 which is designed to allow an individual

02:17 - 28.740 so everybody's Social Security benefits to keep up with inflation.

02:17 - 32.711 I wish I would have put it that eloquently when I start,

02:17 - 34.179 but okay.

02:17 - 37.082 Yes, I agree a latent a latent ambiguity.

02:17 - 42.120 And you would then be asking the court to reverse the workers comp appeal board.

02:17 - 43.888 Yes, I was going to do that in my rebuttal.

02:17 - 45.757 Okay.

02:17 - 48.760 You still can. Yes.

02:17 - 54.065 If it please the court.

02:17 - 54.766 My name is Bradley.

02:17 - 57.535 And bring them here on behalf of the Commonwealth of Pennsylvania.

02:17 - 00.538 I think primarily if you look at this case, it's,

02:18 - 03.541 the claimant attempting to judicially legislate.

02:18 - 04.609 He's bringing up that.

02:18 - 06.478 That's my question to you.

02:18 - 09.281 Me that they don't even mention the cola

02:18 - 12.284 isn't even mentioned in 204A

02:18 - 16.521 aren't you asking the court to add language to this,

02:18 - 20.025 on behalf of the legislature?

02:18 - 21.359 No, we're not asking you to add anything.

02:18 - 22.260 If you look at it.

02:18 - 24.462 Well, it's not based on the wages.

02:18 - 27.999 Cola is not based at all on wages.

02:18 - 29.067 Understood.

02:18 - 33.571 The point of the act is not to allow double dipping for wages.

02:18 - 36.207 So it's not in the act.

02:18 - 39.210 It doesn't have anything to do with wages. So.

02:18 - 43.181 So it gets back to the point from the last case Judge Wallace had,

02:18 - 44.049 when she said, you don't have to

02:18 - 47.385 just look at what's in the statute, but also what's not in the statute.

02:18 - 49.020 And if you look at that, I apologize for my Latin.

02:18 - 52.791 I probably butchered Latin, but, the maximum of Cassius Domitius

02:18 - 57.329 Missio have been does a person, object or thing omitted from an enumerated

02:18 - 00.899 in statute must be held to have been admitted intentionally?

02:19 - 01.299 Right.

02:19 - 05.970 So here the cost of living was built into the social security system

02:19 - 10.875 that was enacted in 1973 and became, effective in 1975.

02:19 - 15.246 The General Assembly in Pennsylvania passed these laws in 1996,

02:19 - 19.050 so they knew cost of living would increase the amount

02:19 - 22.053 that the claimants receiving in terms of the social equity retirement benefit.

02:19 - 24.055 And it's not like the claimant gets in this case,

02:19 - 27.392 he originally started getting $1,200 of Social Security retirement benefits.

02:19 - 28.993 It's not like there's a check that comes now.

02:19 - 32.263 It says, we're gonna give you $100 of, society retirement benefits.

02:19 - 36.000 We're going to give you an extra $204 of cost of living benefits.

02:19 - 39.270 It's all Social Security retirement benefits.

02:19 - 42.741 So what what the claimants trying to do is argue that because they didn't

02:19 - 46.411 specifically say cost of living, that didn't creates an ambiguity.

02:19 - 49.681 But it like I said, the maximum it could do is Cola

02:19 - 52.650 based on the amount of wages earned by the claimant.

02:19 - 54.919 No. But here's the problem too. You have to look at the entirety of this.

02:19 - 57.155 Why isn't that the problem? Because.

02:19 - 58.556 So whenever you look at the statute,

02:19 - 00.158 you have to look at not just the language here

02:20 - 02.026 it says 50%, but there's also this has there's

02:20 - 04.262 two other three other types of offsets.

02:20 - 07.132 There's unemployment compensation where it's 100%.

02:20 - 10.135 There is severance benefits, which is 100%.

02:20 - 11.436 But this is the last one.

02:20 - 13.972 The fourth one is pension offsets.

02:20 - 16.741 So if you look at the language for pension offsets, it says the employer

02:20 - 20.078 only gets, a credit to the extent it funded the pension.

02:20 - 24.048 So this shows if the General Assembly wanted the credit to only be

02:20 - 27.218 for social care, retirement benefits, to the extent the employer funded,

02:20 - 30.088 they could put the same exact language in there.

02:20 - 33.324 The employer feels like a secret that the hole is not funded by the employer.

02:20 - 35.927 Correct? Correct.

02:20 - 37.095 They do want the offset.

02:20 - 39.297 Once again, if you had a claimant

02:20 - 43.034 that worked for 40 years with employer a work for one year with employer

02:20 - 47.372 B, suffered an injury with employer B, and then ultimately got on to.

02:20 - 50.875 So screw retirement benefits that player B didn't pay 50% of everything

02:20 - 52.610 that went into Social Security to get the claimant

02:20 - 55.613 that social retirement benefit, but they still get a 50% offset.

02:20 - 58.817 That's because that's what the General Assembly intended.

02:20 - 00.418 So it looks like the General Assembly is actually doing it

02:21 - 02.620 the other way, saying we don't want the claimant to get more.

02:21 - 04.088 So they contributed 50%.

02:21 - 04.789 So we're going to get

02:21 - 09.093 let them pull back their 50% relative to the Social Security retirement benefit.

02:21 - 10.662 But that's what this is going to be.

02:21 - 14.532 You have to realize worker's comp isn't just about protecting the injured worker.

02:21 - 16.501 It's also it's a grand bargain.

02:21 - 18.937 Both sides where there's no fault liability.

02:21 - 21.506 So but that gives the employer cost certainty.

02:21 - 24.509 And that's one of the things actually, my esteemed counsel,

02:21 - 28.112 argued back in 2011 on the case of white versus City of Pittsburgh.

02:21 - 33.017 Are the employers payment of wages increased by Cola payments

02:21 - 36.454 or the employer's payments of wages?

02:21 - 39.924 We already said it Colas not based on wages earned,

02:21 - 43.127 but you're saying it impacts the employer.

02:21 - 47.198 No. What impacts the employer is a payment of worker's compensation benefits,

02:21 - 49.901 and said the General Assembly would then be passed that

02:21 - 53.338 the offset provisions is helping to limit the liability for employers.

02:21 - 55.206 That's one of the parts of the grand bargain.

02:21 - 58.209 Even though you don't have no fault liability on the employer.

02:21 - 58.943 You know,

02:21 - 02.814 they also have cost certainty in terms of how much they're going to be, liable.

02:22 - 06.818 And your and your, your position then is that the standard?

02:22 - 11.823 Is Social Security benefits received and how can that be ambiguous?

02:22 - 14.893 If something is added and there is more received,

02:22 - 17.962 then the offset provisions are not ambiguous.

02:22 - 23.234 The thing that changes is what's received, not where it came from or anything.

02:22 - 23.601 Correct.

02:22 - 27.572 And if you look at the, act, the actual language of the Workers

02:22 - 33.711 Compensation Act says, 42, USDA, section three. Oh,

02:22 - 37.649 301 at sequence.

02:22 - 40.351 But then if you look at the regulations, actually they go a little bit further.

02:22 - 43.555 The regulations, actually, say it's,

02:22 - 47.559 section 301 to section 1397 one.

02:22 - 51.262 If you look at claim, it's counsel's brief, he'll he notes that, the,

02:22 - 57.235 provisions for both, payment of the retirement benefit that's in, 42 U.S.C.

02:22 - 00.872 44 15A and B, but the cost of living is also

02:23 - 04.776 in that same exact section, section 415, section I.

02:23 - 08.146 So it's all right there in that in the provisions are supposed to be considered

02:23 - 13.051 the benefit in the language of section two of 204 a actually says

02:23 - 17.655 it's 50% of the benefits commonly characterized as old age benefits.

02:23 - 18.990 And they put it all in quotes.

02:23 - 21.993 So like I said, they knew the system whenever they passed this law.

02:23 - 24.929 They cited to this particular provision, which they said.

02:23 - 28.232 So security wasn't just you get paid a screwy retirement benefit, you get paid.

02:23 - 31.536 So sick retirement benefits, plus you get that cost of living increase.

02:23 - 32.770 Everybody knew that back 50.

02:23 - 34.706 That was passed in 1973.

02:23 - 38.476 The General Assembly in Pennsylvania knew that when they passed this law in 1996.

02:23 - 41.479 So you need to look at not only what they put in there with what they excluded.

02:23 - 42.680 They didn't say.

02:23 - 45.984 You only get it for the original amount of Social Security retirement benefits.

02:23 - 48.419 They didn't say we exclude the cost of living.

02:23 - 51.222 They just said, you get it for all Social Security retirement benefits.

02:23 - 53.124 If you look at, what the claimant reported here,

02:23 - 56.527 we took we're taking the offset based upon what is reported.

02:23 - 58.696 Actually, there could be more of an offset because

02:23 - 59.897 they're not taking it retroactively.

02:23 - 01.065 They're only taking it moving forward,

02:24 - 04.068 even though the regulations allow for it to be taken retroactively.

02:24 - 08.940 So, what does the employer continue to pay into?

02:24 - 13.344 I know your brief, I thought, indicated that they continue

02:24 - 18.182 to pay into the Social Security system on behalf of employees who have retired.

02:24 - 20.118 Is that true? No.

02:24 - 21.285 Oh, okay, then I misunderstood.

02:24 - 23.955 So they don't continue to do that. What about. There was a mistake.

02:24 - 24.922 There was a mistake in the brief.

02:24 - 27.692 I saw where it said the act as an attorney, as Mr.

02:24 - 30.962 Chabon indicated that he talked about the act 534 benefits that pays

02:24 - 32.130 full salary.

02:24 - 36.601 So because she was a member of Polk, center, she got paid

02:24 - 41.039 full salary with all applicable raises, while she was still disabled.

02:24 - 44.242 And then what happens in that situation is the workers comp, even after it's

02:24 - 49.080 reduced here by the, offset that's paid out of one pocket into another pocket.

02:24 - 51.649 But the claim, it still keeps on getting the full salary.

02:24 - 55.687 That continued up until 2023, when I believe the claimant retired.

02:24 - 58.289 So she's now also getting a pension?

02:24 - 01.292 There's not yet a pension offset, but that's something that will be,

02:25 - 04.595 there are all these offsets to try to take care of that.

02:25 - 08.566 So the employer, though, after somebody retires,

02:25 - 13.404 continues to pay into workers comp or.

02:25 - 16.574 No, no, they keep they kept on paying workers compensation.

02:25 - 17.742 There's no taxes are they.

02:25 - 20.745 But they are. Then are they self insured.

02:25 - 22.213 The Commonwealth is correct. Right.

02:25 - 25.216 Okay. So this is but are they paying?

02:25 - 28.653 Okay, okay.

02:25 - 32.490 I think I understand they said there was a you go ahead.

02:25 - 33.858 That's right.

02:25 - 36.360 This is this is a good segue because I kind of went down

02:25 - 40.164 a little bit of a rabbit hole in my chambers, and I'm hoping you and Mr.

02:25 - 42.300 Chabon can get me out of that rabbit hole.

02:25 - 46.137 And I think president, judge and Jubilee are exposed

02:25 - 49.440 that a little bit in your brief statement of the case.

02:25 - 53.277 You accept claim that statement of case, but then it goes on

02:25 - 57.215 for the sake of clarity in this unique situation,

02:25 - 01.419 the employer would that only add that the claimants benefits under the Workers

02:26 - 03.654 Compensation Act have never been reduced to her

02:26 - 06.858 at any point in time during the pendency of this entire matter

02:26 - 12.497 due to her concurrent claim as a Commonwealth employee under at 534,

02:26 - 15.867 she has received ongoing salary continuation

02:26 - 19.270 without reduction at all pertinent time since the date of her work injury.

02:26 - 22.006 Then it goes on to the extent

02:26 - 26.277 the employer's working comp worker's compensation liability was reduced

02:26 - 31.516 for SSR offset purposes, including the cost of living Cola adjustments.

02:26 - 34.952 These reductions have applied against the workers compensation

02:26 - 37.922 benefits which have been paid back to the Commonwealth.

02:26 - 42.360 This payment structure would be in place for this and certain other Commonwealth

02:26 - 46.531 employees who, for example, are injured due to the act of an inmate

02:26 - 50.768 in a correctional institution or a resident in a mental health facility.

02:26 - 53.838 The claimant here fell into that latter category.

02:26 - 58.810 It seems to me that you were saying that, hey, she's been paid this long.

02:26 - 00.278 This has always been happy.

02:27 - 02.780 She's been made whole and there's no actual harm here.

02:27 - 03.414 So, okay.

02:27 - 05.116 That's why I did try to clarify that.

02:27 - 06.884 So that was what was put in the brief.

02:27 - 09.987 I didn't prepare the brief, but, actually, I went to clarify, you're you're

02:27 - 12.990 violating the promise and rule, which is you can't say I didn't

02:27 - 14.926 then prepare the book to dawn.

02:27 - 19.263 I know, so originally from 2017 up through six

02:27 - 23.401 nine of 20 369 at 23 is when those act 534 benefits ceased.

02:27 - 26.437 So that should have been the retirement date once you're no longer an employee.

02:27 - 29.440 So up until that point, even though there's a reduction for workers

02:27 - 32.810 comp, the claimant still gets paid the full salary.

02:27 - 36.180 So even though that originally in 2017 they're saying we're taking an offset,

02:27 - 38.349 that offset would not have impacted the claim.

02:27 - 39.617 It it could it would impact.

02:27 - 40.384 But now it does.

02:27 - 41.085 Now it would.

02:27 - 44.989 So so you may agree to disagree, but Mr.

02:27 - 48.960 Chapman's client claimant is advocating that she's having actual harm here.

02:27 - 50.094 And you can't quibble with that.

02:27 - 52.763 I won't ask as of six nine of 2023.

02:27 - 56.400 And in other situations where they're not getting on

02:27 - 58.536 all the special act benefits, right?

02:27 - 01.205 Because typically people who are on worker's comp

02:28 - 04.508 get only two thirds of their salary somewhere around there.

02:28 - 04.976 Correct.

02:28 - 07.979 So there's for for these are usually first responders.

02:28 - 10.314 You also have jail guards you have here.

02:28 - 11.349 No. Understood.

02:28 - 15.453 But I also whatever would you agree that whatever we decide

02:28 - 20.091 about the interpretation of this provision would apply as well

02:28 - 24.629 to claimants who were receiving the standard worker's comp benefits?

02:28 - 25.997 Okay, great.

02:28 - 29.033 And could you clarify, you said something earlier about

02:28 - 30.635 being

02:28 - 34.171 retroactively applied and I wasn't sure what you meant because

02:28 - 39.310 the act provides that the Social Security offset shall not apply

02:28 - 43.981 if old age Social Security benefits were received prior to the compensable.

02:28 - 48.019 So what I meant was, whenever you have somebody that's receiving these benefits,

02:28 - 49.487 we don't learn about it right away.

02:28 - 53.557 So as Attorney Chapman indicated, I think he said it was an libc 760 form.

02:28 - 56.527 It's actually the libc 756 form.

02:28 - 59.063 There's a bunch of forms we can send out, and that's when the claimant

02:28 - 00.197 has to report to you.

02:29 - 03.000 If they start receiving a benefit that allows for offset.

02:29 - 06.570 And in reality it doesn't come the day that they get the change in benefit.

02:29 - 11.042 So if they get a change in benefits as of January 1st of 2025,

02:29 - 16.180 we get that form that comes in six months later on June 1st of 25.

02:29 - 19.717 We then need to fill out the form saying we're going to take a reduction.

02:29 - 23.387 You need to give at least 20 days notice before you can take the reduction.

02:29 - 27.224 So there's always going to be a reduction that happens after the fact.

02:29 - 29.593 And then let's talk about a retroactive as you could go back

02:29 - 33.164 then the law does allow the regulations do allow saying if you have you can say,

02:29 - 38.202 well we've overpaid you now from January 1st until, you know, July 31st,

02:29 - 42.039 and we're starting to take the offset, then you can take that retroactive credit.

02:29 - 44.575 In these cases, there was no retroactive credit.

02:29 - 47.411 They just issued the document saying, we're just going to change your benefits

02:29 - 51.148 now based upon the increase you have in your Social Security retirement.

02:29 - 52.283 They didn't do it

02:29 - 55.086 even though they could have saying, we're going to take even more

02:29 - 58.155 because we overpaid you now for this period of six months

02:29 - 01.225 or eight months or a year until we started to take this further reduction.

02:30 - 05.029 You'll see you'll see that, you know, in the stipulation,

02:30 - 07.665 I think they were taking the reductions every two years.

02:30 - 13.771 It looks like they did it in 2017, 2019 to 2021 and 2023.

02:30 - 16.340 And obviously there's the cost of living increase every year.

02:30 - 20.344 So they weren't taking it every year and they weren't even getting the back due.

02:30 - 23.881 Overpayment credit essentially is what it's called.

02:30 - 24.548 But that's what I meant.

02:30 - 27.551 Whenever I said you can take a retroactive, credit.

02:30 - 30.221 If the claimant received the Social Credit old age

02:30 - 33.224 before they were injured, then we don't get the credit whatsoever.

02:30 - 36.193 That's under the regulations or the statute.

02:30 - 39.997 So the other thing, you know, going into the maximum statutory construction to

02:30 - 43.000 I think, you know, like I said, I'm going to put you the Latin, but,

02:30 - 46.137 Ruby lacks nine distinguished notes.

02:30 - 47.204 Does this thing right.

02:30 - 49.407 This is where the law makes no distinctions.

02:30 - 52.076 One does not distinguish where the law does not distinguish the courts.

02:30 - 54.045 And I distinguish here,

02:30 - 56.414 you know, the General Assembly knew there's a cost of living increase.

02:30 - 57.782 They didn't distinguish.

02:30 - 01.452 They just said you get 50% of the Social Security old age

02:31 - 02.987 or so 60 retirement benefit.

02:31 - 05.389 So it shouldn't be distinguished by the court here.

02:31 - 06.090 And as the

02:31 - 10.928 appeal Board, indicated, they said,

02:31 - 14.565 you know, when when the language is, you know, you're

02:31 - 16.934 the statutory construction Act, you're supposed to,

02:31 - 19.603 ascertain and effectuate the intent of the General Assembly

02:31 - 22.440 when the words of the statute are clear and free from ambiguity.

02:31 - 25.743 The letter of the law is not to be disregarded, the pretext of a spirit.

02:31 - 26.710 And that's what the claim is trying to do.

02:31 - 28.579 Saying the spirit is, you know, let's take care of the claim.

02:31 - 30.014 It's mandatory purposes.

02:31 - 31.248 But like I said, there is a, you know,

02:31 - 34.385 the corollary of cost containment for businesses in Pennsylvania.

02:31 - 38.989 And the General Assembly elected up to them to take a 50% credit

02:31 - 41.258 for the Social Security retirement benefits.

02:31 - 43.561 This is really a more of a policy concern.

02:31 - 45.796 And that's what the appeal board indicated that,

02:31 - 47.898 if the claimant has concerns here, that's something that really

02:31 - 49.300 they should take up before the General Assembly

02:31 - 53.404 to, address and rectify as opposed to this honorable court.

02:31 - 55.573 So we would ask that this court just affirm the decision.

02:31 - 58.008 Thank you very much.

02:31 - 00.644 Any other questions? Thank you.

02:32 - 02.012 So I would hear some that Mr.

02:32 - 03.747 Chairman.

02:32 - 04.381 Not no doubt.

02:32 - 07.051 No, not even close.

02:32 - 10.054 I want to I'm going to start with that.

02:32 - 12.456 Because Mr.

02:32 - 15.459 Gantry now agrees with me, the statute is ambiguous

02:32 - 18.963 because if he's going to apply the Latin maxims,

02:32 - 22.466 that means you have to apply statutory construction rules

02:32 - 26.737 because there is an ambiguity.

02:32 - 29.740 So thank you for agreeing with our point.

02:32 - 33.511 I just want to touch on three things.

02:32 - 36.480 Four things real quick.

02:32 - 38.716 The aim it's not to check,

02:32 - 42.520 but as I know, but none of you are old enough

02:32 - 45.556 to know you get an annual notice from Social Security

02:32 - 49.360 telling you what your cola is going to be, and you hear it on the news.

02:32 - 50.494 So we're told.

02:32 - 56.800 And that's the regulations.

02:32 - 58.936 If we want to talk about that, the regulations

02:32 - 02.773 say you only get a net credit, not a gross credit.

02:33 - 06.343 And that's not in the statute,

02:33 - 09.280 but that was put in by the regulations because that's a reasonable

02:33 - 12.783 interpretation, because worker's comp is not tax

02:33 - 15.853 but other offsets are pension unemployment.

02:33 - 19.056 Social security can't be taxed if you make enough money.

02:33 - 23.627 So we believe that there is an ambiguity,

02:33 - 26.897 a latent ambiguities is the correct term.

02:33 - 31.502 And we we would ask that the decision of the workers

02:33 - 34.471 compensation judge be reinstated and the board reversed.

02:33 - 36.273 Thank you very much.

02:33 - 38.475 Thank you both very, very much.

02:33 - 40.144 Very well argued.

02:33 - 43.480 Breathed and very interesting. So thank you.