OPINION BY Judge SIMPSON.
This first of two related interlocutory appeals by permission returns to us after our Supreme Court vacated our prior decision in Meyer v. Community College of Beaver County, 965 A.2d 406 (Pa.Cmwlth. 2009) (en banc) and remanded the case to us. In doing so, the Supreme Court determined that the part of the Judicial Code commonly known as the Political Subdivision Tort Claims Act (Tort Claims Act)
Generally, the Community College appeals an interlocutory order of the Court of Common Pleas of Beaver County (trial court) denying its motion for partial summary judgment. A group of former students (Plaintiffs)
In May 2002, before Plaintiffs completed the Academy's course of study, the Pennsylvania Municipal Police Officers' Education and Training Commission (Training Commission) suspended the Academy's Act 120 certification. The Training Commission based the suspension on numerous violations. The Training Commission officially revoked the Academy's Act 120 certification in August 2002.
Thereafter, Plaintiffs filed a complaint against the Community College that alleged as follows. In its 2000-01
The Community College filed preliminary objections, only some of which are relevant now. In addition to issues regarding whether it is subject to liability under the CPL and whether it is immune from statutory-based claims, the Community College challenged the sufficiency of averments of fraud.
As pertinent to the current discussion, the trial court allowed CPL claims sounding in contract to proceed; however, the trial court sustained objections to all claims sounding in fraud, including CPL claims, because the averments did not establish scienter on the part of the Community College.
Plaintiffs filed an amended complaint. They repeated their previous claims for breach of contract and breach of warranty. As to claims under the CPL, they removed averments of fraudulent conduct, but they retained averments that conduct was unfair and deceptive. This pleading will be discussed below. Plaintiffs alleged substantial economic losses as a result of the Community College's violations of the CPL. They also sought treble damages and an award of costs and attorney fees under Section 9.2 of the CPL.
A second round of preliminary objections was filed. Relevant now, the Community College challenged Plaintiffs' pleading of misrepresentations, asserting the averments reintroduced CPL claims sounding in fraud, contrary to the trial court's ruling on the first set of preliminary objections. Accepting Plaintiffs' arguments that the language sought to bolster breach of contract and warranty claims and not to plead a cause of action in fraud, the trial court overruled the objections.
After the close of pleadings and discovery, the Community College filed a motion for partial summary judgment. Relevant to this appeal, the Community College argued the CPL does not apply to community colleges and, as a local agency, a community college is immune from CPL claims under 42 Pa.C.S. § 8541, part of the Tort Claims Act.
Ultimately, the trial court denied the Community College's motion for partial summary judgment. The trial court rejected the assertion the CPL does not apply to community colleges. It further rejected the immunity defense on the basis that some of Plaintiffs' CPL claims sound in contract, not in tort. In denying the motion for partial summary judgment, the trial court reasoned (with emphasis added):
Trial Ct. Slip Op., 5/12/08, at 5, Reproduced Record (R.R.) at 258.
In response to the denial of its motion, the Community College filed a motion to amend the order to certify for an interlocutory appeal of the following two issues: whether the Community College is a "person" as defined in Section 2(2) of the CPL, 73 P.S. § 201-2(2); and, whether the Community College is immune to prosecution because the CPL sounds in tort and the Community College is immune to tort actions under the Tort Claims Act. The trial court granted the Community College's motion. This Court allowed the appeal.
After argument, an en banc panel of this Court reversed the trial court, holding that regardless of whether the Community College was a "person" under the CPL, it was immune from claims for statutory damages under the Tort Claims Act. The Supreme Court, however, permitted a discretionary appeal. Ultimately, it reversed and remanded, with direction.
The majority opinion was authored by Mr. Justice Saylor. The majority concluded that our application of the Tort Claims Act to statutory damages was not sustainable. The majority emphasized the main policy considerations historically underlying tort law, centered on injury to a person or property. See Meyer II, 606 Pa. at 544-45, 2 A.3d at 502. This was contrasted with the central focus of contract law, the protection of bargained-for expectations. Id. The Torts Claims Act was intended to apply to the former, not the latter. Id. Consequently, the Supreme Court held that governmental immunity does not extend to all statutory causes of action, regardless of whether they sound in tort or contract. See id. at 545-46, 2 A.3d at 503.
In a lengthy note responding to the concurring opinion, the majority presumed the first order of business on remand would be for this Court to undertake the threshold determination of whether the Legislature intended for the government to be subject to private actions under Section 9.2 of the CPL. Id. at 546 n. 6, 2 A.3d at 503 n. 6. The majority highlighted the Plaintiffs' argument referencing Commonwealth Court opinions holding that the Legislature did not intend to include governmental entities within a listing of persons and entities which might technically encompass them where it did not include the governmental entity expressly. See, e.g., Huffman v. Borough of Millvale, 139 Pa.Cmwlth. 349, 591 A.2d 1137 (1991); see also Leonard v. Masterson, 70 A.D.3d 697, 896 N.Y.S.2d 358 (N.Y.App.Div.2010).
In her concurring opinion, Madame Justice Orie Melvin expressed her preference for directing this Court "to examine the pleadings on remand to determine whether
The Community College first asserts it is not included in the CPL's definition of a "person" and thus not subject to prosecution under Section 9.2 of the CPL. Section 2(2) of the CPL, 73 P.S. § 201-2(2), defines a "person" as follows (with emphasis added):
Clearly, no form of government unit or public authority is expressly included in the definition. What is less clear is whether the phrase "any other legal entities" extends to public agencies.
Section 9.2(a) of the CPL, which deals with private actions for alleged violations of that statute, uses the defined term "person" as follows:
73 P.S. § 201-9.2(a) (emphasis added). Notably, this provision uses the term "person" to describe both a plaintiff and a defendant in a private action under the CPL.
The Community College contends that public subdivisions and municipal corporations are recognized as unique statutory entities and are afforded defenses based on that status. One such defense is the well-established prohibition against a presumption that a public entity is subject to suit without having been specifically identified within the statute.
The Community College relies on various Pennsylvania appellate court decisions for the proposition that unless specifically named, public entities are excluded from the reach of statutes even where "catch-all" language is present. E.g., In re Keifer, 430 Pa. 491, 243 A.2d 336 (1968) (an established principle of statutory construction: an act does not deprive the Commonwealth of any prerogative, right, or property unless the Commonwealth is specifically named or the intention to include it is necessarily implied); Hoffman v. City of Pittsburgh, 365 Pa. 386, 75 A.2d 649 (1950) (applicability of statutes to public entities never presumed); Huffman (borough beyond reach of Wage and Payment
Further, the Community College cites various Pennsylvania statutes as evidence that the General Assembly knew how to specifically include public entities within "catch-all" provisions.
In contrast, Plaintiffs assert that a "plain language" reading of the CPL definition of "person" leads to the conclusion that it includes the Community College, which is a legal entity. Citing TIG, they argue that statutory construction rules in general, and the rule of expressio unius est exclusio alterius in particular, should not be applied where the words of a statute are clear and unambiguous.
Plaintiffs also contend that there is no rule of construction that would require the General Assembly to name community colleges in a statute in order to evince its intent to apply the statute to those entities. Many of the cases referenced by the Community College are inapplicable because they deal with the sovereign, the Commonwealth, and not with a local agency. Also, those cases make clear that the rule of construction was applied to protect the Commonwealth's rights and prerogatives from diminution, as by the application of a statute of limitations. Because application of the CPL to the Community College will not involve the Commonwealth as a party or the diminution of any right of the Commonwealth, the cases are inapposite. Plaintiffs also remind this Court of the reasoning which compelled the Supreme Court to abolish sovereign immunity.
Further, Plaintiffs contend there is no legislative intent to exclude community colleges from application of the CPL. Assuming that resort to rules of construction is appropriate, various rules support their position. Thus, although a court must assume that the General Assembly intends the entire statute to be effective, 1 Pa.C.S. § 1922(2), the Community College approach would render the definitional phrase "any other legal entities" ineffective. Also, cases require that the CPL be liberally construed to effectuate the legislative goal of consumer protection. Commonwealth
Finally, Plaintiffs seek to distinguish Huffman, which involved the definition of "employer" under the Wage and Payment Collection Law, and the other statutory definitions upon which the Community College relies.
The parties here advance competing interpretations regarding the meaning of "person" as defined in the CPL. Because the parties offer conflicting interpretations of the relevant statutory provision, the term is ambiguous. See, e.g., Malt Beverage Distribs. Ass'n v. Pa. Liquor Control Bd., 601 Pa. 449, 974 A.2d 1144 (2009). (statute is ambiguous where parties offered conflicting, but plausible interpretations). "As in all cases where a latent ambiguity in [a] statute exists, we resort to the canons of statutory construction to discover the Legislature's intent." Id. at 463, 974 A.2d at 1153.
When statutory language is not explicit, the intention of the General Assembly may be ascertained by considering the mischief to be remedied, the object to be attained, and the consequences of a particular interpretation. 1 Pa.C.S. § 1921(c)(3), (4), (6). Further, in ascertaining legislative intent, the Statutory Construction Act requires a presumption that "the General Assembly did not intend a result that is absurd or unreasonable" as well as a presumption that "the General Assembly intends to favor the public interest as against any private interest." 1 Pa.C.S. § 1922(1), (5).
The General Assembly's intent is revealed by a careful examination of the entire CPL. As noted above, the term "person" in Section 9.2 is used not just to refer to a defendant, such as the Community College here, but also to refer to a plaintiff. This dual use of the term is consistent throughout the CPL. See, e.g., Section 4.1 of the CPL,
Examining the context in which "person" is used throughout the CPL, we conclude that the General Assembly intended the term to have a uniform meaning. Thus, there is nothing in the way the General Assembly used the term to indicate it meant something different depending on whether it referred to a plaintiff or a defendant. Also, there is nothing in the way the General Assembly used the term to indicate it meant something different in each section of the CPL.
We first consider use of the term "person" to connote a plaintiff in an action based on violations of the CPL. Evaluating the consequences of a particular interpretation,
Moreover, the absurdity of such a construction is most evident with regard to Sections 4,
A construction under which a local agency is not a plaintiff "person" results in the inability of a local agency to recover past lost sums under Section 4.1. This is true even if suit brought in the public interest is successful and prospective injunctive relief is granted. In short, even where suit in the public interest is successful, a local agency would have no retrospective remedy, only a prospective remedy. Such a result is indefensible, clearly not in the public interest, and inconsistent with our
We now consider use of the term "person" to mean a defendant in a suit based on violations of the CPL. One way to protect the public fisc is to construe the CPL so that local agencies are not "persons" and therefore can never be defendants. As discussed above, however, such an overbroad prohibition absurdly limits the right of local agencies to recover as plaintiffs. Moreover, such a construction unnecessarily restricts the rights of ordinary consumers or other legal entities to recover against local agencies should agency practices be unfair or deceptive so as to violate the CPL. Such a construction is not consistent with our charge to liberally construe the CPL to achieve its objectives. Id.
A more targeted approach to protecting the public interest is to limit those circumstances in which a "person," can be liable. Indeed, the CPL contains express limitations on liability.
First, a "person" is only liable if it is engaged in trade or commerce, as those terms are defined. See Section 2(3) of the CPL, 73 P.S. § 201-2(3). This status filter operates to protect defendant "persons," including local agencies, from broad liability.
Second, Section 3 of the CPL, 73 P.S. § 201-3, contains specific exclusions from liability. The exclusions cover those who, in good faith and without knowledge of falsity or deceptive character, are involved in the broadcast or publication of an advertisement which may violate the CPL. Tellingly, the exclusions do not more broadly shield local agencies from liability.
Third, Section 9.2 of the CPL, addressing actions other than those brought in the public interest, limits liability on the basis of the purpose of the transaction. In particular, before a "person" can be liable as a defendant in such an action, the transaction must involve "personal, family or household purposes." See Valley Forge Towers S. Condo. v. Ron-Ike Foam Insulators, Inc., 393 Pa.Super. 339, 574 A.2d 641 (1990), aff'd, 529 Pa. 512, 605 A.2d 798 (1992). Through this additional transaction-purpose filter, the General Assembly endeavored to focus recovery on consumer-based practices and to protect defendant "persons," including local agencies, from expansive liability.
Fourth, a careful review of Sections 4, 4.1, and 8(b) of the CPL, relating to suits brought in the public interest, supports our analysis. Thus, suits by the Attorney General or district attorney in the name of the Commonwealth must be based on a determination by an elected official that such a suit is in the public interest. See Weinberg v. Sun Co., Inc., 565 Pa. 612, 777 A.2d 442 (2001). This determination is a prerequisite to injunctive relief under Section 4 (prospective), restorative relief under Section 4.1 (retrospective), and civil penalties under Section 8(b). We conclude that this additional "public interest" filter functions to protect all defendant "persons," including local agencies, from inappropriate suit.
In sum, considering the statute's dual use of the term "person" to mean both plaintiff and defendant, the provisions for suits in the public interest, the consequences of a construction in which the phrase "any other legal entities" does not include local agencies, and the existence of additional filters to protect all "persons,"
The Community College does not acknowledge the dual use issue, and it does not address use of the term "person" throughout the CPL. Also, the Community College does not address the import of provisions for suits in the public interest. Because the Community College does not contemplate the full implications of the construction for which it advocates, its contentions are not persuasive.
Also, given our analysis based on the terms and structure of the CPL, we specifically reject those arguments based on cases which do not involve this statute and those arguments based on unrelated statutes. In particular, we reject as inapplicable the argument based on Kiefer, Hoffman, and Huffman
Further, we distinguish Leonard, which was referenced by our Supreme Court majority in Meyer II. Leonard involved a suit in mandamus seeking to compel a superintendent of highways to commence proceedings to declare a private road over land owned by a county. Thus, the petitioner sought a private taking of public land under the Highway Law. The Supreme Court, Appellate Division, determined:
70 A.D.3d at 698, 896 N.Y.S.2d at 360 (citations omitted).
For the reasons discussed, we conclude that the Community College is a "person" as defined in the CPL. Therefore, no trial court error is evident on this issue.
The Community College next asserts that as a public entity it is immune from tort actions under the Tort Claims Act, except for certain exceptions not relevant here. For several reasons, it asserts the CPL sounds in tort; accordingly, an action for violation of the CPL is a tort action to which immunity under the Tort Claims Act applies.
As to the standard by which to distinguish actions sounding in tort from actions sounding in contract, the Community College advocates several approaches. First, it suggests that for an action to sound in contract there must be an underlying enforceable contract. Where, as here, there is no underlying enforceable contract, the claim cannot sound in contract and must therefore sound in tort. Moreover, courts recognize that attempts to circumvent the Torts Claim Act by reclassifying an action as sounding in contract are not sufficient to avoid immunity.
Citing Matarazzo v. Millers Mutual Group, Inc., 927 A.2d 689 (Pa.Cmwlth. 2007) (application of Tort Claims Act to municipal authority despite attempts to raise contract claim; CPL not involved), the Community College suggests another approach to distinguishing between actions sounding in tort and actions sounding in contract. Under this approach, tort actions lie for breaches of duties imposed by law as a matter of social policy, while contract actions lie only for breaches of duties imposed by mutual agreements between the parties. Id. at 694. Because the CPL is intended to remedy a breach of social policy related to fraud and unfair and deceptive trade practices, suit for violation of the CPL provisions in question here sounds in tort.
As a third approach, the Community College offers the misfeasance/nonfeasance dichotomy discussed in Yocca v. Pittsburgh Steelers Sports, Inc., 806 A.2d 936 (Pa. Cmwlth.2002), rev'd on other grounds, 578 Pa. 479, 854 A.2d 425 (2004) (class action by season ticket holders under CPL; preliminary objections). Under this approach, where, as here, there is misfeasance, the "gist" of the action sounds in tort.
Further, the Community College reminds us that judicial and statutory limitations to damages available against a public entity would be reversed by a decision against it. The Community College specifically refers to treble damages available under Section 9.2 of the CPL.
Finally, the Community College seeks to distinguish cases relied upon by Plaintiffs,
In response, Plaintiffs contend that the Tort Claims Act does not apply to their claims. Claims under the CPL may sound in contract, warranty, tort, fraud and other common law forms of action. The trial court correctly determined that Plaintiffs' claims sound in contract or warranty. The claims are not based on general social obligations but on private agreements between the parties.
Plaintiffs also assail the Community College's argument that they attempt to plead contract claims as a way of avoiding immunity. In the process of disputing this argument, Plaintiffs seek to distinguish cases upon which the Community College relies, including Matarazzo and cases discussing the relationship between a student and a college.
Addressing the damages available under the CPL, Plaintiffs contend that statutory damages, including possible treble damages and attorneys' fees, do not transform contract claims into tort claims. The statutory damages are legislative remedies, not punitive damages.
Finally, Plaintiffs argue that the question of whether their claims sound in contract cannot be answered by reference to a social policy allegedly embodied in the CPL. In their discussion of this point, Plaintiffs reference the Supreme Court's decision in Weinberg, which addressed a private plaintiff's burden of proof in the context of class certification.
In her concurring opinion, Madame Justice Orie Melvin encouraged this Court "to examine the pleadings on remand to determine whether the [Plaintiffs'] claims satisfy the CPL. If sufficient facts have been pled, the Commonwealth Court should ascertain whether the claims sound in tort or in contract and dispose of the matter accordingly." Meyer II, 606 Pa. at 549, 2 A.3d at 505. As to ascertaining whether the claims sound in tort or in contract, Mr. Justice Saylor, writing for the majority, reminded us that the central focus of contract law is the protection of bargained-for expectations. Id. at 544-45, 2 A.3d at 502.
In their amended complaint, Plaintiffs alleged the Community College violated the CPL in the following manner:
Pls.' First Am. Compl. at 13, R.R. at 114. Thus, Plaintiffs allege conduct proscribed by the CPL as defined in Sections 2(4)(ii), (iii), (v), (vii), (xiv) and (xxi), 73 P.S. § 201-2(4)(ii), (iii), (v), (vii), (xiv), (xxi).
Moreover, we conclude that these averments sound in contract rather than tort. Clearly, the averments relate to the sale of educational services. Under these averments, the protection of bargained-for expectations is implicated.
Further, Plaintiffs brought an action under Section 9.2 of the CPL. As discussed elsewhere, such an action may be brought by a person "who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss...." 73 P.S. § 201-9.2. Thus, an action under Section 9.2 of the CPL must be transaction based. For this additional reason, we conclude Plaintiffs' action under the CPL sounds in contract.
Regarding the Community College's argument raising the specter of treble damages, no ruling is necessary at this time, for several reasons. First and foremost, the trial court did not address this issue in denying the motion for partial summary judgment. Second, "[Plaintiffs] are not sure to recover [treble] damages...." See Meyer II, 606 Pa. at 549, 2 A.3d at 505 (Orie Melvin, J., concurring opinion). The speculative nature of such recovery is highlighted by the trial court's decision on the first round of preliminary objections and the current pleadings. In particular, the trial court struck off claims for fraud
As a consequence of these conclusions, we hold that immunity under the Tort Claims Act does not apply to Plaintiffs' CPL claims. Therefore, we discern no error in the trial court's ruling on this issue.
For all the foregoing reasons, we affirm the decision of the trial court denying the Community College's motion for partial summary judgment. The case is returned to the trial court.
Jurisdiction is relinquished.
DISSENTING OPINION by Judge PELLEGRINI.
I respectfully dissent. Unlike the majority, I would hold that the Community College of Beaver County (Community College) is immune from suit because the action brought sounds in tort, not in contract. I also dissent because the majority holds that the Community College is engaged in "trade or commerce" as that term is used in the Unfair Trade Practices and Consumer Protection Law (CPL).
A group of former students (Students) filed a civil action against the Community College for breach of contract and breach of warranty as well as various unfair or deceptive acts as defined in the CPL. In their complaint, the Students alleged that they had completed a substantial portion of the training when the Community College lost its certification under the governing statute as a result of decertification, the credits they earned could not be recognized elsewhere, and they incurred damages as a result. In Meyer v. Community College of Beaver County, 606 Pa. 539, 2 A.3d 499 (2010), reversing in part this Court, our Supreme Court held that governmental immunity created by the Political Subdivision Torts Claim Act
While it raised many issues in its partial motion for summary judgment, the Community College only addressed two of those issues in its brief. First, the Community College argued that it was not subject to liability under the CPL because it is not a "person" within the definition of Section 2.2 of the CPL so as to impose
The second issue the Community College raised in its brief is that the Students' claims sound in tort, not contract. It argues that a course catalog does not create a contract between the parties upon which to base a contract action. Second, representations made by the Community College staff members cannot create a contractual obligation. Based on an examination of the complaint, the majority finds that those allegations the Students have pled sound in contract, not tort. I disagree with the majority because I do not believe that the Students have made out a contractual claim and would dismiss the action.
Insofar as the Students claim that a contract action can be based on breach of representation contained in the student handbook because the handbook created a contract, we rejected that contention in Tran v. State System of Higher Education, 986 A.2d 179 (Pa.Cmwlth.2009), where we explicitly held that a student handbook of a public university does not create a contract between the public university and the student. See also Crabtree v. California University of Pennsylvania, 147 Pa.Cmwlth. 1, 606 A.2d 1239, 1240 n. 3 (1990). Because community colleges are public colleges, a contract action cannot be maintained on an alleged breach of a student handbook or catalog.
As to whether representations by the Community College staff can create a contract between the parties, ignoring that contracts with bodies have to be entered in compliance with statutory formalities, representations made by staff members are not sufficient to bring a contract claim. In Matarazzo v. Millers Mutual Group, Inc., 927 A.2d 689 (Pa.Cmwlth.2007), we addressed whether a contract claim could be brought based upon a governmental employee's representation on which a party relied causing them injury. While we agreed that an action could be maintained for private parties, it could not be used to turn negligent actions by governmental employees into contract actions to avoid governmental immunity. If we were to hold otherwise, any guidance counselor who foolishly and negligently promised to a student that if he or she took a course and did well, he or she would get into Harvard, and then the student would take those courses and do well but did not get into Harvard, could bring an action in contract.
Finally, in footnote 16, the majority holds that it sees "nothing in the language or structure of the CPL to suggest a legislative intent to insulate local agencies engaged in trade or commerce from responsibility for unfair or deceptive practices which cause a loss to Pennsylvania Consumers." First, I disagree because this issue was never raised or briefed by any of the parties, and we should not address it sua sponte. Second, I disagree with the substance of the holding. The reason that I would hold that the CPL does not apply is not that the Community College is not a person but that is not engaged in the conduct of a "trade or commerce." "Trade or commerce" is mercantile activity in which the person engaged in that business is doing so for private profit which could motivate unfair or deceptive practices for private gain or, more accurately, private greed. All of the provisions of the CPL are aimed at private businesses. The Community College is not engaged in the
For the foregoing reasons, I dissent.
DISSENTING OPINION by Judge LEAVITT.
The majority holds that the Community College of Beaver County is a "person" that can be held liable for treble damages under the Unfair Trade Practices and Consumer Protection Law (Consumer Protection Law)
Here, a group of students seek damages because they took police officer training courses based, in part, on the representations of the Community College that its program was certified. The college lost its certification, and the students lost the benefit of their bargain. The students may be entitled to relief, but not under the Consumer Protection Law. To reach this conclusion, I look to the words of the Consumer Protection Law.
The students seek redress under Section 9.2(a) of the Consumer Protection Law, which states:
Section 9.2(a) of the Consumer Protection Law, 73 P.S. § 201-9.2(a), added by Act of November 26, 1976, P.L. 1166 (emphasis added). The students assert they are "persons" who purchased "services" for "personal purposes" and thereafter suffered a loss of money as a result of the unlawful act of another "person," i.e., the Community College. The Consumer Protection Law defines "person" as follows:
Section 2 of the Consumer Protection Law, 73 P.S. § 201-2 (emphasis added). The question is whether the words "any other legal entities" meant to sweep up the Commonwealth, its agencies and Pennsylvania municipal corporations within the reach of "person." There are several reasons why I believe that it does not.
First, the General Assembly knows how to draft legislation to define "person" to designate a Commonwealth agency or political
Section 2 of the Controlled Substance, Drug, Device and Cosmetic Act, 35 P.S. § 780-102(b) (emphasis added). Likewise, Section 103 of the Solid Waste Management Act,
35 P.S. § 6018.103 (emphasis added).
Second, the statutory construction maxim ejusdem generis must inform our construction of "any other entity." This doctrine "mandates that general expressions used in a statute are restricted to things and persons similar to those specifically enumerated in the language preceding the general expressions." Petty v. Hospital Service Association of Northeastern Pennsylvania, ___ Pa. ___, ___, 23 A.3d 1004, 1009 (2011) (citation omitted). In Section 2, the listed entities are private parties, i.e., "natural persons, corporations, trusts, partnerships [and] incorporated or unincorporated associations." 73 P.S. § 201-2. A Commonwealth agency created by the legislature to administer and enforce a statute bears no similarity to the private parties listed in Section 2. Any "other legal entity" might include, for example, a limited liability company, which is a type of legal entity formed to conduct business that is not named in Section 2; indeed, this type of legal entity did not exist at the time the Consumer Protection Law was enacted in 1976.
It makes sense that the Commonwealth and its progeny were intentionally omitted from the definition of "person," because the Consumer Protection Law regulates "trade or commerce," which does not describe governmental activities, as noted by Judge Pellegrini in his dissent.
Section 3 of the Consumer Protection Law, 73 P.S. § 201-3 (emphasis added). The Commonwealth, its agencies and municipal corporations are not engaged in "trade or commerce." The Community College is a public institution, funded, in part, by the Commonwealth and was not created to "compete" with private educational institutions, whether non-profit or for-profit. Rather, the Community College was created to fill a need not filled by other institutions.
This Court has held that the Commonwealth is a "person" capable of bringing "a private action" to recover treble damages under Section 9.2 of the Consumer Protection Law. See Commonwealth v. TAP Pharmaceutical Products, Inc., 885 A.2d 1127, 1143 (Pa.Cmwlth.2005) (TAP II). I agree with the majority that if the Commonwealth or a local agency is a person for purposes of being a plaintiff under the Consumer Protection Law, then it follows that either must also be a "person" for purposes of being a defendant. Stated otherwise, the word "person" must have one meaning for all purposes of the statute. However, I believe we erred in TAP II in holding that the Commonwealth was a "person" for purposes of being a plaintiff in a Section 9.2 action. We should overrule this portion of the decision.
In TAP II, the Attorney General filed suit under Section 9.2 against a number of pharmaceutical companies, asserting that they had engaged in unfair and deceptive marketing practices for the purpose of overcharging consumers for their drug products. To bring a "private action" under Section 9.2, the plaintiff "person" must have purchased the drugs for "personal, family or household purposes." 73 P.S. § 201-9.2. We glossed over that point, holding that the "Commonwealth" could bring a "private" action against the named pharmaceutical defendants, even though the Commonwealth did not purchase drugs for "personal, family or household purposes." 73 P.S. § 201-9.2. We also overlooked the title of Section 9.2, which creates a "private action," and the fact that an action brought by the Attorney General in the name of the Commonwealth cannot be a "private action." Instead, we accepted the Attorney General's argument that because the Commonwealth acted in a representative, or parens patriae capacity, the Commonwealth was a "person" capable of bringing a "private action" under Section 9.2 to recover damages. There are several flaws to our holding in TAP II.
The central flaw is that the Attorney General does not have general parens patriae authority.
PA. CONST. art. IV, § 4.1 (emphasis added). The law that imposes those powers and duties is the Commonwealth Attorneys
This was not always the case. Article IV, section 4.1 was added to the Pennsylvania Constitution by amendment in 1978. Prior to that amendment, the Attorney General was appointed by the governor and served as a member of the governor's cabinet as head of the Department of Justice. Pre-1978, the Attorney General's powers and duties were enumerated in The Administrative Code of 1929, Act of April 9, 1929, P.L. 177, as amended, 71 P.S. §§ 51-732, and they were thought to be augmented by common law powers. In a landmark case, Commonwealth ex. rel. Minerd v. Margiotti, 325 Pa. 17, 188 A. 524 (1936), our Supreme Court reviewed the historic antecedents of the Attorney General's common law power and held that Pennsylvania's Attorney General
Id. at 30-31, 188 A. at 530 (emphasis added).
The Attorney General's common law powers included the power to supersede a district attorney in a criminal matter and to intervene in charitable trust cases on behalf of the citizens of Pennsylvania. See, e.g., Commonwealth v. The Barnes Foundation, 398 Pa. 458, 467, 159 A.2d 500, 505 (1960) (holding that the Attorney General enjoys the common law power to participate in litigation involving charitable trusts).
In 1978, our Supreme Court overruled Minerd, finding "the reasoning in this line of decisions to be erroneous...." Commonwealth v. Schab, 477 Pa. 55, 60, 383 A.2d 819, 821 (1978). Accordingly, the Supreme Court held that the Attorney General lacked the power to supersede a district attorney in a criminal law enforcement matter. That same year, after Schab was issued, the voters adopted Article IV, section 4.1 of the Pennsylvania Constitution, which instituted the election of our Attorney General, replacing the selection by gubernatorial appointment.
Thereafter, the newly elected Attorney General attempted to supersede a district attorney in a criminal case, arguing that the holding in Schab was no longer viable in light of the constitutional amendment. Specifically, the Attorney General argued that the
Commonwealth v. Carsia, 512 Pa. 509, 512, 517 A.2d 956, 957-958 (1986) (emphasis added). Our Supreme Court rejected the argument that the Attorney General had any powers not specified in statutory law.
Explaining the meaning of Article IV, section 4.1 of the Pennsylvania Constitution, the Supreme Court explained:
Id. at 513, 517 A.2d at 958 (emphasis added). In sum, under the Pennsylvania Constitution, the powers of the Attorney General are "strictly a matter of legislative designation and enumeration." Id.
In reaching this conclusion, the Supreme Court relied upon a report of the Joint State Government Commission that had been prepared on the legislation needed to establish the scope and powers of the new Office of Attorney General. The Commission's final report explained that
JOINT STATE GOV'T COMM'N, OFFICE OF ELECTED ATTORNEY GENERAL, FINAL REPORT 4 (1978). The legislation that was the subject of the Joint State Government Commission's report became the Commonwealth Attorneys Act.
The Commonwealth Attorneys Act has limited the Attorney General's parens patriae power, i.e., the power to initiate actions on behalf of citizens, to two circumstances. First, the Attorney General may intervene in charitable matters on behalf of citizens. 71 P.S. § 732-204(c).
In Pennsylvania, our Constitution has limited the Attorney General's powers to those established by "legislative designation and enumeration." Carsia, 512 Pa. at 513, 517 A.2d at 958. The legislature has authorized the Attorney General to bring suit "on behalf of citizens," a parens patriae power, but only for violations of federal antitrust laws.
Further, the General Assembly has created a specific role for the Attorney General with respect to the Consumer Protection Law. Section 4 of the Consumer Protection Law authorizes the Attorney General to "bring an action in the name of the Commonwealth against such person to restrain by temporary or permanent injunction the use of [an unlawful] method, act or practice." 73 P.S. § 201-4.
The majority's construction of "person" has wide-reaching implications. It would allow the Attorney General to initiate a Section 4.1 injunction action against a "person" that is a Commonwealth agency such as, for example, the Liquor Control Board. This shows the absurdity of construing the statute's definition of "person" to mean a government agency or institution, as either a plaintiff or a defendant. The Consumer Protection Law devolves into a program of government feeding on itself.
There are cogent reasons why the Consumer Protection Law did not designate a Commonwealth agency or municipal corporation as a "person" in Section 2. Commonwealth agencies and municipal corporations do not need the protections of the Consumer Protection Law because they are not like private consumers. An individual procurement officer may fall sway to exaggerated claims featured in Superbowl advertisements, but his impressionability is irrelevant. State and local agencies are constrained in how they make purchases. The Commonwealth purchases goods or services through competitive bidding procedures governed by the Commonwealth Procurement Code, 62 Pa.C.S. §§ 101-4604. Likewise, municipal corporations make purchases only in accordance with competitive bidding. See, e.g., Section 3102(a) of the Second Class Township Code, 53 P.S. § 68102(a).
Nor is there an obvious necessity to hold a Commonwealth agency or municipal corporation liable for its actions under the Consumer Protection Law. Persons acting under color of state law can be held accountable for their deceitful acts under 42
In sum, "person" as defined in the Consumer Protection Law does not include a Commonwealth agency or state institution or municipal corporation of any type.
For these reasons, I would reverse the order of the trial court and grant the Community College's motion for partial summary judgment.
DISSENTING OPINION by Judge BROBSON.
I commend my colleagues who penned opinions in this matter for their thorough and thoughtful analyses of the issues before this Court. I write, however, to take a more holistic approach to addressing the general question before this Court—namely, whether governmental entities,
If public agencies can be held liable under the CPL, as the majority reasons, the implications of the majority's holding are far reaching. Under the Liquor Code,
Under the Real Estate Tax Sale Law,
There are many more instances where state and local agencies engage in "trade" and "commerce" as these terms are strictly defined in the CPL. Because our state and local governments are authorized to engage in such activities, I am loathe to construe the CPL in such a way as to create a private right of action against government agencies in the absence of clear legislative intent to support such a construction. I do not believe the General Assembly's use of the phrase "any other legal entities," which follows a list of clearly private concerns, in the definition of "person" in the CPL
Finally, construing "any other legal entity" in such a way as to authorize private litigants to bring suits under the CPL against public entities violates the rule of statutory construction that requires us to presume that the General Assembly does not intend to favor private interests over the public interest. 1 Pa.C.S. § 1922(5). The majority's decision in this case, which provides private citizens access to public coffers to remedy purely private injuries under the CPL, ignores this presumption.
For these reasons, I would reverse the trial court.
CONCURRING OPINION by Judge McCULLOUGH.
I concur in the result reached by the Majority. I agree that the Community College of Beaver County (College), as a legal entity, falls within the definition of "person" set forth at section 2(2) of the Unfair Trade Practices and Consumer Protection Law (CPL)
The instant action was filed by a group of students (Students) who were enrolled in the College's police academy training program (Academy) and had completed a substantial portion of their training when the Academy lost its Act 120 certification.
The threshold question raised in this appeal is whether the College is subject to
The College asserts that it is not subject to the CPL, based in part on the assertion that it is not a "person," which term is defined by section 2(2) of the CPL as "natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations, and any other legal entities." 73 P.S. § 201-2(2). Like the Majority, I disagree.
The College contends that, as a general principle, the word "person" does not include a government entity unless the same is expressly included in the statutory definition.
I agree with the Majority that the holding in Leonard is inapplicable here; indeed, I believe that the statute, facts, and policy concerns in Leonard are so distinguishable as to render any reference to that case of no value.
More important, no Pennsylvania court has issued a similarly explicit holding. Relying on Huffman v. Borough of Millvale, 139 Pa.Cmwlth. 349, 591 A.2d 1137 (1991), the College claims that our courts have applied a substantially comparable principle in construing a statutory definition. However, I believe that the College's reliance on Huffman is misplaced. Huffman involved an injured borough police officer who filed a complaint alleging that the borough failed to compensate him for holiday, vacation and sick leave benefits. On appeal, this Court first addressed the trial court's determination that the police officer had no cause of action under the Wage Payment and Collection Law (Wage Law)
Huffman, 591 A.2d at 1139 (footnote omitted). Subsequently, in Philipsburg-Osceola Education Association v. Philipsburg-Osceola Area School District, 159 Pa. Cmwlth. 124, 633 A.2d 220, 223 (1993), we relied on our analysis in Huffman to hold that a school district was not an employer under the Wage Law. ("The legislature could have easily included municipal corporations or, for that matter, school districts under its definition of employer, but it did not. We therefore decline to extend the Wage Law to school district employers.")
These cases have been cited for the propositions that: (1) the Wage Law does not apply to municipal employees; and (2) the court will not supply a missing term in a statute. Neither case has been cited for the principle that a statute does not apply to a government entity unless the statute specifically so provides. Notably, neither is part of a "line of cases" holding that the legislature did not intend to include governmental entities within a listing of persons and entities which might technically encompass them where it did not expressly include the governmental entity in such listing.
The College cites In re Keifer, 430 Pa. 491, 243 A.2d 336 (1968), for the established principle of statutory construction that "an act does not deprive the Commonwealth of any prerogative, right or property, as would a statute of limitations, unless the Commonwealth is specifically named therein or unless an intention to include the Commonwealth is necessarily implied. When the act is an expression of "public policy," however, the general rule does not apply." Id. at 495, 243 A.2d at 339 (citations omitted). Keifer was an eminent domain proceeding that addressed whether a statute of limitations barred the state from accepting a dedication of land. Concluding that the statute was not an expression of public policy, the court in Keifer held that it did not apply against the Commonwealth. The College also relies on the decision in Hoffman v. Pittsburgh, 365 Pa. 386, 398, 75 A.2d 649, 654 (1950) ("It is axiomatic that a statute is never presumed to deprive the state of any prerogative, right, or property unless the intention to do so is clearly manifest, either by its express terms or necessary implication"). The court in Hoffman held that an ordinance adopted by the City of Pittsburgh pursuant to a statute did not authorize the City to acquire a fee simple title in property owned by the Commonwealth.
Both of these cases are factually distinguishable from the present matter in an important respect: they involved the status of the Commonwealth, rather than a local government agency. Moreover, the College cites no Pennsylvania case applying such a principle to other governmental entities. The distinction between sovereign and governmental entities is well recognized
Accordingly, I agree with the Majority that the College's arguments are without merit. I also would note Students' response to the College's argument that the failure to explicitly include a community college or governmental entity in the CPL's definition of "person" precludes the application of the statute to those entities: the CPL expressly identifies those entities that are not subject to its provisions.
73 P.S. § 201-3. As Students point out, the legislature did not include community colleges or governmental entities of any kind in this provision.
Finally, I agree that a review of the averments establishes that the protection of bargained-for expectations is implicated in this case. Accordingly, I join the Majority in concluding that the College is not immune from Students' claims under the CPL.
However, I believe that the Majority unnecessarily considers issues that are in no way implicated in this appeal. To the extent that this part of the Majority's analysis is other than dicta, I am compelled to disagree.
Indeed, despite the "dual use" of the word "person" within the CPL, I believe it would be equally reasonable to conclude that the CPL's various provisions reflect a legislative intent to provide two distinct methods of ensuring that the purpose of the statute is met. Significantly, the purpose of the CPL is to protect the public from fraud and unfair or deceptive business practices. Burke v. Yingling, 446 Pa.Super. 16, 666 A.2d 288 (1995); see also Commonwealth ex rel. Packel v. Ziomek, 145 Pa.Cmwlth. 675, 352 A.2d 235, 238 (1976) ("The purpose of the General Assembly in passing the [CPL] was to protect citizens from unfair or deceptive practices, and the Legislature granted to the Attorney General the power to bring an action in the name of the Commonwealth for injunctive relief to protect the individual citizens...."). The CPL effectuates
Moreover, holding that all governmental entities are persons permitted to bring an action under section 9.2 of the CPL— which specifically authorizes "a private action"—overlooks the very meaning of the word "private," which is "[r]elating or belonging to an individual, as opposed to the public or the government." Black's Law Dictionary 1315 (9th ed.2009).
Therefore, whereas the Majority sua sponte decides that all public entities are "persons" that can bring private actions and can be subject to suit under the CPL, I would simply hold that there is no legal basis to conclude that the College is not subject to the action brought by Students under section 9.2 of the CPL.
71 P.S. § 732-204(c) (emphasis added).
The Commonwealth has not yet enacted a state antitrust statute. In the meantime, the Attorney General may enforce federal antitrust laws in a representative capacity.
73 P.S. § 201-4.
73 P.S. § 201-4.1. Section 4.1 was added by the Act of November 24, 1976, P.L. 1166.
73 P.S. § 201-8.
53 P.S. § 68102(a).
42 U.S.C. § 1983.
Id. In the Consumer Protection Law, the legislature chose not to follow the default definition of "person" set forth in the Statutory Construction Act of 1972. Instead, it added "natural person," deleted "government entity" and did not add "Commonwealth." These must be presumed conscious decisions.
73 P.S. § 201-2(3) (emphasis in original).
In addition, I do not believe that it is necessary to revisit our decision in Commonwealth v. TAP Pharmaceutical Products, Inc., 885 A.2d 1127, 1143-44 (Pa.Cmwlth.2005), and consider again whether the Commonwealth has parens patriae standing to pursue damage claims of individuals under the CPL, where the issue in the present case is whether an action may be brought under the CPL against the College.
Finally, in answer to the query whether accountability under the CPL is needed, (Dissent, pages 608-09), I believe that the egregious conduct alleged here, see footnote 4, infra, suggests that such accountability is not redundant.
Moreover, in light of the specificity with which the phrase "unfair or deceptive acts or practices" is defined by section 2(4)(i)-(xxi) of the CPL, 73 P.S. § 201-2(4)(i)-(xxi), and particularly in light of the nature of the conduct described, e.g., passing off goods or services as those of another, I do not share the concerns expressed in Judge Brobson's dissent and do not expect that actions will regularly be brought against state or local agencies for the egregious conduct the CPL prohibits. More important, I would not characterize such acts by public entities as causing "purely private injury."