appeals - HMS Legal

PA Supreme Court Further Demolishes Act 13 in Robinson Township Remand Appeal

Whitney Snyder on September 30, 2016

On September 28, 2016, the Pennsylvania Supreme Court (Court) ruled[1] on a Commonwealth Court remand decision[2] of the Robinson Township 2013 Court decision,[3] where the Court held key provisions of Act 13[4] (the statute implementing major changes in Pennsylvania’s oil and gas laws and the ability of local government to regulate this industry) were unconstitutional (HMS Blog). In the 2016 Robinson Township decision, the Court: (1) upheld the Commonwealth Court’s holding that provisions related to Public Utility Commission (PUC) review of local ordinances are unseverable from unconstitutional provisions and thus unenforceable, and (2) held four additional provisions of Act 13, including the grant of eminent domain, unconstitutional.

The Supreme Court Decision

The Court agreed with the Commonwealth Court’s decision (HMS Blog) that provisions of Act 13 related to PUC and Commonwealth Court oversight of municipal zoning laws are unseverable from Sections 3303 and 3304, which prohibited local governments from enacting or enforcing environmental legislation regulating oil and gas operations and mandated that all ordinances regulating oil and gas be uniform, and that certain drilling activities be allowed in all zoning districts regardless of existing zoning laws. The Court’s 2013 plurality opinion found Sections 3303 and 3304 of Act 13 unconstitutional under the Environmental Rights Amendment of the Pennsylvania Constitution. Here, the Court held Act 13 Sections 3305 through 3309 are unseverable from Sections 3303 and 3304, and thus unenforceable, completely stripping the PUC of local zoning oversight under the Act.

The Court disagreed with the Commonwealth Court and ruled unconstitutional four other sections, including the Act’s grant of eminent domain power to entities transporting, selling, or storing natural gas that are not public utilities. Section 3241 granted corporations transporting, selling or storing natural gas the right to appropriate an interest in real property located in a storage reservoir or reservoir protective area if the area is or has been commercially productive of natural gas The Commonwealth Court had upheld the constitutionality of Section 3241 because its grant of eminent domain power to a corporation “empowered to transport, sell, or store natural gas in this Commonwealth” is the equivalent of the power traditionally conferred on public utilities that engage in similar activities. The Supreme Court disagreed, reasoning that Section 3241 conferred the power on a class of entities much broader than public utilities, and that corporations exercising eminent domain power under Section 3241would be acting with a primarily private purpose as opposed to a public purpose, in violation of both the Fifth Amendment of the U.S. Constitution and Article 1, Sections 1 and 10 of the Pennsylvania Constitution.

The Court held the other three sections of Act 13 unconstitutional as “special legislation” forbidden by Article III, Section 32 of the Pennsylvania Constitution:

Section 3218.1, requiring DEP to notify, after investigation, any public drinking water facility that could be affected by a spill;
Section 3222.1(b)(10), (the medical “gag rule”) limiting disclosure by the fracking industry to health professionals of identities and amounts used of chemicals claimed to be proprietary or trade secrets and only allowing disclosure where medical professional executes a confidentiality agreement and a statement that the information is needed for diagnosing or treating an individual; and
Section 3222.1(b)(11), allowing health professionals limited opportunity to request such information in a medical emergency and verbally agree to confidentiality and acknowledge purpose of information.

The Court enjoined further application and enforcement of these provisions, but stayed the injunction with respect to 3218.1, DEP spill notifications, for 180 days in order to give the General Assembly time to enact remedial legislation.

Justice Todd authored the opinion, in which Justices Donohue, Dougherty and Wecht joined, Chief Justice Saylor concurred and dissented, and Justice Baer concurred and dissented.

Public and Industry Reaction

The decision is clearly a win for both environmentalists and municipalities, which describe the decision as a recognition of citizen’s rights over the gas industry’s political power.[5] On the other hand, the industry claims the decision will not actually provide any environmental or safety benefits all the while increasing difficulty of investing and creating jobs.[6]

With many of Act 13’s provisions now unenforceable, it remains to be seen whether the General Assembly will be able to strike a balance between oversight and regulation of oil and gas drilling with the interests of citizens and the industry in future legislation. However, the 2013 plurality opinion in Robinson Township has given the Environmental Rights Act teeth and the Court’s 2016 decision has reinforced that the Court will closely scrutinize legislation that encourages natural resource development at the expense of private property rights and environmental concerns.

[1] Robinson Township v. Commonwealth of Pennsylvania, 104 MAP 2014, ___ A.3d ___ (Pa. Sept. 28, 2016).

[2] Robinson Township v. Commonwealth of Pennsylvania, 96 A.3d 1104 (Pa. Cmwlth. 2014).

[3] Robinson Township v. Commonwealth of Pennsylvania, 83 A.3d 901 (Pa. 2013).

[4] Act 13 of Feb. 14, 2012, P.L. 87 (Act 13).

[5] Susan Phillips, PA Supreme Court rules with environmentalists over remaining issues in Act 13, StateImpact (available at https://stateimpact.npr.org/pennsylvania/2016/09/28/pa-supreme-court-rules-with-environmentalists-over-remaining-issues-in-act-13/); see also Don Hopey, High court strikes down Pa. law on shale gas, Pittsburgh Post-Gazette, PowerSource (Sept. 28, 2016) (available at http://powersource.post-gazette.com/business/legal/2016/09/28/US-appeals-court-hears-arguments-in-Clean-Power-Plan-case-2/stories/201609280043).

[6] Id.

Uber Week for Uber in PA – Commonwealth Court Affirms PUC’s Authorization of Raiser’s Service (an Uber Subsidiary) and PUC Decreases Recommended $49 Mil Civil Penalty to $11 Mil

Whitney Snyder on April 25, 2016

In an April 19, 2016 Opinion, the Pennsylvania Commonwealth Court[1] affirmed the Public Utility Commission’s (PUC) grant of a certificate of public convenience (CPC) for experimental authority to operate as a common carrier to Raiser-PA, LLC (Raiser) in Pennsylvania, excluding Philadelphia.[2] Raiser is a subsidiary of Uber Technologies, Inc. (Uber), which licenses the technology to Raiser that allows users to request a ride via smartphone app.

Raiser requested PUC approval of its services in June 2014, although Uber and some of its subsidiaries had been illegally operating in Pennsylvania since February 2014, for which the PUC fined Uber approximately $11 million on April 21, 2016 in a 3-2 vote, as discussed below.

Raiser’s services do not fit squarely into traditional common carrier service and thus it applied for experimental service because, among other things, it does not own the cars used for service or employ the drivers and it utilizes smartphone app technology to allow customers to request service. The PUC approved Raiser’s application for experimental services on December 5, 2014, imposing numerous conditions on its grant of a CPC and denied reconsideration of its order.[3]

Commonwealth Court Opinion

Various competing “traditional” taxi companies petitioned for review of the PUC’s grant of Raiser’s CPC, arguing the PUC failed to follow its own regulations when it found jurisdiction over Raiser, abused its discretion in granting Raiser’s CPC, lacked substantial evidence in granting Raiser’s CPC, erred in applying its own regulations concerning the requisite rate specificity, erred in reversing the administrative law judge’s initial decision without substantial evidence, and abused its discretion in denying reconsideration. The court rejected all challenges and affirmed the PUC.

First, the court ruled that the PUC has great discretion in applying its experimental service regulation at 52 Pa. Code § 29.352 to find jurisdiction because Raiser is proposing to provide transportation services to the public for compensation. Rejecting the cab companies’ argument that Raiser is not a common carrier because it does not have custody of any vehicles, the court reasoned that Section 102 of the Public Utility Code does not require a carrier to own or operate its motor vehicles.

Second, the court ruled that the PUC’s decision was supported by substantial evidence because there is demand for Raiser’s services, Raiser will not bring unrestrained or destructive competition to the marketplace, and it is technically and financially fit. The court pointed out that the policy statement is just that, and not a binding norm, and dismissed the taxi companies’ arguments regarding competitive harm out of hand, finding that they had not carried the heavy burden required. The finding of demand for Raiser’s services is unsurprising – Raiser-type services are, at least for the tech savvy, undeniably easier and more convenient to utilize, and rates can be lower than traditional taxi rates depending on location and demand.[4] Moreover, as the court and PUC reasoned, there was evidence of other TNC service competitors’ success and multiple witness testimony of the need for service (the evidence usually relied upon to show demand for service in taxi certificate proceedings). The finding of technical and financial fitness concerning propensity to comply with PUC regulations and orders was a more interesting question given Uber’s noncompliance with PUC regulations and orders in the past. However, the court reasoned that since Raiser is now compliant with its PUC authorization “the mere fact of prior violation does preclude a carrier form obtaining lawful authority.”[5] The court upheld the PUC’s finding of adequate capital and resources and technical expertise and experience based on Raiser’s access to Uber’s resources and successful operation in other US cities. For the final prong of technical fitness, insurance coverage and driver and vehicle safety, the court concluded that the PUC could rely on the conditions imposed in the order granting Raiser’s CPC that require Raiser to comply with applicable PUC regulations and establish an ongoing reporting obligation to ensure Raiser is doing so.

Third, the court rejected the argument that the PUC owed deference to the ALJ’s decision because the PUC may supersede ALJ decisions where, as here, the PUC’s order is based on substantial evidence.

Fourth, the court held the argument concerning specificity of tariff rates was waived because it was not properly raised and preserved before the PUC, and that even were the court to address the issue the claim was meritless because “Raiser’s tariff reflects the circumstances of Pennsylvania’s TNC market, i.e., the economic climate in which Raiser will operate.”[6]

Fifth, the court dismissed the argument that the PUC abused its discretion in denying reconsideration because the PUC had already addressed each argument raised in the request for reconsideration in its original order granting Raiser’s CPC, and because the petitioner who raised the argument only appealed the order on reconsideration, not the PUC’s original order granting Raiser’s CPC, thereby depriving the court of jurisdiction to consider challenges to the original order.

PUC Civil Penalty

On April 21, 2016 the PUC voted 3-2[7] to decrease penalties recommended in the November 17, 2015 ALJ Initial Decision[8] regarding Uber and its subsidiaries’ (Gegen, LLC, Raiser, LLC, and Raiser-PA, LLC[9]) operations in Pennsylvania prior to obtaining PUC authorization via a CPC. The Initial Decision recommended fining Uber approximately $49 million based on the PUC’s statutory power to penalize up to $1,000 per violation[10] (each trip provided by Uber was one violation) and the PUC’s regulations at 52 Pa. Code § 69.1201(a), which describes nine factors the PUC will consider when imposing penalties. The ALJs held Uber clearly violated the Public Utility Code and were especially concerned with Uber’s flagrant disregard of the PUC’s July 24, 2015 Order requiring Uber to cease and desist operations in Pennsylvania.

The PUC chose to decrease the penalty to approximately $11 million, voting 3-2 to adopt Chairman Brown and Commissioner Coleman’s Joint Motion, which reasoned Uber and its subsidiary’s ongoing compliance with PUC regulations and conditions pursuant to the CPC for experimental service is a mitigating factor favoring a significant reduction in the penalty. The majority defended the appropriateness of this still record-breaking penalty, stating that Uber “deliberately engaged in the most unprecedented series of willful violation of Commission orders and regulations in the history of this agency.”[11]

Commissioners Witmer and Powelson both issued statements arguing for an even lower penalty, focusing on Uber’s continued compliance, lack of customer complaints, and the fact that the largest penalties imposed by the PUC in the past have involved actual harm to customers, including a $500,000 penalty for a gas explosion resulting in 5 deaths[12] and a $1.4 million penalty for deceptive practices in failing to honor savings guarantees made to customers for electricity supply resulting in actual financial harm to customers.

All of the Commissioners agreed that the service Uber provided was a common carrier public utility service, and thus jurisdictional, echoing the result the Commonwealth Court reached in its April 19, 2016 Opinion concerning Raiser’s similar service.

[1] Case Nos. 238 C.D. 2015, 240 C.D. 2015, 253 C.D. 2015. Judge Cohn Jubelirer authored the opinion in which Judges Leadbetter, Simpson, Leavitt, Brobson, and McCullough joined. Judge Pellegrini concurred in the result only.

[2] Taxi service in Philadelphia is regulated by the Philadelphia Parking Authority.

[3] Application of Rasier-PA LLC, Docket No. A-2014-2416127 (Dec. 5, 2014), reconsideration denied, Docket No. A-2014-2416127 (Jan 29, 2015).

[4] http://www.cnbc.com/2015/08/31/whats-cheaper-in-your-city-cabs-or-ride-shares.html

[5] April 19, 2016 Opinion, slip op. at 16-17 (citing Brinks, Inc. v. Pa. Pub. Util. Comm’n, 456 A.2d 1342, 1344 (Pa. 1983)).

[6] April 19, 2016 Opinion, slip op. at 21.

[7] The PUC’s final order is not available at this time.

[8] Pa Pub. Util. Comm’n v. Uber Technologies, Inc., et al., Initial Decision, Docket No. C-2014-2422723 (Nov. 2015) (“ID”).

[9] Raiser-PA, LLC did not provide any transportation services during the timeframe in question. Uber was precluded from asserting any claim that subsidiaries or affiliates were the provider of service in order to avoid liability as a discovery sanction. ID at 9-10.

[10] ID at 20-22 (citing e.g., Newcomer Trucking, Inc. v. Pa. Pub. Util. Comm’n, 531 A.2d 85 (Pa. Cmwlth. 1987) (interpreting 66 Pa. C.S. § 3301)).

[11] Joint Motion at 2.

[12] At the time, $500,000 was the maximum penalty the PUC was enabled to impose under 66 Pa. C.S. § 3301(c).

Taking an Appeal in PA? 10 Waiver Traps to Avoid

Kevin McKeon on November 24, 2014

Pennsylvania’s appellate rules and the ever-evolving case law interpreting them can make it a challenge to even get to the merits of an appeal. Don’t get caught on the wrong side of a waiver trap. Some reminders:

Must you appeal? Most, but not all, orders that do not end a case cannot be appealed until the case is resolved as to all issues and parties. A subset of those interlocutory orders that may be appealed must be appealed immediately, or the right to do so is lost. These include certain orders deemed appealable under Pa. R.A.P. 311, certain orders involving declaratory judgments, certain orders under the Arbitration Act, certain orders in estate cases, and all collateral orders. Answering the “must I appeal?” question is critical. For further analysis on the issue see Pennsylvania Appellate Practice §§ 311:140 (right of appeal waived in certain cases where immediate apeal not taken); 341:3.2.1 and 341:3.2.2 (declaratory judgments and arbitration orders); 342:13 (Orphans’s Court orders) and 313:3 (collateral orders and waiver).
Thinking reconsideration before you appeal? Think again. If you think that trial court/agency reconsideration of a final order can avoid the need for an appeal, file a motion for reconsideration, but do yourself a favor and simultaneously file a timely appeal. The potential for waiver of all appeal rights when seeking reconsideration is so great that even the appellate courts take the time to point out the peril. See, e.g., M.O. v. J.T.R., 85 A.3d 1058, 1060 n.1 (Pa. Super. 2014). For further explanation and pointers on the issue see Pennsylvania Appellate Practice § 1701:27.
Beware post-trial motion practice. In civil cases a request for post-trial relief pursuant to Pa. R.C.P. No. 227.1 is required in most instances in order to preserve issues for appeal. But not in all cases. So you need to know. If a request for post-trial is not required, the appeal clock will start to run from the date of the order you want to appeal. If you seek post-trial relief, the appeal period likely will have expired by the time you discover your mistake, resulting in waiver of all issues on appeal. For further discussion and suggestions how to avoid the trap, see Pennsylvania Appellate Practice § 302:28.
If you are “misled” by the trial court on post-trial motions, it’s your fault. Sometimes it is difficult to know whether post-trial motions are required. You might think that if the trial court, through its actions or statements, contributes to the confusion by suggesting the wrong procedure, you will be excused. That used to be the law, but no more. If you fail to file post-trial motions where required because of something the trial court said or did, that may be a basis for entertaining post-trial motions nunc pro tunc, but that is cold comfort. The law on this point is summarized in Pennsylvania Appellate Practice § 302:29.
… Except in statutory appeals. Rule 227.1(g) prohibits the filing of post-trial motions in statutory appeals. However, in Appeal of Borough of Churchill the Supreme Court held that parties must file exceptions to orders of courts of common pleas disposing of statutory appeals if directed to do so by local rule or if invited to do so by the trial judge. To prevent waiver in statutory appeals, (a) comply with Pa.R.C.P. 227.1(g) by timely filing a notice of appeal from the order of the court of common pleas disposing of the statutory appeal; (b) comply with the holding in Churchill in those statutory appeal situations in which post-trial motions or exceptions are either required by local rule or invited by the trial judge, by also filing post-trial motions or exceptions; and (c) file a notice of appeal from the entry of judgment on the order resolving post-trial motions. This topic is discussed in more detail in Pennsylvania Appellate Practice § 302:21.
“Entry of judgment” can be a waiver trap. The appealable event in civil cases in which post-trial relief pursuant to Pa. R.C.P. No. 227.1 applies is not the order disposing of the request for post-trial relief, but the entry of judgment on the verdict following resolution of the request for post-trial relief. That means that where post-trial motions are required, the parties control the occurrence of the appealable event, not the court. There is no requirement that the praecipe to enter judgment be filed at any particular time. If you appeal without entering judgment, that is a curable defect. The problem arises where post-trial motions are not required, such as in a dismissal on summary judgment or preliminary objections, and you mistakenly assume that the appeal period is triggered by the filing of a praecipe to enter judgment filed by counsel. It is not: the appealable event is the entry of the order of dismissal, and if you assume otherwise you may miss your appeal deadline. See Pennsylvania Appellate Practice §§ 301:17-301:26.
Post supersedeas security timely, or you may regret it. If you are appealing a money judgment and seek to avoid paying it pending appeal, make sure you post the required security (120% of the judgment) within the appeal period. Otherwise, the appellee can proceed to execution, and, as a practical matter in many cases, render your appeal pointless. For the details on timely posting security see Pennsylvania Appellate Practice §§ 1731:1 and 1735:1.
If it isn’t in the record sent up, it does not exist. Although the Appellate Rules have been amended in recent years to limit the potential for waivers for failure of the appellant to assure that the appellate court has the complete original record before it when deciding an appeal, assume that if you plan to rely on a document that should be in the original record and is not, it is your fault and the issue related to the missing document will be deemed waived, even if the document is in the reproduced record. Just make it your practice to check the original record as transmitted to the appellate court. You will sleep better. See Pennsylvania Appellate Practice §§ 1921:3.
Be specific enough in your petition for review. Unlike a notice of appeal, a petition for review appealing an administrative agency’s decision must provide detail on the basis for the appeal. Every year, the Commonwealth Court quashes agency appeals or deems particular issues waived because the petition for review is deemed not specific enough. Don’t let that happen to you. Although a rule amendment fix has been published for comment, it has not yet been adopted by the Supreme Court. See Pennsylvania Appellate Practice § 1513:9.
Waiving waiver arguments. An ironic twist to the waiver trap problem is that your opponent has the capacity to waive the waiver argument against you by not raising it at the earliest opportunity. If you are confronted with a waiver challenge to your appeal, consider pushing back on this basis. See In Re Adoption of G.K.T., 75 A.3d 521 (Pa. Super. 2013); Pennsylvania Appellate Practice § 302:54.1.

Kevin McKeon is a co-author of West’s Pennsylvania Appellate Practice, an annually updated three-volume treatise on appellate litigation in Pennsylvania.

Supreme Court Orders Shorter Appellate Briefs

Kevin McKeon on April 4, 2013

The Pennsylvania Supreme Court has adopted rule changes that will result in shorter appellate briefs based on a “word count” approach of the type used in the Federal Rules of Appellate Procedure. The current volume limits are 70 pages for principal briefs and 25 pages for reply briefs. Under the new rules, the volume limits are a “word count” of 14,000 words for principal briefs (approximately 56 pages assuming 250 words per page) and 7,000 words for reply briefs (approximately 28 pages assuming 250 words per page). A brief based on word count must be accompanied by certification of counsel that the brief complies with the limit. The rule permits continued use of a page count to determine volume, but at the reduced page count levels of 30 pages for principal briefs and 15 pages for reply briefs.

Page limits for other appellate documents have also been converted to word counts. These are the jurisdictional statement and answer to jurisdictional statement prescribed in Rules 910 and 911, and the application for reargument permitted in Rule 2544.

The new rules also require the text of briefs to be displayed in 14 point type and footnotes in 12 point type.

The rule changes apply to all appeals and petitions for review filed on or after May 28, 2013.

A copy of the Supreme Court’s March 27, 2013 order adopting the rule changes is available here.

Shorter Briefs, Fewer Waiver Traps

Kevin McKeon on April 27, 2012

Under two new proposals to amend Pennsylvania’s Rules of Appellate Procedure lawyers will be writing shorter briefs with less risk of waiver.

Briefs would be shorter because the proposal is to move from the current 70 page limit to the alternatives of either (a) a 30 page limit or (b) a “word count” of 14,000 words that would translate to approximately 56 pages assuming 250 words per page. Reply briefs would move from the current limit of 25 pages to either (a) 15 pages or (b) 7,000 words. The proposal tracks the Federal Rules of Appellate Procedure. The same proposal would eliminate existing page restrictions on the statement of questions and the summary of argument and would require the text of briefs to be displayed in 14 point and footnotes in 12 point type. Comments are due May 7, 2012. 42 Pa.B. 1640 (March 31, 2012). http://www.pabulletin.com/secure/data/vol42/42-13/573.html

Risk of waiver would be decreased under a separate proposal to limit the appellant’s responsibility to provide the appellate court with a complete original record on appeal to those documents actually listed in the trial court’s transmission of the record to the appellate court. The intent is to provide a ”safe harbor” from waiver where parties rely on the contents of the list of record documents prepared by the prothonotary or clerk. The same proposal would require administrative agencies for the first time to provide the parties on appeal with a list of documents transmitted to the appellate court as the record on appeal. Comments are due May 31, 2012. 42 Pa. B. 1986 (April 14, 2012). http://www.pabulletin.com/secure/data/vol42/42-15/633.html