The Com. of PA, by and through The Philadelphia D.A., L. Krasner v. The A.G. of the Com. of PA

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
The Commonwealth of Pennsylvania, :
by and through The Philadelphia :
District Attorney, Larry Krasner, :
:
Plaintiff :
:
v. : No. 233 M.D. 2021
:
The Attorney General of the :
Commonwealth of Pennsylvania, :
:
Defendant :
The Commonwealth of Pennsylvania, :
by and through the Allegheny County :
District Attorney, Stephen A. Zappala, Jr., :
:
Plaintiff :
:
v. : No. 250 M.D. 2021
:
The Attorney General of the :
Commonwealth of Pennsylvania, :
McKesson Corp., Cardinal Health, :
Inc. and AmerisourceBergen Drug Corp., :
:
Defendants :
The Commonwealth of Pennsylvania, :
by and through The Philadelphia :
District Attorney, Larry Krasner, :
:
Plaintiff :
:
v. : No. 260 M.D. 2021
:
The Attorney General of the :
Commonwealth of Pennsylvania, :
:
Defendant :
The Commonwealth of Pennsylvania, :
by and through the Allegheny :
County District Attorney, :
Stephen A. Zappala, Jr. :
:
Plaintiff :
:
v. : No. 261 M.D. 2021
: Argued: December 13, 2021
The Attorney General of the :
Commonwealth of Pennsylvania, :
Johnson & Johnson, Janssen :
Pharmaceuticals, Inc., Ortho-McNeil- :
Janssen Pharmaceuticals, Inc., and :
Janssen Pharmaceutica, Inc., :
:
Defendants :
BEFORE: HONORABLE MARY HANNAH LEAVITT, Judge1
HONORABLE MICHAEL H. WOJCIK, Judge (P.)
HONORABLE ELLEN CEISLER, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE WOJCIK FILED: February 4, 2022
Before the Court in these consolidated matters are the preliminary
objections (POs)2 of the Attorney General of the Commonwealth of Pennsylvania
1
This matter was assigned to the panel before January 3, 2022, when President Judge
Emerita Leavitt became a senior judge on the Court.
2
“In ruling on preliminary objections, the courts must accept as true all well-pled facts that
are material and all inferences reasonably deducible from the facts.” Pennsylvania Independent
Oil and Gas Association v. Department of Environmental Protection, 135 A.3d 1118, 1123 (Pa.
Cmwlth. 2015), aff’d, 161 A.3d 949 (Pa. 2017) (citation omitted). “However, we ‘are not required
(Footnote continued on next page…)
2
(AG), McKesson Corp., Cardinal Health, Inc., AmerisourceBergen Drug Corp.
(collectively, Distributors), Johnson & Johnson, Janssen Pharmaceuticals, Inc.,
Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceutica, Inc.
(collectively, Manufacturer) to the Complaints for Declaratory Relief (PFRs)3 filed
by the Commonwealth of Pennsylvania, by and through the Philadelphia District
Attorney, Larry Krasner (DA Krasner), and the Allegheny County District Attorney,
Stephen A. Zappala, Jr. (DA Zappala) (collectively, DAs), pursuant to the
Declaratory Judgments Act (DJA).4 We sustain the AG’s, Distributors’, and
Manufacturer’s POs, and dismiss the PFRs.
The following facts may be summarized from the PFRs and the exhibits
appended thereto. On June 15, 2017, the AG5 announced that his office was
to accept as true any unwarranted factual inferences, conclusions of law or expressions of
opinion.’” Id. “To sustain preliminary objections, ‘it must appear with certainty that the law will
permit no recovery’ and ‘[a]ny doubt must be resolved in favor of the non-moving party.’” Id.3
Although styled as Complaints, the appropriate pleading that is used to commence an
action in our original jurisdiction against the Commonwealth and its officers under Chapter 15 of
the Pennsylvania Rules of Appellate procedure are petitions for review. See, e.g., MFW Wine Co.,
LLC v. Pennsylvania Liquor Control Board, 231 A.3d 50, 52 n.1 (Pa. Cmwlth. 2020) (Brobson,
J., single-judge opinion) (“Consistent with the applicable rules of appellate procedure, the Court
treats the Amended Complaint as a petition for review directed to this Court’s original jurisdiction.
See Pa. R.A.P. 1501(a)(3), 1502, 1503.”). Consistent with the foregoing, we refer to the filings as
PFRs.
4
42 Pa. C.S. §§7531-7541.
5
Article IV, section 4.1 of the Pennsylvania Constitution provides that the AG “shall be
the chief law officer of the Commonwealth and shall exercise such powers and perform such duties
as may be imposed by law.” Pa. Const. art. IV, §4.1. In relevant part, Section 204(a)(1) and (2),
(c), and (d) of the Commonwealth Attorneys Act, Act of October 15, 1980, P.L. 950, as amended,
71 P.S. §732-204(a)(1) and (2), (c) and (d) states:
(a) Legal advice.--
(Footnote continued on next page…)
3
participating in a nationwide investigation into the marketing and sale of prescription
opioids underlying the nationwide opioid epidemic.
Along with a number of other DAs6 from across the Commonwealth, in
2018, DA Krasner filed two, one-count complaints in coordinated proceedings
against Distributors and Manufacturer in the Delaware County Court of Common
Pleas (trial court). In 2021, DA Zappala filed two similar one-count actions that
were transferred to the trial court. These actions were based on the DAs’ authority
(1) Upon the request of the Governor or the head of any
Commonwealth agency, the [AG] shall furnish legal advice
concerning any matter or issue arising in connection with the
exercise of the official powers or the performance of the official
duties of the Governor or agency. . . .
(2) If the Governor or the head of any Commonwealth agency
disagrees with the legal advice rendered by the [AG], the Governor
or the head of the Commonwealth agency may seek a declaratory
judgment in the Commonwealth Court pursuant to [the DJA]. . . .
***
(c) Civil litigation; collection of debts.--The [AG] shall represent
the Commonwealth and all Commonwealth agencies . . . in any
action brought by or against the Commonwealth or its agencies, and
may intervene in any other action . . . .
(d) Administration of consumer affairs programs.--The [AG]
shall administer the provisions relating to consumer protection set
forth in [S]ections 917 through 922 of the [Administrative Code of
1929, Act of April 9, 1929, P.L. 177, as amended, added by the Act
of December 17, 1968, P.L. 1221, 71 P.S. §§ 307-1–307-6], and
appoint the advisory committee established under section 922.
6
Article IX, section 4 of the Pennsylvania Constitution states that “[c]ounty officers shall
consist of . . . district attorneys . . . .” Pa. Const. art. IX, §4.
4
under Section 4 of the Unfair Trade Practices and Consumer Protection Law (Law),7
to address the causes of the opioid epidemic flowing from Distributors’ and
Manufacturer’s unfair methods of competition and unfair or deceptive acts or
practices in the production, marketing, sale, and distribution of opioids in violation
of the Law.
In July 2021, the AG and three other state attorneys general announced
their support for a proposed Settlement Agreement with Distributors and
Manufacturer under which these companies would agree to pay the states and their
“Subdivisions” that joined the settlement8 more than $21 billion over an 18-year
period from Distributors, and $5 billion over a 9-year period from Manufacturer.
See PFRs Exhibit B ¶IV(A). With respect to the enforcement of the executed
Settlement Agreement, ¶XI(A) states:
A. Scope. As of the Effective Date, the Released Entities
are hereby released and forever discharged from all of the
Releasors’[9] Released Claims. Each Settling State (for
7
Act of December 17, 1968, P.L. 1224, as amended, 73 P.S. §201-4. Section 4 states:
Whenever the [AG] or a [DA] has reason to believe that any person
is using or is about to use any method, act or practice declared by
[S]ection 3 of this [Law] to be unlawful, and that proceedings would
be in the public interest, he may bring an action in the name of the
Commonwealth against such person to restrain by temporary or
permanent injunction the use of such method, act or practice.
8
Both Allegheny County and the City of Philadelphia are “Litigating Subdivisions” and
“Primary Subdivisions” that may be parties to the settlement if it is approved by them. See PFRs
Exhibit B ¶VII, and at C-36, C-37, I-36, I-37.
9
Settlement Agreement ¶I(III) defines “Releasors” as follows:
With respect to Released Claims, (1) each Settling State; (2) each
Participating Subdivision; and (3) without limitation and to the
(Footnote continued on next page…)
5
itself and its Releasors) and Participating Subdivision
hereby absolutely, unconditionally, and irrevocably
covenants not to bring, file, or claim, or to cause, assist or
permit to be brought, filed, or claimed, or to otherwise
seek to establish liability for any Released Claims against
any Released Entity in any forum whatsoever. The
releases provided for in this Agreement are intended by
the Parties to be broad and shall be interpreted so as to give
the Released Entities the broadest possible bar against
any liability relating in any way to Released Claims and
extend to the full extent of the power of each Settling
State and its Attorney General to release claims. This
Agreement shall be a complete bar to any Released Claim.
maximum extent of the power of each Settling State’s Attorney
General and/or Participating Subdivision to release Claims, (a) the
Settling State’s and Participating Subdivision’s departments,
agencies, divisions, boards, commissions, Subdivisions, districts,
instrumentalities of any kind and attorneys, including its Attorney
General, and any person in his or her official capacity whether
elected or appointed to serve any of the foregoing and any agency,
person, or other entity claiming by or through any of the foregoing,
(b) any public entities, public instrumentalities, public educational
institutions, unincorporated districts, fire districts, irrigation
districts, and other Special Districts in a Settling State, and (c) any
person or entity acting in a parens patriae, sovereign, quasi-
sovereign, private attorney general, qui tam, taxpayer, or other
capacity seeking relief on behalf of or generally applicable to the
general public with respect to a Settling State or Subdivision in a
Settling State, whether or not any of them participate in this
Agreement. The inclusion of a specific reference to a type of entity
in this definition shall not be construed as meaning that the entity is
not a Subdivision. Each Settling State’s Attorney General
represents that he or she has or has obtained (or will obtain no later
than the Initial Participation Date) the authority set forth in Section
XI.F. In addition to being a Releasor as provided herein, a
Participating Subdivision shall also provide the Subdivision
Settlement Participation Form referenced in Section VII providing
for a release to the fullest extent of the Participating Subdivision’s
authority.
PFRs Exhibit B ¶I(III) (emphasis added).
6
PFRs Exhibit B ¶XI(A) (emphasis added). The AG has approved the Settlement
Agreement and it has moved on to the Subdivisions, i.e., the City of Philadelphia10
and Allegheny County,11 for their approval on January 2, 2022. See PFRs Exhibit B
10
Pursuant to article IX, section 13 of the Pennsylvania Constitution, the Philadelphia
County offices have generally been abolished, with some exceptions such as the DA, and the City
performs all of the former functions of county government. Pa. Const. art. IX, §13. Under Section
3-101 of The Philadelphia Code, the City Solicitor is the head of the City’s Law Department. In
turn, Section 4-400(a), (b) and (c) of The Philadelphia Code states, in pertinent part:
The Law Department shall have the power and its duty shall be to
perform the following functions:
(a) Legal Advice. It shall furnish legal advice to the mayor, to the
Council and to all officers, departments, boards and commissions
concerning any matter or thing arising in connection with the
exercise of their official powers or performance of their official
duties and except as otherwise expressly provided, shall supervise,
direct and control all of the law work of the City.
(b) Litigation. The Department . . . shall represent the City and
every officer, department, board or commission in all litigation. . . .
(c) Contracts and Bonds. The Department shall prepare or approve
all contracts, bonds and other instruments in writing in which the
City is concerned . . . .
Philadelphia Code §4-400(a), (b), (c).
11
Under Article V, Section 3 of the Allegheny County Home Rule Charter, the County
Solicitor “shall be the chief legal officer of the County and serve as the director of the Law
Department.” Additionally, Allegheny County Administrative Code Section 5-405.03(C), (D),
(E), and (G) states:
The County Solicitor shall be the Director of the Law Department
and shall perform the following duties and responsibilities:
***
(Footnote continued on next page…)
7
¶¶II, VIII. Because the Settlement Agreement purports to extinguish their actions in
the trial court under the Law, by effectively resolving all claims against Distributors
and Manufacturer, the DAs filed the instant PFRs seeking a judgment: (1) declaring
that the AG lacks the authority to release the DAs’ claims filed under the Law; (2)
enjoining the AG’s release of the DAs’ claims filed under the Law against
Distributors and Manufacturer; and (3) providing any other relief that this Court
deems just and proper.
However, as alleged in the AG’s, Distributors’, and Manufacturer’s
third and fifth POs, the Settlement Agreement has not yet been executed by the
parties to become effective, or interposed into the trial court proceedings to
extinguish the DAs’ claims in those matters. As this Court has explained:
C. Commence and prosecute all suits brought or to be brought
by the County wherein or whereby any rights, privileges, properties,
claims or demands of the County are involved, as well as to defend
all actions, suits, grievances, claims or potential claims brought or
alleged against the County;
D. With the authority of the Chief Executive, compromise and
settle actions, suits, claims or potential claims brought by or against
the County, with notification to Council, prior to or
contemporaneous with execution of the agreement;
E. Prepare, or cause to be prepared, as directed by the Manager,
and/or approve as to form all contracts, agreements, leases, surety
bonds or other legal documents on behalf of the County; [and]
***
G. Perform all duties now performed by County Solicitors
under the laws of the Commonwealth and to do, perform every and
all professional acts, and render legal advice incident to the office
of County Solicitor, which may be required under the Charter.
The Administrative Code of Allegheny County §5-405.03(C), (D), (E), and (G).
8
It is well established that “[d]eclaratory judgments are not
obtainable as a matter of right. Rather, whether a court
should exercise jurisdiction over a declaratory judgment
proceeding is a matter of sound judicial discretion.” A
substantial limitation on the exercise of such jurisdiction
is the principle that we will not adjudicate a petition for
declaratory judgment where the issues are not ripe for
determination. In deciding whether the doctrine of
ripeness bars our consideration of a declaratory judgment
action, both the state and federal courts employ a two-part
test: “[t]he court must consider whether the issues are
adequately developed for judicial review and what
hardship the parties will suffer if review is delayed.”
The first prong of the test, whether the issues are
adequately developed for judicial review, itself contains
two parts. The first is whether the asserted deprivation of
rights (or entitlement to relief) is immediate or is
hypothetical and contingent upon uncertain future events.
Our Supreme Court has stated the following:
Only where there is a real controversy may a party
obtain a declaratory judgment.
A declaratory judgment must not be employed to
determine rights in anticipation of events which
may never occur or for consideration of moot cases
or as a medium for the rendition of an advisory
opinion which may prove to be purely academic.
“A substantial contingency is the classic impediment to a
pre-enforcement challenge [to a new statute].” The second
part of the first prong is whether resolution of the
constitutional or other legal dispute will involve
substantial fact-finding. Obviously, the more fact
intensive the dispute, the more significant the obstacle
posed by the uncertainty of future events. The United
States Supreme Court has explained as follows:
the reason [for] postponing [a] decision until a
constitutional issue is more clearly focused by, and
receives the impact from, occurrence in particular
circumstances is precisely that those circumstances
9
may reveal relevancies that abstract, prospective
supposition may not see or adequately assess.
The second prong of the ripeness test recognizes
that, even where the case is not as fully developed for
judicial review as the court would find appropriate, it may
still address the merits if refusal to do so would work a
demonstrable hardship on the parties. This could occur,
for instance, if a new statute provided criminal sanctions
for conduct that was believed to involve constitutionally
protected speech. In that case, a pre-enforcement
challenge might be heard so that the plaintiffs would not
risk incarceration as the price of testing the law.
The ripeness test was succinctly summarized . . . as
follows:
A court should look to (1) “the fitness of the issues
for judicial decision,” and (2) “the hardship to the
parties of withholding court consideration.” Under
the “fitness for review” inquiry, a court considers
whether the issues presented are purely legal, as
opposed to factual, and the degree to which the
challenged action is final. The various factors that
enter into a court’s assessment of fitness include:
whether the claim involves uncertain and contingent
events that may not occur as anticipated or at all; the
extent to which a claim is bound up in the facts; and
whether the parties to the action are sufficiently
adverse.
The second prong focuses on the hardship that may
be entailed in denying judicial review, and the
determination whether any such hardship is
cognizable turns on whether the challenged action
creates a “direct and immediate” dilemma for the
parties, such that the lack of pre-enforcement
review will put the plaintiffs to costly choices.
Applying this test, we must conclude that the [petitioner’s]
claims are not ripe for consideration.
10
City Council of Philadelphia v. Commonwealth, 806 A.2d 975, 978-80 (Pa. Cmwlth.
2002), vacated and remanded on ripeness grounds, 847 A.2d 55 (Pa. 2004) (citations
omitted).12
Likewise, at this juncture in this matter, it is impossible for this Court
to declare the respective rights of the parties regarding a Settlement Agreement that
has yet to be executed and that may still be modified, as it has been before. It is also
impossible for this Court to enjoin the AG from releasing the DAs’ claims under a
Release that has yet to be executed, or introduced into the trial court proceedings,
that may potentially provide the basis upon which the trial court may dismiss the
DAs’ claims. In short, under the first prong of the foregoing test, the DAs’ claims
“involve[] uncertain and contingent events that may not occur as anticipated or at
all,” and any relief that this Court may grant “is bound up in the facts” as they relate
to the terms of the Settlement Agreement and Release that have yet to be finalized
or executed. City Council of Philadelphia, 806 A.2d at 980. Additionally, with
respect to the second prong of the foregoing test, the DAs’ claims do not “create[] a
‘direct and immediate’ dilemma for the parties, such that the lack of pre-enforcement
review will put the[m] to costly choices” at the current stage of the proceedings. Id.As a result, unless and until any finalized Settlement Agreement and/or Release are
executed and affect the DAs’ rights in a substantial and concrete manner, any
opinion that this Court would issue at this stage of the proceedings would be an
impermissible advisory opinion. Id.12
The case was vacated and remanded “in light of the stipulation at argument by the parties
that power over the Philadelphia Gas Works has been transferred to the Pennsylvania Utility
Commission,” thereby making the matter ripe for review by this Court. City Council of
Philadelphia, 847 A.2d at 56.
11
Accordingly, we sustain the AG’s, the Distributors’ and the
Manufacturer’s POs, and dismiss the PFRs.13
MICHAEL H. WOJCIK, Judge
Judge Covey did not participate in the decision of this case.
Judge Fizzano Cannon did not participate in the decision of this case.
13
Based on the foregoing disposition of the POs, we will not address any remaining POs.
Additionally, the AG’s December 13, 2021 Application for Relief in the Nature of a Motion for
Leave to Correct Factual Record, the DAs’ December 22, 2021 Application for Relief to reply
thereto, and the DAs’ December 14, 2021 Emergency Application for Relief in the Nature of a
Notice of Supplemental Authority, are dismissed as moot.
12
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
The Commonwealth of Pennsylvania, :
by and through The Philadelphia :
District Attorney, Larry Krasner, :
:
Plaintiff :
:
v. : No. 233 M.D. 2021
:
The Attorney General of the :
Commonwealth of Pennsylvania, :
:
Defendant :
The Commonwealth of Pennsylvania, :
by and through the Allegheny :
County District Attorney, Stephen A. :
Zappala, Jr., :
:
Plaintiff :
:
v. : No. 250 M.D. 2021
:
The Attorney General of the :
Commonwealth of Pennsylvania, :
McKesson Corp., Cardinal Health, :
Inc. and AmerisourceBergen Drug Corp., :
:
Defendants :
The Commonwealth of Pennsylvania, :
by and through The Philadelphia :
District Attorney, Larry Krasner, :
:
Plaintiff :
:
v. : No. 260 M.D. 2021
:
The Attorney General of the :
Commonwealth of Pennsylvania, :
:
Defendant :
The Commonwealth of Pennsylvania, :
by and through the Allegheny :
County District Attorney, :
Stephen A. Zappala, Jr. :
:
Plaintiff :
:
v. : No. 261 M.D. 2021
:
The Attorney General of the :
Commonwealth of Pennsylvania, :
Johnson & Johnson, Janssen :
Pharmaceuticals, Inc., Ortho-McNeil- :
Janssen Pharmaceuticals, Inc., and :
Janssen Pharmaceutica, Inc., :
:
Defendants :
ORDER
AND NOW, this 4th day of February, 2022, the Defendants’ preliminary
objection is sustained, and the Plaintiffs’ Complaints for Declaratory Relief are
DISMISSED. The Attorney General of the Commonwealth of Pennsylvania’s
Application for Relief in the Nature of a Motion for Leave to Correct Factual Record,
Plaintiffs’ Application for Relief to reply thereto, and The Philadelphia District
Attorney, Larry Krasner’s and The Allegheny County District Attorney, Stephen A.
Zappala, Jr.’s Emergency Application for Relief in the Nature of a Notice of
Supplemental Authority, are DISMISSED as moot.
__________________________________
MICHAEL H. WOJCIK, Judge