Markovsky, J. v. Crown Cork & Seal Co.

J-A17039-14
2014 PA Super 282JAMES C. MARKOVSKY, EXECUTOR OF IN THE SUPERIOR COURT OF
THE ESTATE OF JAMES MARKOVSKY, PENNSYLVANIA
DECEASED
Appellant
v.
CROWN CORK & SEAL CO.,
PENN CENTRAL CORPORATION AND
CONSOLIDATED RAIL CORPORATION
Appellee No. 2755 EDA 2013
Appeal from the Order of September 11, 2013
In the Court of Common Pleas of Philadelphia County
Civil Division at No: 0451
BEFORE: GANTMAN, P.J., PANELLA, and STABILE, JJ.
OPINION BY STABILE, J.: FILED DECEMBER 22, 2014
Appellant James C. Markovsky, Executor of the Estate of James
Markovsky, deceased, appeals from the September 11, 2013 order of the
Court of Common Pleas of Philadelphia County, which granted summary
judgment in favor of Appellee Crown Cork & Seal Co.1 For the reasons set
forth below, we affirm.
____________________________________________
1
By per curiam order dated November 22, 2012, we granted Appellant’s
petition to discontinue this appeal as to Appellees American Premier
Underwriters, a/k/a Penn Central Corporation, and Consolidated Rail
Corporation.
J-A17039-14
I. BACKGROUND
On October 6, 2011, Appellant James Markovsky, now deceased, filed
a complaint against, inter alia, Appellee alleging he contracted mesothelioma
“caused by exposure to the asbestos products of Mundet,” Appellee’s
predecessor-in-interest. Complaint, 10/06/11, at ¶¶ 10ad, 13. Specifically,
Appellant alleged “he was exposed to asbestos fiber or asbestos products
manufactured, sold, distributed, or otherwise placed into the stream of
commerce by [Appellee].” Id. at ¶ 11.
On June 25, 2013, Appellee moved for summary judgment against
Appellant on the basis of, inter alia, 15 Pa.C.S.A. § 1929.1 (Section 1929.1),
Act of December 17, 2001, P.L. 904, No. 101 (Act 101 of 2001 or Act 101),
which in part provides:
(a) Limitation on successor asbestos-related liabilities.--
(1) Except as further limited in paragraph (2), the cumulative
successor asbestos-related liabilities of a domestic business
corporation that was incorporated in this Commonwealth prior to
May 1, 2001, shall be limited to the fair market value of the total
assets of the transferor determined as of the time of the merger
or consolidation, and such corporation shall have no
responsibility for successor asbestos-related liabilities in excess
of such limitation.
(2) If the transferor had assumed or incurred successor
asbestos-related liabilities in connection with a prior merger or
consolidation with a prior transferor, then the fair market value
of the total assets of the prior transferor, determined as of the
time of such earlier merger or consolidation, shall be substituted
for the limitation set forth in paragraph (1) for purposes of
determining the limitation of liability of a domestic business
corporation.
....
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(d) Application.--
(1) The limitations set forth in subsections (a) and (b) shall
apply to mergers or consolidations effected under the laws of
this Commonwealth or another jurisdiction consummated prior to
May 1, 2001.
(2) The limitations set forth in subsections (a) and (b) shall
apply to all asbestos claims, including existing asbestos claims,
and all litigation, including existing litigation, and shall apply to
successors of a domestic business corporation to which this
section applies.
(3) The limitations set forth in subsections (a) and (b) shall not
apply to workers’ compensation benefits paid by or on behalf of
an employer to an employee pursuant to the act of June 2, 1915
(P.L. 736, No. 338), known as the Workers’ Compensation Act,
or comparable workers’ compensation law of another
jurisdiction.
(4) The limitations set forth in subsections (a) and (b) shall not
apply to any claim against a domestic business corporation that
does not constitute a successor asbestos-related liability.
(5) This section shall not apply to an insurance corporation as
defined in section 3102 (relating to definitions).
(6) The limitations set forth in subsections (a) and (b) shall not
apply to any obligations arising under the National Labor
Relations Act (49 Stat. 449, 29 U.S.C. § 151 et seq.) or under
any collective bargaining agreement.
(e) Definitions.--As used in this section, the following words
and phrases shall have the meanings given to them in this
subsection:
....
“Successor asbestos-related liabilities.” Any liabilities, whether
known or unknown, asserted or unasserted, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated or
due or to become due, related in any way to asbestos claims,
that were assumed or incurred by a domestic business
corporation or foreign business corporation as a result of or in
connection with a merger or consolidation, or the plan of merger
or consolidation related thereto, with or into another domestic
business corporation or foreign business corporation effected
under the laws of this Commonwealth or another jurisdiction or
which are related in any way to asbestos claims based on the
exercise of control or the ownership of stock of such corporation
prior to such merger or consolidation. The term shall also include
liabilities which, after the time of the merger or consolidation as
to which the fair market value of total assets is determined for
purposes of subsections (a) and (b), were or are paid or
otherwise discharged, or committed to be paid or otherwise
discharged, by or on behalf of the corporation, or by or on behalf
of a transferor, in connection with settlements, judgments or
other discharges in this Commonwealth or another jurisdiction.
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“Transferor.” A domestic business corporation or foreign
business corporation from which successor asbestos-related
liabilities are assumed or incurred.
15 Pa.C.S.A. § 1929.1(a),(d) and (e).
In Johnson v. Am. Standard, 966 A.2d 573 (Pa. Super. 2009), in
explaining the purpose of Section 1929.1, this Court remarked:
[Section 1929.1] limits the asbestos-related liability of
Pennsylvania corporations when that liability arises from a
merger or consolidation. In general, [Section 1929.1] caps the
successor corporation’s asbestos-related liability at the fair
market value of the prior company as of the time of the merger
or consolidation. . . .
Id. at 576 (cited only for background purposes), rev'd on other grounds,
8 A.3d 318 (Pa. 2010).
On July 12, 2013, Appellant filed a response to Appellee’s summary
judgment motion. In its response, Appellant argued, inter alia, that Section
1929.1 was unconstitutional because it violated Article III, Section 32 of the
Pennsylvania Constitution, the dormant Commerce Clause under the United
States Constitution, and the Equal Protection Clause of the Fourteenth
Amendment to the United States Constitution.2 Additionally, Appellant
argued the manner in which legislation containing Section 1929.1 was
enacted was constitutionally flawed. Specifically, Appellant challenged the
legislation on the basis of Article III, Sections 1 (original purpose) and 3
(single subject) of the Pennsylvania Constitution.
____________________________________________
2
In Johnson v. Am. Standard, 8 A.3d 318 (Pa. 2010), the Supreme Court
held individual plaintiffs had standing to challenge Section 1929.1 on the
basis of the Equal Protection and dormant Commerce Clauses. Id. at 333-
34.
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On July 17, 2013, Appellee filed a reply to Appellant’s response to the
summary judgment motion, specifically contesting Appellant’s constitutional
arguments. On September 11, 2013, the trial court issued an order granting
Appellee’s summary judgment motion as a matter of law. Appellant filed a
timely appeal to this Court. Although the trial court did not order Appellant
to file a Pa.R.A.P. 1925(b) statement of errors complained of on appeal, it
issued an opinion on January 8, 2014 in support of its order granting
Appellee’s summary judgment motion. In its opinion, the trial court
dismissed Appellant’s constitutional arguments as unpersuasive.3 Before
addressing the constitutional arguments, however, the trial court noted it
granted summary judgment in favor of Appellee on the basis that Appellee
was protected from liability under Section 1929.1. Specifically, the trial
court found “[Appellant] acknowledges [Section 1929.1], on its face, would
bar [its] claims against [Appellee]. There is no dispute [Appellee] has paid
hundreds of millions of dollars on asbestos claims pertaining to Mundet
products, and there is no dispute this amount far exceeds Mundet’s value at
the time it merged into [Appellee].” Trial Court Opinion, 1/8/14, at 2.
____________________________________________
3
The trial court, in part, relied on Judge Alan Tereshko’s ruling in a prior
asbestos-related case to dismiss Appellant’s constitutional arguments. Trial
Court Opinion, 1/8/14 at 3-4. Specifically, the trial court relied upon In re
Asbestos Litig., 59 Pa. D. & C. 4th 62, 2002 WL 130599 (Phila. Com. Pl.
2002), rev’d and remanded on other grounds sub nom., Ieropoli v.
AC&S Corp., 842 A.2d 919 (Pa. 2004).
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Addressing Appellant’s dormant Commerce Clause argument, the trial
court concluded that Appellant “has failed to show [Section 1929.1] violates
the dormant aspect of the United States Constitution’s Commerce Clause.”
Id. at 4. The trial court further concluded “there is no apparent
discrimination against interstate commerce. [Section 1929.1] merely
protects Pennsylvania corporations from excessive liabilities. There is no
indication this will encourage intrastate rather than interstate commerce.”
Id. at 6.
The trial court next addressed Appellant’s argument under the
Fourteenth Amendment to the United Stated Constitution. Relying upon
legislative history, the trial court found:
[Section 1929.1] was meant to advance the Commonwealth’s
basic governmental interest to make sure our corporate merger
laws do not unfairly expose innocent companies to ruin solely
because of a merger. [Section 1929.1] combats the
unprecedented avalanche of asbestos-related claims threatening
to destroy corporations like Crown [(Appellee)], which are
exposed to liability based solely on their predecessors’ actions.
[Section 1929.1] protects such corporations, which provide jobs
to Pennsylvania residents and are integral to the
Commonwealth’s economy. [Section 1929.1] only affects
plaintiffs’ tort recoveries to the extent necessary to protect
corporations exposed to excessive successor liabilities, noting
the asbestos plaintiffs would still be adequately compensated by
the plethora of other defendants.
Id. at 7-8 (internal citation and quotation marks omitted). The trial court
thus concluded that “[Section 1929.1] is rationally related to a legitimate
purpose.” Id. at 8.
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Addressing Appellant’s contention that Section 1929.1 violated Article
III, Section 32 of the Pennsylvania Constitution by creating a one-member
class, the trial court found:
[Appellant] has not established the [s]tatute was intended to
benefit [Appellee] alone. The [s]tatute’s legislative history
reflects its sponsors used [Appellee] as an example of the
[s]tatute’s purpose, all the while emphasizing the potential
benefit to other similarly situated corporations throughout the
Commonwealth.
More importantly, [Appellant] has not shown it is
impossible or highly unlikely for other corporations to enjoy the
[s]tatute’s protections.
Id. at 10 (internal record citations omitted). Accordingly, the trial court
concluded that the statute was not unconstitutional under Article III, Section
32.
The trial court lastly addressed Appellant’s challenge to the propriety
of the underlying legislation giving rise to Section 1929.1. Specifically, the
trial court addressed Appellant’s challenge to the legislation, i.e., Act 101 of
2001, under Article III, Sections 1 (original purpose) and 3 (single subject)
of the Pennsylvania Constitution. With respect to Article III, Section 1, the
trial court found that the Act 101’s original purpose was “the regulation of
asbestos-related liability.” Id. at 12. In so finding, the trial court disagreed
with Appellant’s contention that Act 101’s original purpose had to be
construed narrowly. Id. at 11-12. Based on this finding, the trial court
concluded the legislation did not violate the constitution, because the
legislation’s “purpose remained intact when [it] was altered to limit
successor liability and provide for certain judicial costs.” Id. at 12.
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Regarding the constitutionality of the legislation under Section 3 of
Article III, the trial court found that the legislation’s “single subject is the
same as its original purpose, the regulation of asbestos-related liability.” Id.
In so doing, the trial court rejected Appellant’s argument that Act 101’s
limitations and successor liability were separate subjects. Id. The trial
court thus concluded that the legislation was not violative of Article III,
Section 3, because its “provisions pertaining to the statute of limitations and
successor liability in asbestos cases are not distinct or independent. Rather,
those provisions deal with sub-topics germane to regulating asbestos-related
liability.” Id.
II. DISCUSSION
On appeal,4 challenging the trial court’s grant of summary judgment in
favor of Appellee, Appellant raises five issues for our review.5
____________________________________________
4
It is well-settled that
[o]ur scope of review of a trial court’s order granting or denying
summary judgment is plenary, and our standard of review is
clear: the trial court’s order will be reversed only where it is
established that the court committed an error of law or abused
its discretion.
Summary judgment is appropriate only when the record clearly
shows that there is no genuine issue of material fact and that
the moving party is entitled to judgment as a matter of law. The
reviewing court must view the record in the light most favorable
to the nonmoving party and resolve all doubts as to the
existence of a genuine issue of material fact against the moving
party. Only when the facts are so clear that reasonable minds
could not differ can a trial court properly enter summary
judgment.
Hovis v. Sunoco, Inc., 64 A.3d 1078, 1081 (Pa. Super. 2013) (quoting
Cassel-Hess v. Hoffer, 44 A.3d 80, 84-85 (Pa. Super. 2012)). “Failure of a
non-moving party to adduce sufficient evidence on an issue essential to his
(Footnote Continued Next Page)
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I. Did the lower court err when it refused to rule that [] 15
Pa.C.S.[A.] § 1929.1[] created a one-member, closed class in
violation of Article III, § 32 of the Pennsylvania Constitution?
II. Did the lower court err when it refused to rule that [] 15
Pa.C.S.A. § 1929.1 violated Article III, § 1, the “original
purpose” provision of the Pennsylvania Constitution?
III. Did the lower court err when it refused to rule that
[] 15 Pa.C.S.A. § 1929.1 violated of [sic] Article III, § 3, “single
subject” provision of the Pennsylvania Constitution?
IV. Did the lower court err when it refused to rule that[] 15
Pa.C.S.A. § 1929.1 violated the Equal Protection Clause of the
Fourteenth Amendment to the United States Constitution?
V. Did the lower court correctly rule that there was a genuine
issue of material fact as to Mr. Markovsky’s exposure on a
regular and frequent basis for decades to asbestos from products
manufactured by [Appellee’s] predecessor-in-interest, Mundet
Cork Company?
Appellant’s Brief at 4-5.6
_______________________
(Footnote Continued)
case and on which it bears the burden of proof . . . establishes the
entitlement of the moving party to judgment as a matter of law.” Young v.
PennDOT, 744 A.2d 1276, 1277 (Pa. 2000) (noting that under Pa.R.C.P.
No. 1035.2, grant of summary judgment is proper when “an adverse party
who will bear the burden of proof at trial has failed to produce evidence of
facts essential to the causes of action . . . which in a jury trial would require
the issues to be submitted to a jury”).
5
Appellant has not raised its dormant Commerce Clause claim in this appeal,
because it does not raise it as a question presented for review in its brief.
As Appellee notes, Appellant mentions the dormant Commerce Clause
argument only in a footnote in its brief and otherwise fails to develop the
argument in any meaningful way. We agree. See Pa.R.A.P. 2116(a) (“The
statement of the questions involved must state concisely the issues to be
resolved”); see also Southcentral Emp’t Corp. v. Birmingham Fire Ins.
Co. of Pa., 926 A.2d 977, 983 n.5 (Pa. Super. 2007) (holding that issue not
explicitly raised in appellant’s statement of the questions involved is
waived); see also Pa.R.A.P. 2119(a), (b) (relating to the requirements of
the argument section); see also J.J. DeLuca Co., Inc. v. Toll Naval
Assocs., 56 A.3d 402, 412 (Pa. Super. 2012) (concluding that an issue is
waived when appellant failed to develop legal argument or cite relevant legal
authority in support of that issue). Thus, to the extent Appellant mentions a
dormant Commerce Clause argument, it is in passing only and within the
context of its argument that Section 1929.1 violates Article III, Section 32
and the Equal Protection Clause of the United States Constitution.
6
For ease of discussion, we have reorderd Appellant’s issues. We also have
removed the references to “the Crown Cork Statute” from the issues as
(Footnote Continued Next Page)
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At the outset, we note:
acts passed by the General Assembly are strongly presumed to
be constitutional, including the manner in which they were
passed. Accordingly, a statute will not be declared
unconstitutional unless it clearly, palpably, and plainly violates
the Constitution. If there is any doubt that a challenger has
failed to reach this high burden, then that doubt must be
resolved in favor of finding the statute constitutional.
Pa. State Ass’n of Jury Comm’rs v. Commonwealth, 64 A.3d 611, 618
(Pa. 2013) (internal citation and quotation marks omitted). The
constitutional validity of a statute presents a pure question of law and, as
with any question of law, our review of the trial court’s decision is plenary
and de novo. See West Mifflin Area Sch. Dist. v. Zahorchak, 4 A.3d
1042, 1048 (Pa. 2010).
A. Special Law
We first address Appellant’s argument that the trial court erred in
granting Appellee’s summary judgment motion, because Section 1929.1 was
violative of Article III, Section 32 of the Pennsylvania Constitution to the
extent Section 1929.1 created a one-member, closed class consisting solely
_______________________
(Footnote Continued)
presented in Appellant’s brief. The section of the statute in question is
titled, “Limitations on asbestos-related liabilities relating to certain mergers
or consolidations.” Although our review of case law reveals two occasions on
which now-retired Judge Richard J. Klein of this Court referred to the statute
as “the Crown Cork Statute,” neither our Supreme Court nor this Court, in
any majority opinion, has elected to do so and we shall not do so in this
Opinion. See Vanaman v. DAP, Inc., 966 A.2d 603 (Pa. Super. 2009) (en
banc) (Klein, J., concurring and dissenting) and Burger v. Owens Illinois,
Inc., 966 A.2d 611 (Pa. Super. 2009) (en banc) (Klein, J., concurring and
dissenting).
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of Appellee. In support of his argument, Appellant points out that Section
1929.1 creates a substantially closed class, because it sanctions membership
into the class only when the following seven requirements have been
fulfilled:
1. The business must be a corporation. 15 Pa.C.S. § 1929.1
(a)(1).
2. The corporation must be a Pennsylvania corporation.
15 Pa.C.S. § 1929.1(a)(1).
3. The corporation must have been incorporated before May 1,
2001. 15 Pa.C.S. § 1929.1(a)(1).
4. The corporation must have been involved in a merger or
acquisition of a second corporation prior to May 1, 2001.
15 Pa.C.S. § 1929.1(d)(1).
5. The second corporation must have incurred asbestos-related
liabilities prior to the merger or acquisition. 15 Pa.C.S.
§ 1929.1(a)(2).
6. The first corporation must have assumed, knowingly or
unknowingly, the asbestos-related liabilities of the second
corporation. 15 Pa.C.S. § 1929.1(a)(2).
7. Neither the first nor the second corporation can be an
insurance company. 15 Pa.C.S. § 1929.1(d)(5).
Appellant’s Brief at 16. Appellant argues that the foregoing classifications
were designed by the legislature for the exclusive benefit of Appellee and
that no other company could meet the classifications. Id. at 20. Relying
upon West Mifflin, Appellant contends that Section 1929.1 is per se
unconstitutional, because it creates a one-member class that is either closed
or substantially closed. Id. at 17-20. We disagree.
Article III, Section 32 provides in pertinent part that “[t]he General
Assembly shall pass no local or special law in any case which has been or
can be provided for by general law[.]” PA. CONST. art. III, § 32.
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It is well-settled that “a statute may be deemed per se
unconstitutional if, under the classification, the class consists of one member
and is closed or substantially closed to future membership. See Pa. Tpk.
Comm'n v. Commonwealth, 899 A.2d 1085, 1098 (Pa. 2006); accord
Harrisburg Sch. Dist. v. Hickok, 761 A.2d 1132, 1136 (Pa. 2000) (“[A]
classification is per se unconstitutional when the class consists of one
member and it is impossible or highly unlikely that another can join the
class.”). In Pennsylvania Turnpike Commission, the Supreme Court
concluded that the statute at issue was per se unconstitutional in that “the
class [defined by the statute] will never open to more than one member
because the General Assembly defined ‘public employer’ as ‘The
Pennsylvania Turnpike Commission.’” Pa. Tpk. Comm’n, 899 A.2d at 1098.
As our Supreme Court explained:
Pennsylvania’s proscription against local or special laws is
currently found in Article III, Section 32, and was first adopted in
the Pennsylvania Constitution of 1874. Like many constitutional
provisions, it was adopted in response to immediate past
abuses. The main purpose behind Article III, Section 32 was to
put an end to the flood of privileged legislation for particular
localities and for private purposes which was common in 1873.
Over the years, the underlying purpose of Article III, Section 32
has been recognized to be analogous to federal principles of
equal protection under the law and thus, special legislation
claims and equal protection claims have been reviewed under
the same jurisprudential rubric.
The common constitutional principle at the heart of the special
legislation proscription and the equal protection clause is that
like persons in like circumstances should be treated similarly by
the sovereign. Nonetheless, it is settled that equal protection
principles do not vitiate the Legislature’s power to classify, which
necessarily flows from its general power to enact regulations for
the health, safety, and welfare of the community, nor do these
principles prohibit differential treatment of persons having
different needs. . . .
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The prohibition against treating people differently under the law
does not preclude the Commonwealth from resorting to
legislative classifications, provided that those classifications are
reasonable rather than arbitrary and bear a reasonable
relationship to the object of the legislation. In other words, a
classification must rest upon some ground of difference, which
justifies the classification and has a fair and substantial
relationship to the object of the legislation.
Thus, there are a legion of cases recognizing that a legislative
classification which appears to be facially discriminatory may
nevertheless be deemed lawful if the classification has a rational
relationship to a legitimate state purpose. Furthermore,
legislative classifications must be founded on real distinctions in
the subjects classified and not on artificial or irrelevant ones
used for the purpose of evading the constitutional prohibition.
Finally, in analyzing a special legislation/equal protection
challenge, a reviewing court is free to hypothesize reasons the
General Assembly might have had for the classification of certain
groups.
Pa. Tpk. Comm'n, 899 A.2d at 1094-95 (internal citation, quotation marks
and footnotes omitted).
In Hickok, the statute at issue provided for a classification that
applied only to “‘a school district of the second class with a history of low
test performance which is coterminous with the city of the third class which
contains the permanent seat of government.’” Hickok, 761 A.2d at 1136.
Rejecting appellant’s argument (as lacking merit) that the classification
could apply to another school district because the capital could be moved to
another third class city in the future, the Supreme Court concluded that the
classification could apply only to the Harrisburg School District. Id.
Accordingly, the court held the statute to be per se unconstitutional. Id.
Here, unlike the statutes in Pennsylvania Turnpike Commission
and Hickok, Section 1929.1 is not per se constitutionally infirm under Article
III, Section 32, because it does not contain an apparent class consisting of
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one member that is closed or substantially closed to future membership.
Moreover, based on our review of the record, we conclude Appellant has not
offered any relevant evidence suggesting that Section 1929.1 is limited to
Appellee and that no other company could avail itself of the benefits of
Section 1929.1.7 It bears repeating that Appellant carries a heavy burden of
proof for purposes of challenging the constitutionality of Section 1929.1
under Article III, Section 32, which Appellant fails to meet sub judice. See
Pa. Tpk. Comm’n, 899 A.2d at 1098. As the trial court aptly noted:
As a threshold matter, [Appellant] has not established the
[s]tatute was intended to benefit [Appellee] alone. The
[s]tatute’s legislative history reflects its sponsors used
[Appellee] as an example of the [s]tatute’s purpose, all the while
emphasizing the potential benefit to other similarly situated
corporations throughout the Commonwealth.
More importantly, [Appellant] has not shown it is
impossible or highly unlikely for other corporations to enjoy the
[s]tatute’s protection. It seems likely, or at least possible, a
Pennsylvania (non-insurance) corporation besides [Appellee]
acquired a predecessor with asbestos-related liabilities before
May 1, 2001 and could eventually limit its liabilities under the
[s]tatute. [Appellant] offers zero evidence to refute this.
Accordingly, he has not shown [Appellee] is the only member of
the protected class [under Section 1929.1].
Trial Court Opinion, 1/8/14, at 10 (emphasis added). In support of its
conclusion, the trial court quoted the following passage from Judge
Tereshko’s opinion in Asbestos Litig.:
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7
To support its argument, Appellant cites legislative history to suggest
Section 1929.1 was enacted for the benefit of Appellee, because the
legislation’s sponsors invoked only Appellee by name. See Appellant’s Brief
at 21. As the trial court found, however, sponsors of the bill merely used
Appellee as an example to put the legislation’s purpose into proper
perspective. See Trial Court Opinion, 1/8/14, at 10.
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[G]iven the actual number of Pennsylvania Defendants who may
qualify and the lack of contrary evidence, and the clearly
expressed basis for the Legislation, that is, the limiting of liability
of an asbestos Defendant under a successor liability theory to
the acquired assets, the Legislation fails the test for a special law
and passes the rational basis test.
In re Asbestos Litig., 2002 WL 1305991, at *14. Addressing the same
issue that is before us, the trial court found that “there are 7,293
Pennsylvania corporations” who may be subject to the protections of Section
1929.1. Id. at 13. Neither Appellant nor Appellee challenges the trial
court’s reliance on Asbestos Litig., which the Supreme Court reversed on
other grounds.8 Given the fact that Section 1929.1, on its face, does not
exclusively limit its protection to one entity (Appellee) ad infinitum, and
Appellant otherwise has failed to offer any evidence that Section 1929.1
would apply only to Appellee, we conclude that the trial court did not err in
holding Section 1929.1 was not a “special law” under Article III, Section 32.
Appellant’s reliance on West Mifflin is misplaced. Similar to
Pennsylvania Turnpike Commission and Hickok, in West Mifflin, our
Supreme Court concluded on stipulated facts that Act 45 of 2007, Act of July
20, 2007, P.L. 278, No. 45 (Act 45), was per se special legislation and thus
unconstitutional. See West Mifflin, 4 A.3d at 1048 (noting that “a highly
____________________________________________
8
Exercising extraordinary jurisdiction under 42 Pa.C.S.A. § 726, the
Supreme Court reversed the trial court on the basis that Section 1929.1(a)
was unconstitutional as applied under Article I, Section 11 of the
Pennsylvania Constitution to the extent it extinguished causes of actions that
accrued prior to the enactment of the statute. Ieropoli, 842 A.2d at 930-
32.
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improbable convergence of events would be necessary for any school district
. . . to be affected by the legislative provisions at issue.”). As the Supreme
Court recognized, only one school district met all of the criteria under the
challenged legislative provisions of Act 45. Id. Additionally, only five other
school districts could have been subject to the provisions of Act 45, and
none of them operated under a special board of control. To enter the class,
one of those districts would have to return to control-board governance for
five consecutive years and eliminate their high schools without assigning
their pupils to other school districts. Id. More important, no other school
district could benefit from Act 45, because remedial action had to be taken
within fifteen days of the act’s effective date, i.e., by August 14, 2007. Id.
at 1048-49. Based on those facts, our Supreme Court concluded that “the
class created by Section 1607.1 [of Act 45] is, at a minimum, ‘substantially
closed’ to new members.” Id. at 1049.
In the instant case, unlike West Mifflin, there is no stipulation, much
less any reliable evidence, that Section 1929.1 applies only to one entity,
i.e., Appellee. Accordingly, as stated above, the trial court did not err in
concluding that Section 1929.1 was constitutional under Article III,
Section 32.
B. Article III—Procedural Mandates
We next address Appellant’s second and third arguments that the
legislation, i.e., Act 101, giving rise to Section 1929.1, ran afoul of the
procedural mandates of Article III of the Pennsylvania Constitution.
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To put Appellant’s constitutional arguments under Sections 1 and 3 in
context, we must provide a brief discussion of the legislative history of Act
101. The legislation originated in the Pennsylvania State Senate on January
31, 2001, with the introduction of Senate Bill 216 of 2001, P.N. 0223 (“S.B.
216, P.N. 223”). This single page bill contained two sections, one generally
amending Section 5524 of the Judicial Code, 42 Pa.C.S.A. § 5524, relating to
a two-year statute of limitations,9 and the other providing for an effective
date of 60 days after enactment. This bill was passed by the Senate
Judiciary Committee on February 13, 2001. Subsequently, it was considered
by the full Senate on three separate occasions, with final passage in the
Senate occurring on March 14, 2001.
S.B. 216, P.N. 223 was thereafter sent to the House of
Representatives, and, upon approval by the House Judiciary Committee
without amendment, it was considered twice by the full House. Following
the second consideration, S.B. 216, P.N. 223 was referred to the House
Appropriations Committee, which re-reported it on November 19, 2001,
without amendment, and re-referred it to the House Judiciary Committee.
____________________________________________
9
Specifically, the bill added subsection 8 to Section 5524, which provided:
(8) An action to recover damages for injury to a person or for
the death of a person caused by the exposure to asbestos shall
be commenced within two years from the date the person was
informed by a licensed physician that the person has an injury
which is caused by such exposure.
Senate Bill 216, Printer’s No. 223 (emphasis added).
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On December 4, 2001, the House Judiciary Committee approved S.B. 216,
P.N. 223 with amendments, affecting Sections 1725.1 (relating to costs) and
3571(c) (relating to costs in magisterial district judge proceedings) of the
Judicial Code, 42 Pa.C.S.A. §§ 1725.1, 3571(c). In addition, the House
Judiciary Committee amended S.B. 216, P.N. 223—specifically subsection 8
of Section 5524 of the Judicial Code. This amended legislation was
redesignated S.B. 216, P.N. 1576. The full House passed this amended
version of the bill on December 5, 2001, and sent it to the Senate for further
deliberations.
In the Senate, the bill was referred to the Senate Rules Committee,
which altered the legislation by amending the prefatory language of the bill,
removing the amendments made in the House, adding Section 1929.1
(relating to limitations on asbestos-related successor liabilities), amending
subsection 8 of 5524 of the Judicial Code,10 and adding an amended Section
____________________________________________
10
The amended version of subsection 8 of Section 5524, which is now in
effect, provides:
An action to recover damages for injury to a person or for the
death of a person caused by exposure to asbestos shall be
commenced within two years from the date on which the person
is informed by a licensed physician that the person has been
injured by such exposure or upon the date on which the person
knew or in the exercise of reasonable diligence should have
known that the person had an injury which was caused by such
exposure, whichever date occurs first.
42 Pa.C.S.A. § 5524(8).
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8128 of the Judicial Code, 42 Pa.C.S.A. § 8128.11 The Rules Committee
reported the amended version of the bill to the full Senate as S.B. 216, P.N.
1617. The Senate, thereafter, approved the bill on December 11, 2001.
The Senate sent S.B. 216, P.N. 1617 to the House on December 12,
2001, and the house voted to approve it on that date. Subsequently, the bill
was sent to then-Governor Mark Schweiker who signed it on December 17,
2001, at which time it became Act 101 of 2001.
1. Original Purpose
We now address Appellant’s argument that S.B. 216, which eventually
became Act 101, violated the strictures of Article III, Section 1 of the
Pennsylvania Constitution12 to the extent it departed from its original
purpose “as it passed through the legislature.” Appellant’s Brief at 32. In
this regard, Appellant contends that the original purpose of S.B. 216 was
changed in the final iteration of the bill. At the core, Appellant argues the
trial court erred in finding that “the original purpose always was ‘regulation
of asbestos-related liability.’” Appellant’s Brief at 35. We disagree.
____________________________________________
11
Section 8128 was amended by the addition of subsection (c), which now is
in effect and provides “[t]he provisions of this Section shall also apply to the
limitations set forth in 15 Pa.C.S. § 1929.1 (relating to limitations on
asbestos-related liabilities relating to certain mergers and consolidations).”
Senate Bill 216, Printer’s No. 1617; 42 Pa.C.S.A. § 8128(c).
12
Article III, Section 1 provides “[n]o Law shall be passed except by bill, and
no bill shall be so altered or amended, on its passage through either House,
as to change its original purpose.” PA. CONST. art. III, § 1.
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To determine whether a bill has deviated from its original purpose, our
Supreme Court has adopted a two-part test:
First, the court will consider the original purpose of the
legislation and compare it to the final purpose and determine
whether there has been an alteration or amendment so as to
change the original purpose. Second, a court will consider,
whether in its final form, the title and contents of the bill are
deceptive.
Pennsylvanians Against Gambling Expansion Fund, Inc. v.
Commonwealth, 877 A.2d 383, 408-09 (Pa. 2005) (“PAGE”). The
challenged legislation must meet both parts of the test to pass constitutional
muster. See id. at 409. Instantly, however, Appellant challenges Act 101
only on the basis of the first test, i.e., purpose comparison. Explaining the
first test, the Supreme Court remarked:
Regarding the determination of the original purpose of the
legislation, we recognize the realities of the legislative process
which can involve significant changes to legislation in the hopes
of consensus, and the expectation that legislation will be
transformed during the enactment process. Furthermore, our
Court is loathe to substitute our judgment for that of the
legislative branch under the pretense of determining whether an
unconstitutional change in purpose of a piece of legislation has
occurred during the course of its enactment. For these reasons,
we believe that the original purpose must be viewed in
reasonably broad terms.
. . . It is helpful for a reviewing court to hypothesize, based upon
the text of the statute, as to a reasonably broad original
purpose. Given this approach of considering a reasonably broad
original purpose, the General Assembly is given full opportunity
to amend and even expand a bill, and not run afoul of the
constitutional prohibition on an alternation or amendment that
changes its original purpose. The original purpose is then
compared to the final purpose and a determination is made as to
whether an unconstitutional alteration or amendment, on its
passage through either house, has taken place so as to change
its original purpose.
Id. (internal citation and quotation marks omitted) (emphasis added).
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With the foregoing principles in mind, like the court in PAGE, we
consider the original purpose of Act 101 in reasonably broad terms, and
compare it to its final purpose to assess whether the purpose has changed.
Here, based upon our review of the legislative history, particularly the
different versions of Act 101, we agree with the trial court’s conclusion that
“[t]he [legislation’s] original purpose is more appropriately construed as the
regulation of asbestos-related liability.” Trial Court Opinion, 1/8/14, at 12.
When Act 101, as S.B. 216, was introduced on January 31, 2001, its original
purpose was to amend the Judicial Code by extending the two-year statute
of limitations under Section 5524 to asbestos cases. Specifically, the bill’s
original purpose was to “[amend] Title 42 (Judiciary and Judicial Procedure)
of the Pennsylvania Consolidated Statutes, further providing for limitations
of actions.” Senate Bill 216, Printer’s No. 223 (emphasis added). That
purpose, however, changed twice. The House first amended the bill’s
purpose to read “[a]mending Title 42 (Judiciary and Judicial Procedure) of
the Pennsylvania Consolidated Statutes, further providing for costs, for
Commonwealth portion of fines and for limitations of actions.” Senate Bill
216, Printer’s No. 1576 (emphasis added to show amendments). Thereafter,
when the bill containing the House amendments reached the Senate, that
body, in turn, amended the purpose of S.B. 216 to read:
Amending Title 15 (Corporations and Unincorporated
Associations) and 42 (Judiciary and Judicial Procedure) of the
Pennsylvania Consolidated Statutes, providing for limitations on
asbestos-related liabilities relating to certain mergers or
consolidations; and further providing for certain statutes of
limitations and for certain transfers.
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Senate Bill 216, Printer’s No. 1617 (emphasis added). Thus, our review of
the original and final versions of Act 101 confirms the trial court’s holding
that the legislation was constitutional under Article III, Section 1, because its
broad original purpose “remained intact when the [legislation] was altered to
limit successor liability and provide for certain judicial costs.” Trial Court
Opinion, 1/8/14, at 12. Limiting successor liability and providing for judicial
costs both come under the umbrella of regulating asbestos-related liability.
Accordingly, Appellant fails to satisfy the first prong of the PAGE test and we
will not substitute our judgment for that of the General Assembly.
2. Single Subject
We next address Appellant’s argument that Act 101 runs afoul of
Article III, Section 3 of the Pennsylvania Constitution.13 Specifically,
Appellant argues that Act 101 violates the single subject rule of Article III,
Section 3, because it contains “distinct subjects” that lack a “unifying
scheme.” Appellant’s Brief at 24, 29. Differently put, Appellant claims that
the varying subjects within Act 101 were not germane to each other.
Additionally, Appellant claims
[t]he Crown Cork language [(Section 1929.1)] was attached to
an unrelated bill [(S.B. 216)] that was further along in the
____________________________________________
13
Article III, Section 3, relating to form of bills, provides:
No bill shall be passed containing more than one subject, which
shall be clearly expressed in its title, except a general
appropriation bill or a bill codifying or compiling the law or a part
thereof.
PA. CONST. art. III, § 3.
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legislative process with little opposition to its passage, and the
final version rushed through the legislature before the December
holiday recess before any objection to [the] language could be
made by affected parties.
Id. at 29. We, disagree.
As our Supreme Court recently remarked:
the single subject rule of Article III, Section 3 was first included
by the framers of our Commonwealth’s organic charter in 1864,
and then readopted as part of the 1874 Constitution, in order to
effectuate the electorate’s overall goal of curtailing legislative
practices that it viewed with suspicion. In particular, there were
two legislative practices the framers and the electorate sought to
eliminate with their adoption of Article III, Section 3. The first
involved the insertion into a single bill of a number of distinct
and independent subjects of legislation in order to deliberately
hide the real purpose of the bill. The second was the practice of
logrolling which involves embracing in one bill several distinct
matters, none of which could singly obtain the assent of the
legislature, and procuring its passage by combining the
minorities who favored the individual matters to form a majority
that would adopt them all.
Our Court has additionally observed that Article III,
Section 3 serves other salutary purposes furthering the efficiency
of the legislative process. The requirement that each piece of
legislation pertain to only one subject creates a greater
likelihood that it will receive a more considered and thorough
review by legislators than if it is aggregated with other pieces of
legislation pertaining to different topics into a singular omnibus
bill, thereby creating a jumbling together of incongruous
subjects.
Additionally, and significantly, the single subject
requirement proscribes the inclusion of provisions into legislation
without allowing for fair notice to the public and to legislators of
the existence of the same. It, thus, provides a vital assurance to
residents of this Commonwealth that they will be able to make
their views and wishes regarding a particular piece of legislation
known to their duly elected representatives before its final
passage, and it concomitantly ensures that those representatives
will be adequately apprised of the full scope and impact of a
legislative measure before being required to cast a vote on it.
Commonwealth v. Neiman, 84 A.3d 603, 611-12 (Pa. 2013) (internal
citation and quotation marks omitted) (emphasis in original).
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It is settled that to determine whether a bill is violative of Article III,
Section 3, a court must employ a two-prong test. “First, the title of the bill
must clearly express the substance of the proposed law. . . . Second, the
differing topics within the bill must be ‘germane’ to each other.” Jury
Comm’rs, 64 A.3d at 616. Instantly, Appellant challenges Act 101 only
under the second prong, i.e., the various topics were not germane to each
other.14
In determining germaneness, our [Supreme Court] has
acknowledged that some degree of deference to the General
Assembly’s prerogative to amend legislation is required, due to
the normal fluidity inherent in the legislative process, and, thus,
[the Court has] deemed it is appropriate for a reviewing court to
hypothesize a reasonably broad topic which would unify the
various provisions of a final bill as enacted. However, [the]
Court has also stressed the reasonable aspect of any proposed
hypothetical unifying topic, in recognition of the fact that Article
III, Section 3 would be rendered nugatory if such hypothetical
____________________________________________
14
As Appellee aptly notes, and we agree, to the extent Appellant claims
under the first prong that fair notice regarding Act 101 was not provided to
the public or interested stakeholders, such claim must be rejected as lacking
merit because Appellant provides no evidence in support of the claim. As
our Supreme Court explained in PAGE, “‘[o]ne who seeks to declare a title
unconstitutional under [Section III] must demonstrate either (1) that the
legislators and the public were actually deceived as to the act’s contents at
the time of passage, or (2) that the title on its face is such that no
reasonable person would have been on notice as to the act’s contents.’”
PAGE, 877 A.2d at 406 (emphasis added). As noted earlier, a legislative
enactment enjoys a strong presumption of constitutionality and it will not be
declared invalid unless it clearly, palpably, and plainly violates the
Constitution. See PAGE, 877 A.2d at 393. The party seeking to overcome
this presumption bears a heavy burden of persuasion and we will resolve all
doubts in favor of a finding of constitutionality. See Commonwealth v.
Hendrickson, 724 A.2d 315, 317 (Pa. 1999). Moreover, to the extent
Appellant argues, without providing any legal support, that the time in which
Act 101 was enacted was per se insufficient to provide fair notice to the
public, we also reject such argument as without merit.
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topics were too expansive. [The Court] observed that, no two
subjects are so wide apart that they may not be brought into a
common focus, if the point of view be carried back far enough.
Consequently, in determining whether a proposed unifying
subject is sufficiently narrow so as to pass muster under Article
III, Section 3, [courts] must examine the various subjects
contained within a legislative enactment and determine whether
they have a nexus to a common purpose. Stated another way,
[their] task is to ascertain whether the various components of
the enactment are part of a unifying scheme to accomplish a
single purpose.
Neiman, 84 A.3d at 612 (internal citation and quotation marks omitted)
(emphasis added). The requirements of Article III, Section 3 are fulfilled
“where the provisions added during the legislative process assist in carrying
out a bill’s main objective or are otherwise ‘germane’ to the bill’s subject as
reflected in its title.” City of Philadelphia v. Commonwealth, 838 A.2d
566, 587 (Pa. 2003).
In PAGE, the court concluded that the challenged legislation (Gaming
Act) survived Section 3 scrutiny inasmuch as the law provided for the
regulation of gaming. PAGE, 877 A.2d at 396. The court distinguished
PAGE from City of Philadelphia, in which it previously held that Act 230 of
2002 was repugnant to the single subject rule, because the main objective
of the act was to amend Title 53 (Municipalities) and “virtually all of local
government is a municipality.” Id. In so distinguishing, the court noted
“[t]he single topic of gaming does not encompass the limitless number of
subjects which could be encompassed under the heading of municipalities.”
Id.
Here, based on the record and legislative history, we conclude that Act
101 comports with the constitutional requirements of Article III, Section 3.
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The Act sub judice is similar to the Gaming Act in PAGE in that its single,
unifying purpose is the regulation of asbestos-related liability. All sections of
Act 101 are connected to this particular purpose. We, therefore, conclude
that the trial court did not err in holding Act 101 constitutional under Article
III, Section 3 on the basis that all provisions of Act 101 “deal with sub-topics
germane to regulating asbestos-related liability.”15 Trial Court Opinion,
1/8/14, at 12.
We also find that Appellant’s reliance upon Neiman to argue that Act
101 is unconstitutional under Section 3 is misplaced. Neiman is markedly
distinguishable from the instant case. The Supreme Court in Neiman
entertained a challenge (under Article III, Section 3) to Act 152 of 2004,
which made various amendments to the Judicial Code.16 As in City of
____________________________________________
15
To the extent Appellant argues that Section 3 of Act 101, i.e., 42
Pa.C.S.A. § 8128(c), does not relate to the regulation of asbestos-related
liability, we disagree. Section 3 extends protections of Section 8128 of the
Judicial Code to companies that qualify under Section 1929.1. Differently
put, the addition of subsection (c) to Section 8128 of the Judicial Code limits
creditors’ ability to recover damages from companies that qualify under
Section 1929.1 in a forum that affords fewer protections to such companies
than Pennsylvania.
16
As our Supreme Court noted, S.B. 92, P.N. 1995, which eventually
became Act 152,
accomplished the following substantive legal changes: (1)
established a two-year limitation for asbestos actions; (2)
amended the Crimes Code to create various criminal offenses for
individuals subject to sexual offender registration requirements
who fail to comply; (3) amended the provisions of the
Sentencing Code which govern “Registration of Sexual
Offenders”; (4) added the offenses of luring and institutional
sexual assault to the list of enumerated offenses which require a
(Footnote Continued Next Page)
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Philadelphia, the court observed that the unifying subjects of Act 152 were
too broad to meet the requirements of Article III, Section 3, because “such
subjects are virtually boundless in that they could encompass, respectively,
any civil court proceeding which could be brought in the courts of this
Commonwealth, and any power of the judiciary to impose sanctions on, or
order the payment of damages by, a party to civil litigation.” Neiman, 84
A.3d at 613 (emphasis in original). Declaring Act 152 violative of the single
subject provision of Section 3, the court noted that it could not discern a
“common nexus” between the different provisions of the act. Id.
Specifically, the court noted “we can see no reasonable basis under which
_______________________
(Footnote Continued)
10–year period of registration and established local police
notification procedures for out-of state sexual offenders who
move to Pennsylvania; (5) directed the creation of a searchable
computerized database of all registered sexual offenders
(“database”); (6) amended the duties of the Sexual Offenders
Assessment Board (“SOAB”); (7) allowed a sentencing court to
exempt a lifetime sex offender registrant, or a sexually violent
predator registrant, from inclusion in the database after 20 years
if certain conditions are met; (8) established mandatory
registration and community notification procedures for sexually
violent predators; (9) established community notification
requirements for a “common interest community”—such as a
condominium or cooperative—of the presence of a registered
sexually violent predator; (10) conferred immunity on unit
owners associations of a common interest community for good
faith distribution of information obtained from the database;
(11) directed the Pennsylvania State Police to publish a list of
approved registration sites to collect and transmit fingerprints
and photographs of all sex offenders who register at those sites;
and (12) mandated the Pennsylvania Attorney General to
conduct annual performance audits of state or local agencies
who participate in the administration of Megan’s Law, and, also,
required registered sex offenders to submit to fingerprinting and
being photographed when registering at approved registration
sites.
Neiman, 84 A.3d at 606-07 (footnotes omitted).
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deficiency judgment procedures, asbestos statutes of limitations, county
police jurisdiction, and sexual offender registration requirements act
together as ‘a unifying scheme to accomplish a single purpose.’” Id. As
explained above, Act 101 sub judice, unlike Act 152 in Neiman, contains
provisions that are germane to each other because they embody the single
unifying purpose of regulating asbestos-related liability.
Accordingly, the trial court did not err in rejecting Appellant’s
constitutional challenges against Act 101 under Sections 1 and 3 of Article
III.
C. Equal Protection
Appellant argues Section 1929.1 fails to withstand constitutional
scrutiny under the Equal Protection Clause of the Fourteenth Amendment to
the United States Constitution, U.S. CONST. amend. XIV, § 1, as well as
Article III, Section 32 of the Pennsylvania Constitution. To support its
argument, Appellant points out that similarly situated out-of-state
corporations and Pennsylvania corporations that do not meet the
classifications of Section 1929.1 are subject to disparate treatment, because
their asbestos-related liability is not capped. Appellant’s Brief at 39. More
important, Appellant argues that Section 1929.1 facially discriminates
against out-of-state corporations. Id. at 40.
To begin, as we noted above, our Supreme Court treats equal
protection claims under the Fourteenth Amendment to the United States
Constitution the same as equal protection claims brought under Article III,
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Section 32 of the Pennsylvania Constitution. See Probst v. Dep’t of
Transp., Bureau of Driver Licensing, 849 A.2d 1135, 1143 (Pa. 2004);
see also Harrisburg Sch. Dist. v. Zogby, 828 A.2d 1079, 1088 (Pa. 2003)
(noting that “the meaning and purpose of the Equal Protection Clause of the
United States Constitution . . . and [Pennsylvania’s] Constitution’s
prohibition against special laws . . . are sufficiently similar to warrant like
treatment, and that contentions concerning the two provisions may be
reviewed simultaneously”). “The essence of the constitutional principle of
equal protection under the law is that like persons in like circumstances will
be treated similarly.” Curtis v. Kline, 666 A.2d 265, 267 (Pa. 1995)
(citation omitted). However, “[t]he prohibition against treating people
differently under the law does not preclude the Commonwealth from
resorting to legislative classifications, provided that those classifications are
reasonable rather than arbitrary and bear a reasonable relationship to the
object of the legislation.” Id. at 268 (citations omitted).
Describing the equal protection analytical framework, our Supreme
Court recognized
three different types of classifications calling for three different
standards of judicial review. The first type—classifications
implicating neither suspect classes nor fundamental rights—will
be sustained if it meets a “rational basis” test. . . . In the second
type of cases, where a suspect classification has been made or a
fundamental right has been burdened, another standard of
review is applied: that of strict scrutiny. . . . Finally, in the third
type of cases, if “important,” though not fundamental rights are
affected by the classification, or if “sensitive” classifications have
been made, the United States Supreme Court has employed
what may be called an intermediate standard of review, or a
heightened standard of review. . . .
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Commonwealth v. Parker White Metal Co., 515 A.2d 1358, 1363 (Pa.
1986) (quoting James v. Se. Pa. Transp. Auth. (SEPTA), 477 A.2d 1302,
1306 (1984)).
Here, as Appellee correctly observes, Appellant does not claim that
Section 1929.1 affects a fundamental right or a suspect class. Appellee’s
Brief at 25. Instead, Appellant claims, inter alia, Section 1929.1’s disparate
treatment of Appellee compared to similarly situated out-of-state concerns
and certain in-state companies that do not meet Section 1929.1’s
classifications is not reasonable, but arbitrary.17 See Appellant’s Brief at 41.
Because this argument does not implicate a fundamental right or suspect
class, we proceed to analyze Appellant’s equal protection claim under the
rational basis standard.
This Court has observed:
Rational-basis review in equal protection analysis is not a license
for courts to judge the wisdom, fairness, or logic of legislative
choices. Nor does it authorize the judiciary to sit as a
superlegislature to judge the wisdom or desirability of legislative
policy determinations made in areas that neither affect
fundamental rights nor proceed along suspect lines. For these
reasons, a classification neither involving fundamental rights nor
proceeding along suspect lines is accorded a strong presumption
of validity. Such a classification cannot run afoul of the Equal
Protection Clause if there is a rational relationship between the
disparity of treatment and some legitimate governmental
purpose.
____________________________________________
17
Specifically, Appellant argues “[t]here is no reasonable explanation why all
other successor corporations were excluded. It is obvious that the criteria
were chosen because the drafters intended that only [Appellee] benefit from
the legislation.” Appellant’s Brief at 41.
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In re Keyes, 83 A.3d 1016, 1027 (Pa. Super. 2013) (quotation marks and
citation omitted), appeal denied, 2014 WL 4799569 *1 (Pa. filed Sep. 24,
2014).
It is settled that in applying the rational basis test, we apply a
two-step analysis: 1) whether the challenged statute seeks to promote any
legitimate state interest or public value and, if so, 2) whether the
classification adopted in the legislation is reasonably related to
accomplishing an articulated state interest or interests. Curtis, 666 A.2d at
269. As we have repeatedly stated herein, Appellant bears a heavy burden
of proof for purposes of challenging the constitutionality of a statute, see
Pa. Tpk. Comm’n, 899 A.2d at 1098, especially where, as here, the
challenged legislation concerns only economic issues to be examined under a
rational basis standard. See also Hodel v. Indiana, 452 U.S. 314, 332
(1981) (“[S]ocial and economic legislation is valid unless ‘the varying
treatment of different groups or persons is so unrelated to the achievement
of any combination of legitimate purposes that [a court] can only conclude
that the legislature’s actions were irrational.’ This is a heavy burden . . . .”).
We resolve all doubts in favor of a finding of constitutionality. See
Commonwealth v. Hendrickson, 724 A.2d 315, 317 (Pa. 1999).
With respect to the first step of the rational basis test, we must
determine whether the Commonwealth had any legitimate interest in
enacting Section 1929.1. Our review of the record and legislative history
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indicates that the General Assembly indeed provided a purpose or rationale
underlying the enactment of Section 1929.1.18 As the trial court noted:
[Section 1929.1’s] purpose was explained in detail by its
sponsors, Senators Michael J. Stack, III, Robert M. Tomlinson,
and Michael L. Waugh, before the General Assembly in 2001.
Pa. Legis. Journal—Senate (December 11, 2001), 1230-33.
[Section 1929.1] was meant to advance the Commonwealth’s
“basic governmental interest to make sure our corporate merger
laws do not unfairly expose innocent companies to ruin solely
because of a merger.” Id. at 1231-32. [Section 1929.1]
combats the “unprecedented avalanche of asbestos-related
claims” threatening to destroy corporations like [Appellee],
which are exposed to liability based solely on their predecessors’
actions. Id. at 1230-32. [Section 1929.1] protects such
corporations, which provide jobs to Pennsylvania residents and
are integral to the Commonwealth’s economy. Id. at 1230-33.
[Section 1929.1] only affects plaintiffs’ tort recoveries to the
extent necessary to protect corporations exposed to excessive
successor liabilities, noting the asbestos plaintiffs would still be
adequately compensated by the plethora of other defendants.
Id. at 1232.
Trial Court Opinion, 1/8/14, at 7-8. Accordingly, we find that Section 1929.1
in fact promotes a legitimate state purpose by providing protection to
corporations—that provide jobs to state residents, which is integral to our
economy—exposed to excessive successor liabilities.
Turning now to the second step under the rational basis test, we
address Appellant’s assertion that Section 1929.1’s classification is arbitrary
and not reasonable, because it is intended for the sole benefit of Appellee,
as opposed to advancing a state interest. Appellant’s Brief at 41. Our
____________________________________________
18
Even if the General Assembly had not articulated a purpose or rationale
for Section 1929.1, “it is enough that some rationale may conceivably . . .
have been the purpose and policy of the relevant government
decisionmaker.” Small v. Horn, 722 A.2d 664, 672 (Pa. 1998) (citation and
quotation marks omitted).
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review of Section 1929.1 and its legislative history does not reveal any basis
for us to conclude that Section 1929.1’s classification of domestic business
corporations is not reasonably related to the state interest sought to be
advanced. As stated, the Commonwealth has a legitimate interest to ensure
corporate merger laws do not unfairly expose domestic business
corporations to ruin solely because of mergers. To this end, Section 1929.1
protects domestic corporations that provide jobs to Pennsylvania residents
by not exposing the corporations to excessive successor liability. 19 The
classification of domestic business corporations that employ Pennsylvania
residents is rationally related to the purpose to be achieved under the
protection afforded by Section 1929.1. This basis alone is sufficient
justification to find the legislative classification under Section 1929.1 is not
arbitrary or unreasonable. As for Appellant’s argument that Section 1929.1
is unreasonable because it benefits only Appellee, it bears repeating, as the
trial court aptly noted, that more than 7,000 Pennsylvania corporations may
benefit from Section 1929.1. More important, the mere fact that the
legislative classification under Section 1929.1 only partially ameliorates a
____________________________________________
19
Even in the absence of legislative history, a classification, though
discriminatory, is not arbitrary or in violation of equal protection if any state
of facts reasonably can be conceived to sustain the classification. See
Curtis, 666 A.2d at 268; accord Heller v. Doe by Doe, 509 U.S. 312,
319–320 (1993). In undertaking this analysis, a reviewing court also is free
to hypothesize reasons the legislature might have had for the classification.
Curtis, 666 A.2d at 268.
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perceived evil does not render the classification in violation of equal
protection. The General Assembly may take an incremental approach to
addressing problems that are of statewide concern. See Pa. Tpk. Comm’n,
899 A.2d at 1097. This is so even if the class consists of only one member,
so long as other members might come into the class. Id. States are
accorded wide latitude in the regulation of their local economies, and rational
distinctions may be made with less than mathematical exactitude. See
Martin v. UCBR, 466 A.2d 107, 112 (Pa. 1983). It is only invidious
discrimination, or the wholly arbitrary act, which cannot withstand scrutiny
under an equal protection analysis. Id. We find no such discrimination
present in the instant case.
We also find Appellant’s reliance upon WHYY, Inc. v. Borough of
Glassboro, 393 U.S. 117 (1968), to be misplaced. In WHYY a
Pennsylvania nonprofit corporation operated a noncommercial television
station in New Jersey and had registered and qualified to do business in that
state. A New Jersey statute exempted nonprofit corporations from its real
and personal property taxes, but this exemption applied only to New Jersey
nonprofit corporations. The United States Supreme Court noted that it has
consistently held:
[W]hile a State may impose conditions on the entry of foreign
corporations to do business in the State, once it has permitted
them to enter, the adopted corporations are entitled to equal
protection with the state's own corporate progency [sic], at least
to the extent that their property is entitled to an equally
favorable ad valorem tax basis.
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Id. at 119 (citations omitted). In finding the statute denied WHYY, Inc.
equal protection of the law, the Court held New Jersey had not advanced any
distinction between the appellant and a domestic nonprofit corporation to
justify the unequal treatment. In so holding, the Court rejected the
argument that the legislative purpose could reasonably have been to avoid
the administrative burden on the taxing authority to examine the laws of
other jurisdictions to determine if a corporation’s nonprofit status satisfied
New Jersey’s requirements. See id. at 120. None of the parties suggested
there was any greater administrative burden in evaluating a foreign than a
domestic corporation under New Jersey law. See id. Therefore, the
inequality of treatment arose solely because of “the different residence of
the owner,” rather than upon any “difference in (New Jersey’s) relation to a
decisive transaction.” Id. (citation omitted).
The result in WHYY is in accord with Pennsylvania’s decisional law,
which requires that a legislative classification be reasonable rather than
arbitrary and bear a reasonable relationship to the object of the legislation.
See Curtis, supra. It became evident in WHYY that the legislative
classification drawn by New Jersey (domestic nonprofits versus foreign New
Jersey registered nonprofits) had no reasonable relationship to any
legislative objective sought to be achieved under the taxing statute. Thus,
equal protection was violated because the legislative classification was
wholly arbitrary.
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J-A17039-14
The instant matter is distinguishable from WHYY, because, as already
stated, Section 1929.1’s legislative classification of domestic business
corporations has a very real and reasonable relationship to Pennsylvania’s
legislative objective to protect domestic business corporations, which employ
Pennsylvania residents and are integral to its economy, from financial ruin
because of mergers.20
Accordingly, we conclude the trial court did not err in determining that
Section 1929.1 did not violate the Equal Protection Clause of the Fourteenth
Amendment to the United States Constitution or? Article III, Section 32 of
the Pennsylvania Constitution.
III. CONCLUSION
For the foregoing reasons, we conclude that the trial court did not err
as a matter of law in granting Appellee’s motion for summary judgment.21
____________________________________________
20
Citing Moyer v. Phillips, 341 A.2d 441 (Pa. 1975), only for the general
proposition that legislative classifications must have a fair and reasonable
relation to the object of the legislation, Appellant, alternatively, attempts to
construct an equal protection argument that Section 1929.1 discriminates
against classes of plaintiffs: those who cannot recover from Appellee and
those who can recover from other successor corporations. We reject this
attempt to redefine the legislative classification drawn by our General
Assembly under Section 1929.1. The statute expressly establishes the class
of domestic business corporations as opposed to foreign business
corporations.
21
Based on the outcome in this case, we need not address Appellant’s
remaining argument, i.e., whether the trial court sub silentio determined
there was a genuine issue of material fact as to Appellant’s exposure to
asbestos products.
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Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 12/22/2014
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