Pennsylvania Litigation Blog : Pennsylvania Litigation Lawyer & Attorney : Barley Snyder Law Firm : Serving Lancaster, Reading, York, Chambersburg

 A unanimous en banc panel of the Pennsylvania Superior Court has held the issuance of Service Bulletins does not toll or restart the clock for calculating the statute of repose found in the federal General Aviation Revitalization Act of 1994.  In Moyer v. Teledyne Continental Motors Inc., No. 1402 EDA 2007, 2009 WL 1929328 (Pa. Super. July 7, 2009). Appellants (Plaintiffs), relying on Caldwell v. Enstron Helicopter Corp., 230 F.3d 1155 (9^th Cir. 2005) that held flight manuals could be considered a new part or defective system sufficient to restart the clock, sought a similar ruling from the Court that would treat frequently issued Service Bulletins in the same manner as instruction manuals in an effort to circumvent the 18 year statute of repose. 

The Superior Court, however, finding support in a 2009 Washington Court of Appeals matter captioned, Burton v. Twin Commander Aircraft, 148 Wash. App. 606 (Wash. Ct. App. Feb. 9, 2009) that held maintenance manuals are not to be considered a “part of an aircraft” extended the Burton ruling to Service Bulletins.  The Moyer Court held Service Bulletins are distinguishable from instruction manuals, in part, because in the Caldwell case, it was the manual itself that was defective for failing to supply critical information to the operator, whereas in the Moyer case it was the aircraft part/component that was defective-not the Service Bulletin.  The Court determined that a Service Bulletin is more analogous to a repair/maintenance manual used by mechanics for purposes of troubleshooting, repair and maintenance of an aircraft. 

Rejecting Appellant’s assertions that Congress considered and intended to include the re-issuance of Service Bulletins to re-trigger the statute of repose, the Moyer Court held, instead, that frequency upon which Service Bulletins are issued would, to the contrary, frustrate and erode the intent of the Act if the issuance of Service Bulletins could be used to restart the clock. 

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Most parents of children with disabilities will regale you of stories of their on-going battle with their child’s school district in an attempting to secure the most meaningful and appropriate education to their children while at the same time keeping the child mainstreamed for social purposes. Most parents who face this battle quickly become versed in the alphabetical soup of special education lingo including FAPE - a free appropriate public education, which is guaranteed by IDEA - the Congressional Individuals with Disabilities Education Act. And of course the nature in which such an education is obtained under an IEP - Individualized Education Plan. 

A recent United States Supreme Court has again brought IDEA to the forefront. In that the Supreme Court found in favor of a child with a disability in the June 22, 2009 decision Forest Grove School District v. T.A. (557 U.S. ___ (2009)). This dispute arose after the school district failed to establish an Individualized Education Plan (IEP) for a student with ADHD. As a result of the school district’s failure to act, the parents enrolled the child, at the advice of a private counselor, in a private school. The Court found that such action was appropriate as the school had failed to provide a FAPE as required by the IDEA. As a result, the school district was ordered to reimburse the child, who was substituted as a party when he reached the age of majority, for the expense incurred procuring the private school education.

This decision reinforces the authority the parents retain in seeking and procuring the most appropriate education for their child with disabilities, even if such a decision results in removing the child from public school. However, a decision to remove a child from a public school should not be treated lightly with an expectation that such reimbursement would be ordered by the court.

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In an unexpected move, the Pennsylvania Supreme Court declined to render a decision whether changes to the law of strict liability are necessary or desirable. The move comes as a surprise given the Court's response comes after it granted allocatur and heard oral arguments on the matter.   In the matter Bugosh v. I.U. North America, 971 A.2d 1228 (Pa. June 16, 2009) [dissent filed by Justice Saylor], the issue presented was whether changes in the current law applicable in product liability cases that hold suppliers and others strictly liable for injuries and harms are now (over)due,  i.e., adoption of the Restatement (Third) of Torts. Opponents of the current regime argue that strict liability is unfair and outdated. Specifically, in Bugosh, an asbestos litigation case, counsel argued that when the alleged harmful product was manufactured and supplied in 1965, mesothelioma, a condition caused by exposure to asbestos products was a medical unknown and to hold the supplier liable for a failure to warn of an unknown was unfair and illogical. Had the Court rendered a decision accepting a more modern approach or adoption of the Restatement Third in line with other states that have already steered away from the concept of strict liability it would open the doors to future defendants to introduce evidence of negligence/fault of plaintiffs in litigation. 

The Court refusal to render a decision comes as a further surprise given the recent line of cases evolving from the High Court seemingly steering course to a more modern approach or flat out adoption of the Restatement Third. See Phillips v. Cricket Lighters, 841 A.2d 1000 (Pa. 2003) [with Concurring and Concurring & Dissenting opinions]. Spectators and other interested parties/persons likely are not alone in this surprise given a recent Third Circuit Court of Appeals decision in the matter of Berrier v. Simplicity Manufacturing, 563 F.3d. 38 (3d.Cir., 2009) whereby that Court, now seemingly prematurely, predicted that in line of the recent line of cases flowing from the Pennsylvania Supreme Court that the Court would adopt relevant provisions of the Restatement (Third) of Torts. 

So the question remains, what, if anything will become of the law of strict liability in Pennsylvania. In spite of the short sweeping away of the Bugosh matter, the answer may lie in the lengthy nearly 40 page dissent of two of the Justices indicating that the real question is not whether a change in law will arrive but when.    

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On June 8, 2009, the United States Supreme Court issued another 5-4 opinion. This time, the Court was policing its own. The case involved an appeals court judge in West Virginia who refused to recuse himself from an appeal of a $50M jury verdict. At the heart of the recusal request was a campaign contribution from the CEO of a party to the appeal who spent over $3M supporting the Judge’s campaign. The contribution amounted to more than 60% of the total amount spent in support of the Judge’s campaign. In an outcome that is only rivaled in the fiction of John Grisham, the Judge in question cast the tie breaking vote to overturn the verdict.

Justice Kennedy wrote for the majority, citing serious risk of actual bias and focusing on objective and disproportionate perceptions. He wrote “…when a person with a personal stake in a particular case had a significant and disproportionate influence in placing the judge on the case by raising funds or directing the judge’s election campaign when the case was pending or imminent” there is a serious risk of bias. Per Justice Kennedy, ‘[t]he inquiry centers on the contribution’s relative size in comparison to the total amount of money contributed to the campaign, the total amount spent in the elections, and the apparent effect such a contribution had on the outcome of ht election.”

Seems clear enough - the WV appeals judge should have recused himself. So why the 5-4 split on the High Court? While Kennedy’s words ring true and while we can probably all agree that there were some pretty egregious facts at play in this case, the majority’s opinion provides little guidance to the practitioner in states where judges are elected and not appointed. Justice Roberts dissented, writing “The Court’s new ‘rule’ provides no guidance to judges and litigants about when recusal will be constitutionally required. This will inevitably lead to an increase in allegations that judges are biased, however groundless those charges may be.”

From one who routinely cares about elections and makes contributions to judicial campaigns in the hope that the judges before whom one appears will be fair, intelligent, prepared jurists, I’m a bit perplexed. When the mere allegation of impropriety can cause the transfer of a case or a significant delay while the issue is fought out, does this merely increase a party’s way of judge shopping?

Most commentators have heralded and praised the decision. They focus on the extraordinary facts - you can’t make this stuff up! I just worry about my clients and what this means for them if I make a contribution. Perhaps someone will print the road map soon.

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Every year, millions of people spend hours of their free time engrossed in sports. Whether it is college athletics, professional baseball or football, NASCAR, the Olympics or even little league, America’s pastimes have come to center around the pursuit of excellence in the sporting arena. Sports have become so important to Americans that Congress has taken time to investigate steroid drug use in professional sports and the Olympics. Even President-elect Obama has shown his passion for college football in saying that “I’m going to throw my weight around a bit” in calling for a national playoff system. John Ward, Obama to Push for College Football Playoff, Washington Times, Nov. 17, 2008,

With the increasing focus on sports, especially at the collegiate level, colleges and universities are seeing an increase in litigation from their current and former athletes. This is an area of interest in legal circles as it invokes a variety of legal issues especially for those athletes attending school under an athletic scholarship. Of utmost concern, though, is whether a legal duty of care is owed to the athlete by the team physicians and athletic trainers.

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In Brewster v. DEP and Highway Materials, EHB Docket No. 2008-196C (Issued September 18, 2008) , the Board granted the Brewester’s petition for supersedeas, effectively suspending blasting authorization issued by DEP to Highway Materials for quarry production blasting. 

Highway Materials had filed an action in the Montgomery County Court of Common Pleas relative to the blasting authorization at its quarry. The Court, relying on local zoning, issued an order authorizing Highway Materials to blast within 25’ of the Brewester’s property line and restricted the Brewsters’ from occupying certain portions of their property during blasting activity. 

Highway Materials submitted a revised blast plan to DEP, consistent with the Court of Common Pleas’ Order. DEP approved the revised blast plan authorizing blasting within 25’ of the property line and in effect within 300’ of the Brewsters’ residence.

The Brewsters appealed DEP’s approval of the blast plan. The Board conducted a hearing on the petition for supersedeas. After initially denying the petition for supersedeas, the Board reconsidered its decision and held that 52 P.S. §3316, section 16 of the Non-coal Surface Mining Act of December 19, 1984, P.L. 1093, pre-empts local regulation of blasting activity and that the local zoning ordinance, which would allow blasting within 25’ of a property line, is potentially in conflict with the 300’ setback from an occupied dwelling under the Department’s regulations at 25 Pa. Code §77.504. The Board held that the Brewsters were likely to prevail on the merits of their appeal given the clear regulatory requirement for a waiver to blast within 300’ of an occupied dwelling. The Board also held that the Brewsters had made a credible case in terms of showing irreparable harm.

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Recently, the Pennsylvania Superior Court once again provided "more bite" for the 18 year statute of repose, more fully set forth in the General Aviation Revitalization Act (GARA) of 1994, Pub. L. No. 103-298, 108 Stat. 1552, codified at 49 USC 40101 et seq, by refusing to permit Plaintiffs to perform an end run around of the repose period by "resetting the clock." In the matter of Moyer v. Teledyne Continental Motors, Inc., et al., No. 1402 EDA 2007, 2008WL3854350 (Pa. Super. Aug. 20, 2008), (reargument filed 9/3/2008) children of decedents killed when their aircraft crashed brought an action that included claims against the manufacturer of an aircraft engine. More than 18 years had expired from the date of delivery of the aircraft to its first purchaser. As to the manufacturer, Plaintiffs argued, unsuccessfully, that the trial court erred in refusing to find the issuance of a subsequent Service Bulletin constituted a "replacement part" as the term is defined in GARA. Plaintiffs argued, inter alia, that flight manuals have been ruled to be a "part" of the aircraft as they contain the instructions necessary for the operation of an aircraft and therefore, are inseparable from it. They then argued by extension that like flight manuals, a Service Bulletin is also necessary for the operation of an aircraft and, as such, are tantamount to a flight manual.

The Superior Court held that Plaintiffs' logic was flawed given the continual issuance of Service Bulletins on a variety of topics, and if the issuance of a Service Bulletin were permitted to reset the clock with each subsequent issuance, the intent of GARA -- to "ameliorate the impact of long-tail liability…"-- would be eviscerated. The decision provides yet another well reasoned victory affirming the GARA repose period.

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  The adage that "it is more difficult to build a house than it is to tear a house down" is a phrase often used by legal practitioners to describe the role of the parties to litigation. The adage refers to the role the plaintiff has as architect of the lawsuit in his/her pursuit of satisfying the appropriate burdens of proof. Conversely, the role of the defendant is to poke holes or tear the plaintiff(s)' story--or house--apart. The most important single advantage that the plaintiff has is the benefit to design a house strong enough to fully inform, yet withstand the attack.

It would seem to be obvious that upon building the house, two issues are paramount. One, building a house sufficiently durable to withstand the inevitable forces that will arise for the ultimate objective of two, receiving compensation for harms and/or injuries sustained. During the course of my career representing parties on each side of the "v," I've seen seemingly far too many plaintiff practitioners lose sight of the second and ultimate objective and opt for a house with more amenities and extras, at the cost of durability and through poor pre-pleading planning have had "the money" taken off the table. This is almost always in the form pleading themselves out of what would otherwise be available insurance coverage. Notably, this applies equally to both personal injury, as well as commercial litigation.

By way of example, in many construction contracts, many plaintiffs find it far too tempting to resist the urge and ultimately allege that a contractor performed a given task in a "poor workmanlike manner" which, in far too many circumstances is not be a covered event pursuant to an applicable policy of insurance. In such instances, it may well be recommended that just because you can plead "poor workmanship" and add that to your house, that one avoid the "extra amenity" in exchange for a stronger more durable house.

In personal injury actions that involve aspects of intentional acts but where there may be another available defendant, again, proper pre-pleading planning may be the difference between receiving a paper judgment and receiving actual compensation. The examples are plenty, but one such example may arise (and has frequently) in the context of "really excited bar bouncers" in the process of removing the subsequently unwelcome patron that ultimately suffers an injury as a result of the "conduct of removal." While there may be little harm to allege the "intentional conduct" of the bouncer, actual recovery may well lie with the responsibility of the employer. Careful pre-pleading planning as to the house you build against the employer may well make the difference whether the client will actually recover for the injuries, or simply have bragging rights. In such an event, the practitioner must be mindful of the improper conduct of the employer, for example, negligent supervision, retention or hire of the particular employee and remain focused there in anticipation of the inevitable denial of coverage based upon intentional act exclusions anticipated within a policy.

When practicing from the left side of the "v" the value of proper pre-pleading planning can not be emphasized too much and ultimately your efforts will not be unappreciated from those that practice from the right.

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The Rooker-Feldman doctrine has drawn considerable attention recently in the Third Circuit.

Under the traditional application of the Rooker-Feldman doctrine, lower federal courts (such as district and bankruptcy courts) are prohibited from exercising appellate jurisdiction over state court judgments. In other words, federal courts lack subject matter jurisdiction over actions which have already been litigated in state court, or which are deemed "inextricably intertwined" with a previous state court adjudication. A matter is "inextricably intertwined" where the desired federal relief would require either (1) a determination that the state court was wrong; or (2) action by the federal court that would render the state court’s judgment ineffectual (i.e.: would allow the federal plaintiff to undo or prevent enforcement of the state court’s order).

However, in Exxon Mobil v. Saudi Basic Indust., Corp., 544 U.S. 280, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005) slip op here, the Supreme Court seemed to limit the scope of Rooker-Feldman by specifying that the doctrine applies only when the loser of a state court action asks the federal court to review and reject the state court judgments. Stated differently, the "doctrine applies only when a plaintiff asks a district court to redress an injury caused by the state court judgment itself-not when a plaintiff merely seeks to relitigate a claim or issue already litigated in state court." Moncrief v. Chase Manhattan Mortg. Corp., 2008 WL 1813161 (3d Cir. 2008) slip op here.

In the wake of Exxon, Third Circuit courts have been quick to re-affirm their adherence to the Rooker-Feldman paradigm, while simply invoking the doctrine of Res judicata, or claim preclusion, whenever the Exxon limitation may be implicated. In effect, it may be rather difficult to discern claims which are barred by these respective doctrines. Indeed, some recent opinions simply cite the doctrines as alternative rationales for dismissing the same claim. Technically, however, the Rooker-Feldman doctrine bars a federal claim to the extent it seeks to undo or prevent execution of a state court judgment, whereas Res judicata bars a claim to the extent that it seeks to adjudicate all or part of a claim which was, or even could have been, adjudicated in a previous litigation.

It is further worth noting in this context that the Third Circuit has left the door open for Rule 11 sanctions to be imposed upon a plaintiff who persists in pursuit of a federal claim, even after receiving notice that said claim appears to be barred under the Rooker-Feldman doctrine. See Gary v. Braddock Cemetery, 517 F.3d 195 (3d Cir. 2008) slip op here.

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 In the case N&L Coal Co. v. DEP (case number 2008097 docket available) , N&L appealed an order issued by DEP.   N&L was operating a coal mine on property leased by the City of Philadelphia, Girard Estate. The City sent a letter to DEP alleging that N&L’s lease expired and that the City no longer wanted N&L mining the property. In response to the City’s letter DEP issued an order directing N&L to cease mining and to reclaim the site. 

N&L appealed the order and filed a petition for supersedeas. N&L also filed a declaratory judgment action in Philadelphia Orphan’s Court relative to the lease dispute, Stephen Girard, Deceased (case ID 10DE-1885) search by docket number. The parties met several times in an effort to resolve the dispute. On the eve of the supersedeas hearing, DEP entered into a Consent Order and Agreement whereby it withdrew the order and allowed N&L to resume mining. In rescinding the order, DEP indicated that the pending civil action was the proper forum to address the property dispute and that DEP should not properly enter into such disputes.

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In the case, Unified Sportsmen of Pennsylvania v. Pennsylvania Game Commission, 950 A.2d 1120, slip op available  (Pa. Commw. 2008) the Commonwealth Court denied the Pennsylvania Game Commission’s (“PGC”) preliminary objections relative to a petition for declaratory judgment filed by the Unified Sportsmen of Pennsylvania (“Unified”). Unified alleged in its petition that the PGC abused its discretion with regard to the number and allocation of antlerless deer license it issued for 2007-2008 and also that PGC failed to properly implement the “DMAP” program which allows landowners to apply for additional permits to provide for the taking of additional antlerless deer on their property. 

The PGC filed preliminary objections challenging the sufficiency of Unified’s petition. PGC’s arguments revolved around previous litigation filed by Unified, which litigation had previously been dismissed by the Commonwealth Court. In denying PGC’s preliminary objections, the Court indicated that Unified’s petition adequately addressed the Court’s jurisdiction, the legal challenge to the PGC’s actions and Unified’s standing to bring the action.

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Pennsylvania and federal laws provide heightened confidentiality to an individual’s mental-health records. The confidentiality is heightened as compared to other medical records. This represents an important public-health policy embraced by the state and federal legislatures.

When a party to a lawsuit seeks mental-health records from another party or from a non-party, difficult issues arise. State and federal statutes, such as HIPAA and Pennsylvania’s Mental Health Procedures Act (“MHPA”), and corresponding regulations must be analyzed carefully. The threshold inquiry is whether an entity that has the records falls within the reach of the confidentiality laws. For example, is an entity that has records containing an individual’s mental-health information a “facility” as defined in the MHPA? The answer is not always clear. In that event, it often is prudent for the entity to err on the side of caution and provide heightened confidentiality as required by the law. The Act prohibits a covered facility from disclosing covered information. So an entity exposes itself to greater risk if it does not comply with the law, then later finds out that a court believes it was supposed to comply.

This issue is not novel. It recently came up in a case that was appealed to the Superior Court of Pennsylvania. In T.M. v. Elwyn, Inc., a defendant was a school for children with mental and behavioral issues. The lawsuit alleged that a student was sexually assaulted by a school counselor. In discovery, the student sought information about instances of sexual assault involving other students. The school opposed the requests, arguing that mental-health information could not be released based on the MHPA, HIPAA, and other laws. The trial court issued two discovery orders requiring disclosure but with identifying information redacted. The school appealed the orders. The appellate court vacated the orders and remanded for the trial court’s further consideration on a number of grounds. One of the considerations for the trial court was if the school was a “facility” under the MHPA. If so, and if the trial court also decided that the documents that the student wanted contained mental-health treatment information, then the trial court had to amend its initial discovery orders to provide even further protections.

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DEP has recently begun interpreting 25 Pa. Code 77.108(e)(4) as requiring a small non-coal permit operator (5 acres or less) to have no more than one acre affected at any one time, despite the fact that DEP may have allowed the operator to bond up to the full five acres allowed under a small non-coal mining permit. DEP has issued an order requiring that all areas in excess of the one acre be reclaimed or that the operator submit an alternate reclamation plan and post the bond calculated under the conventional bonding rates.

DEP’s recent interpretation is clearly contrary to its practice over the past two decades with regard to small non-coal mining operations. It appears that DEP has permitted many operations to affect more than one acre and required such operations to post bond for each of the acres that are to be bonded and affected. Such operators may now be operating in violation of the DEP’s recent interpretation of the regulations while being in complete compliance with their mining permits.

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DEP has begun applying the conventional coal bonding rates to non-coal quarry operations. Despite the fact that the statutory and regulatory authority for DEP’s conventional coal bonding rates are different from the statutory and regulatory authority for the non-coal program, DEP is using the bonding rates published in the Pennsylvania Bulletin for coal mining operations.

DEP has indicated that its policy at this point is to require conventional bonding rates be applied to all new non-coal permit applications as well as any revisions or amendments to existing permits. The previous bond rate of $1,000 per acre has been utilized by DEP since the enactment of the Non-coal Mining Act. Under the new conventional bonding rates, the amount of bond required per acre is many times higher, DEP has requested more than $8,000 per acre on one permit I recently reviewed. The depth of the pit and distance of the spoil necessary for reclamation can substantially increase the required bond.

DEP has also indicated that operators with compliance issues may also be identified for increased bonding, even in the absence of a pending permit application or permit revision, in the DEP’s discretion.

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The Environmental Hearing Board (“EHB”) recently sustained a DEP rescission of a sewage planning module after DEP determined it should have properly required a hydrogeologic study to determine whether there would be any adverse impacts to an Exceptional Value (“EV”) watershed. 

In the case Lipton v. DEP and Pine Creek Valley Watershed Association (“PCVWA”) the Board sustained the DEP’s rescission of a planning module that DEP had approved nearly one year earlier. DEP’s basis for the rescission was that it failed to require an analysis of the potential impacts of the proposed septic systems on an EV watershed. The proposed septic systems are ground discharge systems. As part of the planning module approval, the developer had a hydrogeologic study performed to ensure that the proposed septic systems would not result in nitrate loadings above the safe drinking water standard, which was the standard imposed by the DEP at the time the planning module was issued. 

The DEP’s Anti-Degradation Manual identifies ground discharge systems as a non-discharge alternative. Despite the fact that the systems are neither point nor non-point discharges to surface water, the EHB determined that there may be a potential for the systems to have an adverse impact on the Pine Creek and the wetlands which are hydrogeologically connected thereto, all of which are classified as EV, special protection waters.

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Under Pennsylvania law, it is well established that “when one company sells or transfers all of its assets to another company, the purchasing or receiving company is not responsible for the debts and liabilities of the selling company simply because it acquired the seller’s property.” Continental Ins. Co. v. Schneider, Inc., 582 Pa. 591, 599, 873 A.2d 1286, 1291 (2005). 

However, a party can overcome the general rule of non-liability if it can establish that:

(1)        the purchaser expressly or implicitly agreed to assume liability;

(2)        the transaction amounted to a consolidation or merger;

(3)        the purchasing corporation was merely a continuation of the selling corporation;

(4)        the transaction was fraudulently entered into to escape liability; or 

(5)        the transfer was without adequate consideration and no provisions were made for                                  creditors of the selling corporation.

Id. There is also a product-line exception which requires that the entity selling its assets must cease to exist as a functioning business entity before the purchasing entity can be held liable under a successor theory. See Heritage Realty Management, Inc. v. Symbiot Snow Management Network, LLC, 2007 W.L. 2903941 (W.D. Pa. 2007).

Most cases in this area simply combine the analysis related to the merger and continuation exceptions. See Berg Chilling Systems, Inc. v. Hull Corp., 435 F.3d. 455, 468 (3rd Cir. 2006). In determining whether a transaction is a de facto merger or a continuation, courts look to the following factors:

(1)     There is a continuation of the enterprise of the seller corporation, so that there is a    continuity of management, personnel, physical location, assets, and general business operations;

(2)     There is a continuity of shareholders which results from the purchasing corporation paying for the acquired assets with shares of its own stock, the stock ultimately coming to be held by the shareholders of the seller corporation so that they become a constituent part of the purchasing corporation;

(3)     The seller corporation ceases its ordinary business operations, liquidates, and dissolves as soon as legally and practically possible; and

(4)     The purchasing corporation assumes those obligations of the seller ordinarily necessary for the uninterrupted continuation of normal business operations of the seller corporation. 

Id. (citing Philadelphia Electric Co. v. Hercules, Inc., 762 F.2d 303, 310 (3rd. Cir. 1985) (applying Pennsylvania law))). Significantly, while not all factors are required to weigh in favor of de facto merger to establish successor liability in a given case, Pennsylvania courts (and especially federal district courts within the Commonwealth) do strongly emphasize the “continuity of ownership” factor as the most critical part of this four-factor test. Id. See also Heritage Realty, 2007 W.L. at *8.

There is no bright line rule as to what percentage of ownership must be acquired by the seller in the new company to constitute “continuity of ownership.” Id. However, two recent decisions by the United States Bankruptcy Court in the Eastern District of Pennsylvania have found that ownership interest of 71% and 41.26% in the new company were sufficient to constitute continuity of ownership. Id. (citing In Re: Total Containment, Inc., 335 B.R. 589, 617-18 (Bkrtcy. E.D. Pa. 2005) (71% ownership after transfer is sufficient) and In re Asousa Partnership, 2006 WL 1997426 (Bkrtcy.E.D.Pa. 2005) (41.26% ownership is sufficient).

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In at least two instances, DEP has recently begun requiring developers to perform an anti-degradation analysis for on-lot septic systems relative to potential impacts to special protection waters. Both of these matters relate to planning modules for 537 Plan Revisions for subdivisions within the Pine Creek Basin in Berks County. Under the Department’s regulations, when a hydrogeologic study is required to determine potential impacts to groundwater, such study relates to the minimum lot size required to properly assimilate nitrogen from the on-lot systems to ensure that the drinking water wells of down gradient lots are not adversely affected by causing the nitrate level to exceed 10 mg/l. Under DEP’s new position, where the proposed on-lot systems are located within special protection waters, DEP now required an assessment of potential impacts to those waters. There is presently litigation pending before the Environmental Hearing Board relative to the validity of the Department’s new policy, which policy appears to be at odds with the Department’s own anti-degradation policy.      

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The Department of Environmental Protection (“DEP”)has begun implementing “full cost bonding” for non-coal, industrial minerals permits. DEP is requiring additional bonding for all new permits as well as permit revisions and permit renewals. It does not appear that DEP has published the new bonding rates in accordance with the requirements of 25 Pa. Code § 77.202, as such there is some debate as to the propriety of DEP’s new policy. The new bonding rates will typically increase the total bond for a site from three to five times higher than the prior bond amount. Rather than the existing bond rate of $1,000 per acre, the new rates are at least $3140 per acre and depending on the required backfilling may total more than $5,000 per acre.

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To paraphrase the law in Pennsylvania as it applies to Outrageous Conduct Causing Severe Emotional Distress, actors (1) who by extreme and outrageous conduct intentionally or recklessly cause severe emotional distress to another is liable; and (2) where such conduct is directed to at a third person, such actor is liable if s/he intentionally or recklessly causes severe emotional distress to a member of such person's immediate family who is present at the time. Such law is premised upon the Restatement (Second) of Torts § 46(1) and (2). In plain terms Section 46(1) provides a remedy to the individual directly effected. Section 46(2), also known as "the Bystander Rule" provides a remedy to a third party also effected by the conduct but conditioned upon the requisite familial connection. 

The Bystander Rule, and the supporting reasons, generally make sense. It requires the "presence" of a third party that is not otherwise insulated from time or other factors that may "soften the blow" on what still remains an otherwise "shock to the system." It provides for a line in the sand that avoids a very real risk beginning a judicial journey down a slippery slope that affords greater certainty of: credibility of injury, severity of injury and a need to delineate who may recover and to the extent that the incidental tremors of the injury may travel. By way of example, this rule makes sense in the context of an auto accident involving a child whereby injuries are sustained as a result of outrageous or reckless conduct of another where the accident is (1) witnessed (2) by a mother (3) that results in immediate and contemporaneous shock (4) not insulated by time or other factors. Such is not to say that a mother would not suffer shock or injury to her system upon learning about the accident from another--the injury may be very real--nevertheless, a gateway is installed to prevent disingenuous or fabricated subsequent claims of both injury and/or degree of injury. It also limits the class of claimants by denying relief to otherwise would be bystanders, that although may also suffer shock and horror, provides workable boundaries to effectively and efficiently maintain the judicial system.   In the context of the hypothetical car accident this makes sense--the operative word being "accident" i.e., an unintended event. To be sure, some emotional distress claims will be left without a viable remedy, but the rule generally makes sense.

The Bystander Rule, however, is the equivalent of trying to fit a square peg into a round hold when it comes to claims for emotional distress that are the result of intentional acts of extreme and outrageous conduct of others where "the presence" of another would as a practical matter almost always nullify the tort itself. Surely, the literal interpretation of Section 46(2) in all cases, and subsequent application of the same by the Courts of the Commonwealth of Pennsylvania, would deny all claims for recovery for third parties in such circumstances. For example, in a case where a child is abused or sexually molested by a member of the clergy, daycare operator or elementary teacher, common sense tells us that if a parent were present, the abuse (tort) would not occur. The grievous parent that suffers a very real shock to his/her system is left without remedy--penalized for (1) not being present to prevent the harm and (2) left without legal recourse for injuries sustained. 

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If a Pennsylvania attorney engages in misconduct involving the collection and distribution of a client’s settlement funds, the Supreme Court of Pennsylvania provides the exclusive remedy to the client through the Rules of Professional Conduct and Rules of Disciplinary Enforcement (“Rules”). The Unfair Trade Practices and Consumer Protection Law (“UTPCPL”) (and the possibility of treble damages that go with that Pennsylvania statute) does not apply. So held the Supreme Court of Pennsylvania in Beyers v. Richmond, a December 28, 2007 decision.

In Beyers, an unhappy client sued her attorney and his law firm, alleging negligent supervision, negligence, conflict of interest, breach of fiduciary duty, fraudulent misrepresentation, and violation of the UTPCPL. The trial court awarded treble damages on the UTPCPL claim, and the Superior Court affirmed.

The Supreme Court of Pennsylvania, however, disagreed. It held that, although it was disturbed by the attorney’s conduct, the UTPCPL did not apply. Instead, the Rules are the exclusive remedy under the facts of the case. The Pennsylvania Constitution grants the appellate court the exclusive authority to monitor Pennsylvania attorneys’ conduct in practicing law. That grant of authority is consistent with the separation of powers between the Pennsylvania judiciary and legislative branches of government and is intended to ensure the efficient administration of justice. Pursuant to the constitutional authority, the Supreme Court of Pennsylvania enacted the Rules to regulate and monitor conduct of Pennsylvania attorneys.

The holding was fact-specific. As a general rule, though, it seems safe to assume that, where professional misconduct by an attorney is involved (as opposed to an attorney’s debt-collection practices, for example), the Supreme Court of Pennsylvania is not going to allow the Pennsylvania legislature to trump its exclusive authority to govern Pennsylvania attorneys in the practice of law.

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 After issuing draft NPDES permits in September 2007, the Department of Environmental Protection (“DEP”) began issuing final NPDES permits last week.  The permits are being issued as part of the first of three phases of implementation of the Department’s Bay Program.  The largest sewer plants in the Bay watershed comprise the facilities under the first phase of implementation.  The permits serve to impose monitoring requirements for nutrients, specifically nitrogen and phosphorus.  The permits contain compliance schedules for complying with permit specific nutrient levels based on the facilities permitted design flow or treatment capacity multiplied by a 6 mg/l for nitrogen and 0.8 mg/l for phosphorus. 

Each of the facilities that are to receive new NPDES permits under this first phase of implementation were to have submitted a report, which was to demonstrate the facilities ability to comply with the new effluent limits or a schedule for compliance with the new limits by upgrading the treatment facilities or by purchasing nutrient credits to off-set any exceedence of the new effluent.  The required plant upgrades will be expensive by any account, which cost will be passed on to rate payers.

There have been very few nutrient credit trades approved by DEP at this point, but it is anticipated that nutrient credit trading will increase as the new permit limits come into effect. with the first deadline for compliance set for the period between October 1, 2010 and September 30, 2011.

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Under the General Aviation Revitalization Act of 1994 ("GARA"), claims for death, injury and property damages involving certain types of aircraft asserted against manufacturers are generally barred if an accident occurs more than eighteen (18) years after the delivery of the aircraft to the first purchaser or lessee if delivered directly from the manufacturer; or the date of first delivery of the aircraft to a person engaged in the business of selling or leasing such aircraft. See 49 U.S.C. § 40101. GARA, however, contains a "rolling provision" that while preserving foreclosure of actions against manufacturers prescribes a new eighteen (18) year period of time with respect to any new/replacement components that begins to run upon the date of completion of the replacement or addition. See id. 

In the matter Prigden, et al. v. Parker Hannafin Corporation, et al., 588 PA. 405, 905 A.2d 422 (2007), the Pennsylvania Supreme Court was called upon to interpret whether the aforementioned protections afforded to "manufacturers" of aircraft also extend to aircraft type certificate holders and aircraft designers. Type certificates are issued by the Federal Aviation Administration and authorize an entity to manufacture a particular aircraft or engine after an applicant establishes that the type design which includes drawings, specifications and data necessary to insure airworthiness meet applicable design and testing standards. In Prigden, Plaintiffs did not dispute that the original engine assembly was in installed on the subject aircraft more than eighteen years prior to the mishap but did argue that the crash was the result of failures of replacement components that were replaced and overhauled within eighteen years of the accident. See id. In their action, Plaintiffs further argued that the type certificate holder for the engine model installed on the aircraft was not entitled to GARA repose protections because even though they did not supply or install the replacement components, they "supplied specifications upon which replacement components were selected and installed…and marketed such parts under [their] own classification and part number. See id. As such, Plaintiffs argued the type certificate holders were not entitled to GARA protections that are provided to "manufacturers" pursuant to GARA's rolling provisions. See id.

The Pennsylvania Supreme Court ultimately rejected the trial court's distinction between liability asserted against a manufacturer "in its capacity as manufacturer" that is otherwise entitled to GARA protections and designers and/or type certificate holders which the trial court would not accord such protections. Upon legislative review and interpretation, that Pennsylvania Supreme Court held that aircraft designers and type certificate holders are essential prerequisites to "manufacturing" in the aviation industry. See id.   Rejecting Plaintiffs' form over substance argument, the Court's holding was tailored to the role that designers and type certificate holders play in the aviation industry as opposed to the "status" of the entity involved. To rule otherwise, the Court held, would undermine the federal scheme that was crafted to relieve the aviation industry of the burden of "long-tail" liability. The Court continued to reject Plaintiff's alternate theory that Section 400 of the Second Restatement of Torts would provide an alternate theory of recovery premised upon a design defect claim as so doing would also displace GARA's period of repose. The Court, however, did preserve Plaintiff's right to seek recovery pursuant to exceptions to the repose period that appear in GARA by failing to rule upon such theories noting such issues were not previously decided by the lower court and were not then properly before the Court. 

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Claims that cannot be filed anywhere else in the country, might be filed in Minnesota -- because of two laws.

      The first law is a 6 years' statute of limitations for negligence actions, as opposed to 2 years in Pennsylvania.    Minnesota also appears to have a 6 years' statute for contract actions, as opposed to Pennsylvania's 4 years' limit.     That information alone may not help much, because states have "borrowing statutes", which provide that a lawsuit which would be time-barred in the state where filed, if it would be barred in the state where the cause of action accrued -- unless one of the parties resides there.   This leads to the second

unusual law.   In Minnesota, there was no "borrowing statute" from 1978 until August 1, 2004.    If the cause of action accrued before August 1, 2004, it could be filed in Minnesota even though it would be barred in the states of residence of the parties and the state where the cause of action accrued.

      So, this leads to 2 questions.  

      1.         Is there a possible cause of action in contract or negligence which accrued between January 1, 2002, and August 1, 2004?

      2.         If the answer to #1 is "yes", then did a prospective defendant have sufficient contacts in Minnesota to justify suing them there?   Did they do business there? Have a registered agent?   Send in a salesperson?

      A contract claim that accrued in Pennsylvania during 2003 and which would be barred here and probably anywhere else in the country might still be available if filed in Minnesota.

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