Com v. UPMC, Appeal of Com. by A.G.
208 A.3d 898
Pa.2019Background
- OAG, UPMC, and Highmark entered parallel Consent Decrees in 2014 governing transition of contractual relations and protection of certain vulnerable populations; the Decrees expire June 30, 2019.
- The Decrees include an unqualified Modification Provision allowing a party to petition the court to modify the Decree if the modification is in the public interest; the petitioner bears the burden to prove the public interest.
- After this Court's decision in Shapiro I (addressing a separate enforcement petition about a six‑month "runout" clause), OAG filed a Petition to Modify seeking 18 changes, including subparagraph (r): an indefinite extension of the Decrees.
- UPMC demurred, arguing the Modification Provision does not permit elimination of the termination date and that indefinite extension would eviscerate UPMC's negotiated bargain; Commonwealth Court sustained the demurrer only as to the indefinite-extension request, relying on Shapiro I.
- The Supreme Court reversed the Commonwealth Court on the Shapiro I premise, held Shapiro I does not preclude a modification petition, and remanded because the Modification Provision is ambiguous as to whether it permits indefinite extension; extrinsic evidence is needed.
- The Court declined to exercise extraordinary authority to extend the Decrees itself and directed the Commonwealth Court to expedite a narrow evidentiary record focused on parties' intent and public‑interest proof.
Issues
| Issue | Plaintiff's Argument (OAG) | Defendant's Argument (UPMC/Highmark) | Held |
|---|---|---|---|
| Whether Shapiro I precludes OAG's petition to modify the Consent Decrees | Shapiro I addressed enforcement, not modification; it does not bar a timely Modification Petition | Shapiro I described the termination date as unambiguous and material, implying courts cannot alter it absent fraud, accident, or mistake | Court: Shapiro I does not control; it did not decide Modification Provision scope and therefore does not bar OAG’s petition |
| Whether the Modification Provision permits indefinite extension (deleting the termination date) | "Modify" means "change/alter" in plain sense; the Provision contains no textual limits, so it may authorize extending duration if in public interest | "Modify" implies modest changes; deleting a fundamental, negotiated termination date would nullify other provisions and convert the Decree into a perpetual injunction—beyond the Provision's scope | Court: Provision is ambiguous on this point; reasonable constructions support both sides; remand for extrinsic evidence and fact‑finding |
| Whether the question is resolvable on demurrer (pleadings only) | OAG alleged public‑interest basis sufficiently; demurrer inappropriate where ambiguity exists | UPMC: legal interpretation can be resolved as a matter of law; relief unavailable as a matter of law | Court: On demurrer standards, ambiguity requires evidentiary development; demurrer was improperly sustained as to (r) |
| Whether this Court should temporarily extend the Decrees by extraordinary authority pending further proceedings | OAG asked the Court to invoke King's Bench or other authority to temporarily extend the Decrees until final resolution | UPMC did not seek such extraordinary relief; opposed converting modification into a mandatory injunction | Court: Declined to extend; remanded for expedited factfinding and limited record; Commonwealth Court may consider interim relief if necessary under standard principles |
Key Cases Cited
- Commonwealth ex rel. Kane v. UPMC, 129 A.3d 441 (Pa. 2015) (consent decree interpreted as contract; use of extrinsic evidence to resolve ambiguity)
- Commonwealth by Shapiro v. UPMC, 188 A.3d 1122 (Pa. 2018) (addressed enforcement/runout issue and described termination date as unambiguous and material)
- Insurance Adjustment Bureau, Inc. v. Allstate Ins. Co., 905 A.2d 462 (Pa. 2006) (standards for deciding demurrers and when contract meaning is for court vs. factfinder)
- Bilt‑Rite Contractors, Inc. v. The Architectural Studio, 866 A.2d 270 (Pa. 2005) (demurrer review: sustain only when law says with certainty no recovery is possible)
- Kripp v. Kripp, 849 A.2d 1159 (Pa. 2004) (contract ambiguity standard)
- Murphy v. Duquesne Univ. of the Holy Ghost, 777 A.2d 418 (Pa. 2001) (use of extrinsic evidence to resolve latent ambiguity)
- Universal Builders Supply, Inc. v. Shaler Highlands Corp., 175 A.2d 58 (Pa. 1961) (consent‑decree modification limited absent fraud, accident, or mistake)
- MCI Telecommunications Corp. v. AT & T Co., 512 U.S. 218 (1994) (dictionary‑based interpretation: "modify" often means moderate or minor change)
- Salazar v. District of Columbia, 896 F.3d 489 (D.C. Cir. 2018) (distinguishing modification of a consent decree from imposing new injunctive relief)