131 A.3d 1062
Pa. Commw. Ct.2016Background
- Multiple long-term care providers (Golden Living and others) and the Pennsylvania Health Care Association filed a declaratory judgment action challenging the Attorney General (Kane) and Cohen Milstein over a contingent-fee investigation into alleged deceptive marketing/billing and staffing representations under the Consumer Protection Law.
- OAG retained Cohen Milstein under a contingent-fee contract and issued administrative subpoenas as part of an investigation into alleged unfair or deceptive practices concerning staffing and basic care representations.
- Petitioners alleged OAG exceeded its authority (invading DOH’s exclusive domain over staffing standards), unlawfully delegated authority via the contingent-fee contract, improperly spent state funds, and issued overbroad subpoenas for litigation purposes.
- While the petition for review was pending, OAG filed an affirmative enforcement action under the Consumer Protection Law against some Golden Living entities and withdrew/withdrew enforcement of subpoenas for entities named in that enforcement action.
- The Commonwealth Court sustained OAG’s preliminary objections and granted its motion to dismiss: petitioners’ claims were dismissed as moot or premature as to entities in the enforcement action; Count II (challenge to contingent-fee counsel) and related arguments were dismissed for lack of standing under Section 103 of the Commonwealth Attorneys Act; remaining challenges to OAG’s authority and subpoenas were dismissed on the merits or as unripe.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether OAG exceeded authority by investigating/stating staffing standards (impermissible rulemaking; DOH exclusive) | DOH has exclusive jurisdiction over staffing; OAG’s use of staffing models is rulemaking and violates administrative procedure and due process | OAG may enforce Consumer Protection Law against representations about services/staffing; DOH does not have exclusive authority over consumer-marketing claims | Held: OAG may investigate/enforce alleged deceptive representations about staffing; Count I dismissed for petitioners on merits |
| Whether petitioners can obtain declaratory relief before enforcement action (mootness/anticipatory suit) | Immediate controversy exists; litigation imminent so declaratory relief appropriate | Declaratory relief is improper when anticipatory of enforcement; enforcement action provides vehicle to raise claims | Held: Claims as to entities in OAG’s enforcement case are moot/should be raised there; anticipatory declaratory relief denied |
| Validity/enforceability challenge to administrative subpoenas (ripeness) | Subpoenas are overbroad, issued for litigation purpose and lack definiteness; unenforceable | Subpoenas have statutory procedure for enforcement; challenge premature until OAG seeks court enforcement | Held: Challenges to subpoenas are unripe; petitioners must await OAG’s invocation of enforcement procedures; Count III dismissed |
| Standing to challenge contingent-fee retention of outside counsel (Section 103) | Petitioners assert contract delegation, improper expenditure, and conflict concerns; seek declaratory relief about contract | Section 103 bars parties (other than the Commonwealth agency) from contesting legal representation; Janssen controls | Held: Petitioners lack standing under Section 103 to challenge OAG’s retention/contract with Cohen Milstein; Count II dismissed |
Key Cases Cited
- Bowen v. Mount Joy Township, 644 A.2d 818 (Pa. Cmwlth. 1994) (requirements for declaratory judgment standing)
- Gulnac by Gulnac v. South Butler County Sch. Dist., 587 A.2d 699 (Pa. 1991) (discretion in granting declaratory relief)
- Frank Briscoe Co. v. Dep’t of Gen. Servs., 466 A.2d 1336 (Pa. 1983) (declining anticipatory declaratory relief when enforcement actions are pending)
- Ven-Fuel, Inc. v. Dep’t of the Treasury, 673 F.2d 1194 (11th Cir. 1982) (court should decline jurisdiction over pre-enforcement declaratory suits)
- Janssen Pharmaceutica, Inc. v. Commonwealth, 8 A.3d 267 (Pa. 2010) (Section 103 bars non-Commonwealth parties from challenging agency legal representation)
- Seitel Data, Ltd. v. Center Township, 92 A.3d 851 (Pa. Cmwlth. 2014) (standard for sustaining preliminary objections)