Mr. C. R. Hostutler
Office of the Chief Clerk
Commonwealth Court of Pennsylvania
Room 624, Sixth Floor
South Office Building
Harrisburg, PA 17120 re: Commonwealth
of Pennsylvania v. Philip Morris, Inc. et al.
[C.D. 467]
Dear. Mr. Hostutler:
Enclosed, please find an original & fifteen copies of the Brief of Robert B. Sklaroff, MD, Appellant; the original has a handwritten O in the upper right-hand corner of page #1.
This is submitted pursuant to the Order of April 12, 1999 per curiam.
Please date-stamp the extra copy of the cover-page and return it to myself in the stamped, self-addressed envelope; this document is paper-clipped to this cover-letter.
Thank you for your assistance in this matter.
Sincerely,
[RBS]
*
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
COMMONWEALTH OF PENNSYLVANIA,
BY D. MICHAEL FISHER,
IN HIS OFFICIAL CAPACITY AS ATTORNEY GENERAL
v.
PHILIP MORRIS, INC., et al.
COUNTY OF ALLETHENY,
Appellant
ROBERT B. SKLAROFF, M.D.
Appellant
File No. 467 C.D. 1999
Appeal from the Orders of the Court of Common Pleas of Philadelphia
[at No. 97-2443]
dated January 13, 1999
ORDER
AND NOW, this --__ day of April, 1999, upon consideration of the Brief of Appellant Robert B. Sklaroff, MD and responses thereto, it is hereby ORDERED and DECREED that the disposition of the Master Settlement Agreement between the plaintiff (Commonwealth of Pennsylvania) and the defendants (Tobacco Industry) is remanded to the Philadelphia Court of Common Pleas.
BY THE COURT:
________________________
J.
*
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
COMMONWEALTH OF
PENNSYLVANIA,
BY D. MICHAEL FISHER,
IN HIS OFFICIAL CAPACITY AS
ATTORNEY GENERAL
v.
PHILIP MORRIS, INC., et al.
COUNTY OF ALLETHENY,
Appellant
ROBERT B. SKLAROFF, M.D.
Appellant
File No. 467 C.D. 1999
Appeal from the Orders of the Court of Common Pleas of Philadelphia
[at No. 97-2443]
dated January 13, 1999
REPLY BRIEF OF APPELLANT, ROBERT B. SKLAROFF, MD
CERTIFICATE OF SERVICE
*
TABLE OF CONTENTS Page
TABLE OF CONTENTS i-iv
TABLE OF AUTHORITIES .. ... ..v-ix
STATEMENT OF JURISDICTION ...1
ORDERS IN QUESTION ...2
STATEMENT OF THE QUESTIONS INVOLVED ...3
STATEMENT OF THE CASE
4
A. Introduction
.... 4
B. Procedural History
..
......5
C. The Master Settlement Agreement
........7
1. Releasing Parties
...................7
2. Offset
...................9
D. Dr. Sklaroff and the Coalition for a Tobacco Free Pennsylvania
...........10
E. Dr. Sklaroffs Challenge in Pennsylvania
..........11
F. Judge Herrons Memorandum Opinion
........12
G. Need for Immediate Relief
.......14
SUMMARY OF ARGUMENT ..15
ARGUMENT
..16
A. The Applicable Standard & Scope of Review
..........16
B. The Lower Court Erred in Denying Dr. Sklaroffs Petition for Permission
to Intervene ..16
1. The Order and Opinion deny Dr. Sklaroff, et al. the requisite standing
(and the necessary assessment as Class representatives) to pursue matters
of substantial Public Health concern with regard to the MSA............
.17
a. Dr. Sklaroff must be granted standing ................................ ...17
b. Dr. Sklaroff has the capacity to seek relief on behalf of and/or
generally
applicable to the general public by filing a taxpayer lawsuit
18
c. Dr. Sklaroff can articulate two causes-of-action based upon tax-related
implications of the MSA justifying a taxpayer suit
..................................................23
d. Dr. Sklaroff has the legal right to seek relief on behalf of and/or
generally
applicable to the general public by filing generic litigation
.......24
e. Constitutional Concerns ...............................27
2. The Court abused its discretion when it failed to address key issues in the MSA............27
a. The Trial Court is obligated to interpret the MSA ............................. 27
b. The Trial Court failed to consider the standards for evaluating the MSA... 28
c. The Trial Court failed to discharge its duty to analyze the MSA ................................30
d. Time-frame considerations do not mandate hurried, imprudent MSA approval...... ...31
e. Trial Court review of the MSA is ripe. ..................................32
f. The necessity to consider certification of a class action is illustrated
by the
General Motors and Georgine cases
...35
3. The Court must strike II (pp) or add a stipulation based on statements
issued by the Attorney Generalboth publicly and in the official record
denying his capacity to block all future anti-tobacco litigation filed
and
prosecuted by persons/entities acting in any capacity (e.g., parens
patriae,
sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer)...
36
a. In the Commonwealth of Pennsylvania, the Attorney General does not
have the power to preclude the filing and prosecution of lawsuits initiated
by persons or entities acting in any capacity (e.g., parens patriae,
sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer)
...
36
b. During Oral Argument, the Attorney General and his legal representatives
stated it was not and never had been the intent of the Commonwealth
of Pennsylvania to preclude the filing and prosecution of lawsuits
initiated
by persons or entities acting in any capacity (e.g., parens patriae,
sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer)
....37
c. In the public record, the Attorney General has stated that he does
not
have the power to preclude the filing and prosecution of lawsuits initiated
by persons or entities acting in any capacity (e.g., parens patriae,
sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer)
...
.39
d. Dr. Sklaroff merits declaratory relief stating paragraph II (pp)
is
overly-broad, unconstitutional, inconsistent with public policy and
ultra vires
.40
4. The Court must strike XII (b) or add a stipulation based on statements
issued by Attorney Generalboth publicly and in the official record
clarifying the scope of and procedure for application of the Offset
Provision
..40
a. The Offset Provision is illegal, unprecedented, excessively broad,
excessively
vague, and exceeds the power of the Attorney General. ...
40
b. The potential application of the Offset Provision is not speculative,
as was
illustrated by the Attorney Generals response to the filing of RICO
litigation
by Allegheny County
.................................................................
...41
c. The AG lacks authority to give indemnification that trades all of
the CoPs
past, present and future claims against the TI for a settlement that
may have
little value to the CoP, or may be counterproductive
...
..42
d. The Offset creates an unholy alliance between the Settling Parties
that is
contrary to the AGs statutory duties and responsibilities
. ..
...43
e. Dr. Sklaroff merits declaratory relief stating paragraph XII (b)
is complex,
overly-broad, unprecedented, unconstitutional, inconsistent with public
policy
and is ultra vires
.......................................................................................48
CONCLUSION .49
OPINION .. Appendix
*
TABLE OF AUTHORITIES Page
CASES
Allegheny General Hospital, et al v. Philip Morris, Inc., et al.
Court of Common Pleas of Allegheny County
Civil Division GD No. 98-018956 (1998)
..
..25
Application of Medical Service Association of Pennsylvania
d/b/a Pennsylvania Blue Shield et al.
Docket No. MS96-04-098
.17
Biester, 487 Pa. at 443, 409 A.2d at 851 (1979) .15, 18
Biester, 409 A.2d at 851 n.5 .18
Buchanan v. Century Fed. Sav. & Loan Assn
259 Pa.Super. 37, 393 A.2d 704, 709 (1978)
29
Building Industry Assn v. Manheim Township Building Industry Assn
v. Manheim Township.
710 A.2d 141 Pa.Cmwlth. 1998)
..20
Consumer Party of Pennsylvania v. Com. of Pennsylvania
507 A.2d 323 (Pa. 1986)
..19
In re: General Motors Corporation Pick-Up Truck
Fuel Tank Products Liability Litigation
65 Fed 3rd 768
...35
Georgine et al v. Amchem Products, Inc. et al
83 Fed 3rd 610
...35
Girsh v. Jepson
521 F2d 153 3rd Cir. 1975
.29
Jefferson Bank v. Newton Associates
686 A.2d. 834 (Pa. Superior Ct. 1966)
..19
Jones v. Muir
511 Pa. 535 A.2d 855 (1986)
.19
Keener v. Zoning Hearing Board of Millcreek Township
714 A.2d 1120 (Pa. Cmwlth. 1998)
..16
Page
Ken R. v. Arthur Z.
546 Pa. 49, 682 A.2d 1267 (1966)
19
League of Women Voters of PA et al v. Commonwealth of PA et al.
692 A.2d 263 (Pa.Cmwlth. 1997)
.20
Mangini v. R.J. Reynolds Tobacco Company, et al.
875 P 2d 73 (Cal. 1994)
.25
McNamara, et al.
Court of Common Pleas of Montgomery County
No 98-13501 [removed to federal court]
..25
Philadelphia County Medical Society, et al. v. Pennsylvania Insurance
Department
No. 3309, C.D. (Pa.Cmwlth. 1996)
..17
Prince George Center, Inc. v. U.S. Gypsum Co.
704 A.2d 141 (Pa.Super. 1997)
29
Reverend Jesse Brown, et al. v. Philip Morris, Inc., et al.
U.S. District Court for the Eastern District of PA
Civil Action No. 98-5518
..25
Rizzo v. City of Philadelphia
528 A.2d 1128 (Pa.Cmwlth. 1990)
..19
Society Created to Reduce Urban Blight (SCRUB) et al. v.
Zoning Board of Adjustment of the City of Philadelphia et al.
(Opinion Filed April 5, 1999)
...18
Skipworth by Williams v. Lead Industries, Inc.
547 Pa. 224, 690 A.2d 169 (1997)
16
Sprague v. Casey
550 A.2d 184 (Pa. 1988)
..
19
Sweeney, et al. v. American Tobacco Company, et al.
Court of Common Pleas of Allegheny County
No. 98-16226
.25
Tomaskevitch v. Specialty Records Corporation
717 A.2d 30 (Pa. Cmwlth. 1998)
..16
Page
Van Dine v. Gyoriska
522 Pa. 122, 713 A.2d 1104 (Pa. 1998)
16
In re: Washington Public Power Supply System Sec. Litig.
720 F.Supp. 1379, 1387 (D.Ariz. 1989)
affd Plaintiffs v. City of Seattle
955 F.2d 1268 (9th Cir. 1992, cert. Denied, 506 U.S. 953)
..30
Watrel v. Commonwealth, Dept. of Education
518 A.2d 1158 Pa. 1986
..29
Wilson v. State Farm Mutual Automobile Insurance Company
512 Pa. 486, 517 A.2d 944, 947 (1986)
16
Wojdak v. Greater Philadelphia Cablevision, Inc.
550 Pa. 474, 707 A.2d 214 (1998)
16
RULES OF CIVIL PROCEDURE
Pa.R.C.P. 341, 501 . 1
Pa.R.C.P. 1702 ..35
Pa.R.C.P. 1714(a) .27
Pa.R.C.P. 2039, 2064 ...27
Pa.R.C.P. 2327(4) .. . 28, 28
Pa.R.C.P. 2328 ..32
Pa.R.C.P. 2329(3) ..32
Pa.R.C.P. Chapter 7
1
STATUTES
71 Pa.C.S. 732-201 ..41
71 Pa.C.S. 732-204 ..27
71 Pa.C.S. 732-204 (c) .. ..40
71 Pa.C.S. 732-204 (d) ..40
73 Pa.C.S. 201-204 ..27
73 Pa.C.S. 201-208 ..27
73 Pa.C.S. 201 et seq. 41
42 Pa.C.S.A. 762 (a)
1
CONSTITUTIONS
United States
Equal Protection, 5th and 14th Amendments
27
Commonwealth of Pennsylvania
Article I (Sections 1, 20 & 25)
..27
Commonwealth of Pennsylvania
Article IV
..
..
..36
New York State
Article V
39
ADDITIONAL CITATIONS
American Medical Association Policy Compendium
#H-440.929 [Board of Trustees Report QQ (A-93)]
45
A.R.S.
Arizonas Wage Statute 23-351
.44
Berchtold
General Terms of Business
http://www.berchtold.de/berchtold/2/agb.htm
..43
Blue Cross/Blue Shield of New Jersey, Inc. et al. v. Philip Morris,
Inc. et al.
Civil Action # 98-3287 US District Court for the Eastern District of
New York
34
The EDGAR System
SEC Manual
Sect. B (4.9.3)
http://edgar.stern.nyu.edu/sponsors/sec_manual/I-chap4b.pl.toc.html
..44
Federal Register
63(81):23353-23359 (4/28/98)
..43
National Swine Flu Immunization Program of 1976
P.L. 94-380
44
H. Newberg
Newberg on Class Actions
5610b (1977)
.
..29
H. Newberg
Newberg on Class Actions
Section 11.40 (1985)
29
Office of Child Support Enforcement
OCSE-AT-98-15
44
Securities and Exchange Commission
Form S-8 [ 4(a)]
http://www.investquest.com/iz/a/ainn/fin/other/ainns801.txt
..44
*
STATEMENT OF JURISDICTION
The Commonwealth Court possesses jurisdiction over this appeal pursuant to the provisions of 762 (a) of the Judicial Code, 42 Pa.C.S.A. 762 (a).
This constitutes an appeal from a final Order [Rule 341] by an aggrieved party [Rule 501] made to Commonwealth Court because the issues at-hand directly relate to a contract to be executed between the Commonwealth of Pennsylvania and the Tobacco Industry. [Chapter 7].
There is no other prior determination of any court or any government unit in this case; therefore, the only Order and Opinion subject to review is that of Judge John W. Herron, First Judicial District.
ORDER IN QUESTION
This appeal relates to the following Order of the Court of Common Pleas of Philadelphia County, which was entered on the docket of the lower court on January 13, 1999:
ORDER
Now, this 13th day of January, 1999, upon consideration of the Amended
Petition to Intervene of Robert B. Sklaroff, M.D., William T. Godshall,
Jeffrey Barg, SmokeFree Pennsylvania and PennPIRG, and the responses thereto
of the Commonwealth of Pennsylvania and defendants, it is hereby ORDERED
and DECREED that the Amended Petition is DENIED with prejudice.
BY THE COURT:
/s/ John W. Herron, A.J.
STATEMENT OF THE QUESTIONS INVOLVED
1. Whether Dr. Sklaroff, et al. have requisite standing to pursue matters of substantial Public Health concern with regard to the MSA. [suggested answer in the affirmative]
2. Whether the Trial Court must address key issues in the MSA. [suggested answer in the affirmative]
3. Whether the Court must strike II (pp) or add a stipulation based on statements issued by the Attorney Generalboth publicly and in the official recorddenying his capacity to block all future anti-tobacco litigation filed by persons or entities acting in any capacity (e.g., parens patriae, sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer). [suggested answer in the affirmative]
4. Whether the Court must strike XII (b) or add a stipulation based on statements issued by Attorney Generalboth publicly and in the official recordclarifying the scope of and procedure for application of the Offset Provision. [suggested answer in the affirmative]
STATEMENT OF THE CASE
This is an appeal of a final order issued by Judge John W. Herron of the Philadelphia Court of Common Pleas denying the appellant Robert B. Sklaroff, MD standing, and approving a Master Settlement Agreement [MSA] between the Attorney General [AG] of the Commonwealth of Pennsylvania [CoP] and the Tobacco Industry [TI].
A. Introduction
The MSA is an extraordinary agreement, purporting to settle all the CoPs claims against the TI in exchange for the TIs payment of $11.2 billion over 25 years and the TIs agreement to certain non-monetary commitments. Unfortunately, it is a Trojan Horse that is fundamentally flawed. It contains two key provisions rendering it unlawful and its benefits uncertain: the AG improperly waives rights & claims, and the MSA contains a bizarre Offset Provision that is ultra vires, unconstitutional and against public policy.
Releases are to be provided by parties that were not named as parties in the Complaint; further, undefined present and future claims (by the CoP and others) are to be waived, making the MSAs benefits contingent and illusory. Instead of repairing these errors and ensuring the MSA was fair, adequate and reasonable, the Trial Court mistakenly denied Dr. Sklaroff standing, committing a manifest abuse of discretion. Thus, this Court must remand to clarify the legality and scope of waiver and offset language; in the alternative, this Court must examine the MSA de novo and declare the subject provisions unlawful.
B. Procedural History
The AG initiated this action by filing a Complaint against the TI on April 23, 1997 seeking inter alia reimbursement for the CoPs tobacco-related Medicaid expenditures . Although the action was brought as parens patriae (on behalf of all its citizens), it did not includeor identify as partiespersons or entities functioning as municipalities & other local government units, private attorneys general, qui tam plaintiffs or taxpayers . A national settlement was made public on November 16, 1998, and the CoP & TI submitted it to the Court requesting its approval in the form of a consent decree on November 23. Dr. Sklaroff filed his Intervention Petition pro se on November 18 (joined by two individuals and two public interest organizations) for declaratory and injunctive relief. [The concerns were the Release and Waiver Clauses, plus the Indemnification and Offset Provisions.] A Revised Petition was filed on December 2, joined by eleven additional organizations acting on behalf of themselves and others similarly situated. Hearings were held (January 8 & 12, 1999) and an Order was issued (January 13) entering a Consent Decree approving the MSA and denying the petitions to intervene. A timely appeal to Commonwealth Court was filed by Dr. Sklaroff (plus the two co-petitioners and four of the thirteen organizations) and Allegheny County. By information and belief, Dr. Sklaroff avers all other anti-tobacco activists [Activists] withdrew except for Allegheny County and Dr. Sklaroff. Judge Herron issued his 59-page Opinion in support of his decision on February 26. This brief was ordered to be filed by April 22.
During the Hearings, the CoP and the TI [the Settling Parties] joined forces opposing Dr. Sklaroffs intervention and asked the Court to approve the MSA. They lauded both its unprecedented fiscal dimensions and its potential sociological impact, but offered no evidence as to the value of the claims released (i.e., the quid pro quo for dealing with an industry that was mired in profound legal controversy). On the other hand, Dr. Sklaroff introduced evidence demonstrating his interest in this case, including his extensive history of action against the TI as a citizen and taxpayer of the CoP. He also pointed out to the Court the problems with the scope and operation of the Release and Offset clauses.
Neither of the Settling Parties disputed Dr. Sklaroffs interpretation of the MSA. The AG agreed he did not have the power to release the claims of taxpayers and private attorneys general, and he agreed Dr. Sklaroff had brought his petition in good faith; throughout, the TI did not state its position or understanding regarding the Release and Offset clauses. Neither Settling Party offered any explanation or estimate as to the value of the claims (past, present or future) that were being released. Insteadand not withstanding the fact that they had submitted the MSA for Court approvalthey argued the reasonableness, fairness and adequacy of the MSA was not ripe for review before this Trial Court.
Following the Hearings, the Trial Court denied Dr. Sklaroff (and all putative intervenors, including other anti-tobacco activists) standing. It found the MSA was complicated and too difficult to analyze presently, and it made no findings regarding its reasonableness, fairness and adequacy. Nevertheless, the Court entered a Consent Decree approving the MSA (as requested by the Settling Parties) and denied Dr. Sklaroff the right to intervene.
C. The Master Settlement Agreement
The text of the Master Settlement Agreement [MSA] was released publicly on November 16, 1998 at a press conference conducted, in part, by the AG . It was submitted for approval to 46 states (plus the District of Columbia) and to five United States territories (American Samoa, Guam, Northern Mariana Islands, Puerto Rico and Virgin Islands). The national & statewide campaign to achieve approval then started.
Final Approval [II (u)] is to occur by June 30, 2000, regardless of whether any threshold level of State-Specific Finality has been achieved by that date; the TI reserves the right to waive the widely-quoted goal of 80% approval (of the number and the population of settling states). Except in the CoP, the only impediment to approval in a few large states has been state-county conflict regarding proper division of the monies .
1. Releasing Parties
The MSA waives and releases claims on behalf of these Releasing Parties: the CoP (plus its agents, officials, representatives, agencies, departments, commissions, divisions and subdivisions) and persons or entities acting in a parens patriae, sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer or any other capacity. [II (pp)]
Releasing Parties were included:
(A) to the extent that any such person or entity is seeking relief
on behalf of or generally applicable to the general public in such Settling
State or the people of the State, as opposed solely to private or individual
relief for separate and distinct injuries, or (B) to the extent that any
such entity (as opposed to an individual) is seeking recovery of health-care
expenses (other than premium or capitation payments for the benefit of
present or retired state employees) paid or reimbursed, directly or indirectly,
by a Settling State.
These parties were included to the full extent of the power of the signatories to release past, present, and future claims. Thus, Releasing Parties does not include parties to the extent that the AG does not have the power to release these parties claims.
Released Claims gave an unprecedented blanket-release for virtually
all past behavior and absolutely all future behavior [II (nn)]; it encompassed
all torts filed:
(1) for past conduct, acts or omissions (including any damages incurred
in the future arising from such past conduct, acts or omissions), those
Claims directly or indirectly based on, arising out of or in any way related,
in whole or in part, to (A) the use, sale, distribution, manufacture, development,
advertising, marketing or health effects of, (B) the exposure to, or (C)
research, statements, or warnings regarding, Tobacco Products
(2) for future conduct, acts or omissions, only those monetary Claims
directly or indirectly based on, arising out of or in any way related to,
in whole or in part, the use of or exposure to Tobacco Products manufactured
in the ordinary course of business,
The Release [sections II (nn) and II (pp)] was identical to what had been generated nationally and was steadfastly viewed by the Settling Parties as non-severable. In neither instance did the MSA allow for citation of state statute as specifically applied to this vague phraseology to repair its fundamental ambiguity. In neither instance did the MSA cite precedent or procedural guideposts to facilitate rudimentary interpretation thereof.
The Intended Beneficiaries clause centralized enforcement power in the CoP, inexplicably blocking all non-governmental plaintiffs from obtaining injunctive relief were they to file suit to enforce the MSAs mandatory provisions: No portion of this Agreement shall provide any rights to, or be enforceable by, any person or entity that is not a Settling State or a Released Party. No Settling State may assign or otherwise convey any right to enforce any provision of this Agreement. [XVIII (p)].
2. Offset
The MSA also indemnified the TI [XII (b)] in the Settling States
Release, Discharge and Covenant through a litigating releasing parties
offset [Offset]:
If a releasing party (or any person or entity enumerated in subsection
II (pp), without regard to the power of the Attorney General to release
claims of such person or entity) nonetheless attempts to maintain a Released
Claim against a released party, such released party shall give written
notice of such potential claim to the attorney general of the applicable
Settling State within thirty days of receiving notice of such potential
claim
. The released party may offer the release and covenant as
a complete defense.
If it is determined at any point in such action that the release of
such claim is unenforceable or invalid for any reason (including, but not
limited to, lack of authority to release such claim), the following provisions
shall apply: (1) the released party shall take all ordinary
and reasonable measures to defend the action fully. The released
party may settle or enter into a stipulated judgment with respect to the
action at any time in its sole discretion, but in such event, the offset
described in subsection (b)(2) or (b)(3) below shall apply only if the
released party obtains the relevant Attorney Generals consent to such
settlement or stipulated judgment, which consent shall not be unreasonably
withheld
.
(2)
.
A. In the event of a settlement or stipulated judgment, the settlement
or stipulated judgment shall give rise to a continuing offset as such amount
is actually paid against the full amount of such original participating
manufacturers share
of the applicable Settling States Allocated Payment
until such time as the settled or stipulated amount is fully credited on
a dollar-for-dollar basis. [emphasis supplied].
D. Dr. Sklaroff and the Coalition for a Tobacco Free Pennsylvania
The Coalition for a Tobacco Free Pennsylvania, created in the early 1980s, is recognized as the première statewide entity combating Public Health Enemy #1 (the term coined by HHS Secretary Joseph A. Califano, Jr. in 1977). Its work is submitted annually to the Centers for Disease Control [CDC] by the CoP Health Department in conjunction with mandated reportorial responsibilities (to assure receipt of federal grants). It is the only statewide democratically-governed organization of anti-tobacco Activists in the CoP.
The AG announced formal filing of the litigation against the TI while standing alongside the Coalition President. The Coalition tried to provide consultation during settlement discussions, but it failed to have a substantial influence regarding either the national or statewide facets thereof. The Coalition and certain members thereofplus the Coalition President and Vice Presidentultimately filed for Intervenor Status in the instant case.
Individually and collectively, Coalition members are/were involved on the national level, and they noted with dismay that the above-detailed releases appeared in the MSA but not in the settlements effectuated in the four states that had already created national standards (Mississippi, Florida, Texas & Minnesota). Attempts to gain clarification were rebuffed.
Dr. Sklaroff has served as a member and (past- & present-) Secretary of the Coalition. All of the Coalitions efforts with regard to this litigation were consistent with policies adopted by the PA Society of Internal Medicine, as implemented through Dr. Sklaroff.
E. Dr. Sklaroffs Challenge in Pennsylvania
Immediately after learning about the MSA, Dr. Sklaroff and the other Activists sought Intervenor status due to concerns that the MSA would abridge their rights as well as to prevent a wholesale denial of due process to any and all who might bring public interest litigation against the TI. They viewed this as their only opportunity to challenge these egregious sections of the MSA. Statements of fact filed by the Settling Parties were not disputed; rather, characterizations and statements of opinion were rejected. Their focus was on the fundamental right to petition government .
The Activists condemned slight-of-hand releases that effectively immunized the TI from legal liability, regardless of its outcome. The mere existence of the Offset would prompt the CoP to intervene in defense of the TI because: (i) in the event of petitioners success, the litigating releasing parties offset provisions would divert allocated payments from the CoP to the petitioner; (ii) the CoP plaintiffs would therefore have a financial interest in tobacco defendants prevailing against the petitioner, which interest would be directly adverse to the petitioners interest; and (iii) the CoP plaintiffs intervention in petitioners litigation would proceed without objection from the TI.
Appended to their brief were detailed descriptions of cases that have been brought both in the CoP and elsewhere which, if filed after approval of the MSA, would risk dismissal (under the Release or intended beneficiary provisions) or which, if successful, would recover not from the TI defendants but from the CoPs allocated funds (under the Offset).
The Prayer for Relief sought approval of the MSA to be contingent upon severing all these concerns regarding rights of the Activists from any and all provisions of the MSA. Instead of trying to block implementation of the MSA, the intent was primarily to stop the CoP from mandating Activists forfeit their civil rights at the TIs insistence.
F. Judge Herrons Memorandum Opinion
The Opinion noted the terms in the MSA were complex with distinct qualifiers and limitations. It never analyzed the fairness, reasonableness and adequacy of the MSA. The focus was whether Dr. Sklaroff had a Legally Enforceable Interest [LEI] and whether questioning the Release & Offset Clauses was a ripe issue. Repeatedly, the intent of the CoP was stated as not to interfere with the rights of the Petitioners, but it was never asserted the CoP would be amenable to clarifying the document accordingly.
The Opinion cited the need to balance the protection of individual rights and the avoidance of unnecessary restraint upon the AG in performance of legitimate purposes. In the Courts view, the gravaman was whether the alleged harm is at best conjectural. Responsibility for interpreting the MSA was punted to any court but that in which it currently resided [at another time, at another place]; it was concluded that there was no current ripe case that provided sufficient detail to allow overall analysis of the MSA.
The Opinion found the Petitioners did not have a LEI without noting (let alone analyzing) the Appendixwhich listed a multitude of examples of such casesthat had been submitted by the Petitioners.
The Opinion perseverated on this observation, basing all major conclusions
thereupon:
The Activists failed to cite a single case in their petitions or memoranda
to assist the court in determining whether they have, in fact, asserted
a LEI.
The Activists cited to no concrete harm other than the potential
(but as yet undetermined) effect of the release.
Allegations that future
claims would be subject to the MSA were termed hypothetical.
On the present record, the petitioners fail to present an actual case
or controversya LEIripe for disposition.
Erroneously, it was found that discussion of their substantive constitutional rights would be an advisory opinion without legal effect. This was viewed as inherently political and the recourse advised for disputes regarding policynot lawwas inter alia to work against the AGs reelection. [n.b.: No advisory opinion had been requested.]
Erroneously, it was noted that, it is thus not entirely clear whether the Activists object to the offset provisions as a denial of their constitutional right of access to the courts or if they assert it is objectionable as bad policy. [n.b., The Activists had repeatedly and clearly asserted the former, although the latter obviously represents a logical conclusion.]
Erroneously, it was concluded that, the effect of the MSA release provisionsif anycannot be determined except in the context of that future proceeding. At that point, they would have ample opportunity to demonstrate why the release provisions do not apply. [n.b., The MSA contains no provision establishing procedures for any such intervention.]
These excerpts are illustrative of the observation that the Opinion consistently quoted the Settling Parties in a positive light, not withstanding evidence supporting the Petitioners.
G. Need for Immediate Relief
The AG has issued statements that illustrate the immediacy of the two concerns raised by Dr. Sklaroff and the Activists: (1)The AG can not stop the petitioners from filing suits (as opposed to New Yorks AG). (2)The AG does not welcome new RICO litigation filed by Allegheny County because it would merely invoke the offset and result in no net fiscal gain to the CoP. (3)The AG views litigation about cigarette-related fires (being considered by the City of Philadelphia) to have no connection to the MSA. Thus, the urgency of rectifying inherent ambiguity in the CoP continues to grow daily.
The AG has also shown he will turn his sword against the people he is sworn to protect . This serious legal challenge has been falsely characterized as an assertion of non-existent rights intended to block a comprehensive settlement benefiting public health. Thus, in a March 1 letter to the Activists, the AG threatened litigation that could ultimately lead to their having to pay costs plus 6% per annum of $11.2 Billion , prompting a flurry of withdrawals by the other Activists . This occurred despite the facts that these monies are not yet available, that the appeal filed by Allegheny County also pends, and that the TI has donated $50 million for the CoPs legal costs presently totaling ~$10 million .
SUMMARY OF ARGUMENT
It is a manifest abuse of discretion to deny Dr. Sklaroff standing and to refuse to analyze and weigh the merits of the MSA. Dr. Sklaroff has standing as a Taxpayer according to the Biester guidelines [487 Pa. at 443, 409 A.2d at 851 (1979)] and due to his direct interest in the outcome of the MSA approval process; his standing is both personal and professional. The Court is obligated to examine, consider and study the MSA, including the terms of Release and the impact of the Offset. According to court rules, such analysis is required for settlements of class actions and claims for minors, incompetents and incapacitated.
Had the Court performed its duty, it would have found that the Release and Offset clauses were improper and unlawful. The Release purports to waive claims that cannot be waived; the Offset gives away what the AG has no authority to relinquish. Had the Court analyzed these issues, as it was required to do, it would also have found that the MSA improperly limits the fundamental capacity of citizens to seek injunctive relief. This matter is currently ripe, and Dr. Sklaroff has Legally Enforceable Interests therein.
Additionally, it is unclear why the AG will not stipulate what he has already admitted; he has already denied he can indemnify, and he has already averred he would limit the ability to invoke the offset provision indiscriminately. These matters must be clarified. The essential remedy is remand to the Trial Court; in the alternative, Commonwealth Court could itself remedy the MSA. The opportunity to address its fairness, reasonableness and adequacy will never again arise, either in Pennsylvania or in America.
ARGUMENT
A. The Applicable Standard & Scope of Review
The question of intervention is a matter within the sound discretion of the trial court and, unless there is a manifest abuse of such discretion or an error of law was committed, its exercise will not be interfered with on review. Keener v. Zoning Hearing Board of Millcreek Township, 714 A.2d 1120 (Pa. Cmwlth. 1998) See also, Wilson v. State Farm Mutual Automobile Insurance Company, 512 Pa. 486, 517 A.2d 944, 947 (1986). Discretion is abused if, in reaching a conclusion, the law is overridden or misapplied or the judgment exercised is manifestly unreasonable or is the result of partiality, prejudice, bias, or ill will. Van Dine v. Gyoriska, 522 Pa. 122, 713 A.2d 1104 (Pa. 1998).
The scope of review of a question of law is plenary. Wojdak v. Greater Philadelphia Cablevision, Inc., 550 Pa. 474, 707 A.2d 214 (1998); Tomaskevitch v. Specialty Records Corporation, 717 A.2d 30 (Pa. Cmwlth. 1998). When the issues on appeal present questions of law, the appellate courts scope of review is plenary. Skipworth by Williams v. Lead Industries, Inc., 547 Pa. 224, 690 A.2d 169 (1997).
B. The Lower Court Erred in Denying Dr. Sklaroffs Petition for Permission to Intervene.
Establishing that Dr. Sklaroff and other Petitioners have LEIs will
mandate the MSA be remanded to the Trial Court, thereby affording an opportunity
to acquire the necessary declaratory relief. Commonwealth Court could
also act in its primary jurisdiction to declare the Release and Offset
Clauses ultra vires, stricken, or satisfactorily modified.
Dr. Sklaroff must be granted standing because he is a taxpayer and
because has legal and equity interests justifying intervention (i.e., that
are substantial, direct and immediate). He has an interest in the
outcome of the suit that surpasses the common interest of all citizens
in procuring obedience to the law, but which is asserted in the public
interest.
1. The Order and Opinion deny Dr. Sklaroff, et al. the requisite standing (and the necessary assessment as Class representatives) to pursue matters of substantial Public Health concern with regard to the MSA.
a. Dr. Sklaroff must be granted standing.
Both the judicial and executive branches of CoP government have concluded Dr. Sklaroff merited standing based upon facts and averments that are identical to those in this case. Commonwealth Court granted Dr. Sklaroff standing (with the organization he served as President, the PA Society of Internal Medicine)pursuant to efforts to reverse merger of PA Blue Shield and Blue Cross of Western PA because he was a member of the Blue Shield Corporation and was a provider (and insured) thereof . These facts elevated him over what was viewed as the public and proved the direct interest in the outcome of this matter that had been vigorously argued. The Commonwealth Courts Opinion was issued on August 12, 1997. Philadelphia County Medical Society, et al. v. Pennsylvania Insurance Department. No. 3309, C.D. (Pa.Cmwlth. 1996). This view was sustained by the CoP Insurance Department, pursuant to an Order issued on January 14, 1999 . Application of Medical Service Association of Pennsylvania d/b/a Pennsylvania Blue Shield et al. Docket No. MS96-04-098.
The expertise & experience afforded to the CoP by the Activists was recognized throughout the City Hall proceedings, both in the courtroom and in the outside corridor. Thus, the Activists merit being granted full standing to address the MSA at this time, just as the PSIM was granted full standing to address the consolidation of the Blues.
b. Dr. Sklaroff has the capacity to seek relief on behalf of and/or generally applicable to the general public by filing a taxpayer lawsuit.
Dr. Sklaroff warrants standing under the Biester taxpayer exception, even were his interests not substantial, immediate or direct. Under this exception, the taxpayer must show: (1) the governmental action would otherwise go unchallenged; (2) those directly and immediately affected by the complained-of expenditures beneficially affected and not inclined to challenge the action; (3) judicial relief is appropriate; (4) redress through other channels is unavailable; and (5) no existence of other persons better situated to assert the claim. Biester, 487 Pa. at 443, 409 A.2d at 851 (1979). The public policy for this exception was stated as follows:
The ultimate basis for granting standing to taxpayers must be sought outside the normal language of the courts. Taxpayers litigation seems designed to enable a large body of the citizenry to challenge governmental action which would otherwise go unchallenged in the courts because of the standing requirement. Such litigation allows the courts, within the framework of traditional notions of standing, to add to the controls over public officials inherent in the elective process the judicial scrutiny of the statutory and constitutional validity of their acts. [Biester, 409 A.2d at 851 n.5.]
Commonwealth Court has sustained the view that taxpayers merit standing in such matters. Society Created to Reduce Urban Blight (SCRUB) et al. v. Zoning Board of Adjustment of the City of Philadelphia et al. (Opinion Filed April 5, 1999).
The Court found that taxpayers or organizations that represent Philadelphia taxpayers have standing to participate in zoning hearings; the circumstances are strikingly similar to those in this case. Unaddressed but recognized were two additional reasons for granting standing: zone of interest and private Attorney General. The former cited Ken R. v. Arthur Z., 546 Pa. 49, 682 A.2d 1267 (1966) & Jefferson Bank v. Newton Associates, 686 A.2d. 834 (Pa. Superior Ct. 1966), and the latter cited Jones v. Muir, 511 Pa. 535 A.2d 855 (1986). The latter was defined as a party who may not carry a substantial, direct or immediate interest in the subject matter of the litigation may be conferred with standing because he shares a common interest with citizens or taxpayers in general..
The Biester exception has been applied on many prior occasions. Citizen taxpayers gained standing to challenge a new compensation law adopted by and for the state legislature because both no administrative agency was extant that was empowered to provide relief, and legislators themselves were felt unlikely to provide a meaningful mechanism for redress. Consumer Party of Pennsylvania v. Com. of Pennsylvania, 507 A.2d 323 (Pa. 1986). A taxpayer gained standing to challenge two judicial vacancies appearing on the ballot in the 1988 general elections because the only persons better situated to maintain this action are the respondents who were deemed directly and beneficially affected and who did not choose to institute legal action. Sprague v. Casey, 550 A.2d 184 (Pa. 1988). A taxpayer gained standing to challenge an increase in the police commissioners pension because no prior, contemporaneous or even post notice was provided to Rizzo or any other taxpayer. Rizzo v. City of Philadelphia, 528 A.2d 1128 (Pa.Cmwlth. 1990). These plaintiffs raised concerns related more to exertion of public policy than to enforcement of tax law.
There is also precedent for successful efforts based on concerns of a more fiscal nature: an appropriations bill and a user fee. Citizen taxpayers gained standing because the very individuals who enacted such legislation are not going to be inclined to challenge the constitutionality of the process by which Act 1A was enacted. League of Women Voters of PA et al v. Commonwealth of PA et al. 692 A.2d 263 (Pa.Cmwlth. 1997). A trade association gained standing because at least one of its members would pay an impact fee, a tax. Building Industry Assn v. Manheim Township Building Industry Assn v. Manheim Township. 710 A.2d 141 (Pa.Cmwlth. 1998).
In the instant case, Dr. Sklaroff meets the five-prong Biester exception, noting his demonstrated ability to recruit other people and organizations to endorse worthwhile, unprecedented and well-researched efforts to empower patients and physicians; he will utilize all available resources to accomplish profoundly important goals and objectives.
The first prong has been borne out by the chronology of events; public health facets of the CoP's settlement of this lawsuit with the TI would have gone unchallenged but for Dr. Sklaroffs challenge. Dr. Sklaroff wrote the initial petition and filed it within 48 hours following public release of the MSA; recruited endorsements from two organized medicine entities ; and strained long-term personal relationships as he continued to pursue this public-interest Appeal after all other anti-tobacco activists had withdrawn .
As to the Second prong, those directly, immediately and substantially affected by the settlement thereof (the CoP and the TI) are beneficially affected and arent inclined to challenge the agreement or police future behavior. To the contrary, the Settling Parties seek approval of the MSA that will thereby curtail the CoPs monitoring. Certainly, the TI has not developed a track-record of trust during recent decades and years, as is evinced from the release of damning internal memos and embarrassing scientific data. The Department of Justice has recently intensified its probe of the TIs actions, illustrating why one cannot reasonably anticipate these rogue corporations will suddenly toe the line and assiduously obey the law. Because the CoP has shown little interest in probing such abuses, it cannot be anticipated that the CoP would ever mount a future challenge to the TI and thereby threaten a continued flow of funds, even were it to be confronted with myriad abuses.
Legislatively, the CoP has earned a poor grade in the annual state-by-state assessment issued by the Centers for Disease Control [CDC], exemplified by its failure in 1996 to implement a state-wide Youth Access Program (despite strong lobbying from the Coalition).
Administratively, the CoP Health Department has much unfinished business, such as issuance of formal regulations implementing the 1988 Clean Indoor Air Act and release of a half-decade remote Youth Survey (encompassing knowledge, attitudes and behavior). Presently, attention has been shifted (by the public health community, legislature and Governor) towards how tobacco settlement monies should optimally be spent; therefore, only Dr. Sklaroff raises and pursues the ongoing concern with repair of fundamental defects in the MSA that others (who may privately acknowledge his veracity) have abandoned.
As to the third prong, judicial relief is appropriate, inasmuch as the dispute between the CoP and the TI was pending in court and, further, that the Settling Parties submitted the MSA to the court for its formal approval. They tacitly acknowledged they were required to do so inter alia because the suit was filed as a class action (affecting minors, incapacitated, and incompetents, vide infra). Thus, the Trial Court must assess prospectively the propriety of the document it will be responsible to administer thereafter . The courts do have the power and responsibility to provide relief and, in this matter, judicial relief is appropriate.
As to the fourth prong, no procedure is now available to Dr. Sklaroff through which he might directly challenge implementation of the MSA. The Settling Parties know its acute vulnerability to stipulation will be forever limited once they achieve State-Specific Finality, and the optimal judicial setting for assessment of fundamental facets of the MSA is before the particular court that will be charged with ongoing responsibility for its administration .
As to the fifth prong, no other persons/entities are better situated to assert this claim. Dr. Sklaroff is a medical oncologist, treating diseases caused by tobacco on a daily basis. Dr. Sklaroff is an activist, devoting his professional life towards anti-tobacco pursuits . Others could assert such claims against a potent TI abetted by a CoP that has demonstrated minimal enforcement interest or capability, but none could pursue them more vigorously; Dr. Sklaroff envisions reinvolvement of anti-tobacco Activists upon remand, invoking both prior co-petitioners and Activists from the CoP and other states throughout America.
Thus, Dr. Sklaroff would meet the five-prong Biester test were he to institute a separate legal action challenging particular provisions of the MSA. These same LEIs give him the right to intervene in the instant matter. Furthermore, he satisfies these criteria in ways that are identical to those that the courts have sustained as justification for being granted party status as an intervenor. He wants only what exists in the first four settling states: Pennsylvanians should be afforded the freedom to improve problematic clauses in the MSAwhether they are addressed now or laterand the only way they will be able to do so will be by pursuing the instant litigation through the courts at this time. He wants societal structures that would detoxify both the populace and government through a process of reducing reliance upon tobacco and tobacco-tax money. He has standing because, otherwise, neither government nor Activists will be able to ensure the TI abides by the law (generally) and by the MSA (specifically) . The MSA denies Dr. Sklaroff the right to file either litigation intended to achieve these ends, or taxpayer lawsuits such as the two that will now be elucidated.
c. Dr. Sklaroff can articulate two causes-of-action based upon tax-related implications of the MSA justifying a taxpayer suit.
One cause-of-action would be to block allowing settlement monies to be tax-deductible, quietly affording the TI a $40 billion windfall unless taxpayers revolt (as they did when Congress adopted comparable legislation prior to the 1998 summer recess ).
Despite the fact that excise taxes dont cover non-Medicaid tobacco-related
expenses, any effort to raise them would not occur because all monies
raised by that mechanism would then trigger a continuing dollar-for-dollar
offset against the annual payments by the TI to the states. [see
Section X: Effect of Federal Tobacco-Related Legislation].
These are depicted in the MSA in complex legal language, thusly:
(b) The offset described in subsection (a) shall apply only to that
portion of Federal Funds, if any, that are either unrestricted as to their
use, or restricted to any form of health care or to any use related to
tobacco (including, but not limited to, tobacco education, cessation, control
or enforcement)
.
Inasmuch as justification for such tax increases is invariably linked to implementation along the above-stated lines, the net effect of this phraseology to capitate payments not only if a plaintiff is successful [vide supra], but also if the Federal Government determines that it wishes to raise taxes to finance additional tobacco-related expenditures. Dr. Sklaroff, as a non-smoker and as a taxpayer, would want to maximize tax revenue collected from smokers for two reasons: to limit his own fiscal liability for smokers self-inflicted damages and to decrease youth smoking (due to consequent total price increases). This could be litigated.
d. Dr. Sklaroff has the legal right to seek relief on behalf of and/or generally applicable to the general public by filing generic litigation.
The Petitioners Brief cited numerous causes of actionboth in the CoP and throughout Americawhich could be and have been filed in the CoP against the TI. Dr. Sklaroff could serve as the plaintiff in these cases, all of which have passed muster as causes-of-action. These cases are also amenable to being prosecuted by the other Activists (and by Allegheny County ), and all necessarily put forth LEIs applicable in the CoP.
Possible future litigation exemplifying what they could legally now assertbut which could become problematic under the spell of the MSAinclude the following:
Were the TI to try to circumvent advertising restrictions (e.g., promoting a new cigarette brand that shares the name of a parent entity), Dr. Sklaroff could file an intervention comparable to the successful effort by a public interest plaintiff against Joe Camel. Mangini v. R.J. Reynolds Tobacco Company, et al., 875 P 2d 73 (Cal. 1994).
Dr. Sklaroff has provided healthcare to Pennsylvanias Medicaid, medically indigent and non-paying patients and, thus could file a case comparable to that of a hospital group. Allegheny General Hospital, et al v. Philip Morris, Inc., et al., Court of Common Pleas of Allegheny County, Civil Division GD No. 98-018956 (1998).
Dr. Sklaroff has provided consultative support for the litigation filed against the use of mentholated cigarettes. Reverend Jesse Brown, et al. v. Philip Morris, Inc., et al., U.S. District Court for the Eastern District of PA, Civil Action No. 98-5518.
Similarly, he could provide such scientific support for that filed by
a group of smokers seeking cessation programs. Sweeney, et al. v.
American Tobacco Company, et al., Court of Common Pleas of Allegheny County,
No. 98-16226. And this medical approach could easily be provided
to a group of smokers of low-tar/ low-nicotine cigarettes. McNamara,
et al., Court of Common Pleas of Montgomery County No 98-13501 [removed
to federal court].
In each of these matters, TI defendants have not been able to dislodge
plaintiffs from pursuing actions that Dr. Sklaroff could also pursue; these
are not hypothetical ideas. Additional causes of action that have
been pursued successfully in other states could also be invoked in the
CoP related, for example, to environmental tobacco smoke protection
and divulging additives . Each faulty facet of the MSA could be enjoined,
such as the anti-tobacco advertising promoted by the TI against
youth smoking, now shown to have been counterproductive. The focus
of anti-tobacco activism has had scientific roots in the nicotine addiction
literature, also yielding a potential source of litigation .
Antitrust suits could be filed against the TIcomparable to the March 11 filing by RJR-Nabisco against Philip Morristhat the MSA would block the AG from pursuing. Such efforts would be directed against a well-financed and newly-invigorated TIsurrounded by a wounded FDA/EPA, a cautious Congress, an uncertain Administration, and a strict-constructionist judiciarythat keeps killing. But such efforts could never occur unless deeply-committed parents, hard-working taxpayers, and health-care providers (plus government subdivisions and other concerned persons/entities) could sue.
e. Constitutional Concerns.
Blocking Dr. Sklaroff and the Activists from intervening denies them due process (under the 5th and 14th Amendments to the U.S. Constitution) and equal protection (under the U.S. Constitution and the PA Constitutions Declaration of Rights). In the latter (Article I), for example, Section 1 deals with the Inherent Rights of Mankind, Section 20 deals with the Right of Petition, and Section 25 deals with Reservation of Powers in People. The civil rights of many future putative litigants have been violated in the instant matter.
2. The Court abused its discretion when it failed to address key issues in the MSA.
The Court was required to weigh the merits of the MSA to ensure it was fair, reasonable and adequate; failure of the Court to do so was a manifest abuse of discretion and error of law.
a. The Trial Court is obligated to interpret the MSA.
The AG brought this action in his official and representative capacity pursuant to his authority under 71 Pa.C.S. 732-204, 73 Pa.C.S. 201-204 and 73 Pa.C.S. 201-208 and in parens patriae on behalf of the citizens of Pennsylvania, including its children and adolescents, to protect their health and welfare, and to recover damages which the Commonwealth and its citizens have sustained as a result of the unlawful and concerted action of the defendants, as well as injunctive relief. Court approval is required for two reasons: the MSA includes settlement of claims of minors and incapacitated persons [noting repeated reference to alleged benefits for Youth in the Recitals, for example] that require court approval. Pa.R.C.P. 2039, 2064; and, the CoPs citizens were represented as a group therein, and class action settlements require court approval. Pa.R.C.P. 1714(a).
Repeated efforts by the Trial Court to defer its duty to interpret the MSA to another court at another time constitute abuse of discretion , for the Petitioners concerns have been cited with sufficient precision to convey what would be included in any future litigation. This is apt because the word may and not the word must is the operational term [Pa.R.C.P. 2327(4): the determination of such action may affect any LEI of such person, whether or not he may be bound by a judgment in the action]. A qualified word reflects the need to protect rights that could be invoked for as long as settling TI companies exist.
The Opinion cited PA Supreme Court precedent that concluded that the exact boundaries of the LEI limitation [of Pa.R.C.P. 2327(4)] are not clear. And it was observed that its application in a particular case calls for the careful exercise of discretion and a consideration of all the circumstances involved. It was deemed mandatory that these asserted interests be analyzed within the context of the applicable rule and precedent; this analytic task, however, was inexplicably abandoned thereafter.
b. The Trial Court failed to consider the standards for evaluating the MSA.
In evaluating such settlements, CoP courts are required to consider many factors in evaluating the details of a settlement, even if they arent raised by putative Intervenors:
Additionally, in assessing the merits of the appellants claim, we look to various criteria employed by the courts in evaluating the propriety of a class settlement, to wit:
(1) the risks of establishing liability and damages,
(2) the range of reasonableness of the settlement in light of the best
possible recovery,
(3) the range of reasonableness of the settlement in light of all the
attendant risks of litigation,
(4) the complexity, expense and likely duration of the litigation,
(5) the stage of the proceedings and the amount of discovery completed,
(6) the recommendation of competent counsel, and
(7) the reaction of the class to the settlement.
[See e.g., Girsh v. Jepson, 521 F2d 153 3rd Cir. 1975).]
In effect, the court should conclude that the settlement secures an adequate advantage for the class in return for the surrender of litigation rights. As with valuation problems in general, there will usually be a difference of opinion as to the appropriate value of a settlement. For this reason, judges should analyze a settlement in terms of a range of reasonableness and should generally refuse to substitute their business judgment for that of the proponents. H. Newberg, Newberg on Class Actions, 5610b (1977)
[Buchanan v. Century Fed. Sav. & Loan Assn, 259 Pa.Super. 37, 393 A.2d 704, 709 (1978); also see Prince George Center, Inc. v. U.S. Gypsum Co. 704 A.2d 141 (Pa.Super. 1997).]
The Trial Court failed to consider any of these criteria prior to approving the MSA, blindly (and erroneously) accepting the judgment of the CoP. The substance of the MSA has not been subject to even the most superficial level of analysis merited by a contract of far less medical/economic/societal/legal significance, either by the CoP Trial Court or by any other governmental unit in which it has been approved. The courts and not the Attorneys General are the final arbiters of the legality of contracts. Watrel v. Commonwealth, Dept. of Education, 518 A.2d 1158 Pa. 1986). Therefore, to protect the interests of absent class members (plus minors, incompetent persons and incapacitated persons), the court must independently and objectively analyze the evidence and circumstances before it, in order to determine whether implementing a settlement is in the best interest of those whose claims will be extinguished. Newberg on Class Actions, section 11.40 (1985). Weighing such vital considerations, this is what the court failed to do.
Allegheny Countys Brief (pages 29-30) also details two ways that the MSA empowers the AG to aid the TI in limiting future litigation. The Opinion also failed to scrutinize the MSA to the degree necessary to reach assessment of such considerations as these: First, the CoP has retained and/or claimed the right to approve any future settlement which others might reach in their own right; they have potentially interposed a previously non-existent defense to the lawful pursuit of collective claims. Second, the CoP has contractually agreed not to assist or encourage, directly or indirectly, any challenge to the [MSA] or any Consent Decree by any other person, and will support the integrity and enforcement of the terms of the Agreement and the Consent Decrees.
c. The Trial Court failed to discharge its duty to analyze the MSA.
The courts primary concern is whether a settlement, taken as a whole, is fundamentally fair, adequate and reasonable to all concerned. In re: Washington Public Power Supply System Sec. Litig., 720 F.Supp. 1379, 1387 (D.Ariz. 1989), affd Plaintiffs v. City of Seattle, 955 F.2d 1268 (9th Cir. 1992, cert. Denied, 506 U.S. 953.
This concept was noted specifically during the MSA Hearings: The Court in reviewing the consent decree looks at issues of fairness, reasonableness and adequacy for all the parties involved. [Transcript 1/8/99, page 18]. Yet, nowhere in the Opinion is it stated that these fundamental criteria were applied through independent review of the MSA. Instead, analysis was limited to specific concerns raised by established and potential petitioners. Failure to perform this duty constitutes an absolute violation of the law and an abject abuse of discretion.
For example, the MSA did not address the various ways the MSA will obviate litigation such as abridgement the right of citizens to report wrongdoing by invoking centuries-old qui tam law. Also, it did not examine additional issues detailed throughout this brief [n.b., the Statement of the Case in particular] that flesh-out how the Court responsible for administering the MSA envisions this task.
d. Time-frame considerations do not mandate hurried, imprudent MSA approval.
The Settling Parties repeat the mantra that hasty approval is needed; for example, the CoP states: Ultimately, if all appeals within the definition of State-Specific Finality, regardless of how frivolous, have not been concluded by December 31, 2001, the settlement with its historic economic and non-economic terms is automatically terminated as to Pennsylvania. [Memorandum of Law in Support of Motion for Expedited Review and Consolidation of Appeals, italicized in the original.]
The current pace of events is such that it can now be reasonably be anticipated that this matter will be resolved prior to the end of this year (1999)a year prior to the end of the millennium (2000) inasmuch as MSA approval is already before a statewide tribunal.
Rushing to approve the MSA obviates careful scrutiny , as many professional
organizations have noted.
The necessity to consider these issues does not unduly harm the Settling
Parties rights. State-Specific Finality need never occur (inasmuch
as the MSA becomes operational regardless after June 2000) and the TI can
obviate the 80% criteria (for number of states and population encompassed).
Proper review of the MSA could easily be completed by the end of the year
2000, the Settling Parties deadline. The deadline loudly touted
by the Settling Parties is apocryphal, and allegations that delay will
be deleterious nationally are irrelevant and speculative. It must
be determined whether the CoP should live under the public health impact
of this MSA forever.
The TI Brief [page 9] unwittingly provides this key citation of the Pa.R.C.P. [2329(3)]: an application for intervention may be refused if the intervention will unduly delay, embarrass or prejudice. . .adjudication of the rights of the parties, [emphasis switched from TI brief] Again, the qualifier relegates the priority of celerity below that of honoring intervenors, illustrating the priority afforded the decision regarding standing.
e. Trial Court review of the MSA is ripe.
The Opinion noted this court is not concerned with any technical defects in the activists or Countys petition (such as its failure to attach a pleading as required by Pa.R.C.P. 2328). But because they did not do so, a thread running through arguments raised by the Settling Parties and in the Opinion was that they had been unable to have done so.
This thread should be knotted by citing the numerous cases appended to the Petition (some having been filed in the CoP). And this thread should be cut by recalling the unprecedented nature of the MSA and the powerful conclusions drawn by inductive reasoning (noting particularly the lack of congruence of the Offset with any precedent).
The above-mentioned contradiction can be summarized thusly:
It is oxymoronic for the parties to argue the immediacy of the concerns harbored by the putative intervenors both need not be illustrated by the concomitant filing of litigation (which would then lead to the MSAs challenge being addressed by another court, rather than in the current venue) and need be illustrated by the concomitant filing of litigation (which would then lead to the MSAs challenge being addressed by another court, after the case had become sufficiently ripe); Judge Herron impermissibly avoided dealing with these central issues.
One cannot depend on potential, future litigation to settle key MSA-related issues and allow controversial issues that arose during the oral arguments to remain unresolved. For example, if the MSA waived all citizens rights to trial by jury or to retain counsel, the question would be ripe.
Recalling the Intended Beneficiaries clause [see page 9], note the following exchange (1/8/99, page 58) which never was clarified:
Herron: Does the MSA in any of its provisions prohibit the use of seeking to enjoin certain conduct or activity assuming one would have a right or standing to bring such injunction?
Attorney: Assuming that you get over any hurdles if they are asserted with regard to the MSA and you can bring a claim, and I can ask my colleagues again, but I do not believe that there are prohibitions on that.
Herron: All right. Ill wait for that answer.
Illustrative of how over-ripe the current situation has become is this recent harbinger of anti-tobacco lawsuits once the TI achieves State-Specific Finality: a federal court filing by Philip Morris on 3/31/99 raised the MSA as an affirmative defense for present and future actions. Blue Cross/Blue Shield of New Jersey, Inc. et al. v. Philip Morris, Inc. et al., Civil Action # 98-3287 US District Court for the Eastern District of New York (11th affirmative defense). This is an avoidable phenomenon, inasmuch as such constraints do not exist in the first four settling states; thus, the TI cannot claim these non-severable clauses would, if severed, suddenly render them unable to conduct their businesses.
The Petitioners Memorandum depicted the import of the Ripeness Doctrine thusly:
If the decree deprives the petitioners of their power to litigate (or if it renders the indemnified TI untouchable), it will convert them into paper tigers lacking clout in negotiations, lacking appeal to private funding agencies and philanthropic supporters, and being constrained to resort to urging the (heavily compromised) state to make any threat of coercive action. [page 7]
Ultimately, Dr. Sklaroffs objections can be rectified by altering the MSA merely by invoking exact phraseology to which the TI already agreed in the first four settling states (with or without referral to a panel of attorneys general pursuant to the MSA procedure). Thus, it is unclearunless the Settling Parties have failed to reveal additional motiveswhy they object to stipulating what they readily accept as reality.
In short, the case is ripe because the Settling Parties made it ripe; they submitted the MSA for court approval and thereby forced the courts to discern its fairness at this time.
f. The necessity to consider certification of a class action is illustrated by the General Motors and Georgine cases.
The Opinion addressed the issue of Class Certification tangentially: a procedural issue raised by the Activists petition is the request to intervene on behalf of a similarly situated class pursuant to Pa.R.C.P. 1702. Certification of a class action can pose considerable time delays, which could prejudice the settling parties. [footnote #42] Despite this prospect, the Court should consider certification of a class in this matter.
In 1995, the 3rd Circuit Court of Appeals discussed the necessity to view class action litigation broadly (retaining operational limitations) through remand of a case to force a district court to make Rule 23 rulings [In re: General Motors Corporation Pick-Up Truck Fuel Tank Products Liability Litigation. 65 Fed 3rd 768]. In the instant matter, the judiciary must address the interests of the group most directly affected by the terms of the MSA: the Medicaid population. Their interests (individually and among those of others) could most aptly be asserted by Activists (including Dr. Sklaroff) who have been studying the impact of tobacco on all facets of society (in addition to its health effects).
*
In 1996, the 3rd Circuit Court of Appeals discussed the necessity to view class action litigation broadly and to release future claims judiciously. Georgine et al v. Amchem Products, Inc. et al., 83 Fed 3rd 610. [This issue reached the U.S. Supreme Court, which affirmed and reversed in-part.] This case is germane for two pivotal reasons: the MSA indemnifies all future activities of the TI (without realistic limit) and the Opinion deferred any consideration of potential class status in the instant matter (due to the mirage of time-constraint conjured byand controlled bythe Settling Parties).
The Opinion opened thusly: Every decade presents a few great cases that force the judicial system to choose between forging a solution to a major social problem on the one hand, and preserving its institutional values on the other. . . . Inclusion of futures claims causes serious fairness concerns; for example, the stipulation of settlement purports to settle all present & future claims for asbestos-related personal injury or wrongful death.
Thus, if it is unfair to settle future claims limited to asbestos, it is certainly unfair to settle future claims regardless of the etiology thereof. In that case, there were virtually no delayed opt-out rights, necessitating provision of proper notice to absent class members. In this case, there are no delayed opt-out rights, necessitating stipulation of the MSA.
3. The Court must strike II (pp) or add a stipulation based on statements issued by the Attorney Generalboth publicly and in the official recorddenying his capacity to block all future anti-tobacco litigation filed and prosecuted by persons/entities acting in any capacity (e.g., parens patriae, sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer).
a. In the Commonwealth of Pennsylvania, the Attorney General does not have the power to preclude the filing and prosecution of lawsuits initiated by persons or entities acting in any capacity (e.g., parens patriae, sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer).
The CoP Constitution states the AG shall be the chief law officer of the Commonwealth and shall exercise such powers and perform such duties as may be imposed by law. [Article IV]
He has been conferred neither a generic nor a specific power that would permit his precluding either the filing or the prosecution of lawsuits initiated by persons or entities acting in a parens patriae, sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer or any other capacity.
In the MSA, however, the AG waived rights he was sworn to defend and enforce. The Supreme Court protects the right of citizens to sue, and the state legislature authorizes qui tam suits; the AG has no right or power to reverse judicial decisions or to rescind legislative actions, regardless of the monetary reward that is proffered.
Although the CoP may not authorize some of these capacities (sovereign and quasi-sovereign), Dr. Sklaroff could file litigation in others (parens patriae; qui tam; taxpayer and, perhaps, private-AG). Thus, it is imperative that the AG unambiguously foreswear the ability to block such lawsuits, thereby clarifying both intent and policy for the public; such a declaration would codify what has been averred repeatedly in other venues.
b. During Oral Argument, the Attorney General and his legal representatives stated it was not and never had been the intent of the Commonwealth of Pennsylvania to preclude the filing and prosecution of lawsuits initiated by persons or entities acting in any capacity (e.g., parens patriae, sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer).
The following representations are from citations of the record, as noted in the Opinion :
1. The MSA, in no sense, is barred to private litigants. (CoP, page 4}
2. The release applied only to certain monetary claims. (CoP & TI, page 4)
3. I do not believe it was the intention of the attorney generals of 50 states to release these [hospitals] claims .We did not release claims of private organizations for claims that we did not assert. (CoP, page 24)
4. If the attorney general in any given state did not have the authority to release particular claims that are specifically mentioned within the MSA, the court does not approve a release of these claims. (TI, page 26)
5. They did not intend, by one sentence, to have the sweeping enforceable release on 46 states. They left it to a state-by-state determination of whether the attorney general does, indeed, have that power. . . .Based upon our review of the current PA law, we are not aware of any authority under the current law that gives the attorney general the authority to release the claims of political subdivisionsby that, Im including municipalities or counties. That is one lawyers opinion and its not an opinion thats based on a really thorough saturation of work. Its just a preliminary review. (CoP, page 33)
6. We believe we have nothing to interfere with their [the intervenors] interest in settlement of our case and, to the extent that we can continue to work with them, we are interested in their input and their public comments. (AG, page 33)
7. We do not believe that our settlement agreement, in any way, compromises their ability to pursue their claims, any of those groups, and we certainly do believe its in the best interest of the Commonwealth. (CoP, page 34)
The Opinion concludes, Even a cursory analysis of this definition [II (pp)] suggests its complexity, with distinct qualifiers and limitations. (page 32) Differing interpretations are cited, noting the limitations of the applicability of such assurances. (page 34) Yet, omitted is why such cannot be stipulated by the CoP, as a result of precise MSA review.
The Opinion notes the CoPs conclusion that class action litigation filed by smokers would not be precluded, nor would damages sustained due to direct/indirect exposure to tobacco products (page 35). By citing the CoPs Answer to the Petition to Intervene and the Memorandum in Response thereto, he established a record to which future litigants could refer. Nevertheless, knowing the overall chilling effect that the TI exerts upon the community of Activists without such protections, such unchallenged language will have the effect of freezing-out those pursuing Public Health from suing the TI.
c. In the public record, the Attorney General has stated that he does not have the power to preclude the filing and prosecution of lawsuits initiated by persons or entities acting in any capacity (e.g., parens patriae, sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer).
A. spokesperson for the AG told a Reuters reporter that this suit is moot because the MSA did not preclude the Coalitions right to sue the TI. Attorneys general can waive the rights of other parties in certain states, such as New York , Connolly said, But Pennsylvania law does not allow us to do that. This very sentence could be stipulated.
Inasmuch as the AG has recognized Dr. Sklaroff and the Activists have the necessary expertise and ability to file litigation under the aegis of parens patriae, taxpayer or qui tam capacities, this must be stipulated in conjunction with the approval of the MSA. And the opportunity to do so will pass forever once the MSA has been approved.
d. Dr. Sklaroff merits declaratory relief stating paragraph II (pp) is overly-broad, unconstitutional, inconsistent with public policy and ultra vires.
It remains unclear why the CoP refuses to stipulate what it states affirmatively in public statements and legal briefs. It avers Sklaroff argued that the Attorney General does not have the authority to release all future claims by anti-tobacco activists. This is deemed a concession and it is unchallenged by the CoP; thus, it appears to be admitted as a fact. Yet, the CoP has refused to state why it refuses to offer a stipulation foreswearing the admitted inability of the AG to halt public-interest litigation .
4. The Court must strike XII (b) or add a stipulation based on statements issued by Attorney Generalboth publicly and in the official record clarifying the scope of and procedure for application of the Offset Provision.
a. The AG lacks authority to give indemnification that trades all of the CoPs past, present and future claims against the TI for a settlement that may have little value to the CoP, or may be counterproductive.
The AGs civil litigation powers (. . .to collect by suit or otherwise all debts, taxes and accounts due the Commonwealth. . . .) do not include the right to waive claims of unknown value. 71 Pa.C.S. 732-204 (c). Nevertheless, the Offset indemnifies the TI from all claims by taxpayers and other persons, even if the AG does not have authority to release those claims. Such claims may destroy whatever benefit the CoP stands to receive through the MSA, rendering it merit-less as a source of monetary recovery; private suits have sparked punitive damage awards that could occur were other persons (including organizations) to win public interest litigation, monies subject to the Offset. Such a practical expectation is justified, noting the evolutionary nature of jurisprudence.
The AG is not merely indemnifying the TI for claims filed by people/entities he controls. This goes further; the AG is immunizing the TI for claims filed by people/taxpayers over whom he has no power. Thus, were awards to these other persons to total $11.2 billion, the CoP would receive no money from the TI through the MSA. [Its capitated!]
In counterdistinction to the Vaccine Law [vide infra], the AG was not required to submit evidence setting the value of (past, present and future) claims against the TI; not surprisingly, the public balance sheet has thereby been shrouded in secrecy.
b. The Offset creates an unholy alliance between the Settling Parties that is contrary to the AGs statutory duties and responsibilities.
The AG is the CoPs chief consumer law officer, responsible for enforcing the consumer laws and appointing & overseeing a consumer advocate. 71 Pa.C.S. 732-201. And he has specific and unique enforcement obligations under the PA Unfair Trade Practices and Consumer Protection Law. 73 Pa.C.S. 201 et seq. The Offset, however, places the AG on the wrong side of the battlefield, inasmuch as the AG will now have an $11 billion incentive to oppose consumer actions against the TI, lest they result in judgments that will reduce the CoPs annual income through the MSA. The Opinion, quoting the CoP, asserts: The MSA did not require the AG to intervene on behalf of the TI nor would he have any reason to do so. Eschewed are the facts that the AG would be forced to honor the Offset, which consent shall not be unreasonably withheld, and that the Activists constant concern was on the effect of TIs ability to invoke this clause, regardless of any gain through future public interest litigation.
The AG has abdicated his responsibility to protect the citizenry under the above-cited consumer laws from past and future harm by the TI of unknown magnitude. The AG does not have the discretion to ignore the will of the legislature and cede rights, powers and responsibilities on behalf of the CoP for the next quarter-century in exchange for a monetary settlement of admittedly-variable and candidly-unknown value.
c. The potential application of the Offset Provision is not speculative, as was illustrated by the Attorney Generals response to the filing of RICO litigation by Allegheny County.
Illustrative of how the Offset is already determining the behavior of the CoP is this observation of the governors Secretary of Administration on March 5, 1999, Mr. Paese. He asserted Allegheny County should lobby for its fair share rather than litigate for it, adding: A separate settlement for the county simply would be taken from the funds the state already is set to receive. Invoking the Offset Provision is now documented, and it must be clarifiedon behalf of the citizenrythrough stipulating the MSA.
The MSA allowed the TI to place a fiscal windfall before state governmental
officials, without limits on its appropriation. No matter that the
monies to be provided had been generated ostensibly as recompense for Medicaid
expenses, and no matter that this money would continue to flow only if
smoking persisted in epidemic proportions.
This sly act gained adherents, for there was suddenly new support for pet
projects, ranging from health-related research to filling potholes .
A rush-to-judgment was ignited, and an inexorable process of rubber-stamp
approval was on. Into this environment stepped Activists, steeped
in decades-long, heart-felt battles against the TI and those it funded;
suddenly, a new adversary arosestate governmentpotentially ensconced
in this role in perpetuity. Those who would potentially obtain support
chose blithely to seek same, rather than to confront the philosophical
implications of receiving The Devils Money.
d. The Offset Provision is illegal, unprecedented, excessively broad, excessively vague, and exceeds the power of the Attorney General.
The Settling Parties cited to no precedent for how the Offset Provision was to be triggered and implemented. Thus, an Internet-Search was initiated to discern whether reference to the word offset appeared in comparable legal documents. Initially, it was determined that this was a General Business Term, used often within contexts comparable to this contract citation [from Berchtold, IV.2.]: The customer may offset payment only against claims which are indisputed or legally established.
This usage appeared in governmental regulations, always within a context in which the monies involved had been generated in a comparable (if not identical) fashion. The Treasury Department defined an administrative offset as a mandate derived from the Debt Collection Improvement Act of 1996; the Federal Government is required to withhold or reduce certain Federal payments to satisfy the delinquent nontax debts owed to the United States by the payee. Federal Register 63(81):23353-23359 (4/28/98).
Another made reference to an IRS offset (Scenario #2). Office of Child Support Enforcement. OCSE-AT-98-15. Arizonas Wage Statute was noted to mandate the employer cannot offset debts that are unrelated to employment within regard to withholding wages. A.R.S., 23-351. In SEC documents, offset is a tag used in submission headers and is defined as used when the fee or part of the fee is paid with another. The EDGAR System. Sect. B (4.9.3). And Tax Offset Payments may be granted from time-to-time, as per a contract submitted to the SEC. SEC Form S-8 [4(a)] None portrayed a scenario in which monies are paid to provide immunity without the need to write an insurance policy (a task that would necessitate acquiring and exercising a Certificate of Authority from the CoP Insurance Department) as is contemplated by the Settling Parties.
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Thus, application of this concept was explored with relation to Federal Indemnification of manufacturers of vaccines that, rarely, could cause severe allergic reactions. National Swine Flu Immunization Program of 1976. P.L. 94-380. The Senate Report No. 94-1147 noted that the concept of immunizing manufacturers was unprecedented and, thus, implementation of this program is amenable to comparison & contrast with the MSA [vide infra]. The government immunized vaccine manufacturers who were producing a product that would benefit the public health without offsetting any type of payment.
The context of this analysis is reflected in current American Medical
Association policy [Compendium #H-440.929, based on Board of Trustees Report
QQ (A-93)]:
Update on the National Childhood Vaccine Injury Act of 1986:
The AMA: (1) urges the Administration to support and Congress to
appropriate sufficient additional funds to pay for all of the retrospective
claim awards anticipated for this and future fiscal years by the Division
of Vaccine Injury Compensation (the potential shortfall for this year is
estimated to be as high as $174 million) to assure that plaintiffs with
retrospective claims do not return to the tort system with all the attendant
problems of the past.
(2) encourages the Administration to support and Congress to reauthorize
the excise tax and the spending authority of the Trust Fund immediately
so that payments from the fund may be made for vaccines administered after
September 30, 1992, since this is needed both to compensate those injured
by vaccines after that date and to afford vaccine providers with a measure
of liability protection.
(5) supports the development and implementation of an administrative
mechanism to adjust federal vaccine excise tax rates to avoid an unnecessarily
high surplus of funds in the trust fund for post-1988 claims.
The National Vaccine Adverse Event Reporting System has allowed researchers to track the incidence of such toxicity; events not causally related to vaccination were included to ensure scientists were able to discern the relative risks of vaccine toxicity over the years.
This capacity was achievedat least in partby the governments having indemnified all participating parties. Thus, the entire law will be parsed to note the many precedents therein that were ignored in the MSA (despite ostensible comparability of the immunity goals of the two efforts).
That the AG overstepped constitutional separation-of-powers considerations when generating the MSA (because none of its tenets were submitted for legislative approval) contrasts with the existence of the Vaccine Law. Further, that the 1998-1999 MSA has vague terminology contrasts with the detail of the 1976 law. And that the MSA is to be expeditiously approved (a public funding compulsion) contrasts with the time-frame concern of two decades ago (a public health epidemic). Additionally, that the Vaccine Law mandated any insurance premium amount which is included in the price of such procurement contract and which is refunded to the manufacturer under any retrospective, experienced-rating plan or similar rating plan shall, in turn, be refunded to the United States contrasts with the absence of any such determination in the MSA.
And that all such claims were to be asserted directly against the United States contrasts with the mandate in the MSA that the TI handle (and reasonably defend) them. (Vaccine program participants were to cooperate in the defense of such claims.) The law states categorically: The Attorney General shall defend any civil action or proceeding brought in any court against any employee of the government. . .or program participant (or any liability insurer thereof) based upon a claim alleging personal injury or death arising out of the administration of vaccine under the swine flu program. Although the Appropriations Committee reported this law without a recommendation, it was noted that this measure sets an entirely new precedent.
Finally, the purpose of this program contrasts with that touted by the
MSAs proponents; whereas the MSA omits an Admissions section that could
simplify interpretation thereof, the lofty goals of the Vaccine immunization
were stated thusly:
The Congress finds that
(i) in order to achieve the participation in the program of the agencies,
organizations, and individuals who will manufacture, distribute, and administer
the swine flu vaccine purchased and used in the swine flu program and to
assure the availability of such vaccine in interstate commerce, it is necessary
to protect such agencies, organizations, and individuals against liability
for other than their own negligence to persons alleging personal injury
or death arising out of the administration of such vaccine.
(ii) to provide such protection and to establish an orderly procedure
for the prompt and equitable handling of claims by persons alleging such
injury or death, it is necessary that an exclusive remedy for such claimants
be provided against the United States because of its unique role in the
initiation, planning and administration of the swine flu program. . . .
Corporate beneficiaries of a government indemnification program were obligated to calculate its price and to ensure the government was not penalized as a result thereof.
Because creation of the Offset was admittedly unprecedented, inferential data have been brought to bear regarding how it might function. Its tenets are excessively broad, inasmuch as it encompasses any future behavior conducted within the course of business. It is excessively vague, inasmuch as it fails to specify any example of what might be excluded with regard to future behavior (if anything). And its indemnification of third-parties exceeds the power of the AG, inasmuch as he AG is not licensed to sell liability insurance protection. This is the heart of the immunity that the TI has vigorously sought and attained, and Activists fear this Offset will function as does a computer operating system: in the background, but in total control of all identifiable processes.
e. Dr. Sklaroff merits declaratory relief stating paragraph XII (b) is complex, overly-broad, unprecedented, unconstitutional, inconsistent with public policy and is ultra vires.
The CoP and TI dont dispute Dr. Sklaroffs interpretation of the offset, succinctly stated:
If a non-releasing party successfully sues the TI (as a taxpayer, county or in some other capacity) and if that action results in a financial judgment against the TI, that judgment will reduce the financial benefits enjoyed by the CoP under the MSA. Furthermore, the Attorney General would have responsibilities to defend the TIs interests in such litigation, thus putting him into an awkward situation; he is the Chief Law Enforcement Officer in charge of consumer protection, not consumer injury. [The Attorney General shall administer the provisions relating to consumer protection. 71 Pa.C.S. 732-204 (d)]
The Offset is the one non-severable clause that is the most onerous, the most in-need of being severed therefrom . Its two strategic implications undermine the public interest. First, it requires the AG either to defend the TI defendant or to accept the outcome. Second, it prompts the TI to accept monetary (rather than policy-oriented) settlement concessions, inasmuch as such costs would be borne totally by the CoP.
It remains unclear why the CoP refuses to stipulate what he clarifies both in public statements and in legal briefs. Documented in the media already are points of absolute disagreement between the CoP and the TI (with regard to the cases both filed by Allegheny County and contemplated by Philadelphia County). Thus, Dr. Sklaroff needs to appreciate why the CoP refuses to offer an appropriate procedural stipulation .
CONCLUSION
Dr. Sklaroff has a LEI in the unprecedented MSA effected by the Settling Parties, due to his capacities to pursue a wide range of public interest litigation and to file a taxpayer lawsuit. Stipulations are needed in its Releasing Parties and Offset sections; the former must not include Activists and the latter is procedurally unfair, unreasonable, unconstitutional and inadequate to Pennsylvanians. The AG does not have the power to indemnify the TI, to apply the Offset Provision broadly, and to deprive citizens of their civil rights.
Abuse of discretion has been documented related both to these specific concerns and to the generic concerns raised by absence of Trial Court analysis of the intentionally-vague MSA. These remedies may be achieved either through remand (to study its scientific, legal and ethical implications) or through direct intervention by the Commonwealth Court. The MSA is widely misconstrued as a useful first step in achieving decreased tobacco use in America and around the world; indeed, it will be the last word in meaningful smoking cessation, for the TI will have achieved de facto indemnification. Culpable for millions of deaths during this millennium, the TI should not be indemnified in the next. Thus, in the haste to acquire a financial wind-fall, the court must not create a fiscal free-for-all that will yield a public health free-fall. For these reasons, Robert B. Sklaroff, MD possesses standing to appeal from the Order of Dismissal and, thus, requests remand of the MSA to the Court of Common Pleas; denial of his Intervention Petition must be overturned.
Respectfully submitted,
[RBS]
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I, Robert B. Sklaroff, M.D., hereby certify that on this, the 22nd day of April, 1999, I caused a true and correct copy of this motion to be sent today, by First Class Mail, to Counsel at the addresses listed below:
Mary A. McLaughlin, Esquire
Dechert, Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103-2793
Reeder R. Fox, Esquire
Duane, Morris & Heckscher
4200 One Liberty Place
Philadelphia, PA 19103-7396
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