October 27, 2017
By: Dennis Whitaker
Last week, the Supreme Court issued seven decisions which we summarize here at varying length:
Justice Todd wrote the majority opinion joined by Chief justice Saylor and Justices Donohue, Dougherty, Wecht and Mundy. Justice Baer wrote a concurring opinion joined by Justices Donohue and Wecht.
This matter was a direct appeal from Commonwealth Court, which determined in a split en banc decision authored by Judge Brobson that the “net loss carryover” provision of the Pennsylvania Revenue Code for tax year 2007 (NLC)— restricting the amount of loss a corporation could carry over from prior years as a deduction against its 2007 taxable income to whichever is greater, 12.5 percent of the corporation’s 2007 taxable income or $3 million — violated Article 8, Section 1 of the Pennsylvania Constitution, more popularly known as “the Uniformity Clause.” As a remedy, the majority declined to strike the NLC from the Revenue Code in its entirety as suggested by the Revenue Department, positing that Nextel had not made a facial challenge to the constitutionality of the NLC and because the court did not find the NLC to be facially unconstitutional. Rather, the majority noted that Nextel claimed only that the NLC was unconstitutional as applied to Nextel for the 2007 tax year such that that the appropriate relief should be limited to remedying the improper application of the NLC to Nextel’s taxable income for that tax year.
Then president Judge Pellegrini joined by Judge Leadbetter filed a concurring and dissenting opinion agreeing with the majority’s conclusion that the NLC violated the Uniformity Clause but dissenting as to the remedy, specifically disagreeing that the majority’s decision could be restricted in its effect only to a determination of the amount of tax Nextel owed for tax year 2007. Instead, Judge Pellegrini wrote that Section 1925 of the Statutory Construction Act, 1 Pa. C.S. § 1925, should apply. That section allows courts to sever unconstitutional provisions of a statute from the remaining constitutional portions:
[U]nless the court finds that the valid provisions . . . are so essentially and inseparably connected with, and so depend upon, the void provision . . . that it cannot be presumed the General Assembly would have enacted the remaining valid provisions without the void one; or . . . that the remaining valid provisions, standing alone, are incomplete and are incapable of being executed in accordance with the legislative intent.
1 Pa. C.S. § 1925. Judge Pellegrini suggested that the structure of the NLC, and similar net loss carryover provisions in the Revenue Code for subsequent tax years 2009, 2010, 2014 and 2015, reflected the General Assembly’s intent to limit the net loss carryover deduction a corporation could utilize in each tax year by capping it. As such, he opined that the majority’s decision to eliminate all caps on the amount of net loss a corporation could carry over was directly contrary to the legislature’s intent. However, he noted that flat dollar deduction could be severed from the percentage deduction in each of the net loss carryover provisions of the Revenue Code, thus leaving the percentage deduction available to all taxpayers, and concluded that severance was the most appropriate remedy as it would carry out the legislative intent to limit net loss carryover deductions for a given tax year, while also protecting the public purse.
The Department of Revenue appealed raising two issues: (1) does the NLC violates the Uniformity Clause by capping the amount of net loss deduction a corporation can take based on its income; and, (2) if so, whether severance of the $3 million flat deduction cap is the appropriate remedy, rather than allowing an unlimited net loss deduction as did the Commonwealth Court majority. The Court granted argument and directed the parties to brief the effect, if any, of its opinion in Mount Airy #1, LLC v. Pa Dep’t of Revenue, 154 A.3d 268 (Pa. 2016), which declared portions of the local tax assessment on casino revenue in the Gaming Act violative of the Uniformity Clause.
After summarizing the parties’ arguments and noting the contributions of the various amici, the court began its analysis with a history of the Uniformity Clause, which first was approved as part of the package of amendments that became the “Reform Constitution of 1874” and was a direct response to the use by the General Assembly of special tax laws applicable only to specific industries or individuals. The Court then examined the NLC and concluded that it effectively creates two classes of taxpayers among corporations which have net loss carryover deductions equal to or exceeding their taxable income by allowing corporations to take a flat $3 million net loss carryover deduction against their taxable income. The first and largest class (98.8% of all corporate taxpayers for tax year 2007) was exempted from paying any corporate net income tax because the class members’ income was $3 million or less. The second and much smaller class was required to shoulder the entire corporate net income tax burden for that tax year due only to the fact that each of those class members had income greater than $3 million. Finding that the NLC created disparate tax obligations between two classes of similarly situated taxpayers based solely on each class member’s taxable income, the Supreme Court concluded that Commonwealth Court correctly determined the NLC violated the Uniformity Clause.
As to a remedy, the Supreme Court considered three available options: (1) sever the flat $3 million deduction from the remainder of the NLC; (2) sever both the $3 million and 12.5% deduction caps and allow corporations to claim an unlimited net loss — the remedy chosen by the Commonwealth Court majority; or (3) strike down the entire NLC and, thus, disallow any net loss carryover. Choosing the remedy required the Court to determine which of these actions would be most consistent with the legislative intent in enacting the NLC.
After reviewing the legislative history of the NLC, the Court concluded that the legislature’s intent was best effectuated by option (1) – severing the $3 million flat deduction from the NLC. By doing so, all corporations for the tax year 2007 would be limited to taking a net loss carryover deduction of 12.5% of their taxable income for that year. Thus, each corporation will be entitled to avail itself of a net loss carryover deduction, as the legislature intended, but such deduction would be equally available to all corporations during that year, no matter what their taxable income. The Court found that this result fulfills the central tenet of the Uniformity Clause that the tax burden be borne equally by the class of taxpayers subject to paying it, because it assures that all corporations will equally share in the obligation to pay corporate net income tax for tax year 2007. The Supreme Court thus affirmed Commonwealth Court’s finding that the NLC violated the Uniformity Clause, but reversed as to the remedy.
Chief Justice Saylor wrote the majority joined by Justices Baer, Donohue and Dougherty. Justices Todd and Mundy filed separate dissenting opinions and Justice Wecht did not participate in the case.
This case involved an appeal by allowance by the Commonwealth from Superior Court which presented the issue of whether, in a criminal prosecution, a sexual abuse evaluator may testify to his opinion that a child was sexually assaulted, where there is no physical evidence of abuse, and the opinion is premised upon the expert’s apparent acceptance of the child’s reporting and description.
Maconeghy was accused of repeatedly abusing his stepdaughter, C.S. At trial, the Commonwealth presented testimony from a pediatrician who evaluated C.S. to determine if she had suffered from sexual abuse. On direct examination, the doctor explained that he regularly rendered consultative services on behalf of the Children’s Advocacy Center for Northeastern Pennsylvania, and, in this capacity, he had been engaged to evaluate C.S. He indicated that he observed a forensic interview of C.S. and collected and reviewed other historical information, then he conducted a physical examination. Although Dr. Novinger found no evidence of abuse in the physical exam, he opined that, outside the first seventy-two hours after the occurrence of a sexual assault, such an examination is unlikely to detect evidence of the abuse. Thus, according to the pediatrician, the fact of abuse can be determined “[r]eally by history only.” On cross-examination, the defense repeatedly attempted to secure a concession that the medical evidence did not support a determination of abuse, to which Dr. Novinger replied: “The history she provided to me pretty clearly indicated that she was sexually abused.”
Maconeghy was convicted and appealed to Superior Court, which vacated the judgment of sentence and remanded for a new trial. Relying on Commonwealth v. Seese, 517 A.2d 920, 922 (Pa. 1986) (experts are forbidden from opining as to the credibility of fact witnesses), the panel concluded the doctor’s testimony that he believed that C.S. was sexually abused, based on her statements “improperly constituted an opinion as to whether the victim was telling the truth, and intruded into the jury’s function to assess the credibility of witnesses.” The Superior Court denied reargument and the Commonwealth sought review by the Supreme Court, which allowed the appeal limited to the following issue:
Whether the Superior Court erred in finding that Dr. Novinger’ statement that he believed the child was victimized encroached on the jury’s function as the sole arbiter of credibility when the case law that the Superior Court relied on does not warrant such a result.
After reviewing the Commonwealth’s arguments and the case law regarding witness credibility in jury trials, the Majority held that:
[A]n expert witness may not express an opinion that a particular complainant was a victim of sexual assault based upon witness accounts couched as a history, at least in the absence of physical evidence of abuse. We find that such testimony intrudes into the province of the jury relative to determining credibility. Such conclusion is consistent with a wide body of decisions in other jurisdictions. See, e.g., United States v. Charley, 189 F.3d 1251, 1267 n.23 (10th Cir. 1999) (collecting cases); State v. Buchholtz, 841 N.W.2d 449, 459 (S.D. 2013) (same).
Slip op. at 9. The majority concluded by stating that:
[W]e agree with the Superior Court, as well as the wide body of decisions from other jurisdictions, that expert testimony opining that a child has been sexually abused — which is predicated on witness accounts and not physical findings — is inadmissible. Our decision is limited according to the terms of this opinion as expressed throughout. For example, we are not presently assessing whether, or under what circumstances, such evidence may be appropriate in light of physical findings or as fair response on redirect examination or in rebuttal.
Slip op. at 15.
Justice Todd filed a lengthy dissent on the following basis:
[T]he majority overlooks an important distinction between expert testimony on the subject of witness credibility, which is inadmissible, and expert testimony on other subjects which are merely founded on assessments of witness credibility, which are not ipso facto inadmissible. I am concerned that the majority’s holding will lead to the exclusion of myriad types of salutary expert testimony which would not infringe upon the jury’s role, but, rather, would assist the jury in its execution of its duties as the finder of fact. I further fear that the majority’s holding is particularly troublesome in the context of prosecutions for child sexual abuse, where pediatricians frequently rely on non-physical evidence of such abuse, where physical evidence is exceedingly rare, and where juries commonly labor under outdated myths to the contrary.
Dissent at 1-2. Following a lengthy recitation of the trial testimony and the relevant caselaw, the dissent turned to the Pennsylvania Rules of Evidence regarding expert testimony and the Court’s case law applying those principles, with a particular emphasis on Pa.R.E. 703 (“If experts in the particular field would reasonably rely on . . . facts or data in forming an opinion on the subject, they need not be admissible for the opinion to be admitted.”) and Commonwealth v. Thomas, 282 A.2d 693, 698 (Pa. 1971) (medical experts may testify to opinions based upon “reports of others which are not in evidence, but which the expert customarily relies upon in the practice of his profession”).
Justice Mundy in her dissent shared the concerns expressed by Justice Todd, and added that the testimony at issue was offered by the Commonwealth’s witness on cross-examination and that defense counsel failed to object in a timely manner.
Justice Mundy’s majority was joined by Justices Baer, Todd, Donohue, Dougherty and Wecht. Chief Justice Saylor filed a concurring opinion.
This matter was an appeal by allowance from Commonwealth Court in which the issue was whether, in the context of a grievance arbitration award, an arbitrator has subject matter jurisdiction to adjudicate a dispute between a union and a municipality arising out of a surviving spouse’s pension benefit, where the benefit was afforded to the surviving spouse statutorily and incorporated into the parties’ collective bargaining agreement (CBA). The majority concluded that such a dispute is arbitrable under the Policemen and Firemen Collective Bargaining Act (“Act 111”), 43 P.S. §§ 217.1-217.10, because the surviving spouse’s pension benefit was incorporated into the CBA, and reversed Commonwealth Court.
Pamela Cimino’s husband Thomas was a police officer for the City of Arnold from July 1, 1990 until April 4, 2002 when he died off-duty of natural causes. At the time of his death, Officer Cimino had completed 11.77 years of service and his average monthly compensation for 2002 was $3,898.21. 1 On May 7, 2002, the City Controller notified Mrs. Cimino in writing that she was entitled to a monthly death/survivor pension benefit of $1,949.11, which represented 50% of Officer Cimino’s 2002 average monthly pay rate. The 50% figure was specified in the City’s Ordinance No. 3 of 1987. The Controller confirmed this pension payment in a letter dated July 14, 2003. Pursuant to this calculation, the City issued Mrs. Cimino 142 consecutive monthly death benefit payments, from May 1, 2002 to February 1, 2014. However, in a 2014 compliance audit, the state Auditor General’s Office determined that the City was administering the death benefit incorrectly. According to the Auditor General’s compliance audit, the City was paying Mrs. Cimino twice as much as it should have under its interpretation of Section 6.01(b) of the 1997 Ordinance. Based on the Auditor General’s report, the City notified Mrs. Cimino in writing that it had been incorrectly administering the surviving spouse death benefit to her. The City stated it had reinterpreted its police pension plan ordinance such that effective March 1, 2014, Mrs. Cimino would receive 50% of 50% of Officer Cimino’s benefit, or $974.56 per month. Additionally, the City determined that it had overpaid Mrs. Cimino $138,386.10 in the past 142 payments, and beginning June 1, 2014, the Police Pension Board would recover the overpayment by deducting $10.00 from Mrs. Cimino’s further monthly pension payments.
On March 5, 2014, the Wage Policy Committee of the City of Arnold Police Department (Union) initiated a grievance on behalf of Mrs. Cimino to dispute the 50% reduction in her death benefit pension payments. The Union followed the grievance procedure contained in the CBA between the City and the Union. When the matter was not resolved through the three-step grievance process, the Union pursued grievance arbitration, as was its right under the CBA. On February 13, 2015, the grievance arbitrator issued an opinion and award sustaining the Union’s grievance and restoring Mrs. Cimino’s death benefit to $1,949.11 per month. The arbitrator determined the dispute between Mrs. Cimino and the City over the amount of her monthly death benefit was arbitrable because the relevant provision of the CBA subjects to arbitration “any dispute” between the parties. He explained that the 2009 CBA states “[a]ll pension benefits not in conflict with any sections of this Article and adopted by ordinance and in existence at the time of the signing of this Agreement are incorporated herein by reference into this agreement including but not limited to . . . Ordinance No. 3 of 1987 . . . .” Therefore, because the parties agreed to submit any dispute to arbitration and expressly incorporated into the CBA all pension plans and benefits, including the survivor pension benefits provided by Ordinance No. 3 of 1987, the arbitrator concluded the dispute was arbitrable.
The City filed a petition to vacate the arbitration award in the Westmoreland County Court of Common Pleas. That court concluded that the arbitrator had jurisdiction to resolve the dispute. The court reasoned that Act 111 gives arbitrators the authority to resolve grievances between police personnel and their employers, and that there was a dispute concerning the interpretation of the CBA and the pension plan provisions based on the issues raised by the Union during arbitration. The court held that the arbitrator had jurisdiction to interpret the CBA and pension plan provisions to resolve the dispute between the Union, representing Mrs. Cimino, and the City.
The City appealed the trial court’s order denying its motion to vacate the arbitration award to Commonwealth Court, where a unanimous three-judge panel reversed the trial court. The panel concluded that the arbitrator did not have subject matter jurisdiction to resolve the grievance between Mrs. Cimino, as the widow of a police officer, and the City. City of Arnold v. Wage Policy Comm. of City of Arnold Police Dep’t, 138 A.3d 719, 726 (Pa. Cmwlth. 2016). The court reasoned that Mrs. Cimino’s “right to a death/survivor benefit is not derivative of Decedent’s rights under the CBA, but an independent right under the City’s pension plan as implemented under the Third Class City Code and its Ordinances.” Id. at 725.
The Supreme Court granted allocatur on the following issue:
Is a dispute between a union and a municipality arising out of a surviving spouse’s pension benefit arbitrable under [Act 111], where the benefit was afforded to the surviving spouse of a police officer or firefighter statutorily, and incorporated into the parties[’] collective bargaining agreement?
On review, the Court first noted that, as the question arose in the context of review of an Act 111 grievance arbitration award, its scope of review is that of narrow certiorari and is limited to four areas: (1) the arbitrator’s jurisdiction; (2) the regularity of the proceedings; (3) an excess of the arbitrator’s power; and (4) the deprivation of a constitutional right. The sole question before the Court was whether the arbitrator had subject matter jurisdiction to resolve the dispute over the interpretation and application of Mrs. Cimino’s survivor benefit.
After discussing the parties’ arguments and reviewing prior decisions regarding Act 111 and arbitration, the Court concluded that the arbitrator had subject matter jurisdiction to adjudicate the dispute between the Union and the City because the survivor benefit afforded to Mrs. Cimino, as a surviving spouse of a deceased police officer, was incorporated into the parties’ CBA. The Court based its conclusion on the express language of Act 111, the Third Class City Code, the City’s pension ordinances, and the parties’ CBA as follows: (1) Section 1 of Act 111 provides police officers with the right to collectively bargain over the “terms and conditions of their employment, including . . . retirement, pensions and other benefits, and shall have the right to an adjustment or settlement of their grievances or disputes in accordance with the terms of this act.” 43 P.S. § 217.1; (2) The survivor benefit in dispute was authorized by the Third Class City Code. See 53 P.S. § 39303(f) (repealed and recodified at 11 Pa. C.S. § 14303(f), effective January 25, 2016); (3) The City’s Ordinance No. 3 of 1987 provided for a survivor benefit for a deceased police officer’s spouse or children, the amount of which the City later amended in Ordinance No. 6 of 1997; and (4) As the result of the parties’ collective bargaining, all pension benefits adopted by ordinance were incorporated into the CBA, including the 1987 Ordinance, and by extension, the 1997 Ordinance. On this basis, the Court reversed Commonwealth Court.
Authored by Justice Wecht for a unanimous Court.
Whether the invocation of the United States Supreme Court’s decisions in Johnson v. United States, ___ U.S. ___, 135 S.Ct. 2551 (2015), and Welch v. United States, ___ U.S. ___, 136 S.Ct. 1257 (2016), satisfies the newly-recognized constitutional right exception to the time limit prescribed by the Post Conviction Relief Act (“PCRA”). See 42 Pa .C.S. § 9545(b)(1) (requiring all petitions for relief to be filed within one year of the judgment of sentence becoming final); id. § 9545(b)(1)(iii) (providing an exception to the time limit upon the recognition of a new constitutional right that is held to apply retroactively to petitioners whose judgments of sentence have become final).
Neither Johnson nor Welch created a constitutional right that applies retroactively to Spotz. Consequently, the timeliness exception does not apply. The Court affirmed PCRA courts’ (two appeals from the Courts of Common Pleas of Cumberland and Schuylkill Counties, respectively) conclusion that Spotz’ petitions are untimely, rendering Pennsylvania courts without jurisdiction to provide relief.
Justice Baer wrote the majority opinion in an appeal by allowance from Superior Court which was joined by Chief Justice Saylor and Justices Todd, Donohue, Dougherty and Wecht. Justice Mundy filed a dissenting opinion.
What constitutes a “compelling reason” for early termination of delinquency supervision under Pennsylvania Rule of Juvenile Court Procedure 632?
The Supreme Court affirmed the Superior Court’s judgment, which affirmed the grant of early termination of delinquency. The Court found the Superior Court properly determined that the juvenile court acted within its discretion in granting early termination to D.C.D. to allow him to obtain necessary and immediate treatment, after properly taking into account the three aspects of balanced and restorative justice (BARJ) embodied in the Juvenile Act and incorporated into the Rules of Juvenile Court Procedure: “the protection of the community, the imposition of accountability for offenses committed[,] and the development of competencies to enable children to become responsible and productive members of the community.” 42 Pa. C.S. §§ 6301(b)(2) (“Short title and purposes of chapter”), 6352(a) (“Disposition of delinquent child”); see also Pa.R.J.C.P. 101 (C) (“These rules shall be interpreted and construed to effectuate the purposes stated in the Juvenile Act, 42 Pa. C.S. § 6301(b).”).
The dissent disagreed with the majority’s position that it is an appropriate exercise of a juvenile court’s discretion to terminate its delinquency supervision over a juvenile in order to circumvent an admission criterion of a treatment center.
Justice Dougherty authored the majority opinion in this appeal by allowance from Commonwealth Court joined by Justices Baer, Donohue, Wecht and Mundy. Chief Justice Saylor and Justice Todd filed dissenting opinions.
Whether the Commonwealth Court in Smith v. Pa. Bd. of Prob. & Parole, 133 A.3d 820 (Pa. Cmwlth. 2016) erred when it vacated the decision of the Pennsylvania Board of Probation and Parole regarding the allocation of pre-sentence confinement credit to which Smith is entitled and whether that decision conflicts with the Supreme Court’s decision in Gaito v. Pa. Bd. of Prob. & Parole, 412 A.2d 568 (Pa. 1980)(if parolee is detained both on a detainer by the Board and for new charges for which he did not satisfy bail requirements, the time spent in custody is to be credited to the sentence imposed for the new charges, but if parolee met bail requirements for the new charges and was thus detained solely on the Board’s detainer, time in custody is to be credited against the original sentence).
Smith was detained on both the Board’s and federal detainers — where he did not satisfy bail for the federal charges — for 209 days, and then received a new federal sentence of 246 months, or approximately 7,480 days. The federal sentence is longer, and thus the general holding of Gaito applies rather than the exception set forth therein at footnote 6 and expanded in Martin v. Pa. Bd. of Prob. & Parole, 840 A.2d 299, 309 (Pa. 2003) (when offender is incarcerated both on Board detainer and for new charges and receives new sentence of imprisonment that is shorter than term of pre-sentence incarceration, credit shall apply to original sentence). Accordingly, the Supreme Court found the Commonwealth Court erred in extending Martin to hold the Board had discretion to apply credit for the detention to appellee’s original sentence, and the panel’s decision in this regard contravened Gaito. The Board properly denied credit under Gaito, and Commonwealth Court’s decision is reversed and remanded for a correct recalculation of appellee’s maximum release date.
Both the Chief Justice and Justice Todd in their dissents lamented the lack of legislative guidance on applying credit when a parolee is detained awaiting trial on new charges and also is subject to a Board detainer.
About the Author:
Dennis A. Whitaker, partner at Hawke, McKeon & Sniscak, LLP, is an experienced litigator with over 25 years of Commonwealth service. Focusing on government appellate and original jurisdiction practice in state and federal courts, Dennis offers sound advice, creative solutions, and effective strategies to clients navigating the appeals process.