The opinion of the court was delivered by: Judge Cohn Jubelirer
Submitted: November 25, 2009
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE JAMES R. KELLEY, Senior Judge.
Before this Court is the Application for Summary Relief (Application) of the United States Organizations for Bankruptcy Alternatives, Inc. (USOBA). In its Application, USOBA asks this Court to "enter judgment in its favor, and declare all sections of Act 117*fn1 pertaining to [debt settlement services*fn2 ] Providers [(DSS Providers)] unconstitutional." (Application at 4.) For the following reasons, we grant, in part, and deny, in part, USOBA's Application.
This case was initiated by USOBA's Amended Petition for Review (Petition), in which USOBA challenged the constitutionality of the Debt Management Services Act (Act 117), which grants the Department of Banking (Department) broad powers to regulate both DSS Providers and providers of debt management services*fn3 (DMS Providers), on a number of grounds.*fn4 In a prior decision in this matter, United States Organization for Bankruptcy Alternatives, Inc. v. Department of Banking, No. 69 M.D. 2009 (Pa. Cmwlth. July 24, 2009) (USOBA I), this Court denied the Application for Summary Relief filed by the Department and Secretary of the Department, Steven Kaplan (Secretary) (together with Department, Respondents). In their Application for Summary Relief, Respondents had asked this Court to dismiss USOBA's Petition for failure to state a claim. This Court declined, citing Association of Settlement Companies v. Department of Banking, 977 A.2d 1257, 1268 (Pa. Cmwlth. 2009) (en banc), which held that Act 117's delegation of power to the Department to regulate DSS Providers was, on its face, a standardless delegation.*fn5 USOBA now asks this Court for summary judgment declaring all provisions of Act 117 relating to DSS Providers unconstitutional.*fn6
USOBA argues that because this Court, in Association of Settlement Companies, held that Act 117 grants a standardless delegation of authority to the Department with respect to DSS Providers, this Court should, therefore, declare Act 117 unconstitutional with respect to DSS Providers. The Respondents, in turn, argue that this matter is not yet ripe for adjudication because the Department has not yet promulgated regulations pursuant to Act 117. Respondents also argue that judgment in this case is premature because there are remaining questions of fact at issue. Finally, Respondents argue that Act 117 is not a standardless delegation of authority with respect to the regulation of DSS Providers.
We first address Respondents' argument that the question of whether Act 117 is a standardless delegation of authority is not ripe for adjudication because the Department has not yet promulgated regulations. In making this argument, Respondents rely primarily upon American Council of Life Insurance v. Foster, 580 A.2d 448 (Pa. Cmwlth. 1990), in which this Court stated "[i]n cases involving challenges to administrative regulations, an actual controversy ripe for judicial determination, has existed only where the regulation was in effect or had been formally promulgated." Id. at 451 (emphasis added). We believe Foster is distinguishable from the current case. In Foster, the American Council of Life Insurance asked this Court to enjoin the Insurance Commissioner from promulgating certain regulations on the ground that she lacked the authority to promulgate these regulations. Id. at 449. In this case, however, USOBA is not challenging regulations the Department might promulgate in the future, but is making a facial constitutional challenge to Act 117 itself.
The present case is similar to Bell Telephone Company of Pennsylvania v. Driscoll, 343 Pa. 109, 21 A.2d 912 (1941). In Driscoll, the Pennsylvania Supreme Court held that the challenging telephone company did not have to violate a statute requiring that utilities not enter into certain types of contracts without the approval of the Public Utility Commission before it could challenge the validity of that statute. Id. at 111-12, 21 A.2d at 913-14. In that case the Supreme Court held that it would be "grossly unfair to require the corporation and its officers to risk [imprisonment and fines] in order to test the constitutionality" of the challenged statute. Id. at 112, 21 A.2d at 914. Here, Section 3(b) of Act 117, 63 P.S. § 2403(b), prohibits DSS Providers from providing or advertising debt settlement services unless it is licensed by the Department and acting in compliance with the Department's regulations. Section 16 of Act 117, 63 P.S. § 2416, provides that each violation of Act 117 is punishable by a $10,000 civil fine and may constitute a violation of the Unfair Trade Practices and Consumer Protection Law.*fn7 Similarly to Driscoll, USOBA's members should not have to subject themselves to these penalties before they may challenge the facial constitutionality of Act 117.*fn8 As such, this matter is ripe for adjudication.
We next address Respondents' argument that USOBA is not entitled to judgment as a matter of law because factual issues remain in dispute. The issues raised in the Application are based on the constitutionality of Act 117 on its face. Statutory interpretation is a question of law, Mohamed v. Department of Transportation, Bureau of Motor Vehicles, 973 A.2d 453, 454 n.2 (Pa. Cmwlth.) (en banc), appeal granted, ___ Pa. ___, 982 A.2d 1218 (2009), and, thus, we do not believe any further factual developments are necessary to dispose of USOBA's Application.*fn9 Moreover, we note that, in making this argument, Respondents do not direct our attention to any relevant fact in dispute.
Finally, we turn to the issue of whether we must declare all of Act 117's provisions regarding DSS Providers unconstitutional as a standardless delegation of authority to the Department. We note that USOBA's characterization of this Court's holding in Association of Settlement Companies, stating that Act 117 grants a standardless delegation of authority to the Department with respect to DSS Providers, is not entirely accurate. In that case, we held that Act 117's grant of authority to the Department to regulate and set fees for DSS Providers lacked constitutionally necessary guidance and restraint and, thus, was a standardless delegation of authority. Id., 977 A.2d at 1266-1270. However, this Court held that Act 117 did set forth sufficient standards to support Act 117's grant of authority to the Department to require licensure of DSS Providers. Id. at 1265. Because USOBA asks this Court to declare all of Act 117 unconstitutional as to DSS Providers, and because this Court has held that only some provisions of Act 117 are unconstitutional standardless delegations of authority with regard to DSS Providers, we must now address which provisions of Act 117 are facially unconstitutional.*fn10
Section 3(b) of Act 117 states that:
No person may advertise, solicit, state or represent that it can offer, obtain or procure debt settlement services to or for a consumer or provide debt settlement services to a consumer for a fee unless the person is licensed by the department under this act and is operating in accordance with regulations promulgated by the department regarding the conduct of debt settlement services.
63 P.S. § 2403(b). This Court has held that:
Act 117 does not, on its face, provide sufficient standards to guide the Department on how DSS Providers are to provide debt settlement services.... Act 117 does not establish operating standards for the Department to follow in promulgating regulations regarding DSS Providers. Without such standards, we can not find that the Department has a legitimate delegation of authority to promulgate regulations affecting DSS Providers and that the ...