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Precision Marketing, Inc. v. Commonwealth

Commonwealth Court of Pennsylvania

September 5, 2013

Precision Marketing, Inc., Petitioner
v.
Commonwealth of Pennsylvania, The Republican Caucus of the Senate of PA/AKA The Senate of PA Republican Caucus, Respondent

Argued: June 19, 2013.

BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE BERNARD L. McGINLEY, Judge HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge.

OPINION

McGINLEY, JUDGE

Before this Court in its original jurisdiction is the Motion for Summary Judgment filed by the Commonwealth of Pennsylvania, The Republican Caucus of the Senate of PA/AKA Senate of PA Republican Caucus (hereinafter "Senate Republican Caucus").[1]

In 1997, the Senate Republican Caucus and Precision Marketing, Inc. (Precision Marketing) entered into a Consulting Agreement whereby Precision Marketing agreed to develop and provide the Senate Republican Caucus with computer consulting and programming services. According to the Consulting Agreement, the services provided to the Senate Republican Caucus by Precision Marketing included "the development of base files or constituent contact lists compiled from the data base of voter information found at county boards of elections." Consulting Agreement, January 1, 1997, at 1-2.

On July 29, 2004, the parties executed an Addendum to the Agreement whereby the contract term was extended through December 31, 2014. On January 5, 2006, the parties signed a Second Addendum to the Consulting Agreement which specially retained Precision Marketing "to provide constituent outreach [telephone] calls… to be undertaken at the direction of the Customer [Senate Republican Caucus]." Second Addendum to Consulting Agreement, January 5, 2006, at 1.

By letter dated July 29, 2009, the Senate Republican Caucus informed Precision Marketing that the Consulting Agreement would be terminated as of August 31, 2009. The letter did not set forth any legal cause for terminating the Consulting Agreement and did not aver that Precision Marketing's work was unsatisfactory. The letter stated "[t]he [Senate Republican] Caucus has the legal right to cancel a contract with a private party that relates to a governmental function, without cause, and irrespective of the termination date or other procedures for cancellation set forth in the contract." Letter from Joseph B. Scarnati, President Pro Tempore, and Dominic F. Pileggi, Majority Leader, Senate Republican Caucus, to Thomas E. Severson, President, Precision Marketing, Inc., July 29, 2009, at 1.

Precision Marketing commenced an action before the Board of Claims[2] on January 28, 2010, seeking damages for breach of the Consulting Agreement. Precision Marketing averred that the Senate Republican Caucus lacked a legal basis to terminate the Consulting Agreement and that Precision Marketing was entitled to damages in the amount of $1, 223, 402.88, which represents the sum of the monthly payments it would have received between September of 2009, and December 31, 2014.

The Board of Claims determined that it did not have jurisdiction over the matter because the Senate Republican Caucus was not a "Commonwealth agency" and transferred the matter to this Court because the Senate Republican Caucus is "the Commonwealth Government" for purposes of defining the Commonwealth Court's jurisdiction. Board of Claims Opinion, April 26, 2010, at 5-6.

Before this Court, the Senate Republican Caucus preliminary objected on the grounds that Precision Marketing's contract claim is barred by sovereign immunity. The Senate Republican Caucus argued that as an organization of the Senate, it is part of the sovereign government, and is thus, immune from suit.

In a Memorandum Opinion and Order dated May 11, 2011, this Court overruled the Preliminary Objections because it was unclear from the pleadings that the Senate Republican Caucus was "the Commonwealth" and, thus, entitled to sovereign immunity. This Court ordered the Senate Republican Caucus to conduct discovery, answer the Complaint and raise sovereign immunity as New Matter.[3]

The parties engaged in discovery. On April 19, 2012, Precision Marketing took the deposition of Senator Dominic Pileggi, Majority Leader of The Pennsylvania Senate. On July 12, 2012, the Senate Republican Caucus took the deposition of Stephen MacNett (Mr. MacNett), former Chief Counsel and General Counsel to the Senate Republican Caucus.

The parties agree that discovery is now complete with respect to the defense of sovereign immunity raised by the Senate Republican Caucus in its New Matter.[4] The Senate Republican Caucus now moves for summary judgment.[5]

The Senate Republican Caucus argues that it is a "subset" of the Senate, created and existing solely for the purpose of fostering and facilitating the legislative duties and goals of the Senate. It argues that the General Assembly has inextricably bound the political party caucuses to the legislative process in Pennsylvania, and the continued existence of the caucus system is now essential to the General Assembly's and Senate's ability to perform their legislative duties. The Caucus argues that numerous statutory provisions and the deposition testimony make it clear that the Caucus is a legitimate and ...


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