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Brouillette v. Wolf

Commonwealth Court of Pennsylvania

July 2, 2019

Matthew J. Brouillette and Rep. James Christiana and Benjamin Lewis, Petitioners
Thomas Wolf, Governor and Joseph Torsella, Treasurer and Eugene DePasquale, Auditor General and The Commonwealth of Pennsylvania and Michael Turzai, Speaker of the House of Representatives and Dave Reed, House Majority Leader and Joseph B. Scarnati, III, President Pro Tempore of the Senate and Jake Corman, Senate Majority Leader and The Pennsylvania General Assembly, Respondents

          Argued: September 13, 2018




         Before the Court are the various preliminary objections (POs) filed by Respondents[1] to the amended petition for review (Amended Petition) filed by Matthew J. Brouillette, Representative James Christiana, and Benjamin Lewis (collectively, Petitioners) challenging the constitutionality of some of the actions taken by Respondents with regard to the state budget for fiscal years (FY) 2016-17 and FY2017-18.[2] Senate Respondents have also filed an Application to Dismiss for Mootness (Application). We overrule the POs in part, sustain the POs in part, grant the Application, and dismiss the Amended Petition.

         Petitioners filed the three-count Amended Petition alleging that Respondents have violated various constitutional provisions by establishing unbalanced budgets and authorizing loans to cover deficits that extended beyond the relevant fiscal years. With regard to FY2016-17, Petitioners allege that the General Operating Fund Budget closed with a $1.55 billion deficit in violation of Article 8, Section 12(a)[3] and Section 13(a) of the Pennsylvania Constitution[4] and Section 618(a) of the Administrative Code.[5] To fulfill the Commonwealth's debt obligations, Petitioners claim that the Governor, Treasurer, and Auditor General approved a $750 million line of credit in August 2017, which was used, in part, to address the $1.55 billion deficit from the prior fiscal year. Because of this borrowing, Petitioners contend that Respondents violated Article 8, Section 7(a)(2)(ii) of the Pennsylvania Constitution.[6] In addition, Petitioners claim that as revenues failed to materialize, the General Assembly and the Governor had a duty to cut spending to ensure a fully funded budget. This resulted in a deficit, which Petitioners refer to as an "unfunded loan" that "illegally followed the Commonwealth" into the current fiscal year. Amended Petition ¶51.

         Additionally, Petitioners assert that this deficit was then compounded by the enactment of the budget for the FY2017-18 when the General Assembly passed a $31.38 billion General Appropriations Bill, which became law when the Governor failed to act on it. At the time of its passage, there was no revenue package in place to fund it. Petitioners maintain that the expenditures exceeded actual and estimated revenues in violation of the Constitution. Finally, Petitioners argue that the Governor had the authority and the duty under Article 4, Sections 15[7] and 16 of the Pennsylvania Constitution[8] to veto the budget, in whole or in part, but failed to do either.

         In Count I, Petitioners seek declaratory judgment against the Governor on the grounds that he violated Article 4, Sections 15 and 16 of the Pennsylvania Constitution, and Section 618 of the Administrative Code, by not vetoing all or part of the $31.38 billion General Appropriations Bill for FY2017-18 that exceeded estimated revenue thereby "authorizing the Commonwealth to appropriate and spend funds that exceeded actual and estimated revenues." Amended Petition at 27.

         In Count II, Petitioners seek declaratory judgment against the Governor, Senate Respondents, House Respondents, and the Commonwealth generally on the grounds that they violated Article 8, Section 13 of the Pennsylvania Constitution because "the Commonwealth ended [FY2016-17] with a $1.55 billion deficit," and "the General Appropriations Bill for [FY2017-18] violates [Article 8, Section 13] because, at the time of enactment, appropriations contained therein 'exceed[ed] the actual and estimated revenues and surplus available in the same fiscal year[]' by $600 million." Amended Petition at 29.

         Finally, in Count III, Petitioners seek declaratory relief against the Governor, the Treasurer, the Auditor General, and the Commonwealth generally for violating Article 8, Sections 7 and 12 of the Pennsylvania Constitution "by authorizing lines of credit to fund a $1.55 billion deficit accrued in [FY2016-17] . . . that spanned across multiple fiscal years," and "[t]hat the General Appropriations Bill for [FY2016-17] violated the Pennsylvania Constitution by appropriating funds in excess of anticipated revenues, thereby saddling the Commonwealth with a debt of $1.55 billion without the explicit approval of the General Assembly." Amended Petition at 36.

         Respondents filed a joint motion to dismiss for mootness alleging that the subsequent passage of legislation eliminating any deficit from the past and current fiscal years' budget and appropriations bills rendered Petitioners' claims moot. This Court denied the joint motion on the basis that there are factual matters in dispute, such as whether the General Operating Fund Budget is currently balanced, and because Respondents did not explain how the subsequent legislation mooted the claim that they engaged in long-term borrowing in violation of Article 8, Section 7 of the Pennsylvania Constitution. Brouillette v. Wolf (Pa. Cmwlth., No. 410 M.D. 2017, filed December 28, 2017), slip op. at 10.

         Respondents also filed four sets of POs.[9] Respondents variously object on the following bases: (1) Petitioners lack capacity to sue (standing); (2) the Amended Petition is insufficiently specific; and (3) the Amended Petition fails to conform to the law or rule of court. In addition, Respondents demur on the following grounds: that the Amended Petition (1) presents a non-justiciable political question; (2) fails to meet the standard for declaratory judgment; (3) fails to state a claim against the Commonwealth or the Treasurer; (4) is moot; and (5) is barred by the doctrine of laches. Respondents also assert that the Senate and House Respondents are protected by legislative immunity and/or sovereign immunity. Subsequently, on September 6, 2018, the Senate Respondents filed the instant Application to dismiss Count II of the Amended Petition for mootness because no practical relief may be granted for the legal claim presented therein based on a change in circumstance and the requested relief is not precluded by our prior opinion.[10]



         As a preliminary matter, Respondents first claim that Petitioners Brouillette and Lewis do not possess standing to prosecute the instant matter. In general, the question of standing relates to whether a party is entitled to have the court decide the merits of a dispute or of particular issues. Warth v. Seldin, 422 U.S. 490, 498 (1975). As the United States Supreme Court has stated:

A federal court cannot "pronounce any statute, either of a State or of the United States, void, because irreconcilable with the Constitution, except as it is called upon to adjudge the legal rights of litigants in actual controversies." Have the appellants alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions? This is the gist of the question of standing[.]

Baker v. Carr, 369 U.S. 186, 204 (1962) (citation omitted).

         Thus, "in order to have standing, a party must have an interest in the controversy that is distinguishable from the interest shared by other citizens. William Penn Parking Garage, Inc. v. City of Pittsburgh, [346 A.2d 269 (Pa. 1975)]." Sprague v. Casey, 550 A.2d 184, 187 (Pa. 1988). To surpass the common interest shared by other citizens, the interest of a party must be "substantial, direct and immediate." Id.

         In this case, with respect to all three counts in the Amended Petition, Petitioners Brouillette and Lewis allege that they have standing in this matter based on their status as taxpayers in this Commonwealth. See Amended Petition ¶¶8-10, 85-88. Regarding taxpayer standing, this Court has noted:

[T]he parameters of taxpayer standing in this Commonwealth have been defined by our Supreme Court in the case of Application of Biester v. Thornburgh, [409 A.2d 848');">409 A.2d 848 (Pa. 1979)]. In that case, our Supreme Court stated that the "purpose of the requirement of standing is to protect against improper plaintiffs." Id. [at 851]. In order to meet this requirement, a plaintiff must allege and prove an interest in the outcome of the suit, which surpasses "the common interest of all citizens in procuring obedience to the law." Id. [(citation omitted)]. To surpass the common interest of all citizens, the interest must be substantial, direct, and immediate. Id.
Nevertheless, the Supreme Court recognized that certain cases exist in which the facts warrant the granting of standing to taxpayers where their interests arguably are not substantial, direct and immediate. Biester, [409 A.2d at 852]; Consumer Party of Pennsylvania v. Commonwealth, [507 A.2d 323, 328 (Pa. 1986)]. The relaxing of those interest requirements in certain cases where there is little causal connection between the action complained of and the alleged injury is best explained by the basic policy considerations underlying taxpayer standing. Consumer Party, [507 A.2d at 328]. Our Supreme Court articulated these policy considerations in Biester 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 (citation omitted)].
In Consumer Party, the Supreme Court held that a taxpayer seeking standing to sue must allege a substantial, direct and immediate interest in the outcome of the suit unless the taxpayer can show:
1. the governmental action would otherwise go unchallenged;
2. those directly and immediately affected by the complained of expenditures are beneficially affected and not inclined to challenge the action;
3. judicial relief is appropriate;
4. redress through other channels is unavailable; and
5. no other persons are better situated to assert the claim.
Consumer Party, [507 A.2d at 329].

Common Cause/Pennsylvania v. Commonwealth, 710 A.2d 108, 115-16 (Pa. Cmwlth. 1998), aff'd, 757 A.2d 367 (Pa. 2000) (emphasis in original). See also Fumo v. City of Philadelphia, 972 A.2d 487, 504 (Pa. 2009) (listing the five factors to be considered in conferring taxpayer standing); Stilp v. Commonwealth, 940 A.2d 1227, 1233 (Pa. 2007) (same).

         In Consumer Party, an organization and several citizen-taxpayers commenced an action in this Court seeking a declaration that the Public Official Compensation Law[11], an act providing for increased compensation to public officials, was unconstitutionally enacted and unconstitutional in its substantive provisions. Id. at 326-27. In considering whether the organization and the taxpayers possessed standing to present these claims, the Pennsylvania Supreme Court observed:

We believe the circumstances of the instant case establish the above five factors and therefore warrant the grant of standing to appellants under the narrow exception outlined in Biester. This case presents a prime example of governmental action, which would otherwise go unchallenged because the very individuals who enacted the legislation are directly and beneficially affected and are thus not inclined to challenge the constitutionality of the legislation. Furthermore, judicial relief is appropriate since the determination of the constitutionality of an act is a function ultimately left to the courts. Moreover, here redress through other channels is unavailable. There is no administrative agency which can provide relief and the legislators themselves are unlikely to provide a meaningful mechanism for redress. Lastly, there are not other persons better situated to assert the claim because all those who are directly and immediately affected by the [Public Official] Compensation Law are beneficially affected and have not brought, and will not bring a cause of action. Thus, there are no possible plaintiffs who can assert a substantial, direct and immediate interest.

Id. at 329 (citations omitted).

         Additionally, in Common Cause/Pennsylvania, a number of organizations commenced an action in this Court seeking a declaration that an act substantially amending the Public Transportation Law[12] and the Vehicle Code[13]was unconstitutionally enacted. Id. at 111. In considering whether the organizations possessed standing to challenge the enactment, we noted:

Based upon the above five factors, we conclude that the circumstances of the present case warrant the granting of standing to petitioners. We believe that the actions taken by the General Assembly in passing HB 67 would likely go unchallenged but for the present proceeding, because the very individuals who enacted such legislation are not going to be inclined to challenge the constitutionality of the process by which [the statute] was enacted. We further believe that judicial relief may be appropriate since the ultimate function of the judiciary is to determine the constitutionality of an act. Moreover, redress through other channels is unavailable as there is no administrative agency which can provide relief and the members of the General Assembly, themselves, are unlikely to provide a meaningful mechanism for redress. Finally, we believe that there are no other persons better situated to assert the constitutional claims which have been raised in the present case than petitioners.

Id. at 116 (citations omitted).

         Similarly, in Seeton v. Pennsylvania Game Commission, 937 A.2d 1028 (Pa. 2007), a taxpayer initiated a mandamus action against the State Game Commission (Commission) seeking to compel the Commission to enforce the Pennsylvania Game and Wildlife Code[14] and its regulations to prevent a hunting preserve's "canned hunts" in which customers pay a fee to shoot and kill animals in an enclosed area. The taxpayer filed suit after the Commission determined that it lacked jurisdiction over the preserve's canned hunts. Both this Court and the Supreme Court rejected the Commission's preliminary objection that the taxpayer lacked standing to prosecute the matter. As the Supreme Court explained:

In re Biester spoke principally to the importance of assuring that a government agency's actions not evade review for want of an aggrieved party under the limited terms of traditional standing. As noted, standing under In re Biester aims to "ensure . . . judicial review which would otherwise not occur," when "those directly and immediately affected by the complained of expenditures are beneficially affected as opposed to adversely affected." 409 A.2d at 852. There appears to be no one better situated than [the taxpayer] to challenge the non-enforcement asserted here. Moreover, we perceive no alternative means to invoke judicial review of the important question before us. Thus, we find no error in the Commonwealth Court's determination that [the taxpayer] had standing to bring the instant claim.

Seeton, 937 A.2d at 1033.

         Thus, in Consumer Party, Common Cause/Pennsylvania, and Seeton, standing was granted to taxpayers to assert the claims raised therein because governmental action would likely evade review for want of an aggrieved party. Likewise, in the instant matter, the Amended Petition alleges that all of the named Respondents were involved in the budgetary process and its oversight and implementation underlying the constitutional and statutory claims raised by Petitioners Brouillette and Lewis therein. As a result, none of the Respondents are inclined to challenge their own actions or inactions in this regard. Additionally, their actions or inactions would otherwise go unchallenged; redress through any other channels is unavailable; and no other persons are better situated to assert the claim than Petitioners Brouillette and Lewis as taxpayers.[15] Moreover, as outlined infra, judicial review of the state budgetary process for FY2016-17 and FY2017-18 is eminently appropriate. Accordingly, we overrule Respondents' POs with respect to Petitioners Brouillette's and Lewis's standing to prosecute the instant Amended Petition. Seeton; Consumer Party; In re Biester; Lawless.


         In contrast, Petitioner Christiana is a representative in the Pennsylvania General Assembly, representing Beaver and Washington Counties. Amended Petition ¶11. Petitioner Christiana only joins in Count III of the Amended Petition alleging that the Governor, the Treasurer, the Auditor General, and the Commonwealth generally violated Article 8, Section 7 of the Pennsylvania Constitution, based on the purportedly illegal long-term borrowing, and Article 8, Section 12(a), based on the Governor's purported submission of an unbalanced operating budget to the General Assembly, with the assistance of the Treasurer and the Auditor General. Amended Petition ¶¶110-138. Petitioner Christiana asserts that he did not vote to authorize the assumption of such debt; the budget deficit purportedly usurps his authority to vote on whether such debt should be assumed; and he did not vote to use short-term borrowing to finance continued deficit spending. Amended Petition ¶¶131, 132, 135.

         As the Supreme Court has explained:

[L]egislative standing is appropriate only in limited circumstances. Standing exists only when a legislator's direct and substantial interest in his or her ability to participate in the voting process is negatively impacted, see Wilt [v. Beal, 363 A.2d 876 (Pa. Cmwlth. 1976)], or when he or she has suffered a concrete impairment or deprivation of an official power or authority to act as a legislator, see Fumo (finding standing due to alleged usurpation of legislators' authority to vote on licensing). These are injuries personal to the legislator, as a legislator. By contrast, a legislator lacks standing where he or she has an indirect and less substantial interest in conduct outside the legislative forum which is unrelated to the voting or approval process, and akin to a general grievance about the correctness of governmental conduct, resulting in the standing requirement being unsatisfied. Id. (rejecting standing where legislators' interest was merely disagreement with way administrator interpreted or executed her duties, and did not interfere with legislators' authority as members of the General Assembly).

Markham v. Wolf, 136 A.3d 134, 145 (Pa. 2016).

         Based on the foregoing, and the allegations raised in the Amended Petition, we hold that Petitioner Christiana has failed to demonstrate the requisite legislative standing to assert Count III of the Amended Petition. The crux of Petitioner Christiana's claims in Count III relate to the purported invalidity of the actions of the Governor, the Treasurer, the Auditor General, and the Commonwealth generally, and do not assert an injury that is personal to him while he was acting in his representative capacity as a legislator. As noted by the Supreme Court:

[T]hese claims of injury reflect no impact on [the Senate] Appellants' right to act as legislators, and are more, in our view, in the nature of a generalized grievance about the correctness of governmental conduct. Simply stated, the assertion that another branch of government-here, the executive branch through the Governor's Executive Order-is diluting the substance of a previously enacted statutory provision is not an injury which legislators, as legislators, have standing to pursue.

Markham, 136 A.3d at 145.

         Moreover, as outlined above, Petitioners Brouillette and Lewis possess taxpayer standing to vindicate the purported harms alleged in Count III of the Amended Petition. See Markham, 136 A.3d at 146 ("[C]hallengers exist who are, from a standing perspective, sufficiently impacted by the Governor's issuance of Executive Order 2015-05, as aptly demonstrated by the parties in this matter . . . ."). Accordingly, we sustain Respondents' POs with respect to Petitioner Christiana's standing, and dismiss him as a party to Count III of the Amended Petition. Id.


         Additionally, as a preliminary matter, the Commonwealth has filed a PO that it was improperly joined as a party in this case. On review, it is clear that Petitioners Brouillette and Lewis have erroneously raised claims against the Commonwealth generally as a party in Counts II and III of the Amended Petition.

         As the Pennsylvania Supreme Court has explained:

The Constitution of Pennsylvania provides that the commonwealth and its agents may only be sued in the manner, in the courts, and in cases specified by the General Assembly. Pa. Const. art. 1[, ] §11. The General Assembly has specified that the Commonwealth and its agents remain immune from suit except when immunity is specifically waived. 42 Pa. C.S. §8522. "When the General Assembly specifically waives sovereign immunity, a claim against the Commonwealth and its officials . . . shall be brought only [as provided by] Title 42 . . . unless otherwise specifically authorized by statute." 1 Pa. C.S. §2310. The General Assembly has waived sovereign immunity for Commonwealth parties in limited cases. 42 Pa. C.S. §8522. The General Assembly has defined a Commonwealth party as a "Commonwealth agency and any employee thereof, but only with respect to an act within the scope of his office or employment." 42 Pa. C.S. §8501.
This Court has further determined that sovereign immunity does not apply to "governmental entities other than the commonwealth itself," and that government entities may not avoid suit simply due to their governmental nature. Specter v. Commonwealth, [341 A.2d 481');">341 A.2d 481, 482 (Pa. 1975)]. Implicit in this premise is the distinction between the Commonwealth and its numerous subdivisions. Appellees in this case have named the Commonwealth, to which the legislature has not waived sovereign immunity, and have failed to name an appropriate Commonwealth party as to which immunity has been waived. Amending their complaint to substitute a Commonwealth party for the Commonwealth amounts to the addition of a new party and not merely the correction of a captioned party name.

Tork-Hiis v. Commonwealth, 735 A.2d 1256, 1258 (Pa. 1999).

         To this end, Pa. R.C.P. No. 2102(a)(2) provides that, while "[a]n action by the Commonwealth" may be brought in the name of "the Commonwealth of Pennsylvania," an action against a "Commonwealth agency or party" generally may not. Citing Article 1, Section 11 of the Pennsylvania Constitution and 1 Pa. C.S. §2310, the Official Note to Pa. R.C.P. No. 2102 recognizes that there is "only" one exception: Where there is a cause of action against the Commonwealth generally and an express "right of action [against the Commonwealth generally] has been authorized by statute." See also Finn v. Rendell, 990 A.2d 100, 105 (Pa. Cmwlth. 2010) ("The Court also notes that the Commonwealth government and its various agencies and officers are separate entities and that 'the Commonwealth of Pennsylvania, itself, which is clearly not a Commonwealth agency, still enjoys absolute immunity pursuant to 1 Pa. C.S. §2310.'") (citation omitted and emphasis in original).

         As a result, Petitioners Brouillette and Lewis improperly joined the Commonwealth generally as a respondent in the instant matter.[16] Accordingly, we sustain Respondents' POs with respect to the improper joinder of the Commonwealth generally, and dismiss it as a party to Counts II and III of the Amended Petition.


         With respect to the purported violations of Article 8, Section 12(a) of the Pennsylvania Constitution and Sections 613(1) and 701(g) of the Administrative Code as asserted in Counts I, II, and III of the Amended Petition, the Governor and the Treasurer demur, [17] in relevant part, on the basis that Petitioners Brouillette and Lewis fail to state a valid claim for declaratory relief. We agree.

         Petitions for declaratory judgments are governed by the provisions of the Declaratory Judgments Act, 42 Pa. C.S. §§7531-7541. Ronald H. Clark, Inc. v. Township of Hamilton, 562 A.2d 965, 967 (Pa. Cmwlth. 1989). Although the Declaratory Judgments Act is to be liberally construed, one limitation on a court's ability to issue a declaratory judgment is that the issues involved must be ripe for judicial determination, meaning that there must be the presence of an actual case or controversy. Ruszin v. Department of Labor and Industry, 675 A.2d 366, 371 (Pa. Cmwlth. 1996). Thus, the Declaratory Judgments Act requires a petition praying for declaratory relief to state an actual controversy between the petitioner and the named respondent. Pennsylvania State Lodge v. Department of Labor and Industry, 692 A.2d 609, 613 (Pa. Cmwlth. 1997), aff'd, 707 A.2d 1129 (Pa. 1998).

         Declaratory judgments are not obtainable as a matter of right. Ronald H. Clark, Inc., 562 A.2d at 968-69. Rather, whether a court should exercise jurisdiction over a declaratory judgment proceeding is a matter of sound judicial discretion. Id. Thus, the granting of a petition for a declaratory judgment is a matter lying within the sound discretion of a court of original jurisdiction. Gulnac v. South Butler School District, 587 A.2d 699, 701 (Pa. 1991). As the Pennsylvania Supreme Court has stated:

The presence of antagonistic claims indicating imminent and inevitable litigation coupled with a clear manifestation that the declaration sought will be of practical help in ending the controversy are essential to the granting of relief by way of declaratory judgment. . . .
Only where there is a real controversy may a party obtain a declaratory judgment.
A declaratory judgment must not be employed to determine rights in anticipation of events which may never occur or for consideration of moot cases or as a medium for the rendition of an advisory opinion which may prove to be purely academic.

Id. at 701 (citations omitted)

         The Amended Petition summarizes the relevant stages of the budget process as follows. Preparation for the annual budget "begins in approximately August of the prior fiscal year for which the [b]udget will be adopted," and the Office of the Budget (Budget Office) issues Budget Instructions to "administrative agencies, which are instructions that provide the agencies with detailed guidance in constructing their budget requests." Amended Petition ¶¶23, 24.[18] The Governor also issues Program Policy Guidelines to administrative agencies to aid in formulating the proposed budget. Id. ¶25. From October to January, the Budget Office reviews the agencies' budget requests to see if they comply with the Program Policy Guidelines and, following review, the Budget Office makes recommendations to the Secretary and the Governor. Id. ¶¶27-29, 33. "[B]y statute and in accordance with the . . . Constitution's balanced budget requirement, the combined total of all agency requests must balance with the estimated total revenues from existing sources; otherwise, new revenue sources must be recommended." Id. ¶30 (emphasis in original). Based on the recommendations and his independent review, the Governor formulates the Executive Budget in January and submits the proposed budget to a joint session of the General Assembly in a budget address in February. Id. ΒΆΒΆ34-35. Article 8, Section 12(a) and Sections 613 ...

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