Smith v. Pennsylvania Employees Benefit Trust Fund

DISSENTING OPINION BY

Judge PELLEGRINI.

I respectfully disagree with the majority that there is any question that the Pennsylvania Employees Benefit Trust Fund (Fund), a non-profit private entity, is an agency within the definition of the Sunshine Act.1 Because it is clear that it is not, I would sustain the- Fund’s preliminary objections and dismiss the petition for review.

This case arose when House Majority Leader Samuel H. Smith and Chairman of the House Appropriations Committee Brett 0. Feese filed a petition for review in our original jurisdiction alleging that the Fund was going to conduct a private meeting on the issue of whether the Fund would extend medical benefits to same-sex partners of Commonwealth employees and annuitants. They alleged that because the Fund was an agency within the meaning of the Sunshine Act, it was required to comply with notice requirements and conduct the meeting in public. In response to their petition, the Fund filed preliminary objections alleging, inter alia, that this Court lacked jurisdiction to hear the matter because the Fund was not an agency as defined in the Sunshine Act.

The majority overrules the Fund’s preliminary objections, specifically regarding *883the jurisdictional issue, stating that, “As cases illustrate, this Court has the power to enter into the inquiry and to decide whether an entity is an agency subject to the Sunshine Act or similar legislation.” (Slip op. at 12.) It then concludes that the question of whether the Fund is an agency subject to the Sunshine Act is not purely a question of law and is “contrary to the purpose of preliminary objections... .It does not appear with certainty that the law will permit no recovery or relief on the basis of the facts pleaded in this case.” (Slip op. at 13.) In doing so, the majority essentially determines that the Fund is an agency within the definition of the Sunshine Act. I disagree with this determination because the Fund does not fall within the definition of “agency” as that term is defined in the Sunshine Act.

The Sunshine Act, 65 Pa.C.S. § 703, defines “agency” as follows:

The Body, and all committees thereof authorized by the body to take official action or render advice on matters of agency business, of all the following: the General Assembly, the executive branch of the government of this Commonwealth, including the Governor’s Cabinet when meeting on official policy-making business, any board, council, authority or commission of the Commonwealth or of any political subdivision of the Commonwealth or any State, municipal, township or school authority, school board, school governing body, commission, the boards of trustees of all State-aided colleges and universities, the councils of trustees of all State-owned colleges and universities and all community colleges or similar organizations created by or pursuant to a statute which declares in substance that the organization performs or has for its purpose the performance of an essential governmental function and through the joint action of its members exercises governmental authority and takes official action. The term shall include the governing board of any nonprofit corporation which by a mutually binding legal written agreement with a community college or State-aided, State-owned or State-related institution of higher education is granted legally enforceable supervisory and advisory powers regarding the degree programs of the institution of higher education. The term does not include a caucus or a meeting of an ethics committee created under the rules of the senate or House of Representatives. (Emphasis added.)

The Fund does not fall within this definition as it is not the General Assembly, the executive branch of the government of this Commonwealth, a school board or other similar organization, and, most importantly, it was not created by statute. Rather, the Fund was created pursuant to a collective bargaining between the Commonwealth and the American Federation of State, County and Municipal Employees Council 13, which resulted in an Agreement and Declaration of Trust (Trust Agreement). The Trust Agreement provides for the establishment of a trust fund to receive contributions from the Commonwealth that it is contractually obligated to pay and other employers for the purpose of paying health and medical benefits for the employees of the participating employers, but that is the extent of the Commonwealth’s involvement.2

The Trust Agreement specifies that the entire responsibility for operating, administering, developing and implementing the medical program is vested in 14 Trustees. *884These Trustees, who receive no compensation for their efforts, are designated equally by the unions and the Secretary of Administration,3 and it is the Trustees solely who select all vendors and authorize all contracts. The Commonwealth has no decision-making authority regarding these contracts, and the contracts are not entered into on behalf of the Commonwealth. The Fund’s budget is determined by contributions it receives pursuant to the various collective bargaining agreements between the Commonwealth and participating unions, and the contribution amounts are set solely through collective bargaining.

The Fund, which is a non-profit, private entity, is entirely funded by the Commonwealth as part of its financial obligation made during collective bargaining in contrast to other Commonwealth agencies which, as part of the Commonwealth, are funded by the state because the state has to if it wants to keep the government operating. While the Fund’s contributions are from the Commonwealth, our Supreme Court in Mooney v. Temple University Board of Trustees, 448 Pa. 424, 292 A.2d 395 (1972), held that receipt of contributions by Temple University, a non-profit corporation, from the Commonwealth did not convert the university into a state agency. “The receipt by Temple of increased state financial aid no more transforms Temple into a state ‘agency’ than the receipt of federal funds can make Temple an agency of the federal government.” Id. at 430, 292 A.2d at 399. Similarly, in this case, the fact that the Fund receives some contribution from the Commonwealth does not transform it into a state “agency.”

Because Section 1 of the Sunshine Act, 65 Pa.C.S. § 704, requires that “official action and deliberations ... of an agency shall take place at a meeting open to the public,” but the Fund does not exercise any governmental authority and does not take official action as it is not an agency, I would grant the Fund’s preliminary objections and dissent accordingly.

Judge LEADBETTER joins this dissenting opinion.

. 65 Pa.C.S. §§ 701-716.

. We note that the majority only cites to facts contained in the petition for review while the dissent cites to facts contained in the Trust Agreement. The Trust Agreement was pled by the Fund in paragraph 8 of its petition for review, but was not attached to the petition. *884In Martin v. Commonwealth, Department of Transportation, 124 Pa.Cmwlth. 625, 556 A.2d 969, 971 (1989), this Court stated:

This court has held that a demurer cannot aver the existence of facts not apparent from the face of the challenged pleading. [Citation omitted.] A limited exception to this general prohibition is recognized where a plaintiff avers the existence of a written agreement and relies upon it to establish his cause of action. In such a case, a defendant may properly annex that agreement without creating an impermissible speaking demurrer since the agreement is a factual matter arising out of the complaint itself.

Accordingly, the facts cited by the dissent are properly used in resolving this matter.

. The Trust Agreement designates that the Board of Trustees will consist of no less than 14 and no more than 22 initial Trustees, half of whom represent management and half of whom represent the employees. Section 3.02 of the Trust Agreement provides that Employer Trustees "shall be appointed by the Secretary of Administration of the Commonwealth of Pennsylvania. Such Employer Trustees may be employees or representatives of the Commonwealth of Pennsylvania or other independent agencies, political subdivisions or other entities which have agreed to participate in this Fund.” (Emphasis added.) Because only one-half of the Trustees are appointed by the Commonwealth, and they may not even be representatives of the Commonwealth but may be from an entity outside the Commonwealth government, clearly the parties to the Trust Agreement did not intend for the Commonwealth to control the Board of Trustees.