D.J. Olean v. Com. of PA

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

David J. Olean, :

Petitioner :

:

v. : No. 604 M.D. 2020

: Submitted: May 7, 2021

Commonwealth of Pennsylvania, :

Respondent :

BEFORE: HONORABLE MARY HANNAH LEAVITT, Judge

HONORABLE MICHAEL H. WOJCIK, Judge

HONORABLE ELLEN CEISLER, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION

BY JUDGE LEAVITT FILED: December 14, 2021

David J. Olean, pro se, has filed a petition for review against the

Commonwealth in the nature of a trespass action and suit in equity. The petition

alleges that the benefits of the Commonwealth’s Alternate Retirement Program Plan

(ARP Plan), in which he is enrolled, are inferior to those provided by the State

Employees’ Retirement System Plan (SERS Plan). Olean claims that because of this

disparity he has suffered an economic loss, in violation of his constitutionally

protected property rights.1 Olean also claims that the lack of any response from

government officials to whom he has complained is a violation of his constitutional

right to redress of grievances.2 The Commonwealth, by the Attorney General, has

1

Article I, Section 1 of the Pennsylvania Constitution states:

All men are born equally free and independent, and have certain inherent and

indefeasible rights, among which are those of enjoying and defending life and

liberty, of acquiring, possessing and protecting property and reputation, and of

pursuing their own happiness.

PA. CONST. art. I, §1.

2

In addition, Article I, Section 20 of the Pennsylvania Constitution states:

filed preliminary objections seeking dismissal of Olean’s petition on grounds of

sovereign immunity. We will dismiss the petition.

On November 9, 2020, Olean filed his petition for review. The petition

alleges that he was employed by Pennsylvania State University (Penn State) for over

15 years. Petition, ¶10. At the time he was hired in January 2000, he was given a

choice of participating in one of two retirement plans: the ARP Plan, which is a

defined contribution pension plan, or the SERS Plan, which is a defined benefit

pension plan. Id., ¶11. Olean chose to enroll in the ARP Plan. Id., ¶12.

The petition alleges that in 1992, the General Assembly set the

employer contribution rate in the ARP Plan at “9.29% of employee gross earnings

for the fiscal year 1992-1993 and all years after that.”3 Id., ¶26. The contribution

rate has remained unchanged. Id., ¶32. In contrast, the employer contribution rate

The citizens have a right in a peaceable manner to assemble together for their

common good, and to apply to those invested with the powers of government for

redress of grievances or other proper purposes, by petition, address or

remonstrance.

PA. CONST. art. I, §20.

3

Section 5301(a)(12) of the State Employees’ Retirement Code, states:

(a) Mandatory membership.--Membership in the system shall be mandatory as of

the effective date of employment for all State employees except the following:

***

(12) School employees who have elected membership in an

independent retirement program approved by the employer,

provided that in no case, except as hereinafter provided, shall the

employer contribute on account of such elected membership at a rate

greater than the employer normal contribution rate as determined in

section 5508(b) (relating to actuarial cost method). For the fiscal

year 1986-1987 an employer may contribute on account of such

elected membership at a rate which is the greater of 7% or the

employer normal contribution rate as determined in section 5508(b)

and for the fiscal year 1992-1993 and all fiscal years after that at a

rate of 9.29%.

71 Pa. C.S. §5301(a)(12).

2

for the SERS Plan was not fixed at the rate of 9.29% of employee gross earnings.

Id., ¶34. Rather, in 1994, 1998, 2001, 2002, 2010, and 2017, the General Assembly

enacted legislation, which was signed by the Governor, “significantly improving the

SERS benefit for themselves and all other plan participants.” Id., ¶36.

The petition also alleges that the Pennsylvania Public Employee

Retirement Commission (Commission)4 is required to determine the method to set

the employer contribution rates for optional alternative retirement programs to

ensure parity with the contribution rates for the SERS Plan. Petition, ¶21. In 1994,

the Commission prepared a report recommending that the contribution to the ARP

Plan be set at 10.52% of the employer’s payroll for five years and that this rate be

reviewed by the Commission every five years thereafter. Id., ¶28. No action was

taken on the Commission’s recommendations, and no further studies have been done

on the parity of employer contributions to the two retirement plans. Id., ¶¶29, 37.

Olean’s petition avers that the Governor and General Assembly have

increased the benefits for the SERS Plan members, which includes them, but have

not increased the benefits for employer contribution rate to the ARP Plan since 1992-

1993. Id., ¶¶32, 36. Olean alleges that there is no parity between the employer

contribution rates to the two plans or the benefits they pay to retirees. Id., ¶¶44-46,

54.

Olean’s petition alleges that Penn State failed to provide him with all

the necessary information about the ARP Plan so that he could make an informed

4

The Commission was created by the Act of July 9, 1981, P.L. 208, to review legislation affecting

public employee pension and retirement plans and to study public employee pension and

retirement policy both at the State and local levels, the interrelationship of the systems, and their

actuarial soundness and costs. Former Section 4 of the Public Employee Retirement Commission

Act, formerly 43 P.S. §1401, repealed by the Act of July 20, 2016, P.L. 849, No. 100 (Act 100 of

2016). Subsequently, Act 100 of 2016 dissolved the Commission and transferred certain powers

and duties to the Department of Auditor General.

3

decision when selecting a plan. Petition, ¶¶56-58. In 2015, he contacted Penn State

and the Commission about the lack of parity between the retirement plans. He was

told that the ARP Plan employer contribution rate was established by statute, and

there were plans to make the ARP Plan benefit “comparable” to the SERS Plan. Id.,

¶¶64-65, Ex. 6. Olean alleges that Penn State and the Commission “knew or should

have known” that the two plans do not provide comparable benefits. Id., ¶¶67-68.

Lastly, Olean’s petition avers that he filed complaints with the Office

of Attorney General, Department of Labor and Industry, United States Senator

Robert Casey’s Office, Governor Wolf’s Office, State Representative Brooks’

Office, and State Senator Brewster’s Office; he has received no meaningful

responses. Id., ¶¶73-76, 88-89, 91-92. In addition, he sent a criminal complaint

directly to Attorney General Josh Shapiro. Olean contacted several county bar

associations for legal assistance, but he was not able to find an attorney to represent

him. Id., ¶¶ 96-100.

Based on the foregoing, Olean’s petition presents two main claims.5

First, he argues that the Commonwealth has failed to ensure equal employer

contributions to the ARP Plan and the SERS Plan. As a result, Olean’s retirement

compensation has been diminished, in violation of his property rights protected by

Article I, Section 1 of the Pennsylvania Constitution. PA. CONST. art. I, §1. Second,

he argues that he has been denied his right to petition the government for redress of

his grievances in violation of Article I, Section 20 of the Pennsylvania Constitution,

PA. CONST. art. I, §20, because the governmental officials did not act on his

complaints.

5

Olean lists 11 “claims” in his petition. Most assert factual allegations or conclusions as opposed

to identifying specific laws he alleges the Commonwealth has violated. In ascertaining Olean’s

claims, we considered the petition in its entirety without regard to its organization.

4

For relief, Olean seeks an order directing the Commonwealth to: (1)

require all SERS participants, except for current and retired employees of the

Pennsylvania State Police and the Commonwealth Court, to forfeit their benefits

earned as of 1992-1993 going forward; (2) require all state employees, except for

current employees of the Pennsylvania State Police and the Commonwealth Court,

to participate in the ARP Plan; and (3) enforce the Public Employee Pension

Forfeiture Act.6 Oelan also seeks compensatory damages in the amount of

$2,000,000 and punitive damages.

The Commonwealth has filed preliminary objections to Olean’s

petition, asserting seven grounds for dismissing the petition.7 First, the

Commonwealth argues that it is immune from Olean’s claim for damages.

Preliminary Objections, ¶29. Second, the Commonwealth argues that Olean’s

claims are barred by the doctrine of res judicata because he filed a substantially

similar action in federal court that was dismissed on August 13, 2020 and which

Olean did not appeal. Preliminary Objections, ¶¶17-19, Ex. B.8 Third, the

Commonwealth asserts that this Court lacks jurisdiction because Olean’s claims

relate to employee benefit plans and, therefore, are preempted by the Employee

Retirement Income Security Act of 1974, 29 U.S.C. §1144(a). Preliminary

Objections, ¶22. Fourth, the Commonwealth contends that Olean’s claims, if viable,

are barred by the applicable statute of limitations because he chose to participate in

6

Act of July 8, 1978, P.L. 752, as amended, 43 P.S. §§1311-1315.

7

For purposes of this opinion, we have rearranged the order of the Commonwealth’s preliminary

objections.

8

Exhibit B is a copy of the order dismissing a case filed by Olean against the Commonwealth in

the United States District Court for the Middle District of Pennsylvania for lack of subject matter

jurisdiction pursuant to the Eleventh Amendment of the United States Constitution, U.S. CONST.

amend. XI. Olean v. Commonwealth (M.D. Pa., No. 1:20-cv-00360, order filed August 13, 2020).

5

the ARP Plan in 2000 but waited two decades to file his petition.9 Id., ¶27. Fifth,

the Commonwealth argues that Olean lacks standing to sue because he admits that

he was given a choice between the two retirement plans and he elected the ARP Plan.

Id., ¶¶31, 33. Sixth, the Commonwealth asserts that the petition fails to state a claim

upon which relief can be granted for several reasons, “including, but not limited to,

the General Assembly is not required to pass any specific laws [that Olean]

requests.” Id., ¶35. Finally, the Commonwealth contends that Olean failed to join

all necessary and indispensable parties because he did not name Penn State, “the

ARP Plan” or the ARP Plan administrator as respondents. Id., ¶¶40-41.

When ruling on preliminary objections, we must accept as true all well-

pleaded material allegations in the petition for review and any reasonable inferences

that we may draw from the averments. Meier v. Maleski, 648 A.2d 595, 600 (Pa.

Cmwlth. 1994). A court need not accept as true conclusions of law, unwarranted

inferences, argumentative allegations, or expressions of opinion encompassed in the

petition for review. Portalatin v. Department of Corrections, 979 A.2d 944, 947

(Pa. Cmwlth. 2009). A demurrer will be sustained where the law is clear that the

petitioner has failed to state a claim for which relief may be granted. Clark v. Beard,

918 A.2d 155, 158 n.4 (Pa. Cmwlth. 2007). In this regard, any doubt is resolved in

favor of the petitioner.

9

The Commonwealth asserts that to the extent Olean brings a claim under 42 U.S.C. §1983

(relating to violations of civil rights), a two-year statute of limitations applies. Preliminary

Objections, ¶26. In response, Olean confirmed that he is not bringing a claim pursuant to 42 U.S.C.

§1983. Brief in Opposition to Preliminary Objections at 7, 9. Likewise, the Commonwealth

asserts that Olean fails to state a claim under the Fourteenth Amendment to the United States

Constitution, U.S. CONST. amend. XIV, as he failed to allege a recognized interest which the

Commonwealth has violated. Preliminary Objections, ¶¶36-37. Olean agrees that he failed to

state a Fourteenth Amendment claim but asserts that his petition should not be dismissed. Brief in

Opposition to Preliminary Objections at 13.

6

We begin with the Commonwealth’s assertion that Olean’s claims are

barred by the doctrine of sovereign immunity.10 “Under the Pennsylvania

Constitution, the Commonwealth enjoys sovereign immunity from lawsuits.” Sutton

v. Bickell, 220 A.3d 1027, 1034 (Pa. 2019). The Pennsylvania Constitution

authorizes the General Assembly to waive immunity by statute. Article I, section 11

of the Pennsylvania Constitution provides:

All courts shall be open; and every man for an injury done him

in his lands, goods, person or reputation shall have remedy by

due course of law, and right and justice administered without

sale, denial or delay. Suits may be brought against the

Commonwealth in such manner, in such courts and in such cases

as the Legislature may by law direct.

PA. CONST. art. I, §11 (emphasis added). This provision was long understood to

mean that only the General Assembly had the power to abrogate the doctrine of

sovereign immunity and to forbid judicial abrogation of the doctrine. Mayle v.

Pennsylvania Department of Highways, 388 A.2d 709, 716-17 (Pa. 1978). In Mayle,

388 A.2d at 716-20, the Supreme Court held that this understanding of article I,

section 11 was incorrect and abrogated sovereign immunity. Thereafter, the

legislature reinstated sovereign immunity and simultaneously waived the immunity

for certain claims. Chapter VI of the act known as the “Pennsylvania Consolidated

Statutes” states, in relevant part, as follows:

10

Under the Pennsylvania Rules of Civil Procedure, immunity from suit is an affirmative defense

that must be pled in a responsive pleading under the heading new matter, not as a preliminary

objection. PA.R.CIV.P. 1030(a). Courts, however, have permitted a limited exception to this rule

and allowed parties to raise the affirmative defense as a preliminary objection where the defense

is “clearly applicable on the face of the [petition for review].” Smolsky v. Pennsylvania General

Assembly, 34 A.3d 316, 321 n.7 (Pa. Cmwlth. 2011). “Where the [petitioner] does not object to

the improper procedure, courts have ruled on the affirmative defense of immunity raised by

preliminary objections.” Id. Although Olean argues that sovereign immunity does not apply, he

does not object to the Commonwealth raising the defense as a preliminary objection.

7

[T]hat the Commonwealth, and its officials and employees acting

within the scope of their duties, shall continue to enjoy sovereign

immunity and official immunity and remain immune from suit

except as the General Assembly shall specifically waive the

immunity.

1 Pa. C.S. §2310 (emphasis added). The General Assembly has waived sovereign

immunity for certain claims against the Commonwealth agencies, officials, and

employees. 42 Pa. C.S. §§8521-8522.11 The Commonwealth of Pennsylvania,

which is not a Commonwealth agency, “still enjoys absolute immunity pursuant to

1 Pa. C.S. §2310.” Brouillette v. Wolf, 213 A.3d 341, 356 (Pa. Cmwlth. 2019) (citing

Finn v. Rendell, 990 A.2d 100, 105 (Pa. Cmwlth. 2010) (citations omitted and

emphasis in original)).

Here, the petition names the “Commonwealth of Pennsylvania” as

Respondent, not a Commonwealth agency, official, or employee. The

Commonwealth of Pennsylvania enjoys absolute immunity from suit. Finn, 990

A.2d at 105. Thus, Olean’s claims for damages against the Commonwealth of

Pennsylvania are barred by sovereign immunity.

Even if Olean had named a Commonwealth agency or employee as a

respondent, his petition would not state a claim. Olean seeks affirmative action by

the Commonwealth to revise the benefits of SERS members and to make state

employees participate in the ARP Plan. Such a grant of mandatory injunctive relief

would be barred by sovereign immunity. Fawber v. Cohen, 532 A.2d 429, 433 (Pa.

11

The General Assembly has waived immunity “to claims for damages” brought against

Commonwealth agencies and employees caused by: (1) vehicle liability; (2) medical-professional

liability; (3) care, custody or control of personal property; (4) Commonwealth real estate, highways

and sidewalks; (5) potholes and other dangerous conditions; (6) care, custody or control of animals;

(7) liquor store sales; (8) national guard activities; (9) toxoids and vaccines; and (10) sexual abuse.

42 Pa. C.S. §8522(b).

8

1987). See also Stackhouse v. Pennsylvania State Police, 892 A.2d 54, 61 (Pa.

Cmwlth. 2006) (claims seeking mandatory injunctions to compel affirmative action

by Commonwealth officials are barred by sovereign immunity). The courts’

equitable powers cannot trump sovereign immunity. Scientific Games International,

Inc. v. Department of Revenue, 66 A.3d 740, 758 (Pa. 2013).

Olean argues, nevertheless, that the General Assembly’s reinstatement

of sovereign immunity was unconstitutional because it interferes with his right of

access to the courts guaranteed by Article I, Section 11 of the Pennsylvania

Constitution. PA. CONST. art. I, §11. This Court has previously rejected Olean’s

argument.

In Zauflik v. Pennsbury School District, 72 A.3d 773, 780-81 (Pa.

Cmwlth. 2013), we explained that the General Assembly’s authority to restore

sovereign immunity is consistent with Article I, Section 11 of the Pennsylvania

Constitution. Article I, Section 11 provides that suits against the Commonwealth

may be brought “in such manner, in such courts and in such cases as the Legislature

may by law direct.” PA. CONST. art. I, §1 (emphasis added). Because the

Pennsylvania Constitution vests the General Assembly with discretion to decide

which cases may be brought against the Commonwealth, Olean’s argument lacks

merit. Zauflik, 72 A.3d at 781.

Further, Olean argues that state sovereign immunity does not apply

where an individual alleges that a state’s action violates the federal or state

constitution. Olean directs this Court to the Florida Supreme Court’s decision in

Department of Revenue v. Kuhnlein, 646 So.2d 717, 721 (Fla. 1994) (emphasis

added), wherein that Court stated:

Sovereign immunity does not exempt the State from a challenge

based on violation of the federal or state constitutions, because

9

any other rule self-evidently would make constitutional law

subservient to the State’s will. Moreover, neither the common

law nor a state statute can supersede a provision of the federal

or state constitutions.

This Court is not bound by the decisions of other state courts.

Condemnation by Pennsylvania Turnpike Commission v. Lands of Tarlini, 185 A.3d

1177, 1186 (Pa. Cmwlth. 2018). Further, the language in Kuhnlein is inapposite here

because the Sovereign Immunity Act does not “supersede” or conflict with Article

I, Section 11 of the Pennsylvania Constitution. The General Assembly, through the

Sovereign Immunity Act, defined the types of claims for damages that may lie

against Commonwealth agencies and their employees, which this Court has held is

consistent with the discretion conferred on the legislature by Article I, Section 11 of

the Pennsylvania Constitution. Zauflik, 72 A.3d at 780-81.12

Accordingly, we sustain the Commonwealth’s preliminary objection

asserting sovereign immunity and dismiss the petition for review.13

____________________________________________

MARY HANNAH LEAVITT, President Judge Emerita

12

Additionally, several of the “claims” in Olean’s petition for review relate to actions or inactions

of the General Assembly, the Governor, and Penn State. However, Olean has not named these

entities or individuals as parties in this matter, and he has only served the Office of Attorney

General with a copy of the petition. See PA. R.A.P. 1513(b) (“[t]he government unit and any other

indispensable party shall be named as respondents”); PA.R.CIV.P. 2102(a)(2) (“[a]n action against

a Commonwealth agency or party shall be styled in the following manner: Plaintiff v. ‘_____

(Name of Agency or Party) of the Commonwealth of Pennsylvania’”). The failure to join an

indispensable party to a lawsuit deprives this Court of jurisdiction. O’Hare v. County of

Northampton, 782 A.2d 7, 13 (Pa. Cmwlth. 2001). To the extent Olean intended to bring claims

against these parties, he needed to identify them in the caption.

13

Given our disposition of this matter, we need not address the Commonwealth’s remaining

preliminary objections.

10

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

David J. Olean, :

Petitioner :

:

v. : No. 604 M.D. 2020

:

Commonwealth of Pennsylvania, :

Respondent :

ORDER

AND NOW, this 14th day of December, 2021, it is ORDERED that the

preliminary objection of the Commonwealth of Pennsylvania asserting sovereign

immunity in the above-captioned matter is SUSTAINED and the petition for review

is DISMISSED.

_____________________________________

MARY HANNAH LEAVITT, President Judge