Petition for Writ of Certiorari — Sklaroff v. Pennsylvania ex rel. Fisher

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Supreme Court, U.S.

“FILED

wv)

No. 9918 52 MAR 2.9 2000

OFFICE OF TRE CLERK

IN THE

Supreme Court of the United States

ROBERT B. SKLAROFF, M.D.

Petitioner,

V. -

COMMONWEALTH OF PENNSYLVANIA

BY D. MICHAEL FISHER, IN HIS OFFICIAL CAPACITY

AS ATTORNEY GENERAL OF

THE COMMONWEALTH OF PENNSYLVANIA,

and

PHILIP MORRIS INCORPORATED, ET AL.,

- Respondents.

On Petition For A Writ Of Certiorari .

To The-Pennsylvania Supreme Court

PETITION FOR A WRIT OF CERTIORARI

Robert B. Sklaroff, MD

pro se

Suite #130

50 East Township Line Road

Elkins Park, PA 19027-2253

(215) 663-8200

May 9, 2000

II.

lif.

IV.

QUESTIONS PRESENTED

Whether the petitioner—functioning as a citizen,

taxpayer, father, activist, physician, private AG and

litigant—can be deprived of standing to intervene

prior to final approval of the Master Settlement

Agreement between the Tobacco Industry and the

Commonwealth of Pennsylvania, under state and

federal law, based upon his current and future civil

and due-process constitutional rights.

Whether the petitioner’s pending litigation against

one member of the tobacco industry constitutes a

legally enforceable interest, representing a case or

controversy that continues to be ripe for adjudication

and that, therefore, reflects a direct, substantial and

immediate interest in the Master Settlement

Agreement sufficient to merit being conferred

standing to intervene.

Whether granting standing to the petitioner would

inter alia yield the required judicial review of the

Master Settlement Agreement’s Immunity and Offset

Clauses which, putatively, are—individually and in

the aggregate—ultra vires, overly broad, complex,

excessively ambiguous, and inconsistent with public

policy.

Whether granting standing to the petitioner would

inter alia yield the required judicial review of the

lack of an evidentiary justification for the Master

Settlement Agreement’s denial of future rights of

youth—putatively, the class of individuals for whom

the litigation had been filed—to seek redress.

PARTIES TO THE PROCEEDING

The petitioner is Dr. Sklaroff; initially, three individuals

and thirteen organizations filed for intervention and,

Subsequently, these three individuals and four of the

organizations filed an appeal. Subsequently, the other six

parties (except Dr. Sklaroff) withdrew their appeals.

The plaintiff in the original litigation was Attorney

General D. Michael Fisher, Esquire, who filed on behalf of

the Commonwealth of Pennsylvania.

The defendants in the Original litigation were:

Philip Morris Incorporated

R. J. Reynolds Tobacco Company

Brown & Williamson Tobacco Corporation

B.A.T. Industries, P.L.C.

The American Tobacco Company, Inc.

Brown & Williamson Tobacco Corporation

Lorillard Tobacco Company

Liggett Group, Inc.

United States Tobacco Company

The Tobacco Institute, Inc.

The Council for Tobacco Research-U.S.A., Inc.

Smokeless Tobacco Council, Inc.

Hill and Knowlton, Inc.

TABLE OF CONTENTS

QUESTIONS PRESENTED ..............cscsesceeeeeeeseeeeees i

PARTIES TO THE PROCEEDING .............. Witvinewsieni ii

TABLE OF CONTENTS ...........cscccccccccesescsccssccess ill-v

TABLE OF AUTHORITIES .............cscesceeeereeeeeeene vi-x

OPINIONS BELOW ............0..cccccccesccccssccerrcccccscces ]

PG BEY isin niccidecnenseccacissecncesasssetestonevessvers |

CONSTITUTIONAL AND STATUTORY PROVISIONS. |!

STATEMENT OF THE CASE .............0ceececeeceeeeeeereoes 2

Be ID vcscivvcnsrnsceddstaheiniviaslascetseniabisedsbates 3

II. Procedural History ...............ccccccccseccsccsscsessccnces 5

II]. The Master Settlement Agreement ............ -.--.sseee: 6

a. Releasing Parties and Released Claims ..............-. 7

Os Ni oat Shera Sve aundencadidacdnecddssvenscteasee sexe 8

i IE ences istic canc dsceessssdetndencaneedensocsscasescens 9

IV. Dr. Sklaroff and the Coalition for a Tobacco Free PA ... 9

V. Dr. Sklaroff’s Challenge in Pennsylvania ............... 10

VI. The Trial Court Hearings and Opinion .............-..+ 11

VII. Philip Morris Financing of Wawa Billboard Ads ... 15

ARGUMENT SUMMARY & REVIEW STANDARDS .. 15

II.

The petitioner—functioning as a citizen, taxpayer, father,

activist, physician, private AG and litigant—should not

be deprived of Standing to intervene prior to final

approval of the Master Settlement Agreement between

the Tobacco Industry and the Commonwealth of

Pennsylvania, under state and federal law, based upon his

current & future civil and due-process constitutional

ps ute eT NS 17

a. Dr. Sklaroff has the Capacity to seek relief on behalf

of and/or generally applicable to the general public

by filing a taxpayer lawsuit ........................... 18

b. In addition to his Wawa cases against PM and the CoP

AG, Dr. Sklaroff can articulate two causes-of-action

based upon tax-related implications of the MSA

justifying a taxpayer suit oo... oo. .ccccecccecee.. 22

c. Dr. Sklaroff has the legal right to seek relief on

behalf of and/or generally applicable to the general

public by filing generic fe cee, 22

d. Constitutional Concerns ...............00.0060........ a3

The petitioner’s pending litigation against one member of

the tobacco industry constitutes a legally enforceable

interest, representing a case or controversy that continues

to be ripe for adjudication and that, therefore, reflects a

direct, substantial and immediate interest in the Master

Settlement Agreement sufficient to merit being conferred

WING sis isa rhe a 23

III. Granting standing to the petitioner would inter alia yield

the required judicial review of the Master Settlement

Agreement’s Immunity and Offset Clauses which,

putatively, are—individually and in the aggregate—ultra

vires, overly broad, complex, excessively ambiguous,

and inconsistent with public policy ................++++0 24

a. The Trial Court failed to analyze the MSA ........... 25

b. II (pp) must be struck from the MSA ..=.......... 26

c. ¥ XII (b) must be struck from the MSA ............. 27

IV. Granting standing to the petitioner would inter alia yield

the required judicial review of the lack of an evidentiary

justification for the Master Settlement Agreement’s

denial of future rights of youth—putatively, the class of

individuals for whom the litigation had been filed—to

QOOK LOGIIOD coins ss cvcscvcasssscenssscchuinsesbassanwatesnan 28

CONSE AIIOIN ic cvsseiccsciiscinidvenccscenssantiiivesntesnems 30

APPENDIX

A. Philadelphia Court of Common Pleas Opinion ........-.

B Pennsylvania Commonwealth Court Opinions ......... 61

C Pennsylvania Supreme Court Order ...........-..+++e0008 93

D Pennsylvania Intervenors’ Brief ..............-.02eeeeeeee 94

E Sklaroff v. Philip Morris Incorporated

Complaint and Key Preliminary Objections.. ......... 120

F Sklaroff v. Fisher

Complaint, Key Preliminary Objections, Response .. 139

TABLE OF AUTHORITIES

CASES

Allegheny General Hospital, ef al v. Philip Morris, Inc..,

et al. Court of Common Pleas of Allegheny County

Civil Division GD No. 98-018956 (1998) .......-sseeeeeees 22

Application of Medical Service Association of

Pennsylvania d/b/a Pennsylvania Blue Shield ef al.

Docket No. MS96-04-098 .........cccceeceeeeeeeeeeteeeeeeeneee 18

Biester, 487 Pa. at 443, 409 A.2d at 851 (1979) ........... 15,18

Biester, 409 A.2d at 851 1.5 ........c cc eeeeeeeneeeee eee eee enenes 19

Blue Cross/Blue Shield of New Jersey, Inc. et al.

v. Philip Morris, Inc. et al.

Civil Action # 98-3287

US District Court for the Eastern District of New York .... 23

Buchanan v. Century Fed. Sav. & Loan Ass’n

259 Pa.Super. 37, 393 A.2d 704, 709 CEGTED cvscsnivsessssces 25

Building Industry Ass'n v. Manheim Township

710 A.2d 141 Pa.Cmwlth. 1998) ............:ceeeeee eee e eee e cee 19

Commonwealth of Pennsylvania v. Philip Morris, Inc.

No. 2443 (Philadelphia County Ct. C.P. April 23, 1997) ... 5

Consumer Party of PA v. Commonwealth of PA

507 A.2d 323 (Pa. 1986).........scceceeeeeneeeeeeceeeeeeeneen eens 19

Daniels et al v. Philip Morris, et al

SDSC Case No. 719446 (4/3/2000) ........ 20s eeeeeeeeeeecees 19

vii

Girsh v. Jepson

ot ae Oe BOG eo eo i is 25

Jefferson Bank v. Newton Associates

686 A.2d. 834 (Pa. Superior Ct. 1966)...................0eeee 19

Jones v. Muir

FEE Be ee Pie BSS COT i otictsmncsceccanssinacsndsizsabanis 19

Keener v. Zoning Hearing Board of Millcreek Township

714 A.24 1120 (Pa. Conwith. 1996) ........0.cccccccccscccsess 16

Ken R. v. Arthur Z.

546 Pa. 49, 682 A.2d 1267 (1966)......... ccc cc eecc eee ee eeee 19

Leagu e of Women Voters of PA et al v. Cmwith. of PA et al.

692 A.2d 263 (Pa.Cmwith. 1997)..........cccccccccscccscess Roe

Mangini v. R.J. Reynolds Tobacco Company, ef al.

sek a ese > | | eee Pete Dia buaak cabtade 22

McNamara, et al. ?

Court of Common Pleas of Montgomery County :

No 98-13501 [removed to federal court]...................44. 22

Philadelphia County Medical Society, et al. v. PA Ins. Dept.

No. 3309, C0). (POC CMIWEE, 1996). occnicccccccacccccccscccccss 18

Prince George Center, Inc. v. U.S. Gypsum Co.

FOE A288 N41 CPO BAG, TGF). vs sccevncsccscscsesccncccsccccess 25

Viii

Reverend Jesse Brown. et al. v. Philip Morris, Inc., ef al.

US. District Court for the Eastern District of PA

Civil Action No. 98-5518...........ceceeeeeeeeeeeee eer eneeneees 22

Rizzo v. City of Philadelphia

528 A.2d 1128 (Pa.Cmwlth. 1990)...........cseeeeeereeeereeees 19

Society Created to Reduce Urban Blight (SCRUB) et al. v.

Zoning Board of Adjustment of the City of Philadelphia

et al. (Opinion Filed April 5, 1999)..........:ssseeeereeeeee eens 19

Skipworth by Williams v. Lead Industries, Inc.

547 Pa. 224, 690 A.2d 169 (1997) ..........cceeeeeeeeeeeeeees 17

Sklaroff v. Fisher

No. 720 M.D. 1999 (PA Commonwealth Court) ...........+. 15

Sklaroff v. Philip Morris Incorporated

No. 2101 (Philadelphia County Ct.C.P. May 17, 1997) ..... 15

Sprague v. Casey

550 A.2d 184 (Pa. 1988)...........cceseeec scene eeetreeeee eee eees 19

Sweeney, ef al. v. American Tobacco Company, ef al.

Court of Common Pleas of Allegheny County

Mo. SO 1G FIG iis ciacccasiccckcasndinasinusinsssrerecscsttciedstaces 22

Tomaskevitch v. Specialty Records Corporation

717 A.2d 30 (Pa. Cmwilth. 1998) .........-:eeeeeeee rere eee eens 17

Van Dine v. Gyoriska

522 Pa. 122. 713 A.2d 1104 (Pa. 1998) ...........eseeeeeeee 16

In re:_ Washington Public Power Supply System Sec. Litig.

720 F.Supp. 1379, 1387 (D.Ariz. 1989) aff'd

Plaintiffs v. City of Seattle 955 F.2d 1268

(9 Cir. 1992, cert. Denied, 506 U.S. 953).....-:::s:eeee0% 24

Watrel v. Commonwealth, Dept. of Education

POM PME BAUME CUM ni cnscsntdonphcdeiuscdlcicsnckscicecucec, 25

Wilson v. State Farm Mutual Automobile Ins. Com

512 Pa. 486, 517 A.2d 944, 947 ( DT ie icsta te oo. 16

Wojdak v. Greater Philadelphia Cablevision, Inc.

550 Pa. 474, 707 A.2d 214 (1998) ..... cece eccccccccecceccecee 17

RULES OF CIVIL PROCEDURE

Pa.R.C.P. ROE cal Miidinitk isis ci ec ks 14

I 5

Pea I is cc ca 5

Pe RC IE os ih 12, 13

“pe SEER Renee ra act es 12

PRIA P. ZIAMOD vicisciscnteced Riachuuidanibdhckea doce cnodads 25

STATUTES

* ic A LL” PREIS Oo cle ae ORRE |

Ue REESE es OROOD EET ae REED |

We Se I Bi cece ee eS 27

WE isl iiss cir lig en ts 24

Pe IN iit cds incicksk eS 27

Pie I ihiceia iii a ce ia 19, 24

po ine eS eco Skgoaenas 24

We MO ies isa io ss ude ccconi ceca 27

BS & P § 17200 ef seg. (California) .............cececcesscoses 19

CONSTITUTIONS

United States

Ist, Sth and 14th Amendments ............................. 1, 23

Commonwealth of Pennsylvania

Article I (Sections 1, 20 & 25) .....-s:.seseeseeeereeeneeees 2, 23

Mmebebe EY ooiciscckceceasvacasoconcesacsnsonseananhedsssanacnseas 26

New York State

ASM VY onciciceccceccsccscssnssscusessacsovecseseusannseeinatess 27

ADDITIONAL CITATIONS

H. Newberg

Newberg on Class Actions

$610b (1977) ........ccccevesesecroosaserrsnrestocsvenssescccaseete 25

H. Newberg

Newberg on Class Actions

Section 11.40 (1985) .......:secseceeeeeeeeeereeneeeeeeeeeenenees 25

PETITION FOR A WRIT OF CERTIORARI

Petitioner Robert B. Sklaroff, MD, respectfully petitions

for a Writ of Certiorari to review the judgment of the

Pennsylvania Supreme Court in this case.

OPINIONS BELOW

The opinion and order of the Court of Common Pleas

(First Judicial District of Pennsylvania) was issued on

February 26, 1999 [Appendix A]. The opinion and order of

the Commonwealth Court of Pennsylvania was issued on

August 10, 1999 [Appendix B]. The Pennsylvania Supreme

Court order was issued on December 17, 1999 [Appendix C].

JURISDICTION

The jurisdiction of this Court is invoked under 28 U.S.C.

{ 1257 (a). “Final judgments or decrees rendered by the

highest court of a State in which a decision could be had,

may be reviewed by the Supreme Court by writ of certiorari

. . where any title, right privilege, or immunity is specially

set up or claimed under the Constitution. . . .”

The Pennsylvania Supreme Court docketed its final order

on December 20, 1999. This writ was filed in a timely

fashion, pursuant to 28 U.S.C. § 2101 (b), and it is refiled

within 60 days thereafter, pursuant to the order of the Clerk

on April 5, 2000 (citing numerous Rules of this Court).

CONSTITUTIONAL AND STATUTORY PROVISIONS

Three Constitutional Amendments are cited: I

[Congress shall make no law. . .abridging . . .the right of the

people. . .to petition the government for a redress of

grievances.”]; V [“No person shall. . .be deprived of life,

liberty, or property, without-due process of law. . . .]; XIV

(“No state shall. . .deprive any person of. . .due process.”].

Two CoP Constitutional concerns are cited [Articles I

(sections 1, 20 and 25) and IV], plus state-level statutes.

The pivotal concern herein is that the very reason the

original suit was filed has been abrogated in its settlement,

and asserting standing through this mechanism—parens

patriae—comports with the facts and the law of this case.

The Master Settlement Agreement threatens the ability of

youth to preserve their present and future rights as a “class.”

Dr. Sklaroff has a 9-3/4 year old son whom he would not

want to start smoking cigarettes, Dr. Sklaroff wants to ensure

the Tobacco Industry does not violate the Master Settlement

Agreement, despite its limitations and vagaries.

STATEMENT OF THE CASE

The Master Settlement Agreement [“MSA”} reached by

the Tobacco Industry [“TI’] was the largest civil litigation

settlement in world history. In the Commonwealth of

Pennsylvania [“CoP”], it was signed by the Attorney General

(“AG”] who had a major role in its negotiation nationally.

Two pending CoP cases fone in Superior Court and one in

Commonwealth Court], however, illustrate that the AG has

invoked prosecutorial discretion to avoid prosecuting alleged

MSA violations by a TI member, Philip Morris Incorporated

[“PM”}. Conduct exhibited during the past year has shown

‘ts obvious defects will protect the TI against prosecution for

current and future behavior until/unless the deficient clauses

therein have been amended or expunged, the goal of this suit.

This is an issue of great legal and public significance:

can an agreement between an industry and government

immunize that industry from any public interest lawsuit filed

by any member of the public, even one intended to ensure

the agreement is honored? Because the MSA was subject

_to judicial review and it will be subject to judicial oversight,

it has been misportrayed merely as a contract; it must be

subject to clarification by the AG prospectively—consistent

with the AG's statements—through issuance of a stipulation.

Ni a

Pea a

The Commonwealth Court’s minority opinion articulates

the profundity of this error of law in the instant case,

providing the foundation for this writ. Judge Kelley traced

the origins of parens patria litigation, and he noted that the

rights of youth had not been discerned by the trial court.

Inasmuch as the MSA abrogates them, he concluded that

blind approval of the MSA was a manifest error of law.

Indeed, fundamental rights of unrepresented parties must be

given greater weight than that of the settling parties.

No cogent rationale has beer issued by any lower court

for denying the petitioner standing in light of his multiple

claims thereupon. Subsequent events demonstrate his legally

enforceable interests regarding the MSA approval process.

Because multiple legal challenges in state and federal courts

pend currently against the MSA (such as that in Missouri),

this Court should review decisions by the CoP (and other)

state courts that involve inter alia issues of federal law.

This litigation represents the only and last challenge to

the non-severable clauses in the MSA, arising in state courts

and totally dissociated from any monetary claims (that

characterize other lawsuits). Nevertheless, its filing does not

eschew assessment of the MSA’s profound fiscal impact,

an issue that is fleshed-out more thoroughly by Judge Kelley.

L. Introduction

The MSA is an extraordinary pact, purporting to settle all

the CoP’s claims against the TI in exchange for its payment

of, perhaps, billions of dollars and for its more responsible

conduct. It is a Trojan Horse that is fundamentally flawed,

for it contains two key provisions rendering it unlawful and

its benefits uncertain: the AG improperly waives rights and

claims, and the TI gains an Offset Clause that is ultra vires,

‘unconstitutional and against public policy. It is perceivable

as collusion between Big Tobacco and Big Government,

inasmuch as removes the major mechanism by which the

public health can be maintained: the threat of litigation.

Releases are to be provided by parties that were not

named as parties in the Complaint; further, undefined present

and future claims (by the CoP and others) are to be waived,

making the MSA’s benefits contingent and illusory. Instead

of repairing these errors and ensuring the MSA was fair,

adequate and reasonable, the Trial Court mistakenly denied

Dr. Sklaroff standing, committing an abuse of discretion.

Thus, this Court must remand, so as to allow Dr. Sklaroff to

clarify the legality and scope of waiver and offset language;

in the alternative, this Court must examine the MSA de novo

and declare the subject provisions unlawful.

The remand is justified for many reasons. Dr. Sklaroff

merits standing because he is a citizen, taxpayer, father,

activist, physician, and litigant. He has pending litigation

against PM, filed (as was the initial litigation) parens patriae

(inter alia, to decrease the risk that his 9-3/4 year old son

will become attracted to cigarettes). This case also perfectly

fits the “Biester” Exception, a statute that was intended to

empower citizen-taxpayers against governmental abuse of

power. Indeed, no state court (primary OF appellate) has yet

addressed these criteria (individually or collectively),

admittedly due to the “historic” nature of the MSA and its

great fiscal implications. Yet, regardless of publicly-stated

posturing intended to improve its image, the TI continues to

commit crimes worldwide (¢.g., smuggling by B.A.T. in

Great Britain and Philip Morris in Canada); it cannot be

rendered immune from suits, regardless of one’s perceptions

of individual responsibility and multi-national corporations.

Dr. Sklaroff, functioning per Sse, submits argument to this

Court that is necessarily incomplete. Nevertheless, he fears

fundamental concepts threaten to escape judicial study.

These profound concerns, individually and in the aggregate,

create precedent that could then become the foundation for

efforts of other entities to gain blanket indemnification for

future conduct that, in turn, could trivialize the generally

recognized capacity of people to petition their government

and private entities for redress. They must not be avoided.

Il. Procedural History

The AG initiated this action by filing a Complaint against

the TI on April 23, 1997 seeking inter alia reimbursement

for the CoP’s tobacco-related Medicaid expenditures'. The

action was brought as parens patriae (“on behalf of all its

citizens”), but it did not include—or identify as parties—

persons or entities functioning as municipalities & other

local government units, private attorneys general, qui tam

plaintiffs or taxpayers’. A national settlement was made

public on November 16, 1998, and the CoP & TI submitted it

to the Court requesting its approval in the form of a consent

decree on November 23.’ Dr. Sklaroff filed his Intervention

Petition pro se on November 18 (joined by two individuals

and two public interest organizations) for declaratory and

injunctive relief. [The concerns were the Release and Waiver

Clauses, plus the Indemnification and Offset Provisions.]

A Revised Petition was filed on December 2 [Appendix D,

which includes the Brief], joined by eleven additional

organizations acting “on behalf of themselves and others

similarly situated.”* After Hearings (January 8 & 12, 1999),

an Order was issued (January 13) entering a Consent Decree

approving the MSA and denying the petitions to intervene.

' This ten-count suit comprehensively elucidated the key factors that

have contributed to this epidemic; it sought compensatory, punitive &

other damages, civil penalties, and injunctive & other equitable relief.

[CoP v. PM, No. 2443 (Philadelphia County Ct. C.P. April 23, 1997).]

* Thus, those aspiring to retain the right to pursue anti-tobacco litigation

could not have known they could become Releasing Parties. [The TI

imposed an 11/20/98 deadline for state-level concurrence, affording

putative intervenors little time to explore this issue with their AGs.]

Court approval was required because the MSA settles claims of minors

[n.b., repeated reference in the Recitals to Youth’s alleged benefits].

Pa.R.C.P. 2039, 2064. Also, the CoP’s citizens were represented as a

group; class action settlements require court approval. Pa.R.C.P. 1714(a).

A hospital group, an insurer, and the County of Allegheny also filed

Complaints; the City of Philadelphia filed a brief. [All were filed prior to

and orally argued during the Hearings, except for that of the insurer,

which was filed late and dismissed due to lack of timeliness. ]

As requested by the Settling Parties, the anti-tobacco

activists—including Dr. Sklaroff—were denied standing.

An appeal to Commonwealth Court was filed by Dr. Sklaroff

(plus the two co-petitioners and four of the thirteen

organizations) and Allegheny County.’ Judge Herron issued

his 59-page Opinion on February 26 [Appendix A]. Appeals

to the Commonwealth [Appendix B] andthe Supreme Courts

[Appendix C] were denied, the latter without comment.

Ill. The Master Settlement Agreement

The Master Settlement Agreement® [“MSA”] was

announced at a press conference led, in part, by the AG’.

The national and statewide campaigns to achieve approval’

led to the release of escrowed funds; the CoP received its

first payment on December 31, 1999. The only impediment

to approval outside the CoP was state-county conflict

regarding division of the monies’; most have been resolved.

Its non-severable clauses!’ did not allow for citation of

state statute to repair fundamental ambiguity of such vague

phraseology; no precedent or procedural guideposts were

cited to facilitate rudimentary interpretation thereof.

* The petitioners were repre vented as a group by Alice Ballard, Esquire;

subsequent appellate efforts were conducted pro se.

6 “MASA” connotes both the model for the CoP and the document signed

in the CoP; the two are identical, in the CoP and in all other localities.

7 The MSA contained far less for public health (legally and fiscally) than

the most-recently effectuated state-specific settlement (in Minnesota),

thus. critical analyses thereof (including one from Dr. Sklaroff & Messrs.

Barg & Godshall) were published in the lay and professional literature.

8 “State-Specific Finality” was sought from 46 states (plus the District of

Columbia) and five United States territories (American Samoa, Guam,

Northern Mariana Islands, Puerto Rico and Virgin Islands).

9 In most states, approval was perfunctory. In a few, hospitals and

governmental subunits raised objections; smokers raised concerns in two.

in New York, anti-tobacco activists led a serious, focused challenge.

'© The TI cannot claim any “non-severable” clause would, if severed,

suddenly render it unable to conduct their businesses in the CoP,

inasmuch as such constraints do not exist in the first four settling states.

a.- Releasing Parties and Released Claims

The MSA waived and released claims on behalf of these

“Releasing Parties”: the CoP (plus its agents, officials, repre-

sentatives, agencies, departments, commissions, divisions

and subdivisions) and “persons or entities acting in a parens

patriae, sovereign, quasi-sovereign, private attorney general,

qui tam, taxpayer or any other capacity.” [“II (pp)”]'

Releasing Parties were included:

(A) to the extent that any such person or entity sought

relief on behalf of or generally applicable to the

general public in such Settling State or the people

of the State, as opposed solely to private or indi-

vidual relief for separate and distinct injuries, or

(B) to the extent that any such entity (as opposed to an

individual) sought recovery of health-care costs

(other than premium or capitation payments for

the benefit of present or retired state employees).

Released Claims gave an unprecedented blanket-release,

encompassing all torts filed [“II (nn)”] for claims arising

from conduct, acts or omissions, directly or indirectly:

(1) in the past “(including any damages incurred in

the future arising from such past conduct, acts or

omissions), those Claims. . . based on, arising out

of or in any way related, in whole or in part, to

(A) the use, sale, distribution, manufacture, deve-

lopment, advertising, marketing or health effects

of, (B) the exposure to, or (C) research, state-

ments, or warnings regarding, Tobacco Products.”

(2) in the future “only those monetary Claims. . .

based on, arising out of or in any way related to,

in whole or in part, the use of or exposure to

Tobacco Products manufactured in the ordinary

course of business. . . .”

The MSA did not define “non-business” business.

'' [Bracketed References are to excerpts from the MSA.]

Offset

The “Settling States’ Release, Discharge and Covenant”

(“XII (b)”] granted this “litigating releasing parties offset”:

If a releasing party (or any person oF entity enu-

merated in subsection II (pp), without regard to the

power of the Attorney General to release claims of

such person or entity) nonetheless attempts to main-

tain a Released Claim against a released party, such

released party shall give written notice of such poten-

tial claim to the attorney general of the applicable

Settling State within thirty days of receiving notice of

such potential claim. . . .The released party may offer

the release and covenant as a complete defense.

If it is determined at any point in such action that the

release of such claim is unenforceable or invalid for

any reason (including, but not limited to, lack of

authority to release such claim), . . .

(1) the released party shall take all ordinary and

reasonable measures to defend the action fully. The

released party may settle or enter into a stipulated

judgment with respect to the action at any time in its

sole discretion, but in such event, the offset described

in subsection (b)(2) or (b)(3) below shall apply only if

the released party obtains the relevant Attorney

General’s consent to such settlement or stipulated

judgment, which consent shall not be unreasonably

withheld. . .

(2)... -A. In the event of a settlement or.

stipulated judgment, [it] shall give rise to a

continuing offset as such amount is actually

paid against the full amount of such original

participating manufacturers’ share. . .of the

applicable Settling State’s Allocated Payment

until such time as the settled or stipulated

amount is fully credited on a dollar-for-

dollar basis.” [emphasis added]

Cc. Scope

The MSA was to be effectuated “to the full extent of the

power of the signatories to release past, present, and future

claims.” Thus, “Releasing Parties” did not include parties to

the extent the AG lacked power to release their claims’.

Nevertheless, enforcement power was centralized by the

“Intended Beneficiaries” clauses [XVIII (p)], blocking non-

governmental plaintiffs from obtaining injunctive relief!

IV. Dr. Sklaroff and The Coalition for a Tobacco Free

Pennsylvania

The Coalition for a Tobacco Free Pennsylvania has been,

for two decades, the CoP’s only statewide democratically-

governed organization of anti-tobacco activists. Its work is

submitted annually to the Centers for Disease Control and

Prevention [“CDC”] by the CoP Health Department in

conjunction with mandated reportorial responsibilities.

The AG announced formal filing of the litigation against

the TI while standing alongside the Coalition President. The

Coalition was unable, however, to provide consultation

during or achieve an impact upon any settlement discussions.

Coalition members noted with dismay that the MSA’s

above-detailed releases and offset did not appear in the

agreements effectuated in the first four settling states

(Mississippi, Florida, Texas & Minnesota). The Coalition

and certain members thereof—plus the Coalition President

and Vice President—ultimately filed for Intervenor Status.

As a direct result, some key members resigned therefrom.

'° Legislation based on Exhibit T (“Non-Participating Manufacturers”)

threatens to do that, for CoP HB-445 affords “stealth immunity” by

omitting reference to the qualifying clause while affirming the immunity.

Dr. Sklaroff's testified accordingly before its Courts Subcommittee.

'" “No portion of this Agreement shall provide any rights to, or be

enforceable by, any person or entity that is not a Settling State or a

Released Party. No Settling State may assign or otherwise convey any

right to enforce any provision of this Agreement.”

Dr. Sklaroff has served twice as the Coalition Secretary.

Its efforts regarding this issue'* were consistent with policies

of the Pennsylvania [“PA”] Society of Internal Medicine, as

implemented by Dr. Sklaroff (its immediate-past President).

Thus, although Dr. Sklaroff has acted alone during the

past year, his goals are consistent with Coalition policies.

V. Dr. Sklaroff’s Challenge in Pennsylvania

Dr. Sklaroff and the other activists sought Intervenor

status “to prevent a wholesale denial of due process to any

and all [such as themselves] who might bring public interest

litigation.” They viewed this as their only opportunity to

challenge egregious sections of the MSA’. —

They condemned slight-of-hand releases that effectively

immunized the TI from legal liability. The mere existence of

the Offset would prompt the CoP to intervene in defense of

the TI because: (i) in the event of petitioner’s success, the

litigating releasing parties offset provisions would divert

allocated payments from the CoP to the petitioner; (ii) the

CoP plaintiffs would therefore have a financial interest in

tobacco defendants’ prevailing against the petitioner, which

interest would be directly adverse to the petitioner's interest;

and (iii) the CoP plaintiffs’ intervention in petitioner’s

litigation would proceed without objection from the TI.

4 The Coalition continues to lobby for use of MSA monies that complies

with the CDC’s “Best Practices” Guidelines. In Pennsylvania (unlike

other states), health initiatives are to be supported—consistent with goals

of the initial lawsuit—focusing on Medicaid. Yet, the Coalition strives

to maintain a 25% tithe for tobacco prevention and cessation programs,

even as others ignore tobacco and youth. It opposes a fiscal free-for-all,

as evidenced before the CoP’s House Appropriations Committee on

March 16, 2000. The Dean of the University of Pittsburgh Medical

School would fund the Human Genome Project (well-funded and almost

complete) claiming this would help identify potential nicotine addicts;

Dr. Sklaroff immediately testified this was “quite a stretch,” medically.

'S They obtained seriatim a Rule that scheduled a Hearing in Motions

Court before Judge Mary D. Colins and an Order that transferred the

proceedings to Judge John W. Herron, despite CoP/TI opposition.

—————————

The Settling Parties’ proposed statements of fact were

not disputed; instead, characterizations therein were rejected.

Appended to their brief were detailed descriptions of cases

that have been brought both in the CoP and elsewhere which,

if filed after approval of the MSA, would be subject to

dismissal (n.b., “release” or “intended beneficiaries” clauses)

or which, if successful, would recover not from the TI

defendants but from the CoP’s allocated funds (n.b., offset).

The Prayer for Relief sought approval of the MSA to be

contingent upon severing all these concerns regarding rights

of the Activists from any and all provisions of the MSA.

Instead of trying to block implementation of the MSA, the

intent was primarily to stop the CoP from mandating

Activists forfeit their civil rights at the TI’s insistence.

VI. The Trial Court Hearings and Opinion

During the Hearings, the Settling Parties opposed

intervention and asked the Court to approve the MSA. They

lauded both its unprecedented fiscal dimensions and its

potential sociological impact. Meanwhile, Dr. Sklaroff

introduced evidence demonstrating his interest in this case,

including his extensive history of action against the TI as a

citizen and taxpayer of the CoP. He also pointed out to the

Court the problems with the scope and operation of the

Release and Offset language; absent standing, however, he

noted inability to address all other constitutional problems.

The Settling Parties didn’t dispute his interpretation of

the MSA. The AG averred he lacked power to release the

claims of taxpayers and private attorneys general, and he

agreed Dr. Sklaroff had brought his petition in good faith.

Unlike the AG, the TI did not state its position, intent or

understandings regarding the Release and Offset clauses.

Neither Settling Party offered any explanation or estimate“as

to the value of the released claims (past, present or future),

the quid pro quo for dealing with a TI mired in litigation.

More than a year hence, these issues remain unresolved.

More than a year hence, other issues remain unclear’’.

The Opinion noted the MSA’s terms were complex “with

distinct qualifiers and limitations.” It never analyzed its

fairness, reasonableness and adequacy. The Opinion

concluded the Petitioners—including Dr. Sklaroff—lacked a

Legally Enforceable Interest [“LEI”] that would empower

them to question the Release & Offset'®. Yet, it didn’t cite

(let alone discuss) the Appendix to the Petitioners’ brief,

which listed a multitude of examples of such cases.

On the one hand, it recognized “this court is not

concerned with any technical defects in the activists’. . .

petition (such as its failure to attach a pleading as required by

Pa.R.C.P. 2328).” On the other hand, the existence of this

“curable technicality” yielded the view that, absent a filing,

the petitioners lacked a LEI and, thus, lacking standing.

The Petitioners had cited their concerns with sufficient

precision to convey what would be subject to future lawsuits.

This was deemed apt because the word “may” (a qualifier)

and not the word “must” was the operational term [Pa.R.C.P.

2327(4): “the determination of such action may affect any

LEI of such person, whether or not he may be bound by a

judgment in the action”). This was felt to reflect the need to

protect rights that could be invoked for the MSA’s lifetime.

'7 As an example, note this exchange (N.T., 1/8/99, page 58):

Herron: Does the MSA in any of its provisions prohibit the use

of seeking to enjoin certain conduct or activity assuming one would have

a right or standing to bring such injunction?

Attorney: | Assuming that you get-over any hurdles if they are

asserted with regard to the MSA and you can bring a claim, and I can ask

my colleagues again, but | do not believe that there are prohibitions on

that.

Herron: All right. I'll wait for that answer

'8 The Activists failed to cite “a single case in their petitions or

memoranda to assist the court in determining whether they have, in fact,

asserted a LEI.” .... The Activists cited “to no concrete harm other than

the potential (but as yet undetermined) effect of the release.” ...

Allegations that future claims would be subject to the MSA were termed

“hypothetical.” .... “On the present record, the petitioners fail to present

an actual case or controversy—a LEI—ripe for disposition.”

The Opinion noted the CoP had asserted it did not wish

to interfere with the Petitioners’ rights, but it also found

“discussion of their substantive constitutional rights would

be an advisory opinion’ without legal effect.” It ignored the

Petitioners’ warning that the TI could take advantage of the

inhibitory impact of this uncertainty on “disarmed” activists.

It cited PA Supreme Court precedent that concluded that

“the exact boundaries of the LEI limitation [of Pa.R.C.P.

2327(4)] are not clear. . .[and its application in a particular

~ case] “calls for the careful exercise of discretion and a

consideration of all the circumstances involved.” These

asserted interests were to be analyzed “within the context of

applicable rule and precedent”; this self-imposed task,

however, was inexplicably abandoned thereafter, and the

presumed absence of a LEI was deemed fatal to the petition.

Thus, responsibility for interpreting the MSA was punted

elsewhere [“at another court, at another time”]. This posture

afforded the Opinion a “NIMBY” [“Not In My Back Yard”]

quality that recurred when Judge Herron refused to address

an alleged violation of the MSA by the TI [vide infra},

precisely the LEI he had previously deemed indispensable.

“The effect of the MSA release provisions—if any—

cannot be determined except in the context of that future

proceeding. At that point, they would have ample oppor-

tunity to demonstrate why the release provisions do not

apply.” It failed to note that the MSA contains no provision

establishing procedures for any such intervention.

Ultimately, it cited the need to balance protection of

individual rights against avoiding unnecessary restraint upon

the AG in performing legitimate duties; the gravaman was

felt to be whether “the alleged harm is at best conjectural.”

The Opinion noted that, “it is thus not entirely clear

whether the Activists object to the offset provisions as a

denial of their constitutional right of access to the courts or if

they assert it is objectionable as ‘bad policy.’ ””°

" No “advisory opinion” had been requested, either orally or in the brief.

”° Activists had clearly asserted the former, without denying the latter.

SE————__-

This was viewed as inherently political and the recourse

advised for disputes regarding policy—not law—was,

presumably, inter alia to work against the AG’s reelection.

Finally, the Opinion eschewed any consideration of certi-

fying a class [Pa.R.C.P. 1702] due to inherent potential to

delay the proceedings [footnote #42]. Haste was preferable,

even if precedents such as the following were to be ignored.

In 1995, class action litigation was viewed broadly when

a district court was forced to make Rule 23 rulings [In_re:

General Motors Corporation Pick-Up Truck Fuel Tank

Products Liability Litigation. 65 Fed 3" 768]. And in 1996,

“inclusion of future claims” was felt to raise serious fairness

concerns regarding claims for asbestos-related personal

injury or wrongful death.” Georgine et al v. Amchem

Products, Inc. et al., 83 Fed 3610. Just as in the MSA, this

settlement didn’t afford victims any delayed opt-out rights.

The AG has mischaracterized this serious legal challenge

as a trivial assertion of non-existent rights intended to block

a comprehensive settlement benefiting the public health’.

He has turned his sword against those he had sworn to

protect”. The other activists withdrew, despite the facts that

these MSA monies were not yet available, that the appeal

filed by Allegheny County was pending, and that the TI has

donated $50 million for legal costs that totaled ~$10 million.

He pledged to enforce, the TI promised to obey; neither has.

no matter how onerous. Thus, individuals are often overwhelmed by the

sheer size of a menacing corporation, and tend to capitulate. Cynics refer

to “all the democracy money can buy,” but altruists point to the inability

to “buy happiness.” Intervenors are “irresistible forces” encountering the

“immovable objects” in the forms of Settling Parties. It is the role of

overnment—and, in this instance, the judiciary—to rectify these forces.

“' Ina March | letter, the AG threatened to force the activists to pay legal

costs plus 6% per annum of $11.2 Billion. This gross intimidation

threatened to obstruct justice by denying individuals constitutional access

to the courts, free speech, civil rights, and equal application of the law,

but the AG said it was a “friendly reminder.” As a result, the other

activists discontinued their appeals, rationalizing this “strategic retreat”

by arguing the lower court opinion would facilitate future enforcement.

VII. Philip Morris Financing of Wawa Billboard Ads

In April, 1999, Wawa Food Markets initiated a billboard

advertising campaign financed by PM, a “manufacturer

sponsored promotion.” A public outcry prompted the AG to

exert pressure on Wawa; the billboards were then removed.

Dr. Sklaroff filed litigation intended to fine PM for this

MSA violation and to enjoin PM from recidivism, but PM

claimed immunity under the MSA. ~ Sklaroff v. PM.

[Appendix E]. The billboards returned in December, and

another retailer (Sheetz) emulated this act in Western

Pennsylvania. Dr. Sklaroff filed litigation intended to force

the AG to enforce the MSA, but the AG claimed Dr. Sklaroff

had no standing to do so. Sklaroff v. Fisher. [Appendix F].

Thus, a dangerous precedent has been established and

validated in the CoP; a member of the TI can violate the

MSA’s “Third Parties” clause and escape enforcement. Yet,

although this scenario was predicted and occurred, the lower

court refused to allow the record to be supplemented (during

reconsideration) with data documenting this conduct. For

now, the TI is confident the AG will not enforce the MSA,

even as the public blindly assumes otherwise.

ARGUMENT SUMMARY & REVIEW STANDARDS

It is an abuse of discretion to deny Dr. Sklaroff standin

and to refuse to analyze and weigh the merits of the MSA”.

Dr. Sklaroff has standing as a Taxpayer according to the

Biester guidelines [487 Pa. at 443, 409 A.2d at 851 (1979)]

and due to his direct, substantial and immediate interest in the

outcome of the MSA approval process; his standing is both

personal and professional, mutually exclusive from the AG’s.

* Dr. Sklaroff, as the Petitioner/Appellant, is in a position to re-inspire a

dormant pursuit. The capacity for public health entities to pursue the

commonweal is on life-support; if it succumbs, it will become virtually

impossible to aid the general public. The MSA is known to be deficient,

but many of Dr. Sklaroff's colleagues view this legal fight as quixotic.

The Court is obligated to examine, consider and study

the MSA, including the terms of Release and the impact of

the Offset. According to court rules, such analysis is

unambiguously required for settlements of class actions and

claims for minors, incompetents and incapacitants.

Had the Court performed its duty, it would have found

the Release and Offset clauses were improper and unlawful.

The Release purports to waive claims that cannot be waived,

and the Offset gives away what the AG has no authority to

relinquish. It would also have found that the MSA

improperly limits the fundamental capacity of citizens to

seek injunctive relief. This matter is currently “ripe,” and

Dr. Sklaroff has Legally Enforceable Interests therein, amply

manifest in two CoP courts (Commonwealth & Superior).

The AG must stipulate what he has admitted; he has

denied he can indemnify, and he has averred he would limit

the ability to invoke the offset provision indiscriminately.

The essential remedy is remand to the Trial Court to

establish that Dr. Sklaroff and other Petitioners have LEI’s,

thereby affording an opportunity to acquire the necessary

declaratory relief. In the alternative, this Court could itself

act in its primary jurisdiction to declare the release and offset

clauses ultra vires, stricken, or satisfactorily modified. The

chance to study its “fairness, reasonableness and adequacy”

will never again arise, either in the CoP or nationally.

The question of intervention is a matter within the sound

discretion of the trial court and, unless there is a manifest

abuse of such discretion or an error of law was committed,

its exercise will not be interfered with on review. Keener v.

Zoning Hearing Board of Millcreek Township, 714 A.2d

1120 (Pa. Cmwith. 1998) See also, Wilson_v. State Farm

Mutual Automobile Insurance Company, 512 Pa. 486, 517

A.2d 944, 947 (1986). Discretion is abused if, in reaching

a conclusion, the law is overridden or misapplied or the

judgment exercised is manifestly unreasonable or is the

result of partiality, prejudice, bias, or ill will. Van Dine v.

Gyoriska, 522 Pa. 122, 713 A.2d 1104 (Pa. 1998).

The scope of review of a question of law is plenary.

Wojdak_v. Greater Philadelphia Cablevision, Inc., 550 Pa.

474, 707 A.2d 214 (1998); Tomaskevitch v. Specialty

Records Corporation, 717 A.2d 30 (Pa. Cmwith. 1998).

When the issues on appeal present questions of law, the

court’s scope of review is plenary. Skipworth by Williams

v. Lead Industries, Inc., 547 Pa. 224, 690 A.2d 169 (1997).

Dr. Sklaroff must be granted standing because he is a

taxpayer and because has legal and equity interests justifying

intervention (i.e., that are substantial, direct and immediate).

He has an interest in the outcome of the suit that surpasses the

common interest of all citizens in procuring obedience to the

law, but which is asserted in the present/future public interest.

I. The petitioner—functioning as a citizen, taxpayer,

father, activist, physician, private AG and

litigant—should not be deprived of standing to

intervene prior to final approval of the Master

Settlement Agreement between the Tobacco

Industry and the Commonwealth of Pennsylvania,

under _state_and federal law, based upon _his

current and _ future civil and due-process

constitutional rights.

Both the judicial and executive branches of CoP

government have concluded Dr. Sklaroff merited standing

based upon facts and averments identical to those herein.

Commonwealth Court granted Dr. Sklaroff standing (with

the organization he served as President, the PA Society of

Internal Medicine)—pursuant to efforts to reverse merger of

PA Blue Shield and Blue Cross of Western PA**—because

he was elected (by his peers) to be a Corporate Member of

Blue Shield and was a provider (and insured) thereof”.

These facts indisputably elevated him over the “public.”

This would be the CoP’s largest health care organization consolidation.

** He alleged they have a monopoly/monopsony and have abrogated their

Social Mission, a pattern of conduct that has intensified from 1996-2000.

They proved he had a “direct” interest in the outcome of

this matter. Philadelphia County Medical Society, et al. v.

Pennsylvania Insurance Department. No. 3309, C.D.

(Pa.Cmwith. 1996). This view was sustained by the CoP

Insurance Department, pursuant to an Order issued on

January 14, 19997°. Application of Medical Service

Association of Pennsylvania d/b/a Pennsylvania Blue Shield

et al. Docket No. MS96-04-098. It remains operational.

The CoP recognized the expertise & experience afforded

by the activists throughout the City Hall proceedings, in the

courtroom and outside in the corridor; the AG “needs” them.

Thus, the activists merit being granted full standing to

address the MSA at this time, just as the PSIM was granted

full standing to address the Blues consolidation. Dr. Sklaroff

cannot exert the interests of all activists; rather, he

anticipates remand would trigger a process comparable to

that which occurred with regard to the Blues: the lower court

would issue a public invitation to other putative intervenors.

a. Dr. Sklaroff has the capacity to seek relief on

behalf of and/or generally applicable to the

general public by filing a taxpayer lawsuit.

Dr. Sklaroff also warrants standing under the Biester

taxpayer exception. Under this exception, the taxpayer must

show: (1) the governmental action would otherwise go

unchallenged; (2) those directly and immediately affected by

the complained-of expenditures beneficially affected and not

inclined to challenge the action; (3) judicial relief is

appropriate; (4) redress through other channels is unavailable;

and (5) no existence of other persons better situated to assert

the claim. Biester, 487 Pa. at 443, 409 A.2d at 851 (1979).

25 The PA Society of Internal Medicine [“PSIM”], Dr. Sklaroff and the

PA Medical Society are full parties before the PA Insurance Department,

which initiated the process of holding full adjudicatory adverse-party

public hearings in March, 1999; two other entities are amici curiae.

ste Te

et hg I cil na ot A PMO BE MOET ES

The relevant public policy ensures taxpayers are able to

seek judicial oversight. [Biester, 409 A.2d at 851 n.5.]

Commonwealth Court granted standing to “taxpayers or

organizations that represent Philadelphia taxpayers” at

zoning hearings who wish to discuss billboards. Society

Created to Reduce Urban Blight (SCRUB) ef al. v. Zoning

Board of Adjustment of the City of Philadelphia et al. (4/5/99).

The pending issue involved more than a government contract,

just as is the case with a court-approved lawsuit settlement;

thus, the settling parties can’t finesse dealing with intervenors.

Unaddressed but recognized were two additional reasons

for granting standing: “zone of interest” and “private AG.”

The former cited Ken R. v. Arthur Z., 546 Pa. 49, 682 A.2d

1267 '(1966) & Jefferson Bank v. Newton Associates, 686

A.2d. 834 (Pa. Superior Ct. 1966).

Regarding the Private Attorney General issue, Jones v.

Muir, 511 Pa. 535 A.2d 855 (1986) was cited. This party

was defined as one “who may not carry a direct, substantial

or immediate interest in the subject matter of the litigation,

[but who] may be conferred with standing because he shares

a common interest with citizens or taxpayers in general.”

A recent (4/3/2000) ruling in San Diego, California’

noted that standing as a private-AG was readily and fully

available under the “Business and Professions Code.”

Daniels et al v. Philip Morris, et al, [SDSC Case # 719446].

Biester has been broadly applied. Consumer Party of Penn-

sylvania v. Com. of Pennsylvania, 507 A.2d 323 (Pa. 1986);

Sprague v. Casey, 550 A.2d 184 (Pa. 1988); Rizzo v. City of

Philadelphia, 528 A.2d 1128 (Pa.Cmwith. 1990); League of

Women Voters of PA et a/ v. Commonwealth of PA et al. 692

A.2d 263 (Pa.Cmwith. 1997); Building Industry Ass’n_v.

Manheim Township. 710 A.2d 141 (Pa.Cmwith. 1998).

*” “Unfair competition shall mean and include any unlawful, unfair or

fraudulent business act or practice and unfair, deceptive, untrue or

~ misleading advertising.” § 17200, et seq.””. Comparable statutes exist in

the CoP, such as the UTPCPL (73 P.S. § 201-4) that authorizes the AG to

seek injunctive relief to enjoin fraudulent trade practices.

Dr. Sklaroff meets the five-prong Biester exception,

noting demonstrated ability to utilize all available resources to

accomplish profoundly important goals and objectives.

The first prong has been borne out by the chronology of

events; public health facets of the CoP’s settlement of this

lawsuit with the TI would have gone unchallenged but for

Dr. Sklaroff’s challenge. Dr. Sklaroff inter alia wrote and

filed this suit; recruited endorsements from two organized

medicine entities”’; and strained long-term personal relation-

ships as he continues to pursue this public-interest Appeal.

As to the Second prong, those directly, immediately and

substantially affected by the settlement thereof (the CoP

and the TI) are beneficially affected and aren’t inclined to

challenge the agreement or police future behavior. To the

contrary, the Settling Parties seek approval of the MSA that

will thereby curtail the CoP’s monitoring. Certainly, the TI

lacks a record of trust over the decades (n.b., publication of

embarrassing scientific “data”) and years (n.b., publication of

damning internal memos); rogue corporations do not abandon

patterns of misconduct, thus requiring vigorous regulation”

Legislatively, the CoP has earned a poor grade in the

annual state-by-state assessment issued by the CDC,

exemplified by its failure in 1996 to implement a state-wide

Youth Access Program (despite lobbying from the Coalition).

Administratively, the CoP Health Department has much

unfinished business, such as issuance of formal regulations

implementing the 1988 Clean Indoor Air Act and release of a

half-decade remote Youth Survey (encompassing knowledge,

attitudes and behavior). Presently, attention has been shifted

(by the public health community, legislature and Governor)

towards how tobacco settlement monies should optimally be

spent; although Dr. Sklaroff has provided testimony in that

regard, only he pursues the ongoing concern with repair of

fundamental defects in the MSA that others (who may

privately acknowledge his veracity) have abandoned.

*? The PSIM & The Philadelphia County Medical Society endorsed it.

*® The CoP has shown little interest in probing such abuses in the past.

eee

As to the third prong, judicial relief is appropriate,

inasmuch as the dispute between the CoP and the TI was

pending in court and, further, that the Settling Parties

submitted the MSA to the court for its formal approval. Thus,

the Trial Court must assess prospectively the propriety of the

document it will administer thereafter’.

As to the fourth prong, no procedure is now available to

Dr. Sklaroff through which he might directly challenge

implementation of the MSA. Even were he to win his other

two cases, the MSA’s onerous clauses would not be disturbed.

As to the fifth prong, no other persons/entities are better

situated to assert this claim. Dr. Sklaroff is a medical

oncologist, treating tobacco-diseases on a daily basis; he has

devoted his professional life towards anti-tobacco pursuits’.

Thus, Dr. Sklaroff meets the five-prong Biester test, and

he has LEI’s that afford him the right to intervene. He

satisfies these criteria in ways identical to those previously

sustained as having justified being granted party status. He

wants only what exists in the first four settling states:

Pennsylvanians should now be empowered to improve

problematic clauses in the MSA, and the only way they will

be able to do so will be by pursuing the instant litigation

through the courts. He has standing because, otherwise,

neither government nor activists will be able to ensure the TI

obeys the law (generally) and the MSA (specifically)*.

* The Settling Parties failed to identify any facet of the MSA they admit

must be subject to prior judicial approval; this is predictable for—if they

had their way—it would be rubber-stamped without any need for review.

»° These started during his medical oncology fellowship at the Memorial

Sloan-Kettering Cancer Center (1977-1979) and have continued unabated

in all available forums (public and professional) since that time.

*' The Settling Parties act as if they have suddenly discovered the

“emergency” of the tobacco abuse epidemic (tenaciously, loudly and

robustly ignored by the TI over the decades). Evidence of public health

damage emerged in the medical/lay media more than a half-century ago,

led to annual reports issued by the U.S. Surgeon General starting in 1964,

and reached generalized public consciousness during 1994 House and

1998 Senate Hearings. And the Government must recognize that the

need to fund Tobacco Control isn’t contingent on the MSA’s existence.

b. In addition to his Wawa cases against PM and the

CoP AG, Dr. Sklaroff can articulate two causes-of-

action based upon tax-related implications of the

MSA justifying a taxpayer suit.

These causes-of-action are as follows. One would block

‘the Tobacco Industry from making settlement monies tax-

deductible. The second would block the Tobacco Industry

from invoking Section X [‘Effect of Federal Tobacco-Related

Legislation”] to invoke “a continuing dollar-for-dollar offset”

against the annual payments by the TI to the state were

Congress to increase excise taxes, as the MSA depicted in

complicated legal language.

te Dr. Sklaroff has the legal right to seek relief on

behalf of and/or generally applicable to the

general public by filing generic litigation.

The Petitioners’ Brief cited numerous causes of action—

both in the CoP and throughout America—which could be

and have been filed in the CoP against the TI. Dr. Sklaroff

could serve as the plaintiff in these cases, all of which have

passed muster as causes-of-action, or in a consultative role.

Cited are the following cases: Mangini v. R. J. Reynolds

Tobacco Company, ef al., 875 P 2d 73 (Cal. 1994);

Allegheny General Hospital, et al v. Philip Morris. Inc., ef

al., Court of Common Pleas of Allegheny County, Civil

Division GD No. 98-018956 (1998); Reverend Jesse Brown,

et al. v. Philip Morris, Inc., et al, U.S. District Court for the

Eastern District of PA, Civil Action No. 98-5518; Sweeney,

et_al. v. American Tobacco Company, ef al, Court of

Common Pleas of Allegheny County, No. 98-16226;

McNamara, et al., Court of Common Pleas of Montgomery

County No 98-13501 [removed to federal court]. Additional

cases dealing, for example, with nicotine addiction and with

antitrust matters might also prompt acquisition of input from

a physician-activist whose work is distinct from the “public.”

d. Constitutional Concerns.

Blocking Dr. Sklaroff and the Activists from intervening

denies them due process (under the 1, S" and 14" Amend-

ments) and equal protection (under the 14 Amendment and

the PA Constitution’s Declaration of Rights).

In the latter (Article I), for example, Section 1 deals with

the Inherent Rights of Mankind, Section 20 deals with the

Right of Petition, and Section 25 deals with Reservation of

Powers in People. The class action and civil rights of many

future putative litigants have been violated in this matter.

As anticipated, a federal court filing by PM on 3/31/99

raised the MSA as an affirmative (11") defense for present

and future actions. Blue Cross/Blue Shield of. New Jersey,

Inc. et al. v. Philip Morris, Inc. et al., Civil Action # 98-3287

US District Court for the Eastern District of New York.

PM also invoked the MSA in its Preliminary Objections to

the current filing against the Wawa Billboard Advertising.

Il. The petitioner’s litigation against one member of

the tobacco indust constitutes a_ legal

enforceable interest, representing a case or

controversy that continues to be ri for

adjudication and that reflects a direct, substantial

and immediate interest in the Agreement

sufficient to merit being conferred standing.

The litigation against PM for having financed the Wawa

Billboard Advertisements was opposed by PM due inter alia to

the MSA’s immunity clause. It was viewed, however, as moot

by the Trial Court because the billboards had been removed.

Although the ads reappeared prior to final adjudication of the

case, the judge inexplicably refused to reconsider. Therefore,

Wawa and PM have clearly not foresworn this conduct.

This observation is supported by two additional facts.

First, Sheetz has pursued comparable behavior in Western

Pennsylvania, despite the AG’s jawboning.

Indeed, the TI’s financing of billboard advertising is a

national phenomenon, but the CoP AG has failed to attempt to

enforce the MSA’s clear, multiple proscriptions thereupon,

particularly as they relate to contractual obligations.

In addition, multiple additional violations of the MSA’s

restrictions on youth advertising were reported to his office,

raw information that would be easy to confirm and prosecute.

This is also why the AG has been directly sued; he must be

forced to fight the TI, even as he blocks others from doing so.

Thus, the Wawa case is, has been, and will remain ripe.

One cannot depend on potential litigation to settle key

MSA-related issues, letting controversies remain unresolved;

for example, if the MSA waived all citizens’ rights to trial by

jury or to retain counsel, the issue sui generis would be ripe.

Ill. Granting standing to the petitioner would inter

alia_yield the required judicial review of the

Master Settlement Agreement’s Immunity and

Offset Clauses which, putatively, _are—

individually and _ in the aggregate—ultra vires,

overly broad, complex, excessively ambiguous,

and inconsistent with public policy.

The Court was required to weigh the merits of the MSA to

ensure it was fair, reasonable and adequate. In re:_Washington

Public Power Supply System Sec. Litig , 720 F.Supp. 1379,

1387 (D.Ariz. 1989), aff'd Plaintiffs v. City of Seattle, 955

F.2d 1268 (9" Cir. 1992, cert. Denied, 506 U.S. 953.

Its failure to do so was a manifest abuse of discretion and

error of law. The AG brought this action in his official and —

representative capacity “pursuant to his authority under 71

Pa.C.S. 732-204, 73 Pa.C.S. 201-204 and 73 Pa.C.S. 201-208

and in parens patriae on behalf of the citizens of Pennsylvania.

including its children and adolescents, to protect their health

and welfare, and to recover damages the Commonwealth and

its citizens have sustained as a result of the unlawful and

concerted action of the defendants, as well as injunctive relief.”

a. The Trial Court failed to analyze the MSA.

The court should conclude that the settlement secures an

adequate advantage for the class in return for the surrender of

litigation rights. As with valuation problems in general, there

will usually be a difference of opinion as to the appropriate

value of a settlement. For this reason, Judges should analyze a

settlement in terms of a “range of reasonableness.” H.

Newberg, Newberg on Class Actions, 5610b (1977) [See also,

Buchanan v. Century Fed. Sav. & Loan Ass’n, 259 Pa.Super.

37, 393 A.2d 704, 709 (1978); also see Prince George Center,

Inc. v. U.S. Gypsum Co. 704 A.2d 14] (Pa.Super. 1997).]

In evaluating such settlements, CoP courts are required to

consider many factors, even if intervenors don’t raise them:

(1) the risks of establishing liability and damages,

(2) the range of reasonableness of the settlement in

light of the best possible recovery,

(3) the range of reasonableness of the settlement in

light of all the attendant risks of litigation,

(4) the complexity, expense and likely duration of

the litigation,

(5) the stage of the proceedings and the amount of

discovery completed,

(6) the recommendation of competent counsel, and

(7) the reaction of the class to the settlement.

[Girsh v. Jepson, 521 F2d 153 3“ Cir. 1975).]

The Trial Court failed to consider any such criteria prior to

approving the MSA, blindly (and erroneously) accepting the

AG’s judgment”. “The courts and not the Attorneys General

are the final arbiters of the legality of contracts.” Watrel v.

Commonwealth, Dept. of Education, 518 A.2d 1158 Pa. 1986).

One must “determine whether implementing a settlement is in

the best interest of those whose claims will be extinguished.”

Newberg on Class Actions, section 11.40 (1985).

* Indeed, “An application for intervention may [not “must”] be refused if

‘the intervention will unduly delay, embarrass or prejudice. . .

adjudication of the rights of the parties’ ” [Pa.R.C.P. 2329(3)].

Instead of analyzing the MSA, however, the courts

honored the AG’s desire for speedy approval. Through

exchanges of briefs during the past year, the AG failed to

challenge this portrayal of Dr. Sklaroff’s perspective:

“Sklaroff argued that the Attorney General does not have the

authority to release all future claims by anti-tobacco

activists.” Yet, the AG has refused to explain why he

refused to offer a stipulation foreswearing his admitted

inability to halt public-interest litigation” .

b. q 1 (pp) must be struck from the MSA.

The CoP Constitution states the AG “shall be the chief

law officer of the Commonwealth and shall exercise such

powers and perform such duties as may be imposed by law.”

[Article IV] He is not empowered to preclude the filing and

prosecution of lawsuits initiated by persons or entities acting

in any capacity (e.g., parens patriae, sovereign, quasi-

sovereign, private attorney general, qui tam, taxpayer)”.

33 The haste to approve the MSA in the CoP was patently political, as

well. First, the City of Philadelphia filed a brief that raised two concerns

that were unsatisfied, but that led to no further legal action. (It stated the

defendants had “an obligation to file a petition for interpleader to bring

the City of Philadelphia into the case as a party,” and it averred “the

Court should require the parties hereto to clarify their position on the

scope of the release.”) Second, the County of Allegheny (Pittsburgh)

precipitously dropped its appeal, according to a published account

written by its lead-counsel, after Governor Tom Ridge threatened to slash ~

funding for its airport. (The Commonwealth Court permitted this to

occur absent submission of a proper application—violations of procedure

detailed by Judge Kelley—but the PA Supreme Court denied Dr.

Sklaroff’s Petition for Review of this particular issue.) Third, journalists

have been told that the AG rationalized not suing against the billboards

because he feared loss would create adverse precedent [personal

communication]; yet, such reticence persists following the filing of

litigation that would compel him to do so. [Most everyone became

mesmerized by power to spend a “wind-fall,” as the TI had anticipated. ]

34 The MSA would have the AG waive rights he was sworn to defend and

enforce. He cannot reverse judicial decisions (protecting citizens’ rights

to sue) or rescind state legislative actions (authorizing qui tam filings).

A. spokesperson for the AG told a reporter that this suit

is moot because the MSA did not preclude the Coalition’s

right to sue the TI. “Attorneys general can waive the rights

of other parties in certain states, such as New York*4, [Press

Secretary Sean] Connolly said, ‘But Pennsylvania law does

not allow us to do that.’ ” This sentence could be stipulated.

C. q XII (b) must be struck from the MSA.

The AG’s civil litigation powers (“. . .to collect by suit or

otherwise all debts, taxes and accounts due the

Commonwealth. . . .”) do not include the right to waive

claims of unknown value. 71 Pa.C.S. 732-204 (c).

Nevertheless, the Offset indemnifies the TI from all claims

by taxpayers and “other persons,” even if the AG does not

have authority to release those claims.

The AG is the CoP’s chief consumer law officer,

responsible for enforcing the consumer laws and appointing

& overseeing a consumer advocate. 71 Pa.C.S. 732-201. He

has specific and unique enforcement obligations under the

PA Unfair Trade Practices and Consumer Protection Law.

73 Pa.C.S. 201 et seq. The Offset, however, places the AG

on the wrong side of the battlefield, inasmuch as the AG will

now have an $11 billion “incentive” to oppose consumer

actions against the TI, lest they result in judgments that will

reduce the CoP’s annual income through the MSA. The

Opinion, quoting the CoP, asserts: “The MSA did not

require the AG to intervene on behalf of the TI ‘nor would

he have any reason to do so.’ ” Indeed, the AG would be

forced to honor the Offset, “which consent shall not be

unreasonably withheld,” according to the MSA (vide supra);

ignored is its obvious monetary incentive to support the TI.

™ Cursory review of the New York State Constitution (Article V) did not

yield language that could be compared/contrasted with that of the CoP:

nevertheless, this is a stand-alone quotation that is consistent with what

had been stated during oral argument [vide supra] and with what Dr.

Sklaroff has sought. The AG only avers a stipulation is “unnecessary.”

The Offset Provision is complex, unprecedented,

overly-broad, inherently vague, unprecedented,

unconstitutional, inconsistent with public policy, and

ultra vires, and it excessively empowers the AG.

The AG is not merely indemnifying the TI for claims

filed by people/entities he controls. The AG is immunizing

the TI for claims filed by people and taxpayers over whom

he has no power. Thus, were awards to other persons to total

$11.2 billion, the CoP would receive no money from the

TI through the MSA. [It’s capitated!] Therefore, the offset

creates an unholy alliance between the Settling Parties that is

contrary to the AG’s statutory duties and responsibilities.

Illustrative of how the Offset is already determining the

CoP’s conduct is an observation of the governor’s

Secretary of Administration on March 5, 1999, Mr. Tom

Paese. He asserted Allegheny County should lobby for its

“fair share” rather than pursue RICO litigation to attain it,

adding: “A separate settlement for the county simply would

be taken from the funds the state already is set to receive.”

PM has also tried to deduct a punitive damages award

(based solely on an individual’s case, overtly excluded from

the MSA) to Oregon from the annual allocated payment.

Invoking the Offset Provision is now documented, and it

must be clarified—on behalf of the citizenry—through

stipulating the MSA. This concern clearly is not speculative.

The AG must stipulate what he avers publicly and in briefs.

IV. Granting standing to the petitioner_would inter

alia yield the required judicial review of the lack

of an evidentiary justification for the Master

Settlement Agreement’s denial of future rights of

youth—putatively, the class of individuals for

whom the _ litigation had been filed—to seek

redress.

36 In addition, the CoP should not have attacked the existence of the

Allegheny County RICO filing, for any comment thereupon should have

been strictly legal in focus and manifest as an official court filing.

As noted previously, the financial implications of the

MSA were not addressed through the judicial process, and

estimates as to the current economic risk faced by the TI

(perhaps in the hundreds of billions of dollars) in the Engle

case (in Florida) illustrate why this issue must be faced.

Commonwealth Court Judge Kelley dissented “with

respect to the majority’s order discontinuing the above-

captioned appeals” [the plural includes this case] because:

The record in this case is absolutely devoid of

any evidence establishing the damages suffered

by the Commonwealth through its agencies,

departments, com-missions or divisions, and its

67 counties, and its various municipalities, cities,

boroughs, townships, entities, instru-mentalities

and educational institutions. Thus, from this

record, there is absolutely no way to determine

the adequacy or appropriateness of the proposed

settlement in this case. In the absence of any

evidence to support this determination, the trial

court was absolutely precluded from possessing

the sufficient necessary information to permit an

intelligent decision prior to accepting and

endorsing settlement in this case.

In conclusion, it is clear to me that a trial court

may not place its judicial imprimatur on a

proposed settlement and consent decrees, and

order the entry of judgment thereon, where the

record utterly fails to demonstrate that it is a just

and fair resolution to the matter. This is

particularly so where the proposed settlement and

consent decrees are of such a broad expanse, so

absolutely preclude future claims and liability,

and may never be altered or amended in any

manner by the court. To my mind, the entry of

judgment based on such a speculative and

conjectural predicate affecting such significant

rights must surely constitute an error of law.

CONCLUSION

Dr. Sklaroff has a Legally Enforceable Interest in the

unprecedented MSA, inter alia due to his capacities to pursue

a wide range of public interest litigation, to file a taxpayer

lawsuit, and to function in parens patriae on behalf of his son.

Far from “moot,” his pending litigation has been prescient.

He and other activists merit standing, so that they can

elucidate clauses in the MSA that require stipulation. The

Releasing Parties clause must exclude activists; the Offset

clause is procedurally unfair, unreasonable, unconstitutional

and inadequate to Pennsylvanians. The AG isn’t empowered

to immunize the TI, to countenance use of the offset, or to

deprive citizens of civil (due process, constitutional) rights.

Abuse of discretion has been documented related both to

these specific concerns and to the generic concerns raised by

the absence of Trial Court analysis of the intentionally-vague

MSA: it is not fair, reasonable or adequate for the CoP’s youth.

These remedies may be achieved through remand (to study its

scientific, legal and ethical implications) or through direct

intervention by the Court. The MSA is misconstrued as a

“useful first step” in achieving decreased tobacco use in

America and around the world; indeed, it threatens to

become “the last word” in meaningful smoking cessation,

for the TI will have achieved de facto indemnification.

The Settling Parties are attempting to “have it both ways”

for they deny the public any power to enforce the MSA,

even as the TI violates it and the AG fails to investigate.

These arguments appear in briefs (filed in the year 2000),

despite solemn promises they would act responsibly (issued

in the year 1999). They misportray the MSA as a contract,

when it is a court-approved resolution of a class-action suit.

For these reasons, Robert B. Sklaroff, MD possesses

standing to appeal from the Order of Dismissal of his

Intervention Petition and, thus, requests remand of the MSA to

the Philadelphia Court of Common Pleas in the CoP.

Respectfully submitted,

pert B.SkLaag’, “0

Appendix

Philadelphia Court of Common Pleas Opinion

Pennsylvania Commonwealth Court Opinions

Pennsylvania Supreme Court Order

Pennsylvania Intervenors’ Brief

Sklaroff v. Philip Morris Incorporated

Complaint and Key Preliminary Objections

Sklaroff v. Fisher

Complaint, Key Preliminary Objections, Response .. 139

Appendix A

Philadelphia Court of Common Pleas Opinion

[The “footnotes” have been transformed to “endnotes”;

references to the original pagination have not been retained.]

RECEIVED

FEB 26 1999

CIVIL ADMINISTRATION

IN THE COURT OF COMMON PLEAS

OF THE FIRST JUDICIAL DISTRICT OF

PENNSYLVANIA

CIVIL TRIAL DIVISION

Commonwealth of Pennsylvania,

by Michael Fisher,

in his official capacity as Attorney General

of the Commonwealth of Pennsylvania

Philip Morris, Inc. et al.

April Term 1997

No. 2443

Memorandum Opinion

|. Introduction

On January 13, 1999, this court approved Consent

Decrees and Final judgments presented by the Common-

wealth of Pennsylvania and various Defendant Tobacco

Manufacturers to settle and end their landmark lawsuit. This

court also denied petitions to intervene by a group of

hospitals, Allegheny County, and various private anti-

tobacco activists and organiza- tions filed shortly after the

settlement agreement was announced in November 1998.

Paradoxically, some of the petitioners stated that they

neither opposed the settlement nor sought to participate in it.

Rather, they asked this court for an interpretive opinion on

whether any future claims against the tobacco defendants

could be barred or affected by the release provisions in the

settlement agreement (the Master Settlement Agreement or

MSA). Alternatively, other petitioners asked this court to

delete language from the MSA’s release provisions despite

protests from the Commonwealth, that such revisions might

jeopardize the settlement agreement as to Pennsylvania and

result in its exclusion from the monetary and non-monetary

benefits of the settlement. [1]

Significantly, except for the group of hospitals, all of the

other petitioners requested an interpretive opinion without

having filed a claim against the tobacco defendants.

Moreover, the activists and Allegheny County asserted

broad, anticipatory policy arguments against the indemni-

fication scheme within the MSA. They argued, for instance,

that it would force the state to come to the defense of the

tobacco industry, thereby pitting it against future claims by

the activists and Allegheny County. These broad public

policy arguments—as distinguished from constitutional

arguments or arguments premised on case law or statutes

arising in an actual case oF controversy—did not present

justiciable standards for court review on the record presented

by the petitioners.

These petitions thus were not based on an actual case or

controversy but sought instead an advisory opinion despite a

longstanding tenet of jurisprudence against providing them.

See generally Gabel v. Cambruzzi, 532 Pa. 584, 616 A.2d

1364, 1369 (1992) (where court lacks sufficient facts to issue

anything but an advisory opinion it “will not break its

tradition of refusing to author advisory opinions”); Milton

Hershey Medical Center v. Doe, M.D., 407 Pa. Super. 565,

595 A.2d 1290, 1293 (1991), aff'd, 535 Pa. 9, 634 A.2d 159

(1993), quoting Okkerse Vv. Howe, 521 Pa. 509, 556 A.2d

827. 833 (1989) (an advisory opinion is without legal

effect); Suehr v. State Ethics Commission, 1994 Pa. Cmmw.

LEXIS 670, 651 A.2d 648, 649 (Pa. Cmwith. 1994), alloc

denied, 541 Pa. 647, 663 A.2d 697 (1995) (where no case or

controversy exists, a court should not render an advisory

opinion). |

The only petitioners who had an actual claim pending—

the group of hospitals—had filed their complaint in

Allegheny County shortly after the settlement was

announced. Any ruling on the impact of the MSA on this

claim is both premature and more appropriately decided by

the presiding judge in that litigation if, and when, the MSA

release provisions are raised.

The precise legal issues raised by these petitions must be

carefully defined. The petitions of the activists and

Allegheny County, for instance, raise the following issue:

Did the petitioners establish a “legally enforceable interest”

to intervene in the final, settlement stages of the

Commonwealth’s highly innovative—but risky—lawsuit

based on their concern that the MSA might affect their future

(but yet unfiled) actions against the tobacco defendants. The

petitioners ultimately failed to establish such an interest

because their claims do not present a case or controversy ripe

for disposition. The record created during the intervention

hearing and in the memoranda as to the inherent limitations

within the releases might, however, ultimately prove

useful—although a determination of the actual scope of these

releases must await an actual case or controversy. There

was, moreover, no dispute that the releases would not affect

the rights of individuals who suffer tobacco related injuries

from bringing legal actions against the tobacco defendants to

recover for those injuries. [2] Furthermore, _ the

Commonwealth and tobacco defendants indicated that the

release would not bar such other claims as requests for

injunctive relief. [3]

Several of the petitioners have filed appeals of the orders

denying their intervention. The following opinion is

therefore entered to address the many concerns and issues

raised by the petitioners and to explain the denial of the

intervention petitions.

Il. Procedural Background

After months of negotiations, [4] forty-six states, the

District of Columbia and five territories on November 23,

1998 executed [5] two agreements to settle their nationwide

lawsuits against tobacco manufacturers—the Master

Settlement Agreement (MSA) and the Smokeless Tobacco

Master Settlement Agreement (STMSA). [6] In signing these

agreements, the Commonwealth of Pennsylvania, through its

Attorney General D. Michael Fisher, resolved to end the

lawsuit it had filed in April 1997 against various tobacco

manufacturers, their public relations agency and the three

trade associations created by them (hereinafter “tobacco

defendants”). [7]

The MSA required each settling state to file a consent

decree with its appropriate state court. [8] Consequently, on

December 11, 1998, the Commonwealth and tobacco

defendants [9] filed Joint Motions to approve the settlement

and consent decrees. Before and after this joint motion was

filed, petitions to intervene were filed by individuals and

organizations (hereinafter “Petitioners”) representing a Cross-

section of interests: private anti-tobacco activists and

organizations; not-for-profit hospitals that had filed a

complaint against tobacco manufacturers seeking recovery

inter alia, of unreimbursed healthcare costs of Medicaid

recipients [10], and Allegheny County. In addition, the City

of Philadelphia filed an amicus brief to assist the court in

evaluating the MSA. [11] A common bond among these

petitioners was an assertion that they did not oppose the

MSA in general [12]; they were, however, deeply concerned

that release and offset provisions within the MSA might

stifle or destroy their right to bring effective legal actions

against the tobacco defendants in the future—even though

the petitioners were not signatories to the settlement

agreement.

The issues raised by the petitioners—whether they

should be granted leave to intervene because release

provisions in the MSA might affect any future action against

the tobacco defendants—were serious. During the

intervention hearings that were held on two separate days,

this court sought to raise and address the concerns raised by

the petitioners. Ultimately, upon consideration of the

testimony at the hearings, the documents submitted by all

parties and petitioners, and the relevant precedent, this court

concluded that the petitions to intervene should be denied for

the reasons set forth below as to each petitioner.

Ill. The Settlement Agreement [13]

The Master Settlement Agreement negotiated by the

Commonwealth and tobacco defendants is massive and

complex, numbering 147 pages with 21 exhibits. In

presenting this agreement, the Commonwealth and tobacco

defendants emphasize that it will provide the following relief

resulting in “far-ranging changes in the tobacco industry’s

business practices, advertising and marketing:

* Prohibits the direct or indirect targeting of

minors in the advertising, promotion, or

marketing of tobacco products.

* Bans use of cartoons in advertising,

marketing, and packaging.

* Restricts brand name sponsorships.

* Removes and bans all tobacco billboards.

* Removes and bans all transit tobacco

advertising.

* Bans payment for product placement in

movies as well as in television shows,

theatrical performances, live theater,

recorded performances, and video games.

¢ Restricts distribution of free samples to adult-

only facilities.

¢ Requires proof of age for distribution of free

gifts.

¢ Restricts the use of brand names by third

parties and requires tobacco companies to

enforce their trademarks.

* Bans the use of nationally recognized brand

names as names of future tobacco

products.

¢ Establishes a minimum pack size of 20

cigarettes until December 31, 2001 ....

* Dissolves the Tobacco Institute, The Council

for Tobacco Research, and the Council for

Indoor Air Research, and mandates that

future trade associations do not act like

those of the past.

¢ Restricts lobbying against laws that limit non-

tobacco products that look like tobacco

products (e.g. bubble gum).

¢ Establishes a user friendly searchable web site

of all industry produced documents.

¢ Establishes a counter-advertising fund and

education foundation of at least $1.45

billion, which includes $250 million to

fund the study of youth smoking.

* Establishes a $50 million enforcement fund

with the National Association of

Attorneys General.

Conmonwealth’s Settlement Memorandum at 3-4.

These concessions by the tobacco defendants, the parties

assert, are a major accomplishment because they exceed the

kind of injunctive relief that this Court would have been able

to extend in light of First Amendment and other constraints.

Id. at 4. Indeed, the difficulties in limiting tobacco

advertising even when aimed at minors was demonstrated

recently by a Federal District Court Judge’s decision to strike

down a New York City Ordinance entitled the “Youth

Protection Against Tobacco Advertising and Promotion

Act.” This law limited, inter alia, outdoor advertising for

tobacco products in the vicinity of schools, playgrounds and

other places children gather. The court struck down this local

law on federal preemption grounds without even reaching

the thorny First Amendment issues. Greater New_York

Metropolitan Food Council, Inc. v. Giuliani, 1998 U.S.Dist.

LEXIS 19498 (Dec. 15, 1998). In contrast, the significant

benefits secured by the MSA agreement were underscored

by one commentator who observed that “since most outdoor

cigarette advertising is to end under the nationwide

settlement with tobacco companies that part of the law would

have been largely irrelevant.” [14]

In addition to these voluntary restraints on the tobacco

industry’s marketing initiatives, the MSA will bestow on the

‘Settling states an unprecedented financial recovery. Under

these agreements, the tobacco industry is required to pay to

the states “$206 billion dollars over 25 years.” In the course

of these 25 years, Pennsylvania will receive $11.26 billion

with the potential of payments of “over $500 million per

year thereafter.” Indeed, Pennsylvania’s share of the total

recovery represents “the third highest recovery among the

settling states.” [15] These massive sums of money hold the

promise of inestimable benefits for the citizens of

Pennsylvania. Not surprisingly, when this settlement

agreement was initially offered to the 46 states as an option

to continuing their lawsuits against the tobacco manu-

facturers, all 46 states decided to sign the agreement. [16]

The parties emphasize that they are not required by the

Rules of Civil Procedure to seek court approval and the entry

of a consent decree in this case. [17] However, the MSA

requires certain uniform procedures in each settling state that

will be facilitated by the entry of consent decrees creating

“continuing jurisdiction in this Court to adjudicate any

interpretation issues and issues of enforcement that may arise

as they apply to Pennsylvania.” [18] As of December 10,

1998—the day before the parties filed their motion for the

court’s approval of the consent decree—courts in twenty

other states had approved the settlement and entered the

Consent Decrees. [19] Before this court could consider

approving the MSA, however, it was necessary to address

the issues raised by the intervention petitions.

IV. Petition to Intervene of the Not-for-Profit Hospitals

_ A group of sixteen Pennsylvania not-for profit hospitals

filed a petition to intervene for declaratory relief “to

determine whether the MSA affects the claims set forth” in a

complaint that they had filed against various tobacco

defendants on December 10, 1998 in Allegheny County.”

[20] In filing their Allegheny County complaint, the

hospitals seek to recover the “unreimbursed cost of health

care services” that they provided to the “State’s Medicaid

and medically indigent patients” as a result of tobacco-

related injuries. [21]

The hospitals claim that they may intervene in the

remaining phases (i.e. settlement) of the Conmonwealth’s

action against the tobacco defendants because the hospitals

have a “legally enforceable interest” as set forth in Pa. a a

P. 2327 (4) that may be affected by the Release Provisions in

the MSA:

Proposed intervenors have legally enforceable

interests at stake insofar as the MSA and Consent

Decree may affect their ability to assert, and

obtain Recovery for, claims they have and/or may

have against the settling defendants. Proposed

intervenors have a further interest in any damages

awarded pursuant to the MSA and Consent decree

that relate to tobacco attributable healthcare costs

for Medicaid recipients and the medically

indigent. Hospitals’ Memorandum at 3

(emphasis added).

More specifically, the hospitals sought from this court a

declaration of their rights under the MSA:

Specifically, they ask this court to determine

whether the MSA and/or Consent Decree release

or bar Proposed intervenors’ claims against the

Tobacco _Defendants-in their separately filed

action in Allegheny County. Second, if this Court

determines that the Proposed Consent decree does

in fact release their claims, then the Proposed

Intervenors ask this Court to determine what

rights the Proposed Intervenors have under the

MSA and the Consent Decree, including what

rights they have to the proceeds of the settlement

terminating their claims. [22]

A. The MSA Release Provisions At Issue [23]

The hospitals argue that the claims set forth in their

Allegheny County Complaint against the tobacco defendants

might become ensnared in the broad definitions for “Claims”

and “Released Claims” set forth in the MSA. The term

“Claims,” for instance, includes all “claims” whether

“ ‘legal, equitable, or statutory.’ “ [24] The definition of

“ ‘Released Claims’ includes the claims set forth in Exhibit

D to the MSA, or any comparable Claims that . . .could be. . .

asserted . . .in any comparable action . . .by a ‘Releasing

Party.’ “ [25] Because of this broad language, the hospitals

argue, the hospitals’ claims against the Tobacco Defendants

may fall within the definition of “Released Claims.”

Hospitals’ Memorandum at 9.

The Hospitals are also concerned that the following

broad definition of “Releasing Parties” in the MSA might

include them:

[T]o the full extent of the powers of the

Signatories hereto to release past, present and

future claims, the following: (1) any Settling

State’s subdivisions (political or otherwise

including but not limited to, municipalities,

counties. . .and hospital districts). . and (2)

persons or entities acting in a parens patriae. . .OT

in any other capacity, whether or not any of

them participate in this settlement. . . (B) to the

extent that any such entity (as opposed to an

individual) is seeking recovery of health care

expenses. . .paid or reimbursed, directly or

indirectly, by a Settling State. Hospitals’

Memorandum at 10 (quoting MSA, {il (pp))

(emphasis in original).

Finally, the hospitals urge this court to consider the broad

implications of Section 7 of the Consent Decree and Section

XII of the MSA, the Settling States’ Release, Discharge and

Covenant because “[m] ost, if not all, of the provisions of

this section could be interpreted to affect rights of the

Proposed Intervenors.” Hospitals’ Memorandum at 10

(emphasis added). The hospitals suggest that their rights

might be affected by the following language in XII (a)

because of the broad definition of “Releasing Party” in the

MSA:

(1) Upon the occurrence of State Specific Finality

in a Settling State, such Settling State shall

absolutely and unconditionally release and

forever discharge all Released Parties from all

Released Claims that the Releasing Parties

directly, indirectly, derivatively or in any other

capacity ever had, now have, or hereafter can,

shall, or may have . . ..

(3) Each Settling State (for itself and for the

Releasing Parties) further covenants and agrees

that it (and the Releasing Parties) shall not. .

sue or seek to establish civil liability against any

Released Party . . .and further agree that such

covenant and agreement shall be a complete

defense to any such civil action or proceeding.

MSA, XII (a), (as quoted by Hospitals’

Memorandum at 10-1 1).

Finally, the hospitals are concerned that the following

provisions in XII (B) “could” operate to bar their claims:

(b) Releasing Claims Against Released Parties.

If a Releasing Party (or any person or entity

enumerated in subsection II (pp), without regard to

the power of the Attorney General to release claims

of such person or entity) . . .nonetheless attempts to

maintain a Released Claim against a Released Party. .

- -The Released Party may offer the release and

covenant as a complete defense. [26]

B. Applicable Standards for Intervention

The criteria for intervening in a pending action are set

forth in the Pennsylvania Rules of Civil Procedure 2326

through 2329. Pa.R.C.P. 2327, for instance, provides in

relevant part that intervention should be permitted if:

(3) such person could have joined as an original

party in the action or could have been joined

therein; or

(4) The determination of such action may affect any

legally enforceable interest of such person whether or

not he may be bound by a judgment in the action.

Pa.R.C.P. 2327

The rules further provide that a hearing be held to

consider a petition to intervene. Pa.R.C.P. 2329. The court

may then either allow intervention or refuse it if the

following conditions exist:

(1) The claim or defense of the petitioner is not in

subordination to and in recognition of the

propriety of the action; or

(2) the interest of the petitioner is not already

adequately represented; or

(3) The petitioner has unduly delayed in making

application for intervention or the intervention

will unduly delay, embarrass or prejudice the trial

or adjudication of the rights of the parties.

Pa.R.C.P. 2329

In the instant case, the hospitals seek to intervene based

on both Pa.R.C.P. 2327(4), which allows intervention if they

can show a “legally enforceable interest” in that action, and

on Pa.R.C.P. 2327(3).

C. The Hospitals Fail to Establish the Requisite

“Legally Enforceable Interest”

The standard for determining a “legally enforceable

interest” for intervening in a pending action under 2327(4) is

not as straightforward as it might at first appear. As the

Pennsylvania Supreme Court has long emphasized, “the

exact boundaries of the ‘legally enforceable interest’

limitation [of Pa.R.C.P. 2327(4)] are not clear.”

Consequently, “[tJhe result is a flexible, although

uncertain rule whose application in a given case calls fora

careful exercise of discretion and consideration of all

the circumstances _ involved.” Pennsylvania __ Crime

Commission Subpoena, 453 Pa. $13, 309 A.2d 401, 406

(1973); Pennsylvania R.R. Co. _v. Hughart, 422 Pa. 615, 222

A.2d 736, 738 (1966) (citations omitted). In applying this

mule, it is thus necessary to analyze the exact nature of the

“legally enforceable interest” that the hospitals claim “may

be” affected by the MSA within the context of the

Commonwealth’s action against the tobacco defendants.

In arguing that the potential effect of the Release

Provisions in the MSA constitutes a legally enforceable

interest under PaR.C.P 2327(4), the hospitals cite cases

outlining the standards for intervening under this rule.

Hospitals’ Memorandum at 7-8. The facts of these cases,

however, are clearly distinguishable from the hospitals’

essentially hypothetical concerns about the potential impact

of the MSA on their Allegheny County action. This case by

case analysis is necessary in light of the fact sensitive

———eEeEEE—EeEEEEE

standard for determining whether a petitioner has presented a

“legally enforceable interest” sufficient to allow intervention.

In four of the five cases cited by the hospitals, the

intervenors’ interest in the underlying action was patent.

Thus, in Bannard v. N. Y. State Natural Gas Corp., 404 Pa.

269, 172 A.2d 306, 310, 312 (1961), the Pennsylvania

Supreme Court concluded that the owner of a parcel of land

(Le., the Pennsylvania Game Commission) could intervene

in an action of ejectment that was filed against its tenant. The

court observed, however, that this right to intervene was

premised on the Act of 1915 rather than Rule 2327. Id., 172

A.2d at 312. Similarly, in Tremont Township School

District _v. Western Anthracite Coal Co., 381 Pa. 276, 113

A.2d 234 (1955), the Pennsylvania Supreme Court

concluded that the county had a legally enforceable interest

and could intervene in an action to attach royalties collected

from coal mined from the County’s property. The Supreme

Court in Bily, Exec. v. Allegheny Cty. Bd. of Property

Assessment, 353 Pa. 49, 44 A.2d 250 (1945) concluded that

a mortgagee who foreclosed on her property and purchased it

at a sheriffs sale should have been allowed to intervene as

the new owner of the property during tax appeal proceedings

relating to her property. Finally, in Commonwealth, Dept. of

Gen. Servs. v. Weinberger, 65 Pa. Cmwith. 201, 441 A.2d

1341 (1982), a subcontractor was permitted to intervene in

an action brought by his contractor to recover for payments

due where the subcontractor’s payments were withheld by

the contractor pending resolution of the litigation.

In a fifth intervention case cited by the hospitals, the

court held that intervention should not be allowed. See, e.g.,

Marion Power Shovel Co. v. Fort Pitt Steel Casting, Co., 285

Pa. Super. 45, 426 A.2d 696 (1981). In Marion Power, a

striking union and its members sought to intervene in a

replevin action brought against their employer/manufacturer

by a customer/company that wanted to seize possession of

stee! castings manufactured by the union members’

employer. The union asserted a legally enforceable interest

in the steel castings because of “incentive wages” that might

have been due to them on the castings. The ower

court, however, rejected this argument, noting that the union

“neither claims nor could claim the right” to possess the

castings, which it needed solely as a basis to calculate

incentive wages. Id., 426 A.2d at 702.

In all of these cases where the courts allowed

intervention, the proposed intervenors’ interests in the

underlying action were clear and direct as either property

owners or subcontractors whose interests were clearly at

issue in the underlying action. None of these cases,

therefore, bears a close factual similarity to the hospitals’

request for an interpretation of the potential effect of the

MSA release provisions. It must be noted, of course, that

these cases are also distinguishable because the hospitals are

requesting a declaratory judgment. Nonetheless, precedent

construing the Declaratory Judgments Act likewise

establishes that the hospitals could not intervene in the

Commonwealth’s case because their claims are too remote

and fail to present an actual case or controversy ripe for

adjudication.

D. The Hospitals’ Request for Declaratory Relief Fails

to Present an Actual Case or Controversy Ripe for

Disposition

In their petition to intervene, the hospitals seek a

declaratory judgment and properly attached a copy of their

proposed pleading as required by Pa.R.C.P. 2328. In this

Complaint in Action for Declaratory Judgment, the hospitals

invoke the Declaratory Judgments Act and assert that this

court has jurisdiction under 42 Pa.C.S. 5753. [27] Section

7532 provides:

Courts of record, within their respective

jurisdictions, shall have power to declare rights,

status, and other legal relations whether or not

further relief is or could be claimed. 42 Pa.C.S.A.

q 7532.

Despite this broad language, courts interpreting the

Declaratory Judgments Act have emphasized the need for a

case or controversy before a court may act pursuant to this

Act. Thus, “[a]lthough the Declaratory Judgments Act is to

be liberally construed,” the Commonwealth Court recently

observed, “some 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.” Pa-State Lodge,

Fraternal Order of Police v. Com., Dept. of Labor & Indus.,

692 A.2d 609, 613, 1997 Pa. Commw. LEXIS 150 (1997),

aff'd, 550 Pa. 549, 707 A.2d 1129 (1998). The

Pennsylvania Supreme Court likewise emphasized:

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. Gulnac v. South Butler County School

Dist., 6 Pa. 483, 587 A.2d 699, 701 (1991)

(citations omitted).

Thus, in Fraternal Order of Police v. Dept. of Labor,

supra, the Commonwealth Court dismissed the FOP’s

petition for a declaratory judgment that amendments to the

Pennsylvania Workers Compensation Act were

unconstitutional because its new offset provisions would

have an “adverse actuarial impact” on their pension plans. In

so doing, the court explained that the FOP did not allege any

facts that demonstrate “any actual and immediate harm”

from these amendments. Thus, the FOP “has presented no

case or controversy between the parties for which we are

empowered to declare rights.” Id., 692 A.2d at 613-614 &

611. See Also Pa, State Lodge, FOP by Bascelli v. Com..

131 Pa. Cmwith. 611, 571 A.2d 531, 532 (1990), aff'd, 527

Pa. 363, 591 A.2d 1054 (1991) (the FOP’s petition for

declaratory judgment that certain pension laws violated the

Pennsylvania Constitution's authorization of collective

bargaining was dismissed where he FOP failed to allege that

any contract with the Commonwaalth had not been enforced

because of the challenged statutes); Pa. Gamefowl Breeders

Assoc. v. Com., 533 A-2d 838, 340-41, 1987 Pa. Commw.

LEXIS 2646 (1987) (petition for declaratory relief denied

because Gamefowl Breeders fiiled to state a case OF

controversy ripe for review and “a declaratory judgment will

not be entered in anticipation of events that have not

occurred or may never occur”).

A series of three cases, presenting facts and issues

analogous to those raised by the hospitals, petition, and are

also instructive. See Brown Adm. of the Est. of

Zimmerman v. Com., Liquor Control Bd., 673 A.2d 21,

1996 Pa. Conmw. LEXIS 91, app. denied, 546 Pa. 648,683

A.2d 886 (1996); Avrich v. General Accident Ins. Co., 367

Pa. Super. 248, 532 A.2d 882 (1987); Boyle_v. Com., Dept.

of Trans., 151 Pa.Cmwith. 430 617 A.2d 70 (1992). In

Brown, Adm. Of the Est. of Zmmerman_v. Com, Liquor

Control Bd., 673 A.2d 21, 199€ Pa. Cmwith. LEXIS 91

(1996), an Administratrix of Zimmerman’s estate brought a

wrongful death action after he was killed in an automobile

accident with intoxicated students. The Administratrix

named various defendants including the students, the

Pennsylvania Liquor Control Board (PLCB), and the

Pennsyivania Department of Traasportation (“DOT”).

While this action was pending, the Zimmerman

Administratrix also brought a ceclaratory judgment action

seeking a determination as to the maximum amount the

Estate might recover in its action. Under 42 Pa.C.S. 4 8522

& $528, the maximum amount a plaintiff could recover as to

Commonwealth parties was $250,000. The Administratrix

apparently wanted to bypass this limitation with a

declaratory judgment that the PLCB and DOT were each

————

ee ee

liable for a maximum of $250,000. The Commonwealth

Court concluded, however, sua sponte that it could not

consider this issue because there was no case or controversy

until a judgment in excess of $250,000 was entered against

both the PLCB and DOT. “While both this court and the trial

court have the power to determine the statutory limits of

liability on commonwealth parties,” the Zimmerman court

observed, “we do not have the ability to grant any relief that

is merely advisory, one that does not involve any case or

controversy. Any action, including a declaratory judgment

action, may 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 purely academic.”

[28]

Such an opinion, the court emphasized, would have been

academic because the plaintiff had not yet achieved any

judgment against the defendants. Her case was not ripe

because of a variety of contingencies: “it was possible that

both Commonweaith parties may be found liable, only one

of the Commonwealth parties will be found liable, or

neither” would be found liable. [29]

Similar unknown contingencies bedevil the petitioning

hospitals—and indeed all litigants. What they are seeking is

determination of an issue that is not actual: whether a

contractual defense might be raised against them in a

different proceeding. As counsel for the tobacco defendants

Suggested during the hearing, it could be some time before

this defense is asserted—if ever—in an Answer to the

hospitals’ Complaint. Prior to that, the tobacco defendants

“no doubt” [30] will file preliminary objections—with their

inherently uncertain impact on the hospitals’ claims. Yet

another possible contingency is that a court—at the

appropriate stage in the proceeding—might conclude that the

Releases in the MSA have no impact whatsoever in the

Hospitals’ Allegheny County claim. For this reason, the

hospitals, petition is not ripe; this court cannot interpret the

MSA in a vacuum without presenting an advisory opinion

without legal effect. See, ¢.g., Gulnac_v. South Butler

County School Dist., 526 Pa. 483, 587 A.2d 699, 701

(1991) (the court erred in unnecessarily deciding a

constitutional issue in a vacuum, thereby rendering “an

advisory opinion which our courts are not entitled to do”).

But cf. Reichley. v. North Penn School District, 533 Pa.

519, 626 A.2d 123 (1993) (distinguishing the facto of

Gulnac). See generally Gabel v. Cambruzzi, 532 Pa. 584,

616 A.2d 1364, 1369 (1992) (where court lacks sufficient

facts to issue anything but an advisory opinion it “will not

break its tradition of refusing to author advisory opinions”);

Milton Hershey Medical Center_v. Doe, M.D., 407 Pa.

Super. 565, 595 A.2d 1290, 1293 (1991), aff'd, 535 Pa. 9,

634 A.2d 159 (1993), quoting Okkerse Vv. Howe, 521 Pa.

509, 556 A.2d 827,833 (1989) (an advisory opinion is

without legal effect).

E. The Practical Effect of the Hospitals’ Premature

Constitutional and Substantive Arguments is to

Undercut their Claimed _~ egally Enforceable

Interest” to Intervene

There is yet another reason why the Hospitals’ Petition to

Intervene was denied. The thrust of the hospitals’ argument

for intervention is that the sweeping language of the MSA

release provisions “could be interpreted to affect the rights

of the Proposed Intervenors.” Hospitals’ Memorandum at

10. After outlining the provisions of the MSA that might

affect them, the hospitals then present formidable arguments

as to why these provisions do not encompass their Allegheny

County claims.

They assert, for instance, that their constitutionally

protected right of access to the courts and their right to be

free from governmental taking of property without due

process or just compensation would be violated by such a

sweeping __ interpretation of the MSA. Hospitals’

————— ee ——__

Memorandum of Law at 13-15. They further argue that the

Attorney General lacks the authority to release the Hospitals’

claims under the “Commonwealth Attorneys’ Act”, 71 P.S.

7732-201 et seq. [31] Finally, the hospitals assert the

general rule that settling parties and court approved

settlement agreements may not dispose of third parties’

claims without their consent. [32] The practical effect of

such arguments, ironically, is to undercut their initial

assertion that they must be allowed to intervene based on the

negative impact of the MSA release provisions on the

hospitals’ claims.

Both the Commonwealth and the Tobacco defendants are

careful not to address these substantive arguments in their

memoranda. Rather, they suggest that such arguments are

premature. During the intervention hearing, however, the

settling parties were more forthcoming as to the scope of the

releases and consent decree. In response, for instance, to

questioning as to the effect of the releases on the hospitals’

claims, Counsel for the Commonwealth stated that he did

“not believe it was the intention of the attorney Generals of

50 states to release those claims.” N.T. (1/8/99) at 26. When

asked to elaborate as to whether Attorney General Fisher

released the hospitals, claims, he responded: “The

agreement expressly says we did not release claims of

private organizations for claims that we did not assert.

Unreimbursed costs are not claims that we asserted.” N.T.

(1/8/99) at 28. He further stated:

I would say the general concept was the

Attorney General’s—we’re agreeing to release

quasi-sovereign public claims for reimbursed

costs for tobacco related illness period.

But they were also expecting through certain

claims that might get filed that might be directly

or indirectly reimbursed claims for tobacco-

related illness would also be released.

So you get into the directly or indirectly

language, you get into the need to go behind the

pleading, and I am assuming that if I had checked

out all the charters of these hospitals they would

be about totally private organizations.

We were not intending, at the time the

discussions took place, to release private claims

of private hospitals that were not, in effect, claims

for reimbursement but were unreimbursed costs.

N.T. (1/8/99) at 28-29.

This statement was offered, however, with the cautionary

note that these issues would have to be raised—and

resolved—after the defense was actually asserted in the

context of a particular case. Id. This point is ultimately

convincing since otherwise this court would be forced to

make an anticipatory ruling without the requisite facts.

The hospitals were also concerned that court approval of

section VII of the Consent Decree might be interpreted as

finding that “the Attorney General has full and complete

authority to bind everyone set forth in the MSA.” [33] At

the hearing, this court therefore asked counsel for tobacco

defendant Philip Morris: “would you agree that if the

attorney general, at (sic) any given state, did not have the

authority to release particular claims that are specifically

mentioned within the MSA, that the court does not approve a

release of those claims.” She responded affirmatively. [34]

F. The Hospitals Have Not Established Intervention

under Pa.R.C.P. 2327(3)

As an alternative basis for intervention, the hospitals

argue in their motion and memorandum that they can

intervene under Pa.R.C.P. 2327(3) which allows

intervention if “such person could have joined as an original

party in the action or could have been joined therein.” The

rule for permissive joinder provides:

Persons may join as plaintiffs who assert any

right to relief jointly, severally, separately, or in

the alternative, in respect of or arising out of the

ee ee

Same transaction, occurrence, or series of

transactions or occurrences if any common

question of law or fact affecting the rights to

relief of all such persons will arise in the action.

Pa.R.C.P. 2229

The Commonwealth, in contrast, denies that the hospitals

could have joined as original parties in their action because

of profound differences in their complaints and causes of

action. [35] The Commonwealth filed its complaint in April

1997 in its capacity as sovereign and as Parens Patriae on

behalf of all of its citizens [36] alleging, inter alia, that the

defendants disregarded and violated the laws and public

policy of Pennsylvania to market their Cigarettes and other

tobacco products to Pennsylvania’s children. Moreover, it

alleged that the tobacco defendants purposefully manipulated

the nicotine levels in their products to addict the citizens of

Pennsylvania. [37] In filing this action, the Commonwealth

sought to recover for the state’s expenditures for medical

assistance provided through Pennsylvania’s Medicaid and

General Assistance Program for treatment of tobacco related

injuries. [38] It also sought punitive damages, civil

penalties, and injunctive and other equitable relief.

The hospitals, in contrast, brought their action as “not-

for-profit-corporations” to recover their “unreimbursed costs

for healthcare provided in the past, healthcare currently

being provided and future healthcare to be provided to

Medicaid, medically indigent patients” suffering from

tobacco related injuries. [39]

During the intervention hearing, the hospitals conceded

that they had not joined in the Conmonwealth’s action earlier

because initially their claims seemed significantly

different—until the hospitals learned of the broad release

provisions in the MSA:

THE COURT: The Commonwealth in the

settlement proposes to recover sums representing

the payment of medical expenses. The hospitals

propose to recover what they didn’t receive by

way of providing care to Medicaid indigents and

non-paying patients for tobacco related health

treatment. The damages don’t seem the same.

Mr. O’ Rourke: They’re not exactly the same.

THE COURT: How is there any similarity at all?

| don’t see any similarity.

Mr. O’Roarke: That’s why we didn’t intervene in

the Attorney General’s action. But when it does

come to release provisions whether or not the

damages are identical in the Commonwealth’s

brief on pages 4 and 5 -they talk about the

differences in our damages. N.T. (1/8/99) at 7-8

(emphasis added).

Later in the hearing, the hospitals’ counsel explained that

they did not attempt to intervene earlier in the

Conmonwealth’s action because of the distinctions between

that action and the hospitals’ claims against the tobacco

defendants:

To answer the other parts of the questions as to

why we delayed, that’s precisely why we delayed.

We had no reasonable idea that our damages were

implicated in this lawsuit and we entered only

when this. language popped up in the master

settlement agreement. N.T. (1/8/99) at 14.

The hospitals also make this point in their memorandum:

that it is the MSA and the Consent decree that “create the

common questions of law and fact” that would allow them to

intervene in the Commonwealth’s action. Hospitals’

Memorandum at 20. Yet, for the reasons previously stated,

the relief requested by the hospitals—an interpretation of the

release provisions of the MSA in a vacuum before it has

been raised against them—is not yet ripe. To address their

concerns at this point would result merely in an advisory

opinion without legal effect. See Gulnac_v. South Butler

County School Dist., 526 Pa. 483, 587 A.2d 699, 701 (1990)

(trial court erred in issuing an advisory opinion “which our

courts are not entitled to do”). But cf. Reichley_v. North

—

—————

Penn School District, 533 Pa. 519, 626 A.2d 123 (1993)

(distinguishing the facts of Gulnac).

G. Comity Concerns

Finally, another problem with the hospitals’ request to

intervene must be noted. The hospitals elected to file their

lawsuit against the tobacco defendants in the Allegheny

County Court of Common Pleas. They fail to explain why

this court in Philadelphia County should intrude and decide

the scope of the MSA release in advance of the filing of any

answer that asserts a defense based on the MSA. Such an

intrusion invites chaos, forum shopping and ignores all

procedural precedent much less the comity among our state

courts and the associated deliberative process observed by

both forums with respect to matters pending.

V.__Petitions to Intervene by Private Anti-Tobacco Activists

and Allegheny County

The County of Allegheny [40] as well as_various public

activist organizations and individuals [41] filed petitions to

intervene in this case both individually and on behalf of a

similarly situated class (hereinafter “Private anti-tobacco

activists” or “activists”). [42]

In contrast to the hospitals, the activists and Allegheny

County do not have any pending action against the tobacco

defendants. They argue, however, that they should be

permitted to intervene because the broad definition of

“releasing parties” in the MSA, II (pp) and the

release/indemnification provisions in MSA, XII, [43] could

affect any future claims against the tobacco defendants. They

thus assert that approval of the MSA “may affect legally

enforceable interests’ of the petitioners. [44] Unfortunately,

neither the county nor the activists cited a single case in their

petitions or memoranda to assist the court in determining

whether they have, in fact, asserted a legally enforceable

interest. The Pennsylvania Supreme Court has emphasized,

however, that because the “exact boundaries of the ‘legally

enforceable interest’ limitation [of Pa.R.C.P. 2327(4)] are

not clear,” its application in a particular case “calls for the

careful exercise of discretion and a consideration of all the

circumstances involved.” Pennsylvania Crime Commission,

supra, 309 A.2d at 406. It is thus necessary to analyze the

petitioners’ asserted interests within the context of the

applicable rule and precedent.

The definition of “releasing parties” that the activists

and Allegheny County object to provides: [45]

“Releasing Parties” means each Settling State and

any of its past, present and future agents, officials

acting in their official capacities, legal

representatives, agencies, departments,

commissions and divisions; and also means, to

the full extent of the power of the signatories to

release past, present, and future claims, the

following: (1) any Settling State’s subdivisions

(political and otherwise, including, but not

limited to, municipalities, counties, parishes,

villages, unincorporated districts and hospital

districts), public entities, public

instrumentalities and public educational

institutions; and (2) persons Or entities acting in

a parens patriae, sovereign, quasi-sovereign,

private attorney general, qui tam, taxpayer OF

any other capacity, whether or not any of them

participate in this settlement, (A) to the extent

that any such person or entity is seeking relief

on behalf of or generally applicable to the

general public in such Settling State or the

people of the State, as opposed solely to private

or individual relief for separate and distinct

injuries, or(B) _— to the extent that any such

entity (as opposed to an individual) is seeking

recovery of health-care expenses (other than

premium or capitation payments for the benefit

of present or retired state employees) paid or

reimbursed, directly or indirectly, by a Settling

State. MSA, II (pp).

Even a cursory analysis of this definition suggests its

complexity, with distinct qualifiers and limitations.

Allegheny County argues that because the definition of

“releasing parties” includes “counties” its interests have

been compromised by the Attorney General without its

consent. [46] The Anti-Tobacco Activists likewise claim

this definition could include them as individuals and

organizations “if they attempt to bring public interest

litigation against the tobacco companies” even though

they were “completely excluded from” the settlement

negotiations and will receive no benefit from it

whatsoever. [47]

More specifically, Allegheny County argues that the

definition of “releasing parties” harms the County and

creates a legally enforceable interest sufficient to intervene

because “the harm is sustained at the point we go to court

and the MSA is presented as a defense. It’s the harm that we

have to overcome this defense, and without this language, we

would just go to court and prove our case.” N.T. (1/12/99) at

14-15.

The Commonwealth counters that the scope of the

release is clearly limited to “the Power of the Signatories

{the Attorney General of Pennsylvania] hereto to release

past, present, and future claims.” [48] At the hearing, the

Commonwealth’s counsel also emphasized that the MSA

was, in essence, an agreement forged on a national scale

involving 46 states and a number of territories. Counties and

cities in some of these states had either filed their own claims

or joined in the particular State’s claims: [49]

So the people who were trying to draft this

agreement had to deal with political subdivisions.

And, therefore, what they came up with is the

language that, yes, there is a release for political

subdivisions, but it is “To the full extent of the

wer of the si ries l |

present and future claims.”

They did not intend, by one sentence, to have

the sweeping enforceable i

state-by- determinati

attorney general does, indeed, have that power.

We have looked at the current law of

Pennsylvania, Your Honor, and I stress the word

current because as Your Honor is well aware, in

some states, the plaintiffs got somewhat of a

boost in the merits of their claims by significant

substantive amendments to support their claims

against the tobacco industry, and I have no idea

what the future Commonwealth statutes could be,

which might affect this. But based upon our

review of the current Pennsylvania law, we are

not aware of any authori t law

that gives the attoi i

release the claims of political subdivisions or—by

that. I’m including municipalities or counties.

That is one lawyer’s opinion and it’s not an

opinion that’s based on a really thorough

saturation of work. It’s just a preliminary review.

[50]

Moreover, at the conclusion of the hearing the Attorney

General stated: “So with that, I thank the Court for giving me

the opportunity to say those remarks and I would say to the

intervenors, I appreciate the good faith in which they all

come here before this court. We believe we have done

nothing to interfere with their interest in settlement of our

case, and to the extent that we can continue to work with

them, we are interested in their input and their public

comments. [51]

These assurances as to the scope of the release, while

potentially helpful in a future case the County may seek to

file against the tobacco defendants, underscore the

hypothetical, abstract nature of the interest the County is

asserting.

Like Allegheny County, the activists are concerned about

any limitations that might affect any future—but as yet

unfiled—claims against the tobacco defendants. As they

argued in their petition to intervene, “[I]f the MSA is

approved, its effect on petitioners and the class they

represent will be to render them vulnerable to dismissal in

any future action they might bring against the tobacco

defendants in furtherance of their common goals in tobacco

control ... .” [52] The activists argue that “the release

provisions of the MSA effect an unconstitutional deprivation

of Petitioners’ right of access to the courts . . .” [53] but they

cite to no concrete harm other than tie potential (but as yet

undetermined) effect of the release. The Commonwealth

counters, however, that the definition of “releasing parties”

is inherently limited. First, the definition applies to persons

or entities acting in certain specified capacities that seek

relief “generally applicable to the general public” as

opposed to private or individual relief. [54] Second, the

definition applies to entities “seeking recovery of health care

expenses (other than premium or capitation payments for the

benefit of present or retired state employees) paid or

reimbursed directly or indirectly, by a Settling State.” [55]

Finally, the scope of the release for “releasing parties” is

specifically limited “to the full extent of the power of the

signatories hereto [i.e., the Attorney General].” [56]

These provisions, the Commonwealth argues, clearly

would not apply to class actions involving Pennsylvania’s

smokers since that would not be a lawsuit applicable to the

general public. They would also not apply to

Pennsylvanians who sustained damage due to direct or

indirect exposure to tobacco products. [57]

“Therefore,” the Commonwealth suggests, “it is hardly

Surprising that the petitioners failed to articulate any even

theoretical future lawsuit that they could bring that would be

released under this provision and that would not have been

within the Attorney General’s power to release.” [58]

During the hearing, the activists argued that “it is not a

good idea to cut out all public interest litigation for the next

25 years” [59] and in so doing addressed the

Commonwealth’s arguments that their claims were

hypothetical. “In response to the claim that our position is

hypothetical,” [60] the activists asked the court to consider

their appendices, and especially the affidavit of Jeffrey Barg

concerning the efforts of the organization, TEACH

(Tobacco Free Education and Action Coalition for Health),

to control the sale of tobacco to minors by Rite Aid in

violation of a City ordinance. N.T. (1/8/99) at 43-44. This

affidavit, however, does not describe any specific legal

action undertaken by TEACH which might be threatened by

the MSA. Indeed, during the hearing, the activists

emphasized how TEACH brought “Rite Aid to its knees

essentially through public opinion and through the threat of

some sort of adverse action by the City.” N.T. (1/8/99) at

44 (emphasis added). This example thus does not illustrate

how the MSA affects or limits access to the courts for public

interest lawsuits during the next 25 years. [62] It thus serves

to underscore that the activists’ constitutional challenge is

anticipatory. An analysis of the effect oil the MSA release on

a particular public interest lawsuit must await the actual

filing of such a suit.

The Pennsylvania Supreme Court emphasized this point

when it concluded that the right to intervene based on a

“legally enforceable interest” couldn’t be maintained where

“the alleged harm is at best conjectural.” Pennsylvania

Crime Commission Subpoena, 453 Pa. 513, 309 A.2d 401,

407 (1973). In Pennsylvania Crime Commission,

individual policemen (retired and active duty) together with

the Fraternal Order of Police (hereinafter “appellants” or

“intervenors”) sought to prevent the Police Commissioner

from complying with a subpoena issued by the Pennsylvania

Crime Commission in its investigation of charges of

llc

widespread corruption in the Philadelphia Police

Department. The court analyzed the right of these appellants

to intervene in the subpoena enforcement proceeding under

Pa.R.C.P. 2327(4). Id, 309 A.2d at 405-08.

The intervenors asserted a legally enforceable interest in

these proceedings on various grounds—including an

invocation of their constitutional rights. They argued that

the records sought under the subpoena might endanger their

well being since disclosure of their names, addresses,

pictures and badge numbers could make them vulnerable to

attack by those whom they had arrested. These records

might also contain information about past infractions for

which they had already been disciplined but which would

unnecessarily embarrass them in their present jobs. Release

of these documents, they also asserted, would violate a

number of their constitutional rights and only through

intervention would they be able to assert these rights. Id.,

309 A.2d at 405.

In analyzing these facts within the parameters of

Pa.R.C.P. 2327 (4), the Pennsylvania Supreme Court

concluded that “[h]ere, we are not convinced that the interest

asserted by appellants justified the lower court’s granting

intervention.” Id., 309 A.2d at 406. First, the court

concluded that an individual’s “general interest in avoiding

investigation does not, standing alone, afford him standing to

object to the enforcement of a subpoena issued to a third

party. Such a general interest is not of sufficient magnitude

to allow intervention.” Id., 309 A.2d at 406.

In reaching this conclusion, the court consciously struck

a balance “between the protection of the rights of the

individual and the avoiding of unnecessary restraint upon the

State in the performance of its legitimate governmental

purposes.” Id., 309 A.2d at 407. In striking this balance, the

Pennsylvania Supreme Court observed:

In the present record it is clear that the alleged

harm is at best conjectural. Admittedly, it will not

flow as a direct consequence of the proceedings

before us, but rather if it does in fact occur it

would be in connection with other proceedings

that may in some future time be_ instituted as a

result of the information obtained. It must also be

remembered that if these subsequent Proceedings

become an actuality the appellant then would be

provided ample opportunity to present any

objections to the use of such information. Id., 309

A.2d at 407 (emphasis added).

The parallels between the intervenors in the Pennsylvania

Crime Commission case and the instant petitioners are

striking. Like the Crime Commission intervenors, the

activists and Allegheny County raise anticipatory concerns

about the effect of a third party’s action (i.e., their

negotiated settlement) on 4 future action that they might

bring. In analyzing the present record, this court must also

strike a balance between the state’s legitimate governmental

purpose in settling its lawsuit with the need to protect the

rights of the petitioners from unjust consequences of this

settlement. Since at this point the interests of the activists

and Allegheny County in some future action “are at best

conjectural,” the effect of the MSA release provisions—if

any—cannot be determined except in the context of that

future proceeding. At that point, they would have ample

opportunity to demonstrate why the release provisions do not

apply. On the present record, the petitioners fail to present an

actual case or controversy—a legally enforceable interest—

ripe for disposition.

Thus. the County’s concern that the release provisions

“will render them vulnerable to dismissal of any future

action they might bring against the tobacco defendants in

pursuing a cause of action that already exists or might exist

in the future” [63] fails to prevent an actual case or

controversy ripe for disposition. Treski v. Kemper National

Ins. Co., 449 Pa. Super. 620, 674 A.2d 1106, 1113 (1996)

(because ripeness is a prerequisite for judicial review, the

trial court did not err in dismissing an action where plaintiffs

failed to suffer an actual injury due to the insurers,

misrepresentations as to the effect of the New Jersey

“Deemer Statute.”) See also Neshaminy Water Res. Auth. v.

Com., D.E.R., 511 Pa. 334, 513 A.2d 979, 982 (1986)

(action attacking DER regulations governing the method for

determining acceptable phosphorous levels in water under

the plaintiffs’ jurisdiction was properly dismissed for failing

to present a ripe case or controversy where plaintiff failed:to

show immediate and adverse impact on the waters); Roeder

v. Hatfield Borough Council, 439 Pa. 241, 266 A.2d 691,

695-96 (1970) (the court properly quashed an appeal which

sought to have a zoning amendment declared invalid where

“absolutely nothing had happened under the ordinance

to create a case or controversy ripe for judicial

determination”); Borough of Marcus Hook v. Pa. Mun.

Retirement Bd., 720 A.2d 803, 1998 Pa. Conmw. LEXIS 856

(1998) (where issue on appeal relates to hypothetical facts,

the petition for review is dismissed for seeking an

impermissible advisory opinion). As previously discussed in

the context of the hospitals’ petition, since this court has

concluded that the petitioners’ claim is not ripe, any

discussion of their substantive constitutional rights would be

an advisory opinion without legal effect. See, _e.g., Gulnac v.

South Butler County School District, 526 Pa. 483, 587 A.2d

699, 701 (1991) (trial court unnecessarily decided a

constitutional issue in a vacuum, rendering “an advisory

opinion which our courts are not entitled to do.”). But cf.

Reichley v. North Penn School District, 533 Pa. 519, 626

A.2d 123 (1993) (distinguishing the facts of Gulnac). See

generally Gabel v. Cambruzzi, 532 Pa. 584, 616 A.2d 1364,

1369(1992) (where court lacks sufficient facto to issue

anything but an advisory opinion it “will not break its

tradition of refusing to author advisory opinions”); Milton

Hershey Medical Center v. Doe. M.D., supra, 595 A.2d at

1293, quoting Okkerse v. Howe, 521 Pa. 509, 556 A.2d

827, 833 (1989) (an advisory opinion is without legal effect).

The activists and Allegheny County, in addition, argue

that their interests are potentially affected by the MSA’s

indemnification provisions set forth in Section XII, relating

to “Settling States’ Release, Discharge and Covenant.”

They assert that even if future litigation determines that they

are not precluded from bringing a suit against tobacco

defendants because they are not “releasing parties” under

the MSA, their legally enforceable interests will be barred by

section XII (b), the “litigating releasing parties offset” [64]

which provides in relevant part:

If a releasing party (or any person or entity

enumerated in subsection II (pp) without regard

to the power of the Attorney General to release

‘claims of such person or entity) nonetheless

attempts to maintain a Released Claim against a

Released Party, such Released Party shall give

written notice of such potential claim to the

Attorney General of the applicable Settling State

within thirty days of receiving notice of such

potential claim. . . . The released party may

offer the release and covenant as a complete

defense. If it is determined at any Point in such

action that the release of such claim is

unenforceable or invalid for any reason

(including, but not limited to, lack of authority to

release such claim), the following provisions shall

apply:

(1) the Released Party shall take all ordinary

and reasonable measures to defend the action

fully. The released party may settle or enter

into a stipulated judgment with respect to the

action at any time in its sole discretion, but in

such event, the offset described in subsection

(b) (2) or (b) (3) below shall apply only if the

released party obtains the relevant Attorney

General’s consent to such settlement or

stipulated judgment, which consent shall not

be unreasonably withheld...

A. In_the event of a settlement or

stipulated judgment, the settlement or

stipulated amount shall give rise to a

continuing offset_as such amount is

actually paid against the full amount of

such Original Participating Manufactu-

rers’ share. . . of the applicable Settlin

State’s Allocated Payment until such

time as the settled or stipulated amount

is fully credited on a dollar-for-dollar

basis. [65]

This offset provision, both the activists and Allegheny

County argue, will harm them because it “will cause the

Commonwealth of Pennsylvania to intervene in any such

litigation against a tobacco defendant, to strengthen the

tobacco defendants’ defense” because any recovery awarded

to the activists would be offset by the Commonwealth to its

financial detriment. [66] During the intervention hearing,

counsel for the activists elaborated on how this provision

affected the activists’ legally enforceable interests:

Our legally enforceable interest, your Honor,

is two folds. It is our interest in access to the

Courts not just in a_ particular piece of

litigation, but over the next 25 years in our

access to the courts. And, secondly, our

interest in being able to engage the tobacco

industry as opposed to the state as a defendant

in litigation. Those are our two legally

enforceable interests that are being squelched

essentially by this agreement and are going to

basically make it very difficult for us to scare

anybody after this. [67]

To remedy this ill, the activists asked the court to

condition its approval of the MSA on the deletion of “of all

individuals and entities who are not political subdivisions of

the Commonwealth” from the definition of “Releasing

Parties.” [68]

The Commonwealth objected to these contentions on

various grounds. It argued, for instance, that the activists’

concerns were based on hypothetical cases, which might be

brought in the future. Thus they were not ripe. It also

asserted that the MSA did not require the Attorney General

to intervene on behalf of the tobacco industry “nor would he

have any reason to do so.” [69] Moreover, the release

provisions would not affect plaintiffs who successfully sued

the tobacco defendants for recovery; rather they would

collect their full amount from the defendants. [70] The

Commonwealth also suggests the dangers inherent in

tampering with the definition of “releasing parties,” because

it is an essential, nonseverable term within Section XII of the

MSA. Consequently, if it were modified prior to approval of

the MSA, a team of Attorneys General would have to be

appointed to renegotiate the terms. The tobacco

manufacturers would be under no obligation to accept these

terms and the MSA could be terminated as to Pennsylvania.

[71]

The arguments of the Commonwealth were ultimately

convincing. The interests asserted by the activists in being

able to inflict financial harm on the tobacco manufacturers

were speculative and remote. The exact implementation of

the offset provisions is, at this point, conjectural. At the point

where the activists actually trigger the off set provisions,

. their arguments could be analyzed within a concrete factual

| scenario. Moreover, the exact basis for—and nature of—

| their protest against these indemnification and offset

provisions is unclear, partly because they cite no supporting

authority of any kind. Thus, the activists assert:

Against this background, Petitioners’ position in

this litigation is that the release provisions of the

MSA effect an unconstitutional deprivation of

Petitioners, right of access to the courts and that

nl TT

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the indemnity provisions of the MSA, by which

the citizenry indemnifies the tobacco companies

even for awards of punitive damages, are directly

contrary to the public policy of the State which

expressly forbids insurance against such

liabilities. Memorandum in Support of Activists’

Petition to Intervene at 5.

It is thus not entirely clear whether the activists object to the

offset provisions as a denial of their constitutional right of

access of the courts or if they assert it is objectionable as

“bad policy” which the court must help correct.

If they were raising constitutional objections, these

would not be ripe until they can demonstrate an actual

harm—at the very least that the offset provisions were

triggered. In attacking the indemnity provisions, however,

the activists appear to focus primarily on policy—as opposed

to constitutional—concerns:

The effect of this indemnity is to reverse the

interests inter_sese of the states and the

petitioners. Without the indemnity, the states’

interest and the petitioners’ interest in the

outcome of public interests claims against

tobacco companies were the same; both wanted to

maximize recovery; the petitioners could be

viewed as supporters of the State. The indemnity

reverses the lineup; the petitioners still want to

maximize recovery, but now the state wants to

minimize it. This converts the petitioners from

Supporters to opponents of the State, clearly. bad

public policy that should have been (but was

not) debated. [72]

The activists’ request that this court modifies a hard

fought settlement agreement based on its “policy”

decisions—or theirs—is problematic for several reasons.

First, the activists have not established the requisite standing.

Second, their policy arguments do not constitute “legally

enforceable interests” since they do not provide justiciable

standards for a court’s review. The basic requirements for

standing were recently outlined by the Pennsylvania

Supreme Court in Sierra Club v. Hartman, 529 Pa. 454, 605

A.2d 309, 310 (1992):

Generally, in order to have standing, a party must

have an interest in the controversy that is

distinguishable from the interest shared by other

citizens. To surpass that common interest, the

interest must be substantial, direct and immediate.

In outlining this test, the Sierra Club court emphasized

that “rooted in this precept (of standing) is the notion that

for a party to maintain a challenge to an official order or

action, his rights must have been invaded or infringed.” Id.

There is also a general exception to this general rule “when

the degree of causal connection is small but judicial review

is necessary to protect against governmental action which

otherwise would go unchallenged.” Id., 605 A.2d at 310-11.

In applying these principles, the Pennsylvania Supreme

Court concluded that the Sierra Club lacked standing to bring

an action seeking mandamus and equitable relief for the

Legislature’s veto barring publication of a proposed air

pollution regulation. The plaintiffs alleged deprivation of a

constitutional right to clean air and proper functioning of the

state government did not establish the group’s standing to

bring its action because these claims were “general in nature

and arguably common to all Commonwealth citizens.” Id.,

605 A.2d at 311. Similarly, the tobacco activist’s lack

standing since in asserting that the indemnification

provisions in the MSA infringe on their rights, they fail to

establish either direct or immediate harm. See also In re

Biester, 487 Pa. 438, 409 A.2d 848, 851 (1979) (standing

requires an interest that is substantial, direct, and

immediate); Pennsylvania Crime Comm. Subpoena, supra,

309 A.2d at 406 (an individual’s general interest does not

give him standing and “is not of sufficient magnitude to

allow intervention”). Moreover, the effects of the

eens

indemnification on the petitioners could be suhiect. ta review

once the offset provisions have actually been triggered.

The activists’ assertion that the settlement agreement

represents bad policy because it forces the state to indemnify

the tobacco industry and “converts the petitioners from

supporters to opponents of the State” [73] similarly does not

provide a “legally enforceable interest” for the activists’

intervention nor does it provide a basis for this court’s

interference with the settlement process. The activists, in

essence, are asking this court to make a political, policy

decision—or to adopt theirs—in substitution of the Attorney

General’s judgment in entering into a settlement agreement.

This raises issues analogous to the political question

doctrine. In analyzing whether a case raises a nonjusti-ciable

political question, the Pennsylvania Supreme Court has

emphasized that the political question doctrine derives from

the separation of powers inherent in the federal constitution.

See, e.g., Blackwell v. City of Phila. , 546 Pa. 358, 684

A.2d 1068 (1996) The Blackwell court further emphasized

that “Courts will not review actions of another branch of

government where political questions are involved because

the determination of whether the action taken is within the

power granted by the Constitution has been entrusted

exclusively and finally to political branches of the

government for self-monitoring.” Id., 684 A.2d at 1071. In

analyzing whether a particular case presents such a non-

justiciable political question, the Pennsylvania Supreme

Court has repeatedly emphasized the criteria set forth by the

United States Supreme Court in Baker v. Carr, 369 U.S. 186,

217 (1962):

Prominent on the surface of any case held to

involve a political question is found a textually

demonstrable constitutional commitment to a

coordinate political department; or a lack of

judicially discoverable and manageable standards

for resolving it; or the impossibility of deciding

without an initial Policy determination of a kind

clearly for nonjudicial discretion; or the

impossibility of a court’s undertaking

independent resolution without expressing lack of

the respect due coordinate branches of

government; or an unusual need for

unquestioning adherence to a political decision

already made; or the potentiality of

embarrassment from multifarious pronouncement

by various departments on one question.

Zemprelli v. Daniels, 496 Pa. 247, 436 A.2d

1165, 1169 (1981), quoting Baker v. Carr, 369

U.S. 186, 217 (1962). [74]

“The presence of any one of these elements,” the

Pennsylvania Supreme Court recently observed, “will

prompt a court to refrain from considering the claim

asserted. [75] To the extent that the “activists base their

arguments against the indemnification provisions of the

MSA on policy considerations concerning its potential

effects, they failed to provide this court with “judicially

manageable standards.” They were seeking “an initial policy

determination of a kind clearly for nonjudicial discretion.”

A different case would have been presented if they had

invoked a statute or constitutional basis for review of an

actual harm suffered. [76] As the Pennsyl-vania Supreme

Court recently observed, “[pJolicy consi-derations” are “for

the legislature and not the courts to determine and act

on.” Reichley v. North Penn School District, 533 Pa. 519,

626 A.2d 123, 129 (1993).

Under the Pennsylvania Constitution the Attorney

General, an elected member of the Executive Department of

the state government, is the “chief law officer of the

Commonwealth” empowered “to exercise such powers and

perform such duties as may be imposed by law.” Pa.Const.

Art. IV, 9 4.1 & Art. IV, fl. The legislature by statute

provides that he shall “collect, by suit or otherwise, all

debts” that are “due the Commonwealth.” 71 P.S. 9732-

204(c). The exact scope of this authority, as previously

discussed, remains to be explored when concrete cases and

controversies are posed. Policy arguments, alone, however,

fail to provide an adequate standard for review at this point.

If the Attorney General has engaged in a bad policy decision

as the anti-tobacco activists contend, the remedy lies in

challenging the Attorney General electorally or in filing

lawsuits when and if a successful claim has resulted in a set

off.

In concluding that neither the activists nor Allegheny

County have established the requisite legally enforceable

interest to intervene in this case, it is important to emphasize

that this court is not concerned with any technical defects in

the activists’ or County’s petition (such as its failure to

attach a pleading as required by Pa.R.C.P 2328). [77] On the

contrary, the critical factor is that the “legally enforceable

interest” raised by the activists and County is based on

events yet to occur. Interpretation of the scope of the

release, in contrast, must evolve through actual case by case

analysis as Judge Sosmon of Massachusetts eloquently

observed in explaining her approval of the MSA:

All the other Attorney Generals, and all the other

public entities that have brought these kinds of

cases in other jurisdictions, have accepted this

settlement. That itself speaks volumes for the

fact that many have perceived—all have

perceived that this settlement is indeed wortn

giving up their claims just as the Attorney

General has decided.

There is, and I do have some questions about

the specific issue of the scope of the release that

this Attorney General purports to grant in this

agreement.

As I read the Master Settlement Agreement, it

seems to itself acknowledge that there is

uncertainty as to the precise contours of that

release because there is uncertainty as to the

precise contours of the Attorney General’s

[78]

VI. Prejudice to the Settling Parties

The Pennsylvania Rules of Civil Procedure also provide

that a petition to intervene may be refused if “the

intervention will unduly delay, embarrass or prejudice the

trial or adjudication of the rights of the parties. Pa.R.C.P.

2329 (3) (emphasis added). Allowing the petitioners to

intervene in the final settlement stages of this action would

both unduly delay and prejudice the resolution of the

Commonwealth's lawsuit.

The MSA contains a complicated scheme for achieving

“Final Approval.” It provides, for instance, that “ ‘Final

Approval’ means the earlier of: (1) the date by which State-

Specific Finality in a sufficient number of Settling States has

occurred; or (2) June 30, 2000.” MSA, { II (u). A key event

in achieving “Final Approval,” therefore, is the attainment

of “State-Specific Finality” in a requisite number of states:

For the purposes of this subsection (u), “State-

Specific Finality in a sufficient number of

Settling States” means that State-Specific Finality

has occurred in both:

(A) A number of Settling States equal to at

least 80% of the total number of Settling

States; and

(B) Settling States having aggregate Allocable

Shares equal to at least 80% of the total

aggregate Allocable Shares assigned to all

Settling States. MSA, II (u).

For a specific state, the attainment of “State-Specific

Finality” is thus crucial. According to the MSA, a state

attains this degree of finality when the following occurs:

(1) this Agreement (i.e. the MSAI and the

Consent Decree have been approved and entered

by the Court as to all Original Participating

Manufacturers, or, in the event of an appeal from

or review of a decision of the Court to withhold

its approval and entry of this Agreement and the

Consent Decree, by the court hearing such appeal

or conducting such review;

(2) entry by the Court has been made of an

order dismissing with prejudice all claims

against Released Parties in the action as

provided herein; and

(3) the time for appeal or to seek review of or

permission to appeal (“Appeal”) from the

approval and entry as described in subsection (1)

hereof and entry of such order described in

subsection (2) hereof has expired; or, in the

event of an Appeal from such approval and

entry, the Appeal has been dismissed, or the

approval and entry described in (1) hereof and the

order described in subsection (2) hereof have

been affirmed in all material respects by the

court of last resort to which such Appeal has

been taken and such dismissal or affirmance has

become no longer subject to further Appeal

(including, without limitation, review by the

United States Supreme Court). MSA, q 11(ss).

During the intervention hearing, Attorney General Fisher

emphasized how critical it was that Pennsylvania reach

“state specific finality as soon as possible so that it could

benefit from the settlement recovery. He urged that “it’s very

important for the people of Pennsylvania to be able to move

forward.” N.T. (1/12/99) at 85. More specifically, “it’s so

important for this court to allow that time period to begin so

that the lawmakers and the governor can make the beat

decisions possible, as quickly as possible, as to how to utilize

the provisions of this agreement for the public health of

Pennsylvania.” Id. at 86. Failure to attain state-specific

finality, he warned, “could mean that Pennsylvania would

fall behind in receipt of the monies, which hopefully the

general assembly and the governor will use for public health

purposes.” Id.

Allowing intervention during this final stage of the

Commonwealth’s lawsuit would inevitably have caused

delay. The petition to intervene by the activists, for instance,

posed a particular threat of delay since they sought to

intervene not only as individuals but also as a class. The

Pennsylvania Rules of Civil Procedure impose very precise

requirements for the certification of a class that could

seriously delay the attainment of “State-Specific Finality” in

Pennsylvania. The rules require that a class action complaint

be filed and that the case be assigned to a particular judge.

Pa.R.C.P. 1703. The responding parties may then file

Preliminary Objections, Pa.R.C.P. 1705 or an Answer,

Pa.R.C.P. 1706. After the pleadings, the court must then

decide whether the class should be certified. Pa.R.C.P.

1707-1710. See also Janick v. The Prudential Ins. Co., 305

Pa. Super 120, 451 A.2d 451, 455 (1982) (“A court may not

make the initial class action determination until after the

close of pleadings to ensure that the class proponent is

presenting a non-frivolous claim capable of surviving

preliminary objections). Significantly, if a court denies class

certification, that order can be appealed with all the inherent

delays of that process. Dilucido v. Terminix, 450 Pa. Super.

393, 676 A.2d at 1237, 1239, app. denied, 546 Pa. 655, 684

A.2d 557 (1996).

Allowing intervention at this point in the settlement

process would not only unduly delay the resolution of the

settling parties, lawsuit. Such delay itself might also

jeopardize the agreement, thereby severely prejudicing all

the settling parties. This prejudice is an especially serious

concern in light of the petitioners’ failure to establish the

requisite “legally enforceable interests” for intervention. For

these reasons as well, therefore, the petitions to intervene

were denied.

VII. Approval of the Consent Decrees

The Commonwealth and Tobacco Defendants asked this

court to approve their settlement and to enter a Consent

Decree. This Consent Decree creates continuing jurisdiction

with this court for consideration of any interpretation or

enforcement issues that may arise under the agreement as

they relate to Pennsylvania. It would not, however, require

the court “to actively monitor compliance with the

settlement.” [79]

There are several reasons why the parties seek court

approval. First, the Master Settlement Agreement requires

uniform approval procedures throughout the various settling

states. Moreover, the parties emphasize that public law

Settlements spanning many years are frequently complicated

documents that benefit from continuing oversight by a court

familiar with the issues. Moreover, “a court that maintains

continuing jurisdiction over a consent decree will have a

more flexible repertoire of enforcement measures.”

A consent decree is arrived at through negotiation and

settlement. In re John W., 300 Pa. Super. 293, 446 A.2d

621, 623 (1982). By its very nature, therefore, a consent

decree “requires the understanding of or ratification by the

respective parties.” Archbishop v, Karlak, 450 Pa. 535, 299

A.2d 294, 297 (1973). As the Pennsylvania Supreme Court

has observed, a consent decree “is not a legal determination

of the matters in controversy; it has the binding force of, a

legal determination on the parties thereto only.” Sabatine v.

Comm, 497 Pa. 453, 442 A.2d 210, 212 (1981). [81].

In essence, a consent decree is a contract that binds the

parties to its terms and a court may not modify it absent

fraud, accident or mistake. Univ. Builders Supply Inc. v.

Shaler Highlands Corp., 405 Ps, 259, 175 A.2d 58, 61

(1961). See also Jones Memorial Baptist Church _v.

Brackeen, 416 Pa. 599, 207 A.2d 861, 863 (1965);

Dravosburg Housing Assoc. v. Borough of Dravosburg, 71

Pa. Cmwith. 144, 454 A.2d 1153, 1161 (1983). But even

though a consent decree is not a legal determination by the

court of matters in controversy .. . it binds the parties with

the same force and effect as if a final decree has been

rendered after a full hearing upon the merits.” Armstead v.

Dandridge, 257 Pa. Super. 415, 590 A.2d 1305, 1310 (1978)

(citations omitted); Pennypack Woods Home Ownership

Assoc. v. Regan, 298 Pa. Supe. 170, 444 A.2d 715, 716

(1982). Because of its nature as a binding contract, it is

imperative that each party has fully consented to it. Pa.

Human Relation Comm'n v. Graybill, 482 Pa. 143, 393 A.2d

420. 423 (1978) Com. of Pa. v. Rozman. 10 Pa. Cmwith.

133. 309 A.2d 197, 199-200 (1973).

In light of these principles, this Court approved the

Consent Decrees that all the parties endorsed in their joint

motion to approve the settlemenss and consent decree. This

complicated settlement was reacied after months of vigorous

arms-length negotiations. It spares all parties incalculable

expense and the uncertainties inherent in such complex

litigation. The claims asserted by the Common-wealth’s ten-

count complaint brought in its capacity as sovereign, and as

parens patriae on behalf of all of its citizens, were often

novel and subtle. Resolution of such fundamental questions

as whether subrogation is the exclusive Statutory remedy for

recouping the state’s Medicaid expenditures was far from

clear-cut as evidenced by conflicting precedent from other

states. Compare Illinois v. Philip Morris et al. No. 96L13146,

slip op. at 7 (Illinois Cir. Ct., Cook Cty. Nov. 13, 1997)

with Iowa v._R. J. Reynolds. No. CL71048, slip op. at 6-7

(lowa Dist. Ct., Polk Cty. Aug. 26, 1997). While other state

courts in approving the MSA have noted the risks the

Attorneys General faced with their cases, [83] the tobacco

defendants faced the formidable task of defending in 46

States actions raising complex issues that had to be fought

out in a maze of varying state statutes and precedent.

Not only does the settlement spare the parties the

expense and risks of continuing litigation; it accords with the

strong judicial policy in Pennsylvania favoring voluntary

settlements. See, e.g. Muhammad v. Strass-burger, 526 Pa.

541, 587 A.2d 1346, 1349 (1991), cert. denied, 502 U.S. 867

(1991) (“A long st

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