[J-46-2023] [MO: Mundy, J.] 

IN THE SUPREME COURT OF PENNSYLVANIA

MIDDLE DISTRICT

MBC DEVELOPMENT, LP, MBC 

MANAGEMENT, LLC, MBC PROPERTIES, 

LP, JAMES L. MILLER, MILLER 

PROPERTIES MANAGEMENT, LLC, 

MARTIN CERULLO, WILLIAM KIRWAN

 v. 

JAMES W. MILLER

APPEAL OF: MBC DEVELOPMENT, LP, 

MBC MANAGEMENT, LLC, MBC 

PROPERTIES, LP, JAMES L. MILLER, 

AND MILLER PROPERTIES 

MANAGEMENT, LLC

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No. 1 MAP 2023

Appeal from the Order of the 

Superior Court dated August 12, 

2022 at No. 1295 MDA 2021 

Vacating in Part/Affirming In Part the 

Order of the Schuylkill County Court 

of Common Pleas, Civil Division, 

dated September 28, 2021 at No. S797-2021 and Remanding.

ARGUED: September 13, 2023

DISSENTING OPINION

JUSTICE WECHT DECIDED: May 31, 2024

I agree that the plain language of the Pennsylvania Uniform Limited Partnership 

Act of 20161 requires “court review” of a special litigation committee recommendation, 

and that a limited partnership agreement may not “[v]ary the provisions” of the section 

that sets forth the procedures relating to such committees.

2 As the Majority aptly

concludes, this suggests that arbitration of the matter is unavailable. Pennsylvania law 

is clear enough on the question. If that were the end of our inquiry, I would concur fully 

with the Majority’s disposition.

1 15 Pa.C.S. §§ 8611-95 (“PULPA”). 

2 Id. §§ 8694(f), 8615(c)(18); see Maj. Op. at 18-20. 
[J-46-2023] [MO: Mundy, J.] - 2

However, as Appellee argues, federal law has something to say on the matter. 

Section 2 of the Federal Arbitration Act declares that arbitration agreements in contracts 

“involving commerce” are “valid, irrevocable, and enforceable, save upon such grounds 

as exist at law or in equity for the revocation of any contract . . . .”3 Appellant here makes 

no effort whatsoever to suggest that the agreement at issue does not involve commerce,

a suggestion that would in any event be difficult to sustain given that the matter involves 

the business activities of a commercial entity. Appellant also does not suggest that the 

partnership agreement or the arbitration clause are invalid under any contract theory, 

such as fraud, duress, or unconscionability. Appellee, by contrast, invokes the FAA and 

quotes the Supreme Court of the United States’ declaration that, “[w]hen state law 

prohibits outright the arbitration of a particular type of claim, the analysis is 

straightforward: The conflicting rule is displaced by the FAA.”4

Appellee’s position has facial merit. The FAA is not merely a guideline, and its 

application is not restricted to federal court. We also must observe the FAA’s 

requirements. By virtue of the United States Constitution’s Supremacy Clause,5 we are 

without authority to declare PULPA superior to the FAA, regardless of how plain we find 

the language of Pennsylvania’s statute.6 In Southland Corporation v. Keating, the 

Supreme Court of the United States made clear that the FAA is “applicable in state as 

3 9 U.S.C. § 2 (“FAA”).

4 Appellee’s Br. at 28 (quoting Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 530, 

533 (2012)).

5 U.S. CONST. art. VI, cl. 2.

6 See Taylor v. Extendicare Health Facilities, Inc., 147 A.3d 490, 499-504 (Pa. 2016)

(discussing the evolution of federal law establishing that the FAA displaces contrary state 

law).
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well as federal courts.”7 As the Court explained there, through the FAA, “Congress 

declared a national policy favoring arbitration and withdrew the power of the states to 

require a judicial forum for the resolution of claims which the contracting parties agreed 

to resolve by arbitration.”8 With that enactment, Congress specifically “intended to 

foreclose state legislative attempts to undercut the enforceability of arbitration 

agreements.”9 “The FAA’s displacement of conflicting state law is ‘now wellestablished.’”10 As Appellee notes, this proposition is so well-settled that the Supreme 

Court deems the analysis “straightforward.”11 The FAA’s sweep is broad. Indeed, as we 

have previously noted, commentators have characterized the FAA as a “preemption 

juggernaut” due to its far-reaching displacement of contrary state law.12

Southland is particularly noteworthy here. In that case, the Supreme Court of the 

United States considered a California statute that the state court interpreted as requiring 

“judicial resolution” of claims brought thereunder, notwithstanding a contrary arbitration 

agreement.

13 “So interpreted,” the Southland Court concluded, the statute “directly 

7 Southland Corp. v. Keating, 465 U.S. 1, 16 (1984).

8 Id. at 10 (emphasis added).

9 Id. at 16.

10 Preston v. Ferrer, 552 U.S. 346, 353 (2008) (citing Allied-Bruce Terminix Cos. v. 

Dobson, 513 U.S. 265, 272 (1995); Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 

440, 445-46 (2006); Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 684-85 (1996); 

Perry v. Thomas, 482 U.S. 483, 489 (1987)).

11 See Appellee’s Br. at 28 (quoting Marmet Health Care, 565 U.S. at 533); see also

AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 341 (2011) (citing Preston, 552 U.S. at 

353) (“When state law prohibits outright the arbitration of a particular type of claim, the 

analysis is straightforward: The conflicting rule is displaced by the FAA.”).

12 Taylor, 147 A.3d at 502 (quoting Lisa Tripp & Evan R. Hanson, AT&T v. 

Concepcion: The Problem of A False Majority, 23 KAN. J. L. & PUB. POL’Y 1 (Fall 2013)).

13 Southland, 465 U.S. at 10. Specifically, the statute at issue, similar to Section 

8615(c)(18) of PULPA, forbade “[a]ny condition, stipulation or provision purporting to bind 

(continued...)
[J-46-2023] [MO: Mundy, J.] - 4

conflicts with § 2 of the Federal Arbitration Act and violates the Supremacy Clause.”14 

Before us is a Pennsylvania statute that, as the Majority correctly opines, requires judicial 

resolution of a claim brought thereunder, notwithstanding an otherwise valid and 

applicable arbitration clause. The reasoning of Southland would seem to apply equally 

here.15 Absent any other reason to conclude that the FAA is inapplicable to this matter, 

I must conclude that Appellee’s position is meritorious.

any person acquiring any franchise to waive compliance with any provision of this law,” 

which the California Supreme Court interpreted as requiring “judicial resolution” of claims 

brought under the statute. Id. (quoting Cal. Corp. Code § 31512 (West 1977)) (emphasis 

added). PULPA analogously provides that a limited partnership agreement may not 

“[v]ary the requirements” of the section that requires “court review” of the matter at issue. 

15 Pa.C.S. §§ 8615(c)(18), 8694(f).

14 Southland, 465 U.S. at 10.

15 The only appreciable distinction is that Section 8615(c)(18) of PULPA allows a 

partnership agreement to opt out of the use of a special litigation committee altogether. 

15 Pa.C.S. § 8615(c)(18) (stating that a partnership agreement may not “[v]ary the 

provisions of section 8694 (relating to special litigation committee), except that the 

partnership agreement may provide that the partnership may not have a special litigation 

committee”) (emphasis added). The parties do not address whether this option has any 

effect upon the FAA’s otherwise vast scope.

The Concurrence takes up the issue and, volunteering an argument on Appellants’ 

behalf, suggests that, by declining to specifically exempt themselves from the special 

litigation committee process, the parties affirmatively chose to render arbitration 

unavailable for this species of claim. Concurring Opinion at 9 n.13 (Donohue, J.). This 

proposition dovetails with the Concurrence’s overarching view that the arbitration clause 

at issue must be read to incorporate the relevant provisions of PULPA, notwithstanding 

what the clause says on its face. As it concerns the FAA, this argument—had Appellants 

bothered to make it—would be more attractive than some of the alternatives, but it is 

unavailing nonetheless. The argument would be more persuasive if PULPA provided the 

opposite—a default rule that would allow enforcement of the plain language of the

arbitration clause, with an “opt-in” for those who specifically desired court review of this 

class of dispute. Were that the case, one would be able to point to textual evidence that 

the parties actually agreed to exclude such claims from the scope of the arbitration clause.

As things stand, there is no indication in the text of the arbitration clause that the 

parties intended it to exclude any sort of claim. As the Concurrence notes, the clause 

provides: “Any dispute or controversy arising under or in connection with this Agreement 

shall be settled exclusively by arbitration . . . .” Id. at 6 n.9 (quoting MBC Properties 

(continued...)
[J-46-2023] [MO: Mundy, J.] - 5

Appellants dispute none of this, and they make no attempt to demonstrate that 

Appellee’s argument fails on the merits. Appellants’ only mention of the FAA comes in 

their reply brief, in which they argue that Appellee’s federal argument is waived, either for 

lack of preservation or want of development.16 Issue-preservation concerns are 

unavailing, given that Appellee’s argument for affirmance implicates the right-for-anyLimited Partnership Agreement, § 11.1; MBC Development Limited Partnership 

Agreement, § 11.1) (emphasis added). The Concurrence accurately characterizes the 

clause as “broad” and “mandatory.” Id. at 7. Yet, the Concurrence suggests nonetheless

that we must disregard the plain language of the clause and then proceed to read it to 

say something altogether different. The Concurrence discerns an “implied term” binding 

the parties to Section 8694 of PULPA, and, because this (apparently invisible) term 

cannot be made “meaningless or superfluous,” the Concurrence suggests that we must 

read the arbitration clause as including an unspoken carveout for challenges to special 

litigation committee recommendations. Id. This approach, the Concurrence suggests, is 

necessary to “effectuate the intent of the parties”—an intent not reflected in the words 

that the parties actually used. Id at 8. Because it relies upon nonexistent contractual 

language, this approach is too strained to carry the weight that the Concurrence asks of 

it.

A more straightforward analysis recognizes that the arbitration clause, in fact, says 

what it says. It applies to “any dispute or controversy” arising under the partnership 

agreements. The parties intended it so apply. See Kripp v. Kripp, 849 A.2d 1159, 1163 

(Pa. 2004) (“When the terms of a contract are clear and unambiguous, the intent of the 

parties is to be ascertained from the document itself.”). Yet, under the plain language of

Section 8694(f) of PULPA, this outcome would be precluded. Such a result remains

facially problematic under the FAA.

The Concurrence further asserts that I maintain that the Court should “not give 

effect to terms that are implied by virtue of the Limited Partnership Act.” Concurring 

Opinion at 7 n.10 (Donohue, J.). This assertion is incorrect. It is the circumstances of 

this case and the involvement of the FAA that compel this result. Here, the parties’ 

agreement contains an arbitration clause that appears not to exclude any type of claim. 

PULPA would prohibit arbitration of the challenge to the special litigation committee’s 

recommendations. The FAA requires that such state law be displaced. Here, whether we 

like it or not, PULPA must give way to the FAA.

16 See Appellants’ Reply Br. at 5 n.2.
[J-46-2023] [MO: Mundy, J.] - 6

reason doctrine.17, 18 Moreover, this Court previously has endorsed the proposition that 

“a claim of state law preemption by federal law is of such fundamental importance that it 

may be considered for the first time on appeal.”19 With regard to the adequacy of 

Appellee’s development of the issue, Appellee certainly could have written more on the 

matter. But his argument was nonetheless sufficient for me to notice it in his brief, and to 

warrant my inquiry into the merit of his position.20 I do not discern a clear basis for 

deeming Appellee’s argument to be waived. In any event, such a fact-specific conclusion 

would simply mean that this particular case does not warrant this Court’s review. Even if 

the dispositive issue is waived, we cannot issue a decision that is in conflict with federal 

law. If waiver did apply here, the law would be better served by us issuing no decision at 

all.

17 See, e.g., Ario v. Ingram Micro, Inc., 965 A.2d 1194, 1200 (Pa. 2009) (“an appellate 

court may uphold an order of a lower court for any valid reason appearing from the 

record”); Bearoff v. Bearoff Bros., 327 A.2d 72, 76 (Pa. 1974) (citing Taylor v. Churchill 

Valley Country Club, 228 A.2d 768, 769 (Pa. 1967); Sherwood v. Elgart, 117 A.2d 899 

(Pa. 1955)) (“We have often stated that where a court makes a correct ruling, order, 

decision, judgment or decree, but assigns an erroneous reason for its action, an Appellate 

Court will affirm the action of the court below and assign the proper reason therefor.”).

18 Appellants also assert that any argument concerning the FAA was waived below

due to Appellee’s failure to specifically list the matter in his Pa.R.A.P. 1925(b) statement 

when appealing to the Superior Court. See Appellants’ Reply Br. at 5 n.2. Although this 

is a plausible position, it is noteworthy that Appellee offered the same arguments about 

the FAA and related case law in his brief to the Superior Court, and Appellants did not 

complain of waiver at that point. In any event, even assuming that Appellee’s argument 

was not fairly encompassed within his Rule 1925(b) statement and that a finding of waiver 

is permissible here, this strikes me more as an argument in favor of dismissing this appeal 

as improvidently granted, than an argument in favor of issuing a decision in conflict with 

federal law.

19 In re Novosielski, 992 A.2d 89, 98 (Pa. 2010) (citing Oatts v. Jorgenson, 821 P.2d 

108, 112 (Wyo. 1991)).

20 See Appellee’s Br. at 28-30.
[J-46-2023] [MO: Mundy, J.] - 7

The Majority attempts to avoid this problem by insisting that the FAA does not 

control this case. To support this position, the Majority invokes the Supreme Court of the 

United States’ decision in Volt Information Sciences, Inc. v. Board of Trustees of Leland 

Stanford Junior University.

21 Volt affirmed a state court’s judgment applying a contract’s

choice-of-law provision. In that provision, the parties agreed to be bound by state law, 

which contained rules allowing a stay of arbitration pending the outcome of related 

litigation with third parties. The application of these state arbitration rules, the Volt Court 

held, did not violate the FAA. But Volt concerned exactly that—state arbitration rules. 

The Majority suggests that Volt is applicable here because the “parties’ agreements 

incorporated the PULPA rules” concerning review of special litigation committee 

recommendations—rules that preclude arbitration.22 

Volt held that “[i]nterpreting a choice-of-law clause to make applicable state rules 

governing the conduct of arbitration—rules which are manifestly designed to encourage 

resort to the arbitral process—simply does not offend the rule of liberal 

construction . . . nor does it offend any other policy embodied in the FAA.”23 The Volt 

Court reiterated Southland’s holding that the FAA precludes state laws that “require a 

judicial forum for the resolution of claims which the contracting parties agreed to resolve 

by arbitration.”24 “But it does not follow,” the Volt Court reasoned, “that the FAA prevents 

the enforcement of agreements to arbitrate under different rules than those set forth in 

the Act itself.”25 The Court continued: “Where, as here, the parties have agreed to abide 

21 489 U.S. 468 (1989).

22 Maj. Op. at 22.

23 Volt, 489 U.S. at 476.

24 Id. at 478 (quoting Southland, 465 U.S. at 10).

25 Id. at 479 (emphasis added).
[J-46-2023] [MO: Mundy, J.] - 8

by state rules of arbitration, enforcing those rules according to the terms of the agreement 

is fully consistent with the goals of the FAA . . . .”26

The issue in the instant case is not merely a matter of applying different state-law 

arbitration rules than those set forth in the FAA. The operative language of PULPA does 

not set forth an alternative arbitration process. As the Majority correctly explains, the 

plain language of PULPA precludes arbitration entirely in this context. Accordingly, this 

is not a matter of choosing between different rules “governing the conduct of arbitration.”27 

This is not a Volt case; it is a Southland scenario. The Majority suggests that Volt controls 

here “because the parties’ agreement incorporated Pennsylvania law, which includes 

PULPA, and we are enforcing the entirety of the parties’ agreement.”28 But the Majority 

is not enforcing the entirety of the agreement; it is specifically declining to enforce the 

clause that mandates arbitration of all disputes under the agreement. It does so because 

PULPA, as the Majority correctly interprets it, requires “a judicial forum for the resolution 

of claims which the contracting parties agreed to resolve by arbitration.”29 The Majority’s 

approach is directly “at odds with Southland” because the Majority is “applying state law 

to deny the enforcement of the parties’ arbitration agreement.”30 Under state law, this is 

a perfectly acceptable result. Under the FAA, it is not.

Because we “may uphold an order of a lower court for any valid reason appearing 

from the record,”31 and because Appellee presents a facially meritorious reason for such 

26 Id.

27 Id. at 476.

28 Maj. Op. at 23.

29 Southland, 465 U.S. at 10; Volt, 489 U.S. at 478.

30 Maj. Op. at 23.

31 Ario, 965 A.2d at 1200.
[J-46-2023] [MO: Mundy, J.] - 9

affirmance, I conclude that we are bound by federal law to affirm the order of the Superior 

Court.

Accordingly, I respectfully dissent.