IN THE COMMONWEALTH COURT OF PENNSYLVANIA

The Commonwealth of Pennsylvania, : by and through The Philadelphia : District Attorney, Larry Krasner, :

:

Plaintiff :

:

v. : No. 233 M.D. 2021

: The Attorney General of the : Commonwealth of Pennsylvania, :

:

Defendant :

The Commonwealth of Pennsylvania, : by and through the Allegheny County : District Attorney, Stephen A. Zappala, Jr., :

:

Plaintiff :

:

v. : No. 250 M.D. 2021

: The Attorney General of the : Commonwealth of Pennsylvania, : McKesson Corp., Cardinal Health, : Inc. and AmerisourceBergen Drug Corp., :

:

Defendants :

The Commonwealth of Pennsylvania, : by and through The Philadelphia : District Attorney, Larry Krasner, :

:

Plaintiff :

:

v. : No. 260 M

. D

. 2021

: The Attorney General of the : Commonwealth of Pennsylvania, :

:

Defendant :2

The Commonwealth of Pennsylvania, : by and through t he Allegheny : County District Attorney, : Stephen A. Zappala, Jr. :

:

Plaintiff :

:

v. : No. 261 M.D. 2021

: Argued: December 13, 2021

The At torney General of the : Commonwealth of Pennsylvania, :

Johnson & Johnson, Janssen :

Pharmaceuticals, Inc., Ortho

- McNeil

- :

Janssen Pharmaceuticals, Inc.

, and :

Janssen Pharmaceutica, Inc., :

:

Defendants :

BEFORE: HONORABLE MARY HANNAH LEAVITT, Judge 1

HONORABLE MICHAEL H. WOJCIK, Judge (P.)

HONORABLE ELLEN CEISLER, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION

BY JUDGE WOJCIK FILED: February 4, 2022

Before the Court in these consolidated matters are th e preliminary

objections (POs) 2 of the Attorney General of the Commonwealth of Pennsylvania

1 This matter was assigned to the panel before January 3, 2022, when President Judge

Emerita Leavitt became a senior judge on the Court.

2 “ In ruling on preliminary objections, the courts must accept as true all well

- pled facts that

are material and all in ferences reasonably deducible from the facts. ” Pennsylvania Independent

Oil and Gas Association v. Department of Environmental Protection , 135 A.3d 1118, 1123 (Pa.

Cmwlth. 2015), aff ’ d , 161 A.3d 949 ( Pa. 2017) ( citation omitted ). “ However, we ‘ are not required

(Footnote continued on next page...)3

(AG), McKesson Corp., Cardinal Health, Inc., AmerisourceBergen Drug Corp.

(collectively, Distributors), Johnson & Johnson, Janssen Pharmaceuticals, Inc.,

Ortho

- McNeil

- Janssen Pharmaceuticals, Inc ., and Janssen Pharmaceutica, Inc.

(collectively, Manufacturer) to the Complaints for Declaratory Relief (PFRs) 3 filed

by the Commonwealth of Pennsylvania, by and through the Philadelphia District

Attorney, Larry Krasner (DA Krasner)

, and the Allegheny Co unty District Attorney,

Stephen A. Zappala, Jr. (DA Zappala) (collectively, DAs)

, pursuant to the

Declaratory Judgments Act (DJA). 4 We sustain the AG’s, Distributors’

, and

Manufacturer’s PO s , and dismiss the PFRs.

The following facts may be summarized f rom the PFRs and the exhibits

appended thereto. On June 15, 2017, the AG 5 announced that his office was

to accept as true any unwarranted factual inferences, conclusions of law or expressions of

opinion. ’” Id. “ To sustain preliminary objections, ‘ it must appear with certainty that the law will

permit no recovery ’ and ‘ [a]ny do ubt must be resolved in favor of the non

- moving party. ’” Id.

3 Although s tyled as Complaint s , the appropriate pleading that is used to commence an

action in our original jurisdiction against the Commonwealth and its officers under Chapter 15 of

the Pennsy lvania Rules of Appellate procedure are petitions for review. See, e.g.

, MFW Wine Co.,

LLC v. Pennsylvania Liquor Control Board , 231 A.3d 50, 52 n.1 (Pa. Cmwlth. 2020) ( Brobson,

J., single

- judge opinion) (“Consistent with the applicable rules of appellate procedure, the Court

treats the Amended Complaint as a petition for review directed to this Court ’ s original jurisdiction.

See Pa. R.A.P. 1501(a)(3), 1502, 1503.”). Consistent with the foregoing, we refer to the filing s as

P FRs.

4 42 Pa. C.S. §§7531

- 75 41.

5 Article IV, section 4.1 of the Pennsylvania Constitution provides that 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.” Pa. Const. art. IV, §4.1. In relevant par t, Section 204(a)(1) and (2),

(c), and (d) of the Commonwealth Attorneys Act, Act of October 15, 1980, P.L. 950, as amended

, 71 P.S. §732

- 204(a)(1) and (2)

, (c) and (d) states:

(a) Legal advice.

-- (Footnote continued on next page...)4

participating in a nationwide investigation into the marketing and sale of prescription

opioids underlying the nationwide opioid epidemic.

Along with a number of other DAs 6 from across the Commonwealth, in

2018, DA Krasner filed two

, one

- count complaints in coordinated proceedings

against Distributors and Manufacturer in the Delaware County Court of Common

Pleas (trial court). In 2021, DA Zappala filed two similar one

- count actions that

were transferred to the trial court. These act ions were based on the DAs’ authority

(1) Upon the request of the Governor or the head of any

C ommonwealth agency, the [AG] shall furnish legal advice

concerning any matter or issue arising in connection with the

exercise of the official powers or the performance of the official

duties of the Governor or agency.

. . . (2) If the Governor or the hea d of any Commonwealth agency

disagrees with the legal advice rendered by the [AG], the Governor

or the head of the Commonwealth agency may seek a declaratory

judgment in the Commonwealth Court pursuant to [the DJA].

. . .

* * *

(c) Civil litigation; collection of debts.

-- The [ AG ] shall represent

the Commonwealth and all Commonwealth agencies

. . . in any

action brought by or against the Commonwealth or its agencies, and

may intervene in any other action

. . . .

(d) Administrat ion of consumer affairs programs.

-- The [ AG ]

shall administer the provisions relating to consumer protection set

forth in [S] ections 917 through 922 of the [Administrative Code of

1929, A ct of April 9, 1929

, P.L. 177, as amended , added by the Act

of Decembe r 17, 1968, P.L. 1221, 71 P.S. §§ 307

- 1

– 307

- 6 ], and

appoint the advisory committee established under section 922

.

6 Article IX, section 4 of the Pennsylvania Constitution states that “[c]ounty officers shall

consist of .

. . district attorneys .

. . .” P a. Const. art. IX, §4.5

under Section 4 of the Unfair Trade Practices and Consumer Protection Law (Law), 7

to address the causes of the opioid epidemic flowing from Distributors’ and

Manufacturer’s unfair methods of competition and unfair or deceptive acts or

practices in the production, marketing, sale, and distribution of opioids in violation

of the Law.

In July 2021, the AG and three other state attorneys general announced

their support for a proposed Settlement Agreement with Distributors and

Manufacturer under which these companies would agree to pay the states and their

“Subdivisions” that joined the settlement 8 more than $21 billion over an 18

- year

period from Distributors, and $5 billion over a 9

- year period from Manufacturer.

See PF Rs Exhibit B ¶IV(A). With respect to the enforcement of the executed

Settlement Agreement, ¶XI(A) states:

A. Scope. As of the Effective Date, the Released Entities

are hereby released and forever discharged from all of the

Releasors’ [ 9 ] Released Claims

. Each Settling State (for

7 Act of December 17, 1968, P.L. 1224, as amended , 73 P.S. §201

- 4. Section 4 states:

Whenever the [AG] or a [DA] has reason to believe that any person

is using or is about to use any method, act or practice declared by

[S]ection 3 of this [Law] to be unlawful, and that proceedings would

be in the public interest, he may bring an action in the name of the

Commonwealth against such person to restrain by temporary or

permanent injunction the use of such method, act or practice.

8 Bo th Allegheny County and the City of Philadelphia are “Litigating Subdivisions” and

“Primary Subdivisions” that may be parties to the settlement if it is approved by them. See PFRs

Exhibit B ¶VII, and at C

- 36, C

- 37, I

- 36, I

- 37.

9 Settlement Agreement ¶I(III) defines “Releasors” as follows:

With respect to Released Claims, (1) each Settling State; (2) each

Participating Subdivision; and (3) without limitation and to the

(Footnote continued on next page...)6 itself and its Releasors) and Participating Subdivision

hereby absolutely, unconditionally, and irrevocably

covenants not to bring, file, or claim, or to cause, assist or

permit to be brought, filed, or claimed, or to otherwise

seek to establish liability for any Released Claims against

any Released Entity in any forum whatsoever. The

releases provided for in this Agreement are intended by

the Parties to be broad and shall be interpreted so as to give

the Released Entities the broadest possible bar against

any liability relating in any way to Released Claims and

extend to the full extent of the power of each Settling

State and its Attorney General to release claims. This

Agreement shall be a comp lete bar to any Released Claim

.

maximum extent of the power of each Settling State’s Attorney

General and/or Participating Subdivision to release Claims, (a) the

Settling State’s and Participating Subdivision’s departments,

agencies, divisions, boards, commissions, Subdivisions, districts,

instrumentalities of any kind and attorneys , including its Attorney

General, and any person in his or her official capacity whether

elected or appointed to serve any of the foregoing and any agency,

person, or other entity claiming by or through any of the foregoing,

(b) any public entities, public instrumentalit ies, public educational

institutions, unincorporated districts, fire districts, irrigation

districts, and other Special Districts in a Settling State, and (c) any

person or entity acting in a parens patriae , sovereign, quasi

sovereign, private attorney gen eral, qui tam , taxpayer, or other

capacity seeking relief on behalf of or generally applicable to the

general public with respect to a Settling State or Subdivision in a

Settling State, whether or not any of them participate in this

Agreement . The inclusi on of a specific reference to a type of entity

in this definition shall not be construed as meaning that the entity is

not a Subdivision. Each Settling State’s Attorney General

represents that he or she has or has obtained (or will obtain no later

than th e Initial Participation Date) the authority set forth in Section

XI.F. In addition to being a Releasor as provided herein, a

Participating Subdivision shall also provide the Subdivision

Settlement Participation Form referenced in Section VII providing

for a release to the fullest extent of the Participating Subdivision’s

authority.

PFRs Exhibit B ¶I(III) (emphasis added).7

PFRs Exhibit B ¶XI(A) (emphasis added). The AG has approved the Settlement

Agreement and it has moved on to the Subdivisions, i.e. , the City of Philadelphia 10

and Allegheny County

, 11 for their approval on January 2, 2022. See PFRs Exhibit B

10 Pursuant to article IX, section 13 of the Pennsylvania Constitution, the Philadelphia

County offices have generally been abolished, w ith some exceptions such as the DA, and the City

performs all of the former functions of county government. Pa. Const. art. IX, §13. Under Section

3

- 101 of T he Philadelphia Code, the City Solicitor is the head of the City’s Law Department. In

turn, Sect ion 4

- 400(a), (b) and (c) of T he Philadelphia Code states, in pertinent part:

The Law Department shall have the power and its duty shall be to

perform the following functions:

(a) Legal Advice. It shall furnish legal advice to the mayor, to the

Council and to all officers, departments, boards and commission s

concerning any matter or thing arising in connection with the

exercise of their official powers or performance of their official

duties and except as otherwise expressly provided, shall supervise,

direct and control all of the law work of the City.

(b) Litigation. The Department .

. . shall represent the City and

every officer, department, board or commission in all li tigation.

. . .

(c) Contracts and Bonds. The Department shall prepare or approve

all contracts, bonds and other instruments in writing in which the

City is concerned .

. . .

Phila delphia Code §4

- 400(a), (b), (c).

11 Under Article V, Section 3 of the A llegheny County Home Rule Charter, the County

Solicitor “shall be the chief legal officer of the County and serve as the director of the Law

Department.” Additionally, Allegheny County Administrative Code Section 5

- 405.03(C), (D),

(E), and (G) states:

T he County Solicitor shall be the Director of the Law Department

and shall perform the following duties and responsibilities:

* * *

(Footnote continued on next page...)8

¶¶II, VIII. Because the Settlement Agreement purports to extinguish their actions in

the trial court under the Law, by effectively resolving all claims against Distributors

and Manufacturer, the DAs filed the instant PFRs seeking a judg ment: (1) declaring

that the AG lacks the authority to release the DAs ’ claims filed under the Law; (2)

enjoining the AG’s release of the DAs’ claims filed under the Law against

Distributors and Manufacturer; and (3) providing any other relief that this C ourt

deems just and proper.

However, as alleged in the AG’s, Distributors’, and Manufacturer’s

third and fifth POs, the Settlement Agreement has not yet been executed by the

parties to become effective, or inter pose d into the trial court proceedings to

ex tinguish the DAs’ claims in those matters. As this Court has explained:

C. Commence and prosecute all suits brought or to be brought

by the County wherein or whereby any rights, privileges, prope rties,

claims or demands of the County are involved, as well as to defend

all actions, suits, grievances, claims or potential claims brought or

alleged against the County;

D. With the authority of the Chief Executive, compromise and

settle actions, suits, claims or potential claims brought by or against

the County, with notification to Council, prior to or

contemporaneous with execution of the agreement;

E. Prepare, or cause to be prepared, as directed by the Manager,

and/or approve as to form all contrac ts, agreements, leases, surety

bonds or other legal documents on behalf of the County; [and]

* * *

G. Perform all duties now performed by County Solicitors

under the laws of the Commonwealth and to do, perform every and

all professional acts, and render legal advice incident to the office

of County Solicitor, which may be required under the Charter.

The Administrative Code of Allegheny County §5

- 405.03(C), (D), (E), and (G).9 It is well established that “[d]eclaratory judgments are not

obtainable as a matter of right. Rather, whether a court

should exercise jurisdiction over a declaratory judgment

proceed ing is a matter of sound judicial discretion.” A

substantial limitation on the exercise of such jurisdiction

is the principle that we will not adjudicate a petition for

declaratory judgment where the issues are not ripe for

determination. In deciding whe ther the doctrine of

ripeness bars our consideration of a declaratory judgment

action, both the state and federal courts employ a two

- part

test: “[t]he court must consider whether the issues are

adequately developed for judicial review and what

hardship th e parties will suffer if review is delayed.”

The first prong of the test, whether the issues are

adequately developed for judicial review, itself contains

two parts. The first is whether the asserted deprivation of

rights (or entitlement to relief) is i mmediate or is

hypothetical and contingent upon uncertain future events.

Our Supreme Court has stated the following :

Only where there is a real controversy may a party

obtain a declaratory judgment.

A declaratory judgment must not be employed to

determi ne 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

.

“A substantial contingency is the classic impediment to a

pre

- enfor cement challenge [to a new statute].” The second

part of the first prong is whether resolution of the

constitutional or other legal dispute will involve

substantial fact

- finding. Obviously, the more fact

intensive the dispute, the more significant the ob stacle

posed by the uncertainty of future events. The United

States Supreme Court has explained as follows :

the reason [for] postponing [a] decision until a

constitutional issue is more clearly focused by, and

receives the impact from, occurrence in part icular

circumstances is precisely that those circumstances10 may reveal relevancies that abstract, prospective

supposition may not see or adequately assess

.

The second prong of the ripeness test recognizes

that, even where the case is not as fully developed for

judicial review as the court would find appropriate, it may

still address the merits if refusal to do so would work a

demonstrable hardship on the part ies. This could occur,

for instance, if a new statute provided criminal sanctions

for conduct that was believed to involve constitutionally

protected speech. In that case, a pre

- enforcement

challenge might be heard so that the plaintiffs would not

risk i ncarceration as the price of testing the law

.

The ripeness test was succinctly summarized

. . . as

follows:

A court should look to (1) “the fitness of the issues

for judicial decision,” and (2) “the hardship to the

parties of withholding court considera tion.” Under

the “fitness for review” inquiry, a court considers

whether the issues presented are purely legal, as

opposed to factual, and the degree to which the

challenged action is final. The various factors that

enter into a court ’ s assessment of fit ness include:

whether the claim involves uncertain and contingent

events that may not occur as anticipated or at all; the

extent to which a claim is bound up in the facts; and

whether the parties to the action are sufficiently

adverse

.

The second prong f

ocuses on the hardship that may

be entailed in denying judicial review, and the

determination whether any such hardship is

cognizable turns on whether the challenged action

creates a “direct and immediate” dilemma for the

parties, such that the lack of pre

- enforcement

review will put the plaintiffs to costly choices

.

Applying this test, we must conclude that the [petitioner’ s ]

claims are not ripe for consideration

.11

City Council of Philadelphia v. Commonwealth , 806 A.2d 975, 978

- 80 (Pa. Cmwlth.

2002), vacat ed and remanded on ripeness grounds , 847 A.2d 55 ( Pa. 2004) (citations

omitted). 12

Likewise, a t this juncture in this matter , it is impossible for this Court

to declare the respective rights of the parties regarding a Settlement Agreement that

has yet to be executed and that may still be modified, as it has been before. It is also

impossible for this Court to enjoin the AG from releasing the DAs’ claims under a

Release that has yet to be executed, or introduced into the trial court proceedings

,

that may potentially provide the basis upon which the trial court may dismiss the

DAs’ claims. In short, under the first prong of the foregoing test, the DAs’ claims

“ involve [] uncertain and contingent events that may not occur as anticipated or at

all ,” and any relief that this Court may grant “ is bound up in the facts ” as they relate

to the terms of the Settlement Agreement and Release that have yet to be finalized

or executed

. City Council of Philadelphia

, 806 A.2d at 9 8 0. Additionally, with

respect t o the second prong of the foregoing test, the DAs’ claims do not “ create [] a

‘ direct and immediate ’ dilemma for the parties, such that the lack of pre

- enforcement

review will put the [m] to costly choices ” at the current sta g e of the proceedings. Id.

As a result, unless and until any finalized Settlement Agreement and/or Release are

executed and affect the DAs’ rights in a substantial and concrete manner, any

opinion that this Court would issue at this stage of the proceedings would be an

impermissible adv isory opinion. Id.

12 The case was vacated and remanded “ in light of the stipulation at argum ent by the parties

that power over the Philadelphia Gas Works has been transferred to the Pennsylvania Utility

Commission ,” thereby making the matter ripe for review by this Court. City Council of

Philadelphia

, 847 A.2d at 5 6

.12 Accordingly, we sustain the AG’s, the Distributors’ and the

Manufacturer’s PO s , and dismiss the PFRs. 13

MICHAEL H. WOJCIK, Judge

Judge Covey did not participate in the decision of this case.

Judge Fizzano Cannon did not participate in the decision of this case.

13 Based on the foregoing dis position of the POs, we will not address any remaining POs.

Additionally, the AG’s December 13, 2021 Application for Relief in the Nature of a Motion for

Leave to Correct Factual Record

, the DAs’ December 22, 2021 Application for Relief to reply

thereto, and the DAs ’ December 14, 2021 Emergency Application for Relief in the Nature of a

Notice of Supplemental Authority, are dismissed as moot.IN THE COMMONWEALTH COURT OF PENNSYLVANIA

The Commonwealth of Pennsylvania, : by and through The Philadelphia :

District Attorney, Larry Krasner, :

:

Plaintiff :

:

v. : No. 233 M.D. 2021

: The Attorney General of the : Commonwealth of Pennsylvania, :

:

Defendant :

The Commonwealth of Pennsylvania, :

b y and through the Allegheny : County District Attorney, Stephen A. : Zappala, Jr., :

:

Plaintiff :

:

v. : No. 250 M.D. 2021

: The Attorney General of the : Commonwealth of Pennsylvania, : McKesson Corp., Cardinal Health, : Inc. and AmerisourceBergen Drug Corp., :

:

Defendants :

The Commonwealth of Pennsylvania, : by and through The Philadelphia : District Attorney, Larry Krasner, :

:

Plaintiff :

:

v. : No. 260 M

. D

. 2021

: The Attorney General of the : Commonwealth of Pennsylvania, :

:

Defendant :The Commonwealth of Pennsylvania, :

by and through t he Allegheny : County District Attorney, : Stephen A. Zappala, Jr. :

:

Plaintiff :

:

v. : No. 261 M.D. 2021

: The Attorney General of the : Commonwealth of Pennsylvania, :

Johnson & Johnson, Janssen :

Pharmaceuticals, Inc., Ortho

- McNeil

- :

Janssen Pharmaceuticals, Inc.

, and :

Janssen Pharmaceutica, Inc., :

:

Defendants :

O R D E R

AND NOW, this 4 th day of February , 20 2 2

, the Defendants’ preliminary

objection is sustained, and the Plaintiffs’ Complaints for Declaratory Relief are

DISMISSED. The Attorney General of the Commonwealth of Pennsylvania’s

Application for Relief in the Nature of a Motion for Leave to Correct Factual Record

,

Plaintiffs’ Application for Relief to reply thereto, and The Philadelphia District

Attorney, La rry Krasner’s and The Allegheny County District Attorney, Stephen A.

Zappala, Jr.’s Emergency Application for Relief in the Nature of a Notice of

Supplemental Authority, are DISMISSED as moot.

__________________________________ MICHAEL H. WOJCIK, Jud ge