Court Opinion

ID: 4968912
Source: CourtListenerOpinion
Date Created: 2021-09-24 16:30:00.051606+00
Date Added: 2024-06-11T08:16:27.015233
License: Public Domain

DISSENTING OPINION BY
President Judge PELLEGRINI.
Even though it would give me pleasure to join with the majority because I share the concerns with the process by which the Consent Decree was entered, I am compelled not to do so for the reasons expressed below.
I.
This matter is presently before us on a Joint Motion for Judgment on the Pleadings filed by Plaintiffs. In their Joint Motion, Plaintiffs asked us to enter judgment on the pleadings and enter the following relief:
(1) A declaration that the Endowment Act is a valid and constitutional law;
(2) A declaration that the NCAA has violated the Endowment Act;
(3) A declaration that the entirety of the monetary penalty in the Consent Decree be paid to the State Treasury;
(4) An order compelling the NCAA to immediately pay or direct payment of the first $12 million installment to the State Treasury;
(5) An injunction compelling compliance by the NCAA with the Endowment Act; and
(6) Such other relief as this Court deems just and proper.
In its response to Plaintiffs’ Joint Motion for Judgment on the Pleadings, the NCAA set forth its interpretation of our *22holdings in Corman v. Nat'l Collegiate Athletic Ass’n, 74 A.3d 1149 (Pa.Cmwlth. 2013) ((Corman I) and stated:
[T]o the extent the above-holdings constitute final, settled conclusions by this Court — and not merely determinations that were preliminary or contingent on as-yet undeveloped facts — then it appears the Court has already held as a matter of law (and wrongly, in the NCAA’s view) that (1) the Endowment Act has been triggered under the current circumstances and (2) that the Endowment Act does not violate the U.S. or Pennsylvania Constitutions. Ultimately, this Court is in the best position to evaluate the scope and import of its prior decision. If the Court views the September 4 Order as fully resolving all outstanding issues as a matter of law, then — despite the NCAA’s strong disagreement with that Order — the proceedings before this Court may well be at an end.
(NCAA’s October 28, 2013 Response to Plaintiffs’ Motion for Judgment on the Pleadings at 3-4).
However, because the NCAA’s New Matter contained a defense that the Endowment Act was special legislation within the meaning of Article III, Section 32 of the Pennsylvania Constitution, an issue we had not previously addressed, we could not grant the Motion. Instead, we issued an order that the parties address the “issue raised in its New Matter that the Endowment Act is an unconstitutional special law, as well as any matter raised in its Response to Plaintiffs’ Motion for Judgment on the Pleadings.” In response to that order, the parties addressed only two issues: that the Endowment Act was per se unconstitutional and that there was no rational basis for the classification created by this legislation.
The majority, however, does not limit itself to issues that were addressed by the parties. On its own, it finds that we cannot grant the Motion because there is an issue of material fact concerning whether the Consent Decree is valid. In arriving at that conclusion, the majority relies on allegations made by the NCAA in its New Matter that relate to the NCAA’s authority to impose the sanctions and the validity of the Consent Decree.1 The paragraphs that contained those allegations were made by the NCAA in support of its defense that PSU was an indispensable party, that the Endowment Act was an unconstitutional impairment of contract, and some stray conclusions entitled “Additional Defenses.” By cobbling those paragraphs together and examining the NCAA by-laws, the majority questions the validity of the Consent Decree stating that:
The Consent Decree expressly recognizes the NCAA’s questionable involvement in and its dubious authority pertaining to a criminal action against a non-university official which involved children who were non-university student-athletes. The Consent Decree recites that “[t]he sexual abuse of children on a university campus by a former university official ... while despicable, ordinarily would not be actionable by the NCAA.” Consent Decree at 4 (emphasis added).
Corman v. Nat’l Collegiate Athletic Ass’n, 93 A.3d 1, 16, 2014 WL 1382675, at *11 (Pa.Cmwlth.2014). Because contracting parties cannot ignore their own contractual covenants with impunity and still seek to *23hold others to the contract, the majority-then goes on to find that a determinative issue in this case is whether the Consent Decree is legal and whether the Consent Decree should be enforced at all. It also infers that because other students and coaches were affected, the Consent Decree may have denied procedural rights guaranteed by the NCAA bylaws and they may have an interest. Because this issue contained issues of disputed fact that could not be resolved without PSU, the majority, without notice, joins PSU as a party to this action.2
The majority appears to arrive at this outcome because it is bewildered, as I am, by how the Board of Trustees of PSU could have approved or allowed to be executed a “Consent Decree” involving the expenditure of $60 million of PSU funds when the Consent Decree specifically states that the matter “ordinarily would not be actionable by the NCAA.” If, as the majority suggests, the NCAA did not have jurisdiction over conduct because it did not involve the regulation of athletics, then the expenditure of those funds is problematic, given that PSU is a non-profit corporation as well as being tax-exempt as a charitable organization, and that Boards of Directors of non-profit charitable corporations have a fiduciary duty to ensure that funds are only used for matters related to its charitable purpose — in this case, the students of PSU. See 15 Pa.C.S. § 5712. Moreover, the majority position is understandable given the lax supervision by those responsible for insuring that nonprofit and charitable organizations operate as non-profit and charitable organizations as well as their failure to take action against Boards of Directors and Officers who use funds of a non-profit and/or charitable entity to pay funds that they are not legally obligated to pay and/or expend funds not related to their charitable purpose or who no longer act as a charity. See Zampogna v. Law Enforcement Health Benefits, Inc., 81 A.3d 1043, 1047 (Pa.Cmwlth.2013).
Notwithstanding all of that, I disagree with the majority that this is a matter before us. None of the parties to this case have disputed that the contract — the Consent Decree — is valid; the only dispute is applicability of the Endowment Act to the expenditure of funds owed under that agreement. Essentially, the majority spontaneously came up with that new cause of action, inferred from paragraphs in various defenses pled by the NCAA that the Consent Decree is invalid and none of the sanctions could be enforced. Because we must only address the matters before us and the causes of action pled by Plaintiffs, I respectfully dissent from that portion of the majority opinion.
II.
I also dissent from the majority’s decision that the Endowment Act is not special legislation. I would hold that the Endowment Act creates a class that is substantially closed to future membership and, therefore, is per se unconstitutional.
Article III, Section 32 of the Pennsylvania Constitution provides, in relevant part, that “[t]he General Assembly shall pass no local or special law in any case which has been or can be provided for by general *24law....” PA. CONST, art. Ill, §32. Over the years, the underlying purpose of Article III, Section 32 has been recognized to be analogous to federal principles of equal protection under the law. Pennsylvania Turnpike Commission v. Commonwealth, 587 Pa. 347, 363, 899 A.2d 1085, 1094 (2006). The common constitutional principle at the heart of the special legislation proscription and the equal protection clause is that like persons in like circumstances should be treated similarly by the sovereign. Id.
As our Supreme Court has held, “legislation creating a class of one member that is closed or substantially closed to future membership is per se unconstitutional.” West Mifflin Area School District v. Zahorchak, 607 Pa. 153, 163, 4 A.3d 1042, 1048 (2010) (emphasis added). See also Harrisburg School District v. Hickok, 563 Pa. 391, 398, 761 A.2d 1132, 1136 (2000) (“a classification is per se unconstitutional when the class consists of one member and it is impossible or highly unlikely that another can join the class.”) (Emphasis added).
The Endowment Act only applies if the following conditions are met: (1) there is an agreement; (2) between an institution of higher education; and (3) a governing body; (4) for a monetary penalty; (5) that is at least $10,000,000; (6) that is payable in installments; (7) over more than one year; and (8) the agreement states that the penalty can only be used for programs in Pennsylvania regarding child abuse and advocacy. The majority, relying on Hickok, holds that although it is unknown' if those conditions will ever be met in the future, the fact that these circumstances could theoretically occur precludes a finding that the Endowment Act is per se unconstitutional.
I disagree with the majority for two reasons. First, from the facts, it is obvious that this is special legislation because of the pleadings in this case and public comments by the sponsor of the bill that it insures that the $60 million fine imposed under the Consent Decree for matters addressing child abuse can only be spent in Pennsylvania. Second, the majority ignores that the Endowment Act provisions track provision by provision the Consent Decree imposing the fine, which, itself, makes it “highly unlikely” that the Endowment Act will ever apply to an agreement other than the Consent Decree between the NCAA and PSU. Given the Act’s extremely specific conditions, it is beyond dispute that a “highly improbable convergence of events would be necessary” for the Act to apply to any subsequent agreement. See West Mifflin School District, 607 Pa. at 163, 4 A.3d at 1048. Therefore, the class created by the Endowment Act is, at a minimum, substantially closed to new members and is per se unconstitutional.
Accordingly, for the foregoing reasons, I respectfully dissent.

. NCAA's September 24, 2013 Answer with New Matter to Plaintiffs’ Second Amended Complaint, ¶¶ 96, 103-105, 137-140.

. I reiterate what I stated in my dissent in Corman I that PSU is an indispensable party and, as a result, we lack jurisdiction. A party is generally regarded to be indispensable "when his or her rights are so connected with the claims of the litigants that no decree can be made without impairing those rights.” City of Philadelphia v. Commonwealth, 575 Pa. 542, 567, 838 A.2d 566, 581 (2003) (citation omitted). If the issue involved is whether the Consent Decree is valid, as a party to the consent decree, PSU's rights are so connected that no decree can be issued without affecting those rights.