Court Opinion

ID: 9953010
Source: CourtListenerOpinion
Date Created: 2024-03-21 13:11:37.108356+00
Date Added: 2024-06-11T14:45:35.825147
License: Public Domain

[J-43-2023]
                     IN THE SUPREME COURT OF PENNSYLVANIA
                                 MIDDLE DISTRICT

       TODD, C.J., DONOHUE, DOUGHERTY, WECHT, MUNDY, BROBSON, JJ.

    PENNSYLVANIA STATE EDUCATION              :   No. 90 MAP 2022
    ASSOCIATION,                              :
                                              :   Appeal from the Order of the
                      Appellant               :   Commonwealth Court at No. 199
                                              :   MD 2021 dated July 21, 2022.
                                              :
               v.                             :   ARGUED: September 12, 2023
                                              :
                                              :
    PUBLIC SCHOOL EMPLOYEES’                  :
    RETIREMENT BOARD,                         :
                                              :
                      Appellee                :

                                       OPINION

JUSTICE WECHT                                        DECIDED: March 21, 2024
        This appeal concerns the requirements for establishing standing to pursue an

action for a declaratory judgment. 1   The Pennsylvania State Education Association

(“PSEA”) brought such an action against the Public School Employees’ Retirement Board

(“PSERB” or the “Board”), challenging a Resolution in which PSERB addressed the

manner in which it intended to apply a statute, and which states an approach that PSEA

believes to be impermissible. The Commonwealth Court dismissed PSEA’s action for

lack of standing. We conclude that PSEA’s averments established standing. We thus

reverse the Commonwealth Court’s order and remand the matter in order to allow PSEA’s

action to proceed.

1       See Declaratory Judgments Act, 42 Pa.C.S. §§ 7531-41.
                                       I. Background

      The underlying dispute concerns a recently enacted provision of the Public School

Employees’ Retirement Code, 2 which was meant to remedy a problem that occurred

when an employer withdrew employees from the Public School Employees’ Retirement

System (“PSERS” or the “System”), the multi-employer pension plan for employees of

public schools. Previously, when an employer withdrew employees from that plan, it

would leave behind unfunded liability for the vested but unpaid benefits that PSERS owed

the former employees—a financial burden that would be shouldered by the other

employers who remained in the System. In 2019, the General Assembly added Section

8327.1 to the Code, which provides, in relevant part:

      (a) General rule.--A nonparticipating employer is liable to the system for
      withdrawal liability in the amount determined under subsection (c). A
      nonparticipating employer is an employer that is determined by the board
      to have ceased:
             (1) covered operations under the system; or
             (2) to have an obligation to contribute under the system for all or any
             of the employer’s school employees but continues covered
             operations.
      (b) Determination.--An employer shall, within the time prescribed by the
      board in a written request, furnish such information as the board deems
      necessary to administer this section and to determine whether an employer
      is a nonparticipating employer. If the board determines that an employer is
      a nonparticipating employer, the board shall:
             (1) determine the nonparticipation date;
             (2) determine the amount of the employer’s withdrawal liability;
             (3) notify the employer of the amount of the withdrawal liability; and
             (4) collect the amount of the withdrawal liability. 3

2     24 Pa.C.S. §§ 8101-8547 (hereinafter, the “Code”).
3     24 Pa.C.S. § 8327.1(a)-(b).

                                      [J-43-2023] - 2
       Section 8327.1 imposes “withdrawal liability” upon school district employers that

PSERB determines to be “nonparticipating,” which include both those that cease “covered

operations” under PSERS and those that withdraw some but not all of their employees

from the System. 4 Withdrawal liability is an added cost to a school district employer when

it makes certain employment decisions that affect the funding of the System, shifting the

pension costs onto the employer that makes the decision rather than the employers that

remain in the System. Because withdrawal liability affects the bottom-line cost to the

employer of withdrawing employees, however, it may affect the employer’s decision as to

whether a contemplated employment decision is financially worthwhile in the first place.

       Section 8327.1 relies upon PSERB for its implementation. Specifically, and most

importantly for our purposes, it is PSERB’s duty under Section 8327.1 to make the

determination as to whether and when an employer becomes a “nonparticipating

employer” that incurs withdrawal liability.     On December 11, 2020, PSERB posted

guidance on its website regarding Section 8327.1, which explained the reason for the

enactment and gave some indication as to how PSERB interpreted its obligations

thereunder. 5 Then, on March 5, 2021, PSERB adopted Resolution 2021-08, which

provided as follows:

4        Section 8327.1 further provides the formula for calculating a nonparticipating
employer’s “withdrawal liability” in subsection (c), specifies the method for valuing benefits
in subsection (d), states how the calculation must treat interest rates in subsection (e),
and directs the manner in which a nonparticipating employer must pay its withdrawal
liability in subsection (f). None of these provisions are pertinent here.
5      This posting provided:
       Effective September of 2019, Act 72 of 2019 requires PSERS to calculate
       and collect a withdrawing employer’s unfunded retirement benefit liabilities,
       i.e., the employer’s “withdrawal liability.” Prior to September 2019, when an
       employer terminated its participation in PSERS, for all or some of its
       employees, that employer’s share of the system’s unfunded retirement
       benefit liability was re-allocated to the remaining employers. Such
(continued…)

                                       [J-43-2023] - 3
       RESOLVED that [PSERB] directs [PSERS] staff to perform an outreach to
       relevant organizations to elicit input and feedback and to research and
       prepare a report for the Board assessing the applicability of Section 8327.1
       of the [Code] to outsourcing scenarios prior to applying the provision of
       Section 8327.1 to such scenarios.
       In the interim, no action will be taken by PSERS regarding withdrawal
       liability as it pertains to outsourcing until further policy is approved by the
       PSERS Board and by legislation. 6

Thus, through the Resolution, PSERB stated its intent not to apply Section 8327.1 to

“outsourcing” scenarios, i.e., subcontracting, until further notice.

       withdrawals, under a cost-sharing multiple employer plan like PSERS,
       resulted in an increased funding obligation for the remaining employers.
       The withdrawal liability is designed to relieve the additional funding burden
       on the remaining employers.
       Under the Public School Employees’ Retirement Code, an employer is
       deemed to withdraw from PSERS when it ceases covered operations under
       the system or ceases to have an obligation to contribute under the system
       for all or any of its employees but continues covered operations. Thus, an
       employer will be responsible for paying a withdrawal liability when, for
       example, it permanently closes all operations or creates an alternate
       retirement plan to cover some or all new employees. The calculation and
       payment of the withdrawal liability differs based on whether the employer is
       ceasing operations entirely or continuing participation in PSERS for some
       employees, but not all. For a complete withdrawal, a lump sum amount is
       due PSERS. For a partial withdrawal, the amount owed may be paid over
       time.
                                       *      *      *

       If you are considering closing a school, creating an alternate retirement
       plan, or in any other way limiting PSERS membership for employees, you
       should contact the PSERS Employer Service Center for more information.

PSEA v. PSERB, 199 M.D. 2021, 2022 WL 2840514 (Pa. Cmwlth. July 21, 2022)
(unreported) (“PSEA”), slip op. at 3 n.2 (quoting Amended Petition for Review ¶ 12)
(cleaned up); see Employer News Archive, December 11, 2020, available at
https://www.psers.pa.gov/Employers/pages/EmployerNewsArchive.aspx (last visited
December 4, 2023).
6      PSERB Resolution 2021-08 (the “Resolution”) (emphasis added); see Amended
Petition for Review ¶ 13 & Exhibit A; PSEA, slip op. at 4.

                                       [J-43-2023] - 4
       PSEA, 7 on behalf of itself, its members, and its local union affiliates, brought an

action against PSERB in the Commonwealth Court’s original jurisdiction, seeking a

declaratory judgment that PSERB’s Resolution was unlawful, and that Section 8327.1

does, in fact, apply to situations in which the work of school employees is subcontracted

to private entities, where such subcontracting results in the removal of employees from

the System. 8 On PSEA’s reading of Section 8327.1, a public school employer’s decision

to subcontract the work of union-member employees can render the employer

“nonparticipating” under Section 8327.1(a)(2), triggering an assessment of the employer’s

withdrawal liability. This additional cost, in turn, would affect the employer’s determination

of whether subcontracting would provide a cost-savings sufficient to justify the decision.

       PSEA averred that, under Pennsylvania law, subcontracting the work of union

members is a mandatory subject of collective bargaining, and that, under the Public

Employe Relations Act, 9 an employer considering subcontracting for economic reasons

commits an unfair labor practice if it fails to advise the union of the projected savings and

7       PSEA is “a nonprofit corporation and labor organization representing over 178,000
members, most of whom are employees of public-school districts of the Commonwealth
and members of the System. PSEA has over 1,000 affiliated local associations, most of
which are certified as exclusive-bargaining representatives of employees of public-school
districts of the Commonwealth.” Amended Petition for Review ¶ 1.
8       See id. at ¶¶ 64 (requesting declaration that the Resolution “was entered ultra vires
and is a legal nullity”), 73 (requesting declaration that “Section 8327.1 of the Code applies
when participating school employers subcontracts/outsources [sic] work to private actors,
resulting in removal of public-school employees from the System”).
        PSEA initially sought a declaration that Section 8327.1 applies to the conversion
of a public school into a charter school, as well, but it has since abandoned that aspect
of its action because the proposed charter school conversion that it cited is no longer
under consideration. See PSEA’s Br. at 3 n.1 (noting that PSEA “is no longer seeking
relief related to charter schools”). Accordingly, our discussion here is limited to the issue
of subcontracting the work of union members.
9      Act of July 23, 1970, P.L. 563, 43 P.S. §§ 1101.101 – 1101.2301 (the “PERA”).

                                       [J-43-2023] - 5
to give the union an opportunity to match those savings. 10 Because withdrawal liability

affects the bottom-line cost to the employer, PSEA averred, “[u]nless school districts and

unions representing public-school employees know that withdrawal liability will be

imposed when school districts remove members from the System due to subcontracting

bargaining unit work, school districts and unions will not be able to fulfill their obligations

under PERA.”11

       According to PSEA, PSERB’s Resolution already has presented difficulties in

negotiations over subcontracting decisions at the Pocono Mountain, Shikellamy, and Port

Allegany School Districts.     In each of those school districts, PSEA averred, work

performed by PSEA’s members was outsourced (or proposed to be outsourced) to private

entities, and PSEA’s local union affiliates were unable to bargain effectively because the

school districts, relying upon the Resolution, believed that Section 8327.1 did not apply

under the circumstances. 12 In PSEA’s view, the school districts based their decisions

upon an inaccurate assessment of the projected cost-savings because they failed to take

into account the amount of withdrawal liability that the subcontracting decision should

trigger under Section 8327.1. Due to the Resolution, the school districts and the unions

were not basing their calculations upon the same numbers, and the unions were thus

unable to determine whether they could match the amount that the school districts could

expect to save through subcontracting.

10   Amended Petition for Review ¶¶ 16-17 (citing, inter alia, 43 P.S. § 1101.1201(a);
PLRB v. Mars Area Sch. Dist., 389 A.2d 1073, 1075 (Pa. 1978); Morrisville Sch. Dist. v.
PLRB, 687 A.2d 5, 8 (Pa. Cmwlth. 1996)).
11     Id. ¶ 18.
12     Id. ¶¶ 19-46. PSEA averred that the subcontracting decisions already had
occurred in the Pocono Mountain and Shikellamy School Districts when it commenced its
action. The subcontracting decision at issue in the Port Allegany School District was
under consideration at the time.

                                       [J-43-2023] - 6
      PSEA asserted that it had associational standing to challenge the Resolution

because at least one of its members had suffered injury attributable to it. 13 As relief,

PSEA sought a declaration that PSERB acted ultra vires in adopting the Resolution,

because Section 8327.1 imposes a mandatory duty upon PSERB, which “has no authority

to suspend the implementation of an existing statutory mandate until some indefinite time

in the future when it may approve policy” relating to its application of the statute.14

Additionally, PSEA sought a declaration that Section 8327.1 applies to outsourcing

decisions, because a school district that subcontracts work formerly performed by

employees in the System puts it “squarely within the definition of a ‘nonparticipating

employer’ as set forth in Section 8327.1(a)(2): it has ceased to have an obligation to

contribute under the System for all or any of its employees but continues covered

operations.”15

      PSERB filed preliminary objections that, in relevant part, challenged PSEA’s

standing to bring its action. The Pennsylvania School Boards Association, Inc. (“PSBA”),

was granted intervention, and it also filed preliminary objections challenging PSEA’s

standing.   The Commonwealth Court sustained these preliminary objections and

dismissed PSEA’s action. 16

13     Id. ¶ 14 (“PSEA has standing to bring this action because ‘at least one of its
members is suffering an immediate or threatened injury as a result of the challenged
action.’”) (quoting Americans for Fair Treatment, Inc. v. Philadelphia Fed’n of Tchrs., 150
A.3d 528, 533 (Pa. Cmwlth. 2016)).
14    Id. ¶ 62.
15    Id. ¶ 71 (citing 24 Pa.C.S. § 8327.1(a)(2)).
16     PSERB additionally asserted in its preliminary objections that PSEA’s claims were
not ripe, and PSBA asserted that PSEA’s claims were impermissible because PSEA has
no private right of action to enforce Section 8327.1 and because its claims failed to state
a viable cause of action. Because the Commonwealth Court ultimately dismissed PSEA’s
action on standing grounds, it dismissed these preliminary objections as moot.

                                     [J-43-2023] - 7
       The Commonwealth Court correctly set forth the requirements to establish

standing, noting that a party must be “aggrieved” in order to have standing to pursue a

claim, and that Pennsylvania courts apply the “substantial, direct, and immediate” test to

measure the adequacy of the party’s interest. Quoting the traditional formulation of this

standard, the Commonwealth Court explained:

       A party’s interest is substantial when it surpasses the interest of all citizens
       in procuring obedience to the law; it is direct when the asserted violation
       shares a causal connection with the alleged harm; finally, a party’s interest
       is immediate when the causal connection with the alleged harm is neither
       remote nor speculative. 17

The court further noted that Pennsylvania jurisprudence “permits pre-enforcement review

of statutory provisions in cases in which petitioners must choose between equally

unappealing options,” but the court found this rationale inapplicable to the instant

dispute. 18 Instead, the Commonwealth Court concluded that PSEA lacked standing on

the traditional criteria.

       The court opined that “PSEA has not shown that it, its members, or its local

affiliates have a substantial, direct, and immediate interest in PSERB’s action, or, in this

instance, inaction to establish the standing required to bring this action.” 19 The gravamen

of PSEA’s claim, the court reasoned, was that the inability to determine whether

subcontracting triggers withdrawal liability hampers a union’s ability to effectively bargain

with the public school district employers. PSEA directed its declaratory judgment action

at PSERB, but it was actually designed “to aid PSEA, and its local affiliates, in their

17     PSEA, slip op. at 9 (quoting Office of Governor v. Donahue, 98 A.3d 1223, 1229
(Pa. 2014)).
18    Id. at 9-10 (quoting Robinson Twp. v. Commonwealth, 83 A.3d 901, 924 (Pa.
2013)).
19     Id. at 14 (emphasis in original).

                                       [J-43-2023] - 8
relationship and transactions with school district employers.”20 This was problematic, in

the Commonwealth Court’s view, under this Court’s 1939 decision in Petition of Capital

Bank & Trust Co., which the court cited for the proposition that a “declaratory judgment is

not to resolve remote questions or to aid a party in a different transaction.” 21

       The harm that PSEA asserted, the court continued, was “the subcontracting of

bargaining unit work,” which was “not the immediate or direct result of the challenged

action of PSERB, but of the school district employers’ decisions.”22 Further, PSEA had

acknowledged that a school district could still choose to subcontract even if PSERB were

to impose withdrawal liability in connection with that decision.        Because “PSERB’s

decision may not affect the ultimate decision of a school district to subcontract bargaining

unit work,” the Commonwealth Court opined, PSEA’s interest in PSERB’s Resolution was

“not direct or immediate,” and there was “a lack of causal connection between the harm

and the challenged action.” 23 Moreover, the court reasoned, the fact that PSERB will not

render a preliminary decision on the amount of withdrawal liability in a particular situation

“does not prevent PSEA from bargaining over subcontracting,” because Section

8327.1(c) sets forth the formula for calculating withdrawal liability, so the union can do its

own approximation of the withdrawal liability that it believes will apply to a given

subcontracting decision and use that number in its negotiations. 24                 Finally, the

Commonwealth Court concluded that PSEA could not assert standing on behalf of its

20     Id. at 14-15 (emphasis in original).
21     Id. at 15 (citing Petition of Cap. Bank & Tr., 6 A.2d 790, 792 (Pa. 1939)).
22     Id.
23     Id.
24     Id.

                                       [J-43-2023] - 9
individual employee members on the basis of their interests in their pension benefits,

concluding that PSEA did not adequately allege any harm to those interests.

         Having concluded that PSEA failed to demonstrate the requisite “substantial,

direct, and immediate” interest necessary to establish its standing to challenge PSERB’s

Resolution, the Commonwealth Court sustained PSERB’s and PSBA’s preliminary

objections to that effect and dismissed PSEA’s action. The court accordingly dismissed

PSERB’s and PSBA’s remaining preliminary objections as moot.

         PSEA appealed the Commonwealth Court order to this Court. PSEA raises three

issues. In addition to challenging the Commonwealth Court’s conclusion that it lacked

standing, PSEA argues that PSERB’s and PSBA’s outstanding, unaddressed preliminary

objections lacked merit, and further asserts that it is entitled to the declaratory relief that

it sought below. 25 We heard argument on September 12, 2023, limited to the issue of

standing. Given our disposition, our discussion is similarly limited to that issue.

25       Specifically, PSEA seeks review of the following questions, as stated in PSEA’s
brief:
         1. Do the well-pled material facts of the Amended Petition establish that
         PSEA has a substantial, direct, and immediate interest, and therefore
         standing, to challenge the PSERS Board’s refusal to apply the withdrawal
         provisions of Section 8327.1 of the Public School Employees’ Retirement
         Code, 24 Pa.C.S. § 8327.1, to subcontracting?
         2. Do the well-pled material facts of the Amended Petition establish that
         PSEA has set forth a legally sufficient claim for declaratory relief alleging
         that Resolution 2021-08 was an ultra vires action?
         3. Do the well-pled material facts of the Amended Petition establish that
         PSEA has set forth a legally sufficient claim for declaratory relief alleging
         that the PSERS Board violates the mandatory withdrawal liability provisions
         of the Retirement Code when it refuses to impose withdrawal liability on
         school districts that cease contributing to PSERS for some of their school
         employees by subcontracting their work to private contractors who are not
         participating employers in PSERS?
PSEA’s Br. at 3-4.

                                       [J-43-2023] - 10
                                   II. Parties’ Arguments

         With regard to its standing, PSEA contends that it meets the traditional

requirements explicated in this Court’s oft-cited decision in William Penn Parking

Garage, 26 i.e., the demonstration of an interest in the subject-matter of the litigation that

is “substantial,” “direct,” and “immediate.” PSEA’s interest is substantial, it asserts,

because a school district’s decision to subcontract work performed by union members is

a significant and common issue raised in collective bargaining—subcontracting is often

contested because it can result in the loss of jobs and the termination of the benefits of

public employment. PSEA suggests that its interests in the financial consequences of

subcontracting, and in negotiating over such decisions, exceed those of the public at

large.    PSEA’s interest is direct, it argues, because PSERB’s asserted failure to

implement Section 8327.1 is causally connected to the harm that PSEA alleged. That

harm is a union’s “inability to know the true potential cost of subcontracting” when

negotiating with a school district, and, consequently, its inability to “fulfill its legal

obligation to bargain when school districts propose to outsource bargaining unit work.” 27

PSEA stresses that a school district is obligated to inform the union of the projected cost-

savings of a subcontracting decision, that the union must be given a chance to determine

if it can match those savings, and that, due to PSERB’s Resolution stating that it will not

apply Section 8327.1 to subcontracting, “PSEA’s local associations are unable to

effectively factor in the potential cost of withdrawal liability to determine whether, how

much, or if subcontracting will actually result in lower costs to the employing district.”28

Thus, PSEA asserts a causal connection between the Resolution and the alleged harm.

26       William Penn Parking Garage, Inc. v. City of Pittsburgh, 346 A.2d 269 (Pa. 1975).
27       PSEA’s Br. at 19.
28       Id. at 21.

                                      [J-43-2023] - 11
Because that causal connection is neither remote nor speculative, PSEA contends that

its interest in the litigation is immediate. Indeed, PSEA avers that the Resolution already

has harmed three local unions in their negotiations with school districts.

       In the alternative, PSEA contends that its standing may be established through a

“zone of interests” analysis. This theory, PSEA summarizes, asks whether “the interest

the party seeks to protect is within the zone of interests sought to be protected by the

statute or constitutional guarantee in question.” 29 PSEA suggests that it falls within the

zone of interests protected by Section 8327.1 because the General Assembly

presumptively was aware of collective bargaining obligations when it enacted Section

8327.1, and because the Code generally addresses matters that relate to subjects of

collective bargaining. Finally, PSEA argues, recent decisions of this Court, particularly

Firearm Owners Against Crime v. Papenfuse, 30 signal a trend toward relaxation of

standing requirements in declaratory judgment actions. To the extent that its standing is

in doubt, PSEA believes that it should benefit from this liberalization of standing doctrine.

       PSERB, by contrast, characterizes PSEA’s action as premised upon “potential

harm caused by another entity, i.e., school district employers.” 31 PSERB endorses the

Commonwealth Court’s conclusion that PSEA’s asserted harm is subcontracting, itself,

and that its interest is not direct or immediate because the application of Section 8327.1

does not directly control whether a school district ultimately decides to subcontract.

PSERB portrays the dispute as “between school districts and unions over subcontracting,

entirely separate and apart from PSERB’s actions with respect to withdrawal liability.” 32

29    Id. at 23 (quoting Allegheny Reprod. Health Ctr. v. Pa. Dep’t of Hum. Servs., 249
A.3d 598, 605 (Pa. Cmwlth. 2021)).
30     Firearm Owners Against Crime v. Papenfuse, 261 A.3d 467 (Pa. 2021) (“FOAC”).
31     PSERB’s Br. at 5.
32     Id. at 9.

                                      [J-43-2023] - 12
PSERB stresses that it is not involved in negotiations over subcontracting, and it makes

no decisions about subcontracting in any school district.          It further stresses that

withdrawal liability under Section 8327.1 is not calculated until after an employer is

deemed to be nonparticipating, and that PSEA has no right to a “predetermination” of

withdrawal liability in any particular case. 33 PSERB further argues that PSEA is not

entitled to the benefit of any purported relaxation of standing requirements suggested by

decisions like FOAC, stressing that PSEA is not in the “equally unappealing options”

scenario discussed in FOAC or Robinson Township. 34

       Turning to PSEA’s stated argument—that the asserted harm is a union’s inability

to effectively bargain over subcontracting decisions due to the Resolution—PSERB

endorses the Commonwealth Court’s reliance upon Petition of Capital Bank & Trust Co.

for the proposition that a party cannot obtain a declaratory judgment in order to aid it in

another transaction. 35   To the extent that the asserted harm is the deprivation of

knowledge of whether subcontracting will trigger withdrawal liability, PSERB suggests

that this is merely a pretext for PSEA’s actual goal—preventing subcontracting. 36

Moreover, PSERB suggests that unions can make their own estimates of withdrawal

liability under the formula set forth in Section 8327.1(c). Thus, PSERB argues, if the

asserted harm is a lack of information, the union can inform itself by performing its own

calculation.

33     Id. at 13.
34     Id. at 15-16 (discussing FOAC, 261 A.3d 467; Robinson Twp., 83 A.3d 901).
35     Id. at 16 (citing PSEA, slip op. at 15; Petition of Cap. Bank & Tr., 6 A.2d at 792).
36    Id. at 17 (“PSEA does not want to bargain simply for the sake of bargaining; it
wants to prevent subcontracting (should it arise) at future bargaining tables. PSEA only
seeks to use PSERB to tip the scales of the negotiations and convince employers not to
subcontract.”).

                                     [J-43-2023] - 13
      PSERB also stresses that the application of Section 8327.1 does not impact the

retirement benefits of individual members; instead, the statute was designed to relieve a

financial burden upon employers who participate in the System. For this same reason,

PSERB argues that PSEA does not fall within the zone of interests that Section 8327.1

was designed to protect. PSERB finds no indication that the General Assembly meant

for Section 8327.1 to do anything other than securing funding for the System. In any

event, PSERB maintains that the imposition of withdrawal liability upon a nonparticipating

employer does not affect the benefits of individual members, which are determined by a

specific statutory formula. Thus, PSERB argues, no individual participant in the System

is aggrieved by the Resolution, and PSEA, by extension, similarly lacks standing.

      PSBA’s argument is largely repetitive of PSERB’s with regard to PSEA’s standing.

PSBA likewise emphasizes that Section 8327.1 was designed to protect the System and

employers who participate in it, and that it was not meant to aid unions in collective

bargaining. Any harm arising from PSERB’s refusal to apply the statute to subcontracting

decisions, PSBA asserts, is merely “potential and indirect.”37       Like PSERB, PSBA

suggests that unions can make their own calculations of withdrawal liability under Section

8327.1(c) and use that figure in their negotiations. It insists that PSEA’s dispute is with

school district employers, not with PSERB. And because Section 8327.1 was designed

to ease the financial burdens placed upon those employers, and not to aid PSEA or its

affiliated unions in collective bargaining, PSBA argues that PSEA is not within the zone

of interests sought to be protected by the statute.        PSBA likewise reiterates the

Commonwealth Court’s reliance upon Petition of Capital Bank & Trust Co. Finally, PSBA

37    PSBA’s Br. at 11; see id. at 19 (“[The] ‘causal connection’ between the alleged
harm asserted by PSEA and the complained of actions of PSERB in terms of Section
8327.1 is tenuous, speculative, indirect and remote.”).

                                     [J-43-2023] - 14
echoes PSERB’s argument that a FOAC rationale does not apply because PSEA is not

in a position where it must choose between legally untenable options.

                                        III. Discussion

       The question of whether a petitioner has standing “presents a question of law, over

which our standard of review is de novo and our scope of review is plenary.”38 As the

matter arises on preliminary objections, however, we accept all well-pled material facts

averred in the petition as true, and “we will affirm an order sustaining preliminary

objections based on standing only if the [petitioner] is clearly not entitled to relief as a

matter of law.” 39

       Standing is a justiciability concern—a threshold requirement that must be

established “[p]rior to judicial resolution of a dispute.”40 Although the standing doctrine is

prudential in this Commonwealth and not a question of jurisdiction, 41 our courts

nevertheless maintain a commitment to ensuring that the judiciary’s involvement in a

dispute is warranted. Such “judicial intervention is appropriate only where the underlying

controversy is real and concrete, rather than abstract.”42 To that end, the standing

38     FOAC, 261 A.3d at 476 (citing Robinson Twp., 83 A.3d at 917).
39     Id.
40      Pittsburgh Palisades Park, LLC v. Commonwealth, 888 A.2d 655, 659 (Pa. 2005)
(citing Bergdoll v. Kane, 731 A.2d 1261, 1268 (Pa. 1999)).
41     See, e.g., Robinson Twp., 83 A.3d at 917 (“In contrast to the federal approach,
notions of case or controversy and justiciability in Pennsylvania have no constitutional
predicate, do not involve a court’s jurisdiction, and are regarded instead as prudential
concerns implicating courts’ self-imposed limitations.”).
42    City of Philadelphia v. Commonwealth, 838 A.2d 566, 577 (Pa. 2003) (citing In re
Hickson, 821 A.2d 1238, 1243 (Pa. 2003)).

                                      [J-43-2023] - 15
doctrine protects against “improper plaintiffs”43 by preventing litigation by “a person who

is not adversely impacted by the matter he seeks to challenge.”44

       “Stated another way, a controversy is worthy of judicial review only if the individual

initiating the legal action has been ‘aggrieved.’” 45 A party “who is not negatively affected

by the matter he seeks to challenge is not aggrieved, and thus, has no right to obtain

judicial resolution of his challenge.” 46 “This principle is based upon the practical reason

that unless one has a legally sufficient interest in a matter, that is, is ‘aggrieved,’ the courts

cannot be assured that there is a legitimate controversy.”47 As noted above, we assess

whether a party is “aggrieved” through a three-part inquiry.                An “individual can

demonstrate that he is aggrieved if he can establish that he has a substantial, direct, and

immediate interest in the outcome of the litigation.”48 As traditionally framed:

       A party’s interest is substantial when it surpasses the interest of all citizens
       in procuring obedience to the law; it is direct when the asserted violation
       shares a causal connection with the alleged harm; finally, a party’s interest
       is immediate when the causal connection with the alleged harm is neither
       remote nor speculative. 49

43    FOAC, 261 A.3d at 481 (citing In re Application of Biester, 409 A.2d 848, 851 (Pa.
1979)).
44    Pittsburgh Palisades Park, 888 A.2d at 659 (quoting William Penn Parking Garage,
346 A.2d at 280-81).
45     Id. (citing In re Hickson, 821 A.2d at 1243).
46    City of Philadelphia, 838 A.2d at 577 (citing Pa. Game Comm’n v. Dep’t of Envtl.
Res., 555 A.2d 812, 815 (Pa. 1989); Zemprelli v. Daniels, 436 A.2d 1165, 1168 (Pa.
1981)).
47    Pittsburgh Palisades Park, 888 A.2d at 659-60 (citing In re Hickson, 821 A.2d at
1243; City of Philadelphia, 838 A.2d at 577).
48     Id. at 660.
49     FOAC, 261 A.3d at 481 (quoting Donahue, 98 A.3d at 1229).

                                        [J-43-2023] - 16
       PSEA’s averments easily establish the traditional requisites of a substantial, direct,

and immediate interest in the outcome of its challenge to PSERB’s Resolution. Most of

the arguments to the contrary are premised upon patent mischaracterizations of PSEA’s

position. PSERB’s and PSBA’s arguments are rife with assertions that PSEA’s “true” or

“actual” harm is subcontracting, itself, and that its “true” dispute, thus, is with school

districts that engage in subcontracting rather than with PSERB. 50 The suggestion slyly

distances PSERB from the matter, asking us to ignore the downstream consequences of

the Resolution. PSEA has been quite clear, in both its pleading and its briefing, that the

harm it alleges from PSERB’s Resolution is a hindrance to a union’s ability to effectively

negotiate over subcontracting decisions, because the Resolution has created a mismatch

between the relevant parties’ understandings of when Section 8327.1 applies.

       It is helpful to illustrate the problem. Suppose that a school district is considering

subcontracting the work of employees, who are members of a PSEA-affiliated union,

because it expects to save money thereby. No one disputes PSEA’s characterization of

the legal obligations of the parties, specifically that the school district must give the union

50      See, e.g., PSERB’s Br. at 5 (“PSEA does not seek knowledge for the sake of
knowledge; it seeks knowledge to use in collective bargaining negotiations to persuade
employers not to subcontract, which is the true harm it seeks to avoid.”), 8 (“PSEA’s true
harm is not a lack of information at the bargaining table, but rather, subcontracting.”), 9
(“PSEA does not have standing because its true alleged harm is caused by school
districts deciding to subcontract, not by PSERB.”), 14 (“PSEA’s true dispute is not with,
or caused by, PSERB, PSERS, or the Retirement Code; PSEA’s dispute is with the school
districts in Pocono Mountain, Shikellamy, and Port Allegany.”), 17 (“The lack of
information is only allegedly harmful because PSEA desires that information to attempt
to dissuade school district’s [sic] from causing the actual alleged harm, i.e., the
subcontracting.”); PSBA’s Br. at 18 (“In short, PSEA’s true dispute is not with, or caused
by PSERB, it is with the employers who seek to contract out bargaining unit work.”).
      The Commonwealth Court mischaracterized PSEA’s averments in a similar
manner. See PSEA, slip op. at 15 (“The harm PSEA asserts, the subcontracting of
bargaining unit work . . . is not the immediate or direct result of the challenged action of
PSERB, but of the school district employers’ decisions.”).

                                      [J-43-2023] - 17
an opportunity to attempt to match the expected cost-savings that would be achieved

through subcontracting.        The union, based upon its understanding of Section

8327.1(a)(2), believes that the subcontracting decision will trigger the imposition of

withdrawal liability, will increase the costs to the school district, and therefore will make

subcontracting less attractive. This, on the union’s account, would make it easier for it to

match or exceed the expected cost-savings, and, thus, to dissuade the school district

from subcontracting the union members’ work. The school district, by contrast, could

point to PSERB’s Resolution, which states that PSERB does not intend to apply Section

8327.1 to subcontracting decisions, at least “[i]n the interim.”51 Thus, on the school

district’s account, there will be no withdrawal liability, and its costs will be significantly

lower than the union asserts.

       Right at that moment, the union has a problem. The parties are not working with

the same numbers. Because they are not on the same page, they are unable to negotiate

effectively. The parties are proverbially comparing apples to oranges; except, in this

circumstance, apples are categorically cheaper, making matters rather difficult for the

advocate of oranges. That mismatch in the parties’ expectations about Section 8327.1 is

directly attributable to the Resolution. Absent the Resolution, the parties might still

disagree about the applicability of Section 8327.1, but the school district would not be

able to rely upon PSERB’s declaration that it does not intend to apply Section 8327.1 to

subcontracting scenarios—a determination that PSEA believes to be impermissible under

the language of the statute.

       This illustration further demonstrates that many of PSERB’s and PSBA’s other

arguments similarly rely upon mischaracterizations of PSEA’s position. PSEA is not

asserting a right to receive a “predetermination” of withdrawal liability in any particular

51     See supra n.6.

                                      [J-43-2023] - 18
case, nor is it seeking to prevent any particular subcontracting decision through its

declaratory judgment action. PSEA, rather, is seeking to challenge PSERB’s Resolution

due to its alleged misinterpretation of a statute that will impact labor negotiations. PSEA

merely seeks a declaration that Section 8327.1 can apply to subcontracting in a manner

that triggers withdrawal liability, so that the union may have a fair opportunity to compete

with a subcontracting proposal. As things stand, the union is in an inferior bargaining

position, which is directly attributable to the Resolution. It is immaterial, moreover, that

withdrawal liability would not be calculated until after a subcontracting decision is made,

and this does not render PSEA’s asserted harm “speculative” or “potential.” The harm

asserted occurs before the decision is made, i.e., the harm occurs during the negotiation

process, when the school district uses the Resolution to devalue, if not wholly disregard,

the union’s counter-proposal. For this same reason, whether a union can perform its own

calculation of estimated withdrawal liability under Section 8327.1(c) is irrelevant. The

school district, again, can merely cite the Resolution, safely conclude that withdrawal

liability will not be imposed (at least “[i]n the interim”), and consequently determine that

the union’s calculation is worthless.

       Simply assessing the harm that PSEA actually alleges, rather than diversions

about its supposedly “true” harm, reveals that the Resolution is the cause of the harm that

PSEA describes.      Framed in the language of our standing jurisprudence, PSEA is

“aggrieved” by the Resolution.          PSEA’s interest in challenging the Resolution is

“substantial” because it far exceeds the interest of the public at large in the correct

application of Section 8327.1. 52 The ordinary citizen has little to no interest in the financial

consequences of a school district’s decision to subcontract the bargaining unit work of its

52    See In re Hickson, 821 A.2d at 1243 (“A ‘substantial’ interest is an interest in the
outcome of the litigation which surpasses the common interest of all citizens in procuring
obedience to the law.”) (citing Bergdoll, 731 A.2d at 1261).

                                        [J-43-2023] - 19
employees, or whether the school district will be required to pay additional funds into

PSERS as a result of that decision. PSEA and its affiliated unions, by contrast, are

interested in the matter due to its impact upon the union’s negotiating position. PSEA’s

interest is “direct” because, as established above, the Resolution is causally connected

to the asserted harm to the union’s ability to effectively bargain over subcontracting

decisions. 53 The Resolution is the reason for the mismatch in the parties’ understandings

of when Section 8327.1 applies. If PSEA’s view of the statute is correct, then school

districts, relying upon the Resolution, are premising subcontracting decisions upon an

inaccurate assessment of the potential cost-savings, placing the union in a materially

inferior negotiating position. 54 Finally, PSEA’s interest is “immediate” because the causal

connection between the Resolution and the asserted harm is real and concrete, not

“remote or speculative.” 55 Indeed, according to PSEA’s factual averments (which must

be accepted as true when considering preliminary objections) the Resolution already has

harmed local unions’ interests in negotiations over subcontracting decisions in the

Pocono Mountain, Shikellamy, and Port Allegany school districts.

       These averments establish a substantial, direct, and immediate interest sufficient

to warrant a request for the sort of remedy that a declaratory judgment action seeks—a

clarification of the law to resolve a dispute between interested parties over its meaning.

53    See Pittsburgh Palisades Park, 888 A.2d at 660 (“[A] ‘direct’ interest mandates a
showing that the matter complained of ‘caused harm to the party's interest,’ i.e., a causal
connection between the harm and the violation of law.”) (citation omitted) (quoting In re
Hickson, 821 A.2d at 1243).
54      To be clear, we offer no opinion at this juncture as to whether Section 8327.1, in
fact, applies to subcontracting in the abstract or in any particular instance. The question
of PSEA’s standing is merely a determination of whether PSEA may bring its challenge
in the first place.
55     See id. (“[A]n interest is ‘immediate’ if the causal connection is not remote or
speculative.”) (citing City of Philadelphia, 838 A.2d at 577; Kuropatwa v. State Farm Ins.
Co., 721 A.2d 1067, 1069 (Pa. 1998)).

                                     [J-43-2023] - 20
A demonstration of standing requires no more. Nonetheless, the parties have addressed

a number of specific theories that courts may consider when assessing challenges to a

party’s standing, and which might be viewed as particular ways of establishing a legally

cognizable injury. None of these alternative theories bear upon our decision today, but

the parties’ arguments nonetheless raise points that are worthy of discussion and

emphasis. For instance, PSERB and PSBA argue that PSEA does not fall within the

“zone of interests” sought to be protected by Section 8327.1, because that statute is

designed to secure adequate funding of PSERS and to protect the financial interests of

employers who participate therein, not to aid unions in collective bargaining. This may

well be true, but it does not defeat PSEA’s standing. As in previous cases:

       [W]e reiterate what has been stated before: in Pennsylvania, a party must
       be aggrieved in order to possess standing to pursue litigation. Aggrievability
       is obtained by having a substantial, direct, and immediate interest in
       proceedings or litigation. When the standards for substantiality, directness,
       and immediacy are readily met, the inquiry into aggrievability, and therefore
       standing, ends. 56

A “zone of interests” analysis may be employed where a party’s immediate interest is not

apparent, but it is “merely a guideline that may be used to find immediacy,” not an

“absolute test.” 57 Because PSEA’s interest readily meets the traditional requirements,

PSEA has standing. No further inquiry is necessary.

       This underscores a point woven through much of PSERB’s and PSBA’s

arguments—that Section 8327.1, on its face, concerns the duties of employers, not of

PSEA or its affiliated unions. Thus, the argument goes, PSEA is uninterested in its

application. This is a misapplication of the doctrine of standing. It is not disqualifying that

the statute in question imposes an obligation upon the employer, and not the union, when

56     Johnson v. Am. Standard, 8 A.3d 318, 333 (Pa. 2010).
57     Id. at 333-34.

                                      [J-43-2023] - 21
the union nonetheless is affected by PSERB’s interpretation and application of the statute.

The consequences of a statute, or an agency’s interpretation of that statute, can extend

to others beyond those expressly targeted. Although PSERB and PSBA may correctly

identify the zone of interests that Section 8327.1 was designed to protect, this is no barrier

to PSEA’s ability to establish that it is aggrieved by PSERB’s application of the statute.

       The parties additionally have addressed the rationale that we have applied in

decisions such as FOAC and Robinson Township, which, under certain circumstances,

allow a party to seek a pre-enforcement declaratory judgment without placing itself in the

untenable position of having to violate the law in order to challenge it. 58 All parties agree

that PSEA is not in the sort of circumstance that would implicate this reasoning.

Regardless, PSEA suggests that cases such as FOAC represent a trend toward relaxing

standing requirements in declaratory judgment cases, from which it should benefit. In our

view, PSEA requires no such assistance, because its standing is clear under the

traditional criteria. Although we offer no characterization of recent trends in standing

jurisprudence, it is always worthwhile to stress, as FOAC did, the breadth of the remedy

contemplated by the Declaratory Judgments Act, 59 and to note that complainants always

should receive the benefit of doubt when their actions are challenged by preliminary

objections. Such objections may be sustained only where it is clear and free from doubt

that the complainant is not entitled to relief as a matter of law. 60

       All of these considerations converge in our analysis of the final point of discussion.

The most plausible argument against PSEA’s standing lies in the Commonwealth Court’s

58     See Robinson Twp., 83 A.3d at 923-25; FOAC, 261 A.3d at 482-91 (discussing
case law developing this aspect of standing jurisprudence).
59     See FOAC, 261 A.3d at 490.
60     See id. at 476 (citing Robinson Twp., 83 A.3d at 917).

                                       [J-43-2023] - 22
citation of this Court’s 1939 decision in Petition of Capital Bank & Trust Co. for the

proposition that parties “are not entitled to a declaratory judgment on remote questions,

or to aid them in another transaction.” 61 Like much of PSERB’s and PSBA’s arguments,

the supposed significance of this proposition is premised upon PSEA’s motives rather

than its averments, i.e., that PSEA actually seeks to avoid its purportedly “true” harm of

subcontracting, itself. Nevertheless, we will assume, arguendo, that PSEA’s clear interest

in negotiations with school districts over subcontracting decisions implicates the above-

quoted statement. Significantly, prior to the Commonwealth Court’s decision in the instant

case, no appellate court has cited Petition of Capital Bank & Trust Co. for the relevant

proposition since this Court issued that decision in 1939. There is good reason for its

moribundity.

      Petition of Capital Bank & Trust predates the enactment of the modern Declaratory

Judgments Act by nearly forty years. Nothing in the Declaratory Judgments Act purports

to deny a party access to a declaratory judgment merely because the party is interested

in another transaction. Indeed, the Act would seem to contradict this proposition. Section

7532 of the Declaratory Judgments Act states that courts “shall have power to declare

rights, status, and other legal relations whether or not further relief is or could be

claimed.” 62 Section 7533, moreover, grants persons who are interested in a deed, will,

or contract the right to seek a declaratory judgment on the meaning of laws that affect

their rights under those documents. 63 The fact that those documents reflect the person’s

61     Petition of Cap. Bank & Tr. Co., 6 A.2d at 792 (emphasis added); see PSEA, slip
op. at 15.
62    42 Pa.C.S. § 7532 (emphasis added).
63     Id. § 7533 (“Any person interested under a deed, will, written contract, or other
writings constituting a contract, or whose rights, status, or other legal relations are
affected by a statute, municipal ordinance, contract, or franchise, may have determined
any question of construction or validity arising under the instrument, statute, ordinance,
(continued…)

                                    [J-43-2023] - 23
interest in another transaction is no barrier to relief. 64 Moreover, under Section 7536, the

fact that particular classes of declaratory remedies are specifically enumerated “does not

limit or restrict the exercise of the general powers . . . where declaratory relief is sought,

in which a judgment or decree will terminate the controversy or remove an uncertainty.”65

       As we stated in FOAC: “There is no basis to constrain the power granted by the

Declaratory Judgments Act.”66 “The Declaratory Judgments Act gives courts the ‘power

to declare rights, status, and other legal relations whether or not further relief is or could

be claimed.’ The Act refers to the ‘rights, status, and other legal relations’ without

qualification . . . .” 67 To the extent that Petition of Capital Bank & Trust Co.’s declaration

was ever an accurate statement of the law of declaratory judgments, we conclude that it

is inconsistent with the current iteration of the Declaratory Judgments Act, and has been

superseded thereby. Accordingly, the fact that PSEA and its affiliated unions have an

interest in negotiations with school districts does not preclude PSEA from establishing

standing to challenge the Resolution, due to the harm that the Resolution causes to its

contract, or franchise, and obtain a declaration of rights, status, or other legal relations
thereunder.”).
64     We note, however, that Section 7540(a) specifies that “all persons shall be made
parties who have or claim any interest which would be affected by the declaration, and
no declaration shall prejudice the rights of persons not parties to the proceeding.” 42
Pa.C.S. § 7540(a). Because our decision only concerns PSEA’s standing, we offer no
opinion as to whether the declaration that PSEA seeks may impact the interests of any
other party pursuant to Section 7540(a) of the Declaratory Judgments Act. It is
conceivable that, for example, school districts may be deemed to have an interest in the
matter as great as PSEA and its local union affiliates, either individually or in the
aggregate. Whether any such parties may be deemed to be indispensable, or whether
the participation of PSBA in this litigation is adequate to represent such interests, are
questions beyond the scope of our decision today.
65     42 Pa.C.S. § 7536.
66     FOAC, 261 A.3d at 490.
67     Id. (quoting 42 Pa.C.S. § 7532).

                                      [J-43-2023] - 24
position in such negotiations. Because PSEA has established the requisite “substantial,

direct, and immediate” interest in the outcome of this litigation, the inquiry into its standing

is complete. 68

                                         IV. Conclusion

       Because the Commonwealth Court ruled solely upon standing and we reverse on

that basis, we need not address PSEA’s arguments concerning the preliminary objections

that the court dismissed as moot, nor the merits of the declarations that PSEA seeks. We

conclude only that PSEA is aggrieved by PSERB’s Resolution to a degree sufficient to

entitle it to make its case in court.

       We reverse the order of the Commonwealth Court, and remand without prejudice

to any preliminary objections dismissed as moot, or which are otherwise available by law.

       Chief Justice Todd and Justices Donohue, Dougherty, Mundy and Brobson join

the opinion.

68     Johnson v. Am. Standard, 8 A.3d at 333 (“When the standards for substantiality,
directness, and immediacy are readily met, the inquiry into aggrievability, and therefore
standing, ends.”).

                                        [J-43-2023] - 25