Monday, May 24, 2004

Summary of Commonwelth Court Decision

Pennsylvania Law Weekly
Volume XXVII, Number 21
Copyright 2004 by American Lawyer Media, ALM LLC

May 24, 2004

Digests of Recent Opinions
Commonwealth Court

ASS'N, PICS CASE NO. 04-0645 (PA. COMMW. EN BANC APRIL 23, 2004) COHN, J.;

Open Meetings • Merger with State University • Private Entity • State Agency • Sunshine Act 

Following a merger between a private law school and a state university, the law school's board of governors did not qualify as a "committee" of the university for Sunshine Act purposes. Reversed. 

The Dickinson School of Law was a private nonprofit corporation before its merger with The Pennsylvania State University (PSU). The merger took place through a multistep process. First, Dickinson and PSU entered into an affiliation agreement and an agreement and plan of merger. Dickinson's board of trustees agreed to form a separate corporation, the Pennsylvania State University School of Law of the Pennsylvania State University Association (association), that would continue to exist after the merger. 

The association's board of governors scheduled a private meeting for November 2003 to discuss the possibility of relocating the law school's main campus from Carlisle to University Park in State College.
Plaintiff newspapers filed a complaint in equity and a motion for a preliminary injunction addressed in the Commonwealth Court's original jurisdiction. The complaint, which was brought pursuant to the Sunshine Act, sought to either stop the meeting from occurring or to open the meeting to the public.

The Commonwealth Court denied the injunction. The board of governors held the meeting and appointed members to four committees created to investigate different alternatives for relocating the law school. 

The newspapers filed a complaint and a motion for preliminary injunction in the Court of Common Pleas of Cumberland County. Following a hearing, the trial court granted the injunction on the ground that the board of governors qualified as a committee of PSU. Therefore, the board constituted an agency under Sunshine Act provisions, the court reasoned. The court directed the board to comply with act provisions. 

A majority of an en banc Commonwealth Court panel reversed. Section 703 of the act, 65 Pa.C.S. § 703, defines "agency" as the body, and all committees thereof, authorized to take official action for boards of trustees of all state-related universities. That statutory provision applies in this case if the board of governors is a committee of the board of trustees of PSU, the majority explained. 

The majority utilized the definition of "committee" set forth in the Nonprofit Corporation Law in determining that the board of governors did not qualify as a committee of the board of trustees of PSU. The board of governors did not possess the qualities of a "committee of PSU," the majority determined, relying on the fact that the board of governors was not composed of members of PSU's board of trustees and that board members could not be appointed or removed by the board of trustees of PSU, its chairman or the university president. 

The majority also cited evidence that the association is a separate and autonomous corporation, with authority to sue PSU. Thus, the majority held that the board of governors did not qualify as a "committee" of PSU within the meaning of the Sunshine Act. 

Because the newspapers could demonstrate a likelihood of success on the merits of their claim, they were not entitled to injunctive relieve, the majority concluded. 

Judge Smith-Ribner, joined by President Judge Colins, dissented. Smith-Ribner observed that the merger agreement provided the board of governors with express authority to provide advice to Penn State and to make binding recommendations concerning the law school curriculum. She also observed that the board could preclude Penn State, in perpetuity, from changing the name and the location of the law school. 

Smith-Ribner argued that meetings at which the board of governors takes official action or renders advice on agency business should be open to the public, subject to any limitations under the Sunshine Act. When performing such functions, the board is acting as an agency, as that term is defined in Section 703, the judge contended. The trial court correctly issued a preliminary injunction upon deciding that meetings of Dickinson's board of governors are subject to the open meeting provisions of the act, she concluded.

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