Category Archives: Government

Government

ARE YOU FROM PENNSYLVANIA? CONGRATULATIONS, HERE’S A 10 MINUTE PRIMER ON WHY YOUR GOVERNMENT SEEMS TO BE IMPLODING

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It’s tough to be a Pennsylvanian these days.  Especially if you are from Philadelphia.  Our State is on the verge of shutting down because we can’t pass a budget.  Our public school systems are still a problem and habitually underfunded.  And we can’t even take solace in our diversion of choice – sports (at least those of us in Philadelphia). The Flyers are terrible, the Eagles are worse and the Sixers are trying to lose games and have been for 3 years.

But compared to what’s going on in the upper echelon of our government, these seem like minor annoyances.  Because just now, Pennsylvania’s entire democratic government appears to be imploding.

The sheer volume and breadth of potentially career-ending allegations being asserted against the State’s political elite is astonishing and unprecedented.  If you haven’t been able to keep up with daily allegations of widespread political misconduct and corruption (and who could blame you), here is a quick rundown on the current state of your government:

  • Your elected Attorney General’s license to practice law has been revoked by the Pennsylvania Supreme Court and she is facing trial on multiple perjury charges, allegedly for lying about her role in leaking confidential grand jury information;
  • One of your elected Supreme Court Justices (Justice Seamus McCaffery) resigned after allegations that he sent pornographic, misogynistic and racially derogatory emails to other State employees, including prosecutors;
  • Governor Tom Wolf has formally requested that a second Supreme Court Justice (Justice Michael Eakin) resign, also for sending and receiving sexually and racially offensive emails. Justice Eakin has also been accused of exchanging offensive and inappropriate emails concerning female members of his staff;
  • A third Supreme Court Justice (the Court’s Chief Justice) has been accused of implementing a clandestine scheme to save his imperiled colleague’s job by appointing a ringer to the Court of Judicial Discipline – the Court responsible for doling out potential punishment to Justice Eakin; and
  • A number of your State’s top prosecutors have been accused of pursuing a racially tainted corruption sting targeting minorities. There are calls for some of these same prosecutors to resign or be fired for exchanging pornographic and offensive emails with the above referenced Supreme Court Justices.

The bullet points above are only an outline of recent headline grabbing allegations involving the leaders of your State.  The media has been using the term “Porngate” to describe the exponentially growing investigation into hundreds of arguably pornographic emails exchanged by government officials. As far as I know, none of the upper echelon political figures identified in these controversies has been convicted of a crime.  Most have not admitted to any wrongdoing, although Justice Eakin has issued an apology.  I can’t and won’t pass judgment on the guilt or innocence of any of the parties involved.  For the most part, these are all just allegations.  That said, every new, scandalous headline is a black eye for our home State.

At this point, these high-profile scandals have assumed a life of their own.  But what is remarkable, and lost in the avalanche of new allegations, is how this entire mess appears to have started in the first place.  Believe it or not, the ongoing investigations threatening to take down a significant chunk of Pennsylvania’s political elite seems to have grown from a small squabble between prosecutors.  Really!  It is like a Shakespearean tale.  Two prosecutors who didn’t like each other inadvertently set in motion a series of events that could result in the meltdown of Pennsylvania’s government (or at least its Judiciary).

Hard to believe?  Well, let me tell you a story . . . about what “allegedly” happened:

Way back in 2012, Pennsylvania’s Democratic Party backed former prosecutor Kathleen Kane for Attorney General.  It had been an awfully long time since a Democrat had been Attorney General in Pennsylvania. In fact, before Kane, no Democrat had EVER been elected Attorney General in Pennsylvania.   But Kane liked her chances and so did her supporters.

One of Kane’s campaign strategies was to criticize then Governor Tom Corbett’s handling of the Jerry Sandusky case. Governor Corbett had been serving as Pennsylvania’s Attorney General when the Attorney General’s Office began investigating claims that Jerry Sandusky was sexually abusing minors.  The primary attorney investigating Sandusky was Frank Fina, a well-known prosecutor with a long list of high-profile convictions.

During her campaign for office, Kane suggested that Corbett and Fina had delayed prosecuting Sandusky so that it would not impact Corbett’s successful bid to run for Governor in 2010.  On the campaign trail, she promised she would review Fina’s investigation into the Sandusky matter.

Kane was eventually elected as Pennsylvania’s Attorney General.  But, a number of newspapers reported that Fina was angry that Kane wanted to review his work on the Sandusky matter and that she criticized the way the prosecution was handled.

On March 17, 2014, the Philadelphia Inquirer broke a story that Kane, in one of her first significant acts as Attorney General, had quietly shut down an undercover sting operation that had succeeded in capturing various Philadelphia politicians accepting cash payments in return for favors. That sting operation had been run by Frank Fina.

The Inquirer story was critical of Kane shutting down the sting operation.  Particularly in light of the video evidence of politicians taking money as bribes.  Reportedly, Kane believed that Fina had leaked the story to the Inquirer. For her part, Kane told the Inquirer that she had shut the sting down because she believed that the individuals conducting the operation (i.e. Fina) had improperly targeted only black politicians.

Kane, angry about the Inquirer article, allegedly decided what is good for the goose is good for the gander and decided to leak negative information about Fina.  Reportedly, Kane leaked confidential memos from a 2009 Grand Jury investigation run by Fina.  Kane believed that Fina had botched the investigation and the memos proved it.  Fina, in turn, reported the illegal leak of Grand Jury memos to a Montgomery County judge.  That kick started a separate Grand Jury investigation into who exactly leaked the confidential memos.

Kane was then called to testify in front of a Grand Jury about her involvement in leaking the memos. She denied any wrongdoing, but the Grand Jury concluded there was sufficient evidence that she lied.  Boom! Kane is now facing a criminal trial in Montgomery County for multiple counts of perjury.

Still with me?  Good – because now things get a little crazy.

While Kane and Fina were allegedly busy trying to destroy each other, Kane made good on her campaign promise to review the Sandusky investigation.  Fina, who ran that investigation, was cooperating with the probe, but he had left the AG’s office and joined the Philadelphia District Attorney’s Office.  In order to better recollect his actions in the Sandusky probe, Fina reportedly requested his emails from that investigation.  That turned out to be an inadvertent, yet fatal mistake

When Kane started searching through Fina’s old emails from the Sandusky matter, she reportedly found additional emails he had sent or received that contained offensive and/or pornographic emails. Reportedly, this gave Kane leverage she could use to strike back at Fina and potentially destroy his career.

But Kane didn’t just find offensive emails from Fina.  She also found racially insensitive and offensive emails sent to and from Supreme Court Justices Seamus McCaffery and Michael Eakin, amongst others.  A number of people were included on these email chains, including prosecutors, making the emails not only offensive but evidence of troubling conflicts of interests (Supreme Court Justices really shouldn’t be exchanging personal emails with prosecutors when a significant part of a Justices job is to review the conduct of those same prosecutors). And this is the pivotal moment in this story.  Up until this point, the story playing out was simply a scorched earth personal dispute between two prosecutors.  But now, with these offensive emails being sent to and from Supreme Court Justices and high powered prosecutors, the controversy exploded.

Justice McCaffery resigned shortly after the emails uncovered by Kane came to light.  Justice Eakin did not resign. Special Counsel was hired to investigate Justice Eakin’s involvement and determined that the emails he sent weren’t really all that bad.  It was later reported that the Special Counsel had previously assisted with Justice Eakin’s re-election for the Supreme Court in 2011 . . . but that’s a different story.

Anyway, things with Justice Eakin were status quo for a time, but of course, in a story like this, it is inevitable that the next shoe would dropped.  And it did.  In a surprising move, the Supreme Court suspended Kane’s law licenses this past summer, ostensibly because of the criminal charges pending against her for perjury. By suspending Kane’s law license, the Supreme Court left the State’s lawyer-in-chief unable to practice law.

Now, it just so happens that not long after the Supreme Court moved to suspend Kane’s law license, additional emails from Justice Eakin were “discovered.”  These emails, reportedly included email exchanges between Justice Eakin and other men that contain highly suggestive and offensive discussions about female judicial staff members.

After the content of these “new” emails became public, Governor Wolf called for Justice Eakin to resign.  But, as a sitting Supreme Court Justice, it is for the Court of Judicial Discipline to decide whether Justice Eakin is fit to remain on the bench.

Now, you would think that if a Supreme Court Justice was subject to trial before the Court of Judicial Discipline the Court of Judicial Discipline would be independent of the Supreme Court.  But, of course you would be wrong. It turns out that the Supreme Court has the authority to appoint a judge to the Court of Judicial Discipline.  A few days ago the Inquirer broke a story that Justice Eakin and the Supreme Court’s Chief Justice Thomas Saylor were attempting to nominate Karen Snider, former secretary with the Department of Welfare, to the Court of Judicial Discipline because she would be sympathetic to Justice Eakin.  Regardless of the motives for appointing Snider, it appears Eakin was permitted to vote for Snider’s appointment, which seems like a potential conflict of interest.

I could go on for another dozen pages with this stuff, but my 10 minutes are up.  And you are now caught up on the current state of Pennsylvania politics!

PJames Goslee is a trial attorney in Philadelphia and can be reached at http://jamiegoslee.com/about/hoto Credit: Darastar, Everystockphoto.com

Government, Uncategorized

Attorney General Kathleen Kane Punches Back

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City Hall

Beleaguered Pennsylvania Attorney General Kathleen Kane is facing mounting legal and political pressure to resign from office.  “Pressure to resign” is actually a bit of an understatement.  Kane is facing a criminal trial in Montgomery County for allegedly leaking confidential Grand Jury material to local newspapers in order to attack a political rival.  On top of that, the Pennsylvania Supreme Court has suspended her law license, and a Special Committee appointment by the State Senate has recommended that the legislature initiate potential impeachment proceedings.  But it is becoming increasingly clear that Kane does not intend to go down without a fight. And it could be a very long, very messy and very embarrassing fight for a number of elite government officials.

Only one week ago, a “Special Committee” appointed by the State Senate reported that it did not believe Kane could or should continue in her role as Attorney General.  The report was seen as the first step in initiating impeachment proceedings in the Senate. But today Kane threw a heavy counter-punch, hiring independent counsel to conduct an investigation  of her own into offensive and arguably pornographic emails allegedly exchanged by high-level State officials, including prosecutors and Supreme Court Justices.  Ostensibly, Kane appointed independent counsel to investigate and issue a report on potential crimes committed by individuals sending these offensive emails on government computers.  But the subtext is clear – her political enemies may succeed in forcing her out of office, but she is not going down quietly or alone.  Kane is going on the offensive.

During the press conference today, the Attorney General’s Office announced that it has appointment former Maryland Attorney General Douglas F. Gansler to conduct an independent investigation into the offensive emails. Gansler’s task is to determine if any crimes were committed in connection with these emails and make a recommendation as to whether individuals involved should be prosecuted.

Significantly, Gansler will not just be reviewing emails currently in the possession of the Attorney General.  He has been given authority to seek additional emails and has the ability to subpoena additional records.  The fact that Gansler has been tasked with expanding the scope of the investigation and has authority to issue subpoenas is important. His investigation may expand to implicate even more government employees.  Gansler’s investigation will almost certainly be viewed as a threat to Kane’s political rivals who are maneuvering to kick her out of office.  Kane’s back may be against the wall, but she is pushing back.

At today’s press conference, the Attorney General’s Office displayed a number of allegedly offensive emails.  These included racist and sexist jokes undisputedly offensive to women and minorities. Kane is clearly working to frame the emails as evidence of institutional bigotry within upper echelon of Pennsylvania’s government.  Her position is that she is being attacked by the politically powerful for trying to expose and root out this systemic prejudice.

Interestingly, Gansler went to great lengths at today’s press conference to establish that his investigation would be “independent” and that he would not be biased in anyway in favor of Kane.  It is always fair to question whether an independent investigator hired by an interested party can be truly “independent.” But Gansler didn’t do himself any favors by criticizing the Supreme Court for suspending Kane’s law license.  Gansler said at the press conference that the Supreme Court “waded across lines of separation of powers” in suspending Kane’s license.  If Gansler is truly conducting an “independent investigation” on behalf of Kane, he should probably refrain from offering her public support.

Regardless of the merits of either side’s argument, Kane’s actions today demonstrate that she is not afraid to throw a counter-punch and that her dramatic tenure as Attorney General will not end quietly.

James Goslee is a trial attorney in Philadelphia and can be reached at http://jamiegoslee.com/about/

 

Constitution, Courts, Government, James P. Goslee, Uncategorized

Reality Check – State Governors Have No Authority to Exclude Syrian Refugees

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In the aftermath of the recent terrorist attacks in Paris, there has been widespread debate as to whether the United States should accept Syrian refugees.  Although the investigation into the Paris attacks is ongoing, it appears that some of the terrorist involved in the attack posed as refugees in order to enter the country.  The fear of a similar “Trojan Horse” attack in the United States has clearly struck a nerve and in some respects, divided the Country. Some argue that the United States was founded by immigrants, has a long history of welcoming and protecting refugees and should not let reflexive and irrational fear influence our social philosophy or domestic policy. Citing the Paris attack, others argue that until we have an effective and proven method of vetting Syrian immigrants, we should not accept them within our borders.

A number of state governors have recently joined this increasingly heated debate.  For instance, Texas Governor Greg Abbott and Massachusetts Governor Charlie Baker, have explicitly stated that their respective states will not accept any more Syrian refugees.  Louisiana Governor Bobby Jindal has gone so far as to issue an Executive Order to the State’s executive agencies, requiring the agencies to use all lawful means to prevent the resettlement of Syrian refugees within Louisiana. In contrast, Pennsylvania’s Governor Tom Wolf has welcomed the resettlement of Syrian refugees within the State.

Lost among the rhetoric as to whether the United States should or should not accept Syrian refugees, is the fact that state governors have absolutely no legal authority to prevent Syrian refugees from settling within their respective borders.  Indeed, the law on this point is crystal clear.   The United States Constitution and federal law vests all authority for accepting foreign refugees with the federal government, not the states. Any action taken by states to prevent refugees from settling within their borders, whether by executive order (as in the case of Governor Jindal) or by legislation would violate the United States Constitution and almost certainly would be struck down by a federal judge.

Article I, section 8 of the United States Constitution provides that the federal government (not state governments) shall have sole authority to “establish a[] uniform Rule of Naturalization.”  This provision of the Constitution has been broadly construed by the United States Supreme Court and has been interpreted to preempt the majority of state laws dealing with immigration. In other words, state governors and legislators are not allowed to pass or enforce laws that deal with immigration or naturalization.  This includes laws seeking to keep refugees out.

The United States Supreme Court addressed this issue a few years ago when Arizona attempted pass and enforce laws designed to be tough on illegal immigration.  Justice Kennedy, writing for the majority in Arizona v. United States, cogently explained the Constitutional authority and rational for vesting the federal government (as opposed to the various states) with the sole right to regulate immigration:

The Government of the United States has broad, undoubted power over the subject of immigration and the status of aliens.  . . . This authority rests, in part, on the National Government’s constitutional power to “establish an uniform Rule of Naturalization,” U.S. Const., Art. I, § 8, cl. 4, and inherent power as sovereign to control and conduct relations with foreign nations. . . .

The federal power to determine immigration policy is well settled.  Immigration policy can affect trade, investment, tourism, and diplomatic relations for the entire Nation, as well as the perceptions and expectations of aliens in this country who seek the full protection of its laws. …

It is fundamental that foreign countries concerned about the status, safety, and security of their nationals in the United States must be able to confer and communicate on this subject with one national sovereign, not the 50 separate states.

In light of the Constitutional authority granting the federal government sole authority to deal with immigration, any state law or executive order seeking to keep foreign refugees out would be preempted by federal law.  Specifically, any attempt by states to exclude refugees would be preempted by the federal Refugee Act of 1980, which permits the President to admit refugees facing “persecution or well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group, or political opinion.”

So what does all of this mean for Syrian refugees?  It means that if state governors actually attempted to follow through with their threats and bar Syrian refugees from entering their states, their actions would be illegal and certainly overturned by the federal courts.

James Goslee is a trial attorney in Philadelphia and can be reached at http://jamiegoslee.com/about/

 

Photo Credit: Kristy Pargeter, Dreamstime Stock Photos

Government

Governor Wolf’s Executive Powers Under the Microscope

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The Pennsylvania Supreme Court is currently hearing arguments on issues that will ultimately define the scope of Governor Tom Wolf’s powers as the State’s Chief Executive. This morning the Supreme Court is hearing arguments on Governor Wolf’s executive “moratorium” on the execution of death row prisoners in Pennsylvania. Since taking office, Governor Wolf has suspended the execution of prisoners until a legislative panel completes an ongoing study on the use of capital punishment in Pennsylvania. Most view this “temporary moratorium” as the first step in eliminating capital punishment altogether in Pennsylvania.

The death penalty case revolves around death row inmate Terrance Williams who was convicted of beating a Philadelphia man to death with a tire iron over 30 years ago. Williams had unsuccessfully sought a pardon and to have his death penalty sentence overturned or commuted. Since taking office in January, Governor Wolf has granted Williams 3 reprieves, indefinitely postponing Williams’ scheduled execution.

Governor Wolf has taken the position that all executions in Pennsylvania should be suspended until the State’s legislature completes a study on the use of capital punishment. The Governor’s Office argues that as the State’s Chief Executive, Governor Wolf has “unconditional power” to grant reprieves to death row inmates and state courts have no jurisdiction to review or challenge his exercise of executive power.

Philadelphia’s District Attorney Seth Williams has challenged Governor Wolf’s actions as “flagrantly unconstitutional” and outside the scope of the Governor’s authority.

Considering Governor Wolf’s criticism of the continued use of the death penalty, the Supreme Court’s decision in Williams will likely have a significant impact on the ongoing viability of capital punishment in Pennsylvania. It will also help define the scope and breath of the Governor’s powers as chief executive. Proponents and opponents of the death penalty are watching this case closely.

In addition to the “death penalty moratorium,” the Pennsylvania Supreme Court is also hearing arguments on Governor Wolf’s authority to remove Erik Arneson from his position as Executive Director of the Office of Open Records. The Arneson case is interesting, but more nuanced than the death penalty moratorium case. Arneson centers on former Governor Corbett’s last minute appointment of Erik Arneson to the position of Executive Director of the Office of Open Records. The Office of Open Records is a new, quasi judicial state agency that is tasked with making preliminary decisions as to whether government records should be turned over to the public under the State’s “Right to Know Law.” This potentially means the Office of Open Records will decide whether the public is entitled to otherwise private records from the Governor’s Office.

On January 13, 2015, in his last week as Governor, Tom Corbett appointed Erik Arneson as Executive Director of the Office of Open Records. By statute, the Executive Director will serve a 6 year term. On January 20, 2015, Tom Wolf officially became the new Governor of Pennsylvania and one of his first acts as Governor was to fire Arneson.

Arneson appealed the decision to the State’s Commonwealth Court. On June 10, 2015, an en banc panel of the Commonwealth Court found Governor Wolf acted outside his authority in firing Arneson without cause. The Commonwealth Court ordered Arneson to be reinstated and awarded him back pay. Governor Wolf’s office appealed the decision to the Supreme Court, which is hearing arguments this morning.

The primary issue before the Supreme Court is whether the State legislature intended the Executive Director position of the Office of Open Records to be “independent” of the Governor’s Office. In other words, when the legislature created the Office of Open Records, did it intend to immunize the Executive Director from political influence, including the influence of the Governor. If it intended the office to be “independent,” then Governor Wolf would not be permitted to fire Arneson except for cause. If the legislature did not intend the Office of Open Records to be independent, then Arneson serves at the pleasure of the Governor and the Governor has unfettered authority to remove him for any reasons or no reason at all.

Governor Wolf contends that nothing on the legislation creating the Office of Open Records indicates that the office was meant to be “independent” and there are no limitations on his ability to appoint and replace the Executive Director “at will.”

Arneson obviously disagrees, arguing that by granting the Executive Director a 6 year term, which exceeds the term of the Governor by 2 years, the State legislature intended the Executive Director to operate free from political pressure or threats of removal from the Governor’s Office. Arneson also argues that the Office of Open Records is responsible for making decisions as to whether government records, including records from the Governor’s Office should be made public under the State’s Right to Know Laws. Given that authority, Arneson contends that the legislature clearly intended the office to be “independent.”

As with the death row moratorium, the Supreme Court’s decision in Arneson will help shape the limits of the Governor’s authority. It will also resolve contentious political wrangling between the outgoing Governor and Governor Wolf. Regardless, hearing both arguments at the same time means that in short order the Supreme Court will be making unprecedented decisions that influence the shape and operation of our State’s government.

Check back for updates.

Government

“Absolute” No More – Effectively Challenging Workers’ Compensation Liens

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Resolving a workers’ compensation lien is a frequent hurdle for attorneys attempting to settle third-party personal injury claims.  By statute, employers have a right to be reimbursed for workers compensation benefits provided to an injured employee if there is a third-party recovery.   Thus, employers that provide workers compensation benefits to an injured employee have an automatic lien against any financial recovery in a personal-injury lawsuit involving the same injury. In light of this statutory subrogation right, settlement demands made by plaintiffs normally incorporate the amount of an outstanding workers’ compensation lien and the lien amount is normally stipulated to as a component of damages at trial.

Because employers are entitled to be reimbursed for workers’ compensation benefits, there is a logical incentive to assist (or at least cooperate with) employees pursuing personal injury claims. After all, the employer can only be reimbursed if its employee prevails.  Because of this inherent incentive, plaintiffs’ attorneys often take for granted that employers will be cooperative during the course of litigation.  There is an expectation that the employer will assist in producing fellow employees for deposition, turn over relevant documents and appropriately comply with subpoenas.

Despite an employer’s financial incentive (and arguably moral obligation) to cooperate during litigation of its employee’s personal injury claim, it does not always happen.  For a variety of reasons employers sometimes take a more obstructive position.   In my experience, employers are more likely to adopt a more obstructive position when the lawsuit is against a third-party vendor or company with which the employer has an important, long-standing business relationship.  Whatever the reason, no matter how uncooperative an employer may be during litigation, it is safe to assume that if the plaintiff does recover in spite of the employer’s obstructive conduct, the employer will nevertheless expect reimbursement for its lien.

It naturally seems unfair that if an employer actively obstructs an employee’s personal injury claim by, for instance, refusing to turn over key documents or attempting to prevent the deposition of co-employees, it should nevertheless be entitled to reimbursement of a lien if there is a recovery.  After all, if an employer takes affirmative steps to hinder an employee’s chances of recovering in a personal injury claim, why should it get the financial benefit of any such recovery?  Yet, even when employers do obstruct an employee’s personal injury claim, they often pursue and receive lien reimbursement anyway.  The reason for this seemingly perverse result is simple.  An employer’s statutory subrogation right has often been interpreted by courts as “absolute,” thus discouraging equitable challenges from employees and counsel.

Although challenging an employer’s subrogation rights on equitable grounds is difficult, it is not hopeless. It is true that an employer’s statutory right to assert a lien against an employee’s third-party recovery has been generally recognized as “absolute,” there is one crucial exception.  The Pennsylvania Supreme Court has ruled that where an employer fails to act in good-faith or is “derelict in its duty so as to subvert its employee’s third-party claim,” as a matter of equity, that the employer will not be permitted to recover its lien.

In Thompson v. Workers’ Comp. App. Board, 781 A.2d 1146, 1154 (Pa. 2001), the Supreme Court noted that:

Although our disapproval of ad hoc equitable exceptions to the statutory right of subrogation, such as those relied upon by the Commonwealth Court below, is enough to decide this particular case, this Court is aware that there may be circumstances where an employer undertakes in deliberate bad faith to subvert a third party suit brought by its employee, circumstances which might require a different calculus.

Based upon this reasoning, the Thompson Court appears to have explicitly carved-out a bad faith and dereliction of duty equitable exception to an employer’s “absolute” right to subrogation, concluding:

Given the substantial benefits conferred upon employers by the Workers’ Compensation Act, and the inherently equitable nature of the doctrine of subrogation, it would be unreasonable to permit an employer both to act in deliberate bad faith to subvert an employee’s third party action, and then to demand subrogation arising from that action. Accordingly, nothing in this Opinion shall be construed as suggesting that subrogation would be appropriate in the face of deliberate, bad faith conduct on the part of the employer.

The rational of the Thompson court is important because it provides a legal “hook” that plaintiff attorneys can utilize to ensure that employer’s act in a good faith, cooperative manner during litigation.  But the Supreme Court’s decision to create an “equitable exception” to an employer’s absolute right to subrogation creates a novel question of jurisdiction.  Historically, the right to “adjudicate” the amount of an employer’s subrogation entitlement has been the province of a workers’ compensation judges and not the Court of Common Pleas.  This jurisdictional issue could present additional problems in challenging an employer’s right to subrogation.  First, attorney’s specializing in personal injury may be unfamiliar with proceedings before a workers’ compensation judge.  More importantly, opening a parallel proceeding before a new judge unfamiliar with the facts of the personal injury action may delay final distribution of the recovery.  For these reasons, it may be beneficial for an employee to have a Common Pleas judge make an equitable determination as to whether an employer can seek subrogation of its lien.  And, it just so happens, the Pennsylvania Supreme Court has recognized limited circumstances whereby the Court of Common Pleas can retain jurisdiction for purposes of determining an employer’s right to pursue subrogation.

In Gillette v. Wurst, 937 A.2d 430 (Pa. 2007), the Pennsylvania Supreme Court held that the Common Pleas Court could exercise jurisdiction over an employer’s subrogation claim under the Workers’ Compensation Act if resolution of the subrogation right included issues outside the scope of an administrative law judge’s authority:

The courts of common pleas lack jurisdiction to adjudicate Workers’ Compensation claims including issues involving subrogation. . . .  However, the issue here does not arise solely under the Workers’ Compensation Act; rather, it demands consideration of the interplay between . . .  unquestioned right of subrogation under the Act, Gillette’s  right to a wrongful death award, and the intestacy laws. Therefore, this matter was properly filed before the trial court rather than an administrative law judge, who would not be in position to adjudicate the wrongful death issue. It is the existence of the valid subrogation claim, not jurisdiction to adjudicate it in the first place, that answers the issue.

Arguably, this language can be interpreted to provide jurisdiction to the Court of Common Pleas in resolving “the existence” of an employer’s subrogation rights if there is substantial evidence that the employer’s failure to act in good-faith or derelict conduct subverted an employee’s ability to pursue a third-party personal injury action.  It can be credibly argued that resolution of such an equitable issue necessarily requires the exercise of the Court of Common Pleas’ broad equitable powers.  Broad equitable powers that administrative law judges do not necessarily possess.  See, e.g., Dollar Tree Stores, Inc. v. Workers’ Comp. App. Board., 931 A.2d 813, 815 (Pa. Commw. Ct. 2007) (“The doctrine of unjust enrichment is an equitable one; the Board, however, does not have its roots in equity. While we do not believe that this fact precludes the Board from employing certain equitable principles, its use of such principles must be restricted in light of its statutory constraints.”).

Although the jurisdictional issue would be a question of first impression, the Thompson decision alone is an important tool for plaintiffs’ counsel.  It can and should be used to ensure reluctant employers cooperate in personal injury actions.  The Thompson decision should also prompt counsel to make a strong record of instances of bad faith or derelict conduct by an employer.  Armed with such evidence, an employer’s historically “absolute” right to subrogation is no longer such a sure thing.