The Pennsylvania Supreme Court ruled Monday that a political subdivision agency, such as
a community college, cannot be defined as a "person" under state consumer protection laws.
The definition question was kicked up to the higher court by an appeal from the Commonwealth Court, where a summary judgment is sought over a lawsuit filed against the Community College of Beaver County. Before a ruling could be considered, a clear determination needed to be made regarding the school's status under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL).
The case in question concerns a group of 38 cadets enrolled in the college's police training program who lost their progress in 2002 when misconduct by the school forced the state to halt the program. Some of the infractions include misplaced paperwork and the employment of a firearms instructor who was not properly certified.
The cadets sued the school, saying that post-graduation job opportunities were lost because they could not complete the training. The suit seeks damages of more than $200,000 for the students, who claim the school violated consumer protection laws by advertising itself as properly certified when, in fact, it was not.
The question of whether a political, non-commercial agency such as the community college could be sued under the UTPCPL was originally considered by the Beaver County Court of Common Pleas. Lawyers for the school argued that the language in the UTPCPL defined persons as "natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations, and any other legal entities." Since the language did not explicitly mention political subdivision agencies, they argued they were exempt from the law.
The plaintiffs countered that the final phrase, "any other legal entities," did, in fact, cover any subjects not specifically named in the definition. CCBC replied by saying that the ending phrase is ambiguous and could mean other, private legal entities such as the ones previously listed in the definition.
The state supreme court agreed that the term is ambiguous and concluded that the state legislature intended to exclude political subdivision agencies from the definition of "persons."
The legislature enacted the UTPCPL to account for the fundamental inequality between buyer and seller, and to protect consumers from exploitative merchants," wrote Justice Debra Todd.
"The parties offer, and we discern, no evidence to suggest that, in enacting the UTPCPL, the General Assembly was concerned with and, thus, sought to eliminate unfair trade practices in the public sphere."
The court also determined that defining political subdivisions would be an unprecedented move considering that government agencies are immune from common-law punitive damages. A reversal of a long-standing law would require more explicit language from the assembly, Todd wrote.
Finally, another consequence of ruling political subdivision agencies as "persons" under the UTPCPL would grant the attorney general the power to close the offices. According to language in the statute, the Attorney General may seek the “dissolution, suspension or forfeiture of the franchise or right to do business” of a “person” who violates a court’s injunction against an unfair or deceptive practice, as well as the appointment of a receiver to manage the party’s affairs.
CCBC's motion for a summary judgment has been remanded to the Commonwealth Court.