Commonwealth Court dismisses dog kennel suit over Pa. general fund transfer

By Jim Boyle | Nov 19, 2014

A three-judge panel of the Commonwealth Court of Pennsylvania has dismissed a

complaint filed by a group of humane societies that said the state's 2009 appropriations bill illegally transferred $4 million from a special account to the general fund.

According to the opinion filed Wednesday by Judge Anne Covey, The Pennsylvania Federation of Dog Clubs, The Federated Humane Societies of Pennsylvania, and the Humane League of Lancaster County did not have vested rights to the money in the Dog Law Restricted Account because those funds were not guaranteed to the organizations. The kennels and humane societies could apply for grants paid out of the account, as long as there was a surplus of money after payments to the counties, meaning there was no ownership of the account.

The suit was filed in June 2012, seeking injunctive relief and a declaratory judgment against the Commonwealth for its passage of the 2009 General Appropriations Act that included the transfer of $4 million from the Dog Law Restricted Account. The petitioners claimed that the account had been created to collect money from dog, kennel and dealer licensing fees and disbursed among counties and incorporated humane society organizations for designated purposes, and the transfer violated their due process rights.

The plaintiffs cited the Pennsylvania Supreme Court's ruling in a similar complaint filed by the Hospital & Healthsystem Association of Pennsylvania, which argued that the state's transfer of $100 million from the Medical Care Availability and Reduction of Error (MCARE) Fund to the General Fund was unlawful.

In its ruling that the Hospital & Healthsystem Association of Pennsylvania's due process rights were violated, the court wrote "[M]onies in restricted accounts/special funds, collected under compulsion and with explicit statutory statement that they would be used for specified purposes, cannot be legislatively diverted on a retroactive basis so long as the purpose(s) for which the funds have been collected remains.” The humane societies held that the passage also applied to their suit.

Attorneys representing the commonwealth offered several reasons to challenge the plaintiffs' standing in the suit, and the court supported the humane societies in almost every instance save the last. For example, the commonwealth argued that the humane societies' interest in the legislation did not rise above the ordinary citizen and was speculative because the funds from the account were not guaranteed.

The court agreed that the plaintiffs' had substantial interest in the outcome of the suit, saying that they directly benefited from the account and would clearly be disadvantaged by the diversion of the funds.

However, the court could not look past the fact that the DLRA is not protected from the legislative branch's authority to control the fate of special funds in order to serve the changing needs of the government.

"Again, the DLRA does not mandate that grants be furnished," Covey wrote. "Petitioners have no rights that rise above the level of a mere expectation that the DLRA will continue in place."

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