UC - voluntary quit - no express quit - absence due to ink-patient drug/alcohol treatment

Spivey v. UCBR – Cmwlth. Court – July 6, 2020 – reported opinion

Claimant held to have voluntarily quit his job when

• On parole, he failed a drug test – alcohol, cocaine, marijuana
• As a result, he was held in detox
• After detox, he entered into an in-patient substance abuse treatment program from 12-11-18 to 1-25-19
• Contacted ER upon release – informed no work for him

From the opinion:

Voluntary quit – burden of proof - Section 402(b) of the Law states that an employee shall be ineligible for compensation for any week “[i]n which his unemployment is due to voluntarily leaving work without cause of a necessitous and compelling nature[.]” 43 P.S. § 802(b).  Aclaimant seeking benefits bears the burden of establishing either that (1) his separation from employment was involuntary or (2) his separation was voluntary but he had cause of a necessitous or compelling nature that led him to discontinue the relationship. Greenray Indus. v. UCBR, 135 A.3d 1140, 1143 (Pa. Cmwlth. 2016) (quoting Watkins v. UCBR, 65 A.3d 999, 1004 (Pa. Cmwlth. 2013)). 

Express resignation not required - When examining whether a claimant has ‘voluntarily’ left employment, an express resignation is not necessary to make this determination and ‘conduct which is tantamount to a voluntary termination of employment is sufficient.’ Greenray Indus[.] . . . , 135 A.3d [at] 1143 . . . ([quoting] Shrum v. UCBR, 690 A.2d 796, 799-800 (Pa. Cmwlth. 1997)). 

Totality of circumstances - When making a determination of whether a person voluntarily left his employment, we must examine the totality of the facts surrounding the cessation of employment. An employee’s failure to take all necessary and reasonable steps to preserve his employment will result in a voluntary termination of employment. Thiessen v. UCBR, 178 A.3d 255, 260 (Pa. Cmwlth. 2018) (emphasis added; citations omitted). 

Leaving w/o action by employer is a voluntary quit - The courts have defined ‘voluntary’ as leaving on one’s own motion, stating: ‘Where the employee, without action by the employer, resigns, leaves or quits his employment, his action amounts to ‘voluntarily leaving work. . . .’’ Labor [&] Industry Dep[’t] v. UCBR, . . . 3 A.2d 211[, 214] ([Pa. Super.] 1938). Roberts v. UCBR, 432 A.2d 646, 648 (Pa. Cmwlth. 1981). Claimant left w/o any action by his employer, under the undisputed facts found by the UCBR.

Sec. 3 – “through no fault of his own” - Having determined that Claimant voluntarily left his employment, this Court must now rule on whether Claimant is eligible for UC benefits under Section 402(b) of the Law. Pursuant to Section 3 of the Law, the purpose of the Law is to provide UC benefits for “persons unemployed through no fault of their own.” 43 P.S. § 752 (emphasis added). Although the UCBR did not rely on Section 3 of the Law in reaching its decision in this case, this Court has determined that it is a valid interpretive aid when analyzing Section 402(b) of the Law. See Kawa v. UCBR, 573 A.2d 252 (Pa. Cmwlth. 1990); see also Bostic v. UCBR (Pa. Cmwlth. No. 1531 C.D. 2009, filed February 16, 2010). 

No express quit, but -- "In determining fault, this Court has historically and consistently concluded that an employee is responsible for the consequences of his alcohol and drug use. Here, claimant’s own testimony was substantial evidence for UCBR finding that his absence from work due to in-patient drug program was the result of claimant’s alcohol and drug use. “Therefore, although Claimant did not expressly quit his job, his conscious disregard to consume alcohol and drugs despite being fully aware of the potential consequences was sufficient for the UCBR to conclude that he was voluntarily unemployed without a necessitous and compelling reason.”

admin. law - hearsay - exceptions - applicability of Pa. Rules of Evidence

Lancaster Co,. CYS v. DHS – Cmwlth. Court – July 1, 2020 – reported decision

Held: Police officer’s testimony--to which alleged abuser mother did not object at admin. hearing--about the unobjected-to statement of father to police at scene of alleged child abuse was admissible as an excited utterance—an exception to the hearsay rule--to prove that the mother was alone in her car when she overdosed on heroin.

DHS found that the CYS had not proved its case, because, inter alia, it was based on uncorroborated hearsay—the testimony about what the police officer said at the scene. CYS appealed, arguing that DHS erred in excluding it from consideration as hearsay because: (1) corroborating evidence [to support the unobjected-to hearsay] existed in the form of Officer Ayers’ first-hand observations of the scene; and (2) the Father’s statements constituted an “excited utterance” and, therefore, are subject to a hearsay exception.  The court reversed the DHS decision on the basis of (1).

From the opinion:

Hearsay is a statement, other than the one made by a declarant while testifying at the trial or hearing, offered into evidence to prove the truth of the matter asserted in the statement. Pa. R.E. 801(c). Generally, hearsay is not admissible under the Pennsylvania Rules of Evidence. Pa. R.E. 802. We recognize, however, that “Commonwealth agencies [are] not . . . bound by technical rules of evidence at agency hearings, and all relevant evidence of reasonably probative value may be received.” A.Y. v. Dep’t of Pub. Welfare, Allegheny Cty. Children & Youth Servs., 641 A.2d 1148, 1150 (Pa. 1994) (citing 2 Pa. C.S. § 505). 

We have consistently applied the following standard, referred to as the Walker Rule, to determine whether hearsay evidence is admissible at administrative proceedings: 

(1) Hearsay evidence, [p]roperly objected to, is not competent evidence to support a finding of [an agency][;] 

(2) Hearsay evidence, [a]dmitted without objection, will be given its natural probative effect and may support a finding of [an agency], [i]f it is corroborated by any competent evidence in the record, but a finding of fact based [s]olely on hearsay will not stand. 

Rox Coal Co. v. Workers’ Comp. Appeal Bd. (Snizaski), 807 A.2d 906, 915 (Pa. 2002) (citing Walker v. UCBR, 367 A.2d 366, 370 (Pa. Cmwlth. 1976)). The Walker Rule “need not be considered if evidence is admissible under an exception to the hearsay rule.” Estate of Fells by Boulding v. UCBR, 635 A.2d 666, 669 (Pa. Cmwlth. 1993), appeal denied, 647 A.2d 905 (Pa. 1994). 

One of the more well-established exceptions to the inadmissibility of hearsay evidence is commonly referred to as the “excited utterance exception,” and it is set forth among other hearsay exceptions in Pennsylvania Rule of Evidence 803. Specifically, Rule 803(2) defines an “excited utterance” as: 

A statement relating to a startling event or condition, made while the declarant was under the stress of excitement that it caused. When the declarant is unidentified, the proponent shall show by independent corroborating evidence that the declarant actually perceived the startling event or condition. 

Pa. R.E. 803(2). 

The court held that the father’s statement satisfied the requirements of Pa. R.E. 803(2) and where thus admissible to help prove abuse by the mother. The court also noted that mother did not object the father’s hearsay statement. For some reason, the court did not then go on to determine if it was supported by some other competent evidence in the record, as per the Walker rule.

In addition, there is a reasonable argument that the court improperly considered the Pa. Rules of Evidence.Rule 101 – scope and citation of rules, says that the rules “shall govern proceedings in all courts of the Commonwealth.” The Comment to the Rules clarifies that this means that the rules “are not intended to supersede these other provisions of law unless they do so expressly or by necessary implication” and—more important—that the rules “are applicable only to courts. . . . They are not applicable to other tribunals, such as administrative agencies and arbitration panels, except as provided by law or unless the tribunal chooses to apply them.” [emphasis added]

In this writer’s opinion, the court’s consideration of hearsay exceptions has the potential of poking a big hold in the Walker rule.

UC - wages - wages used to get benefits in other state cannot subsequently used in PA

George v. UCBR – Commonwealth Court – April 13, 2020 – order to be reported June 23, 2020

Held: Claimant not eligible for UC benefits in Pennsylvania based on same wages used in prior North Carolina receipt of UC benefits.

Claimant filed a UC application in North Carolina in May 2018, establishing a base year for his North Carolina claim of January 1, 2017 through December 31, 2017. . . .The unemployment authorities determined that, under North Carolina law, Claimant was entitled to UC benefits in the amount of $350 per week for a maximum of 12 weeks.  

After exhausting his N.C. benefits, claimant applied for Pa. UC benefit. Under 34 Pa. Code § 65.132(a), Claimant would be permitted to file a subsequent UC claim in Pennsylvania but only if he had “available benefit credits” in Pennsylvania. The Board found that, under 34 Pa. Code § 65.133(a), because North Carolina had used all of Claimant’s wages from 2017, including those earned in Pennsylvania, to determine his financial eligibility in North Carolina, and because Claimant exhausted his benefit credits in North Carolina, “[C]laimant had no available credits left . . . that could be used in calculating his financial eligibility in Pennsylvania.”

North Carolina used Claimant’s wages from 3Q and 4Q 2017 to determine his eligibility for UC benefits in that state, and those two quarters also fell within Claimant’s base year for his Pennsylvania claim. Under Pennsylvania law, when a claimant’s quarterly wages are used to determine his or her eligibility for UC benefits in a prior base year, they “cannot be used again to calculate [the c]laimant’s eligibility in [a] subsequent application for UC benefits.” Logan v. UCBR, 103 A.2d 451, 453 (Pa. Cmwlth. 2014); see Lewis v. UCBR, 454 A.2d 1191, 1193 (Pa. Cmwlth. 1983) (“[W]e would doubt that the legislature intended a claimant to be entitled to use the same quarter’s wages twice – i.e.[,] for two successive benefit years.”). 

Consequently, because North Carolina used Claimant’s wages from 3Q and 4Q 2017 to establish his financial eligibility for UC benefits in that state, we conclude that Claimant could not use those same quarterly wages to establish his financial eligibility in Pennsylvania. 

See also, federal combined benefits regulations, relevant but not used as a basis for the UCBR decision. See 20 C.F.R. § 616.1, et seq.

UC - indpt. contractor - claimant's individual circumstances

Begovic v. UCBR – Cmwlth. Court – June 23, 2020 – reported decision

http://www.pacourts.us/assets/opinions/Commonwealth/out/682CD19_6-23-20.pdf?cb=1

Held: Claimant’s wages for two separate employers were earned in “employment.” Neither employer sustained its burden under  the independent contractor/self-employment exemption is set forth in section 4(l)(2)(B) of the Law, 43 P.S. §753(l)(2)(B), which provides, in pertinent part: 

Services performed by an individual for wages shall be deemed to be employment subject to this act, unless and until it is shown to the satisfaction of the [local service center] that—(a) such individual has been and will continue to be free from control or direction over the performance of such services both under his contract of service and in fact; and (b) as to such services such individual is customarily engaged in an independently established trade, occupation, profession or business. 

This provision presumes that an individual is an employee, as opposed to  an independent contractor, but this presumption may be overcome if the putative employer sustains its burden of showing that the claimant was free from control and direction in the performance of her service and that, as to such service, was customarily engaged in an independent trade or business. Beacon Flag Car Co. v. UCBR, 910 A.2d 103, 107 (Pa. Cmwlth. 2006). Unless both of these showings are made, the presumption stands that one who performs services for wages is an employee. York Newspaper Company v. UCBR, 635 A.2d 251 (Pa. Cmwlth. 1993), appeal denied, 647 A.2d 906 (Pa. 1994); Electrolux Corporation v. Department of Labor & Industry, Bureau of Employment Tax Operations, 705 A.2d 1357, 1360 (Pa. Cmwlth. 1998). 

Neither employer satisfied the second prong of the statutory test, i.e., that Claimant was actually in the business of a) canvassing public opinion or b) acting as a language interpreter for a number of health care organizations in the Pittsburgh area. 

Our Supreme Court recognized that “a worker can be considered an independent contractor only if he or she is in business for himself or herself.” Danielle Viktor, Ltd. v. Department of Labor & Industry, Bureau of Employer Tax Operations, 892 A.2d 781, 798 (Pa. 2006) (emphasis added). Our Supreme Court in Danielle Viktor, Ltd. established a three-part test for determining whether a putative employee is engaged in “an independently established trade, occupation, profession or business” under this second prong. 

Specifically, under Danielle Viktor, Ltd., we look at the following factors: (1) whether the individuals are able to work for more than one entity; (2) whether the individuals depended on the existence of the presumed employer for ongoing work; and (3) whether the individuals were hired on a job-to-job basis and could refuse any assignment. 892 A.2d at 801-02. Moreover, as part of the second prong, we must analyze whether “the claimant [was] customarily engaged in such trade or business in order to be considered self-employed.” Minelli v. UCBR, 39 A.3d 593, 598 (Pa. Cmwlth. 2012) (en banc) (emphasis in original). 

Recently, in A Special Touch v. Department of Labor and Industry, __ A.3d __ (Pa., No. 30 MAP 2019, filed April 22, 2020, slip op. at *22-23), 2020 WL 1932622 at *10, our Supreme Court clarified that the meaning of the phrase “customarily engaged” requires an individual to be “usually,” “habitually,” or “regularly” “employed” or “involved” in activity; or “employed” or “involved” in activity “according to the customs,” “general practice,” or “usual order of things.” 

The Supreme Court has instructed a putative employer must show that an individual is actually involved in an independent trade, occupation, profession, or business in order to establish that the individual is self-employed under the second prong of subsection (4)(l)(2)(B). Id. [emphasis added]  The UCBR and courts are obligated to examine “such individual[’s]” unique set of circumstances. . .  .The proper approach is to focus the inquiry on the conduct of the individual claimant. Thus, the appropriate inquiry is whether the claimant, was, in fact, customarily engaged in a trade, occupation, profession or business that was independently established. See A Special Touch. See also Glatfelter Barber Shop v. UCBR, 957 A.2d 786 (Pa. Cmwlth. 2008). 

Here, there is no indication that Claimant held herself out as being in the business of either a canvasser or interpreter for hire.

employment - non-compete agreements - Pa. SCt.

Rullex Co. v. Tel-Steam Inc. – Pa. Supreme Court – June 17, 2020

Restrictive covenants are generally disfavored in Pennsylvania as they constitute a restraint on trade that also undercuts a former employee’s ability to earn a living. . . .[citations omitted] That principle is tempered to some degree by the recognition that, in the modern business environment, such covenants can be “important business tools” which prevent individuals from “‘learning [employers’] trade secrets, befriending their customers and then moving into competition with them.’” . . . .

To be enforceable, a restrictive covenant must be incident to an employment relationship between the parties and supported by consideration; also, its restrictions must be reasonably necessary for the protection of the employer’s legitimate interests and reasonably limited in duration and geographic extent. [citations omitted] . . . .

A bright-line rule such as that utilized by the Superior Court [concerning the necessity of new consideration] could subvert the expectations of parties who fully anticipate and intend the restriction to be ancillary to the taking of employment, but the employee, for whatever reason, signs the covenant shortly after the first day. Alternatively, such an approach might unnecessarily delay an employee’s ability to begin earning income if he or she is not in a position to sign the agreement until a reasonably short period after work begins. 

Hence, the test for whether new consideration is required has not ordinarily centered on whether the employee physically executed the agreement precisely on (or before) the first day of employment. Rather, and as explained, restrictive covenants have been deemed enforceable absent fresh consideration in situations where the parties contemplated and intended that, incident to the employment relationship, the employee would be bound by its substantive terms – and the employee ultimately signed it shortly after the first day. 

This is in contrast with circumstances where a non-compete agreement is imposed on an employee essentially as a belated addition to the employment relationship. See generally Jordan Leibman & Richard Nathan, The Enforceability of Post-Employment Noncompetition Agreements Formed After At-Will Employment Has Commenced: The “Afterthought” Agreement, 60 S. CAL. L.REV. 1465, 1472 (1987) (referring to these as “afterthought agreements”). In Maintenance Specialties, Inc. v. Gottus, 455 Pa. 327, 314 A.2d 279 (1974), for example, this Court found a non-compete clause unenforceable where it was not in the original, oral employment contract, but appeared when the contract was reduced to writing the next year and was unsupported by new consideration. See id. at 330, 314 A.2d at 281. 

From the foregoing it should be evident that, for a restrictive covenant executed after the first day of employment to be enforceable absent new consideration, the parties must have agreed to its essential provisions as of the beginning of the employment relationship. Only in that circumstance will the covenant in substance be “ancillary to taking employment[.]” Pulse Techs., Inc. v. Notaro, 620 Pa. 322, 327, 67 A.3d 778, 781 (2013) (quoting Beneficial Finance, 422 Pa. at 534, 222 A.2d at 875). 

In this respect, [the employee] argues that, as with other types of agreements, there must be a meeting of the minds on the terms of [the] restrictive covenant. Thus, before preliminary negotiations ripen into contractual obligations, there must be evidence of mutual assent to the terms of a bargain. If “the parties themselves contemplate that their agreement cannot be considered complete, and its terms assented to, before it is reduced to writing, no contract exists until the execution of the writing.”  . . . . In making an assessment along these lines, it may not be necessary to prove an actual, subjective “meeting of the minds,” as objective manifestations of assent and/or an intent to be bound by the covenant’s substance can suffice. 

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This case is also reported in the PLAN Legal Update  http://planupdate.blogspot.com/ , which is searchable and can be accessed without a password.

UC - credibility - Board ultimate finder if substantial evidence

Casey Ball Supports Corporation v. UCBR – June 9, 2020 – Cmwlth. Court – unreported memorandum opinion **

We turn first to the Board’s issuance of its own decision. Contrary to Employer’s suggestion, the Board is the ultimate finder of fact in unemployment compensation cases with the power to determine credibility and evidentiary weight. Peak v. Unemployment Comp. Bd. of Review, 501 A.2d 1383, 1388 (Pa. 1985); Oliver v. Unemployment Comp. Bd. of Review, 5 A.3d 432, 438 (Pa. Cmwlth. 2010). The Board’s findings of fact are conclusive on appeal when the record, in its entirety, contains substantial evidence supporting those findings. Oliver, 5 A.3d at 438. Additionally, although Employer challenged the legality of the Board’s issuance of findings of fact, Employer failed to make specific challenges to any of those findings. Accordingly, the findings are conclusive on appeal. Campbell v. Unemployment Comp. Bd. of Review, 694 A.2d 1167, 1169 (Pa. Cmwlth. 1997). 

Where, as here, both parties submitted evidence, there was no need for the Board to specify why it deviated from the referee’s findings of fact and conclusions of law. Peak, 501 A.2d at 1386-87; Hasely v. Unemployment Comp. Bd. of Review, 553 A.2d 482, 487 (Pa. Cmwlth. 1989). Consequently, the fact that the referee personally observed the witnesses is of no moment. 

Finally, as long as there is substantial evidence for the Board’s findings, “[t]he fact that Employer may have produced witnesses who gave a different version of the events, or that Employer might view the testimony differently than the Board, is not grounds for reversal . . . .” Tapco, Inc. v. Unemployment Comp. Bd. of Review, 650 A.2d 1106, 1108-09 (Pa. Cmwlth. 1994). Here, the Board credited Claimant’s testimony and we cannot overturn that credibility determination on appeal. 

Fitzpatrick v. Unemployment Comp. Bd. of Review, 616 A.2d 110, 111 (Pa. Cmwlth. 1992). We are bound to view the evidence in the light most favorable to Claimant, as the party who prevailed before the Board, and give her the benefit of all inferences that can logically and reasonably be drawn from the testimony. Chapman v. Unemployment Comp. Bd. of Review, 20 A.3d 603, 607 (Pa. Cmwlth. 2011). 

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This case is also reported in the PLAN Legal Update  

http://planupdate.blogspot.com/ , which is searchable and can be accessed without a password.

**An unreported Commonwealth Court case may not be cited binding precedent but can be cited for its persuasive value.  See 210 Pa. Code § 69.414(b) and Pa. R.A.P.  3716

UC - voluntary quit - safety concerns - objective evidence

Morgan v. UCBR – Cmwlth. Court – May 29, 2020 – unreported* memorandum opinion

Claimant that it was necessary for him to quit his job out of fear for the safety of the children served by Employer and “concern” for his own professional reputation if he continued to work for Employer under circumstances involving alleged child neglect. 

. . . The Board and Employer7 argue that Claimant failed to meet his burden, because he did not sufficiently describe any reasons for his concerns or fears before the Referee but instead made nonspecific, conclusory statements that conditions were unacceptable. The Board also emphasizes Claimant’s admission that he spoke only to his friends—not to Employer—about his concerns, and that he did not discuss his concerns with anyone until the day before he voluntarily quit. 

We agree with the Board and Employer that Claimant failed to establish a necessitous and compelling reason to quit. Although safety concerns may give rise to such reasons, the claimant must “demonstrate[] by objective evidence” that the workplace is actually unsafe, and “‘fears’ alone do not constitute a compelling reason to resign.” Green Tree Sch. v. Unemployment Comp. Bd. of Review, 982 A.2d 573, 578 (Pa. Cmwlth. 2009). Here, Claimant offered no objective evidence that the conditions of his employment were unsafe, either for himself or for the children served by Employer. Accordingly, Claimant failed to demonstrate circumstances that exerted real and substantial pressure on him to terminate his employment. 

Whether a claimant had cause of a necessitous and compelling nature for leaving work is a question of law subject to this Court’s review. Brunswick Hotel & Conference Ctr., LLC v. Unemployment Comp. Bd. of Review, 906 A.2d 657, 661 (Pa. Cmwlth. 2006). A claimant who voluntarily terminates his employment “bears the burden of proving that necessitous and compelling reasons motivated that decision.” Fitzgerald v. Unemployment Comp. Bd. of Review, 714 A.2d 1126, 1129 (Pa. Cmwlth. 1998), appeal denied, 794 A.2d 364 (Pa. 1999). To establish cause of a necessitous and compelling nature, a claimant must establish: (1) circumstances existed that produced real and substantial pressure to terminate employment, (2) like circumstances would compel a reasonable person to act in the same manner, (3) the claimant acted with ordinary common sense, and (4) the claimant made a reasonable effort to preserve his employment. Procito v. Unemployment Comp. Bd. of Review, 945 A.2d 261, 264 (Pa. Cmwlth. 2008) (en banc). 

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*An unreported Commonwealth Court case may not be cited binding precedent but can be cited for its persuasive value.  See 210 Pa. Code § 69.414(b) and Pa. R.A.P.  3716

evidence- digital evidence - Rule 901

Order – effective date 10-01-2020

http://www.pacourts.us/assets/opinions/Supreme/out/Order%20Entered-attach%20-%20104429584100888982.pdf?cb=1

Rule 901         http://www.pacourts.us/assets/opinions/Supreme/out/Order%20Entered-attach%20-%20104429584100888982.pdf?cb=1

Final report   http://www.pacourts.us/assets/opinions/Supreme/out/Order%20Entered-report%20-%20104429584100889049.pdf?cb=1

admin. law - legislative-rulemaking

http://www.pacourts.us/assets/opinions/Commonwealth/out/674MD16_5-12-20.pdf?cb=1

Hommrich v. PUC – May 12, 2020 – Cmwlth. Court – reported decision

This is a PUC case but has some issues of general relevance.

Legislative Rule-Making v. Interpretive Rule-Making

The Supreme Court of Pennsylvania “has long recognized the distinction in administrative agency law between the authority of a rule adopted pursuant to an agency’s legislative rule-making power and the authority of a rule adopted pursuant to interpretive rule-making power.” Popowsky v. Pennsylvania Public Utility Commission, 910 A.2d 38, 53 (Pa. 2006) (citations omitted).

“Legislative rule-making [emphasis added] is an exercise of legislative power by an administrative agency, pursuant to a grant of legislative power by the legislative body, and is valid and is as binding upon a court as a statute if it is: (a) within the granted power, (b) issued pursuant to proper procedure, and (c) reasonable.” Id.; accord Tire Jockey Service, Inc. v. Department of Environmental Protection, 915 A.2d 1165, 1186 (Pa. 2007). “Generally, a legislative regulation establishes ‘a substantive rule creating a controlling standard of conduct.’” Borough of Pottstown v. Pennsylvania Municipal Retirement Board, 712 A.2d 741, 743 (Pa. 1998) (quoting Slippery Rock Area School District v. Unemployment Compensation Board of Review, 983 A.2d 1231, 1236 (Pa. 2009)). 

“An interpretative rule [emphasis added] on the other hand depends for its validity not upon a law-making grant of power, but rather upon the willingness of a reviewing court to say that it in fact tracks the meaning of the statute it interprets.” Popowsky, 910 A.2d at 53. Legislative regulations are binding whereas interpretative regulations are merely entitled to deference. Slippery Rock, 983 A.2d at 1236.

All regulations, whether legislative or interpretative, “must be consistent with the statute under which they were promulgated.” Popowsky, 910 A.2d at 53.

PUC’s Granted Power – does the regulation fall within Legislature’s grant of authority?

“To determine whether a regulation is adopted within an agency’s granted power, we look for statutory language authorizing the agency to promulgate the legislative rule and examine that language to determine whether the rule falls within the grant of authority.” Marcellus Shale Coalition v. Department of Environmental Protection, 216 A.3d 448, 459 (Pa. Cmwlth.), appeals quashed, 223 A.3d 655 (Pa. 2019) (citing Slippery Rock, 983 A.2d at 1239-41).

We consider “the purpose of the statute and its reasonable effect” and whether “the regulation is consistent with the enabling statute.” Id. “Clearly[,] the legislature would not authorize agencies to adopt binding regulations inconsistent with the applicable enabling statutes.” Slippery Rock, 983 A.2d at 1241.

When regulation conflicts with the statute

“When . . . a regulation presents ‘an actual conflict with the statute,’ we cannot reasonably understand the regulation to be within the agency’s ambit of authority, and the statute must prevail.” Marcellus Shale, 216 A.3d at 459 (quoting AMP Inc. v. Commonwealth, 814 A.2d 782, 786 (Pa. Cmwlth. 2002), aff’d, 852 A.2d 1161 (Pa. 2004)). Indeed, “a regulation that is at variance with a statute is ineffective to change the statute’s meaning.” Geisinger Health System v. Bureau of Workers’ Compensation Fee Review Hearing Office (SWIF), 138 A.3d 133, 139 (Pa. Cmwlth. 2016). 

“That is so because ‘the power of an administrative agency to prescribe rules and regulations under a statute is not the power to make law, but only the power to adopt regulations to carry into effect the will of the Legislature as expressed by the statute.’” Id. (quoting Volunteer Firemen’s Relief Association of the City of Reading v. Minehart, 227 A.2d 632, 635-36 (Pa. 1967)). “When an agency adopts regulations at variance with the statute, the regulations, and not the statute, fall by the wayside.” Id. (citing Union Electric Corporation v. Board of Property Assessment, Appeals and Review of Allegheny County, 721 A.2d 823 (Pa. Cmwlth. 1998), rev’d on other grounds, 746 A.2d 581 (Pa. 2000)).

Broad grant of power v. narrow grant of power to agency
Sometimes, the General Assembly confers broad power. For example, in Section 201(a) of the Unemployment Compensation Law,7 the General Assembly vested power in the Department of Labor and Industry (L&I) “to adopt, amend, and rescind such rules and regulations . . . as it deems necessary or suitable. Such rules and regulations shall not be inconsistent with the provisions of this act.” In Slippery Rock, our Supreme Court described this power as “broad” and one that encompassed L&I’s authority “to define by regulation terms otherwise undefined by the statute.” Slippery Rock, 983 A.2d 1239. In Pennsylvania Human Relations Commission v. Uniontown Area School District, 313 A.2d 156, 168-71 (Pa. 1973), the Supreme Court held that similar statutory language in Section 7(d) of the Pennsylvania Human Relations Act8 allowed the PHRC to promulgate a regulation that defined “de facto segregation” in such a way that it imposed strict desegregation standards and new accompanying duties on public schools.  In contrast, the powers the General Assembly conferred to the PUC under the AEPS Act are much narrower. Sunrise Energy, 148 A.3d at 901. . . .

We recognize the PUC’s broad authority in regulating public utilities under the Code. As this Court recently opined, “the General Assembly intended the PUC to occupy the field of public utility regulation, in the absence of an express grant of authority to the contrary.” Delaware Riverkeeper Network v. Sunoco Pipeline L.P., 179 A.3d 670, 692 (Pa. Cmwlth.), appeal denied, 192 A.3d 1106 (Pa. 2018). However, we are not dealing with “public utilities” here. See 66 Pa. C.S. §102 (definition of “public utility”). Rather, the AEPS Act applies to “customer-generators,” which by definition are not public utilities. See Section 2 of the AEPS Act, 73 P.S. §1648.2. 

We, therefore, conclude that the PUC’s authority in this matter derives solely from the AEPS Act, and not the Code. . . .Under the AEPS Act, the PUC’s authority is limited to developing “technical and net metering interconnection rules.” Section 5 of the AEPS Act, 73 P.S. §1648.5.

Reasonableness
In deciding whether a legislative regulation is reasonable. . . .a court may not substitute its own judgment for that of the agency. To demonstrate that the agency has exceeded its administrative authority, it is not enough that the prescribed system of accounts shall appear to be unwise or burdensome or inferior to another. Error or lack of wisdom in exercising agency power is not equivalent to abuse. What has been ordered must appear to be so entirely at odds with fundamental principles as to be the expression of a whim rather than an exercise of judgment. Tire Jockey, 915 A.2d at 1186 (internal quotations and citations omitted); accord Slippery Rock, 983 A.2d at 1242.

“[A]ppellate courts must accord deference to the agency and may only overturn an agency determination if the agency acted in bad faith or the regulations constituted a manifest or flagrant abuse of discretion or a purely arbitrary execution of the agency’s duties or functions.” Popowsky, 910 A.2d at 55; accord Tire Jockey, 915 A.2d at 1186.

However, when there is express, contradictory language in the statute conferring regulatory authority, a proposed regulation would be deemed “unreasonable.” See Keith v. Commonwealth, 151 A.3d 687, 695 (Pa. Cmwlth. 2016). Nevertheless, “where legislative rules are adopted within the agency’s granted power and issued pursuant to proper procedure, they enjoy a presumption of reasonableness.” Marcellus Shale, 216 A.3d at 460.

consumer - debt collection - FDCPA - oral v. written dispute of validity of debt

Riccio v. Sentry Credit – 3d Cir. – March 30, 2020

https://www2.ca3.uscourts.gov/opinarch/181463p.pdf

A panel of this Court previously concluded § 1692g(a)(3) requires that “any dispute, to be effective, must be in writing.” Graziano, 950 F.2d at 112. Yet reading the statutory text with fresh eyes—and more importantly, with the past three decades of Supreme Court statutory- interpretation caselaw—we think § 1692g(a)(3) permits oral disputes. The plain language and meaning § 1692g(a)(3) permits a debtor to dispute a debt orally. 

Other courts have reached the same conclusion. The Second, Fourth, and Ninth Circuits reject a writing requirement, openly splitting with Graziano. See Clark v. Absolute Collection Serv., Inc., 741 F.3d 487, 490-91 (4th Cir. 2014) (per curiam); Hooks v. Forman, Holt, Eliades & Ravin, LLC, 717 F.3d 282, 285-86 (2d Cir. 2013); Camacho v. Bridgeport Fin. Inc., 430 F.3d 1078, 1080-81 (9th Cir. 2005). And without noting the split, the First, Fifth, Sixth, and Seventh Circuits have taken the same position. See Macy v. GC Servs. Ltd., 897 F.3d 747, 757- 58 (6th Cir. 2018); Evans v. Portfolio Recovery Assocs., LLC, 889 F.3d 337, 347 n.6 (7th Cir. 2018); Sayles v. Advanced Recovery Sys., Inc., 865 F.3d 246, 249-50 (5th Cir. 2017); Brady v. Credit Recovery Co., 160 F.3d 64, 66- 67 (1st Cir. 1998). 

In sum, we no longer think § 1692g(a)(3) requires written disputes. Simply put, “Congress did not write the statute that way.” United States v. Naftalin, 441 U.S. 768, 773 (1979). Subsections (a)(4), (a)(5), and (b) command a written dispute; (a)(3) does not. “We would not presume to ascribe this difference to a simple mistake in draftsmanship.” Russello, 464 U.S. at 23. 

In short, we conclude that debt collection notices sent under § 1692g need not require that disputes be expressed in writing. In doing so, we overrule Graziano’s contrary holding. Because Sentry Credit’s notice perfectly tracked § 1692g’s text, we will affirm the judgment of the District Court.