Pennsylvania Supreme Court rejects Commonwealth Court's extension of Political Subdivision Tort Claims Act to all statutory claims and limits the scope of the Act to claims sounding in tort.

The impact of a pair of decisions issued by the Pennsylvania Commonwealth Court in 2008, which vastly expanded the scope of governmental immunity to all claims, tort or contract, has been short lived. In Meyer, the Pennsylvania Supreme Court, in a unanimous decision issued on August 17, 2010, overturned two decisions by the Pennsylvania Commonwealth Court which granted summary judgment to a community college. In doing so, the Supreme Court reaffirmed its position that the Political Subdivision Tort Claims Act (“PSTCA”) applies only to claims sounding in tort and does not confer immunity to local agencies for contract based claims. The two underlying civil cases were companion claims involving two groups of former students who were enrolled in a police training program and had completed a substantial portion of the training when the college lost its certification. As a result of the loss of accreditation, the students claimed that the course work which was already completed and paid for was not transferable to another college. The students sued the community college, a local agency under the PSTCA, and claimed breach of contract, warranty and claims under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”). The college sought dismissal of the UTPCPL claims on the basis that the claims sought tort remedies, were subject to governmental immunity, and did not fall within any of the exceptions to immunity set forth within the PSTCA. The trial court disagreed with the characterization of the UTPCPL as being based in tort and, instead, ruled that as the law protected consumer expectations, a claim under the Act was more contractual in nature and thus governmental immunity conferred by the PSTCA did not apply. The Commonwealth Court granted review of the decisions and overturned the trial court and determined that the college was entitled to immunity from the claims. The majority holdings were based on the court’s determination that local agencies are immune from all statutory causes of action, whether arising in contract or tort, as long as they do not implicate any of the eight exceptions to governmental immunity. The Supreme Court accepted review and overturned the Commonwealth Court’s decision. In doing so, the Court described the Commonwealth Court’s decision as ”not sustainable” and, to the extent that its reasoning was adopted, it would impair the enforceability of contractual relationships with the government. Such a result would have unintended effects which, in the words of the Court, "are best to be avoided." The Court ruled that the immunity provided to local agencies under the PSTCA applied to tort claims only and not claims sounding in contract, whether statutorily based or otherwise.

Case Law Alert - 4t Qtr 2010