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Defense Digest

PA Supreme Court Narrows Sexual Abuse Exception to Governmental Immunity

Defense Digest, Vol. 32, No. 2, June 2026

June 30, 2026

Key Points:

  • Stronger immunity defense: The ruling provides a clear basis to dismiss negligence claims against insured public entities in adult sexual abuse cases, reducing defense costs and settlement pressure.
  • Risk differentiation by age: Defense strategies can more confidently separate minor-victim claims (higher exposure under the exception) from adult-victim claims (generally immune).
  • Focus remains on prevention: While immunity helps limit financial liability, good training, screening, supervision, and reporting protocols are still essential to reduce incidents and defend against any claims that do proceed.
  • Legislative monitoring needed: The General Assembly could expand the exception in the future. Insurers should track any bills that attempt to broaden liability for adult victims in public settings.

Case Overview

A recent decision from Pennsylvania’s highest court has important implications for municipalities, prisons, school districts, and the insurance professionals who cover them. On March 26, 2026, the Pennsylvania Supreme Court ruled that a 2019 exception to governmental immunity for sexual abuse claims applies only when the victim was under 18 years old at the time of the incident.

The case, City of Philadelphia v. J.S., 320 A.3d 1234 (Pa. 2026), involved serious allegations from an adult inmate who claimed he was sexually assaulted by multiple prison employees shortly after arriving at the Curran-Fromhold Correctional Facility in Philadelphia. He sued the City of Philadelphia, arguing the city was negligent in training, screening, and supervising its staff, and in protecting inmates from harm. The central legal question was whether the city could be held liable under the sexual abuse exception added to the Political Subdivision Tort Claims Act (PSTCA) in 2019.

Pennsylvania’s Supreme Court answered clearly: No. Since the plaintiff was an adult, the exception did not apply, and the city remained protected by governmental immunity.

Understanding Governmental Immunity

Pennsylvania law provides broad protection to local governments and public agencies against most negligence lawsuits. This shield, known as governmental immunity, helps protect taxpayer dollars from wide-ranging claims that could deplete public budgets. The legislature has created only a few narrow exceptions where liability is allowed. See 42 Pa.C.S. § 8542(b), et seq

In 2019, lawmakers added one such exception for sexual abuse, 42 Pa.C.S. § 8542(b)(9), which permits claims against a local agency if its negligence contributed to conduct that qualifies as one of several serious sexual offenses. However, the exception specifically refers to offenses listed in a statute (42 Pa.C.S. § 5551(7)) that eliminates the statute of limitations for those crimes only if the victim was a minor.

The Supreme Court examined the exact language of the law and concluded that the age requirement is an essential part of the exception, not an optional detail that can be overlooked. Writing for the majority, Justice McCaffery emphasized that governmental immunity is the general rule and exceptions must be interpreted strictly and narrowly. The Court also reviewed the legislative history, noting that the 2019 changes were primarily motivated by high-profile cases involving childhood sexual abuse in institutions. A proposal to remove the age limit did not pass. As a result, even serious allegations involving adult victims do not open the door to negligence claims against the public entity itself.

What the Ruling Means in Practice

This ruling has broad implications beyond just prisons. It applies to municipalities, counties, school districts, and any other local public agencies covered by the PSTCA. For cities and counties, the decision means that negligence claims arising from alleged sexual abuse of adult residents, employees, or visitors are typically protected by immunity. In school settings, while claims involving the sexual abuse of students who are still minors can proceed if negligence by the district is adequately shown, claims involving adult students, staff members, or visitors are generally barred. This ultimately provides a solid basis for dismissing negligence claims early in litigation, which can help control legal costs and reduce settlement pressure.

Individual employees may still face personal liability for intentional or criminal acts, but the public agency and its insurance coverage are largely shielded in these adult-victim scenarios.

The Court’s decision aligns with several earlier rulings from both Pennsylvania and federal courts, creating consistent guidance across jurisdictions

Looking Ahead

Critically, this decision does not mean public entities bear zero responsibility. Public agencies must still investigate serious allegations of sexual abuse thoroughly, report them properly to law enforcement, and support victims where appropriate. Individual wrongdoers can, and should, face criminal charges and personal civil liability.

However, for public agencies and the insurance policies that protect them, the ruling significantly limits exposure in a major category of cases. Insurance professionals should immediately review pending claims involving adult plaintiffs and governmental insureds. Early motions to dismiss or preliminary objections based on immunity will likely succeed more often now.

The Pennsylvania Supreme Court has sent a clear and forceful message: governmental immunity still carries real weight, and the 2019 sexual abuse exception remains narrower than some hoped or feared. For municipalities, counties, schools, prisons, and their insurers, this clarity delivers valuable protection in an area where claims frequently become emotionally charged and financially significant. By preserving the traditional limits on municipal liability, the Court reinforces that any broadening of exposure must come directly from the legislature—not through expansive court interpretations.

Connor works in our Philadelphia, PA office. He can be reached at (215) 575-2588 or DCWarner@mdwcg.com.

Firm Highlights

Thought Leadership

Congress Passes Financial Exploitation Prevention Act

On June 25, 2026, the House passed the Financial Exploitation Prevention Act of 2025 (“the Act”) by a vote of 414 to 2. The Act allows financial advisors and firms to delay suspicious transactions regarding the accounts of clients who are 65 or older, if they believe financial exploitation has occurred or is about to take place. With the advancement of technology and AI, the House’s overwhelming bipartisan passage of the Financial Exploitation Prevention Act represents an important step in strengthening the financial industry’s ability to combat the growing threat of elder financial exploitation. The Act recognizes what advisors have long known that financial professionals are often the first to detect suspicious behavior but have historically lacked clear legal authority to intervene before irreversible financial harm occurs. From the industry’s perspective, the bill accomplishes several important objectives, including the following: (1) Provides a practical “pause button” by allowing financial professionals to temporarily delay certain transaction requests when there is a reasonable belief that a senior or vulnerable adult is being financially exploited; (2) Empowers financial professionals to act by providing greater certainty that firms can act in good faith to protect clients without unnecessary legal risk; and (3) Strengthens investor protection without sacrificing client rights by allowing temporary delays based on a reasonable suspicion of exploitation, which is intended only to allow additional review and not to deny clients access to their money indefinitely. In sum, the Financial Exploitation Prevention Act will equip financial professionals with practical, carefully tailored tools to stop suspected financial exploitation before client assets are lost. By allowing firms to temporarily delay suspicious transactions under defined circumstances, Congress is recognizing the critical role advisors play as the first line of defense against increasingly sophisticated fraud schemes. The Act strikes an appropriate balance between protecting vulnerable investors and preserving individual financial autonomy, while reinforcing collaboration among advisors, families, and law enforcement to combat financial exploitation. The bill now awaits Senate action.

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict. 

Thought Leadership

SIU Gets a Boost: NJ Supreme Court Affirms Insurers' Right to Litigate, Not Arbitrate, Fraud Claims

In a significant win for insurers' Special Investigation Units, the New Jersey Supreme Court clarified that statutory insurance fraud and racketeering claims may proceed in court rather than through PIP arbitration. At issue was whether insurance fraud claims brought under New Jersey's Insurance Fraud Prevention Act (IFPA) and the state's Anti-Racketeering Act (NJ RICO) are subject to mandatory arbitration under the Automobile Insurance Cost Reduction Act’s (AICRA) PIP dispute-resolution framework. Allstate had sued a network of medical practices, physicians, and related corporate entities, alleging a scheme to extract more than $1.7 million in PIP benefits through fraudulent and misleading billing. The trial court dismissed Allstate's complaint and compelled arbitration, reading AICRA's arbitration clause — which covers "any dispute regarding the recovery of... benefits" under PIP coverage, N.J.S.A. 39:6A-5.1(a) — as sweeping in fraud and racketeering claims along with routine benefit disputes. The Supreme Court affirmed the Appellate Division's reversal, adopting Judge Gilson's opinion below (480 N.J. Super. 566 (App. Div. 2025)) as its own reasoning. The Court held that IFPA and RICO claims fall outside the scope of AICRA's PIP arbitration mechanism because that "streamlined and specialized" process cannot grant the relief those statutes contemplate — treble damages, injunctive relief, broad discovery, and joinder of third parties — and because arbitrators lack authority to award compensatory or treble damages to an insurer. The Court also rejected the argument that Allstate's own Decision Point Review Plans independently compel arbitration, finding those plan provisions no broader than AICRA's own arbitration clause. Notably, the Court expressly disagreed with the Third Circuit's contrary holding in GEICO v. Mt. Prospect Chiropractic Center, 98 F.4th 463 (3d Cir. 2024), concluding it is not bound by that federal interpretation of New Jersey law. Insurers retain the right to pursue IFPA and RICO claims in the Law Division, with a jury trial. For SIU units and NJ insurance carriers, this decision is a significant win: it forecloses defense clinics' primary procedural tool for shunting fraud investigations into limited-scope PIP arbitration, where treble damages, RICO relief, and meaningful discovery were never realistically available. Carriers building cases against fraudulently structured clinics, straw-owned practices, or coordinated billing networks can now proceed with confidence that a well-pleaded IFPA/RICO complaint stays in the Law Division rather than being diverted to arbitration on a motion to compel. Practically, this strengthens SIU's leverage in settlement negotiations, preserves civil discovery tools (subpoenas, depositions, joinder of related corporate entities) critical to unwinding complex ownership and referral schemes, and resolves the split with the Third Circuit in favor of NJ insurers — at least as a matter of state law. Expect increased reliance on IFPA civil actions, rather than PIP arbitration demands, as SIU's primary enforcement vehicle going forward.

Thought Leadership

New Jersey Expands Family Leave Protections Effective July 17, 2026

On January 17, 2026, Governor Murphy signed into law legislation expanding the New Jersey Family Leave Act (NJFLA). Beginning July 17, 2026, significant amendments to the NJFLA will expand job-protected family leave to smaller businesses and more employees across the state. The new law broadens coverage by lowering the threshold for private employers from 30 employees to 15 employees, meaning many smaller businesses will now be subject to the NJFLA. Employees of state and local government agencies will continue to be covered regardless of the size of the employer. The amendments also make it easier for employees to qualify for leave. Under the revised law, an employee will be eligible after three months of employment and at least 250 hours worked during the preceding 12 months, replacing the previous requirement of 12 months of employment and 1,000 hours worked. Currently, New Jersey's Temporary Disability Insurance (TDI) and Family Leave Insurance (FLI) programs provide eligible employees with wage replacement while they are on leave but do not independently guarantee job protection. The recent amendments to the New Jersey Family Leave Act (NJFLA) expand these protections by extending job-protected leave to additional employees. Under the amended law, employees receiving TDI or FLI benefits may be entitled to return to the same position they held before taking leave, or to an equivalent position with the same seniority, status, pay, and benefits. Although the legislation also states that it does not expand or modify an employee's reinstatement rights under the NJFLA, the amendments appear to provide job protection to eligible employees receiving TDI or FLI benefits without requiring them to separately satisfy the eligibility requirements of the NJFLA or the federal Family and Medical Leave Act (FMLA). As a result, some employees may be entitled to longer periods of job-protected leave than were previously available under existing law. With these amendments, New Jersey continues to strengthen workplace protections by expanding access to job-protected family leave for eligible employees. These changes significantly expand access to job-protected family leave and may require employers to update their leave policies, employee handbooks, and HR practices. Notably, employers who were previously not required to administer NJFLA may need to amend their policies and/or create new protocols to come into compliance with the NJFLA. Failure to do so would prove costly, as the penalties for non-compliance are significant.