Phantom Fireworks Showrooms, LLC v. Wolf

• Citation: 198 A.3d 1205
• Decision Date: 04 December 2018
• Docket Number: No. 21 M.D. 2018,21 M.D. 2018
• Parties: PHANTOM FIREWORKS SHOWROOMS, LLC, Sky King Fireworks of Easton, Inc., Sky King Fireworks of Erie, Inc., Sky King Fireworks of Morrisville, Inc., Sky King Fireworks of Tioga, LLC, CRJ Enterprises, LLC, Petitioners v. Tom WOLF, Governor of the Commonwealth of Pennsylvania, Russell C. Redding, Secretary of the Pennsylvania Department of Agriculture, C. Daniel Hassel, Secretary of the Pennsylvania Department of Revenue, Joseph B. Scarnati, III, Pro Tempore of the Senate of Pennsylvania, Mike Turzai, Speaker of the Pennsylvania House of Representatives, Respondents
• Court: Pennsylvania Commonwealth Court

198 A.3d 1205

PHANTOM FIREWORKS SHOWROOMS, LLC, Sky King Fireworks of Easton, Inc., Sky King Fireworks of Erie, Inc., Sky King Fireworks of Morrisville, Inc., Sky King Fireworks of Tioga, LLC, CRJ Enterprises, LLC, Petitioners

v.Tom WOLF, Governor of the Commonwealth of Pennsylvania, Russell C. Redding, Secretary of the Pennsylvania Department of Agriculture, C. Daniel Hassel, Secretary of the Pennsylvania Department of Revenue, Joseph B. Scarnati, III, Pro Tempore of the Senate of Pennsylvania, Mike Turzai, Speaker of the Pennsylvania House of Representatives, Respondents

No. 21 M.D. 2018

Commonwealth Court of Pennsylvania.

Argued September 13, 2018

Decided December 4, 2018

Kevin J. McKeon, Harrisburg, for petitioners.

Matthew H. Haverstick, Philadelphia, for respondent Joseph B. Scarnati, III.

Karl S. Myers, Philadelphia, for respondent Mike Turzai.

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE P. KEVIN BROBSON, Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE MICHAEL H. WOJCIK, Judge, HONORABLE ELLEN CEISLER, Judge

OPINION BY JUDGE SIMPSON

Before this Court, in our original jurisdiction, is a petition for review challenging the constitutionality of the Act of October 30, 2017, P.L. 672, No. 43 (Act 43).

Petitioners are Phantom Fireworks Showrooms, LLC; Sky King Fireworks of Easton, Inc.; Sky King Fireworks of Erie, Inc.; Sky King Fireworks of Morrisville, Inc.; Sky King Fireworks of Tioga, LLC; and CRJ Enterprises, LLC (collectively, Phantom Fireworks).

Respondents are Tom Wolf, Governor of Pennsylvania (Governor Wolf), Russell C. Redding, Secretary of the Pennsylvania Department of Agriculture (Secretary Redding), and C. Daniel Hassell, Secretary of the Pennsylvania Department of Revenue (Secretary Hassell)¹ (collectively, Executive Respondents); Joseph B. Scarnati, III, President Pro Tempore of the Senate of Pennsylvania (Senator Scarnati); and Mike Turzai, Speaker of the Pennsylvania House of Representatives (Speaker Turzai).

Executive Respondents jointly and Senator Scarnati and Speaker Turzai separately filed preliminary objections to the petition for review. Phantom Fireworks opposed the preliminary objections and filed an application for summary relief concerning its constitutional challenges, which all Respondents oppose. Both the preliminary objections and the application for summary relief have been briefed and argued. They are now before us for disposition.

I. Background

Act 43 originated as House Bill (HB) 542, Printer's Number (PN) 568 of 2017. The short bill read in its entirety:

AN ACT

Amending the act of March 4, 1971 (P.L. 6, No. 2), entitled ‘An act relating to tax reform and State taxation by codifying and enumerating certain subjects of taxation and imposing taxes thereon; providing procedures for the payment, collection, administration and enforcement thereof; providing for tax credits in certain cases; conferring powers and imposing duties upon the Department of Revenue, certain employers, fiduciaries, individuals, persons, corporations and other entities; prescribing crimes, offenses and penalties,’ in sales and use tax, providing for remote sales tax notice.

The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:

Section 1. The act of March 4, 1971 (P.L. 6, No. 2), known as the Tax Reform Code of 1971, is amended by adding a section to read:

Section 279. Remote Sales Tax Notice. -- (a) A seller in this Commonwealth or remote seller shall conspicuously provide the following notice to a purchaser in this Commonwealth upon each separate sale at retail of tangible personal property or services via an Internet website operated by the seller or remote seller:

‘Unless you paid Pennsylvania sales tax on this purchase, you may owe a Pennsylvania use tax on this purchase based on the total sales price of the purchase in accordance with the act of March 4, 1971 (P.L. 6, No. 2), known as the Tax Reform Code of 1971. Visit www.revenue.state.pa.us for more information. If you owe a Pennsylvania use tax on this purchase, you must report and remit the tax on your Pennsylvania income tax form.’

(b) The department shall impose a fine of not less than five dollars ($5) on a seller or remote seller for each sale in which the seller or remote seller is in violation of this section.

(c) This section shall apply to sales made on or after the effective date of this section.

Section 2. This act shall take effect in 60 days.

HB 542, PN 568.

HB 542 was amended several times. In its final form, enacted as Act 43, it contains voluminous additions concerning revenue issues beyond sales tax issues.² Relevant here, Article XXIV of Act 43 adds a new chapter to the Tax Reform Code,³ relocating and modifying the provisions of the Fireworks Law.⁴ The modifications include expansion of permissible fireworks sales to consumers, imposition of a 12% tax (including the 6% sales tax) on those sales, and permitting peak season sales of fireworks in tents and other temporary structures. Act 43 repeals the entire former Fireworks Law.

Among its provisions concerning fireworks sales in temporary structures, Act 43 provides that sales in temporary structures are governed by the safety standards in "NFPA 1124," defined as Standard 1124 in the 2006 edition of the National Fire Protection Association (NFPA) CODE FOR THE MANUFACTURE, TRANSPORTATION, AND STORAGE OF FIREWORKS AND PYROTECHNIC ARTICLES (Code) "or any subsequent edition" of that Code. Pet. for Review, Ex. A at 33. This definition is significant to our reasoning below.

Phantom Fireworks asserts, and Respondents do not dispute, that NFPA 1124 has been amended in subsequent editions of the NFPA Code. According to Phantom Fireworks,⁵ in the 2013 edition, NFPA Code 1124 was similar to the 2006 edition. However, the NFPA withdrew NFPA Code 1124 in 2014. The current edition of the NFPA Code, published in 2017, contains no safety standards for retail sales of consumer fireworks.

In the course of the various amendments to HB 542, its title also expanded substantially. In its final form, the title included the phrase "providing for fireworks," referring to Article XXIV of Act 43, titled simply "Fireworks." Pet. for Review, Ex. A at 2, 32.

II. Issues

Phantom Fireworks contends Act 43 violates the following several provisions of the Pennsylvania Constitution. Adding the provisions of the Fireworks Law, including its safety provisions, to the text of Act 43 violates the original purpose rule of Article III, Section 1. Similarly, by including provisions governing sundry subjects in addition to the original tax provision, Act 43 violates the single subject requirement of Article III, Section 3. By burying a short descriptor, "providing for fireworks," in its lengthy title, Act 43 also violates Article III, Section 3's requirement that a bill's title contain a clear expression of its subject matter. Further, by failing to set forth the entire text of the repealed Fireworks Law, Act 43 violates the repealed text publication requirement in Article III, Section 6. In addition, by providing that sales in temporary structures will be governed by NFPA standards in the 2006 or any subsequent edition, Act 43 impermissibly delegates legislative authority in violation of Article II, Section 1.

There is considerable overlap in the preliminary objections filed by the Executive Respondents, Senator Scarnati, and Speaker Turzai. The various preliminary objections allege failure to join the Commonwealth and the Attorney General as indispensable parties, lack of standing, improper inclusion of the Executive Respondents as parties, non-ripeness of Phantom Fireworks' claims, improper pleading of a request for relief as a separate count of the petition, and sovereign immunity of Executive Respondents.

Phantom Fireworks argues its claims present questions of law appropriate for resolution by summary relief. Respondents disagree that Phantom Fireworks is entitled to any relief, but they do not contend that summary disposition of the issues is inappropriate. In fact, Senator Scarnati asserts a counter-request for summary relief, seeking dismissal of all counts of the petition for review.

There is substantial overlap in the parties' briefing of issues relating to the preliminary objections and the request for summary relief. Accordingly, we dispose of all issues, including the preliminary objections, the request for summary relief, and the counter-application for summary relief, in a single decision.

III. Preliminary Objections⁶

A. Proper Parties

1. Nonjoinder of Indispensable Parties

A party is indispensable when its rights are so connected with the claims of the litigants that no relief can be granted without infringing on those rights. Pa. State Educ. Ass'n v. Pa. Dep't of Educ., 101 Pa.Cmwlth. 497, 516 A.2d 1308 (1986) (citing Piper Aircraft Corp. v. Ins. Co. of N. Am., 53 Pa.Cmwlth. 209, 417 A.2d 283 (1980) ). Section 7540 of the Declaratory Judgments Act, 42 Pa. C.S. § 7540(a), defines an indispensable party as any person who has or claims "any interest which would be affected by the declaration." Id. A Commonwealth agency whose interest will be affected by a declaration sought against another is an indispensable party. Pa. State Educ. Ass'n (citing Piper; Pleasant Twp. v. Erie Ins. Exch., 22 Pa.Cmwlth. 307, 348 A.2d 477 (1975) ).

Here, Senator Scarnati argues that both the Commonwealth and the Attorney General are indispensable parties whose nonjoinder deprives this Court of original jurisdiction. We disagree.

Both Pa. R.C.P. No. 235 and Pa. R.A.P. 521 state clearly that while a party challenging the constitutionality of a statute must notify the Attorney General of the challenge, the Attorney General may, but need not, intervene in order to be heard on the issue of constitutionality. See MCT Transp. v. Phila. Parking Auth., 60 A.3d 899 (Pa. Cmwlth.) (en banc ), aff'd, 622 Pa. 741, 81 A.3d 813 (2013), af...