Rae v. Pa Funeral Directors Ass'n

• Citation: 977 A.2d 1121
• Decision Date: 17 August 2009
• Docket Number: No. 43 MAP 2008,43 MAP 2008
• Parties: Robert RAE and Commonwealth Funeral Consultants, Inc. v. PENNSYLVANIA FUNERAL DIRECTORS ASSOCIATION, John W. Eirkson and James O. Pinkerton v. Monty J. Batson, Esq., Shawn E. Smith, Esq., and Larry Hall Appeal of Robert Rae and Commonwealth Funeral Consultants, Inc.
• Court: United States State Supreme Court of Pennsylvania

977 A.2d 1121

Robert RAE and Commonwealth Funeral Consultants, Inc. v. PENNSYLVANIA FUNERAL DIRECTORS ASSOCIATION, John W. Eirkson and James O. Pinkerton v. Monty J. Batson, Esq., Shawn E. Smith, Esq., and Larry Hall

Appeal of Robert Rae and Commonwealth Funeral Consultants, Inc.

No. 43 MAP 2008

Supreme Court of Pennsylvania.

Argued December 4, 2008.

Decided August 17, 2009.

Barbara A. Zemlock, James John Kutz, Post & Schell, P.C., Harrisburg, for Robert Rae and Commonwealth Funeral Consultants, Inc.

Sarah C. Yerger, PA Office of Attorney General, for James O. Pinkerton.

Daniel L. Grill, Stephanie Lynn Hersperger, Anthony Lucido, Thomas, Thomas & Hafer, L.L.P., Harrisburg, Gordon W. Gerber, Dechert LLP, Philadelphia, for John W. Eirkson and PA Funeral Directors Association.

Henry E. Hockeimer, Jr., Brooke Judith McDermott, William Brooke Igoe, Ballard Spahr Andrews & Ingersoll, L.L.P., Philadelphia, for Monty Batson, Shawn Smith and Larry Hall.

Before: CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, GREENSPAN, JJ.

OPINION

Justice TODD.

In this appeal, we are asked to determine whether the collateral order test laid out in Ben v. Schwartz, 556 Pa. 475, 729 A.2d 547 (1998), and Pa.R.A.P. 313 must be met for each individual issue an appellate court reviews on collateral appeal. The question in essence is whether this Court should adopt an "issue-by-issue application" of Rule 313, or whether, once the collateral order test is satisfied with respect to one issue, an appellate court has jurisdiction to consider every issue within the ambit of the appealed order—that is, whether to adopt a "whole order approach" to Rule 313. For the reasons which follow, we adopt an issue-by-issue application of Rule 313. Accordingly, we vacate the determination of the Commonwealth Court quashing the depositions of Appellees Monty J. Batson, Esquire, Shawn E. Smith, Esquire, and Larry Hall (collectively "Deponents"), and remand for further proceedings consistent with this opinion.

The background of this case is as follows: Appellants Robert Rae and Commonwealth Funeral Consultants, Inc. operated a business selling insurance for funeral expenses to consumers, which was investigated by the Pennsylvania Bureau of Professional and Occupational Affairs ("the Bureau"). The investigation commenced after a complaint filed by the Pennsylvania Funeral Directors Association ("the Association") in 2000. Initially, the Bureau assigned Appellee Monty J. Batson to the investigation. After five years of unexplained inactivity, the file was closed and then reopened.¹ At that time, Deponents Smith and Hall were assigned to the investigation.

In the interim, Appellants commenced the present civil suit against the Association for defamation, tortious interference with contractual relationships, and tortious interference with potential contractual relationships, alleging the Association told consumers Appellants were engaged in illegal activity and that they consequently lost business. Appellants filed subpoenas duces tecum upon Smith and Hall, seeking to depose them and directing that they produce the file of the Bureau's investigation into Appellants at the time of their deposition. The Bureau initially sought to quash the subpoenas. However, after briefing, argument, and the trial court's in camera review of the file, the Bureau voluntarily produced the file. Deponents then moved to quash the subpoenas as related to their depositions only, and the Bureau moved to treat the file as confidential. After a subsequent status conference, the trial court denied Deponents' motion to quash and scheduled the depositions, though specifying that proceedings would be conducted in camera and barring any party from disclosing any information which might arise during the discovery process to any non-party without the express permission of the court. Trial Ct. Order, 8/24/06. Deponents appealed to the Commonwealth Court, asserting, inter alia, that their testimony was (1) precluded by the deliberative process privilege, and (2) irrelevant to Appellants' cause of action. Appellants moved to quash the appeal as interlocutory, challenging whether the order in question was an appealable collateral order.

A unanimous panel of the Commonwealth Court denied the motion to quash the appeal and affirmed in part and reversed in part in a published opinion. Rae v. Pennsylvania Funeral Directors Ass'n, 925 A.2d 197 (Pa.Cmwlth.2007). The court restated the well-established test for collateral review laid out in Ben, supra, and Pa.R.A.P. 313: collateral review is appropriate, despite the general directive that appellate courts conduct review only of final orders, if an order is (1) separable from and collateral to the main cause of action, (2) implicates rights which are too important to be denied review, and (3) the appellant's claim as to that order will be lost if postponed until final judgment. The court reasoned the order in question was a collateral order, since it was collateral to the defamation suit, involved the important issue of the deliberative process privilege, and would be mooted if review was postponed until final judgment because the privileged depositions would already have been conducted. On that basis, the court denied Appellants' motion to quash.

On the merits, the court concluded the Deponents' assertion of privilege was meritless. Nevertheless, rather than ending its review with that assessment, it went on to address the relevance of Deponents' testimony. In that regard, the court concluded Appellants had not demonstrated the relevance of Deponents' testimony and, accordingly, concluded deposing Deponents was inappropriate under Pa.R.Civ.P. 4003.1(a).²

Appellants then sought allowance of appeal with this Court, which we granted on the following issue:

Must an appellate court separately apply the collateral order test laid out in Pa. R.A.P. 313 and this Court's decision in Ben v. Schwartz, 556 Pa. 475, 729 A.2d 547 (Pa.1999), to every legal question it addresses on collateral appeal, or is it sufficient that the legal question giving rise to the order itself satisfies the collateral order test?

Rae v. Pennsylvania Funeral Directors Ass'n, 597 Pa. 220, 951 A.2d 256 (2008) (order).³

As a general rule, an appellate court's jurisdiction extends only to review of final orders. See Pa.R.A.P. 341 ("[A]n appeal may be taken as of right from any final order.") Final orders are those which either (1) dispose of all claims and all parties, (2) are explicitly defined as final orders by statute, or (3) are certified as final orders by the trial court or other reviewing body. See Pa.R.A.P. 341. The final order rule

serves to maintain the appropriate relationship between the district and appellate courts ... by ensuring that [trial judges'] every determination is not subject to the immediate review of an appellate tribunal.... The consolidation of all contested rulings into a single appeal provides the circuit courts with an opportunity, furthermore, to consider a trial judge's actions in light of the entire proceedings below, thereby enhancing the likelihood of sound appellate review.

Riyaz A. Kanji, The Proper Scope of Pendent Appellate Jurisdiction in the Collateral Order Context, 100 Yale L.J. 511, 512-13 (1990), (discussing the Collateral Order Rule in the federal court context).

Rule 341 reflects the traditional approach of American appellate courts. However, in Cohen v. Beneficial Ind. Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), the United States Supreme Court crafted the collateral order doctrine, permitting the appeal of a narrow class of orders which address claims of right "separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause [of action] itself to require that appellate consideration be deferred until the whole case is adjudicated." Id. at 546, 69 S.Ct. 1221.

This Court followed the United States Supreme Court in adopting a "practical rather than a technical construction" of what constitutes an appealable order, and so permitting immediate appellate review of certain collateral orders. See Pugar v. Greco, 483 Pa. 68, 73, 394 A.2d 542, 545 (1978) (quoting Cohen, supra). Pa.R.A.P. 313, promulgated in 1992, solidified and codified the collateral order doctrine. That rule provides, in pertinent part:

(a) General rule. An appeal may be taken as of right from a collateral order of an administrative agency or lower court.

(b) Definition. A collateral order is an order separable from and collateral to the main cause of action where the right involved is too important to be denied review and the question presented is such that if review is postponed until final judgment in the case, the claim will be irreparably lost.

Pa.R.A.P. 313.⁴ Accordingly, where an order satisfies Rule 313's three-pronged test, we may exercise appellate jurisdiction where the order is not final. If the test is not met, however, and in the absence of another exception to the final order rule, we have no jurisdiction to consider an appeal of such an order. See Commonwealth v. Kennedy, 583 Pa. 208, 215, 876 A.2d 939, 943 (2005) (a Rule 313 issue is "an issue of [an appellate court's] jurisdiction to entertain an appeal").

In response to perceived over-reliance on the collateral order doctrine by courts of appeals to establish jurisdiction over otherwise interlocutory orders, the U.S. Supreme Court began imposing "severe limitations" on the scope of collateral review.⁵ In Coopers & Lybrand v. Livesay, 437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978), for instance, the Court rejected the determination by the United States Court of Appeals for the Second Circuit that a denial of class certification justified collateral review, reasoning, inter alia, that the factual issues underlying the denial of certification were enmeshed with the merits of the underlying litigation...