Seda-Cog Joint Rail Auth. v. Carload Express, Inc., No. 12 MAP 2019

Decision Date01 October 2020
Docket NumberNo. 12 MAP 2019
Citation238 A.3d 1225
Parties SEDA-COG JOINT RAIL AUTHORITY, Appellant v. CARLOAD EXPRESS, INC., Susquehanna Union Railroad Company, and Northern Plains Railroad, Inc., Appellees
CourtPennsylvania Supreme Court
OPINION

JUSTICE DONOHUE

This case involves the interpretation of the majority vote standard set forth in Section 5610(e) of the Pennsylvania Municipality Authorities Act, 53 Pa.C.S. §§ 5601 - 5623 ("MAA"), and the interplay between the MAA and the common law rule that only a majority of members present and voting is required to take action. Section 5610(e) provides in relevant part as follows:

(e) Quorum.--A majority of the members shall constitute a quorum of the board for the purpose of organizing and conducting the business of the authority and for all other purposes, and all action may be taken by vote of a majority of the members present unless the bylaws shall require a larger number. ...

53 Pa.C.S. § 5610(e). Here, the question is whether Section 5610(e) mandates that six present but recused Board members of a sixteen-member Board count in the calculation of the total number of Board members required for a majority. Stated otherwise, are nine votes (a majority of the sixteen members) required to take action, or conversely, are seven of the ten votes actually cast sufficient for approval of the action. This Court granted discretionary appeal to determine whether Section 5610(e) of the MAA's use of the phrase "members present" abrogates the common law rule that a simple majority (a majority vote of the voting members who make up the quorum of a municipal authority) carries a vote. Because we conclude, for the reasons that follow, that it does not, we affirm the order of the Commonwealth Court.

I. Factual and Procedural Background

Appellant SEDA-COG Joint Rail Authority (the "JRA") is a joint authority formed in 1983, pursuant to the MAA, to protect rail customers throughout central Pennsylvania and to promote industrial and economic development throughout the region. The JRA is governed by a sixteen member Board, with each of the eight member counties (Centre, Clinton, Columbia, Lycoming, Mifflin, Montour, Northumberland, and Union) appointing two members to the Board. In addition to the MAA, the Board's operations are governed by the JRA's bylaws and a code of conduct. The JRA is the owner of approximately 200 miles of rail lines and various facilities, which are operated via its private-public partnership with a third-party operator. The most recent third-party operator, acting pursuant to an operating agreement dated January 1, 2007, was appellee Susquehanna Union Railroad Company ("SURC"). Because its operating agreement with the JRA was set to expire on June 30, 2017, the JRA initiated the process to award a new operating agreement.

The request for proposal process involved two phases. During Phase One, JRA Board members were tasked with reviewing and scoring the qualifications of those operators submitting proposals, with the top three candidates proceeding to Phase Two, at which time the Board would vote to select which entity would be awarded the new operating agreement. At the outset of this process, the Board accepted the voluntary recusals of six Board members, each of whom indicated that they would not participate in the selection process in order to avoid any appearance of bias and reduce the likelihood of potential litigation.1 The remaining ten members of the Board were tasked with reviewing, evaluating, and scoring the proposals submitted by the interested parties. At the end of Phase One, the ten voting members, by a count of seven-to-three, voted to invite the four highest scoring proposers to Phase Two.2 When this vote took place, general counsel for the JRA questioned whether seven votes were sufficient to take action, and it was agreed that the Board would consider the issue at a subsequent meeting. Id . at 14.

At the October 8, 2014 Board meeting, the JRA's counsel announced because the Board had sixteen members, a nine-vote majority was required for the Board to act. The ten voting members, in order to ratify the Phase One action, voted unanimously to do so.3 Moving on to Phase Two, the participating Board members evaluated detailed proposals by the top four proposers. At the end of the analysis, Carload received twenty-four points, SURC received twenty-three, and Northern Plains Railroad received thirteen.4 A roll call vote was taken on the motion to award the contract to Carload and, of the ten voting Board members, seven voted in favor and three against. When certain Board members questioned the nine vote requirement for action, the Board voted unanimously to table the decision to award the operating agreement to Carload pending further review of the JRA's bylaws and the applicable law.

After the meeting, Carload submitted its position in writing to the JRA, arguing that it had been awarded the operating agreement based upon the seven-to-three vote. The JRA responded on September 23, 2015 by filing an action for declaratory judgment requesting a declaration upholding its use of the nine vote requirement.5 Carload filed an answer denying the material allegations in the JRA's complaint and asserting, inter alia, a counterclaim in declaratory judgment seeking a ruling that the vote of the JRA on July 8, 2015 passed the motion to award the operating agreement to Carload Express and that as a result Carload was entitled to the immediate execution of that agreement by the JRA. On November 1, 2016, the JRA filed a motion for summary judgment on Carload's complaint and the JRA's counterclaim and on December 6, 2016, Carload filed a cross-motion for summary judgment (seeking judgment on its counterclaim for declaratory judgment and also on the JRA's cause of action for declaratory judgment). On May 11, 2017, following briefing and argument on the motions, the trial court granted the JRA's motion and denied Carload's cross-motion.

In granting the JRA's motion for summary judgment, the trial court reviewed the above undisputed facts and examined the MAA, determining that it applied to this case. The trial court stated that the proper voting standard hinged upon the meaning given to the word "present" in Section 5610(e), a term that is not defined in the MAA or in the Pennsylvania Statutory Construction Act. Id. at 9. The trial court applied two rules of statutory construction: that "[w]ords and phrases shall be construed according to rules of grammar and according to their common and approved usage," id. (quoting 1 Pa.C.S. § 1903(a) ); and "[a]bsent a statutory definition, we construe statutory words according to their ordinary usage." Id. (quoting Penn Jersey Advance, Inc. v. Grim , 599 Pa. 534, 962 A.2d 632, 637 n.6 (2009) ). The trial court decided that the proper method for identifying the number of votes needed for the JRA to act was "to determine how many members were ‘present’ and then determine what a majority of that number would be." Id. at 10. Because all sixteen members of the JRA were present at the relevant Board meeting, the trial court ruled that that a nine vote majority was required for the JRA to take action. Id .

The trial court rejected Carload's assertion that the trial court should apply the common law quorum rule (the "common law rule"). According to the common law rule, no more than a majority of the members present and voting is required to take action, even if the result is a plurality vote potentially carrying a motion. That rule was inapplicable, according to the trial court, because this Court has held that it "will construe statutes dealing with the number of votes required for action by a municipal body without any presumption in favor of the common law rule." Id. at 9-10 (quoting Commonwealth ex rel. Bagnoni v. Klemm , 499 Pa. 566, 454 A.2d 531, 532 (1982) ). The trial court explained that the common law rule would require courts to read the words "and voting" into Section 5610(e) of the MAA. Such reading "would clearly change the meaning of the voting language by adding another word," and would, by extension, abrogate the intention of the Legislature in drafting the statute." Id.

On appeal, a unanimous panel of the Commonwealth Court reversed, holding that Section 5610(e) incorporates the common law rule into the MAA and that as a result the seven-to-three vote constituted a majority sufficient to approve Board action. Seda-Cog Joint Rail Auth. v. Carload Express, Inc. , 185 A.3d 1232, 1240 (Pa. Commw. 2018), appeal granted in part , 650 Pa. 621, 201 A.3d 143 (2019). "The Commonwealth Court explained that when a post-1937 statute is substantially a reenactment of a pre-1937 statute, the rule of strict construction will continue to apply." Id . (citing Commonwealth v. Chiappini , 566 Pa. 507, 782 A.2d 490 (2001) and 1 Pa.C.S. § 1962 ). Because Section 5610(e) of the MAA is a substantial reenactment of a pre-1937 statutory provision (Act of June 28, 1935, P.L. 463, No. 191), it is presumed to follow the common law and "must be strictly construed." Id . Under the common law rule, a majority of those present and voting may act on behalf of the body "even if, because of abstentions, the majority of the affirmative votes constitutes only a plurality of the members in attendance." Id. at 1236-37 (citing, e.g., DiGiacinto v. Allentown , 486 Pa. 436, 406 A.2d 520 (1979) ).

Based upon its analysis, the Commonwealth Court identified the critical issue in the case as whether the General Assembly's inclusion of the word ‘present’ expressly alters the [c]ommon [l]aw [r]ule." Id . at 1237. The Commonwealth Court explained that this Court in Bagnoni , and the Commonwealth Court in McAdoo Borough, 79 Pa.Cmwlth. 158, 469 A.2d 693 (1983), rev'd on other grounds , 506 Pa. 422, 485 A.2d 761 (1984), "concluded that statutory language substantially the same as that at issue here did not abrogate the common law regarding a...

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