Lee Publications, Inc. v. Dickinson School of Law

848 A.2d 178, 2004 Pa. Commw. LEXIS 318
Commonwealth Court of Pennsylvania·Decided April 23, 2004·Published·Cited by 15 cases

Opinions

[180] OPINION BY

Judge COHN.

The Dickinson School of Law of The Pennsylvania State University Association (Association) and The Board of Governors of The Dickinson School of Law of the Pennsylvania State University Association (Board of Governors),1 appeal the order of the Court óf Common Pleas of Cumberland County granting a motion for a preliminary injunction filed by Lee Publications, Inc., Publisher of The Sentinel and P. J. Browning, Publisher of The Sentinel, and The Patriot-News and Cate Barron (jointly Newspapers). The trial court determined that the Board of Governors was an “agency” as that term is defined in the Sunshine Act, 65 Pa.C.S. §§ 701-716(Act).2 Accordingly, the trial court directed the Board of Governors to comply with the provisions of the Act, and, of particular importance here, allow public attendance at its upcoming meetings, thus giving the Newspapers access to what were previously private meetings of the Board of Governors. The Association and the Board of Governors ask us to determine whether the trial court’s holding, that the Board of Governors is an “agency” of the Pennsylvania State University (PSU) because it is a committee, and therefore subject to the provisions of the Act, is an error of law.

The case arises out of the merger of The Dickinson School of Law (Dickinson), an independent, private, non-profit corporation, with PSU. The merger occurred as part of a multi-step process, after which Dickinson ceased to exist as a separate entity and became a part of PSU.

As the first part of this process, Dickinson and PSU entered into an Affiliation Agreement and Agreement and Plan of Merger (Merger Agreement), which was negotiated at arms length by the parties, and approved by both schools’ Boards of Trustees on January 17, 1997. Pursuant to the Merger Agreement, PSU and Dickinson agreed, inter alia, to uphold certain continuing covenants. (Merger Agreement, § 4.06). Because the Dickinson Board of Trustees, along with Dickinson School of Law, would be merging into PSU, the entities sought a means that would enable them to enforce these covenants into perpetuity. Therefore, the Dickinson Board of Trustees agreed to form a separate corporation, the Association, which would continue to exist after the merger; therefore, the Association, through its Board of Governors, would be able to enforce these covenants into perpetuity.3 As the second part of this process, the Merger Agreement also provided for a period of “affiliation” between Dickinson and PSU beginning July 1, 1997. During this period, the law school changed its name to “The Dickinson School of Law of the Pennsylvania State University,” and amended its articles of incorporation to form a non-stock, single-member, Pennsylvania non-profit Corporation, with PSU designated as the single-member. (Merger Agreement, § 1.01(A) and (B)). As the third part of this process, on June 28, 2000, the parties filed the Articles of [181] Merger and the merger became effective July 1, 2000 (Merger Date). At that time, pursuant to Section 1.02(A) of the Merger Agreement, Dickinson merged with and into PSU, and ceased to exist as a separate entity. In addition, pursuant to Section 1.02(E) of the Merger Agreement, the Board of Trustees of Dickinson formed the Association as follows:

1.02 The Merger. At the Effective Time of the Merger (as defined in Section 1.02(B)):
(E) The Dickinson School of Law of The Pennsylvania State University Association. Effective as of the Merger Date, the Board of Trustees of Dickinson shall cause to be formed a new non-stock, non-membership Pennsylvania non-profit corporation to be named “The Dickinson School of Law of The Pennsylvania State University Association” (the “Association”). The term of its existence shall be perpetual. In accordance with Section 4.13(C), the Association shall be governed by a self-perpetuating Board of Governors....

(Emphasis added). Section 4.13(C) of the Merger Agreement, entitled “Association Governance,” provided that the Dickinson Board of Trustees would become the Association’s Board of Governors:

Effective as of the Merger Date, Dickinson’s Board of Trustees will be irrevocably appointed as a self-perpetuating Board of Governors of a newly-created non-stock, non-membership, nonprofit corporation, The Dickinson School of Law of The Pennsylvania State University Association (the “Association”). The Association will be governed by then-existing Class I and Class II Trustees of Dickinson as a self-perpetuating Board of Governors.4 The Board of Governors shall provide counsel and guidance to Penn State with respect to the operation and academic mission of The Dickinson School of Law of The Pennsylvania State University....

(Footnote added.) Section 4.13(C) describes numerous responsibilities of the Board of Governors. Specifically, the Board of Governors possesses the “authority to enforce by specific performance in accordance with Section 8.09 of [the Merger Agreement], Penn State’s continuing covenants which survive the Merger.”5 (Merger Agreement, § 4.13(C)(9)). Of primary importance here, is the covenant described in Section 4.06(B): that PSU will not change the name of the school from “The Dickinson School of Law of the Pennsylvania State University” nor the school’s primary location from Carlisle.6 On June [182]*1821, 2000, before the Merger Date, the Dickinson Board of Trustees filed the Articles of Incorporation for the Association. Thereafter, the newly formed Association possessed the authority to enforce the continuing covenants, including PSU’s promise that the school’s primary location would remain in Carlisle, unless otherwise agreed.

This controversy began when the Board of Governors scheduled a private meeting for November 21 and 22, 2003, during which the possibility of relocating the Law School’s main campus from Carlisle to University Park in State College, Pennsylvania was to be discussed.7 (N.T. 53-54). On November 20, 2003, Lee Publications, Inc. and P.J. Browning, as publishers of The Sentinel, filed a complaint in equity and a motion for a preliminary injunction addressed to the original jurisdiction of this Court, brought under and pursuant to the Sunshine Act, seeking either to stop the November 21st meeting from occurring, or open the Board of Governors’ meeting to the public.8

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Lee Publications, Inc. v. Dickinson School of Law, 848 A.2d 178, 2004 Pa. Commw. LEXIS 318 (Pa. Ct. App. 2004).

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Lee Publications, Inc. v. Dickinson School of Law
848 A.2d 178 (Commonwealth Court of Pennsylvania, 2004)