Lieberman v. Howard Johnson's, Inc.

68 Pa. D. & C.2d 179, 1973 Pa. Dist. & Cnty. Dec. LEXIS 22
Procedural entryThis page is a short order in Lieberman v. Howard Johnson's, Inc.. Read the opinion of the Court — 68 Pa. D. & C.2d 129
Pennsylvania Court of Common Pleas, Philadelphia County·Decided June 29, 1973·No. No. 2; No. 4168·Published

Opinion

ANDERSON, J.,

On January 23, 1973, the Commonwealth of Pennsylvania filed a petition to intervene in the above-captioned case. That action was brought by Charles Lieberman on his own behalf and as a class action on behalf of all other users of the Pennsylvania Turnpike who have purchased or will in the future purchase gasoline, motor fuel, motor oils and food from the named defendants, Howard Johnson, Inc., Atlantic-Richfield Co., Humble Oil & Refining Co., and Gulf Oil Corp.

The complaint alleges that pursuant to lease agreements with the Pennsylvania Turnpike Commission, the oil company defendants were granted the exclusive right to operate gas stations and restaurant facilities along the Turnpike. The lease contracts allegedly provide, inter alia, that the prices at which gasoline, motor fuel, motor oils and food sold from the various demised premises should not be in excess of the retail prices charged in the vicinity.

Subleases between the oil companies and Howard Johnson allegedly contain similar pricing provisions. Plaintiff alleges that the named defendants have breached their respective contracts by charging prices in excess of those prevailing in the vicinity of their turnpike establishments. Plaintiff further contends that he and the class he represents are third-party beneficiaries of the contracts, and, as such, are entitled to damages and injunctive relief.

The Commonwealth’s petition to intervene is founded on two distinct theories.-

1. The Commonwealth, by its Attorney General, has the duty to protect the general welfare of its citizens in its capacity as parens patriae, trustee, guardian and representative of the citizens, and, therefore, has a substantial interest in the outcome of the litigation.

[181]*1812. The Commonwealth in its proprietary capacity has a direct pecuniary interest in the outcome of the litigation because purchases by officials, employes and agents of the Commonwealth were made from defendants at prices which were in violation of the lease and sublease provisions. Therefore, the Commonwealth is a member of the class defined in the Lieberman complaint, and thus has a right to intervene.

INTERVENTION BASED ON PARENS PATRIAE DOCTRINE

The concept of parens patriae is derived from the royal prerogative of the English monarch as father of the country, and as guardian of persons under legal disabilities to act for themselves. This concept has been greatly expanded in the United States and has come to mean the right of a State to sue to “prevent or repair harm to its quasi-sovereign,’ interests”: Hawaii v. Standard Oil, 405 U. S. 251, 258, 31 L. Ed. 2d 184, 190 (1972). An examination of the leading cases indicates that this means that while a State can sue to maintain the economic well-being of the State itself or to protect the health, safety and welfare of the public at large, it cannot sue to protect the interests of specific individuals. Thus, in Missouri v. Illinois, 180 U. S. 208, 45 L. Ed. 497 (1901), it was held that Missouri could sue as parens patriae to enjoin the Sanitary District of Chicago from discharging sewage into the Plaines River. In Kansas v. Colorado, 185 U. S. 125, 46 L. Ed. 838 (1902), it was held that Kansas could bring suit as parens patriae to enjoin Colorado and Colorado citizens from diverting waters from the Arkansas River. Georgia v. Tennessee Copper Co., 206 U. S. 230, 51 L. Ed. 1038 (1907), permitted Georgia to seek an injunction against a Tennessee factory [182]*182which was discharging noxious fumes into the atmosphere. See also Pennsylvania R. R. v. Sagamore Coal Co., 281 Pa. 233 (1924), cert. den. 267 U. S. 592, 69 L. Ed. 803 (1925); Commonwealth ex rel. v. Philadelphia & Reading Coal & Iron Co., 50 D. & C. 411 (Phila. Co., 1944); Mountain Water Supply Co. v. Melcroft Coal Co., 1 D. & C. 660 (C. P. Fay. Co., 1922), all of which involved the right of the Commonwealth of Pennsylvania to intervene because of its interest in enjoining pollution. But see Oklahoma v. Atchison, Topeka & Santa Fe Railway Co., 220 U. S. 277, 55 L. Ed. 465 (1911), where it was held that Oklahoma had no standing to enjoin for the benefit of particular shippers the exaction of allegedly illegal rates by a Kansas railroad corporation.

In California v. Frito-Lay, Inc., 474 F. 2d 774 (9th Cir., 1973), cert. den. 412 U. S. 908 (1973), the State of California sued to recover treble damages under section 4 of the Clayton Act, 15 U. S. C. §15, 38 Stat. 731. It was alleged that 12 manufacturers of snack foods had conspired to fix prices in violation of the Sherman Act, 15 U.S.C. §1, 26 Stat. 209, as amended. The court held that the State of California had no standing to sue as parens patriae on behalf of its citizen-consumers for injuries suffered by them, and that such an action in circumventing the notice provisions of F. R. C. P. 23, would conflict with constitutional due process requirements.

In the Commonwealth’s petition to intervene and in its proposed complaint, it alleges no facts to support a finding that the alleged overcharges on the turnpike are endangering the economic well being of the State itself, or that the welfare of the public-at-large is in jeopardy. On the contrary, all that is alleged is that individual users of the turnpike who purchase goods and services from defendants are overcharged. [183]*183Therefore, since the State has no “quasi-sovereign” interest in the matter, intervention as parens patriae cannot be sustained.

It should be noted, however, that none of the decisions cited above in any way limit the right of a State to sue as a class representative pursuant to F. R. C. P. 23, to protect the interests of its citizens. See especially Hawaii v. Standard Oil, 405 U.S. at 266, 31 L. Ed. 2d at 194-95 (1972). See also Illinois v. Bristol-Myers Co., 470 F. 2d 1276 (D. C. Cir., 1972; In re Ampicillin Antitrust Litigation, 55 F. R. D. 269 (D. C., 1972). In both these cases, the courts held that State attorneys general were to be favored as class representatives. However, in the instant case, the Commonwealth’s Attorney General is precluded from acting in that capacity because the class is already represented by plaintiff Lieberman.

INTERVENTION BASED ON COMMONWEALTH’S PROPRIETARY INTEREST

Generally, intervention is governed by Pennsylvania Rules of Civil Procedure 2326 to 2330. Rule 2327 specifies, inter alia, that subject to the rules, any person can intervene in an action if “the determination of such action may affect any legally enforceable interest of such person whether or not he may be bound by a judgment in the action.” However, it was held in Bannard v. New York State Natural Gas Corp., 404 Pa. 269, 280 (1961), that the right of the Commonwealth to intervene in a case is not governed by Rule 2327, but rather is based on the Act of May 28, 1915, P. L. 616, sec. 1, as amended, 12 PS §145, which provides:

“in all cases at law or in equity ...

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Lieberman v. Howard Johnson's, Inc., 68 Pa. D. & C.2d 179, 1973 Pa. Dist. & Cnty. Dec. LEXIS 22 (Pa. Super. Ct. 1973).

68 Pa. D. & C.2d 179 (Lieberman v. Howard Johnson's, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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