The US Supreme Court has refused to hear the Commonwealth of Pennsylvania’s appeal in the pooled trust case, Lewis v. Alexander. On January 14, 2013, the Supreme Court denied Pennsylvania’s request to grant a writ of certiorari.
The Supreme Court denial leaves intact the June 20, 2012 decision of the Federal Third Circuit Court of Appeals in the case. The Third Circuit upheld a lower court’s invalidation of various restrictions that Pennsylvania had tried to place on pooled trusts. The Supreme Court’s denial of certiorari means that the lower appellate court’s decision stands and Pennsylvania may not impose those restrictions.
In Act 42 of 2005, Pennsylvania enacted a number of limitations on the use of pooled trusts. Section 1414 of Act (62 Pa. Stat. Ann. §1414) imposed restrictions based on (1) the disabled individual’s age; (2) the characteristics of the individual’s needs in relation to disability; (3) what expenditures a trust could make to improve the disabled individual’s quality of life under the trust instruments; and (4) the percentage of any funds remaining in the trust after a beneficiary's death that could be retained by the pooled trust to assist other disabled individuals.
For more on the Lewis v. Alexander case see the Third Circuit Court’s opinion at http://www.ca3.uscourts.gov/opinarch/113439p.pdf.
See also my earlier post discussing this case “Federal Court voids Restrictions on Pooled Trusts.”