WILKES-BARRE - A state appeals court on Wednesday overturned a lower court's decision that awarded millions of dollars to the Dallas and Pittston Area school districts from the surplus of the Northeastern Pennsylvania School Districts Health Trust.
The two districts have argued they were entitled to that money after leaving the trust in 2007.
In an opinion written by Commonwealth Court Judge Kevin Brobson, a panel of five judges unanimously ruled the trust does not have to return $7.4 million in surplus, legal fees and interest because it is a pooled trust rather than a group of separate accounts for each of its members, as the school districts had argued.
The Northeastern Pennsylvania School Districts Health Trust was formed by 13 public school entities in 1999 to pool bargaining power for negotiating health care rates and share risk, but has been criticized by school officials for inefficiency.
During and after the breakup, the two districts argued they were overpaying, eventually filing suit against the trust in 2008 to recover their portions of the $18.3 million surplus the trust had accumulated. They won their case in Luzerne County Court in December 2011.
Howard Levinson, one of the attorneys representing the districts, said they plan to appeal the decision to the state Supreme Court
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