In another major victory for open government, the Kentucky Court of Appeals issued a second opinion today in Cabinet for Economic Development v Courier Journal.

The opinion affirms the public's right to know the names of shareholders in Braidy Industries, Inc., a private company that received $15 million in public funds for a 20% ownership stake under a hastily enacted bill presented to the legislature in the waning hours of the 2017 legislative session.

The court quoted, at length, the open records decision issued by the attorney general's open records staff in 2017. Characterizing the open records staff's decision as "highly persuasive," the court quoted 12 pages of the open records decision, verbatim, declaring that it "correctly and thoroughly resolves this issue."

The court adopted language recognizing that the Cabinet for Economic Development "made an extraordinary investment of public funds in Braidy. In doing so, the Commonwealth has conferred a direct benefit on the Braidy shareholders in the form of a capital injection into Braidy. Moreover, the Commonwealth is now in business with those shareholders. This creates a heightened public interest in disclosure."

The court also adopted the open records staff's rejection of each of the five exceptions invoked by the Cabinet and the staff's conclusion that the shareholder names were not private, not preliminary, and not proprietary or confidential.

Disclosure of the identities of shareholders, the court determined, "allows the public to evaluate the cabinet's decision to invest substantial resources in that company."

The Court of Appeals also affirmed the circuit court's award of attorneys' fees in the amount of $30,693 and penalties in the amount of $2225 to the Courier Journal. The court found no "plausible justification"for the cabinet's denial of the Courier Journal's request.

The court did, however, narrowly reverse the circuit court on the extent of the required disclosures.

It is important to note that HB 387, introduced in the 2019 legislative session, would have exempted shareholder identities from public inspection, as well as vast amounts of information relating to monetary and other incentives offered by the Cabinet for Economic Development (and others) to lure business to the state, for example, the City of Louisville's incentive package to attract Amazon.

That issue, too, is currently in the courts.

That bill would have severely impacted the public's ability to scrutinize the incentives/concessions the state is willing to offer in the name of economic development. It would have come at a tremendous cost both to the public's coffers as well as to the public's existing rights under the open records law.

It failed in the 2019 regular session but may very well be back in 2020.

There is little doubt that the Cabinet for Economic Development will petition the Kentucky Supreme Court for discretionary review. With respect to state agencies and adverse open records rulings, it is no longer a question of "if" but "when."

Look for the Cabinet to file a petition for review with the Supreme Court within thirty days (or after it has exhausted every other opportunity for reconsideration).

And, again, savor the victory for the time being.