Attorneys for Ellen Suetholz and the State Budget Director battled it out in the Franklin Circuit Court this morning in the ongoing dispute involving public access to the actuarial analysis of the pension reform plan introduced by the governor in 2017.

On May 9, Franklin Circuit Court Judge Phillip Shepherd ruled that the budget director improperly characterized the actuarial analysis as a preliminary record and that he violated the open records law in denying Suetholz access to the analysis.

In his opinion, Shepherd directed the budget director to disclose the analysis within ten days and agreed to entertain a motion for attorneys' fees by Suetholz's attorneys.

What followed, Shepherd commented over a period of several minutes this morning, was a "wholly unnecessary" monthlong "avalanche of appellate litigation" that left him "totally perplexed."

It was never his intention, Shepherd reassured the parties, to deprive the budget director of the opportunity to present the legal issue to the appellate courts before disclosure was required.

On behalf of the budget director, attorney Matthew Kuhn asserted that the court's orders in this and previous cases have created "panic" and are "extraordinarily difficult for agencies. " The result is the "flurry of activity" to which Shepherd referred.

He later noted that given the strong language Shepherd used in his opinion, the budget director's legal team thought it best to take the case to the appellate courts. He nevertheless insisted that the legal team had done everything it could do to "respect the court."

Following a tense exchange, Shepherd again reassured attorneys for the budget director that he never intended to deprive the parties of an opportunity to be heard.

In an offer of folksy conciliation, attorney Steve Pitt ambled to the lecturn to share the words of a former federal court judge to the effect that "clear understanding makes for long friendships." He indicated that the budget director's lawyers — who are attached to the governor's office — would follow the court's guidance going forward.

Turning to the first issue before the court, Kuhn argued that the budget director would be irreparably harmed unless the court stayed its May 9 order. Any victory in the appellate courts would be "hollow," he maintained, if the actuarial analysis was released per the court's order.

In another tense exchange, Shepherd pointedly asked Kuhn how the executive branch would suffer irreparable injury absent a stay since the preliminary documents exception is postulated on the need to protect the deliberative process, a need not implicated here.

In this case, Shepherd noted, the disputed actuarial analysis was commissioned by the Kentucky Retirement System, pursuant to statute and at taxpayer cost, and related to a policy that had already been announced.

Kuhn responded that the actuarial analysis was still a draft when Suetholtz requested it on November 14, 2017, and pointed to the budget director's affidavit as proof. Because it was "shelved" by the General Assembly, he continued, it was never "final."

Later, he cited a "2014 opinion" of the attorney general laying out a cogent legal analysis of the protected status of a "consultant's report" prior to final action.

He vigorously argued for a stay based on the court's failure to address the legal authorities cited in support of the budget director's position as well as the court's failure to cite any legal authority that contradicts the budget director's position. Because the issue is one "of first impression," and has a direct bearing on the budget director's right of appeal, Kuhn maintained, a stay was imperative.

Suetholz's attorney, Tricia Herzfeld, responded that the law presumes that the actuarial analysis is open and that the public owns the document. With a special session looming, she reasoned, the actuarial analysis is directly relevant and the public's interest correspondingly heightened. Suetholz has now waited in excess of 500 days, she argued, and should not be made to wait another day.

Characterizing the budget director's substantive legal arguments as "red herrings," she maintained that experienced practitioners, like the budget director's lawyers, knew or should have known the proper process for seeking a stay of the court's order. She suggested that the "avalanche of litigation," to which Shepherd pointed, represented a "flagrant abuse" of the system.

Moving on to the issue of attorneys' fees, Herzfeld agreed to certain exclusions from the calculations but maintained that the amount sought ($100,000) was reasonable in light of the work completed up to the entry of summary judgment and the additional work necessitated by the budget director's subsequent appellate maneuvers.

She noted that every effort was made to avoid "running the meter up" since she had no way of knowing if fees wiould be awarded.

Kuhn thereafter attacked the reasonableness of the requested fees, suggesting several additional exclusions. But because there had been no showing of "bad faith" or "conscious disregard" for Suetholz's rights, he chiefly argued that Suetholz had no right whatsoever to an award of attorneys' fees.

He took the argument one step further by asserting that because Suetholz's legal team provided their services pro bono, she did not "incur" any expenses associated with the case and should therefore be awarded none.

Shepherd directly questioned Kuhn on this issue, asking him if he was seeking to establish a precedent that attorneys working pro bono in these cases can never recover attorneys fees.

That question went unanswered as Kuhn recommended a significant reduction in attorneys fees to no more than $20,000 based on the circuit and later appellate court litigation.

Herzfeld responded that the precedent Kuhn seemed to be seeking would disincentivize attorneys from taking open records cases pro bono. She emphasized that Suetholz did not choose to fight this battle for a record that the judge — in his May 9 opinion — saw "no plausible reason" to withhold.

Shepherd concluded with a discussion of the balancing of the equities required in these cases. He characterized the actuarial analysis at issue as a "cold hard economic analysis" devoid of opinion or recommendation.

He continued to question how, since the Kentucky Retirement Systems is invested with the public trust (in addition to taxpayer dollars and employee contributions), that trust was not breached by depriving the public of the right to see the actuarial analysis in dispute.

In summation, Shepherd indicated he would continue the June 3 stay and issue a final judgment as soon as possible.

Asked about the hearing, Suetholz later emphasized that the "bigger issues should not be lost in a discussion of attorneys' fees." Those issues, she suggested, relate to the administration's decision to bring this legal action against her to impede disclosure of the actuarial analysis with no apparent intention of pursuing the action, allowing it to languish in the court,until her legal team moved for summary judgment.

It was her hope that the administration would not succeed in taking the focus away from these substantive legal issues that have far reaching implications for the Commonwealth.