On July 12, a panel of Court of Appeals judges made up for every soft ball question lobbed by lawmakers – other than Representative Charles Booker – during the July 11 Legislative Contract Review Committee meeting at which they approved an $8.5 million contract with a private non-profit closely tied to the Cabinet for Economic Development.

The issue before the panel of judges -- consisting of Chief Judge Irv Maze, Judge Pamela Goodwine, and Judge James Lambert – also involved economic development. That issue is whether the public has a right to an unredacted copy of Louisville Metro Government's failed proposal for the Amazon's HQ2 project.

The judges peppered attorney Michael Abate, for the Courier Journal, and Annale Taylor, for Louisville Metro, with a series of hard ball questions at the oral argument conducted in Frankfort on July 12.

In September 2017, Amazon announced that it would solicit bids for the project which was expected to cost $5 billion and bring 50,000 jobs to the location selected.

Louisville was among the bidders, spending $170,000 in public and private funds to develop a proposal. In January 2018, Louisville learned that it was not a finalist.

https://www.wdrb.com/news/business/louisville-spent-on-unsuccessful-bid…

In October 2017, Louisville Business First requested a copy of Louisville's proposal under the open records law. Louisville denied the request, citing exceptions for preliminary documents (KRS 61.878(1)(i) and (j)) and economic development (KRS 61.878(1)(d)). Business First unsuccessfully appealed the denial to the attorney general. His office concluded that at the time of the request, Amazon had not yet taken final action on Louisville's proposal and that it was therefore exempt.

https://ag.ky.gov/orom/2018/18ORD029.doc

In time, the city released portions of the proposal but refused to disclose it in its entirety.

In March 2018, the Courier Journal sued Louisville Metro, arguing that the city willfully violated the open records law in withholding the proposal. The CJ bypassed the attorney general's office and took its appeal directly to the Jefferson Circuit Court. In an opinion issued in September 2018, the circuit court sided with the CJ, ruling that because Amazon rejected Louisville's proposal the city was required to release the full proposal.

https://www.bizjournals.com/louisville/news/2018/09/26/louisville-metro…

Determined to keep its "economic playbook out of the hands of competitor cities," Louisville Metro appealed the circuit court's opinion to the Court of Appeals.

That appeal brought attorneys for the CJ and Louisville to Frankfort for oral argument on July 12.

As counsel for Louisville Metro, Taylor began by identifying the legislative policies supporting the open records law that guided the city in denying requests for the proposal. She acknowledged that those policies favor disclosure but maintained that the legislature carved out exceptions in recognition of the need, in some cases, for governmental confidentiality.

Taylor recounted the events that culminated in Amazon's January 2018 decision to eliminate Louisville from consideration.

Chief Judge Maze asked whether, at that point, the proposal was no longer preliminary and therefore subject to full disclosure.

Taylor responded that analysis of this issue must be contextual since the preliminary documents exceptions do not identify the date when a preliminary document ceases to be preliminary and becomes final. In the context of economic development, she maintained, records are preliminary until the deal is finalized.

Chief Judge Maze agreed that the statutory exceptions do not spell out when a preliminary document loses its preliminary status and must be disclosed, but suggested that case law does. He asked that she address a 1992 case involving the University of Kentucky's response to an NCAA investigation in which the Kentucky Supreme Court held that the response was final as to UK when UK submitted it to the NCAA regardless of the action taken by the NCAA on the University's response.

Taylor responded that the case is distinguishable insofar as UK's response was a fact-based investigative review that looked backwards. The proposal, on the other hand, was informational and policy based and not final as to the city. It was, she maintained, subject to change and might one day be modified and used again.

Both Judge Goodwine and Judge Lambert pressed Taylor on the city's argument that the proposal might never be final and therefore never accessible. Judge Lambert emphasized that taxpayers "bought" the proposal but will never get to see what they paid for.

Taylor stood firm on the city's reliance on the exceptions given the need for governmental confidentiality, repeating that the proposal would remain final in perpetuity if never finalized.

Abate then presented the CJ's arguments in support of disclosure of the city's Amazon proposal. He focused on the public's right to know how city employees discharged their duties in developing the proposal, what the proposal consists of, and how much the city was prepared to "give away," whether too much or too little.

The city's refusal to release the proposal, he argued, improperly preempts that right.

Abate suggested that the widely publicized bid solicitation by Amazon in September 2017 removed the city's proposal from the economic development exception upon which the city relied. That exception, he argued, only applies "where no previous public disclosure has been made of the business's or industry's interest in locating in . . . the Commonwealth."

Nor, Abate argued, were the preliminary documents exceptions applicable here since the disputed proposal did not consist of preliminary interagency communications or discussions of alternative proposals.

Chief Judge Maze asked Abate if disclosure of the proposal might not, in fact, place the city at a competitive disadvantage. Abate dismissed this argument suggesting that success in future bidding is not dependent on what transpired in the past. He noted that selection of a winning proposal is not entirely driven by economic incentives.

Abate relied heavily on the 1992 UK case as direct legal authority for the CJ's position that the city's proposal was final upon submission to Amazon and that Amazon subsequent actions were, like the NCAA's actions in the 1992 case, wholly irrelevant.

Abate rejected the city's attempt to read an economic development component into the preliminary documents exceptions, which, he reminded the court, focus exclusively on predecisional interagency communications and are not at issue here

Judge Goodwine asked Abate if disclosure would adversely impact future proposals or discourage business prospect from coming to Kentucky.

Abate responded with an unequivocal "no." He reiterated that the Amazon proposal was unprecedented and unlikely to recur, noting that some cities voluntarily made their proposals public. The city abandoned its claim of future competitive injury, and reliance on the economic development exception, by trumpeting its Amazon proposal.

Abate distinguished each of the attorney general's open records decisions upon which the city relied -- which led to an amusing "side bar" concerning the extent to which those decisions represent binding legal authority -- and suggested that none of the decisions was correct in view of the attorney general's failure to factor the 1992 UK case into his analysis.

(To that I say, reasonable minds may differ.)

Taylor returned to the lectern for two minutes of rebuttal. She conceded that the attorney general's decisions were not legally binding on the court, but noted that courts have treated them as highly persuasive. Further, she attempted to demonstrate the harm to future competitive negotiations, pointing out that business prospects would expect the same incentives the city offered Amazon.

With that the case stood submitted.

As Abate pointed out, the city's reliance on the "economic development" exception is misplaced since Amazon made no secret of it interest in locating in the city that submitted the winning proposal. And he is correct that the city "contextually" reads an "economic development" component into the preliminary documents exceptions.

If the court agrees with his interpretation of the 1992 UK case, it will affirm the circuit court's opinion and rule in the CJ's favor. The ball is now in the hands of the Kentucky Court of Appeals.

At the conclusion of oral arguments, Chief Judge Maze indicated that, given the importance of the issue, the court advanced the appeal on its docket and that it would issue an opinion within three weeks.

I learned long ago not to try to predict the likely outcome of a case based on a court's interaction with counsel. At least we won't have long to wait.