The United States District Court for the Eastern District of Kentucky has issued an opinion in Zillow, Inc. v. Daniel P. Bork, rejecting plaintiff Zillow’s First Amendment challenge to the commercial/non-commercial purpose distinction contained in KRS 61.874(3) and (4), but permanently enjoining defendants property valuation administrators from enforcing KRS 61.870(4)(b)(1) “in light of the unconstitutional restriction it places on the First Amendment rights of other commercial purpose requesters” and declaring “the newspaper exception established in KRS § 61.870(4)(b)(1) unconstitutional under the First and Fourteenth Amendments.”
KRS 61.870(4)(b)(1) is a carve out from the definition of “commercial purpose” that is applied in determining reasonable copying fees under KRS 61.874(3) and (4).
It states:
“"Commercial purpose" means the direct or indirect use of any part of a public record or records, in any form, for sale, resale, solicitation, rent, or lease of a service, or any use by which the user expects a profit either through commission, salary, or fee.
(b) "Commercial purpose" shall not include:
1. Publication or related use of a public record by a newspaper or periodical[.]”
(Because the issue was not presented, the district court did not revile on the remaining statutory carve outs for:
“2. Use of a public record by a radio or television station in its news or other informational programs; or
“3. Use of a public record in the preparation for prosecution or defense of litigation, or claims settlement by the parties to such action, or the attorneys representing the parties”).
Given this split decision, it’s a safe bet that the case will proceed to the federal appellate courts.
In its March 24 opinion, the court described the case’s backstory as follows:
“In recent years, Zillow has transcended its identity as a housing services brand andachieved social media stardom. ‘Zillow Surfing’ has become a popular alternative form of social media and the brand inspired a viral Twitter account reviewing its most intriguing listings. But to provide its services, be they for entertainment or practical use, Zillow relies on publicly available information. This case arises from Zillow’s attempts to obtain tax roll files from six Kentucky counties. Each of those counties informed Zillow it would have to pay an increased cost, pursuant to a state statute, because it was using the files for commercial purposes. Zillow then brought this action alleging this practice and the statutory scheme allowing it violate its rights to free speech and equal protection under the First and Fourteenth Amendments.
“Zillow challenges two distinctions included in these statutes. The first distinguishes between whether a party is requesting open records for a commercial or non-commercial purpose and imposes a higher fee on commercial purpose requesters. The second distinction states that newspapers are not to be considered commercial purpose requesters, even if they meet the statutory definition. As explained below, the Court finds the former distinction is constitutional, but the latter violates Zillow’s rights to free speech and equal protection.
“Zillow is a publicly traded company which owns several ‘brands focus[ed] on all stages of the home lifecycle.’ Its ‘most well-known brand’ is Zillow.com, a database of properties across the country which lists information about the property and a ‘Zestimate’ of the property’s value. Zillow receives this information by requesting tax roll files (tax roll, tax assessment, and tax appraisal files) from local Property Value Administrators. In 2019, Zillow requested these files from PVAs in Shelby, Franklin, Henry, Owen, Trimble, and Clark Counties. Each asked Zillow to pay a ‘commercial purpose’ fee in order to access the files.
“County PVAs are permitted to charge a ‘commercial purpose’ fee pursuant to Kentucky’s open records statutory scheme. Kentucky’s Open Records Act, KRS 61.872, grants Kentucky residents the right to inspect any ‘public record,’ subject to some exceptions. KRS 133.047 mandates property tax rolls be maintained as ‘an open public record’ for five years.
“Pursuant to KRS 61.874, if a requester is seeking records for ‘commercial or business purposes,’ they can be charged a ‘reasonable fee’ to compensate for the ‘cost of personnel time.’ KRS 133.047(4)(b). The Department of Revenue is directed to assist PVAs in developing ‘a reasonable fee schedule.’ These fees can be based on (1) the cost of the media, processing, or staff required to make a copy of the record, and/or (2) the cost of the creation, purchase, or acquisition of the record. KRS 61.874(4)(c). Non-commercial requesters may also be subject to a ‘reasonable fee,’ but that fee cannot exceed the actual cost of reproduction, not including the cost of necessary staff.
“A request is for a ‘commercial purpose’ if the record will be directly or indirectly used ‘for sale, resale, solicitation, rent, or lease’ or any other use the requester expects will result in a profit. KRS 61.870(4)(a). However, use by newspapers, periodicals, radio and television stations in news or informational programs, or in prosecution or defense of litigation is not considered a commercial purpose, even if those requesters expect to profit from their use. KRS 61.870(4)(b). Commercial users can also be required to state the purpose of their request and ‘enter a contract with the agency’ permitting use of the record for that stated purpose. KRS 61.874(4)(b).
“When Zillow requested tax roll files from the PVAs, each deemed Zillow a commercial user and asked it to pay the commercial fee, while some asked it to agree to a commercial user contract. Zillow brought this action in response, claiming the commercial purpose fee statutes are unconstitutional facially and as-applied under the First and Fourteenth Amendments.”
The court went on to address the parties’ disagreement “over what portions of the commercial purpose fee statutes should be severed. Zillow does not suggest the entire Kentucky Open Records Act should be stricken; rather, it argues all of the provisions establishing a distinction between commercial and non-commercial purposes should be severed from the remainder of the Act. The PVAs argue that if the Court decides to sever the statute, only the newspaper exception should be severed.”
Based on the “strong presumption that statutes are severable so long as the statute, without the invalidated provision, is ‘capable of functioning independently,’ the court found the unconstitutional “newspaper exceptions are severable and there is no need to invalidate the entire statutory scheme,” there being “no suggestion or evidence that the legislature would only desire the commercial purpose fee statutes to exist if newspapers could be exempted.”
As noted, it’s unlikely the district court’s opinion represents final resolution of this critical issue. The opinion seems to be based on a strange notion that purpose equals viewpoint (see the bottom of page 10) and satisfies no one. It is surely bound for the Sixth Circuit Court of Appeals.
