Not every "entity" doing business with state or local government is a public agency subject to the open records law.

One of the toughest issues a reviewer of open records disputes often faces is whether the "entity" whose records are sought falls within the expansive but not all-encompassing definition of the term "public agency."

https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=45231

In the attorney general's office, we referred to this as a threshold issue. One of the greatest challenges we faced was the noncooperation of "entities" resisting designation as public agencies and, specifically, their refusal to provide records substantiating their position that they were not public agencies.

It goes without saying that unless an "entity" falls under one or more of the definitions to "public agency" in the open records law, it is not bound by the law.

Case in point, Historic Courthouse LLLP, "a limited liability partnership that oversees the day to day operations of the former Fayette County courthouse" but that "refuses to provide detailed information on the city-owned building's finances and how much each of the tenants in the courthouse pay in rent."

Following months of research, Lexington Herald-Leader reporter Beth Musgrave asked, in articles published last week: "City spent millions to renovate old courthouse. Why do it's finances remain secret?"

This much we know. Historic Courthouse, LLLP, is a for profit entity whose board is made up of city employees (how many of its total board members are city employees and by whom were they appointed?).

It was created (by whom?) in March 2016, along with two other entities (Historic Courthouse Square Development, Inc., a nonprofit, and Historic Courthouse GP, Inc., as it's general partners,) to qualify for $11 million in tax credits. The city kicked in $22 million.

Historic Courthouse LLLP "oversees" the courthouse, under a lease that will expire in 2091, for $1 a year. The lease obligates Historic Courthouse to pay for all operational expenses.

It also obligates Historic Courthouse to "furnish to landlord [the city], upon request, a proof of payment of all items."

Some records relating to the courthouse are held by the city and Historic Courthouse, but some are apparently held exclusively by Historic Courthouse. It maintains that financial records generated after December 30, 2017, are not accessible because money spent after that date was not public money.

(Not sure what this has to do with anything, but it's clear that if is a public agency under one or more of the definitions of "public agency" in the open records law, this makes no difference).

Musgrave's requests for records relating to the courthouse were only partially successful.

For example, she obtained copies of the leases with each tenant (she submitted her request to both Historic Courthouse and the city), but the monthly lease amounts paid by the tenants were redacted.

Historic Courthouse maintains that it is not a public agency for open records purposes, but "voluntarily" released the redacted leases, asserting that disclosure of lease amounts would create an unfair advantage to competitors of the entity that disclosed the records.

We don't have sufficient information to determine if it is a public agency and therefore subject to the open records law. As noted, these are very fact specific, and therefore challenging, determinations.

It may well fall under one or more of the definitions of "public agency" Musgrave identifies in her story. It may not. That is a decision for the attorney general's staff or the courts.

What troubles me is Historic Courthouse's apparent belief that merely saying that lease amounts are exempt because disclosure would place Historic Courthouse at a competitive disadvantage makes them exempt.

Assuming, for the sake of argument, that Historic Courthouse is subject to the open records law (a possibility that has not been definitively ruled out), it has the burden to prove three things under the referenced exception: 1) the leases were confidentially disclosed to Historic Courthouse or required by Historic Courthouse to be disclosed to it; 2) the leases are "generally recognized as confidential or proprietary;" and 3) disclosure of the leases "would permit an unfair commercial advantage to the competitors of the entity that disclosed them."

https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=48230

This is not a burden that is easy to meet, and nothing appears in the story to suggest that any effort was made to meet it.

https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=23065

Clearly, leases are not "confidentially disclosed." There is nothing to suggest a general custom or usage of regarding a lease as confidential. The first test is not met.

The lease amounts, in isolation, do not reveal anything of substance about the economic status, or private financial details, of the tenants. Nor does disclosure of lease amounts place them at a competitive disadvantage. Nothing here reveals trade secret, economic status, or business structure. The second and third tests are not met.

Assuming again, for the sake of argument, that Historic Courthouse is a public agency, could it meet its burden of proving that lease amounts are statutorily protected? Perhaps. But based on Musgrave's article, it has not done so here.

And this is the point. Our open records law assigns the burden of proving that a denial is proper to the public agency. In this context, it is not sufficient to simply say that disclosure of lease amounts will give competitors an advantage.

Simply saying it doesn't make it so.

This point is all the more important in light of a recent US Supreme Court opinion interpreting a parallel exception in the federal Freedom of Information Act.

In Argus Leader v. Food Marketing Institute the Court abandoned a forty year old ruling requiring a showing of "substantial harm" from disclosure of business information in federal agency hands. At the federal level, business information will enjoy protection from the federal FOIA if the business simply designates the information confidential. That's it.

Kentucky's law is, and must remain, superior in this regard. Our law requires the agency resisting disclosure of business information (such as shareholder identity in the hands of the Cabinet for Economic Development in the Braidy Industries case) to prove that the information was confidentially disclosed, that the information is generally recognized as confidential or proprietary, and that disclosure will place the business that disclosed it at a competitive disadvantage.

Based on what we know, Historic Courthouse did not meet this burden. It's role as a steward/ overseer of a public asset is discordant with secrecy. And that secrecy may violate the open records law.

I repeat this. HB 387, introduced in the 2019 regular session, had it been enacted, would have made dramatic changes in the open records law and left us with a toothless law that would more closely resemble post-Argus Leader FOIA.

https://apps.legislature.ky.gov/record/19rs/hb387.html

There is a very strong possibility that it, or some version of it, will be reintroduced in this session.

Let's not make it easy for public agencies (or their corporate alter egos) to hide records and information relating to "private" entities doing business with, seeking incentives or a license to do business from, or regulated by, those agencies (or their alter-egos).

Let's not let the Historic Courthouses or the C3's of Kentucky decide "what is good for the public to know and what is not good for them to know."