Today’s Lexington Herald-Leader reports:
“The Fayette County Public Schools board has entered into a settlement with JUUL after the board filed a lawsuit against the e-cigarette company in late 2019.
Reporter Valarie Honeycutt Spears quotes district spokeswoman Lisa Deffendall:
“While we are unable to share details of the settlement, our Fayette County Board of Education will be considering how best to invest the funds to battle the scourge of vaping in our schools.”
Louisville attorney Ron Johnson confirms that the settlement amount is confidential, “but suffice to say it was to the satisfaction of the Board as they voted to accept it.”
Neither Deffendall nor Johnson identify the statutory basis for asserting that the district is prohibited from disclosing the settlement amount or, for that matter, the settlement agreement itself.
The district’s position appears to proceed from the belief that the settlement agreement is not a public record.
The district is wrong.
In a 1997 case involving Lexington Fayette Urban County Government and the Lexington Herald Leader, the Kentucky Supreme Court emphatically stated:
“There could be no viable contention that an agreement which represents the final settlement of a civil lawsuit whereby a governmental entity pays public funds to compensate for an injury it inflicted is not a public record. KRS 61.872(1) provides in part that ‘all public records shall be open for inspection by any person’ and we can think of no construction of this language which would permit exclusion of an agreement of the type at issue here.”
See also https://caselaw.findlaw.com/ky-supreme-court/1522952.html
The Court rejected LFUCG’s assertion of the open records privacy exception to protect the private litigants who obtained public funds in settlement of their claims.
Quoting an Alaska case addressing the same issue, the Kentucky Supreme Court concurred:
“We recognize the important public policy served by those measures which encourage settlement․ We recognize also that some litigants are unwilling to settle unless the terms of settlement remain confidential, and that a [public agency’s] inability to assure confidentiality may, therefore, adversely affect its ability to negotiate a settlement. Nevertheless, the specific statutory provisions upon which the [newspaper] relies reflect a policy determination favoring disclosure of public records over the general policy of encouraging settlement. The people of this state, through their elected representatives, have stated in the clearest of terms that it is more important that they have access to this type of information than that it remain confidential. Thus, we hold that a public agency may not circumvent the statutory requirements by agreeing to keep the terms of a settlement agreement confidential.”
Should the outcome be the different if the public agency brings the legal action against a private company?
In our view, no.
The settlement agreement is unquestionably a public record. The Fayette County Schools identify no legal basis for refusing to disclose the settlement amount, or the settlement agreement itself, and we can identify none.
Here, as in LFUCG v Herald Leader, the Fayette County Public School "may not circumvent the statutory requirements by agreeing to keep the terms of a settlement agreement confidentiality." The right of the public to inquire into funds flowing out of, or into, public coffers are "a matter of legitimate public concern which the public is entitled to scrutinize."
Absent any specific legal authority to the contrary, the Fayette Public Schools must disclose not only the settlement amount but the settlement agreement itself.
"A confidentiality clause reached by the agreement of parties to litigation cannot in and of itself create an inherent right to privacy superior to and exempt from the statutory mandate for disclosure contained in the Open Records Act."