Request By:
Ms. Kimberly K. Greene
Wyatt, Tarrant & Combs
Citizens Plaza
Louisville, Kentucky 40202Mr. Michael A. Fulkerson
Chief Administrative Officer
Kentucky Racing Commission
Kentucky Horse Park
4063 Iron Works Pike
Lexington, Kentucky 40511
Opinion
Opinion By: Chris Gorman, Attorney General; Amye B. Majors, Assistant Attorney General
OPEN RECORDS DECISION
This matter comes to the Attorney General on appeal from the Kentucky Racing Commission's denial of Courier-Journal Frankfort Bureau Chief, Tom Loftus's, June 19, 1992, request to inspect "all financial information regarding Dueling Grounds Race Course, the Simpson County Steeplechase Association and the owners of the Simpson County Steeplechase Association." Specifically, Mr. Loftus sought access to "any and all balance sheets, financial statements, profit and loss statements, audits and any other records held by the commission concerning the financial condition of Simpson County Steeplechase Association and its owners."
Mr. Michael A. Fulkerson, Chief Administrative Officer for the Kentucky Racing Commission, denied Mr. Loftus's request in a letter dated June 23, 1992. Relying on KRS 61.878(1)(a) and (b) 1, he argued that the records "are of a very personal nature, inasmuch as Mr. [Mike] Shannon claims to be a 100% beneficial owner of this track and submitted them on a confidential basis pursuant to his application for a license, and the regulation of a commercial enterprise. "
On behalf of her client, The Courier-Journal, Ms. Kimberly K. Greene appealed to the Attorney General, pursuant to KRS 61.880(2), the Commission's denial of Mr. Loftus's request. It is her position that disclosure of the records would not constitute "a clearly unwarranted invasion of personal privacy" inasmuch as the requested records are the records of a corporation and not records pertaining to an individual. In support of her position, she cites
Maysville Transit Co. v. Ort, 296 Ky. 524, 177 S.W.2d 369, 370 (1944), in which the Kentucky Court of Appeals held that the right of privacy does not extend to "property, business or other pecuniary interests."
With respect to Mr. Fulkerson's argument that the requested records are exempt under KRS 61.878(1)(b), relating to records confidentially disclosed to an agency in conjunction with the regulation of commercial enterprise or for the grant or review of a license to do business, which if openly disclosed would permit an unfair advantage to competitors, Ms. Greene argues that the exemption does not apply to these records since "disclosure or publication . . . is directed by another statute." Citing KRS 230.260(8), which authorizes the Commission to compel racing associations to file with it a balance sheet and an earning statement, as well as additional information, at the end of their fiscal year, she argues that "the very records requested by Loftus were intended by the legislature to be filed with the state and available to the public through the Open Records Act." Moreover, Ms. Greene notes that the requested records do not satisfy the requirement that "disclosure would permit an unfair advantage to competitors of the subject enterprise."
The question presented in this appeal is thus: Did the Kentucky Racing Commission meet its burden of proof in sustaining its denial of the requested records under KRS 61.878(1)(a) and (b)? For the reasons set forth below, we conclude that although the Commission may have properly invoked the cited exceptions, it has failed to meet its burden of proof and must release the records forthwith.
KRS 61.880(1) contains guidelines for agency response to an open records request. That section provides the "[a]n agency response denying, in whole or in part, inspection of any record shall include a statement of the specific exception authorizing the withholding of the record and a brief explanation of how the exception applies to the record withheld ." (Emphasis added.) Pursuant to KRS 61.880(2), the Attorney General "may request additional documentation from the agency for substantiation." On July 8, 1992, this Office requested such documentation in the form of a more detailed explanation of how the exceptions invoked applied to the records withheld. Specifically, we asked that the Commission explain how disclosure of the requested records would constitute a clearly unwarranted invasion of privacy per KRS 61.878(1)(a), and how the records qualified for exclusion under KRS 61.878(1)(b).
Mr. Fulkerson's terse response restated the Commission's earlier position. He concluded:
I realize this past practice does not in and of itself indicate that this position is appropriate but it also appears that it is based on past philosophies contained in various Opinions of the Attorney General as they relate to similar circumstances. Please look at the following list of OAG's for additional support to our position: 77-394; 89-50; 77-585; 79-275; 88-44; 84-51; 85-1; and in particular 85-119.
Mr. Fulkerson did not offer any further explanation of how the exceptions he had invoked applied to the specific records withheld.
We have reviewed the cited opinions, and do not find them dispositive of the issues raised in this appeal. 2 Indeed, we fail to see the relevance of many of those opinions. This fact notwithstanding, it has long been the position of this Office that mere invocation of an exception and reference to prior opinions, without an adequate explanation of how the exception applies or the opinions are relevant, does not satisfy the burden of proof imposed on the agency under KRS 61.880(2) and KRS 61.882(3)
We note that in order to successfully raise the exception codified at KRS 61.878(1)(b), an agency must establish that the requested records: (1) were confidentially disclosed to it; (2) in conjunction with an application for a loan, the regulation of commercial enterprise, or the grant or review of a license to do business; and (3) that release of the records would permit an unfair advantage to competitors. 3 Mr. Fulkerson indicated that the records were confidentially disclosed in conjunction with the regulation of the Simpson County Steeplechase Association and the review of its license to do business. He did not, however, attempt to establish that the Association would be competitively disadvantaged by disclosure of the information. The Commission therefore failed to sustain its burden of proving that the records withheld satisfy this three part test. OAG 91-105.-
The Commission's invocation of KRS 61.878(1)(a) is similarly flawed. The Kentucky Supreme Court recently enunciated a clear test for analyzing the propriety of invoking the privacy exception. In
Kentucky Board of Examiners of Psychologists v. The Courier-Journal and Louisville Times Company, Ky., 826 S.W.2d 324, 327-328 (1992), the court stated:
[G]iven the privacy interest on the one hand and, on the other, the general rule of inspection and its underlying policy of openness for the public good, there is but one available mode of decision, and that is by comparative weighing of the antagonistic interests. Necessarily, the circumstances of a particular case will affect the balance. The statute contemplates a case-specific approach by providing for de novo judicial review of agency actions, and by requiring that the agency sustain its action by proof. Moreover, the question of whether an invasion of privacy is 'clearly unwarranted' is intrinsically situational, and can only be determined within a specific context.
Mr. Fulkerson premises his denial of Mr. Loftus's request on the fact that "Mr. [Mike] Shannon claims to be a 100% beneficial owner of this track . . . ." This statement, standing along, does not persuade us that the public's right to know is outweighed by a countervailing interest in personal privacy. While we are "[m]indful that the policy of disclosure is purposed to subserve the public interest, not to satisfy the public's curiosity," Board of Psychologists, supra at 328, we do not believe that the Commission has sustained its burden by establishing a superior privacy interest.
We do not suggest that the Kentucky Racing Commission's invocation of these exceptions was unwarranted, only that it failed to sustain its statutory burden of proof. Simply stated, we are unable to resolve these issues on the facts and law presented. We therefore conclude that the Commission must immediately release the requested documents. The Commission and Ms. Greene may challenge this decision by initiating action in the appropriate circuit court pursuant to KRS 61.880(5) and KRS 61.882.
Footnotes
Footnotes
1 As amended by the 1992 General Assembly, KRS 61.878(1)(b) is now codified as KRS 61.878(1)(c), and provides for the nondisclosure of:
1. Records confidentially disclosed to an agency, generally recognized as confidential or proprietary, which if openly disclosed would permit an unfair commercial advantage to competitors of the entity that disclosed the records, and which are compiled and maintained:
a. In conjunction with an application for a loan;
b. In conjunction with the regulation of commercial enterprise, including mineral exploration records, unpatented, secret commercially valuable plans, appliances, formulae or processes, which are used for the making, preparing, compounding, treating, or processing of articles or materials which are trade commodities obtained from a person; or
c. For the grant or review of a license to do business.
2 Those opinions may be summarized as follows:
OAG 77-394 - holding that agency properly denied request to inspect annual teacher evaluations pursuant to KRS 61.878(1)(a).
OAG 77-585 - holding that agency improperly denied request to inspect restaurant inspection records.
OAG 79-275 - setting forth rules of general application vis-a-vis the exceptions to open records, and holding that the exceptions are permissive and not mandatory.
OAG 84-51 - holding that the Kentucky State Racing Commission may withhold social security numbers and home addresses of its licenses.
OAG 85-1 - holding that a requester may inspect records pertaining to occupational license fees.
OAG 85-119 - holding that agency properly denied request to inspect the financial statement of a private corporation relative to a request for bids by a state agency.
OAG 88-44 - holding that documents in the possession of a private firm are not subject to public inspection.
OAG 89-50 - holding that blanket denial of inspection of property record and assessment cards may not be based upon KRS 61.878(1)(a)
3 Although the language of this exception was clarified by the 1992 General Assembly, we do not believe it was the legislature's intent to expand or retract its scope.