Request By:
[NO REQUESTBY IN ORIGINAL]
Opinion
Opinion By: Albert B. Chandler III, Attorney General; Amye L. Bensenhaver, Assistant Attorney General
Open Records Decision
This matter comes to the Attorney General on appeal from the responses of Northern Kentucky Telecommunication Authority, the City of Ft. Wright, and the City of Ft. Thomas to a series of requests for public records submitted by Donald J. Ruberg, an attorney representing TKR-TCI Cable Company of Northern Kentucky. Because the transactions giving rise to Mr. Ruberg's appeals raise common questions of law, they are consolidated for purposes of administration adjudication. These transactions are summarized below:. November 11, 1997 -Mr. Ruberg submits a written request to Northern KentuckyTelecommunications Authority (NKTA) for a copy of thecomplete feasibility study prepared by Tamkin Fiber Corporation(TFC) and Nortel.. November 17, 1997 -Jeffrey S. Earlywine, secretary-treasurer of NKTA, responds tothis request by releasing a seventeen page executive summary ofthe feasibility study, advising Mr. Ruberg that:Officials of NKTA have only received a copyof the Executive Summary. . . . No officer orboard member is in possession of the"complete" Feasibility Study. . . . We cannotprovide copies of information for which wedo not provide custodial responsibilities. . . .NKTA cannot compel the production of thisdocument by our consultant since they are thesole owners of the report that was preparedutilizing private funds.In closing, Mr. Earlywine notes that even if NKTA could getcustody of the complete feasibility study, its contents, with theexception of the executive summary, would be excluded frompublic inspection by KRS 61.878(1)(c)1. as construed in 92-ORD-1134. He explains that the document contains confidentialand proprietary information relating to market studies, broadband system design, financial projections and other informationwhich, if openly discussed, would permit an unfair commercialadvantage to competitors of the entity that prepared and ownsthe study (TFC/Nortel).. January 15, 1998 -Mr. Ruberg submits a written request to NKTA and the City ofFt. Thomas for copies of five appendices which were referencedin a March 6, 1997, letter of intent from Public FacilitiesInvestment Corporation (PFIC) to the "Municipal Consortium ofNorthern Kentucky.". January 20, 1998 -NKTA responds, through Mr. Earlywine, that "there is nocorrespondence between NKTA and PFIC." He explains thatNKTA came into existence upon approval of an interlocalagreement by the Attorney General on August 25, 1997, andheld its first meeting on September 11, 1997. The letteridentified in Mr. Ruberg's request was generated beforeNKTA's inception. NKTA therefore has "no custodialinvolvement" with the letter or its appendices.. February 18, 1998 -Mr. Ruberg submits a written request to the City of Ft. Wrightfor copies of "the five appendices attached to the letter fromPublic Facilities Investment Corp. to the Municipal Consortia ofNo. Ky. c/o the City of Ft. Wright.". February 23, 1998 -Marc E. Bergman, city administrator for the City of Ft. Wrightand chairman of NKTA, responds on behalf of the city that hehas searched his files and is unable to find the appendices. Mr.Bergman notes that he does not remember these documents, andis not sure if the city ever received them.. February 26, 1998 -Mr. Ruberg resubmits his request for the appendices.. March 2, 1998 -Mr. Bergman confirms that he has a copy of the PFIC letter, butdoes not have copies of the appendices.. March 4, 1998 -Mr. Bergman advises Mr. Ruberg:I am not aware if the document [appendices] that youmentioned exists. I do not remember it and have looked inall of my files to find this information. I feel that I havetaken reasonable effort to find this document and do notfeel the need to contact Public Facilities as I feel thatwould be burdensome.. June 4, 1998 -Mr. Ruberg submits a written request to the "MunicipalConsortium" and the City of Fort Wright for eleven categoriesof documents relating to the "Consortium.". May 26, 1998 -Mr. Bergman issues a terse response to Mr. Ruberg's request,advising him as follows:A simple answer to a complicated question.There was no "municipal consortium ofNorthern Kentucky." It was a name given tous by PFIC. Therefore, there would be noanswer to 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11.
It is Mr. Ruberg's position that this series of denials, or partial denials, of his records requests violates that Open Records Act. He asks that this office render an opinion on the propriety of NKTA's, the City of Ft. Wright's, and the City of Ft. Thomas's failure to release the entire feasibility study, the appendices referenced in PFIC's letter of intent, and five of the eleven documents identified in his June 4 request addressed to the Municipal Consortium of Northern Kentucky and relating to the consortium.
For the reasons that follow, we find that NKTA, the City of Fort Wright, and the City of Ft. Thomas complied with the provisions of the Open Records Act in all material respects, and that they did not violate the Open Records Act in responding to Mr. Ruberg's requests.
Our review of the record submitted to this office discloses that prior to the formation of NKTA, the City of Fort Wright and seven other northern Kentucky communities entered into an alliance with Public Facilities Investment Corporation "to capitalize on the emerging market for public-private arrangements where integrators, under the direction of PFIC, who would act on behalf of the municipalities . . . would build for operation broad band telecommunications networks for the municipalities. " To this end, PFIC, through its president, Jeffrey H. Tamkin, directed a letter of intent to the municipalities on March 6, 1997, confirming the parties' understanding relative to their "ongoing strategic alliance, " and delineating the terms of the alliance. Because NKTA had not yet been formally constituted, and the municipalities were not yet operating under an official title, PFIC designated them the "Consortia of Municipalities in Northern Kentucky" (or the Municipal Consortia). In this letter of intent, Mr. Tamkin referenced five appendices, but apparently failed to affix these documents. Despite their efforts, neither Mr. Bergman nor Mr. Earlywine have succeeded in locating these records, and neither recalls ever seeing them.
In July, 1997, the municipalities entered into an interlocal agreement "to study the feasibility of developing a telecommunications system and associated services." That interlocal agreement was approved by the Attorney General's Office on August 25, 1997, and NKTA conducted its inaugural meeting in September, 1997. In the intervening period, TFC (a subsidiary of PFIC) and Nortel undertook a privately funded feasibility study "to provide a review and assessment for the development, deployment, and operation of a new carrier, . . . (NKTA), [for the provision of a] broad band network . . . intended to include, but not be limited to video, telephony, and data services for residential and business users (customers) and service providers." The parties agreed that the executive summary of the feasibility study would not be treated as confidential, and Mr. Ruberg obtained a copy of this document in response to his November 11 open records request.
The dispute here centers on that portion of the feasibility study designated the business case report. Under the terms of NKTA's contract with TFC, the parties agreed "that the Business Case Report is a confidential and proprietary document owned by TFC and its strategic ally, Nortel, the disclosure of which is controlled under the provision . . . of this Agreement." This confidentiality clause was ratified by NKTA's board at its September 11 meeting. Although the board was ultimately afforded an opportunity to review the report, which is described as the project's "cookbook" and contains such information as market studies, broad band system design, financial projections on cost of services and technology, and the build out plan, it was not permitted to retain a copy of the privately funded report. It is NKTA's position that had it taken possession of the business case report, in addition to the executive summary, the contents of the report would be exempt from public inspection pursuant to KRS 61.878(1)(c)1. insofar as disclosure would permit an unfair commercial advantage to competitors of the private entity that prepared and owned the study, namely TFC and Nortel.
From these somewhat convoluted facts a single legal issue can be extracted: Whether NKTA, the City of Ft. Wright, or the City of Fort Thomas was obligated to retrieve the missing appendices from PFIC, and the privately funded and privately held business case report from TFC and Nortel, in order to discharge their duties under the Open Records Act. Based on this office's decision in 98-ORD-90, and the authorities cited therein, we conclude that the agencies did not violate the Open Records Act in refusing to retrieve the documents from PFIC, TFC, and Nortel.
In 98-ORD-90, this office recognized that a record that is not in the custody of the public agency from which it is sought is generally not a "public record" for purposes of the Open Records Act. On this issue, the Attorney General had earlier observed:
There are two legal thresholds which must be crossed by a person seeking to compel access to documents under the Open Records Law, KRS 61.870 to 61.884; (1) the custodian of the records must be a "public agency" as defined in KRS 61.870(1), and (2) the documents to be inspected must be "public records" as defined in subsection (2) of the same statute. Unless and until those thresholds are crossed it is not necessary to consider the provisions of the law pertaining to exemptions (KRS 61.878) or pertaining to an unreasonable burden in producing voluminous public records (KRS 61.872[(6)].
OAG 82-27, p. 3 (overruled on other grounds in OAG 82-277).
In a series of subsequent open records decisions, we amplified on this view. For example, in 95-ORD-125, this office held that the Louisville Firefighters Pension Fund properly denied a request for confirmation tickets reflecting investment transactions made on its behalf by a private corporation with which the Fund had contracted to manage its assets. Because the confirmation tickets were neither possessed nor used by the Fund, we concluded that they could not be characterized as "public records" as defined in KRS 61.870(2). See also, 96-ORD-41 (holding that the Department of Military Affairs properly denied a request for records relating to vending services at an air national guard facility where those records were prepared by, and in the possession of, a private corporation, and were never in the Department's possession); 97-ORD-15 (holding that the University of Kentucky was not obligated to retrieve a fee agreement between a University employee and a private attorney from the attorney in whose custody the document resided); 98-ORD-90 (holding that a correctional facility was not obligated to contact a toothpaste manufacturer to obtain a copy of a material safety data sheet for toothpaste used at the facility in order to satisfy an inmate's open records request).
At page 4, 5 of 98-ORD-90, we reasoned:
This position is generally consistent with the standard articulated by the United States Supreme Court in Forsham v Harris, 445 U.S. 169, 186, 100 S. Ct. 978, 987, 63 L. Ed. 2d 293 (1980), and Kissinger v Reporters Committee for Freedom of the Press, 445 U.S. 136, 152, 100 S. Ct. 960, 969, 63 L. Ed. 2d 267 (1980). In these opinions, the Court held that "an agency must first either create or obtain a record as a prerequisite to it becoming an 'agency record' within the meaning of the (Freedom of Information Act, 5 USCS § 552)." Forsham at 63 L. Ed. 2d 305. The Court rejected the notion that a public agency's right of access, and its right to obtain custody of records, brought those records within the reach of the Act, concluding that "FOIA applies to records which have been in fact obtained, and not to records which merely could have been obtained." Forsham at 63 L. Ed. 2d 307.
Although the Kentucky Open Records Act does not track the language of the federal act, the laws are identical in at least one significant respect: neither law imposes a duty on the public agency to create records. Thus, the Supreme Court's holding that "by ordering [a public agency] to exercise its right of access, we effectively would be compelling the agency to 'create' an agency record since prior to that exercise the record was not a record of the agency[,]" applies with equal force to agencies governed by the Open Records Act. Forsham at 63 L. Ed. 2d 308.
For this reason, the Attorney General has consistently recognized that a public agency does not violate the Open Records Act when it declines to retrieve copies of records which could have been obtained, but were not obtained, in order to satisfy an open records request.
Neither the appendices to PFIC's letter nor the business case report which comprised the confidential and proprietary portion of TFC's and Nortel's feasibility study are in the custody of NKTA, the City of Ft. Wright, or the City of Ft. Thomas. There is no evidence in the record to support the argument that these are public records which have been secreted away in the care and custody of the private entities to defeat the purpose of the Open Records Act. With respect to the appendices referenced in PFIC's letter of intent, the records, whether by error or omission, never reached the public agencies. Although the agencies may have had the right to obtain the appendices, this fact, standing alone, did to bring them within the reach of the Open Records Act. With respect to the business case report, the agencies contracted away their right to retain a copy. Although the report related to a joint public and private undertaking, those private corporations which funded and prepared it properly asserted a possessory claim to it. We find no error in NKTA's, the City of Ft. Wright's, and the City of Ft. Thomas's refusal to retrieve these records to satisfy Mr. Ruberg's requests.
Assuming for the sake of argument that the business case report was properly characterized as a public record, as defined in KRS 61.870, our conclusion, relative to the agencies' obligation to release them, would not be altered. It is our opinion that the report, if it is in fact a public record, is not an open record but is instead exempt pursuant to KRS 61.878(1)(c)1. That statute excludes from mandatory disclosure:
Records confidentially disclosed to an agency or required by an agency to be disclosed to it, 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.
KRS 61.878(1)(c)1. is aimed at protecting records of private entities which, by virtue of involvement in public affairs, must disclose confidential or proprietary records to a public agency, if disclosure of those records would place the private entities at a competitive disadvantage. See, for example, Marina Management Services, Inc., v. Commonwealth of Kentucky, Cabinet for Tourism, Ky., 906 S.W.2d 318, 319 (1995) ("These are records of privately owned marine operators, disclosure of which would unfairly advantage competing operators. The most obvious disadvantage may be the ability to ascertain the economic status of the entities without the hurdles systematically associated with acquisition of such information about privately owned organizations"); Hoy v. Kentucky Industrial Revitalization Authority, Ky., 907 S.W.2d 766, 768 (1995) ("It does not take a degree in finance to recognize that [information submitted to the Authority in an application for tax credits] concerning the inner workings of a corporation is generally recognized as confidential or proprietary" ).
The same can be said for the business case report in the appeal before us. It does not take a financial or technical genius to recognize that potential competitive harm that would result from disclosure of a record which contains the project "cook book." The reasoning of 92-ORD-1134, which is cited by the agencies as an alternative basis their denial of Mr. Ruberg's request, can be extended to the business case report at issue in this appeal since it might serve as a prototype for similar and competing systems in Northern Kentucky and elsewhere. Accordingly, we believe that the report falls within the parameters of the cited exception.
The only remaining issue in these consolidated appeals is whether NKTA, the City of Ft. Wright, and the City of Ft. Thomas properly denied Mr. Ruberg's request for records relating to the "Municipal Consortium of Northern Kentucky." As we have noted, and as the record demonstrates, no legal entity was ever formally constituted under this name. Rather, it was a designation given to the then informally affiliated Northern Kentucky counties, which had expressed an interest in participating in the broad band network project, by PFIC in its letter of intent. Presumably, this letter of intent is the only document in existence (other than Mr. Ruberg's open records requests and appeals) which makes reference, or is directed, to the "Municipal Consortium." Clearly, NKTA, the City of Ft. Wright, and the City of Ft. Thomas cannot afford Mr. Ruberg access to records which do not exist. In general, it is not our duty to investigate in order to locate documents which the public agencies advise us do no exist. See, e.g., OAG 86-38; OAG 91-101; 93-ORD-51; 96-ORD-164.
The Kentucky Open Records Act was substantially amended in 1994. The General Assembly recognized "an essential relationship between the intent of [the Act] and that of KRS 171.410 to 171.740, dealing with the management of public records. . . ." KRS 61.8715. Although there may be occasions when, under the mandate of this statute, the Attorney General requests that the public agency substantiate its denial by demonstrating what efforts were made to locate a record or explaining why no record was generated, we do not believe that this appeal warrants additional inquiries. Mr. Bergman confirms that "there was no 'municipal consortium of Northern Kentucky.'" Hence, no records exist which satisfy this portion of Mr. Ruberg's open records requests. Again, we find no error in the agencies' responses.
A party aggrieved by this decision may appeal it by initiating action in the appropriate circuit court pursuant to KRS 61.880(5) and KRS 61.882. Pursuant to KRS 61.880(3), the Attorney General should be notified of any action in circuit court, but should not be named as a party in that action or in any subsequent proceeding.