Request By:
[NO REQUESTBY IN ORIGINAL]
Opinion
Opinion By: Albert B. Chandler III, Attorney General; Amye L. Bensenhaver, Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether Inter-Modal Transportation Authority, Inc., properly relied on KRS 61.878(1)(c)1. in denying Joey Roberts's March 11, 1999, request for access to various records "submitted by consultants in response to the 'Request for Qualifications' from firms interested in performing future studies related to the Southern Kentucky Tri-Modal Commerce Center ...." (Emphasis in original.) On March 12, ITA's recording secretary, Marie Smith, denied Mr. Roberts's request, notifying him that the "requested documents are exempt from inspection according to KRS 61.878(1)(c)(i)(j) [sic] as the records are confidential and proprietary, and constitute preliminary correspondence recommendations and memorandums [sic]." 1 This appeal followed.
Following receipt of this office's notification of open records appeal, ITA altered its position. In a letter to this office dated March 26, Ms. Smith advised:
At the time the complainant, Joey E. Roberts, filed his subject request to inspect all documents submitted in response to the Inter-Modal Transportation Authority, Inc. ("ITA")'s request for qualifications ("RFQ") from professional firms interested in performing studies pertaining to the site location, facility master plan, preliminary design, etc., of the proposed multi-modal distribution and commerce park in South Central Kentucky, the requested documents were exempted from inspection under Subsection (c) of KRS 61.878(1). At that time, the requested records were of the type that are "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."
However, since all of the requested records were subject to question and discussion during ITA's interviews of each firm which submitted responses to the RFQ during ITA's open meeting on Monday, March 22, 1999, the disclosure of these records will no longer "permit an unfair commercial advantage ..." to anyone. Accordingly, complainant, Joey Roberts, is hereby notified by his copy of this letter that he can now inspect the original copies of the records he requested at the undersigned's office on the second floor of the Warren County Courthouse, 429 East 10<th> Street, Bowling Green, Kentucky 42101, during normal business hours.
On behalf of ITA, Ms. Smith urged the Attorney General to treat this appeal as moot under 40 KAR 1:030 Section 6.
While 40 KAR 1:030 Section 6 authorizes the Attorney General to decline to render a decision where the dispute before him has been resolved or there is no actual controversy, the provision does not foreclose the Attorney General from rendering a decision when the issue is a recurring one and is likely to arise again in open records exchanges involving Mr. Roberts and ITA, if not in this particular factual context than in another analogous factual context. We therefore proceed to an adjudication of this appeal. For the reasons that follow, we find that ITA did not meet its statutory burden of proof in denying Mr. Roberts's request.
KRS 61.878(1)(c)1. Excludes from public inspection:
Upon and after July 15, 1992, 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[.]
This office has consistently recognized that in order to qualify for exclusion under KRS 61.878(1)(c)1., public records must be:
1) confidentially disclosed to an agency or required by an agency to be disclosed to it;
2) generally recognized as confidential or proprietary; and
3) of such a character that disclosure would permit an unfair commercial advantage to competitors of the entity that disclosed them.
See, e.g., 96-ORD-135; 97-ORD-66; 97-ORD-132. On at least two occasions, the Kentucky Supreme Court has analyzed this provision, concluding that the public agencies which had invoked it met their statutory burden of proof. In
Marina Management Services, Inc. v. Cabinet for Tourism, Ky., 906 S.W.2d 318 (1995), the Court held that records containing financial information of privately owned marina operators were exempt from disclosure. The Court reasoned that disclosure would provide an unfair advantage to competitors by allowing them to ascertain the economic status of the marina operators. At page 319 of that opinion, the Court observed:
The records submitted to the Parks Department include information on asset values, notes payable, rental amounts on houseboats, related party transactions, profit margins, net earnings, and capital income. These are records of privately owned marina 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. Further, the facts on the record indicate that the audit statements were disclosed confidentially to Tourism and the Auditors Office. On these facts alone, the exemption clearly applies.
Thus, the Parks Department adduced sufficient proof to support invocation of the exemption.
Similarly, in
Hoy v. Kentucky Industrial Revitalization Authority, Ky., 906 S.W.2d 766 (1995), the Court found:
The financial information required to be submitted by GE in its application to KIRA detailed the company's business and revitalization project. Under administrative regulations adopted by KIRA, such information included a financial history of the corporation, projected cost of the project, the specific amount and timing of capital investment, copies of financial statements and a detailed description of the company's productivity, efficiency and financial stability? It does not take a degree in finance to recognize that such information concerning the inner workings of a corporation is "generally recognized as confidential or proprietary" and falls within the wording of KRS 61.878(1)(c)(2).
Again, the public agency from which access to confidentially disclosed records of a private corporation was sought established that those records were generally recognized as confidential or proprietary. 2
These cases, along with the cited open records decision, confirm that the burden of proving that the records withheld qualify for exclusion under KRS 61.878(1)(c)1. or 2. rests with the public agency. In the appeal before us, ITA has done little more than recite the language of the exception, without explaining how it applied to the disputed records. As we have so often stated, a bare allegation, without a supporting explanation, is not sufficient under the Open Records Act. See, e.g., 95-ORD-107 and
Edmondson v. Alig., Ky.App., 926 S.W.2d 856, 858 (1996) (holding that KRS 61.880(1) requires public agencies to "provide particular and detailed information in response to a request for documents," and recognizing that a "limited and perfunctory response" does not "even remotely comply with the requirements of the Act..."). On this particular issue, we have observed:
Without going into an exhaustive and highly technical explanation, and thus defeating the purpose for which the exception was invoked, we believe that [the agency] could have offered a brief description of the competitive harm the private entities might suffer as a result of disclosure, and some proof, beyond a bare assertion, that the disputed records are generally recognized as confidential or proprietary.
96-ORD-135, p. 6.
Moreover, KRS 61.878(4) provides:
If any public record contains material which is not excepted under this section, the public agency shall separate the excepted and make the nonexcepted material available for examination.
This provision applies to all public records in which exempt and nonexempt information is commingled, including those qualifying for partial exemption under KRS 61.878(1)(c)1. Records submitted by private entities to ITA in response to its request for qualifications are likely to contain both excepted and nonexcepted material, and the public agency asserting the right to withhold the excepted material is obligated to separate it and make the nonexcepted material available for examination at the time the request is tendered.
Having said this, we acknowledge that ITA has now expressed its willingness to disclose the records identified in Mr. Roberts's request. Its decision to do so is clearly consistent with the policy, announced at KRS 61.871, "that free and open examination of public records is in the public interest...." Nevertheless, we remind ITA that the corollary of this proposition is that "the exceptions provided for by KRS 61.878 or otherwise provided by law shall be strictly construed...," and thus given no broader application than is necessary to effectuate their purposes. KRS 61.871. Unless ITA can, in good faith, justify its refusal to permit inspection by reference to a specific exemption, it is obligated to comply with the mandatory disclosure provisions of the Open Records Act upon receipt of a request. We urge ITA to bear these observations in mind in future open records exchanges with Mr. Roberts.
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.
Footnotes
Footnotes
1 In support of ITA's denial of Mr. Roberts's request, Ms. Smith originally cited KRS 61.878(1)(c). In later correspondence, she explained that the disputed records "were of the type that are '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.'" From this description of the records, we can infer that Ms. Smith intended to rely on KRS 61.878(1)(c)1. There is, in fact, no exemption in the Open Records Law which is codified as KRS 61.878(1)(c).
In its later correspondence, ITA did not reaffirm its view that KRS 61.878(1)(i) and (j) authorized nondisclosure of the records, or offer any explanation of how those exceptions applied to the records withheld. We therefore do not address the issue of ITA's reliance on KRS 61.878(1)(i) and (j).
2 In Hoy , the Court interpreted KRS 61.878(1)(c)2. That exemption does not require a showing that the entity disclosing confidential records to an agency will be commercially disadvantaged by further disclosure. Like the other exceptions to public inspection, however, the burden of proof relative to its invocation rests with the agency. The agency must prove that the records were confidentially disclosed, and are generally recognized as confidential or proprietary.