Opinion
Opinion By: Albert B. Chandler III, Attorney General; James M. Ringo, Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether the actions of the Owensboro Riverport Authority (Riverport) relative to David A. Smith's August 15, 2002 open records request violated the Open Records Act. We find that the Riverport's response was procedurally deficient and substantively failed to meet its statutory burden of proof in sustaining its partial denial of Mr. Smith's request under authority of KRS 61.878(1)(c)1. For the reasons that follow, we remand the appeal back to the public agency with directions that it issue a new response to Mr. Smith's request within three business days after receipt of the remand.
By letter dated August 15, 2002, Mr. Smith submitted an open records request to the Riverport, requesting copies of the following records:
1. Copies of all 2002 Minutes of the Riverport's Board meetings
2. Copy of 2002-2003 Budget as approved at the June 28, 2002 meeting
3. Copies of all financial audits of the Owensboro Riverport Authority since its inception
4. Copies of all required public notices per KRS 45A.343 et seq. regarding the proposed 300,000 square foot warehouse
5. Copy of current general tariff schedule
6. Copy of Riverport's By-Laws
7. Copy of warehouse market analysis mentioned at July 2, 2002 city commission meeting.
In his letter of appeal, dated January 21, 2003, Mr. Smith indicated that he had been provided copies of the records requested in items # 1 - # 4. Maurice Owen, Port Director of the Riverport, had advised that it did not have request # 6 (copy of Riverport's By-Laws). With regard to his requests # 5 and # 7, Mr. Smith explained:
Within a week or two, Mr. Owen telephoned to tell me that the Riverport no longer had a tariff schedule (request # 5) and that request # 7 included potential customers that they did not want to reveal. I asked him to exclude that information if he wished but to note that it was deleted. To date I have yet to receive the market analysis (request # 7) in any form even though the decision to construct the warehouse was made at the August 23rd, 2002 meeting of the Riverport Board of Directors.
Please address two issues:
After receipt of Notification of the appeal and a copy of the letter of appeal, Mr. Owen, on behalf of the Riverport, provided this office with a response to the issues raised in the appeal. In his response, he stated the Riverport's position:
It is the Riverport's position that the information contained in the work that compromises our internal analysis on the feasibility of the construction of our warehouse is not "public information" under KRS 61.878(1)(c)1. The information contained in our internal analysis contains customer information that we deem confidential and proprietary. Disclosure of this information would be commercially harmful to our customers.
This was explained to Mr. Smith as he states in his appeal. He asked that we modify our feasibility information so that any proprietary information not be revealed. It is our opinion that under the open records law, it is not a requirement of a "public agency" to develop customized, modified or special reports from "public records," even if such records are not exempt from public inspection.
Consequently, it is our opinion that records, reports or other information pertaining to the feasibility of the construction of our warehouse that contains confidential and proprietary information related to customer information be exempt from inspection in their entirety.
Should Mr. Smith need records regarding the construction of our warehouse that do not require disclosure of our customer's proprietary information, we will be happy to let him inspect these records.
By letter dated February 14, 2003, Mr. Smith submitted a reply to Mr. Owens's response, arguing that the Riverport's reliance upon KRS 61.878(1)(c)1. was misplaced. In his reply, he argued:
In regards to the Owensboro Riverport Authority's use of KRS 61.878(1)(c)1, I believe it is a stretch to consider future warehousing needs proprietary information. The knowledge of their future warehousing needs could not be "harmful" to nor provide "unfair commercial advantage to competitors" of customers of the Riverport. Customers of the Riverport were not required by law or regulation to provide this information and the Riverport does not state how release of this information could cause those who disclosed it harm.
If you find that the application of KRS 61.878(1)(c)1 was proper, I request that the Riverport follow KRS 61.878(4) and redact the confidential or proprietary information from the market analysis.
We are asked to determine whether the Riverport's partial denial of Mr. Smith's request was consistent with the requirements of the Open Records Act. For the reasons that follow, we conclude that the Riverport's actions were procedurally deficient and substantively failed to meet its statutory burden of proof in sustaining its partial denial of Mr. Smith's request under authority of KRS 61.878(1)(c)1.
We address the procedural issues first. The record before us does not indicate that the Riverport responded to the request in writing within three business days after its receipt. KRS 61.880(1) provides:
Each public agency, upon any request for records made under KRS 61.870 to 61.884, shall determine within three (3) days, excepting Saturdays, Sundays, and legal holidays, after the receipt of any such request whether to comply with the request and shall notify in writing the person making the request, within the three (3) day period, of its decision. An 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. The response shall be issued by the official custodian or under his authority, and it shall constitute final agency action.
To the extent that the Riverport failed to respond to Mr. Smith's request in writing within three business days after its receipt, it violated the procedural requirements of KRS 61.880(1).
Moreover, the Open Records Act requires that, if there is to be a delay in excess of three working days after an open records request has been made, the agency is required to immediately notify the requester and provide a detailed explanation of the cause for further delay and give a place, time and earliest date on which the public record will be available for inspection. KRS 61.872(5).
In the instant case, Mr. Smith's letter of appeal indicates that within a week or two after he had been provided with copies of records in requests # 1-# 4, Mr. Owen, on behalf of the Riverport, telephoned him and advised that "the Riverport no longer had a tariff schedule (request # 5) and that request # 7 included potential customers that they did not want to reveal." This action was procedurally deficient on two counts. First, its delay of a week or two without a detailed explanation of the cause of the delay violated KRS 61.872(5). Secondly, although this telephone communication may have been consistent with the spirit of the Open Records Act, it did not comply with the requirements of KRS 61.880(1), in that it did not set forth in writing "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. " Accordingly, we find that the agency's responses were procedurally deficient and inconsistent with the requirements of KRS 61.880(1) and KRS 61.872(5).
We next address the substantive issue. The Riverport denied Mr. Smith's request for a copy of the warehouse market analysis under authority of KRS 61.878(1)(c)1. That statute 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
These cases, along with the cited open records decisions, 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, the Riverport has done little more than recite the language of the exception, without explaining how it applied to the disputed record. As this office has 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 compl[y] with the requirements of the Act . . ."). On this point, in 96-ORD-135 at p.6, we 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.
We find that the Riverport did not meet its statutory burden of proof in its blanket denial of Mr. Smith's request. The Riverport in its response to the letter of appeal stated it was the agency's position that information contained in the requested record was exempt from public disclosure, under authority of KRS 61.878(1)(c)1., and indicated the "information contained in our internal analysis contains customer information that we deem confidential and proprietary. Disclosure of this information would be commercially harmful to our customers. " Other than this bare assertion, the Riverport did not adequately explain how the exemption relied upon applied to the withheld record. The Riverport's reliance on this exemption may not have been entirely misplaced, but it failed to provide sufficiently detailed information in its response to Mr. Smith's request to meet its statutory burden of proof to qualify for exemption from disclosure under KRS 61.878(1)(c)1.
Mr. Owen, on behalf of the Riverport, further argues that agency "records, reports or other information pertaining to the feasibility of the construction of our warehouse that contains confidential and proprietary information related to customer information be exempt from inspection in their entirety." We disagree. Only those portions that qualify for exemption under KRS 61.878(1)(c)1., may be withheld. 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. Because records submitted by private entities to the Riverport may contain both excepted and nonexcepted material, 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. 1
We therefore find that although the Riverport may withhold those portions of the record that qualify for exclusion under KRS 61.878(1)(c)1., it is obligated to disclose any nonexempt portions and to identify in general terms, as suggested above, the portions withheld and articulate the reasons for withholding those portions in terms of the requirements of the exemption. Accordingly, consistent with the principles articulated above, the instant appeal is remanded back to the public agency with directions that it issue a new response to Mr. Smith's request within three business days after receipt of the remand.
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.
David A. SmithYeiser's Warehouse P.O. Box 865Owensboro, KY 42304
Maurice OwenOwensboro Riverport AuthorityP.O. Box 21955Owensboro, KY 42304
Charles KamufKamuf, Yewell & Pace221 West 2nd StreetOwensboro, KY 42302
Footnotes
Footnotes
1 The Riverport also argues that the Open Records Act does not require a public agency to "develop customized, modified or special reports' from 'public records', even if such records are not exempt from public inspection. " In this regard, this office has held that the redaction of exempt information from an existing record (or database) does not create a new record. 98-ORD-33.