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Opinion

Opinion By: Jack Conway, Attorney General; Michelle D. Harrison, Assistant Attorney General; Amye L. Bensenhaver, Assistant Attorney General

Open Records Decision

The sole question presented in this appeal is whether the City of Danville Water and Sewer Department violated the Kentucky Open Records Act in denying Clay P. Moore's October 9, 2009, written request for "one (1) copy of the 2008 and 2009, by month, water bills, to include sewer and storm water fees, paid to the City of Danville by EMRMC [Ephriam McDowell Regional Medical Center], Centre College, and CKASC [Central Kentucky Ambulatory Surgery Center, LLC]." In a timely written response, H. Vincent Pennington, III, attorney at law, advised Mr. Moore that such records are protected under KRS 61.878(1)(a) "because those documents can be used to infer the personal lifestyle of a customer or suggest the competitive position of a commercial or industrial customer and would be an improper and unjustifiable invasion of the customers' privacy, " as the Attorney General determined in 96-ORD-176. 1 Accordingly, the Department declined to produce the documents requested on the basis of KRS 61.878(1)(a) per 96-ORD-176.

Based upon the following, this office hereby modifies 96-ORD-176 and 96-ORD-237, a related decision issued shortly after 96-ORD-176. Both decisions were erroneously postulated on the notion that equal privacy interests could be attributed to aggregate information contained in a water bill for a customer with multiple unidentified users and information contained in a water bill for a single residential user. Although the Department relied in good faith on 96-ORD-176, this office finds that disclosing the requested aggregate information would not identify the water and sewer usage of specific individuals; accordingly, that information cannot properly be characterized as "personal." The interest of the public in ensuring that the Department has, and fairly enforces a uniform billing structure for all customers outweighs the nonexistent privacy interest implicated by the disclosure of the requested billing records.

Upon receiving notification of Mr. Moore's appeal from this office, Mr. Pennington advised that the City of Danville "maintains ordinances and utility policies and procedures that provide the utility services of any customer [that] does not pay its bills will be terminated." Inasmuch as Mr. Moore "[p]resumably" desired to confirm that all of the named entities were paying their utility bills, 2 Mr. Pennington observed that "if those entities weren't paying their utility bills, then their utility services would be terminated. For that reason, Mr. Moore has no legitimate reason for these documents that would outweigh the substantial privacy interests of these private municipal customers. " In closing, Mr. Pennington noted that the Department's position "rests squarely upon the decision of the Kentucky Attorney General in 96-ORD-176, a decision that has never been reversed and remains good precedent."

Pursuant to KRS 61.880(2)(c) and 40 KAR 1:030, Section 3, and in light of 96-ORD-237, which partially distinguished 96-ORD-176, the undersigned counsel asked Mr. Pennington to provide this office with additional information to assist in resolution of the instant appeal; specifically, "whether any of the named entities have entered into a contract under the terms of which they receive billing privileges." In 96-ORD-237, the Attorney General held, in relevant part, that because a private company (Kroger) had entered into a contract with a local utility company (WMU) "to avail itself of billing privileges," it was "subject to greater public scrutiny and a corresponding diminution in its right of privacy [,]" and its billing records were thus not protected. Id., p. 2. In response, Mr. Pennington advised that Heidi Lowry, an employee of the "billing section" of the Department, had indicated to him "that the entities in question do not receive any billing privileges." 3 Both 96-ORD-176 and 96-ORD-237 were based on a flawed premise, namely that a multiple user entity has a privacy interest in aggregate information contained in a water bill that is equivalent to that of a single residential customer.

In Commonwealth v. Chestnut, Ky., 250 S.W.3d 655, 663 (2008), the Kentucky Supreme Court expressly recognized the prerogative of the Attorney General to depart from precedent, declaring that the "Attorney General was permitted to reexamine -- and even reject -- its former interpretation of the law." Significantly, the Court went on to find that "any shock the [agency] suffered when the Attorney General changed course certainly caused the [agency] to suffer no lasting prejudice, even though the [agency] was barred from seeking the Attorney General to reconsider his [decision], because the [agency] had the right, which it obviously exercised, to appeal the Attorney General's" decision to circuit court. Id. The facts presented in this appeal compel us to reexamine, and ultimately reject our earlier position as it relates to utility billing records of a multiple user entity.

In resolving the question presented, our analysis is guided by the legislative statement of policy codified at KRS 61.871, declaring that "free and open examination of public records is in the public interest and the exceptions provided for by KRS 61.878 or otherwise provided by law shall be strictly construed," as well as the judicial recognition that the Open Records Act "exhibits a general bias favoring disclosure. " Kentucky Board of Examiners of Psychologists v. The Courier-Journal and Louisville Times Company, Ky., 826 S.W.2d 324, 327 (1992). As the Kentucky Supreme Court has emphasized, the "unambiguous purpose of the Open Records Act is the disclosure of public records even though such disclosure 'may cause inconvenience or embarrassment to public officials or others.'" Beckham v. Board of Education of Jefferson County, Ky., 873 S.W.2d, 575, 577 (1994), citing KRS 61.871.

Despite this "manifest intention to enact a disclosure statute," the General Assembly has mandated that certain records are not subject to public inspection. Among those records excluded from application of the Act in the absence of a court order are public records "containing information of a personal nature where the public disclosure thereof would constitute a clearly unwarranted invasion of personal privacy. " KRS 61.878(1)(a). When denying access to public records pursuant to this exception, as with any other, the public agency has the burden of proof. KRS 61.880(2)(c).

In Kentucky Board of Examiners, above, the Kentucky Supreme Court established the standard by which this office must determine whether a public agency has properly relied on KRS 61.878(1)(a) as the basis for denying access to public records. Recognizing the Act "exhibits a general bias favoring disclosure, " the Court formulated a test whereby "the public's right to expect its agencies properly to execute their functions" is measured against the "countervailing public interest in personal privacy" when the records sought contain information that touches upon the "most intimate and personal features of private lives." Id. at 327-328. Resolving the question of whether a public agency properly relied upon KRS 61.878(1)(a) necessarily turns on whether the offense to personal privacy that would result from disclosure of the information contained therein outweighs the benefit to the public, and is an "intrinsically situational" determination that can only be made within a "specific context." Id. However, the "clearly unwarranted" standard "tips the scales in favor of disclosure. " 03-ORD-084, p. 4.

As indicated, the public's "right to know" under the Act is premised upon the right of the public to expect its agencies to properly execute their statutory functions. Kentucky Bd. of Examiners, above, at 328. Generally speaking, inspection of public records may reveal whether the public servants are indeed serving the public, "and the policy of disclosure provides impetus for an agency steadfastly to pursue the public good." Id. Echoing this view, the Court of Appeals refined the standard of Kentucky Bd. of Examiners in Zink v. Commonwealth of Kentucky, Ky. App., 925 S.W.2d 825 (1994). In discussing its "mode of decision," the Court of Appeals observed:

[O]ur analysis begins with a determination of whether the subject information is of a 'personal nature.' If we find that it is, we must then determine whether public disclosure 'would constitute a clearly unwarranted invasion of personal privacy. ' This latter determination entails a 'comparative weighing of antagonistic interests' in which the privacy interest in nondisclosure is balanced against the general rule of inspection and its underlying policy of openness for the public good. [Kentucky Bd. of Examiners] at 327. As the Supreme Court noted, the circumstances of a given case will affect the balance. Id. at 328.

In determining whether an invasion of privacy was warranted on the facts presented in Zink, the Court emphasized that its "analysis does not turn on the purposes for which the request for information is made or the identity of the person making the request." Id. at 828. Rather, the only relevant public interest considered "is the extent to which disclosure would serve the princip[al] purpose of the Open Records Act. . . . At its most basic level, the purpose of disclosure focuses on the citizens' right to be informed as to what their government is doing." Id. at 829.

Applying the foregoing analysis, in 96-ORD-176 this office found that "customer billing records contain information which 'touches upon the personal features of private lives'." Id., quoting Zink at 828. To the extent such information "'can be used to infer a particular lifestyle of a residential customer or suggest the competitive position of commercial and industrial customers, '" the Attorney General agreed that "it is not unreasonable to assume that [a public utility's] customers have at least some expectation of privacy in their billing records." 96-ORD-176, p. 2. Accordingly, this office concluded "that billing records contain information of a personal nature" and the "relevant public interest supporting disclosure" in that appeal "did not outweigh the privacy interests of individual customers in their billing records." Id., pp. 2-3. In so holding, this office noted that WMU had indicated a willingness to provide "generic billing information without individual customer names" which could be used "to verify billing methodology and calculations." Id. Release of "specific billing information, which identifies individual users and their individual water and sewer usage, " was, in our view, "simply too invasive." Id., p. 3. This office continues to ascribe to this view as it relates to individual users but modifies its position as it relates to aggregate information contained in billing records of multiple user entities. The Open Records Act does not support the proposition that "the competitive position of commercial and industrial customers" is personal in nature or that its disclosure constitutes a clearly unwarranted invasion of personal privacy.

In 96-ORD-237, this office was presented with a second appeal involving the same parties. Relying on KRS 61.878(1)(a) and 96-ORD-176, the utility maintained that such billing records "'contain personal, private, and confidential information as to the amount of water required for the manufacturing process, the amount of sewer discharge of the manufacturing process, and the rates being paid for water, sewer, and solid waste utility services.'" 96-ORD-237, p. 1. The requester clarified that he was not concerned with verifying billing methodology and calculations, but with "determining the existence of, and compliance with, agreements by which billing privileges" were conferred on these industrial customers. Id. In response, the utility argued that releasing the requested water and sewer billing information "would expose these industri[al] customers to unfair business competition by divulging information about their respective manufacturing processes." Id., p. 2.

The Attorney General found that because Kroger had entered into a contract with the city and the utility, pursuant to which it received certain billing privileges, it was "subject to greater public scrutiny and a corresponding diminution in its right of privacy. " 4 Id., p. 2. Accordingly, this office held that the utility erred in withholding Kroger's billing records. In the "absence of proof that similar billing privileges [had] been extended to [Martek]," the Attorney General found that the utility properly withheld its records. Id. Here, the Department has twice confirmed that no billing privileges have been extended to EMRMC, Centre, or CKACS. Because this office no longer equates the privacy interest of a multiple user entity with the privacy interest of a single residential user, the Attorney General finds that the billing records in dispute must be disclosed notwithstanding the nonexistence of billing privileges vis-a-vis these customers.

Aggregate billing information of a multiple user entity, as opposed to specific information regarding use by a single customer, cannot properly be characterized as "personal in nature." Accordingly, this office proceeds no further in the relevant analysis. To the extent 96-ORD-176, 96-ORD-237, or any other decisions of this office recognize a privacy interest in aggregate billing information contained in the records of a public utility, those decisions are hereby modified. 5

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 96-ORD-176, the requester asked Winchester Municipal Utilities for copies of monthly water and sewer bills paid by the Kroger Company and the Martek Company for a specified time period.

2 In his letter of appeal, Mr. Moore specified that he wished to confirm that all of the named entities, which are "large water consumption businesses," are "paying the City of Danville their proportional share of water, sewer, and storm water fees."

3 Upon reviewing 96-ORD-237, a copy of which the undersigned counsel forwarded to him upon request, Mr. Pennington advised that Ms. Lowry had again confirmed that "the City does not have contracts with any of the entities referred to in the open records request of Mr. Moore that would confer upon those entities special billing privileges." Accordingly, Mr. Pennington reiterated that 96-ORD-176, "and the portion of the decision of the Attorney General in 96-ORD-237 that related to Martek Company [the Kroger received billing privileges but Martek did not]" validate the Department's position.

4 Our holding today does not alter this reasoning.

5 Our holding today does not limit the right of a public agency to withhold records, or portions thereof confidentially 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" per KRS 61.878(1)(c)1. No evidence has been presented in this appeal that any of the named entities would suffer a commercial disadvantage from disclosure of information that is used in calculating their bills.

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Requested By:
Clay P. Moore
Agency:
City of Danville Water and Sewer Department
Type:
Open Records Decision
Lexis Citation:
2009 Ky. AG LEXIS 99
Forward Citations:
Neighbors

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