Opinion
Opinion By: Jack Conway, Attorney General; James M. Herrick, Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether the Cabinet for Health and Family Services, Division of Behavioral Health, violated the Open Records Act in its disposition of Elizabethtown City Attorney Deborah L. Shaw's September 18, 2009, request for copies of records related to an application to operate a proposed methadone clinic. For the reasons that follow, we conclude that although the Division of Behavioral Health failed to make a timely response to Ms. Shaw's request under KRS 61.880(1), there was no substantive violation of the Act in its ultimate disposition of the request.
Ms. Shaw's original request, faxed to the Division on September 18, 2009, was for the following:
1. Complete application of Dr. Lori Nation, Elizabethtown Addition [sic] Solutions, LLC for a proposed Methadone Clinic to be located in Elizabethtown, Kentucky.
2. Of upmost priority, we request the Memoranda of Agreement attached to the agreement from Hardin Memorial Hospital, Hardin County Detention Center and the Hardin County Sheriff's Office.
The first response came on September 25, 2009, two days beyond the time set forth in KRS 61.880(1), from Division Director Donna J. Hillman, who stated as follows:
Your request was received and referred to our Office of Legal Services for review. I received notice today that the records are to be released to you upon receipt of your check for $ 10.44 made out to the Kentucky State Treasurer. There are 73 pages to the application and the cost per page for copying is $ .10 plus $ 3.14 for postage. ? The records will be prepared, copied and mailed to you within the next 10-15 days.
Ms. Hillman gave no reason for the additional delay of 10 to 15 days as required by KRS 61.872(5). On October 14, Ms. Shaw initiated the present appeal to the Attorney General, stating: "This check [for $ 10.44] was mailed on September 28, 2009. To date, we have still received none of the requested records."
The response to this appeal was submitted on November 13, 2009, by Assistant Counsel Jon R. Klein, Cabinet for Health and Family Services, who indicates that the Division provided twelve pages of documents to Ms. Shaw on November 3, 2009, and promised a refund of the full amount paid. For an explanation of why the other 61 pages of records were not provided, he cites the November 3 response letter from Donna J. Hillman, which states as follows:
Upon advice of legal counsel, the Cabinet has withheld the following documents and the basis for withholding same is identified therewith:
1. the identity and personal information of proposed staff of the facility has been redacted on the grounds that any individuals who have indicated an interest in working at this facility, which has not yet opened its doors for business, are not yet committed to employment at the facility and release of their identity could compromise their current employment as these individuals may well change their minds before operations at this facility begin. At this point in time, release of their identities would constitute an unwarranted invasion of these individuals['] personal privacy in accordance with KRS 61.878(1)(a), and therefore, the Cabinet has withheld this information, in addition to any other personal identifying information about these individuals including their dates of birth, social security numbers, telephone numbers, home addresses, and any other such personal information that may be maintained by the Cabinet.
2. Furthermore, the healthcare delivery business is a highly competitive endeavor and the work associated with the development and implementation of a proposed program of services would be of interest to prospective competitors of the applicant. Based upon the written assertions of counsel for the applicant, and the general recognition that the below identified records are considered confidential and/or proprietary, and the fact that these records are required to be disclosed to the Cabinet during the review of a license to operate the intended business enterprise in accordance with 908 KAR 1:340, the below identified records have been withheld and deemed exempt from disclosure under the Open Records Act in accordance with KRS 61.878(1)(c)2.d.:
a. the plan of operation of the facility;
b. materials related to a proposed patient identification system unique to this facility/provider;
c. the facility/provider's chain of command;
d. the roles of the proposed staff members;
e. the proposed fee schedule;
f. any and all drawings of the facility which could also pose a security threat for employees and patients if disclosed;
g. records relating to client selection systems; admission procedures, criteria and forms; the client handbook; termination procedures and form; and, grievance and appeal procedures;
h. Records relating to program rules and instructions, operational procedures, dosage level information, inventory maintenance, urinalysis procedures and forms, and emergency and disaster procedures;
i. The facility's financial records including their funding sources and proposed first year budget; and,
j. Any memoranda for supportive services entered into between E'town Addiction Solutions, LLC and any private, third-party entity required to be submitted per 908 KAR 1:340, as these are generally recognized as confidential and proprietary and are agreements between two private entities. The Cabinet is, however, disclosing to you those memoranda for supportive services entered into between E'town Addiction Solutions, LLC and any public agency, as the public agency would likewise be required to disclose such documents pursuant to the Open Records Act upon a properly submitted request.
We address first the records withheld on grounds of personal privacy under KRS 61.878(1)(a). In 02-ORD-221, this office noted that applications and resumes of unsuccessful applications for public employment had consistently been regarded as protected from disclosure under KRS 61.878(1)(a). The "clearly unwarranted invasion of personal privacy" existed not only because present and future employers could learn that those individuals were deemed less qualified than others, but also because "[t]he simple fact that the unsuccessful applicant wished to leave his present employment might prove embarrassing." 02-ORD-221, p. 2.
That same privacy interest is present in this case, but weighs even more strongly here since the usual countervailing public interest "in the competence of the applicants public agencies hire and the agencies' adherence to proper hiring practices" is absent. See 03-ORD-084, p. 5. The hiring for the clinic in this instance had not occurred yet and, in any event, was not being done by a public agency. Therefore, the Division properly withheld the identifying information for proposed facility staff on privacy grounds under KRS 61.878(1)(a).
As to the various materials withheld pursuant to KRS 61.878(1)(c)2.d, we observe that that section authorizes the nondisclosure of
records confidentially disclosed to an agency or required by an agency to be disclosed to it, generally recognized as confidential or proprietary, which are compiled and maintained . . . [f]or the grant or review of a license to do business[.]
To claim the protection of this exception, a public agency must establish that the records in dispute: "(1) are confidentially disclosed to the agency or required by the agency to be disclosed to it; (2) are generally recognized as confidential or proprietary; and (3) are compiled and maintained for the grant or review of a license to do business." 99-ORD-220, p. 8; accord, 95-ORD-107. The records at issue in this appeal satisfy the first and third parts of this three-part test, since there is no apparent dispute that the information in question was confidentially provided to the Division pursuant to regulatory requirements in connection with the private entity's application for a license to do business. The remaining question is whether the records withheld are generally recognized as confidential or proprietary. In addressing this question we are guided by the knowledge that in KRS 61.880(2)(c) the General Assembly has assigned the burden of proof to the public agency.
Mr. Klein, in supplemental correspondence to this office dated December 23, 2009, states the following:
[T]he information withheld pertains to the inner workings of the corporation. Disclosure of the withheld records would allow the public, including a competitor, access to the minute details of the operation of the business. More specifically, the information withheld is not the type that a company would readily provide to the public or a competitor for fear that it could be used by others to provide the same or similar services, or otherwise undercut the company's business. This information would not have been disclosed if it had not been a required part of the licensure process under 908 KAR 1:340. These records should be found to be exempt from disclosure under the Open Records Act due to the confidential and proprietary nature.
In Hoy v. Kentucky Industrial Revitalization Authority, 907 S.W.2d 766, 768 (Ky. 1995), a case which Mr. Klein cites, the Court noted that "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)." Although the Court in that case was primarily concerned with financial information, we agree that the types of information and documentation at issue in this appeal, to the extent they do not concern finances, at least represent corporate assets that have required the expenditure of time and money to develop and concern the inner workings of the private entity.
We therefore believe the Division has met its burden in regard to the applicability of KRS 61.878(1)(c)2.d. Accordingly, while the Division committed a procedural violation of the Act by its lack of a timely response, its substantive disposition of Ms. Shaw's request was correct.
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.
Deborah L. Shaw, Esq.Donna HillmanJon R. Klein, Esq.