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 Department of Revenue violated the Open Records Act in the disposition of a request by attorney Kipley J. McNally for records relating to his client, Taylorsville Lake Marina, Inc. For the reasons stated below, we find no violation of the Act.
Mr. McNally requested copies of the following from the Department on March 26, 2014: "all documents, whether in paper, digital, or other format, contained in your files related to, used for, or relied upon, in relation to the above referred case regarding Taylorsville Lake Marina, Inc." The request expressly included all relevant correspondence between the Spencer County Property Valuation Administrator (PVA) and the Office of Property Valuation in the Department of Revenue.
Only two items are in dispute. The first is a memorandum titled "Is It Real Estate or Tangible Personal Property?" which was made an attachment to an e-mail from David Gordon (Department of Revenue) to Sheila Robertson (Department of Revenue) and Kim Stump (Spencer County PVA) on June 5, 2013. The Department invokes attorney-client privilege and the work product doctrine as to this memorandum.
The Kentucky Court of Appeals has recognized that "the protections generally afforded by the attorney-client privilege have been recognized and incorporated into the [Open Records Act] by the Kentucky General Assembly." Hahn v. University of Louisville, 80 S.W.3d 771, 774 (Ky. App. 2001). The court reasoned as follows:
[The attorney-client privilege, codified at KRE 503,] recognizes that sound legal advice and advocacy serve vital public purposes and that such advice and advocacy depend upon a guarantee of confidentiality between attorney and client. Upjohn v. United States, 449 U.S. 383, 389, 101 S. Ct. 677, 682, 66 L. Ed. 2d 584, 591 (1981).
KRE 503(b) provides that:
KRE 503(a)(5) states that a communication is deemed
The privilege attaches to confidential communications made for the purpose of facilitating the process of rendering professional legal services to a client; counsel must be acting in the course and scope of employment for the client, and the communication must pertain to the matter within the course and scope of that employment . KRE 503(a)(2); Underwood and Weissenberger, Kentucky Evidence 2001 Courtroom Manual, § 503 (2000).
Hahn at 775-776 (emphasis added).
The decisions of this office have also consistently held that the attorney-client privilege is incorporated into the Open Records Act through KRS 61.878(1)(l). In 97-ORD-127, we stated:
KRS 61.878(1)(l) . . . operates in tandem with KRE 503 to exclude from public inspection otherwise public records protected by the attorney-client privilege. KRE 503(b) establishes the general rule of privilege, [which] consists of three elements: The relationship of attorney and client, communication by or to the client relating to the subject matter upon which professional advice is sought, and the confidentiality of the expression for which the protection is claimed . Robert G. Lawson, The Kentucky Evidence Law Handbook § 5.10 (Michie, 3rd ed. 1993), citing United States v. Schwimmer, 892 F.2d 237, 243 (2nd Cir. 1989). Its purpose is to [e]nsure that confidences exchanged by an attorney and client are protected, thereby encouraging them to freely communicate. . . . The privilege extends to communications from attorney to client " if they constitute legal advice , or tend directly or indirectly to reveal the substance of a client confidence." Kentucky Evidence Law Handbook at § 5.10 citing United States v. Defazio, 899 F.2d 626, 635 (7th Cir. 1990). Of course, the privilege "must be strictly construed and given no greater application than is necessary to further its objective." Kentucky Law Evidence Law Handbook § 5.10.
(Emphasis added.) "KRE 503(c) presumes that lawyers have authority to assert the privilege on behalf of clients. It is to be expected that lawyers will claim the privilege for clients in the absence of explicit directions to the contrary." Kentucky Evidence Law Handbook, supra , at § 5.10.
The memorandum entitled "Is It Real Estate or Tangible Personal Property" has been provided to this office for in camera review. We note that it takes the form of an undated legal research memorandum prepared by attorney Douglas Dowell of the Department of Revenue with technical assistance from Billy W. Whittaker, Tax Consultant. According to Department attorney Greg A. Jennings, Director of the Office of Property Valuation, this legal memorandum was "distributed internally" to Mr. Dowell's clients, namely the Department of Revenue and the Property Valuation Administrators of Kentucky. Mr. Jennings notes that "[t]he DOR has supervisory responsibility over the PVAs pursuant to KRS 132.420 and provides direct legal advice to said PVAs."
From our review of the memorandum, it does indeed appear that it constituted legal advice and was prepared for Mr. Dowell's clients in the course of legal representation. As for the confidentiality of the communication, we find nothing in the record to suggest that the document has been shared with anyone beyond the Department of Revenue and the Property Valuation Administrators, for whom the Department provides legal representation. Furthermore, in the context of this open records appeal, Mr. Jennings has expressly stated in an e-mail to Mr. McNally, dated June 17, 2014, that the disputed records were being sent to the Attorney General for in camera review but were not being sent to Mr. McNally. Thus, there are no indications that the memorandum's confidentiality has been waived. 97-ORD-127.
The involvement of Billy Whittaker as a tax consultant in preparing the memorandum does not affect its confidentiality, since the attorney-client privilege also extends to communications from a "representative of the lawyer," defined as "a person employed by the lawyer to assist the lawyer in rendering professional legal services. " KRS 503(a)(4); see also Kentucky Evidence Law Handbook, supra , at § 5.10 (privileged communications can "occur in the presence of accountants, physicians, engineers or experts of other types needed for the performance of legal services" ). Similarly, the fact that the legal memorandum was transmitted to Kim Stump in this instance by David Gordon, a non-lawyer in the Department of Revenue, does not affect its confidentiality, since the Department provides legal advice to the PVA and Mr. Gordon acted as a representative of the Department's lawyers when he communicated the document to her. Cf. Kentucky Evidence Law Handbook at § 5.10, citing Asbury v. Beerbower, 589 S.W.2d 216 (Ky. 1979) (communication between insured and liability insurance company concerning potential claim covered by the policy was covered by attorney-client privilege when company was required to provide legal counsel for insured) .
The legal memorandum was therefore protected by the attorney-client privilege under KRE 503, as incorporated into the Open Records Act by KRS 61.878(1)(l). Accordingly, we not need address the Department's invocation of the work product doctrine.
The second item in dispute is a string of e-mails dated July 3, 2012, among the same three individuals, with the subject line "Marina DRAFT" (emphasis in original). There were no attachments to these e-mails. The Department has withheld these records under KRS 61.878(1)(j) as containing "[p]reliminary recommendations, and preliminary memoranda in which opinions are expressed or policies formulated or recommended."
Mr. Jennings refers to the following passage from our recent decision in 14-ORD-017:
[T]he Attorney General has recognized that "KRS 61.878(1)[(i) and (j)] have been interpreted to authorize the nondisclosure of both interagency and intra-agency drafts and memoranda, and are designed to encourage frank discussion of matters of concern to the public agency or agencies." 93-ORD-125, p. 4. As evidenced by a review of the relevant authorities, that rationale is deemed "equally compelling regardless of whether the communications are within an agency or between agencies." Id .
Thus, communications either within or between agencies may be deemed preliminary under KRS 61.878(1)(j).
In those published cases and decisions of the Attorney General which refer to documents as losing their "preliminary" characterization, the exempt status is lost only because the document has been adopted as the basis of final agency action and made a part of that final action. See, e.g., Ky. State Bd. of Medical Licensure v. Courier-Journal and Louisville Times Co., 663 S.W.2d 953, 956 (Ky. App. 1983); City of Louisville v. Courier-Journal and Louisville Times Co., 637 S.W.2d 658, 659 (Ky. App. 1982); 93-ORD-9; 97-ORD-168; 08-ORD-230. Therefore, if the July 2012 e-mails were not adopted as the basis of a final action, they remain preliminary and need not be disclosed.
From his appeal dated May 15, 2014, it appears that Mr. McNally is under the impression that the July 2012 e-mails contain a memorandum. He calls this supposed document the "Marina Draft Memorandum" and believes it is somehow analogous to a 1991 memorandum from Billy W. Whittaker instructing all Property Value Administrators that floating marinas should be classified as real property. In fact, however, having reviewed the contested e-mails in camera , we note that they contain no such memorandum.
Rather, the e-mails consist of discussions regarding a course of action on a specific matter. In the Department's response to the appeal dated June 17, 2014, Mr. Jennings accurately characterizes the e-mails as "a discussion and advice that PVA Stump was seeking from DOR policy employees regarding Mr. McNally's client, Javan Montgomery, who owns the Taylorsville Lake Marina. " Recommendations are made and opinions are expressed in the e-mails. Mr. Jennings states that the communications "are frank discussions regarding Mr. McNally's client but does [sic] not represent any matter that related to a final agency action on the part of the DOR or the PVA." After reviewing the e-mails, we agree. Since these records were properly deemed preliminary under KRS 61.878(1)(j), the Department of Revenue did not substantively violate the Open Records Act by withholding them from inspection.
We do, however, find a procedural violation in connection with the Department's invocation of the attorney-client privilege with respect to the legal memorandum. The Department's initial response, dated April 29, 2014, was procedurally deficient insofar as it did not "include a statement of the specific exception authorizing the withholding of the record," namely subsection (1)(l) of KRS 61.878, as required by KRS 61.880(1). See 12-ORD-062. Substantively, however, we find no violation of the Open Records Act.
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.