Opinion
Opinion By: Andy Beshear,Attorney General;J. Marcus Jones,Assistant Attorney General
Open Records Decision
The issue presented in this appeal is whether the Kentucky Retirement System ("KRS") violated the Open Records Act in the disposition of multiple requests for records submitted by Grahmn N. Morgan ("Appellant"), counsel for Prisma Capital Partners LP ("Prisma") and Pacific Alternative Asset Management Company, LLC ("PAAMCO"). For the reasons stated below, we find that KRS initial responses to Appellant's requests violated KRS 61.880(1) by vaguely describing records as "documents or communications" and providing no categorization of the records, thus failing to provide "a brief explanation of how the exceptions applied to the records withheld. " KRS further violated KRS 61.880(1) by responding in error to two requests, but corrected the error on appeal. KRS also failed to meet its burden of proof to demonstrate that KRS 61.878(1)(i) and (j), CR 26.02, KRE 503, and KRE 408, each incorporated into the Act by operation of KRS 61.878(1)(1), authorized withholding of records by refusing to provide this office the records withheld for in camera review pursuant to KRS 61.880(2)(c).
Background
This appeal relates to a Franklin Circuit Court case, captioned Mayberry, et al. v. KKR & Co. L.P. Appellant states that the Mayberry complaint names KRS as a nominal defendant. Appellant explained that the Mayberry Plaintiffs are current and former members of KRS bringing tort claims against various defendants, including Prisma/PAAMCO. The defendants attempted to dismiss the case based on Plaintiff's standing to file suit.
Plaintiffs and KRS filed a Joint Notice ("Notice") in response to the motion to dismiss. The Notice states KRS established an independent special litigation committee ("SLC") to investigate and determine what role KRS should take in the litigation. KRS decided that it will not pursue claims, and it is in the best interest of KRS for Plaintiffs to pursue the claims on their behalf. The Notice lists specific SLC findings that served as a basis for the decisions, including: evaluations of the Plaintiffs' legal counsel; evaluation of the claims; the financial benefits of the litigation; and the burdens KRS would avoid by allowing the Plaintiffs to pursue claims. The Notice does not state any claims the Plaintiffs have against KRS.
On April 2, 2018, Appellant submitted his first open records request to KRS, seeking records related to the decision not to pursue claims and not to object to Plaintiff's pursuit of claims. On April 17, 2018, KRS denied the request pursuant to KRS 61.878(1)(i) and (j) stating the records were "preliminary."
On April 30, Appellant responded by resubmitting his original request and adding eleven additional requests. Appellant numbered his requests and described them as follows:
(1) Documents and communications that identify the members of the "independent special litigation committee of the Board of Trustees" referenced in the Joint Notice;
(2) Documents and communications that identify the date on which the "independent special litigation committee of the Board of Trustees" was established;
(3) Documents and communications related to the determination of "what role KRS should take" in the Action as stated in the Joint Notice;
(4) Documents and communications related to KRS's decision to "not pursue the claims asserted by Named Plaintiffs" as stated in the Joint Notice;
(5) Minutes, notes, reports, presentations, or recordings relating to any meetings (whether in-person, online, telephonic, or otherwise) during which any members of the KRS Board of Trustees, any officers or agents of KRS, or any members of the independent special litigation committee of the KRS Board of Trustees discussed, received information concerning, or deliberated on "what role KRS should take" in the Action and/or KRS's decision to "not pursue the claims asserted by Named Plaintiffs;"
(6) Communications by, between, or among KRS or its agents and Plaintiffs or Plaintiffs' counsel relating to any of the subject matter in the Joint Notice or the conclusions stated therein;
(7) Documents provided to or received from Plaintiffs and/or Plaintiffs' counsel regarding or relating to the statement in the Joint Notice that "Named Plaintiffs agree that the current KRS Trustees have expended diligent and significant efforts, . , investigating the merits of the claims made by Named Plaintiffs in this litigation....",
(8) Documents and communications relating to any agreements concerning fees and/or expenses between Plaintiffs' counsel and Plaintiffs and any agreements between Plaintiffs' counsel and any consultants or experts;
(9) Documents and communications regarding or relating to William Lerach and/or Pensions Forensics, LLC;
(10) Documents and communications relating to any request to the Kentucky Attorney General to pursue the claims asserted or that could be asserted in the Action; and
(11) Documents considered by KRS in reaching its decision not to pursue the claims in the Action.
Request number 12 was the restatement of the original request.
On May 31, 2018, KRS informed Appellant that it possessed no responsive records for requests 8 and 10. KRS also informed him that it had produced all responsive records for requests 1 and 2. However, KRS denied all of the remaining requests, either in whole or in part. KRS only identified the withheld records as "documents and communications." To provide "a brief explanation of how the exceptions applied to the records withheld" as required by KRS 61.880(1), KRS repeated a non-specific phrase, "[c]ertain documents or communications have been located but are exempt from production pursuant to Kentucky Revised Statute 61.878(1) as beyond the scope of discovery under CR 26.02 and/or privileged communications under evidentiary rule KRE 503 or settlement communications under KRE 408[.]" KRS did specify that the denial under KRE 503 included an assertion of the "common interest privilege."
On October 1, 2018, Appellant appealed the disposition of his requests. On October 10, 2018, the Attorney General asked KRS to provide this office with copies of the responsive records withheld for the limited purpose of in camera review for substantiation, pursuant to KRS 61.880(2)(c)1 and 40 KAR 1:030, Section 3. 2 The office also asked that KRS "include a statement of the specific exemption authorizing the withholding of the record and a brief explanation of how the specific exemption applies to the record withheld, " and "specify the categories of records withheld. "
On October 29, 2018, KRS refused the office's request arguing that disclosure would constitute a waiver of the underlying privileges. KRS complied with the request to categorize the records, and identified them as "litigation emails" and a "litigation packet. " However, KRS provided only a general description of the records. KRS described the litigation emails as "nine (9) pages of emails. ..between counsel for KRS and counsel for the named Plaintiffs[.]" The litigation packet was described as "a 110-page packet. ..Plaintiff's counsel presented...in confidence to KRS's counsel and special litigation committee during a March 27, 2018 meeting."
KRS used the response to the office's request as an opportunity to correct its initial responses to requests 1 and 10. KRS stated that the litigation emails were responsive to Appellant's request 1, for which it had disclosed all responsive records. KRS also stated that the litigation packet was responsive to Appellant's request 10, for which it had stated there were no responsive records. KRS corrected those errors on appeal. However, KRS reaffirmed its position that the litigation emails and litigation packet were exempt from Appellant's requests under KRS 61.878(1)(i)-(j), CR 26.02, KRE 408, and KRE 503.
KRS' Initial Responses Violated KRS 61.880(1) . The initial responses to Appellant's requests did not categorize the withheld records and only vaguely described them as "documents or communications." Additionally, KRS repeated a non-specific phrase as its brief explanation of how the relied upon exceptions applied to the records withheld. Thus, KRS violated KRS 61.880(1) 3 in failing to assign the records to meaningful categories and in failing to provide "a brief explanation of how the exceptions applies" specific to a particular set of records.
In
Edmondson v. Alig, 926 S.W.2d 856, 858 (Ky. App. 1996), the Court of Appeals found that KRS 61.880(1) requires the agency "to provide particular and detailed information in response to a request for documents," admonishing the public agency for its "limited and perfunctory response." In 2013, the Supreme Court reaffirmed this view, declaring that an agency's denial must be "detailed enough to permit [the reviewer] to access its claim and the opposing party to challenge it."
Kentucky New Era, Inc. v. City of Hopkinsville, 415 S.W.3d 76, 82 (Ky. 2013). KRS' denials contained statements of specific exceptions authorizing the withholding of the record, but did not provide an explanation of how those exceptions apply to a specific record. To explain how an asserted exception applies, as required by KRS 61.880(1), the agency must adequately identify and describe the withheld record. Otherwise, the agency cannot meet its burden of proof under KRS 61.880(2)(c). KRS failed to satisfy its burden.
KRS argues that neither this office nor the Kentucky courts have ever required an itemized index correlating each document withheld with a specific exemption, such as that required by the federal courts in
Vaughn v. Rosen, 484 F.2d 820 (D.C. Cir. 1973), cert. denied, 415 U.S. 977 (1974). However, "we believe that [a public agency] is obligated to provide particularized justification for the withholding of documents, or groups of documents, which are properly excludable [footnote omitted], and to release any documents which do not fall squarely within the parameters of the exception and are therefore not excludable." 97-ORD-41, p. 6; 04-ORD-106. In
City of Ft. Thomas v. Cincinnati Enquirer, 406 S.W.3d 842, 852 (Ky. 2013), the Kentucky Supreme Court required that an agency "must identify and review its responsive records, release any that are not exempt, and assign the remainder to meaningful categories." (Emphasis added). The Court found that a category is meaningful if it "allows the court to trace a rational link between the nature of the document and the alleged likely [harm to the agency]." Id. (quoting
Bevis v. Dept. of State, 801 F.2d 1386, 1389 (D.C. Cir. 1986)). KRS' initial categorization of the records as "documents and communications" was inadequate. Coupled with repeating a non-specific phrase as an explanation of how the relied upon exceptions applied to the records withheld, the initial responses violated KRS 61.880(1).
KRS Failed to Meet Its Burden of Proof and justify Withholding Responsive Records . KRS declined the office's request for access to the withheld records, arguing that participating in the review process was discretionary and would be a waiver of privileges. KRS' response to our KRS 61.880(2)(c) request demonstrates a fundamental misunderstanding of the review process. Compliance with a request by the Attorney General pursuant to KRS 61.880(2)(c) is not permissive. Rather, KRS 61.880(2)(c) vests the Attorney General with discretion as to whether such a request is necessary under the circumstances presented in a particular appeal, whereas compliance by the agency is mandatory. As with any decision involving application or interpretation of a statute, our duty "is to ascertain and give effect to the intent of the General Assembly."
Beckham v. Bd. of Educ. of Jefferson Cty., 873 S.W.2d 575, 577 (Ky. 1994) (citing
Gateway Const. Co. v. Wallbaum, 356 S.W.2d 247 (Ky. 1962)). The Attorney General is not at liberty to add or subtract from the legislative enactment "nor discover meaning not reasonably ascertainable from the language used." Id. In the absence of a statutory definition, this office "must construe all words and phrases according to the common and approved uses of language" pursuant to KRS 446.080(4).
Claude D. Fannin Wholesale Co. v. Thacker, 661 S.W.2d 477, 480 (Ky. App. 1983).
The Attorney General is bound to maintain the confidentiality of the records and disclosure would not have constituted a waiver as to any privilege. See 96-ORD-106, p. 5; 10-ORD-079; 17-ORD-221. Referring to KRS 61.880(2)(c) and 40 KAR 1:030 § 3, this office has consistently recognized that "the General Assembly has twice vested the Attorney General with the authority to require production of public records, for which a claim of exemption has been made, for in camera review[.]" 10-ORD-079, p. 5; 17-ORD-221.
A public agency has the statutory burden of justifying its denial of an open records request. KRS "bears the burden to rebut the strong presumption in favor of disclosure. "
Commonwealth v. Chestnut, 250 S.W.3d 655, 660 (Ky. 2008). KRS 61.880(2)(c) is facially unambiguous and provides no exceptions, and KRS "cannot add [such language] where none exists." Id. at 661. In light of 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," and KRS 61.880(2)(c), the Attorney General is "not prepared to accept, without independent confirmation, that all of the responsive documents are shielded from public inspection by KRS 61.878(1)(h), (i), (j), or any other exception[.]" 10-ORD-079, p. 6 (citation omitted); 17-ORD-221. This includes records an agency claims are exempt under the attorney-client privilege. See 16-ORD-133.
When a public agency declines to produce records that are purportedly exempt from disclosure for in camera inspection, the Attorney General's office has repeatedly found that "the agencies whose denials were challenged had not met their burden of proof in sustaining those denials under KRS 61.880(2)(c) ." 10-ORD-079. See 05-ORD-169 (Attorney General's ability to render a decision is "severely impaired" without exercising his authority under KRS 61.880(2)(c) and 40 KAR 1:030 Section 3); 95-ORD-61; 96-ORD-206; 04-ORD-031; 05-ORD-185; 16-ORD-113; 16-ORD-133; 16-ORD-193; 17-ORD-011; 17-ORD-014. The Kentucky Court of Appeals unequivocally endorsed this approach in
Cabinet for Health and Family Srvcs. v. Todd Cty. Std., Inc., 488 S.W.3d 1 (Ky. App. 2016). In admonishing the Cabinet for Health and Family Services for "blatantly refusing to respond to the Attorney General's specific questions" per KRS 61.880(2)(c), the Court observed that CHFS "certainly frustrated the Attorney General's statutory review under KRS 61.880 ..." Id. at 8. The Court declared that a public agency " cannot benefit from intentionally frustrating the Attorney General's review of an open records request ; such result would subvert the General Assembly's intent behind providing review under KRS 61.880(5)." Id. (emphasis added). Accordingly, we find that KRS failed to meet its burden justifying withholding records from Appellant's requests.
No Evidence Supports Finding that the Exceptions Relied on by KRS Apply as a Matter of Law . Though KRS did not support its claims of privilege and exclusion with the records, it cited a recent Franklin Circuit Court opinion to argue that it is nevertheless entitled to withhold the records as a matter of law. In the opinion, the court concluded that "refusal to comply with the OAG's request for documents authorizes the OAG to rule against the agency, absent a clear error of law." Finance and Administration Cabinet v. Kentucky Public Radio, Inc., d/b/a Kentucky Center for Investigative Reporting, No. 18-CI-335 (Franklin Circuit Court, 2018). The court explained that "the agency could defend its denial as a matter of law without producing the documents to the OAG." Id., at 6-7, n. 3. However, this office finds no support in the record for applying the privileges and exceptions as a matter of law.
KRS withheld records as preliminary, pursuant to KRS 61.878(1)(i) and (j)."4 The Attorney General has long recognized that public records which are preliminary in nature forfeit that preliminary status upon being adopted by the agency as a basis for its final action. 18-ORD-198; 05-ORD-177. The Mayberry Notice shows that the withheld records were the basis for KRS delegating its KRS 61.645(2)(a)5 authority to "sue or be sued" to the Plaintiffs. The Notice referenced facts and conclusions from the withheld records as a basis for this final action. The agency does not have to specifically reference records for those records to be adopted into the final agency action. Univ. of Kentucky v. Lexington H-L Services, Inc., d/b/a Lexington Herald-Leader ,--S.W.3d--, 2018 WL 4368680, at *3 (Ky. App. 2018)(unpublished). Rather, preliminary records which form the basis for the agency's final action are subject to disclosure. Id. These facts are significant enough to require KRS to produce records in camera to support the claim of preliminary status. Nevertheless, the Notice is sufficient evidence that the withheld records are not preliminary as a matter of law.
KRS claims that the withheld records are generally exempt under CR. 26.02. However, the civil rule does not exclude responsive records standing alone. This office has found that an agency cannot withhold public records by arguing that the records have no bearing on the civil action to which they relate and are thus not discoverable under the civil rules because they lack relevance. 95-ORD-18, p. 2. KRS 61.878(1) creates no free-standing exception from open records for CR 26.02. Rather, the records must be specifically exempt under one of the exceptions listed in subsections (1)(a) through (1)(p). Accordingly, we find that KRS has not met its burden of proof with respect to withholding records pursuant to CR 26.02, and its denial is not justified as a matter of law.
KRS asserts the attorney-client privilege as an exception authorizing its denial. Again, the attorney-client privilege does not shield records from the Attorney General's in camera review under KRS 61.880(2)(c). 16-ORD-133. 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. Univ. of Louisville, 80 S.W.3d 771, 774 (Ky. App. 2001). However, the attorney-client privilege, codified under KRE 503 and operating in tandem with KRS 61.878(1)(1) 6, is not absolute. The privilege only attaches to a confidential communication "made to facilitate the client in his/her legal dilemma and made between two of the four parties listed in [KRE 503]; the client, the client's representative, the lawyer, or the lawyer's representatives."
The St. Luke Hospitals, Inc., v. Kopowski, 160 S.W.3d 771, 776 (Ky. 2005)(quoting
Haney v. Yates, 40 S.W.3d 352, 355 (Ky.2001)).
The record here does not establish that the withheld communications were solely between parties listed in KRE 503. In fact, the record establishes that the litigation packet was presented at a public meeting and in the presence of non-clients. Although the emails were exchanged between attorneys, there is no evidence that the communications were "made to facilitate the client in his/her legal dilemma" and non-clients were excluded from the exchange. As such, the record does not establish an attorney-client privilege, much less that the privilege exists as a matter of law. We find that KRS did not meet its burden of proof regarding the existence of an attorney-client privilege.
KRS argues that the attorney-client privilege nevertheless applies under the "common interest" application of the privilege. This privilege contemplates two attorneys of two different clients pursuing a common legal objective. KRE 503(b)(3) recognizes that the privilege extends to confidential communications outside the attorney-client relationship:
(3) By the client or a representative of the client or the client's lawyer or a representative of the lawyer representing another party in a pending action and concerning a matter of common interest therein;
As discussed in Robert G. Lawson, The Kentucky Evidence Law Handbook § 5.10, (Michie, 3rd ed. 1993), at p. 238:
The joint defense part of the lawyer-client privilege originated in criminal cases where attorneys "shared information in the course of devising a joint strategy for their clients' defense." It has been broadened to cover a wide range of situations in which multiple clients share common interests. Though most often described as the joint defense privilege, courts have tended recently to label it as the "common interest rule," at least some courts have ruled that that there need not to be actual litigation in progress for the rule to be applicable. KRE 503(b) adopts the "joint defense" or "common interest" rule but limits its application to communications occurring with respect to a "pending action."
However, the "common interest" privilege, like the attorney-client privilege, can be waived upon inclusion of a non-client third party. See
Broessel v. Triad Guaranty Ins. Corp., 238 F.R.D. 215, 219 (W.D. Ky. 2006), (quoting Edna Selan Epstein, The Attorney-Client Privilege and the Work-Product Doctrine , American Bar Association Section of Litigation at 196 (4th ed. 2001)). "Common interest" assumes the existence of a valid underlying privilege. Id. As we have stated, the record shows that the withheld records were shared with non-clients at a public meeting of the SLC and they were referenced in the Notice. In addition, this office was not afforded an opportunity to review the litigation emails to determine whether the communications were "made to facilitate the client in his/her legal dilemma" and non-clients were excluded from those communications. There is evidence in the record that KRS waived the "common interest" privilege. However, we find that there is insufficient evidence that the "common interest" privilege exists as a matter of law.
Finally, KRS relies on the privilege for communications made in the course of settlement negotiations, pursuant to KRE 408. 7 The Kentucky Supreme Court has found that the rule excludes three types of evidence: (1) offers to compromise disputes; (2) settlements of disputes; and (3) statements of fact made or conduct occurring during the course of settlement negotiations.
Norton Healthcare, Inc. v. Deng, 487 S.W.3d 846, 854 (Ky. 2016)(citing Robert G. Lawson, in The Kentucky Evidence Law Handbook § 2.55(1)(a) (LexisNexis Matthew Bender)). There is no evidence that the withheld records fall into any of the three categories, and we cannot reach that conclusion from the very general descriptions KRS offered for the "litigation email" and "litigation packet" categories of records.
Further, KRS cannot rely on this privilege because there is no evidence that the Plaintiffs have claims against KRS or intend to assert claims against KRS in the future. As such, any reliance on the settlement negotiation privilege is foreclosed. There are two prerequisites that the party seeking to enforce the privilege must establish: there must be a dispute as to the validity or amount of a specific claim; and there must be some effort to settle the dispute by agreement, to avoid extending the rule to causal conversation or statements made for some other purpose than settlement. Norton Healthcare, Inc., 487 S.W.3d at 854 (citing Robert G. Lawson, in The Kentucky Evidence Law Handbook § 2.55(1)(b)). KRS cannot meet these prerequisites because there is no evidence of a claim against the agency. Even presupposing a hypothetical claim, there is no evidence that the withheld records were efforts to settle that claim, rather than statements made for some other purpose than settlement. As such, we find that that KRS did not meet its burden of proof, and the record does not establish the existence of a settlement negotiation privilege as a matter of law.
"[T]he Attorney General's duty to conduct a meaningful review and issue an informed and reasoned decision, guided by the statutorily assigned agency burden of proof" must not yield to a noncompliant agency such as KRS. See 17-ORD-011; 17-ORD-192. Accordingly, consistent with KRS 61.880(2)(c), 40 KAR 1:030 Section 3, and prior decisions of the Attorney General, this office finds that KRS failed to satisfy its burden of proof with respect to Appellant's requests for records and violated the Act in withholding responsive records.
A party aggrieved by this decision shall 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 shall be notified of any action in circuit court, but shall not be named as a party in that action or in any subsequent proceeding.
Footnotes
Footnotes
1 KRS 61.880(2)(c) states: "On the day that the Attorney General renders his decision, he shall mail a copy to the agency and a copy to the person who requested the record in question. The burden of proof in sustaining the action shall rest with the agency, and the Attorney General may request additional documentation from the agency for substantiation. The Attorney General may also request a copy of the records involved but they shall not be disclosed."
2 40 KAR 1:030 Section 3 states: "Additional Documentation. KRS 61.846(2) and 61.880(2) authorizes the Attorney General to request additional documentation from the agency against which a complaint is made. If documents thus obtained are copies of documents claimed by the agency to be exempt from the Open Records Law, the Attorney General shall not disclose them and shall destroy the copies at the time the decision is rendered."
3 In pertinent part, KRS 61.880(1) states: "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."
4 KRS 61.878(1)(i) and (j) create exceptions to the Open Records Act in cases of, respectively: "(i) Preliminary drafts, notes, correspondence with private individuals, other than correspondence which is intended to give notice of final action of a public agency;" [and] "(j) Preliminary recommendations, and preliminary memoranda in which opinions are expressed or policies formulated or recommended[.]"
5 KRS 61.645(2)(1) states, "[t]he board is hereby granted the powers and privileges of a corporation, including but not limited to the following powers: (a) To sue and be sued in its corporate name[.]"
6 KRS 61.878(1)(1) excludes: "Public record or information the disclosure of which is prohibited or restricted or otherwise made confidential by enactment of the General Assembly."
7 KRE 408 states: "Evidence of: (1) Furnishing or offering or promising to furnish; or (2) Accepting or offering or promising to accept a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. This rule does not require the exclusion of any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations. This rule also does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution."