24-ORD-115
May 8, 2024
In re: WDRB News/Transportation Cabinet
Summary: The Transportation Cabinet (“the Cabinet”) violated the
Open Records Act (“the Act”) when it failed to meet its burden to support
redacting information from records relating to the performance of a
contract under KRS 61.878(1)(c)1. Such information is only exempt
when it is confidentially disclosed to an agency or required to be
disclosed to it and generally recognized as confidential or proprietary,
and its disclosure would permit an unfair commercial advantage to
competitors.
Open Records Decision
On December 22, 2023, WDRB News (“Appellant”) requested copies of three
categories of records from the Cabinet related to the Ohio River bridges in Louisville.
First, the Appellant requested “[a]ll meeting agendas, minutes and notes involving
ETC [Electronic Transaction Consultants, LLC] between August 1, 2023 and
December 21, 2023 as specified in the Project Management Plan (PMP), Appendix A.”
Second, the Appellant requested “[a]ll monthly reports for 2023 submitted through
December 21, 2023 regarding customer surveys submitted to the Joint Board under
Technical Proposal No. CSC-089.” Finally, the Appellant requested “[a]ll monthly
operations reports submitted under Technical Proposal CSC-151.” In response, the
Cabinet provided heavily redacted documents. To support its redactions, the Cabinet
relied on KRS 61.878(1)(c)1., stating, “The records contained proprietary information
of the RiverLink administration contractor, [ETC], which information was redacted.”
This appeal followed.
Under KRS 61.880(1), “[a]n 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 agency’s explanation must “provide particular and detailed
information,” not merely a “limited and perfunctory response.” Edmondson v. Alig,
926 S.W.2d 856, 858 (Ky. 1996). “The agency’s explanation must be detailed enoughto permit [a reviewing] court to assess its claim and the opposing party to challenge
it.” Kentucky New Era, Inc. v. City of Hopkinsville, 415 S.W.3d 76, 81 (Ky. 2013).
Because the Cabinet merely stated the redacted information was “proprietary,”
without further explanation, it violated the Act. See, e.g., 22-ORD-260.
On appeal, the Cabinet maintains its reliance on KRS 61.878(1)(c)1. to support
its redactions. That statute exempts from disclosure “[r]ecords 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.”
The burden of proof rests with the public agency to sustain its denial of a request to
inspect public records. KRS 61.880(2)(c). When a public agency invokes
KRS 61.878(1)(c)1. on behalf of a private entity, the Office will permit “argument and
input from the non-party to the appeal” to assist the public agency in meeting its
burden. See, e.g., 09-ORD-010.
Here, after consulting ETC, the Cabinet states the redacted information
consists of three categories. The first category contains “[e]mployment decisions like
number of employees, employee retention rates, and allocation of employees used to
meet performance metrics,” which the Cabinet claims “are often trade secrets because
the contractor derives economic value from these proprietary practices and business
decisions’ not being known to competitors.” The second category contains “[p]ast-
performance statistics (e.g., whether service level agreements/key performance
indicators are met, specific statistics like percentages),” because such statistics may
be “used by competitors in procurements and bid protests to attack the contractor’s
reputation and obtain a commercial advantage.” The third category contains
“[s]olutions to system issues and other problems,” which the Cabinet claims “are
frequently trade secrets because the contractor derives economic value from these
proprietary processes and remedies’ not being known to competitors.”
To sustain its redactions under KRS 61.878(1)(c)1., the Cabinet must first
prove all the redacted information was “confidentially disclosed to [it] or required by
[the Cabinet] to be disclosed to it.” Typically an agency proves this element by
showing a written agreement between the agency and the business to maintain
confidentiality, or otherwise demonstrates “the efforts made by the parties . . . to
ensure the confidentiality of shared information.” 20-ORD-019; 17-ORD-002. Here,
although ETC clearly disclosed the redacted information to the Cabinet, the Cabinet
has not provided a written confidentiality agreement or otherwise shown it required
the ETC to provide it with the required information. Rather, it merely states ETC
and the Cabinet “agreed”—after the Cabinet received the Appellant’s request—that
the redacted information had been confidentially disclosed to the Cabinet. This,
without more, is insufficient to show that the information was “confidentially
disclosed to [the Cabinet] or required by [the Cabinet] to be disclosed to it” underKRS 61.878(1)(c)1. See, e.g., 22-ORD-260; see also 09-ORD-050 (noting a “bare
statement that [a private entity has] asked the [agency] to treat . . . records as
confidential” is insufficient to sustain a denial under KRS 61.878(1)(c)1).
Even if the Cabinet had demonstrated the redacted information was
confidentially disclosed to it, or required to be disclosed to it, the Cabinet must also
establish that the redacted information is “generally recognized as confidential or
proprietary.” KRS 61.878(1)(c)1. In Hoy v. Kentucky Industrial Revitalization
Authority, 907 S.W.2d 766, 768 (Ky. 1995), the Supreme Court of Kentucky
considered the applicability of KRS 61.878(1)(c)2.1 to required disclosures of “a
financial history of [a] 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.” The
Court concluded that “[i]t 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.’” Id. Therefore, the Court found that those categories
of information satisfied the second element of the exception.
In past decisions, the Office has generally recognized as confidential or
proprietary “private financial affairs,” see, e.g., 01-ORD-143; “trade secrets,
investment strategies, economic status, or business structures,” see, e.g., 17-ORD-
198; 16-ORD-273; 07-ORD-166; “the method for determining [a] contract price” and
“business risks assumed,” see, e.g., 17-ORD-002; “costing and pricing strategy,” see,
e.g., 92-ORD-1134; OAG 89-44; and “corporate assets of a non-financial nature that
have required the expenditure of time and money to develop and concern the inner
workings of the private entity,” 10-ORD-001 (emphasis added). The common factor
among these categories of information is “the insight they provide into the internal
operations of the entity making the disclosure to the public agency.” 20-ORD-019
(emphasis added).
Here, the Cabinet has redacted information relating to ETC’s staffing levels
and staff allocation for the RiverLink contract, statistics regarding ETC’s
performance of the contract, and information about specific problems with ETC’s
performance of the contract2 and actions ETC took to correct those problems. These
types of information are not like those the Office has previously found are confidential
or proprietary under KRS 61.878(1)(c)1., as they do not tend to disclose the inner
workings or financial status of a private entity. They merely document ETC’s
1
Although KRS 61.878(1)(c)2. pertains to information that is required to be disclosed to an agency
in conjunction with a loan, grant, tax incentive, or for other regulatory reasons, it also states the
information must be “generally recognized as confidential or proprietary” for the exemption to apply.
2
Although the Cabinet focuses on ETC’s “solutions” to its contract administration problems as
allegedly being trade secrets, the Cabinet has redacted not merely “solutions,” but the descriptions of
the problems themselves.performance of its duties under a public contract. Further, the Appellant has provided
a Monthly Operations and Maintenance Report dated June 2022 from ETC’s
predecessor in the RiverLink bridge contract, Kapsch TrafficCom AG (“Kapsch”). In
that report, Kapsch provided, without redaction, the same staffing information for
the project, performance statistics, and problem reports the Cabinet and ETC have
redacted here. The fact a competitor has previously disclosed this information is
evidence that it is not “generally recognized as confidential or proprietary” by those
engaged in this type of business. Moreover, the Cabinet has not pointed to any
solutions to problems by ETC that reveal “trade secrets,” nor are any obvious trade
secrets evident upon an examination of the unredacted records.3
Further, the Appellant argues, there are various inconsistencies in the
Cabinet’s position. For example, in ETC’s monthly operations report for November
2023, the Cabinet entirely redacted call volumes to customer service representatives.
But that statistic does not show whether ETC met performance levels, nor does it fit
any of the other categories of information the Cabinet claims to be proprietary. The
Appellant additionally notes the Cabinet redacted the frequency with which a key
performance indicator was not met in October 2023, but did not redact the same
figure for November 2023. Finally, the Appellant shows the Cabinet redacted
performance statistics that RiverLink’s public relations firm had separately provided
to the Appellant in a written response to questions. Therefore, the Cabinet has not
met its burden of showing the redacted information is “generally recognized as
confidential or proprietary.”
Finally, to support its denial under KRS 61.878(1)(c)1., the Cabinet must show
that the redacted information, if disclosed, “would permit an unfair commercial
advantage to competitors of the entity that disclosed” it. Although the Cabinet claims
the disclosure of information regarding ETC’s staffing allocation, performance
statistics, and performance problems in administering the RiverLink contract could
allow ETC’s competitors to obtain a “commercial advantage,” it has not shown how
any such advantage would be unfair. The public is entitled to know the details of how
efficiently, or inefficiently, ETC has administered a public contract. If such
information reveals ETC has not adequately performed the tasks it agreed to
perform, it would not be “unfair” for ETC’s competitors to learn that information and
use it to their advantage in competing for similar contracts. Accordingly, the Cabinet
has failed to meet its burden of proof that the redacted information is exempt from
disclosure. Thus, the Cabinet violated the Act when it redacted information from the
requested records under KRS 61.878(1)(c)1.
3
The Cabinet has made the unredacted records available to the Office for review under
KRS 61.880(2)(c). Because the Office requested further substantiation from the Cabinet under
KRS 61.880(2)(c), the unredacted records will not be disclosed by the Office pursuant to that
subsection.A party aggrieved by this decision may appeal it by initiating an action in the
appropriate circuit court pursuant to KRS 61.880(5) and KRS 61.882 within 30 days
from the date of this decision. 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 proceedings. The Attorney General will accept notice of
the complaint emailed to OAGAppeals@ky.gov.
Russell Coleman
Attorney General
/s/ James M. Herrick
James M. Herrick
Assistant Attorney General
#151
Distribution:
Mr. Marcus Green
Jesse W. Rowe, Esq.