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January 5, 1999

Mr. Marty Glennon
Meyer, Suozzi, English & Klein, P.C.
One Commerce Plaza, Suite 1810
Albany, NY 12260

The staff of the Committee on Open Government is authorized to issue advisory opinions.
The ensuing staff advisory opinion is based solely upon the information presented in your
correspondence.

Dear Mr. Glennon:

I have received your letter of December 3 in which you requested a declaratory ruling
on behalf of the Laborers' International Union of North America, Local Union No. 17, based
on "the failure" of the New York State Department of Transportation" ("DOT") "to provide
access under FOIL to a certain lease agreement" between DOT and Cargex Newburgh
Limited Partnership" ("Cargex").

Before addressing the substance of the matter, I point out that the Committee on
Open Government is not empowered to issue declaratory rulings. Rather, pursuant to
§89(1)(b) of the Public Officers Law, it is authorized to render advisory opinions.
Consequently, the ensuing commentary should be considered wholly advisory in nature.

By way of background, the correspondence attached to your letter indicates that a
request was made on April 15 for a copy of the "proposed lease agreement." The request was
denied on May 12 by DOT's Records Access Officer "pursuant to Article 6 §87(2)(c) of the
Public Officers Law as the subject lease is not yet approved and disclosure would impair
present or imminent contract awards or collective bargaining negotiations." In your appeal
of June 22, you contended "that the only term in the contract that could possibly interfere
with the contract award would be the price" and that the contract should be disclosed
following the redaction of the "amount of the agreement." In a determination of your appeal
rendered on July 7, Ms. Marie Corrado, the Appeals Officer, the denial was affirmed, and she
wrote that:

"The Cargex lease will not be a final, enforceable contract
until it is approved by both the NYS Attorney General (‘AG')
and the NYS Office of the Comptroller (‘OSC'). In
researching your appeal, I have determined that the lease has
now been approved by the AG but not the Office of the State
Comptroller. OSC has broad discretion under section 112 of
the State Finance Law and could raise questions that would
require further refinements of the terms of the lease, including
but not limited to the terms involving the payment of rent to
the State. It is the Department's judgment that making a draft
lease public before it is fully executed could jeopardize the
bargaining position of the Department in any negotiations
made necessary by the comments of OSC. As a result, it has
been a longstanding practice of this Department to withhold
draft leases form public access until such time as they have
been approved by both the AG and OSC."

Ms. Corrado added that "[a]s soon as OSC executes the lease, it will be available to the
public..."

In your letter to me, you wrote that DOT continued its denial of access even though
"the terms of the lease agreement, including all construction for the project, had commenced
prior to the approval of the Attorney General and the Comptroller" and that "the work was
nearly completed before the final approval of the New York State Attorney General and
Comptroller" (emphasis yours).

If your description of the facts is accurate, it would appear that the delay in disclosure
would have been inconsistent with law.

As you may be aware, as a general matter, the Freedom of Information Law is based
upon a presumption of access. Stated differently, all records of an agency are available,
except to the extent that records or portions thereof fall within one or more grounds for
denial appearing in §87(2)(a) through (i) of the Law.

The provision upon which the DOT has relied to withhold the record sought,
§87(2)(c), permits an agency to deny access to records to the extent that disclosure "would
impair present or imminent contract awards or collective bargaining negotiations." The key
word in that provision in my opinion is "impair", and the question under that provision
involves whether or the extent to which disclosure would "impair" the contracting process by
diminishing the ability of the government to reach an optimal agreement on behalf of the
taxpayers. That a contract has not been approved, signed or ratified, in my view, is not
determinative of rights of access or, conversely, an agency's ability to deny access to records.
Rather, I believe that consideration of the effects of disclosure is the primary factor in
determining the extent to which §87(2)(c) may justifiably be asserted.

As I understand its application, §87(2)(c) generally encompasses situations in which
an agency or a party to negotiations maintains records that have not been made available to
others. For example, if an agency seeking bids or proposals has received a number of bids,
but the deadline for their submission has not been reached, premature disclosure for the bids
to another possible submitter might provide that person or firm with an unfair advantage vis
a vis those who already submitted bids. Further, disclosure of the identities of bidders or the
number of bidders might enable another potential bidder to tailor his bid in a manner that
provides him with an unfair advantage in the bidding process. In such a situation, harm or
"impairment" would likely be the result, and the records could justifiably be denied.
However, after the deadline for submission of bids or proposals are available after a contract
has been awarded, and that, in view of the requirements of the Freedom of Information Law,
"the successful bidder had no reasonable expectation of not having its bid open to the public"
[Contracting Plumbers Cooperative Restoration Corp. v. Ameruso, 105 Misc. 2d 951, 430
NYS 2d 196, 198 (1980)]. Similarly, if an agency is involved in collective bargaining
negotiations with a public employee union, and the union requests records reflective of the
agency's strategy, the items that it considers to be important or otherwise, its estimates and
projections, it is likely that disclosure to the union would place the agency at an unfair
disadvantage at the bargaining table and, therefore, that disclosure would "impair" negotiating
the process.

It is noted that the Court of Appeals sustained the assertion of §87(2)(c) in a case that
did not clearly involve "contract awards" or collective bargaining negotiations. In Murray v.
Troy Urban Renewal Agency [56 NY2d 888 (1982)], the issue pertained to real property
transactions where appraisals in possession of an agency were requested prior to the
consummation of a transaction. Because premature disclosure would have enabled the public
to know the prices the agency sought, thereby potentially precluding the agency from
receiving optimal prices, the agency's denial was upheld [see Murray v. Troy Urban Renewal
Agency, 56 NY 2d 888 (1982)].

In each of the kinds of the situations described earlier, there is an inequality of
knowledge. In the bid situation, the person who seeks bids prior to the deadline for their
submission is presumably unaware of the content of the bids that have already been submitted;
in the context of collective bargaining, the union would not have all of the agency's records
relevant to the negotiations; in the appraisal situation, the person seeking that record is
unfamiliar with its contents. As suggested above, premature disclosure of bids would enable
a potential bidder to gain knowledge in a manner unfair to other bidders and possibly to the
detriment of an agency and, therefore, the public. Disclosure of an records regarding
collective bargaining strategy or appraisals would provide knowledge to the recipient that
might effectively prevent an agency from engaging in an agreement that is most beneficial to
taxpayers.

In a case involving negotiations between a New York City agency and the Trump
organization, the court referred to an opinion that I prepared and adopted the reasoning
offered therein, stating that:

"Section 87(2)(c) relates to withholding records whose release
could impair contract awards. However, here this was not
relevant because there is no bidding process involved where an
edge could be unfairly given to one company. Neither is this
a situation where the release of confidential information as to
the value or appraisals of property could lead to the City
receiving less favorable price.

"In other words, since the Trump organization is the only
party involved in these negotiations, there is no inequality of
knowledge between other entities doing business with the
City" [Community Board 7 v. Schaffer, 570 NYS 2d 769, 771
(1991); Aff'd 83 AD 2d 422; reversed on other grounds 84
NY 2d 148 (1994)].

The extent to which the kinds of considerations described in the illustrations described
in the preceding paragraphs is pertinent to the instant situation is unclear. Nevertheless, based
on the language of §87(2)(c), it is clear in my opinion that the absence of final approvals by
the Attorney General or the Comptroller is not determinative of an agency's ability to deny
access to records relating to the contracting process. If in the situation at hand the terms of
the agreement were being carried out, notwithstanding absence of approvals by the Attorney
General and the Comptroller, DOT could not, in my view, justify a denial of access; disclosure
would not have "impaired" the award of a contract, for the terms of the agreement (albeit not
officially approved) were apparently being executed.

It is emphasized that the courts have consistently interpreted the Freedom of
Information Law in a manner that fosters maximum access. As stated by the Court of
Appeals more than decade ago:

"To be sure, the balance is presumptively struck in favor of
disclosure, but in eight specific, narrowly constructed
instances where the governmental agency convincingly
demonstrates its need, disclosure will not be ordered (Public
Officers Law, section 87, subd 2). Thus, the agency does not
have carte blanche to withhold any information it pleases.
Rather, it is required to articulate particularized and specific
justification and, if necessary, submit the requested materials
to the courts for in camera inspection, to exempt its records
from disclosure (see Church of Scientology of N.Y. v. State
of New York, 46 NY 2d 906, 908). Only where the material
requested falls squarely within the ambit of one of these
statutory exemptions may disclosure be withheld" [Fink v.
Lefkowitz, 47 NY 2d 567, 571 (1979)]."

In another decision rendered by the Court of Appeals, it was held that:

"Exemptions are to be narrowly construed to provide
maximum access, and the agency seeking to prevent disclosure
carries the burden of demonstrating that the requested material
falls squarely within a FOIL exemption by articulating a
particularized and specific justification for denying access"
[Capital Newspapers v. Burns, 67 NY 2d 562, 566 (1986); see
also, Farbman & Sons v. New York City, 62 NY 2d 75, 80
(1984); and Fink v. Lefkowitz, 47 NY 2d 567, 571 (1979)].

Moreover, in the same decision, in a statement regarding the intent and utility of the Freedom
of Information Law, it was found that:

"The Freedom of Information Law expresses this State's
strong commitment to open government and public
accountability and imposes a broad standard of disclosure
upon the State and its agencies (see, Matter of Farbman &
Sons v New York City Health and Hosps. Corp., 62 NY 2d
75, 79). The statute, enacted in furtherance of the public's
vested and inherent 'right to know', affords all citizens the
means to obtain information concerning the day-to-day
functioning of State and local government thus providing the
electorate with sufficient information 'to make intelligent,
informed choices with respect to both the direction and scope
of governmental activities' and with an effective tool for
exposing waste, negligence and abuse on the part of
government officers" (id., 565-566).

I hope that I have been of assistance.

Sincerely,

 

Robert J. Freeman
Executive Director

RJF:tt

cc: Marie Corrado
John B. Dearstyne