December 21, 2005
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, unless otherwise indicated.
I have received your letter and apologize for the delay in response. You wrote that the Village of Scarsdale has received proposals from Verizon and Cablevision in which they sought the opportunity to negotiate a cable television franchise agreement with the Village. The Village has created a Cable Commission by local law, and you asked whether the franchise renewal negotiations between the Commission and either of those entities "are subject to the Open Meetings Law and required to be open to the public." You also asked whether proposals submitted by Verizon and Cablevision are subject to the Freedom of Information Law.
In this regard, please note that the issue involving the application of the Open Meetings Law was raised recently by Dennis B. McAlpine, Chair of the entity in question, and that he referred to it as the "commission" and the "committee" and did not indicate that it is a creation of law. With that additional information that you provided, that the Commission is a creation of law, it would appear that the Commission is a "public body" required to comply with the Open Meetings Law.
Based on the assumption that the entity in question is subject to the Open Meetings Law, as suggested to Mr. McAlpine, there appears to be only one ground for entry into executive that would be pertinent. Section 105(1)(f) authorizes a public body to conduct an executive session to discuss:
"...the medical, financial, credit or employment history of a particular person or corporation, or matters leading to the appointment, employment, promotion, demotion, discipline, suspension, dismissal or removal of a particular person or corporation..."
Insofar as the Commission’s discussions involve either Verizon or Cablevision in relation to the subjects listed in §105(1)(f), e.g., consideration of a corporation’s financial history, I believe that an executive session could properly be held. However, when none of the qualifying subjects included within that provision apply, the Commission must, in my view, conduct its meetings open to the public.
With respect to proposals received by either of the companies, the Freedom of Information Law is broad in its coverage, for it pertains to all government agency records and defines the term "record" in §86(4) to include:
"...any information kept, held, filed, produced, reproduced by, with or for an agency or the state legislature, in any physical form whatsoever including, but not limited to, reports, statements, examinations, memoranda, opinions, folders, files, books, manuals, pamphlets, forms, papers, designs, drawings, maps, photos, letters, microfilms, computer tapes or discs, rules, regulations or codes."
Based on the foregoing, proposals or any other materials received from Verizon or Cablevision constitute agency records subject to rights of access conferred by the Freedom of Information Law when they come into the possession of the Village.
I have been informed that in analogous situations, Verizon has requested that its submissions be kept confidential. Here I point out that the Court of Appeals has held that a request for or a promise of confidentiality is all but meaningless; unless one or more of the grounds for denial appearing in the Freedom of Information Law may appropriately be asserted, the record sought must be made available. In Washington Post v. Insurance Department [61 NY2d 557 (1984)], the controversy involved a claim of confidentiality with respect to records prepared by corporate boards furnished voluntarily to a state agency. The Court of Appeals reversed a finding that the documents were not "records" subject to the Freedom of Information Law, thereby rejecting a claim that the documents "were the private property of the intervenors, voluntarily put in the respondents' 'custody' for convenience under a promise of confidentiality" [Washington Post v. Insurance Department, 61 NY 2d 557, 564 (1984)]. Moreover, it was determined that:
"Respondent’s long-standing promise of confidentiality to the intervenors is irrelevant to whether the requested documents fit within the Legislature’s definition of ‘records’ under FOIL. The definition does not exclude or make any reference to information labeled as ‘confidential’ by the agency; confidentiality is relevant only when determining whether the record or a portion of it is exempt (see Matter of John P. v Whalen, 54 NY2d 89, 96; Matter of Fink v Lefkowitz, 47 NY2d 567, 571-572, supra; Church of Scientology v State of New York, 61 AD2d 942, 942-943, affd 46 NY2d 906; Matter of Belth v Insurance Dept., 95 Misc 2d 18, 19-20). Nor is it relevant that the documents originated outside the government.... Such a factor is not mentioned or implied in the statutory definition of records or in the statement of purpose...."
It is also emphasized that the Freedom of Information Law is permissive. In brief, that statute 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. Although an agency may withhold records in accordance with the grounds for denial appearing in §87(2), the Court of Appeals has held that the agency is not obliged to do so and may choose to disclose. As stated in that unanimous decision: "...while an agency is permitted to restrict access to those records falling within the statutory exemptions, the language of the exemption provision contains permissive rather than mandatory language, and it is within the agency's discretion to disclose such records, with or without identifying details, if it so chooses" [Capital Newspapers v. Burns, 67 NY2d 562, 567 (1986)].
In most situations in which commercial entities are involved in negotiations leading to the award of a contract or franchise, two of the grounds for denial are most relevant.
The first, §87(2)(c), permits an agency to withhold records to the extent that disclosure "would impair present or imminent contract awards..." 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.
I point out that a situation that may be similar to that present in the Village was considered in Verizon New York, Inc. v. Bradbury [803 NYS2d 409 (2005)] in which the court found that "where more than one entity is involved in the negotiation process and an inequality of knowledge exists, thereby giving one entity an unfair advantage, impairment is likely to result and disclosure of records can justifiably be denied" (id., 420). The court concluded its consideration of §87(2)(c) by stating that:
"The bottom line is that Rye Brook is currently negotiating with both Verizon and Cablevision to provide cable television services for the residents of Rye Brook. Premature disclosure of the Documents would enable Cablevision to obtain an unfair advantage over Verizon. Certainly, this unfair advantage may be to the ultimate detriment of Rye Brook and its cable television consumers" (id.).
I am unaware of the extent to which the facts in Scarsdale may be analogous to those considered in Verizon. However, the thrust of the decision may be useful to you.
The other provision of significance, §87(2)(d), authorizes an agency to withhold records that:
"...are trade secrets or are submitted to an agency by a commercial enterprise or derived from information obtained from a commercial enterprise and which if disclosed would cause substantial injury to the competitive position of the subject enterprise..."
As in the case of §87(2)(c), the application of the provision quoted above relates to the effects of disclosure and the extent to which disclosure would, in this instance, cause substantial injury to the competitive position of either Verizon or Cablevision. In Verizon, it was determined that contentions concerning the possibility of harm were conclusory in nature and were inadequate to sustain a denial of access based on an assertion of §87(2)(d). Assuming that the submissions to the Village are analogous to those considered in the litigation, the outcome concerning that provision would likely be the same.
As you may be aware, the courts have consistently held that the Freedom of Information Law is designed to foster disclosure, and the Court of Appeals has 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.
Robert J. Freeman