April 16, 2013
The staff of the Committee on Open Government is authorized to issue advisory opinions. The ensuing staff advisory opinion is based solely upon the facts presented in your correspondence.
This is in response to your request for an advisory opinion regarding application of the Freedom of Information Law to records requested from the Long Island Power Authority, “LIPA”. Specifically, you requested access to “a recent contract entered into between LIPA and National Grid for the purchase of electric power. This contract, which is called a Power Supply Agreement (PSA), has been approved by the LIPA Board of Trustees and signed by executives of both LIPA and National Grid. The contract is currently being reviewed by the New York State Comptroller and the New York State Attorney General.” You further indicated that the contract was “negotiated in secret with no public hearings or other opportunity for meaningful public input,” and that “LIPA’s position also precludes any opportunity for the Village to have effective input with either the Comptroller or the Attorney General.”
In response to your request, LIPA denied access to the Agreement in its entirety on two grounds. First, LIPA relied on §87(2)(c), contending that because the Agreement had not yet received approval from the Attorney General or the Comptroller it was not yet a final, enforceable contract, and disclosure would allow third parties to use detailed information from the Agreement to impair the approval process by lobbying the Attorney General and Comptroller. Secondly, LIPA relied on §87(2)(d), the “trade secret” exception, contending that if disclosure were required prior to finalization of the contract, compelling LIPA to enter into power purchase agreements with other generators “to replace” the power that would otherwise be provided pursuant to the Agreement, potential power producers would have detailed knowledge about the pricing and other terms to which LIPA is willing to agree and would use such information to LIPA’s competitive disadvantage.
In conjunction with his response to your request, the records access officer for LIPA indicated that although he would not make the records available at this time “within five business days of the contract award process being complete, [he would] provide you with a copy of the requested A&R PSA.” (November 8, 2012).
From our perspective, reliance on the provisions of law cited by LIPA to deny access would be inconsistent with law.
As you are 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 (l) of the Law.
Section 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 our 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 an agreement has not received final approval, in our opinion, is not determinative of rights of access or, conversely, an agency's ability to deny access to records. Rather, we 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 we 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 a bid in a manner that provides 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.
In a decision rendered more than thirty years ago, however, it was held that after the deadline for submission of bids or proposals has been reached and a contract has been awarded, 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). See also, CAT*ASI v New York State Insurance Department, 195 Misc2d 456, 760 NYS2d 284 (New York County, 2003); Empire Golf Mgt v Olivieri, 18 A.D.3d 334, 794 N.Y.S.2d 649 (New York County, 2005)].
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 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.
Further, in a case involving facts similar to those presented here, when documents were requested prior to final approvals by the Attorney General and the State Comptroller, it was held by the Appellate Division that the records sought “could no longer be competitively sensitive”, that §87(2)(c) could not validly be asserted and that, therefore, they were accessible to the public [Cross-Sound Ferry v. Department of Transportation, 219 AD2d 346, 634 NYS2d 575, 577 (1995)]. When an agreement has been reached and an award determined, the records that you requested would be required to be made available to the public; in our opinion, no longer would disclosure in any way “impair” the ability of the agency to reach a fair and optimal agreement on behalf of the public.
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).
Finally, we emphasize that in the event of a challenge to an agency’s determination in court, the agency has the burden of proving that an exception was properly asserted. In the context of §87(2)(d), in a recent decision by the Court of Appeals involving that exception, the Court determined that the potential harm through disclosure cannot be speculative or theoretical; on the contrary, it must be proven to be real [Markowitz v. Serio, 11 NY3d 43 (2008)].
Camille S. Jobin-Davis
Cc: William Stohner, Records Access Officer
Michael Hervey, Appeals Officer