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  December 21, 1993

 

 

Mr. Brian D. Murphy, Attorney
Maroney Ponzini & Spencer
14 North Broadway
Tarrytown, NY 10591

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.

Dear Mr. Murphy:

I have received your letter of November 5 Please accept my
apologies for the delay in response.

In your capacity as attorney for the Village of Ardsley, you
asked that I review a proposed local law that would require owners
of income producing properties to produce and submit income and
expense statements annually to the Town Assessor. Section 6 of the
proposal would appear to exempt income and expense statements from
public disclosure and includes provisions that would penalize those
who violate its confidentially requirements.

In this regard, I offer the following comments.

First, the Freedom of Information Law pertains to all agency
records, and §86(4) of that statute defines the term "record"
expansively 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".

Due to the breadth of the language quoted above, any documentation,
irrespective of its function or origin, maintained by an agency
would constitute a "record" subject to rights of access.

Second, 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.

In my view, an assertion or claim of confidentiality, unless
it is based upon a statute, is likely meaningless. When
confidentiality is conferred by a statute, records fall outside the
scope of rights of access pursuant to §87(2)(a) of the Freedom of
Information Law, which states that an agency may withhold records
that "are specifically exempted from disclosure by state or federal
statute". If there is no statute upon which an agency can rely to
characterize records as "confidential" or "exempted from
disclosure", the records are subject to whatever rights of access
exist under the Freedom of Information Law [see Doolan vBOCES, 48
NY 2d 341 (1979); Washington Post v Insurance Department, 61 NY 2d
557 (1984); Gannett News Service, Inc v State Office of Alcoholism
and Substance Abuse, 415 NYS 2d 780 (1979)] As such, an assertion
of confidentiality without more, would not in my opinion guarantee
or require confidentiality.

Moreover, it has been held by several courts, including the
Court of Appeals, that an agency's regulations or the provisions of
a local enactment, such as an administrative code, local law,
charter or ordinance, for example, do not constitute a "statute"
[see e.g., Morris v Martin, Chairman of the State Board of
Equalization and Assessment, 440 NYS 2d 365, 82 Ad 2d 965, reversed
55 NY 2d 1026 (1982); Zuckerman v NYS Board of Parole, 385 NYS 2d
811, 53 AD 2d 405 (1976); Sheehan v City of Syracuse, 521 NYS 2d
207 (1987)]. For purposes of the Freedom of Information Law, a
statute would be an enactment of the State Legislature or Congress.
Therefore, a local enactment cannot confer, require or promise
confidentiality. This is not to suggest that income and expense
statements must be disclosed in every instance; rather, I am
suggesting that those records may in some instances be withheld in
accordance with the grounds for denial appearing in the Freedom of
Information Law, and that any local enactment that is inconsistent
with that statute would be void to the extent of any such
inconsistency.

It is likely in my view that two the grounds for denial would
be particularly relevant with respect to the records at issue.

Specifically, §87(2)(b) of the Freedom of Information Law
enables an agency to withhold records or portions of records the
disclosure of which would result in an "unwarranted invasion of
personal privacy". While I believe that the Freedom of Information
Law is intended to ensure that government is accountable, the
privacy provisions of the Law in my view enable government to
prevent disclosures concerning the personal or intimate details of
individuals' lives.

From my perspective, a disclosure that permits the public to
determine the general income level of an individual would likely
constitute an unwarranted invasion of personal privacy, for such a
disclosure would indicate that a particular individual has an
income or economic means at a certain level. In some
circumstances, individuals might be embarrassed by such a
disclosure. Moreover, the New York State Tax Law contains
provisions that require the confidentiality of records submitted to
the Department of Taxation and Finance reflective of the
particulars of a person's income or payment of taxes (see eg, §697,
Tax Law). Although those provisions are not directly relevant in
this instance, it would appear that the Legislature felt that
disclosure of records concerning income and related information
would constitute an improper or "unwarranted" invasion of personal
privacy. Insofar as the statements contain personal financial
information, I believe that those portions of such records could be
withheld on the ground that disclosure would constitute an
unwarranted invasion of personal privacy.

The other ground for denial of possible significance is
§87(2)(d), which enables an agency to withhold records or portions
of 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".

In my opinion, the question under §87(2)(d) involves the extent, if
any, to which disclosure would "cause substantial injury to the
competitive position" of business entities identified in the
records.

The concept and parameters of what might constitute a "trade
secret" were discussed in Kewanee Oil Co v Bicron Corp, which was
decided by the United States Supreme Court in 1973 (416 U.S. 470).
Central to the issue was a definition of "trade secret" upon which
reliance is often based. Specifically, the Court cited the
Restatement of Torts, section 757, comment b (1939), which states
that:

"[a] trade secret may consist of any formula,
pattern, device or compilation of information
which is used in one's business, and which
gives him an opportunity to obtain an
advantage over competitors who do not know or
use it. It may be a formula for a chemical
compound, a process of manufacturing, treating
or preserving materials, a pattern for a
machine or other device, or a list of
customers" (id. at 474, 475).

In its review of the definition, the court stated that "[T]he
subject of a trade secret must be secret, and must not be of
public knowledge or of a general knowledge in the trade or
business" (id.).

In my view, the proper assertion of §87(2)(d) is dependent
upon a variety of factors, such as the specific content of the
records, the area of commerce in which business entities are
involved, the degree of competition within that area of commerce
and, most importantly, the effect of disclosure, i.e., the extent
to which disclosure would "cause substantial injury" to an entity's
competitive position. I would conjecture that income and expense
statements could often be withheld in great measure, if not in
their entirely, under §87(2)(d).

However, in the case of both §87(2)(b) and (d), potentially
harmful effects of disclosure may diminish with the passage of
time. Current financial information regarding a business entity
might, if disclosed, be highly damaging; disclosure of the same
information three years from now might be innocuous.

For the reasons described above, I believe that section 6 of
the proposed local law is inappropriate and would be invalid
insofar as it conflicts with a statute, such as the Freedom of
Information Law. Preferable in my view would be absence of any
specific reference to disclosure; in that case, records could be
withheld to the extent permitted by the Freedom of Information Law.
Alternatively, a declaration might merely indicate that the records
in question need not be disclosed, except as required by law.

I hope that I have been of some assistance.

Sincerely,

 

Robert J. Freeman
Executive Director

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