April 25, 2008
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.
I have received your letter in which you sought an advisory opinion concerning “the propriety of entry into executive session by the Suffolk County Legislature in order to discuss the imminent sale of the Suffolk County Health Plan” (hereafter “the Plan”).
You indicated by way of background that the County manages the Plan and does so “as if it were a health insurance company” - - an entity in competition with private firms, competing for the business of providing a service for a fee to Suffolk County residents.” You added that the County and potential purchasers of the Plan “have signed confidentiality agreements regarding the sale, in order to protect trade secrets and other information, which, if disclosed, would cause substantial injury to the competitive position of such enterprises, including the County Plan.”
Reference was made in your letter to §105(1)(f) of the Open Meetings Law, which permits a public body, such as the County Legislature, 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...”
You indicated that the Legislature will discuss “the financial and credit history of potential corporate purchasers” of the Plan. Insofar as that is so, I believe that the Legislature clearly has the authority to enter into executive session.
A contention was also offered concerning the application of §105(1)(h), which permits a public body to conduct an executive session to discuss:
“the proposed acquisition, sale or lease of real property or the proposed acquisition of securities, or sale or exchange of securities held by such public body, but only when publicity would substantially affect the value thereof.”
Although you wrote that “the Plan is neither real estate nor a security, the rationale for authorizing entry into executive session would certainly apply to the sale of the Plan....Similar to the sale and acquisition of both real estate and securities, the sale of the Plan involves appraisals of the both the Plan and the potential purchasers that are based on ‘thought process and professional judgement which cannot be classified as mere data gathering’”, citing General Motors Corporation v. Town of Massena, 180 Misc.2d 682, 684 (1999).
In my view, §105(1)(h) would not serve as a valid basis for entry into executive session. Its language is precise and limited to matters involving real property or securities transactions. Moreover, it has been held on several occasions that the “the topics discussed during the executive session must remain within the exceptions enumerated in the statute” and that the exceptions to openness “must be narrowly scrutinized” [see e.g., Gordon v. Village of Monticello, 207 AD2d 55,58 (1994)].
I note too that General Motors Corporation, supra, involved the interpretation of the Freedom of Information Law. Although that statute and the Open Meetings Law are designed to require disclosure, except in circumstances in which grounds for denial of access to appearing in §87(2) of the former and the grounds for entry into executive session appearing in §105(1) of the latter may apply, those provisions are separate and distinct. Further, there are instances in which records may be withheld under the Freedom of Information Law, but the subject of those records must be discussed in public to comply with the Open Meetings Law. For instance, a written opinion expressed by staff concerning a change in policy could be withheld under §87(2)(g) of the Freedom of Information Law, but there would likely be no basis for entry into executive session to discuss an issue of that nature. The reverse may be true as well. A public body may conduct an executive session, for example, to discuss hiring an individual. However, if that person is hired, minutes identifying the individual would be accessible under the Freedom of Information Law.
In your reference to the Freedom of Information Law, two of the grounds for denial were cited. Section 87(2)(c) permits an agency to withhold records to the extent that disclosure “would impair present or imminent contract awards...”, and §87(2)(d) authorizes a denial of access insofar as disclosure “would cause substantial injury to the competitive position of a commercial enterprise...” While those provisions might enable the County to withhold records or portions of records relating to the sale of the Plan, again, they are separate from the grounds for entry into executive session found in the Open Meetings Law.
Most importantly in relation to your question, the foregoing as it relates to the Freedom of Information Law does not, in my view, diminish or alter the ability of the County Legislature to conduct executive sessions as appropriate in accordance with §105(1)(f) of the Open Meetings Law.
Lastly, since you referred to confidentiality agreements, while there is nothing of which I am aware that would require any of the participants in the transaction to make verbal disclosures, based on the language of the Freedom of Information Law and its judicial construction, a “confidentiality clause” is, in my view, irrelevant in considering rights of access to records.
It has been held in variety of circumstances that a promise or assertion of confidentiality cannot be upheld, unless a statute specifically confers confidentiality. In a decision rendered by the Court of Appeals, it was held that a state agency's:
"long-standing promise of confidentiality to the intervenors is irrelevant to whether the requested documents fit within the Legislature's definition of 'record' 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..." [Washington Post v. Insurance Department, 61 NY 2d 557, 565 (1984)].
In short, I believe that the ability to withhold records is limited to the grounds for denial appearing in the Freedom of Information Law, notwithstanding an agreement regarding confidentiality.
I hope that I have been of assistance.
Robert J. Freeman
cc: Jessica Hogan