Request By:
Mr. Charles J. Kamuf
Rummage, Kamuf, Yewell, Pace & Condon
Great Financial Federal Building
322 Frederica Street
Owensboro, Kentucky 42301
Opinion
Opinion By: Frederic J. Cowan, Attorney General; Amye B. Majors, Assistant Attorney General
As attorney for Mr. Ronald J. Prater, Mr. Ronald M. Sullivan has appealed to the Attorney General pursuant to KRS 61.880 your partial denial of his client's March 28, 1991, request to inspect certain documents in the possession of the Owensboro Riverport Authority. The disputed records are identified as "invoices from the Owensboro Riverport Authority to ADM/Growmark and supporting worksheets forwarded to [the Authority] by ADM/Growmark . . . . "
You responded to Mr. Prater's request by letter dated April 11, 1991. In paragraph two of your response, you stated:
With regard to the invoices and related worksheets, we are withholding this information pursuant to KRS 61.878(1)(a), which exempts 'public records containing information of a personal nature where the public disclosure thereof would constitute a clearly unwarranted invasion of personal privacy. ' The reason we feel this exception applies is that your request seeks to advance your own private interest, and not the public interest. The attempt to ascertain marketing data of one of our clients in order to use it for competitive advantage serves your own private interest. Commercial uses of government information does (sic) not constitute a public interest to be protected by the Kentucky Open Records Act. Under KRS 61.878(1)(b), costing and price stategy may be considered a trade secret and be exempted from disclosure. Lastly, the worksheets supplied by ADM/Growmark are not public records and, therefore, are not subject to the Act.
Mr. Prater does not contest that portion of your partial denial pertaining to the minutes of an executive session of the Board of the Owensboro Riverport Authority, but maintains with respect to the remaining records withheld:
The Attorney General has opined (OAG 82-234) that the purpose for which public disclosure is requested is not relevant. Mr. Prater's purpose in seeking access to public records therefor (sic) is not relevant to the question of whether the records must be made available. Also, the Attorney General has opined that when a party contracts with government, its business becomes a public affair and is no longer private (OAG 90-7).
* * *
We are unable to understand what 'costing and pricing strategy' might be revealed by the records which Riverport hopes to hold back, but we submit it is not a trade secret subject to being withheld from public inspection since apparently the information was necessary to determine the public's right to receive lease or other payments from ADM as a result of its operation at the public facility.
He asks that this Office review the Authority's partial denial of his request to determine if this action was consistent with the Open Records Act. For the reasons set forth below, we conclude that your response was improper.
OPINION OF THE ATTORNEY GENERAL
KRS 61.872 provides, in part, that all public records shall be open for public inspection by any person, except as otherwise provided in the Act. Any person may inspect nonexempt public records during the regular office hours of a public agency. This rule is consistent with the basic policy of the Act, enunciated in KRS 61.882(4), which states:
[F]ree and open examination of public records is in the public interest and the exceptions provided for by KRS 61.870 to 61.884 or otherwise provided for by law shall be strictly construed, even though such examination may cause inconvenience or embarrassment to public officials or others . . . .
This Office has consistently held, in interpreting these provisions, that the purpose for which a person seeks access to a public record is not relevant to the Open Records Act. OAG 77-151; OAG 81-345; OAG 82-234; OAG 82-275; OAG 82-394; OAG 89-79. Simply stated, the requester's purpose in seeking access to records has no bearing on whether the public agency should grant or deny his request. Certainly, an agency cannot adopt a policy which permits inspection and copying for certain purposes, and denies it for other purposes. "In deciding whether a document is exempted under the Act it is the nature of the document which is controlling and not who is requesting to inspect the document or for what purpose." OAG 76-717.
Your position is therefore entirely inconsistent with the Open Records Act. You tacitly acknowledge this fact by asserting that the documents are nevertheless exempt under KRS 61.878(1)(a) and (b). It is the opinion of this Office, however, that these exemptions are inapplicable to the records Mr. Prater seeks to inspect.
KRS 61.878(1)(a) exempts from public inspection, "records containing information of a personal nature where the disclosure thereof would constitute a clearly unwarranted invasion of personal privacy. " This oft-cited exception has been raised in numerous contexts, but rarely, if ever, to justify nondisclosure of an invoice issued by a public agency to an entity under contract with it. In OAG 91-35, we discussed at length the privacy exemption to the Open Records Act, and attach a copy for your review. This opinion and a long line of earlier opinions indicate that the exemption was intended to protect records containing intimate personal data which could be identified as applying to an individual who might be harmed by its disclosure. OAG 77-394l OAG 79-275; OAG 79-348; OAG 81-159; OAG 82-204; OAG 83-286; OAG 86-15; OAG 91-62. The exemption was not intended to protect records pertaining to the pertaining to the financial dealings of a public agency, such as the Authority. These records are of obvious interest to the general public. It is irrelevant that the member of the public seeking access to the record is a competitor hoping to advance his commercial interests.
Nor are we persuaded that the requested records contain trade secrets which are exempt under KRS 61.878(1)(b). That statute exempts from inspection:
Records confidentially disclosed to an agency and compiled and maintained for scientific research, in conjunction with an application for a loan, the regulation of commercial enterprise, including mineral exploration records, unpatented, secret commercially valuable plans, appliances, formulae, or processes, which are used for the making, preparing, compounding, treating, or processing of articles or materials which are trade commodities obtained from a person and which are generally recognized as confidential, or for the grant or review of a license to do business and if openly disclosed would permit an unfair advantage to competitors of the subject enterprise. This exemption shall not, however, apply to records the disclosure or publication of which is directed by another statute.
It is apparently your position that the invoices reveal "costing and price strategy," which is somehow confidential under this provision.
We have examined a copy of the lease agreement between the Authority and ADM/Growmark River Systems, Inc. Section 11 of the lease deals with the rates to be charged by the Authority for services it provides to ADM/Growmark. Section 11.3 references the monthly invoices you have withheld. Since the terms of this arrangement are outlined in the lease, which is clearly a public record, it cannot persuasively be argued that the invoices upon which they are calculated are a trade secret or otherwise confidential.
KRS 61.878j(1)(b) has been interpreted to authorize nondisclosure of records pertaining to TF-1, an agent employed in PCB removal; its components and uses, OAG 86-1, and technical proposals submitted in response to Requests for Proposals. OAG 83-256; OAG 88-1. Fundamental to the valid assertion of this exemption is evidence that the requested documents contain information of a proprietary nature.
The term "trade secret" was definded by a Kentucky court in Progress Laundry Co. v. Hamilton, Ky., 270 S.W. 834, 835 (1925). There, the court held:
A trade secret is a plan or process, tool, mechanism, or compound, known only to its owner and those of his employees to whom it is necessary to confide it. It is a property right which equity, in the exercise of its power to prevent breach of trust, will protect. If differs from a patent in that as soon as the secret is discovered, either by an examination of the product or in any other honest way, the discoverer has the full right to use it.
This definition suggests something integral to a product or its production. It does not contemplate financial records or invoices, such as those withheld by the Authority. These invoices do not contain secret commercially valuable plans or formulas, within the meaning of the provision, and are therefore not exempt under KRS 61.878(1)(b). STWith respect to the worksheets prepared by ADM/Growmark, we find that although these documents are "public records, " they are exempt from inspection under KRS 61.878(1)(g) and (h), relating, inter alia , to preliminary drafts, notes, recommendations, and memoranda. OAG 78-816. We have previously stated that if records of a private entity are in the possession of or retained by a public agency, they are, in general, subject to inspection. See KRS 61.870(2) (public records include those "in possession of or retained by a public agency" ); OAG 89-7. This is consistent with the principle announced in OAG 90-7, where we held that a contractor to a governmental entity: [M]ust accept certain necessary consequences of involvement in public affairs. Such a contractor, in our view, loses any character of a 'private individual' . . . in connection with correspondence regarding administration or issues associated with administration of a governmental or public contract.
(Citation omitted.)
Nevertheless, the worksheet are tools which the private entity uses in the process of calculating the final figures contained in the invoices. They may prove to be erroneous or inaccurate, and are subject to modification. There is, accordingly, a compelling reason for their exclusion. We do not believe that their release is mandated by the Open Records Act, and instead find that they are exempt under KRS 61.878(1)(g) and (h).
It is therefore the opinion of the Attorney General that the Authority violated the Open Records Act in denying Mr. Prater's request for access to its invoices. The Authority was correct, however, in withholding the worksheets used by ADM/Growmark, inasmuch as these were preliminary documents exempt from inspection under KRS 61.878(1)(g) and (h).
As required by statute, a copy of this opinion will be sent to the requesting party, Mr. Ronald Sullivan. Both the Authority and Mr. Sullivan may challenge it in the appropriate circuit court. KRS 61.880(5).