Request By:
Mr. Paul V. Guagliardo
Assistant Director of Law
City of Louisville, Department of Law
Room 200, City Hall
Louisville, Kentucky 40202-2771
Opinion
Opinion By: Chris Gorman, Attorney General; Amye B. Majors, Assistant Attorney General
Mr. Brian L. Cullinan has appealed to the Attorney General, pursuant to KRS 61.880, your response to his renewed request for access to certain documents in the City of Louisville's possession. Those documents are identified as the "Greenebaum, Boone [now Greenebaum, Treitz, Brown & Marshall] billing statements." Greenebaum represents the City in three separate civil actions filed by and against it, and one of its employees. The subject of those actions, all of which are currently pending, is the management and investment of the Policemen's Retirement Fund.
On January 30, 1992, this Office issued an opinion in an earlier open records appeal filed by Mr. Cullinan. OAG 92-14. There we addressed the propriety of the City's partial denial of his request to inspect billing invoices submitted by the City's attorneys, including Greenebaum, Boone and Tom Jarrell. We did not, at that time, factor into our deliberations the existence of ongoing litigation.
In OAG 92-14, we held that records of payment made to attorneys by a public agency, and bills and statements submitted to the agency by its attorneys, should be made available for inspection, unless the actions out of which they arose fell within the narrow parameters of KRS 61.878(1)(f), the "pending litigation" exception to the Open Records Act. Relying on OAG 82-169 and OAG 85-91, we also held that records which reflect the general nature of legal services rendered are not exempt. Only those records, or portions of records, which disclose substantive matters protected by the attorney/client privilege, and are exempt under KRS 61.878(1)(j), could properly be withheld. The City was therefore obligated, pursuant to KRS 61.878(4), to separate the exempt material from the nonexempt material, and release the latter for inspection. We rejected the City's invocation of the attorney/client privilege, and KRS 61.878(1)(j), as well as KRS 61.878(1)(g) and (h), to authorize the blanket exclusion of the disputed documents.
In response to the City's request for clarification, and based on additional facts presented, to wit, the existence of ongoing litigation, this Office subsequently issued a miscellaneous letter in which we advised the City that it could continue to withhold the documents until the close of litigation. Through its Director of Law, Ms. Christina Heavrin, the City advised that it had provided Mr. Cullinan with "the contracts, hours billed and payments made under the contract with Greenebaum, Boone," but that it had withheld "the detailed itemization of services performed during the litigation." Ms. Heavrin indicated that the City would release the "non-exempt portions of Mr. [Tom] Jarrell's statements in compliance with OAG 92-14," the litigation for which his services had been retained having apparently been concluded.
It is Mr. Cullinan's position that this Office has not yet addressed a critical issue: Whether the City may properly rely on KRS 61.878(1)(f) to authorize nondisclosure of the remaining records in view of the narrow scope of that exception and the nature of the litigation which gives rise to his open record appeal. With this in mind, he renewed his request on March 11, 1992, asking that the City provide a reasoned explanation for its invocation of KRS 61.878(1)(f), and how that exception applies to the records withheld. The City again denied Mr. Cullinan's request on March 17, 1992, stating that it intended to abide by OAG 92-14, and our subsequent clarification. This appeal followed.
Mr. Cullinan asks that we review the City's response to his renewed request for inspection of public records to determine if it has sustained its burden of proof by establishing that the disputed portions of those records fall within the exception codified at KRS 61.878(1)(f). For the reasons set forth, we conclude that the City has failed to sustain that burden, and that its actions are inconsistent with the Open Records Act.
OPINION OF THE ATTORNEY GENERAL
In OAG 92-14, this Office engaged in an in-depth analysis of the attorney/client privilege as it is applied to fee information. There, we recognized that as a general rule, matters involving the receipt of fees from a client are not privileged inasmuch as they do not involve confidential communication. Continuing, we noted that an agency cannot withhold every document which relates to a particular matter under KRS 61.878(1)(j) and the attorney/client privilege simply because it is represented by an attorney in a given matter. As the Sixth Circuit Court of Appeals noted in United States v. Goldfarb, 328 F.2d 280, 281-82 (6th Cir.), cert. denied, 377 U.S. 976 (1964), the attorney/client relationship does not create "[a] cloak of protection [which is] draped around all occurrences and conversations which have any bearing, direct or indirect, upon the relationship of the attorney with his client."
At the risk of belaboring this issue, we quote portions of our previous opinion from pages four and five:
In OAG 82-169, this Office addressed the question whether the Jefferson County Public Schools could withhold, inter alia, Board records of payments to its attorney, and bills and statements submitted to the Board by its attorney, under KRS 61.878(1)(j) and the attorney client privilege. There we concluded that although generally the contracts, vouchers, and other business records of a public agency are open to public inspection under the Open Records Act, because the Board was engaged in litigation and would be disadvantaged in that law suit by the release of the requested records, they could be withheld pursuant to KRS 61.878(1)(f) until the litigation was concluded. This Office implicitly rejected the argument that such records were protected by the attorney client privilege and KRS 61.878(1)(j). We affirmed this position in OAG 85-91, where we held that a public agency's denial of a request to inspect the contracts, retainer agreements, and other documents pertaining to the relationship between the agency and its attorneys was improper. In that opinion we expressly stated that failure to disclose records of payments, other than as contained in regular income and accounting records, was improper. OAG 85-91, at p. 3. We believe that OAG 82-169 and OAG 85-91 have a direct bearing on this appeal, and that the authority you cite, OAG 88-32, which pertains to the minutes of a personnel committee meeting, is inapposite.
The Kentucky Supreme Court has recognized that communication relating to the fiscal arrangements between an attorney and his client do not fall within the attorney client privilege. In Kentucky-Virginia Stages Inc. v. Tackett, Ky., 182 S.W.2d 226 (1944), the court held that the terms and scope of employment are not communications made to an attorney in his professional character by the client. An attorney does not act as a legal adviser when communicating with the client about his fee, but instead acts in his own interest, representing himself exclusively. Tackett, supra at 230. This reasoning was adopted in United States v. Haddad, 527 F.2d 537 (6th Cir. 1975), wherein the Sixth Circuit held that amounts paid or owed to an attorney by his client are generally not within the attorney client privilege.
Although it does not appear that either the Sixth Circuit or a Kentucky court has had occasion to address the question whether the underlying bills are privileged, in In Matter of Walsh, 623 F.2d 489 (7th Cir. 1980), the Seventh Circuit held that because matters involving the receipt of fees from a client and who paid the fees are not privileged, a grand jury was entitled to review the ledgers, bills, time records, and retainer agreements prepared by an attorney.
This Office has conducted additional research on this issue which confirms our previous position. As indicated, the general rule is well established that information regarding a client's fees is not protected by the attorney/client privilege because the payment of fees is not a confidential communication between the attorney and client. In Matter of Walsh, supra; United States v. Haddad, supra; Colton v. United States , 306 F.2d 633 (2nd Cir. 1962); United States v. Cromer, 483 F.2d 99 (9th Cir. 1973); In re Grand Jury Proceedings 89-9 (MIA), 899 F.2d 1039 (11th Cir. 1990); In the Matter of Grand Jury Proceeding, Cherney, 898 F.2d 565 (7th Cir. 1990). The City of Louisville acknowledges this position by the release of "contracts, hours billed and payments made under the contract with Greenebaum, Boone."
Whether the underlying invoices and billing statements are subject to inspection is a closer question. In OAG 92-14, at p. 5, this Office opined:
We are not unmindful that these records may disclose substantive matters pertaining to the rendition of legal services. As the courts have noted, '[T]he only questions about substantive matters that must be answered are questions about the nature of the legal services rendered. ' United States v. Long, 328 F.Supp. 233, 236 (E.D. Mo. 1971). In Long, supra at 236, the court observed:
These questions require only a response, such as "litigation," "drafting contracts," "tax advice," or "work on domestic relations problems of client." Specific factual inquiry into the communications between attorney and client beyond this is privileged, such as what is said by the client or lawyer in relation to the problem.
See also , Colton v. United States, supra; United States v. Cromer, supra. Thus, records which reflect the general nature of services rendered are not protected by the attorney client privilege. Nor do we believe that such records are exempt under the exception for preliminary documents found at KRS 61.878(1)(g) and (h). Only those records which disclose communications by the client or attorney in relation to the specific matter for which the attorney was retained can be withheld from public inspection.
In so holding, we did not mean to suggest that the City would be required to reveal confidential communications between its attorneys and itself by releasing the billing statements and invoices unredacted and in their entirety. It was not then, nor is it now, our intention to abrogate the attorney/client privilege. By the same token, we decline the City's invitation to adopt a rule of blanket exclusion. Instead, we hold that information about attorney fees is privileged only if its disclosure would reveal confidential communications between the attorney and client.
In support of its position, the City cites In the Matter of Witnesses before the Special March 1980 Grand Jury, 729 F.2d 489 (7th Cir. 1984). We believe the distinction between confidential and nonconfidential matters drawn in that case is instructive. Although the court recognized that information regarding fees is not generally protected by the attorney/client privilege, it also recognized that such records might contain information protected by the privilege. The court noted that billing sheets or time tickets "which indicate the nature of documents prepared, issues researched or matters discussed could reveal the substance of confidential discussions between attorney and client." Id. at p. 495. Moreover, the court cited In Matter of Walsh, supra, which held that although a grand jury could obtain fee records, the attorney/client privilege could be asserted with respect to specific documents and information. Applying this reasoning to the facts presented in the instant appeal, we believe that the City need only permit inspection of records which describe, in general terms, the nature of the services rendered as, for example, "research," "witness interviews," "discussion with client." It may, of course, exercise its discretion in redacting any portion of its records which disclose substantive matters and litigation strategy. This resolution of the issue of the applicability of the attorney/client privilege to the requested records subserves both the City's interest in protecting privileged information and the public's interest in monitoring the city's activities to insure that it is properly executing its statutory function and pursuing the public good. Kentucky Board of Examiners of Psychologists v. The Courier Journal and Louisville Times Co. , 39 K.L.S. 3, p. 22 (3-12-92).
Turning to the remaining issue raised in this open records appeal, we find that the City has failed to sustain its burden of proof by establishing that the disputed documents may be withheld until the conclusion of pending litigation pursuant to KRS 61.878(1)(f). That statute authorizes the nondisclosure of:
(f) Records of law enforcement agencies or agencies involved in administrative adjudication that were compiled in the process of detecting and investigating statutory or regulatory violations if the disclosure of the information would harm the agency by revealing the identity of informants not otherwise known or by premature release of information to be used in a prospective law enforcement action or administrative adjudication. Unless exempted by other provisions of KRS 61.870 to 61.884, public records exempted under this provision shall be open after enforcement action is completed or a decision is made to not take action. Provided, however that the exemptions provided by this subsection shall not be used by the custodian of the records to delay or impede the exercise of rights granted by KRS 61.870 to 61.884.
This Office has consistently recognized that this provision must be strictly applied within the narrow limits of its express purpose. See, e.g., OAG 82-169; OAG 83-326; OAG 87-29; OAG 88-25; OAG 88-31; OAG 88-36; OAG 90-22. Thus, in OAG 92-16, we rejected the Justice Cabinet's invocation of KRS 61.878(1)(f) to authorize nondisclosure of records pertaining to litigation against Cabinet personnel for non-law enforcement matters, reasoning:
Consistent with the rule of strict construction generally applicable to the exemptions to the Open Records Act, KRS 61.878(1)(f) clearly provides that the 'exemptions provided by this subsection shall not be used by the custodian of the records to delay or impede the exercise of rights granted by KRS 61.870 to KRS 61.884.' It is the opinion of this Office that your invocation of KRS 61.878(1)(f) significantly expands the scope of that exemption. The litigation to which the requested records pertains involves a civil action against Justice Cabinet personnel.
This position finds support in a recent decision issued by the Kentucky Supreme Court. In University of Kentucky v. Courier-Journal and Louisville Times , 39 K.L.S. 4, p. 51 (4/9/92) petition for reh'g filed 4/28/92, the Court held that KRS 61.878(1)(f) was inapplicable to the University in the context of a request for records generated in the course of an NCAA investigation. The Court noted:
This exemption applies only to law enforcement agencies or agencies involved in administrative adjudication. The University cannot seriously contend that it is a law enforcement agency. Moreover, the University itself conceded that the NCAA, a private regulatory entity is the only 'agency' involved in 'administrative adjudication. '
Id . at p. 53. The City of Louisville is neither a law enforcement agency, nor is it involved in an administrative adjudication in any of the actions which form the basis for this open records appeal. Accordingly, its reliance on KRS 61.818(1)(f) to justify nondisclosure of the requested records is not warranted by the express language of the statute; a nonfinal opinion of the Supreme Court; or prior opinions of this Office.
At issue in OAG 82-169, which we believe to be dispositive of this appeal, were billing statements and invoices generated in the course of civil litigation initiated by a local board of education against certain contractors under the antitrust laws. In addition, the board alleged that price fixing and bid rigging might be involved, and that consequently, "criminal felony prosecutions . . . [might] eventuate under KRS 45A.325." OAG 82-169, at p. 4. Litigation of this character falls squarely within the parameters of KRS 61.878(1)(f).
The litigation which gives rise to this appeal, on the other hand, centers on the management of the Policemen's Retirement Fund. Policemen's Retirement Fund v. City of Louisville , No. 89-CI-08065 (Jefferson Circuit Court; filed 10-25-89), is an action initiated by the Fund for a declaration of rights as to the validity of the use of "excess funds" by the City for purposes authorized by the amended KRS 95.290. City of Louisville v. Stock Yards Bank and Trust Co., et al. , No. 90-CI-03253 (Jefferson Circuit Court; filed 4-19-90), is an action brought by the City in which it alleges that the Bank and other named defendants breached their fiduciary duty in the management and investment of the Policemen's Retirement Fund. In a similar vein, John H. Nevin v. Stock Yards Bank and Trust Co., et al. , No. 91-CI-03889 (Jefferson Circuit Court; filed 6-13-91), is an action brought by a member and beneficiary of the Policemen's Retirement Fund alleging breach of fiduciary duty. None of these cases can be characterized as actions brought by law enforcement agencies or agencies involved in administrative adjudication. It is therefore the opinion of this Office that KRS 61.878(1)(f) does not apply to the billing statements and invoices submitted to the City by its attorneys, and that the City has failed to sustain its burden under KRS 61.880(2) by establishing that the "pending litigation" at issue in this appeal falls within the parameters of that exception. To the extent that the clarification issued by this Office on February 20, 1992, is inconsistent with this opinion, it is hereby modified.
The City is directed to release the billing statements and invoices it continues to withhold. It may, however, exercise its discretion by redacting any and all references to substantive matters, litigation strategy, or the specific nature of the services provided by its lawyer. In OAG 92-14, we recognized, and we continue to recognize, that such records are exempt pursuant to KRS 61.878(1)(j) and the attorney/client privilege. We further recognize that the City must be afforded considerable latitude in separating the exempt material from the nonexempt material, and that consistent with the weight of authority, the only portions of the records which must be released are those portions which disclose, in very general terms, the nature of legal services rendered.
As required by statute, a copy of this opinion will be sent to the requester, Mr. Brian Cullinan. Mr. Cullinan and the City may challenge it by initiating action in the appropriate circuit court within thirty days.