11-ORD-212

11-ORD-212

December 16, 2011

In re:        The LaRue County Herald News/LaRue County Judge/Executive and LaRue County Jailer        

        Summary:        Because the settlement agreement in dispute is a record that is “prepared, owned, used, in the possession of, or retained by a public agency,” it is a public record within the meaning of KRS 61.870(2), and must be disclosed to the public upon request unless it qualifies for exclusion under one or more of the exceptions to the Open Records Act. Given the circuit court order mandating the confidentiality of the agreement, however, the question of whether it can be withheld on the basis of KRS 61.878(1)(a) must be “raised in the judicial system.”    

Open Records Decision

        The question presented in these consolidated appeals is whether the LaRue County Judge/Executive and/or LaRue County Jailer violated the Kentucky Open Records Act in the disposition of LaRue County Herald News Editor Linda Ireland’s (identical but separate) September 14, 2011, requests for “copies of records with regard to the recent settlement entered in LaRue Circuit Court in case 08-CI-175, which was brought by Michael Embree against the LaRue County Detention Center.”¹  In a timely written response, Judge/Executive Tommy Turner advised that “I have not seen, nor have I [received] any documents regarding the settlement of this case other than the letter from the attorney, Keith Bond, that accompanies this letter to you.”²  Judge Turner further advised Ms. Ireland that “I did not sign, I have not seen, nor was I consulted via phone, email, in person or any other method of communication on any settlement agreement and I do not know what the settlement was in this case.”  In closing, Judge Turner indicated that if he received “additional documents in the future,” Ms. Ireland was “more than welcome to have copies of them.”  Jailer Johnny Cottrill did not issue a written response, as KRS 61.880(1) expressly requires,³ but apparently contacted Ms. Ireland via telephone on September 19 to advise that he was “not in possession of the documents.”  According to Ms. Ireland, Jailer Cottrill also indicated that he “would look for the records.”  

        Ms. Ireland initiated this appeal by letter dated September 28, noting that she had not received any records to date.  Having ultimately reviewed the actual settlement agreement, under authority of KRS 61.880(2)(c) and 40 KAR 1:030, Section 3, in light of governing case law and prior decisions by this office, the Attorney General finds that the settlement agreement is a public record subject to public inspection, which must be disclosed unless it qualifies for exclusion under one or more of the exceptions codified at KRS 61.878(1); however, because the LaRue Circuit Court has ordered that all terms of the agreement shall remain confidential, “the issue of public access to the agreement, and related documentation, must be resolved by the court . . . .”  07-ORD-110, p. 2.  On appeal, Judge Turner reiterated his earlier statement and Jailer Cottrill forwarded a copy of the “Agreed Order Dismissing Settled” to both Ms. Ireland and this office, confirming that he does not possess any other “court settlement or terms of agreements, records, documents or material held regarding Civil Action No. 08-CI-00175.”⁴  

        The existence of the requested settlement agreement, which is unquestionably a “public record” within the meaning of KRS 61.870(2),⁵ is not in dispute, and the Kentucky Supreme Court has recognized that a “confidentiality clause in such an agreement is not entitled to protection” in holding “that a public agency may not circumvent the statutory requirements [of the Open Records Act] by agreeing to keep the terms of a settlement agreement confidential.”  Lexington-Fayette Urban County Government v. Lexington-Herald Leader Company, 941 S.W.2d 469, 472-73 (Ky. 1997).  See Central Kentucky News-Journal v. George, 306 S.W.3d 41 (Ky. 2010) (holding that Lexington-Fayette Urban County Government, above, was controlling).  In Central Kentucky News Journal v. George, the Court adopted the reasoning of the earlier case, holding upon review of the agreements in dispute “that any contention that their disclosure would constitute a clearly unwarranted invasion of personal privacy [within the meaning of KRS 61.878(1)(a)] is meritless. The agreements do not contain any of the underlying details of the claims they purport to resolve that could expose [the former public school employee who initiated the original action] or others to the risk of serious personal embarrassment [or] humiliation.”  Id. at 47.  Rather, the Court observed, the agreements “merely contain some scant personal identifiers that could have easily been redacted.”  Id.  See also 09-ORD-141.  

        The record on appeal in this case did not originally include a copy of the disputed settlement agreement nor did it otherwise contain sufficient context in which to review the issue(s) presented. Neither the Judge/Executive nor the Jailer invoked KRS 61.878(1)(a) or attempted to establish that disclosure would constitute a clearly unwarranted invasion of personal privacy.  Both agencies focused exclusively on their lack of possession, as opposed to denying access on the basis of KRS 61.878(1)(a), which rendered their initial responses both substantively incorrect (see note 4, above) and procedurally deficient. See KRS 61.880(1); KRS 61.872(5). Existing case law removes any doubt as to whether a settlement agreement involving the expenditure of public funds can be properly withheld simply because it contains a confidentiality clause such as the subject agreement.⁶ In the absence of a superior privacy interest, which has not been demonstrated here, this argument has been deemed unpersuasive in the absence of a court order sealing the agreement (or the equivalent).⁷  Having reviewed the actual settlement agreement, which does “not contain any of the underlying details of the claims [it] purport[s] to resolve that could expose [the Jailer or the Detention Center] to the risk of serious personal embarrassment [or] humiliation,” Central Kentucky News-Journal, above, at 47 (original emphasis), this office finds that a “strong public interest in knowing how its tax money is being put to use by the [public agency]” must prevail.  Id.  That said, this office does not have authority to issue a ruling contrary to an existing court order as explained later in this decision. 

         Given the lack of evidence presented regarding the content of the settlement agreement in dispute, as well as the reason for both agencies’ lack of possession, this office requested, per KRS 61.880(2)(c) and 40 KAR 1:030, Section 3, that LaRue County Attorney Dale Morris explain “whether the insurance carrier for the County (and Jailer/Detention Center if not one and the same) paid the settlement” and, if so, whether the insurance carrier possessed a copy of the requested settlement agreement, “who actually possessed the settlement agreement if not[,]” and “the factual situation which resulted in the lawsuit.”  This office also requested that Mr. Morris provide us with a copy of the settlement agreement for purposes of in camera review.  Mr. Morris responded on behalf of the agencies in a timely manner, enclosing a copy of the complaint filed against the Detention Center on August 8, 2008, and noting that it “should provide you with sufficient information regarding the facts of the case as alleged by Mr. Embree.”  Because the matter was “immediately assigned to our insurance provider and subsequently to the attorney who represented the insurance carrier,” he observed, neither the Judge/Executive nor the Jailer or the County Attorney’s Office possessed a copy of same.  As previously indicated, that fact is not dispositive. See note 4, above. However, Mr. Morris further advised that his office was obtaining a copy of the agreement from the “entity” with possession and promptly forwarded us a copy as requested upon receipt.⁸  A review of the record confirms that disclosure would not constitute a clearly unwarranted invasion of personal privacy within the meaning of KRS 61.878(1)(a) as the agreement does not contain so much as even “scant personal identifiers.”  However, “the issue of public access to the agreement, and related documentation, must be resolved by the court regardless of where the record currently resides,” in light of the existing court order mandating the confidentiality of the agreement.  07-ORD-110, p. 2.

This office and the courts have long recognized that settlement of litigation by a governmental entity, which may involve the expenditure of public funds, is a matter of legitimate public concern which the public is entitled to scrutinize. Lexington-Fayette Urban County Government v. Lexington Herald-Leader Company, above; 00-ORD-5. In Lexington-Fayette Urban County Government, above, the Kentucky Supreme Court recognized that such a settlement agreement was unquestionably a public record. At issue in that case was whether the LFUCG had violated the Open Records Act in denying a request for unredacted copies of three final settlement agreements pursuant to which the LFUCG agreed to pay litigants in connection with lawsuits filed against the agency. In denying access, the LFUCG partially relied on confidentiality clauses in two of the three agreements whereby the settlement recipients and their attorneys agreed not to disclose any terms of the agreements. As the Court observed:

There could be no viable contention that an agreement which represents the final settlement of a civil lawsuit whereby a governmental entity pays public funds to compensate for an injury it inflicted is not a public record. KRS 61.872(1) provides in part that “all public records shall be open for inspection by any person” and we think of no construction of this language which would permit exclusion of an agreement of the type at issue here. In fact, even before enactment of the Open Records statute, we held in Courier-Journal & Louisville Times Co. v. McDonald, Ky., 524 S.W.2d 633 (1974), that “the payment of city funds … is a matter with which the public has a substantial concern, against which little weight can be accorded to any desire of the plaintiff in that suit to keep secret the amount of money he received.” Id. at 635. Thus, the government is without any basis upon which to claim a right of privacy, and unless the documents are excluded from disclosure by one or more of the specific provisions of the Act, they must be produced. KRS 61.871.

Typically, the provision relied upon by persons wishing to prevent disclosure is KRS 61.878(1)(a) which excludes “public records containing information of a personal nature where the public disclosure thereof would constitute a clearly unwarranted invasion of personal privacy.”

Id. at 471.

Having summarized the relevant case law regarding application of KRS 61.878(1)(a), the Court noted that “[o]f primary concern is the nature of the information which is the subject of the requested disclosure; whether it is the type of information about which the public would have little or no legitimate interest but which would be likely to cause serious personal embarrassment or humiliation.”  Id. at 472. After weighing the competing interests, the Court determined that “the privacy claim here is simply insufficient to overcome the public’s right of access to information of this type.”  Id. In so doing, the Court adopted the reasoning of the Court of Appeals regarding the requested agreements:

 In balancing the sacrosanct right of an individual to privacy against legitimate public concerns and the right of the public to inquire into the workings of government, we find that a settlement of litigation between private citizens and a governmental entity is a matter of legitimate public concern which the public is entitled to scrutinize. A confidentiality clause in such an agreement is not entitled to protection-in contrast with agreements containing the kind of matters protected by the privileges [implicated in the prior opinions regarding application of KRS 61.878(1)(a) which are not implicated in this context].

Id. at 473. As in Lexington-Fayette Urban County Government, “the record in this case gives no indication that significant privacy rights of the settling plaintiff are implicated here [beyond medical information contained in attachments to the initiating complaint, which is already part of the public record].”  Id. However, the Court again left the “door ajar for those who seek to prevent disclosure.”  Beckham at 578; 98-ORD-24; 08-ORD-023.

        “The ‘right of persons who might be affected by the release of governmental information to be heard on their privacy claim,’” which the Court recognized in Beckham v. Jefferson County Board of Education, 873 S.W.2d 575, 579 (Ky. 1994)⁹  and reaffirmed in Lexington-Fayette Urban County Government, “is triggered when a public agency expresses its intention to disclose that information, and the affected parties commence litigation prior to disclosure. Lexington-Fayette Urban County Government at 472.  It cannot be employed by a public agency to avoid its duties under KRS 61.880(1).”  98-ORD-24, p. 5. Rather, it is “incumbent on the public agency to responsibly discharge its duties under the Open Records Act.”  Id.  Thus, having acknowledged the significant policy considerations weighing in favor of settlements, the Kentucky Supreme Court and this office have nevertheless recognized “that a public agency may not circumvent the statutory requirements by agreeing to keep the terms of a settlement agreement confidential.”  Lexington-Fayette Urban County Government at 472 (citation omitted).

        Significantly, in 07-ORD-110, this office concluded that because the requested “settlement agreement, and any record related thereto, is a record that is ’prepared, owned, used, in the possession of, or retained by a public agency’ [KRS 61.870(2)],’ it is a public record” for purposes of the Open Records Act “and must be disclosed unless it qualifies for exclusion under one or more of the exceptions” thereto. Id., p. 1. In so doing, the Attorney General quoted OAG 01-6, which conclusively determined that “a settlement agreement between a party litigant and a [public agency], sealed or unsealed, is a public record and cannot be withheld from public disclosure unless the document is properly excluded from disclosure by one or more of the applicable exceptions of KRS 61.878(1)[(a) through (n)] of the Open Records Act or other applicable law.”  Id., p. 2. However, in OAG-01-6, this office further acknowledged that “[i]f the settlement agreement is sealed by order of a court, the question of whether the document is subject to public inspection must be raised in the judicial system.”  Id. The burden of proving that the record is exempt from disclosure, this office reasoned, “falls upon the public agency or the affected party.”  Our conclusion rested largely on Lexington-Fayette Urban County Government, above, fundamental to which was the recognition that “[t]here could be no viable contention that an agreement which represents the final settlement of a civil lawsuit whereby a governmental entity pays public funds to compensate for an injury it inflicted is not a public record.”  Id. at 471, citing KRS 61.872(1) and Courier-Journal & Louisville Times Co. v. McDonald, 524 S.W.2d 633, 635 (Ky. 1974) (holding that “the payment of city funds . . . is a matter with which the public has a substantial concern, against which little weight can be accorded to any desire of the plaintiff in that suit to keep secret the amount of money he received”).

        In light of Lexington-Fayette Urban County Government, above, and OAG 01-6, this office held in 07-ORD-110 that the requested settlement records were “public records, and that, in the absence of any claim by the [agency] that the settlement agreement raises legitimate concerns for personal privacy that are superior to the public’s interest in disclosure, they are not exempt[.]”  07-ORD-110, p. 4.  Because the terms of the dismissal and settlement agreement between the public agency and the complainant were placed under seal by order of the court, this office that “’the question of whether the document[s] [are] subject to public inspection must be raised in the judicial system.’”  07-ORD-110, p. 4, quoting OAG 01-6, p. 3. There, as in the instant case, however, the “presumption of openness which informs the Open Records Act extends to the disputed records and militates in favor of disclosure.”  Id.  See also 07-ORD-111.

        Central Kentucky News-Journal v. George, 306 S.W.3d 41 (Ky. 2010), above, is the judicial decision which ultimately resulted from the motion by the appellant in 07-ORD-110 to intervene in both of the underlying actions in circuit court. Declaring that “it is beyond question that the settlement agreements are public records” for purposes of the Act, the Court rejected the agency’s reliance on KRS 61.878(1)(a) and expressly found Lexington-Fayette Urban County Government, above, controlling. Central Kentucky News-Journal, above, at 45. Applying the reasoning of the latter decision to the facts presented, the Court agreed that it was “quite clear that the settlement agreements are presumably public records subject to disclosure, regardless of their confidentiality provisions,” but observed that it still had to address whether agreements were properly withheld on the basis of KRS 61.878(1)(a). Id. at 47.  Having reviewed the subject agreements, the Court ultimately held that “any contention that their disclosure would constitute a clearly unwarranted invasion of personal privacy is meritless.”  Id.  In so doing, the Court observed that the amount of consideration paid bears “a direct nexus to exactly how the public agency uses the public’s money – whether as settlement amounts or in regard to liability insurance premiums.”  Id. The same can be said of the settlement agreement in dispute; nevertheless, in the absence of a contrary directive or specific guidance from the courts regarding his role when presented with such facts, which Central Kentucky News-Journal does not contain, the Attorney General must again conclude, in light of the existing court order, that only the court is authorized to conclusively resolve this question.

        A party aggrieved by this decision may appeal it by initiating action in the appropriate circuit court pursuant to KRS 61.880(5) and KRS 61.882. Pursuant to KRS 61.880(3), the Attorney General should be notified of any action in circuit court, but should not be named as a party in that action or in any subsequent proceeding.

                                                Jack Conway

                                                Attorney General

                                                Michelle D. Harrison

                                                Assistant Attorney General

#344, 345

Distributed to:

Linda Ireland

Dale M. Morris

Tommy Turner

Johnny Cottrill