Opinion
Opinion By: Andy Beshear,Attorney General;James M. Herrick,Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether the Energy and Environment Cabinet ("Cabinet") violated the Open Records Act in its disposition of Mary Varson Cromer's April 5, 2018, request for "all records of communication between the Energy and Environment Cabinet and the Blue Ridge Landfill or its agents from December 1, 2017 through the present date." For the reasons that follow, we find a partial violation of the Act.
On January 3, 2017, the Cabinet and Blue Ridge Landfill ("Blue Ridge") settled a pending enforcement action by entering into an Agreed Order. The order required Blue Ridge to develop a Corrective Action Plan ("CAP") subject to Cabinet approval.
The records in dispute on appeal consist of two categories: (1) unsigned drafts of certain letters and permits, the final versions of which the Cabinet has provided to Ms. Cromer; and (2) an e-mail exchange between a Cabinet attorney and an attorney for Blue Ridge concerning the negotiation of terms of a CAP. The Cabinet has provided this office with a copy of the disputed records, which we deem to have been submitted for in camera review pursuant to KRS 61.880(2)(c).
In its initial response to Ms. Cromer on May 8, 2018, the Cabinet invoked KRS 61.878(1)(i) and (j), 1 stating that "certain documents that were preliminary in nature in which opinions were expressed or policies were formulated or recommended, but do not indicate a final action by the agency, have been removed from the files." On appeal, the Cabinet has clarified that these are the unsigned drafts of letters and permits.
Preliminary drafts "represent a tentative version, sketch, or outline of a formal and final written product." 05-ORD-179. Although "materials that were once preliminary in nature lose their exempt status once they are adopted by the agency as part of its action,"
University of Kentucky v. Courier-Journal & Louisville Times Co., 830 S.W.2d 373, 378 (Ky. 1992), the Cabinet in this case has provided the final versions of the letters and permits to Ms. Cromer. Cf. 99-ORD-206. To the extent that the drafts were adopted as part of final agency action, the Cabinet has disclosed their content; and to the extent that the Cabinet did not adopt them, they remain preliminary. We therefore affirm the Cabinet's withholding of the draft letters and permits.
The e-mail, however, presents a more difficult question. In its initial response, the Cabinet identified the record as an attorney-client communication privileged under KRE 503 and KRS 61.878(1)(l). That argument has been abandoned on appeal, as the Cabinet now argues that the record is "preliminary to final agency action" under KRS 61.878(1)(i) and (j), as well as privileged as a "settlement negotiation" under KRS 61.878(1)(k) and (l) "by operation of the Kentucky Rules of Evidence, the Federal Rules of Evidence, and various privileges recognized in case law construing the statutorily authorized rules governing the practice of law." We address first the argument that the e-mail is "preliminary."
KRS 61.878(1)(i) and (j)
The Cabinet does not identify which type of "preliminary" record the e-mail is purported to be. It is clearly not a preliminary draft, as it constitutes the final version of the communication sent between the parties. It is not a "note" because it was not "created as an aid to memory or as a basis for a fuller statement, as are, for example, written or shorthand notes taken at a meeting." 05-ORD-179.
As for "correspondence with private individuals," that category of records "is generally reserved for that narrow category of public records that reflects 'letters exchanged by private citizens and public agencies or officials under conditions in which the candor of the correspondents depends on assurances of confidentiality. '" Id. (quoting 00-ORD-168). We have previously held that a state agency's communications with a private contractor relating to the administration of its public contract fell outside the scope of "correspondence with private individuals." 00-ORD-98 (affirming OAG 90-7). Nor does this exception apply where correspondence is intended to petition or advocate for particular action by a public agency on a specific matter in which the agency is empowered to make a decision. See, e.g. , 99-ORD-220 (applications for licenses to conduct business); 01-ORD-86 (applications for purchase of conservation easements); 17-ORD-156 (requests to Louisville Metro Government for mayoral proclamations to be made). It is equally inappropriate to apply the exception to communications between a state agency and a regulated entity in the scope and course of the agency's regulatory duties. Accordingly, we find KRS 61.878(1)(i) inapplicable.
This leaves the applicability of KRS 61.878(1)(j). This office has described the purpose underlying that exception as follows: "To preserve the integrity of a public agency's internal decision making process by promoting full and frank discussion between and among public employees and officials and by equipping them with the tools needed in hammering out official action, 'the General Assembly has determined that the public's right to know is subservient to . . . the need for governmental confidentiality' in pre-decisional records not adopted in that official action." 14-ORD-014 (emphasis added) (quoting
Beckham v. Board of Educ. of Jefferson Cnty., 873 S.W.2d 575, 578 (Ky. 1994)).
The rationale underlying KRS 61.878(1)(j) "is equally compelling regardless of whether the communications are within an agency or between agencies." 93-ORD-125. Thus, where two public agencies are collaborating on a matter, interagency as well as intra-agency communications may be covered by the exception, which is "designed to encourage frank discussion of matters of concern to the public agency or agencies." Id.
When the discussion includes an outside entity regulated by the agency, however, this rationale does not apply. Accordingly, where the Energy and Environment Cabinet ("EEC") and the Environmental Protection Agency ("EPA") had conducted a joint investigation of the Louisville Metropolitan Sewer District ("MSD"), we held that an e-mail containing opinions and recommendations as to penalties to be assessed against MSD was not exempt when EEC and EPA had included representatives of MSD in the communication. 16-ORD-256. In the present appeal, the Cabinet's communication with an outside entity (Blue Ridge) concerning a regulatory matter was likewise not "preliminary" within the meaning of KRS 61.878(1)(j).
This situation is distinguished from decisions holding that contract proposals and letters of intent submitted during competitive negotiations are preliminary, inasmuch as those decisions are based on the recognition that "premature disclosure of records reflecting the negotiations . . . could seriously compromise the project [and] nondisclosure of those records prior to the finalization of the agreement promotes the purposes for which KRS 61.878(1)(i) and (j) . . . were enacted." 97-ORD-62. Here, the Cabinet, as a regulatory agency communicating with a regulated entity about the terms of a CAP, is not engaged in a competitive negotiating process, but is merely fulfilling its public regulatory function.
KRS 61.878(1)(k) and (l) and Rules of Evidence
Finally, we address the Cabinet's argument that the e-mail is a "privileged communication" under KRS 61.878(1)(k) and (l) by virtue of the Federal Rules of Evidence and Kentucky Rules of Evidence. KRE 408, which in substance essentially matches its federal counterpart, states as follows:
Evidence of:
(1) Furnishing or offering or promising to furnish; or
(2) Accepting or offering or promising to accept a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount . Evidence of conduct or statements made in compromise negotiations is likewise not admissible. This rule does not require the exclusion of any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations. This rule also does not require exclusion when the evidence is offered for another purpose , such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.
(Emphasis added.)
The Cabinet states that "Cabinet counsel sent the email to the attorney for Blue Ridge to prevent potential litigation regarding a determination that was not yet final because additional conditions the Cabinet was considering to impose as part of the CAP approval would subject to [ sic ] challenge by the Landfill pursuant to KRS 224.10-420." 2 The Cabinet further argues that the e-mail "was a settlement communication because it was intended to prevent a challenge to terms the Cabinet had not yet determined to should [ sic ] be required by the Landfill CAP."
Upon reviewing the e-mail in camera , we find no indication of an active dispute concerning the "additional terms" the Cabinet wished to propose. The discussion, furthermore, does not touch on any substantive terms of the proposed CAP, but merely concerns the scheduling of a telephone call to discuss the matter. Even assuming, however, that the process of finalizing the terms of a CAP pursuant to an Agreed Order was an offer of "valuable consideration" in an attempt "to compromise a claim which was disputed, " we do not find that the Cabinet's nondisclosure of this e-mail was warranted under KRE 408 or its federal counterpart.
In contrast to the attorney-client privilege, which has broad application with only narrow exceptions, the exclusionary rule for settlement discussions only applies in the specific circumstance where the evidence is offered "to prove liability for or invalidity of the claim or its amount." The evidence is admissible for any other purpose , including impeachment of an expert witness, proof of bad faith on the part of an insurance company, proof of failure to mitigate damages, showing the motivation behind an action for fraud, or proving unconscionability of an agreement.
Miller ex rel. Monticello Banking Co. v. Marymount Med. Ctr., 125 S.W.3d 274 (Ky. 2004);
Hale General Contracting, Inc. v. Motorist Mutual Ins. Co., 2016 WL 1068997 (Ky. App., Mar. 18, 2016);
Powers v. Halpin, 2007 WL 1196527 (Ky. App., Apr. 6, 2007);
Midwestern Ins. Alliance, Inc. v. Jones, 2004 WL 2482243 (Ky. App., Nov. 5, 2004);
Barnett v. Barnett, 2014 WL 7232735 (Ky. App., Dec. 19, 2014). In the present case, had Blue Ridge elected to challenge the Cabinet's conditions on the CAP approval, discussions between the parties might therefore have been admissible for proper purposes.
Accordingly, we find no merit in the Cabinet's argument that the e-mail discussion is privileged under KRE 408 or FRE 408, as incorporated into the Open Records Act by KRS 61.878(1)(k) or (l). Since we also find that the e-mail was not exempt under KRS 61.878(1)(i) or (j), the Cabinet partially violated the Act by withholding this record.
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 shall be notified of any action in circuit court, but shall not be named as a party in that action or in any subsequent proceedings.
Footnotes
Footnotes
1 KRS 61.878(1)(i) and (j) create exceptions to the Open Records Act in the cases of, respectively:
(i) Preliminary drafts, notes, correspondence with private individuals other than correspondence which is intended to give notice of final action of a public agency; [and]
(j) Preliminary recommendations, and preliminary memoranda in which opinions are expressed or policies formulated or recommended[.]
2 KRS 224.10-420(2) entitles "[a]ny person not previously heard in connection with the issuance of any order or the making of any final determination" by the Cabinet to file a petition with the Cabinet and demand a hearing.