Can a citizen use Delaware's FOIA to get records that a private company holds under contract with a state agency?

Official title

14-IB02 05/27/14 FOIA Opinion Letter to Mr. Hittinger re: FOIA Complaint Concerning Delaware Transit Corporation

Plain-English summary

A law firm, DLA Piper, filed a FOIA request on behalf of a client seeking records about bus advertising contracts held by the Delaware Transit Corporation (DTC). DTC turned over everything in its own files, including its contract with Gateway Outdoor Advertising, the company that lines up bus advertisers for DTC. DLA Piper wanted more, though: records that existed only in Gateway's own files documenting Gateway's negotiations with a specific law firm, Lundy Law, that had advertised on DTC buses. DTC did not have those documents and argued it had no obligation to get them, because they were Gateway's private business records, not "public records" at all.

The Attorney General agreed with DTC. The opinion adopts a three-part test, borrowed from an Ohio Supreme Court decision, for deciding when a private contractor's own records become subject to public-records law anyway: the contractor must have prepared the records to carry out the public body's own responsibilities, the public body must be able to monitor the contractor's performance through the records, and the public body must have contractual access to the records for that monitoring purpose. Gateway's negotiation records with Lundy failed all three prongs. DTC's public function is transportation, not advertising sales; the contract gave DTC no role in monitoring how Gateway negotiated with its own advertisers; and DTC's audit rights under the contract covered verifying the revenue Gateway collected, not overseeing how Gateway landed that business. The requested records stayed with Gateway.

Currency note

This opinion was issued in 2014. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Can I use a state FOIA request to get records held by a private company that contracts with a government agency?

Sometimes. According to this opinion, it depends on whether the company created the records to carry out the agency's own duties, whether the agency can monitor the company's work through those records, and whether the agency's contract gives it access to the records for that purpose. If all three are true, the records count as public records even though a private company physically holds them.

Why didn't Delaware Transit Corporation have to turn over its advertising contractor's negotiation records?

Because the AG found none of the three tests were satisfied. Providing transportation, not selling advertising, is DTC's public function; its contract with the advertising company gave it no mechanism to monitor how that company negotiated its own advertiser agreements; and its audit rights covered revenue verification, not the negotiation process itself.

Does a public agency's contractual right to audit a contractor's books make those books public records?

Not by itself. The opinion found that DTC's contractual right to audit Gateway's revenue records did not satisfy the monitoring-and-access test on its own, because that audit right existed to verify payments owed to DTC, not to give DTC a role in overseeing Gateway's negotiations with its own advertisers.

Does it matter that the requester wanted the records for an ongoing lawsuit?

Not for this analysis. The opinion notes the requester had other avenues, such as civil discovery in litigation, to pursue the same documents. FOIA only reaches records that meet the public-record definition, regardless of the requester's reason for wanting them.

Background and statutory framework

FOIA defines "public record" broadly as information "owned, made, used, retained, received, produced, composed, drafted or otherwise compiled or collected, by any public body, relating in any way to public business," 29 Del. C. § 10002(l). The opinion traces earlier Delaware AG opinions holding that a public body can be the "constructive custodian" of records physically held by a third party. In Att'y Gen. Op. 06-IB17, the Delaware Public Integrity Commission was found to constructively hold data compiled by a private database vendor because the Commission owned the database and had complete access to it, reasoning the opinion quotes from Att'y Gen. Op. 07-IB05. The opinion also cites out-of-state authority recognizing that a public body's constructive possession of records held by an agent, such as an accountant or attorney, can make those records public records: Swaney v. Tilford (a state finance authority's auditor's working papers) and Tober v. Sanchez (county accident reports held by the county's private attorney).

The opinion then applies the three-part test from State ex rel. Cincinnati Enquirer v. Krings, an Ohio case involving construction-cost records for a privately built football stadium: a private entity's records become public records if (1) the entity prepared them to carry out the public body's own responsibilities, (2) the public body can monitor the entity's performance through the records, and (3) the public body has access to the records for that monitoring purpose. Delaware had previously applied this test in Att'y Gen. Op. 06-IB17. Applying it here, DTC's contract with Gateway Outdoor Advertising did not satisfy any of the three prongs as to Gateway's dealings with Lundy Law: DTC's statutory transportation function, including its bus-shelter advertising authority under 2 Del. C. § 1309(28)(e), did not require the negotiation records; the contract gave DTC no mechanism to monitor Gateway's advertiser negotiations; and DTC's audit rights related to revenue verification rather than the negotiation process. The opinion notes DTC bears the burden of proving it lacks constructive possession of third-party records, citing Att'y Gen. Op. 05-IB10 and Guy v. Judicial Nominating Commission, and cites Harold v. Orange County and Prince George's County v. The Washington Post Co. as further examples of contractor records that were found to be public records because the government had built oversight into the underlying contract.

Citations and references

Statutes:

• 29 Del. C. §§ 10001-10006 (Delaware's Freedom of Information Act)
• 29 Del. C. § 10002(l) (defines "public record")
• 2 Del. C. § 1309(28)(e) (DTC's authority to contract for bus-shelter advertising)

Cases:

• State ex rel. Cincinnati Enquirer v. Krings, 758 N.E.2d 1135 (Ohio 2001) (three-part test for when a private contractor's records become public records)
• Swaney v. Tilford, 898 S.W.2d 462 (Ark. 1995) (state finance authority's auditor working papers constructively in the authority's possession)
• Tober v. Sanchez, 417 So.2d 1053 (Fla. App. 1982) (county accident reports held by the county's private attorney were public records)
• Guy v. Judicial Nominating Commission, 659 A.2d 777 (Del. Super. 1995) (public body bears the burden of proof on a FOIA claim)
• Harold v. Orange County, 668 So.2d 1010 (Fla. App. 1996) (contractor's compliance records were public records where the county delegated compliance-verification duties to the contractor)
• Prince George's County v. The Washington Post Co., 815 A.2d 859 (Md. App. 2003) (private company's risk-management database set up for the county's public business was a public record)

Source

• Landing page: https://attorneygeneral.delaware.gov/2014/05/27/14-ib02-052714-foia-opinion-letter-to-mr-hittinger-re-foia-complaint-concerning-delaware-transit-corporation/
• Original PDF: not linked from landing page

Original opinion text

OFFICE OF THE ATTORNEY GENERAL OF THE STATE OF DELAWARE

Attorney General Opinion No. 14-IB02

May 27, 2014

VIA EMAIL AND REGULAR MAIL

Mr. Carl W. Hittinger, Esq.

DLA Piper LLP (US)

One Liberty Place

1650 Market Street, Suite 4900

Philadelphia, Pennsylvania 19103-7300

RE: DLA Piper Complaint Against the Delaware Transit Corporation

Dear Mr. Hittinger:

By petition received on November 18, 2013, you asked this Office to determine whether the Delaware Department of Transportation/Delaware Transit Corporation (the "DTC") violated the "open records" requirements of the Delaware Freedom of Information Act, 29 Del. C. §§ 10001-10006 ("FOIA"), by failing to provide DLA Piper LLP (US) ("DLA Piper") with access to certain public records regarding advertisement contracts for DTC vehicles pursuant to a FOIA request dated August 29, 2013 (the "FOIA Request"). On December 9, 2013, DTC supplemented its initial production of documents responsive to the FOIA Request. On December 13, 2013, DLA Piper conceded that, through DTC's supplemental production, DTC had produced all documents in DTC's physical possession that were responsive to the FOIA Request. DLA Piper asserts, however, that there are other public records responsive to the FOIA Request that are in the physical possession of a third party, Gateway Outdoor Advertising, Inc. ("Gateway") that are responsive to the FOIA Request. Gateway has contracted with DTC to obtain and maintain external bus advertising on behalf of DTC under Contract #11-043 (the "Contract"). The remaining issue is whether any documents in Gateway's possession that have not already been produced by DTC are "public records" that are subject to examination under FOIA. For the reasons discussed below, it is the position of this Office that the documents in Gateway's possession that have not already been produced by DTC are not public records and are, therefore, not subject to disclosure pursuant to FOIA.

The records sought by DLA Piper through the FOIA Request were as follows:

1. All written contracts, memoranda of understanding, term sheets, and other records setting forth the terms of any and all agreement(s) between [DTC] and [Gateway].

2. All written contracts, memoranda of understanding, term sheets, and other records setting forth the terms of any and all agreement(s) between Gateway and Lundy Law, LLP ("Lundy"); and/or between or among [DTC], Gateway, and Lundy.

3. All written contracts, memoranda of understanding, term sheets, and other records setting forth the terms of any and all agreement(s) between Gateway and any legal services provider other than Lundy; and/or between or among [DTC], Gateway, and any legal services provider other than Lundy.

4. All records, including communications such as e-mails and other correspondence, that refer or relate in any way to the negotiation and execution of the agreement(s) between Gateway and Lundy and/or between or among [DTC], Gateway, and Lundy.

5. All records that in any way refer or relate to [DTC's] and/or Gateway's agreement to place advertisements for Lundy on the interiors or exteriors of buses or trains, in or around bus or train stops, or on any other [DTC] property from January 1, 2006 through the present.

6. All communications between Gateway and Lundy regarding the sale and placement of advertisements for Lundy on the interiors or exteriors of buses or trains, in or around bus or train stops, or on any other [DTC] property from January 1, 2006 through the present.

7. Financial records sufficient to show all payments made by Lundy to Gateway or to [DTC] from January 1, 2006 through the present.

8. All communications between any Gateway representative and Lundy regarding the sale and placement of advertisements for Lundy on the interiors or exteriors of buses or trains, in (sic) or around bus or train stops, or on any other [DTC] property from January 1, 2006 through the present.

9. All communications between any Gateway representative and any representative of a legal services provider regarding the sale and placement of advertisements for the legal services provider on the interiors or exteriors of buses or trains, in or around bus or train stops, or on any other [DTC] property from January 1, 2006 through the present.

10. All written contracts, memoranda of understanding, term sheets, and other records setting forth the terms of any and all agreement(s) between Gateway and any legal services provider other than Lundy Law, and/or between or among [DTC], Gateway, and any other legal services provider other than Lundy Law, giving a legal services provider any exclusive right to place advertisements on the interiors or exteriors of buses or trains, in or around bus or train stops, or on any other [DTC] property from January 1, 2006 through the present.

11. All Communications between Gateway and [DTC] regarding any agreement giving any party any exclusive right to place advertisements on the interiors or exteriors of buses or trains, in or around bus or train stops, or on any other [DTC] property from January 1, 2006 through the present.

12. All board resolutions, communications, and other records reflecting the approval by [DTC] of any and all exclusive agreements between Gateway and any party, and/or between or among [DTC], Gateway, and any party, for any exclusive right to place advertisements on the interiors or exteriors of buses or trains, in or around bus or train stops, or on any other [DTC] property from January 1, 2006 through the present.

I. BACKGROUND

DTC has provided a copy of the contract between DTC and Gateway (request #1), all contracts between Gateway and Lundy Law, LLP ("Lundy") for advertising on DTC buses (request #2), and all spreadsheets provided by Gateway to DTC that show payments by Lundy to Gateway (request #7). The documents produced for the requests #2 and #7 were already in DTC's possession at the time of the FOIA request.

DTC did not produce any documents in response to requests #3, 4, 5, 6, 8, 9 and 10 (collectively, the "Gateway Requests") as DTC did not have any responsive documents in its possession.1 None of the Gateway Requests were for documents that Gateway was required to produce for DTC pursuant to the Contract.

II. LEGAL ANALYSIS

A. RELEVANT STATUTE

According to 29 Del. C. § 10002(l):

(1) "Public record" is information of any kind, owned, made, used, retained, received, produced, composed, drafted or otherwise compiled or collected, by any public body, relating in any way to public business, or in any way of public interest, or in any way related to public purposes, regardless of the physical form or characteristic by which such information is stored, recorded or reproduced. . . .

B. LEGAL ANALYSIS

1. Records in the possession of third-parties that are "public records" subject to FOIA

The fact that the public records are in the custody of a third-party is of little consequence in determining whether they are subject to production in response to an appropriate FOIA request. In Att'y Gen. Op. 07-IB05 we stated:

Our Office has determined that FOIA may require a public body to produce records that are in the possession of a third-party in a contractual relationship with the public body. In Att'y Gen. Op. 06-IB17 (Aug. 21, 2006), the Public Integrity Commission engaged a private company to compile and maintain an electronic database. Our Office determined that the Commission was the "constructive custodian" of the data for purposes of FOIA because the Commission "owns the database and has a complete right of access to the data …. The Commission is the custodian of the database for purposes of FOIA because it contains information 'owned,' 'used,' or 'otherwise compiled and collected' by the Commission."

In Swaney v. Tilford, 898 S.W.2d 462, 464 (Ark. 1995), the Arkansas Supreme Court held that the Arkansas Development Finance Authority had "constructive possession and administrative control over" the working papers of its auditors, Deloitte Touche. "[FOIA] mandates that the burden be placed on the appropriate state agency to make arrangements for reasonable access to the records in … the office of the private custodian." Id. at 465. See also Tober v. Sanchez, 417 So.2d 1053 (Fla. App. 1982) (county accident reports in the possession of the county's private attorney were public records under FOIA).

We believe that the courts in Delaware would agree that when a public body has constructive possession or administrative control of records in the possession of an accountant or attorney or other private agent, those records are public records for purposes of FOIA and the public body must arrange to make those records available for inspection and copying upon request.

Under FOIA, the [DTC] has the burden of proving that it does not have constructive possession or administrative control over records in the possession of third party agents like attorneys and accountants. "'This allocation of the burden of proof underscores the basic public policy that … the plaintiff asserting a freedom of information claim has a disadvantage because only the public body holding the information can speak confidently regarding the nature of the material and the circumstances of the preparation and use …'" Att'y Gen. Op. 05-IB10 (Apr. 11, 2005) (quoting Guy v. Judicial Nominating Commission, 659 A.2d 777, 781 (Del. Super. 1995) (Ridgely, Pres. J.)).

In State ex rel. Cincinnati Enquirer v. Krings, 758 N.E.2d 1135 (Ohio 2001) (per curiam), the City of Cincinnati contracted with two private companies to construct a new football stadium. The contracts required the companies to maintain cost-accounting records and afford the city access to those records. A newspaper asked the county administrator for construction records to investigate cost overruns on the stadium. The county provided all records physically located in the county administration building but argued that records maintained by the two contractors were not subject to the Ohio Public Records Act.

The Ohio Supreme Court held the act affords "access to public records, even when a private entity is responsible for the records … [Governmental entities cannot conceal information concerning public duties by delegating these duties to a private entity." 758 N.E.2d at 1139, 1140. A private entity is subject to the public records law if: "(1) it must prepare the records in order to carry out a public office's responsibilities, (2) the public office must be able to monitor the private entity's performance, and (3) the public office must have access to the records for this purpose." Id. at 1140. The terms of the stadium contracts "are sufficiently broad to establish a right of access on the part of the county to the [contractors'] records concerning cost overruns on the public construction project." Id.2

2. Records in the possession of third-parties that are not "public records" subject to FOIA

Conversely, records in the possession of a private entity like Gateway are not "public records" unless: (1) it prepares the records in order to carry out a public body's responsibilities; (2) the public body is able to monitor the private entity's performance; and (3) the public body has access to the records for that purpose. See Att'y Gen. Op. 06-IB17 (Aug. 21, 2006) (citing Krings). The records sought by DLA Piper in the Gateway Requests do not satisfy the three criteria set forth in Krings. Records generated during contract negotiations between Gateway and Lundy, for example, were not prepared to carry out any of DTC's responsibilities, DTC does not monitor Gateway's performance in the manner contemplated by the previous FOIA interpretations cited herein, and DTC does not have access to those records for that purpose.

First, DTC's public function or responsibility is to provide transportation, not advertising. While DTC is authorized to provide for contractual advertising on its bus shelters to offset the costs of such facilities (2 Del. C. § 1309(28)(e)), there is no mandate regarding advertisements on buses themselves.3 Att'y Gen. Op. 06-IB17 related to information regarding a database created on behalf of the Delaware Public Integrity Commission (the "PIC") "to help carry out the PIC's statutory responsibility to maintain lobbying expense reports and financial disclosure reports of public officials." DTC is not statutorily responsible for advertisements on its buses. It is responsible for providing public transportation. DTC does not use the requested documents as part of its daily functioning like the PIC computer information system. Gateway does not perform a function legally required of DTC. The documents described in the Gateway Requests would not normally be held by DTC in its ordinary course of business, nor are they pertinent to the functioning of DTC. As such, DLA Piper has failed to demonstrate the first prong of the Krings test.

Second, the Contract does not provide for the monitoring of Gateway's performance. As DTC is not in the business of advertising, it contracted with Gateway to locate and contract for advertising on its vehicles. Gateway has the responsibility to independently identify and contract with entities to advertise on the DTC vehicles. Gateway provides spreadsheets to show what entities have paid to demonstrate that the payments to DTC reflect the contractually agreed upon percentages of revenue.4 As DTC does not monitor the performance of Gateway, other than ensuring that Gateway is providing the contractually agreed-upon service, DLA Piper cannot satisfy the second prong of the Krings test.

Third, the Contract provides DTC, the FTA Administrator and the Comptroller General of the United States the right to access to Gateway's books, documents, papers and records for the purposes of "making audits, examinations, excerpts and transcriptions." This section of the Contract does not provide a similar right of access for the purpose of acquiring documentation in response to FOIA requests (under either Delaware or federal law). In addition, nowhere in the Contract does DTC require that Gateway produce documents or communications relating to negotiations and execution of advertising contracts to be produced. As such, DTC's access to Gateway's records is not for the purpose of monitoring performance.

Paragraph 6 of the Contract requires Gateway to keep true and complete records and accounts of all gross revenue and business transacted, and to provide annual verification to DTC of those amounts. The verification meets the definition of "public record," but (as noted in the preceding paragraph) the records from which the verification is derived are Gateway's. DTC maintains the right to audit Gateway's records, but the same can be said for any contract with a public body. The records are generated to carry out Gateway's responsibilities, not DTC's.

Paragraph 8 of the Contract gives DTC the sole right to accept or reject proposed agreements for which the consideration is "trade," rather than cash. This is not a means to monitor Gateway's performance. Rather, it is a reservation of the right to do business solely in cash, rather than in trade.

Paragraph 12 of the Contract provides that all contracts for advertising shall become the property of DTC "[u]pon termination of this contract by expiration." Presumably, then, the contracts for advertising are Gateway's property until the Contract expires. Its inclusion in the Contract does nothing to support the existence of any of the three Krings criteria. It does not provide the opportunity for monitoring, nor does it provide access to the advertising contracts for that purpose.

Paragraph 4 of the Contract gives DTC veto power over objectionable advertising. It does not relate in any way to Gateway's performance under the Contract, or to DTC's ability to monitor that performance. Again, its inclusion in the Contract does nothing to support the existence of any of the three Krings criteria.

III. CONCLUSION

The documents sought in the Gateway Requests are not public records. DLA Piper cannot demonstrate that it can meet the Krings test. DTC has provided all documents in its possession responsive to the FOIA Request. The documents sought in the Gateway Requests are not "public records" for FOIA purposes. DLA Piper has other avenues to obtain the documents identified in the Gateway Requests for the purposes of the ongoing litigation.

Very truly yours,

/s/ Edward K. Black

Edward K. Black

Deputy Attorney General

cc: Mr. Ian R. McConnel, Chief Deputy Attorney General

Ms. Allison Reardon, State Solicitor

Ms. Meredith Tweedie, Deputy Attorney General

Mr. Robert E. Connolly

Ms. Donna Miller, FOIA Coordinator

FOOTNOTES

1 No documents were produced in response to requests #11 and 12 as there were no documents that were responsive to said requests.

2 See also Harold v. Orange County, 668 So.2d 1010 (Fla. App. 1996) (the county "delegated to [the contractors] responsibility, on behalf of the County, to assure that the trade contractors comply with the Fairness in Procurement Ordinance and to maintain whatever records are necessary so that the County can verify such compliance."); Prince George's County v. The Washington Post Co., 815 A.2d 859, 885-86 (Md. App. 2003) (a private company "set up the risk management database and fields for the County to be used for the transaction of public business. Therefore, we believe that both are public records and available, absent an applicable exemption, for public dissemination.").

3 The contracts related to Lundy were for advertisements on buses only.

4 These spreadsheets were produced as they were in DTC's possession at the time of the FOIA request.