Does a nonprofit that gets most of its funding from the state count as a public body under Delaware's open meetings law?

Official title

15-IB05 06/17/15 FOIA Opinion Letter to Ms. Roberta J. Hemmerich re: FOIA Complaint Concerning the Cape Henlopen Senior Center Bd. of Directors

Plain-English summary

A resident asked the AG to determine whether the Cape Henlopen Senior Center, Inc. (CHSC), a private nonprofit set up to provide social, physical, and emotional support to seniors, had to follow Delaware's open meetings law. More than two-thirds of CHSC's budget came from state contributions, with additional support from Sussex County, and at the time of the complaint both the Mayor and the Chief of Police of Rehoboth Beach sat on CHSC's board.

The AG concluded CHSC was not a "public body" subject to FOIA. Delaware's FOIA defines a public body using a three-part test: the entity must be a regulatory, administrative, advisory, executive, appointive, or legislative body of the state or a political subdivision; it must have been established by the General Assembly (or a body the General Assembly established), or appointed by a state body or official, or otherwise empowered by a state governmental entity; and it must be supported by public funds, spend public funds, or be charged with advising or reporting to a government body. CHSC failed the first two parts. It was not any kind of governmental body in nature, and it was not created or empowered by any act of the General Assembly or state entity; it was formed by private citizens as an ordinary Delaware nonprofit corporation. The AG found that receiving substantial public funding does not, by itself, convert a privately created nonprofit into a public body, since the statute separately requires that the entity's creation or empowerment trace back to government action.

Currency note

This opinion was issued in 2015. 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

If a nonprofit gets most of its budget from state grants, does it have to hold open meetings like a government agency?

Not necessarily, according to this opinion. The AG found that receiving public funds is only one of three requirements for being a "public body" under FOIA. A nonprofit also has to be the kind of governmental body FOIA describes, and it has to have been established or empowered by the General Assembly or another state governmental entity. A privately formed nonprofit that merely receives grants does not meet those other requirements.

Does having a mayor or police chief on a nonprofit's board make that nonprofit subject to FOIA?

Not by itself. The opinion does not treat the presence of town officials on CHSC's board as, by itself, transforming the nonprofit into a public body. The AG's analysis turned on how CHSC was created and empowered, not on who happened to serve on its board.

What's the legal test Delaware uses to decide whether an organization is a "public body" under FOIA?

The opinion applies a three-part test: (1) the entity must be a regulatory, administrative, advisory, executive, appointive, or legislative body of the state or a political subdivision; (2) it must have been established by the General Assembly, a body the General Assembly established, appointed by a state body or official, or otherwise empowered by a state governmental entity; and (3) it must be supported by public funds, spend public funds, or be charged with advising or reporting to a government body. All three parts must be satisfied.

If a nonprofit isn't a public body under FOIA, is there any other way to get accountability for how it spends public grant money?

This opinion does not address that question; it resolves only whether CHSC was subject to FOIA's open meetings and records requirements, not whether other state laws, grant conditions, or audit mechanisms might apply to organizations that receive public funding.

Background and statutory framework

FOIA's stated purpose is to ensure "public business be performed in an open and public manner so that our citizens shall have the opportunity to observe the performance of public officials," 29 Del. C. § 10001, and requires public bodies to comply with open-meeting requirements, 29 Del. C. § 10004. FOIA defines "public body" to include any regulatory, administrative, advisory, executive, appointive, or legislative body of the state or a political subdivision that was established by an act of the General Assembly, established by a body the General Assembly established, appointed by a state body or official, or otherwise empowered by a state governmental entity, and that is supported in whole or in part by public funds, expends or disburses public funds, or is charged with advising or making reports, investigations, or recommendations, 29 Del. C. § 10002(h). The opinion reads this definition as requiring three separate elements to all be satisfied: the entity's basic nature, how it was created or empowered, and its relationship to public funds or public advisory duties.

Applying that framework, the opinion found CHSC was not any kind of regulatory, administrative, advisory, executive, appointive, or legislative body, and had not been established by the General Assembly, a body the General Assembly established, or any other state governmental action; it was formed by private citizens as an ordinary nonprofit corporation. The opinion rejected the argument that CHSC's heavy reliance on public grants alone satisfied the statute, reasoning that if receiving public funds were sufficient on its own, the statute would not need to separately require that the entity be established by an act of the General Assembly or otherwise empowered by state government. The opinion's discussion of FOIA's underlying accountability purpose draws on Chem. Indus. Council of Delaware, Inc. v. State Coastal Zone Indus. Control Bd., which in turn cites Delaware Solid Waste Auth. v. The News Journal Co. for the principle that FOIA's mandated openness ensures governmental accountability and informs the electorate, since public entities should not decide unilaterally what the public gets to know.

Citations and references

Statutes:

• 29 Del. C. §§ 10001-10006 (Delaware's Freedom of Information Act)
• 29 Del. C. § 10001 (FOIA's Declaration of Policy)
• 29 Del. C. § 10004 (open meeting requirements for public bodies)
• 29 Del. C. § 10002(h) (defines "public body")

Cases:

• Chem. Indus. Council of Delaware, Inc. v. State Coastal Zone Indus. Control Bd., 1994 WL 274295 (Del. Ch. May 19, 1994) (describes FOIA's accountability purpose)
• Delaware Solid Waste Auth. v. The News Journal Co., 480 A.2d 628 (Del. 1984) (mandated openness ensures governmental accountability and informs the electorate)

Source

• Landing page: https://attorneygeneral.delaware.gov/2015/07/31/15-ib02-061715-foia-opinion-letter-to-ms-roberta-j-hemmerich-re-foia-complaint-concerning-the-cape-henlopen-senior-center-bd-of-directors/
• Original PDF: not linked from landing page

Original opinion text

OFFICE FOR THE ATTORNEY GENERAL OF THE STATE OF DELAWARE

Attorney General Opinion No. 15-IB05

July 31, 2015

VIA EMAIL

Roberta J. Hemmerich

34144 Pinewood Circle

McNicol Place

Lewes, Delaware 19958

[email protected]

Re: FOIA Complaint Concerning Cape Henlopen Senior Center Bd. of Directors

Dear Ms. Hemmerich:

The Delaware Department of Justice ("DOJ") received your letter (the "Petition"1) seeking a determination as to whether the Cape Henlopen Senior Center, Inc. ("CHSC") is a "public body" subject to the provisions of the Delaware Freedom of Information Act, 29 Del. C. §§ 10001-10006 ("FOIA"). For the reasons stated herein, we conclude that the CHSC is not a public body for purposes of FOIA.

FACTS

CHSC is a Delaware nonprofit corporation established by private citizens.2 More than two-thirds of its budget is derived from contributions from the State of Delaware, with Sussex County providing additional financial support.3 At the time of the Petition, both the Mayor and the Chief of Police of the Town of Rehoboth Beach were members of CHSC's Board of Directors.4 As stated in its bylaws, the purpose of CHSC is "to provide social, physical, and emotional support to senior citizens."

DISCUSSION

The policy underlying FOIA is clearly stated:

It is vital in a democratic society that public business be performed in an open and public manner so that our citizens shall have the opportunity to observe the performance of public officials and to monitor the decisions that are made by such officials in formulating and executing public policy; and further, it is vital that citizens have easy access to public records in order that the society remain free and democratic. Toward these ends, and to further the accountability of government to the citizens of this State, this chapter is adopted, and shall be construed.

29 Del. C. § 10001.

To that end, all public bodies in the State of Delaware must comply with FOIA's open meeting requirements. See 29 Del. C. § 10004, et al. "Such mandated openness is intended to ensure 'governmental accountability, inform the electorate, and acknowledge that public entities, as instruments of government, should not have the power to decide what is good for the public to know.'"5).

FOIA defines a "public body" as:

any regulatory, administrative, advisory, executive, appointive or legislative body of the State, or of any political subdivision of the State, including, but not limited to, any board, bureau, commission, department, agency, committee, ad hoc committee, special committee, temporary committee, advisory board and committee, subcommittee, legislative committee, association, group, panel, council or any other entity or body established by an act of the General Assembly of the State, or established by any body established by the General Assembly of the State, or appointed by any body or public official of the State or otherwise empowered by any state governmental entity, which:

(1) Is supported in whole or in part by any public funds; or

(2) Expends or disburses any public funds, including grants, gifts or other similar disbursals and distributions; or

(3) Is impliedly or specifically charged by any other public official, body, or agency to advise or to make reports, investigations or recommendations.

29 Del. C. § 10002(h).6

Thus, three factors must be considered in order to determine whether an entity is a "public body" within the meaning of FOIA. First, the entity must be a "regulatory, administrative, advisory, executive, appointive or legislative body of the State, or of any political subdivision of the State." Id. Second, the entity must be (i) established by an act of the General Assembly of the State, or (ii) established by any body established by the General Assembly of the State, or (iii) appointed by any body or public official of the State, or (iv) otherwise empowered by any state governmental entity. Third, the entity must (i) be supported in whole or in part by any public funds; or (ii) expend or disburse public funds; or (iii) be charged (either implicitly or specifically) by a public official, body, or agency to advise or to make reports, investigations or recommendations.

Based on our review of the record of this case, we conclude that CHSC is not a public body. First, there is no sense in which CHSC can be deemed a "regulatory, administrative, advisory, executive, appointive or legislative body." And while it is undisputed that a large portion of funding for CHSC is derived from "grants-in-aid provided by the State and its political subdivisions,"7 we are not aware of any Delaware authority for the proposition that an entity's receipt of public funds automatically transforms that entity into a "public body." As discussed above, the "public funds" requirement is separate and distinct from the requirements concerning an entity's creation. If receiving public funds were sufficient for a determination of an entity's status as a public body, there would be no need for the statute to first require, for example, that an entity be "established by an act of the General Assembly." 29 Del. C. § 10002(h).

CONCLUSION

The CHSC is not a "public body" within the meaning of 29 Del. C. § 10002(h) because it is not a "regulatory, administrative, advisory, executive, appointive or legislative body of the State, or of any political subdivision of the State" and it was not established as described in the statute. Therefore, the CHSC is not subject to the open meetings and other requirements of FOIA.

Very truly yours,

/s/ Katisha D. Fortune

Katisha D. Fortune

Deputy Attorney General

Approved:

/s/ Meredith S. Tweedie

Meredith S. Tweedie, State Solicitor

cc: Danielle Gibbs, Chief Deputy Attorney General (via email)

Lauren E.M. Russell, Counsel for Cape Henlopen Senior Center (via email)

FOOTNOTES

1 We received the letter on October 7, 2014, and mistakenly believed, until you contacted our office last week, that the Petition had been withdrawn. On October 31, 2014, we received CHSC's response by way of a letter from Ms. Lauren E.M. Russell, acting as counsel for CHSC ("Response Letter"). We also received your "rebuttal" letter on November 22, 2014. There, you essentially argue that it is wrong that "any organization receiv[e] large amounts of taxpayer's money and not have any accountability on how it is spent." You also argue that the nomination of Mayor Sam Cooper and Chief Keith Banks as "ex officio" members of the Board was not permitted by the CHSC bylaws. Whether the CHSC is subject to FOIA, its open meeting requirements, and the corresponding public monitoring, is addressed herein. However, whether the CHSC Board of Directors complied with its bylaws is not a legal matter addressed by FOIA and will not be discussed in this letter determination.

2 See Response Letter at p. 1; www.capehenlopenseniorcenter.org (last visited July 23, 2015).

3 See Response Letter at p. 1.

4 We have been informed that the entire Board has since resigned, although that change of leadership is not yet reflected on CHSC's website.

5 Chem. Indus. Council of Delaware, Inc. v. State Coastal Zone Indus. Control Bd., 1994 WL 274295, at *7 (Del. Ch. May 19, 1994) (citing Delaware Solid Waste Auth. v. The News Journal Co., 480 A.2d 628, 631 (Del. 1984)).

6 We have excluded certain exemptions not pertinent to this case.

7 See Response Letter at p. 1.