DE 23-IB07 2023-02-08

Can a Delaware state retiree get the State's Medicfill contract through FOIA, or can the State withhold it because RiseDelaware sued over the Medicare Advantage switch?

Short answer: The State Employee Benefits Committee released the Medicfill contract in redacted form. Steven LePage, a retiree, said the redactions blocked him from understanding his benefits. The AG ruled the redactions were proper under the pending-litigation exemption: RiseDelaware had sued over the move from Medicfill to Medicare Advantage, and the contract is the very subject of the litigation. Highmark trade-secret information was also properly withheld under § 10002(o)(2).

Disclaimer: This is an official Delaware Attorney General opinion. AG opinions are persuasive authority but not binding precedent. This summary is for informational purposes only and is not legal advice. Consult a licensed Delaware attorney for advice on your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official AG opinion. The original opinion (linked at the bottom of this page, or PDF in the sidebar) is the authoritative source for any reliance.

View original AG opinion (PDF)

Official title

23-IB07 02/08/2023 FOIA Opinion Letter to Steven LePage re: FOIA Complaint Concerning the State Employee Benefits Committee, Delaware Department of Human Resources

Plain-English summary

In 2022, the Delaware State Employee Benefits Committee (SEBC) decided to move state retirees off the Special Medicfill Medicare supplement plan and onto a new Medicare Advantage plan. RiseDelaware, Inc. and other plaintiffs filed suit against the SEBC, the Department of Human Resources, and other state parties. The complaint argued the change was effectively a regulation that had to comply with the Administrative Procedures Act and that procedural rules had been bypassed.

On October 7, 2022, retiree Steven LePage submitted a FOIA request for the current Medicfill contract and all extensions. The SEBC initially denied access, then voluntarily provided redacted copies. LePage filed a FOIA petition arguing the redactions were arbitrary; he could not see how his benefits had been finalized.

The SEBC defended the redactions on two independent grounds. First, the entire contract pertains to pending litigation under 29 Del. C. § 10002(o)(9): the suit was filed less than two weeks before LePage's request, the same plaintiffs were involved, and the complaint centered on the very contract LePage was seeking. Second, the redacted portions specifically were trade secrets and confidential commercial information of Highmark (the carrier) under § 10002(o)(2). The SEBC submitted a sworn affidavit from the Director of the Statewide Benefits Office.

The AG affirmed on the pending-litigation ground without needing to reach the trade-secret issue. The two-prong test for the exemption was met: (1) RiseDelaware's lawsuit was pending, and (2) the request sought the contractual records that lay at the heart of the litigation.

What this means for you

For Delaware state retirees following the RiseDelaware litigation. This opinion does not give you the unredacted contract. It does, however, confirm that the litigation route is the path to the contract. Discovery in the RiseDelaware case is the proper mechanism for the plaintiffs to obtain the unredacted records. If you are a member of RiseDelaware or a retiree closely following the case, the records will surface (subject to protective orders and trade-secret carve-outs) through that channel, not through FOIA.

For people running coverage decisions in any state benefits office. The pending-litigation exemption is a powerful shield, but it is sensitive to timing. Here, the lawsuit was filed about two weeks before the FOIA request, the same parties' counsel was on both sides, and the records were the focus of the case. If those facts are different (lawsuit not yet filed, requester unrelated to the parties, records only tangentially relevant), the exemption may not apply. Don't assume any pending suit auto-qualifies any related record. Document the nexus.

For corporate counsel for state contractors. When a state contracts with you, the contract is a public record subject to FOIA absent an exemption. Highmark's trade-secret information was protected here under § 10002(o)(2), but only because the State submitted an affidavit (not just a redaction list) showing the redacted material was customarily kept confidential and would cause substantial competitive harm if released. Consider including a contractual clause requiring the State to give you notice and an opportunity to be heard before producing your information, and to claim the exemption with affidavit support.

For requesters in active or threatened litigation. Filing a FOIA request that mirrors discovery you cannot get in the case is the canonical way to fail. Even if the FOIA request is in your name and on a separate-looking topic, the AG and the courts will look at the bigger pattern. AG 21-IB32 (Tesla / DelDOT) is the most pointed example. Here, the AG was less aggressive about the relationship between LePage and RiseDelaware, but the result was the same: pending litigation tied up the records.

Common questions

What is "Medicfill"?
Special Medicfill is a Medicare supplement plan administered by Highmark for State of Delaware retirees. It is essentially a "Medigap" wrap on top of original Medicare, paying the deductibles and coinsurance Medicare leaves to the patient. Delaware decided in 2022 to replace it with a Medicare Advantage plan, which packages Medicare and supplemental coverage together. The change generated significant retiree opposition.

What's the pending-litigation exemption?
29 Del. C. § 10002(o)(9) excludes from "public record" any "records pertaining to pending or potential litigation which are not records of any court." The two-prong test: (1) is litigation pending, and (2) do the requested records pertain to that litigation. The exemption avoids using FOIA as backdoor discovery against the State.

Why couldn't LePage just get the contract from RiseDelaware?
The complaint had been filed but discovery would not produce the contract immediately, and the contract may itself be subject to a protective order limiting its dissemination. LePage tried FOIA as a faster, broader path; the AG closed that path under the pending-litigation exemption.

What about the trade-secret redactions specifically?
The AG did not reach those because the pending-litigation ground covered the whole contract. But the SEBC's affidavit was extensive: the Director of the Statewide Benefits Office independently reviewed each redaction, consulted with Highmark, and confirmed each was the type of information the industry customarily kept confidential, with substantial competitive harm if released. That is the kind of affidavit that supports a § 10002(o)(2) redaction even outside the litigation context.

Is there any path for retirees to see the contract?
Three: (1) wait for the RiseDelaware case to resolve, at which point the records may become public via court filings or settlement disclosures, (2) request individual benefit terms from Highmark directly through your member portal (the AG noted the actual benefits are in the Highmark plan benefits booklet, not the State contract), or (3) wait for any successor contract that may not be subject to a pending suit.

Background and statutory framework

Delaware FOIA's two-prong test for the pending-litigation exemption was articulated most clearly in AG opinion 21-IB02 (Jan. 21, 2021): the application of § 10002(o)(9) is limited to determining (1) whether litigation is pending and (2) whether the records pertain to that litigation. AG 21-IB20 (Sept. 14, 2021) reaffirms.

29 Del. C. § 10002(o)(2) exempts "[t]rade secrets and commercial or financial information obtained from a person which is of a privileged or confidential nature." Federal FOIA case law on the federal analog (Exemption 4) is sometimes cited as persuasive: a record qualifies if it is the type customarily and actually kept confidential by the person or industry, and competitive harm is a relevant indicator.

29 Del. C. § 10005(c) places the burden on the public body. Per Judicial Watch, Inc. v. Univ. of Del., the public body must, by sworn statement, describe the efforts taken to identify responsive records and the results, when responsiveness is in dispute. For exemption claims, sworn statements describing the records and the basis for the exemption are likewise often required.

29 Del. C. § 10005(e) limits the AG's FOIA petition jurisdiction to FOIA-violation determinations. Whether LePage was personally entitled to the records by virtue of being a plan participant was a non-FOIA question and outside the AG's jurisdiction.

Citations

29 Del. C. § 10002(o)(2): trade secret / confidential commercial information
29 Del. C. § 10002(o)(9): pending or potential litigation
29 Del. C. § 10003: reasonable access to records
29 Del. C. § 10005, § 10005(c), § 10005(e): petition; burden of proof; petition scope
29 Del. C. §§ 10001-10007: Delaware FOIA chapter
Judicial Watch, Inc. v. Univ. of Del., 267 A.3d 996, 1012 (Del. 2021)
Del. Op. Att'y Gen. 21-IB02 (Jan. 21, 2021): two-prong test
Del. Op. Att'y Gen. 21-IB20 (Sept. 14, 2021): pending litigation
Del. Op. Att'y Gen. 03-IB10 (May 6, 2003): nexus factors

Source

Original opinion text

KATHLEEN JENNINGS
ATTORNEY GENERAL

DEPARTMENT OF JUSTICE
820 NORTH FRENCH STREET
WILMINGTON, DELAWARE 19801

CIVIL DIVISION (302) 577-8400
CRIMINAL DIVISION (302) 577-8500
DIVISION CIVIL RIGHTS & PUBLIC TRUST (302) 577-5400
FAMILY DIVISION (302) 577-8400
FRAUD DIVISION (302) 577-8600
FAX (302) 577-2610

OFFICE OF THE ATTORNEY GENERAL OF THE STATE OF DELAWARE
Attorney General Opinion No. 23-IB07
February 8, 2023
VIA EMAIL
Steven LePage
[email protected]

RE: FOIA Petition Regarding the State Employee Benefits Committee, Delaware Department of Human Resources

Dear Mr. LePage:
We write regarding your correspondence alleging that the State Employee Benefits Committee, Delaware Department of Human Resources violated the Delaware Freedom of Information Act, 29 Del. C. §§ 10001-10007 ("FOIA"). We treat your correspondence as a Petition for a determination pursuant to 29 Del. C. § 10005 regarding whether a violation of FOIA has occurred or is about to occur. For the reasons set forth below, we find that the Committee satisfied its burden of demonstrating that requested records were appropriately withheld under the pending litigation exemption.

BACKGROUND
RiseDelaware, Inc. and other plaintiffs filed suit against the Committee, the Delaware Department of Human Resources, and other parties regarding the change from the current Medicfill contract to a new Medicare Advantage Plan. On October 7, 2022, you submitted a request for "the current Special Medicfill contract and all of the contract extensions for this plan." After initially denying this request, the Committee decided to provide the redacted contract documents and the amendments. You then filed this Petition, alleging that the Committee failed to justify its denial of access to the redacted materials as required by FOIA. You contend that the contract is the sole source for determination of participants' rights, and the redactions prevent you from understanding the final determination of benefits and rules of your plan. Additionally, you argue that some redactions appear to have no possible justification, such as statements of work, certain fees, and performance guarantees. Finally, you argue that many of the paragraph descriptors have been redacted, so you cannot discern what has been redacted. In sum, you believe that public monies and participant premiums are being used for this contract, and the public should have access to the redacted information.

The Committee's counsel responded to the Petition on its behalf ("Response") and included an affidavit from the Director of the Statewide Benefits Office, which serves as the administrative arm to the Committee and responds to FOIA requests on the Committee's behalf. The Committee also produced another copy of the requested documents with some previous redactions removed, including paragraph headings. The Committee argues that the records are exempt under 29 Del. C. § 10002(o)(9) as they pertain to pending litigation. Despite this exemption, the Committee states that in the interest of transparency, it voluntarily released these contracts to you in their redacted form. Additionally, the Committee contends that its redactions are proper under 29 Del. C. § 10002(o)(2) which exempts "[t]rade secrets and commercial or financial information obtained from a person which is of a privileged or confidential nature." The Director states the Committee has consulted with Highmark who has supported its position that the remaining redacted information qualifies as trade secrets or confidential commercial information. The Director's affidavit describes its basis for asserting this exemption, including the competitive harm that Highmark would sustain if the redacted information was released. The Director states under oath that she has "independently reviewed the remaining redacted material and concur with Highmark's position that it is the type of information customarily kept confidential in the industry and would cause Highmark substantial competitive harm if released." Finally, she notes that this contract is not determinative of any member's benefits, as those benefits are provided in the Highmark plan benefits booklet.

DISCUSSION
FOIA requires a public body to provide citizens with reasonable access to public records in accordance with the statute. In any action brought under Section 10005, the public body has the burden of proof to justify its denial of access to records. In certain circumstances, a sworn affidavit may be required to meet that burden. As a preliminary matter, we note that this Office's authority is limited to determining whether violations of Delaware's FOIA law occurred; the allegation that you are entitled to records based on your status as a plan participant are not appropriately considered in this Opinion.

The Committee asserts that these contractual records, including these redactions, may be withheld pursuant to 29 Del. C. § 10002(o)(9) which exempts "records pertaining to pending or potential litigation which are not records of any court." To determine if the pending litigation exemption applies, we must consider the following two factors: 1) whether litigation is pending; and 2) whether the records that the requesting party seeks pertain to that pending litigation. For the first prong, the Committee submitted a copy of the pending complaint filed against it by RiseDelaware, Inc. and other parties. Thus, the first prong is satisfied.

The second prong of this test requires that the requested records pertain to the pending litigation. To evaluate this prong, we consider the relation of these requested records to this litigation, including the timing and nature of your request with respect to the pending litigation. This request seeks the contractual records that comprise the remedy that the plaintiffs requested. Further, the complaint references the Medicfill plan multiple times, as the crux of the complaint relies on comparing the fundamental change from the current Medicfill contract to the new Medicare Advantage Plan. For example, the complaint's first count alleges that the State's action qualifies as a "regulation" under the Administrative Procedures Act as the State has enacted new rules, standards, procedures, requirements, and a "drastic new healthcare 'policy,'" which the plaintiffs argue should have triggered procedural requirements before adopting the new plan. In these circumstances, we find that the Committee adequately demonstrated that this request pertains to this pending litigation, and both prongs of the test for the pending litigation exemption have been satisfied.

CONCLUSION
For the foregoing reasons, we determine that in these circumstances, the Committee met its burden to demonstrate that the requested records may be appropriately withheld under the pending litigation exemption.

Very truly yours,
/s/ Alexander S. Mackler
Alexander S. Mackler
Chief Deputy Attorney General

cc:
Adria B. Martinelli, Deputy Attorney General
Dorey L. Cole, Deputy Attorney General