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?

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

If you are a Delaware retiree who requested the Medicfill contract

The opinion holds that the Committee met its burden to withhold the requested contract under the pending-litigation exemption, so FOIA did not require production of the unredacted records. The AG also noted up front that its authority on a petition is limited to deciding whether a FOIA violation occurred; LePage's argument that he was entitled to the records as a plan participant was, in the AG's words, "not appropriately considered in this Opinion." The Director's affidavit added that the contract "is not determinative of any member's benefits, as those benefits are provided in the Highmark plan benefits booklet."

If you are a state benefits office or other public body invoking the pending-litigation exemption

The opinion applies the two-factor test for § 10002(o)(9): whether litigation is pending, and whether the requested records pertain to it. Here both were met because the Committee produced the pending RiseDelaware complaint and the request sought the very contract that was the remedy and subject of that suit. The AG weighed "the timing and nature of your request with respect to the pending litigation," noting the request came shortly after the suit and that the complaint referenced the Medicfill plan repeatedly.

If you are a vendor or carrier whose information is in a state contract

The Committee also argued the redactions were proper under § 10002(o)(2) as Highmark trade secrets and confidential commercial information, supported by a sworn affidavit from the Director. The AG did not reach that argument, resolving the petition entirely on the pending-litigation ground, so the opinion makes no holding on whether the trade-secret exemption applied here.

Common questions

What is "Medicfill"?
Special Medicfill is the Medicare supplement plan Delaware offered state retirees, administered by Highmark. In 2022 the State moved to replace it with a Medicare Advantage plan, a change that RiseDelaware, Inc. and others challenged in court.

What's the pending-litigation exemption?
29 Del. C. § 10002(o)(9) exempts "records pertaining to pending or potential litigation which are not records of any court." The AG applied a two-factor test: (1) whether litigation is pending, and (2) whether the requested records pertain to that litigation.

Why did the Committee win here?
Both factors were met. RiseDelaware's suit was pending (the Committee submitted the complaint), and LePage's request sought the Medicfill contract, which the complaint referenced repeatedly and which formed the remedy the plaintiffs sought. The AG found the request pertained to the pending litigation.

What about the trade-secret redactions?
The Committee argued separately that the redactions were proper under § 10002(o)(2), backed by the Director's affidavit consulting with Highmark on competitive harm. The AG did not reach that argument because the pending-litigation ground resolved the petition.

Did the AG decide whether LePage was entitled to the contract as a plan participant?
No. The AG stated its authority is limited to determining whether a FOIA violation occurred, and that the plan-participant-entitlement argument was not appropriately considered in the opinion.

Background and statutory framework

29 Del. C. § 10002(o)(9) exempts "records pertaining to pending or potential litigation which are not records of any court." The opinion applied a two-factor test: whether litigation is pending, and whether the requested records pertain to it. The Committee satisfied the first factor by submitting the RiseDelaware complaint, and the second by showing the request sought the contract at the center of that suit.

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." The Committee raised this as an alternative ground for the redactions, supported by the Director's affidavit, but the AG did not reach it.

Under 29 Del. C. § 10005, the AG treats a citizen's correspondence as a petition and determines whether a FOIA violation occurred; the public body bears the burden of justifying its denial of access. The opinion notes the AG's authority is limited to that FOIA-violation question.

Citations

• 29 Del. C. §§ 10001-10007: Delaware FOIA chapter
• 29 Del. C. § 10002(o)(2): trade secret / confidential commercial information (raised but not reached)
• 29 Del. C. § 10002(o)(9): pending or potential litigation
• 29 Del. C. § 10005: petition for determination; burden of proof

Source

• Landing page: https://attorneygeneral.delaware.gov/2023/02/08/23-ib07-02-08-2023-foia-opinion-letter-to-steven-lepage-re-foia-complaint-concerning-the-state-employee-benefits-committee-delaware-department-of-human-resources/
• Original PDF: https://attorneygeneral.delaware.gov/wp-content/uploads/sites/50/2023/02/Attorney-General-Opinion-No.-23-IB07.pdf

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