January 6, 2015
The staff of the Committee on Open government is authorized to issue advisory opinions. The ensuing staff advisory opinion is based solely upon the facts presented in your correspondence.
I have received your correspondence and apologize for the delay in responding. I was under the misimpression that the matter had been resolved verbally.
By way of background, you wrote that your client, the Rocky Point Union Free School District, issued an RFP for legal services but rejected all of the proposals that were received and determined to “readvertise for legal services pursuant to a new RFP.” However, before the rejected proposals could be returned, “a FOIL request was duly received seeking, among other things, copies of the submitted proposals.” You indicated that “[i]t is the District’s view that the proposals are not records of the School District because the RFP has been withdrawn and the proposals are to be returned to the proposers.” You have asked whether I concur with that contention.
From my perspective, it is clear that the proposals are District records that fall within the coverage of FOIL. In this regard, I offer the following comments.
First and perhaps most importantly, §86(4) of the Freedom of Information Law defines the term “record” expansively to include:
“any information kept, held, filed, produced, reproduced by, with or for an agency or the state legislature, in any physical form whatsoever including, but not limited to, reports, statements, examinations, memoranda, opinions. folders, files, books, manuals, pamphlets, forms, papers, designs, drawings, maps, photos, letters, microfilms, computer tapes or discs, rules, regulations or codes.”
The Court of Appeals has construed the definition as broadly as its specific language suggests. The first such decision that dealt squarely with the scope of the term “record” involved documents pertaining to a lottery sponsored by a fire department. Although the agency contended that the documents did not pertain to the performance of its official duties, i.e., fighting fires, but rather to a “nongovernmental” activity, the Court rejected the claim of a “governmental versus nongovernmental dichotomy” [see Westchester Rockland Newspapers v. Kimball, 50 NY 2d 575, 581 (1980)] and found that the documents constituted “records” subject to rights of access granted by the Law. Moreover, the Court determined that:
“The statutory definition of ‘record’ makes nothing turn on the purpose for which it relates. This conclusion accords with the spirit as well as the letter of the statute. For not only are the expanding boundaries of governmental activity increasingly difficult to draw, but in perception, if not in actuality, there is bound to be considerable crossover between governmental and nongovernmental activities, especially where both are carried on by the same person or persons” (id.).
In a decision involving records prepared by corporate boards furnished voluntarily and on a temporary basis to a state agency, the Court of Appeals reversed a finding that the documents were not “records,” thereby rejecting a claim that the documents “were the private property of the intervenors, voluntarily put in the respondents’ ‘custody’ for convenience under a promise of confidentiality” [Washington Post v. Insurance Department, 61 NY 2d 557, 564 (1984)]. Once again, the Court relied upon the definition of “record” and reiterated that the purpose for which a document was prepared or the function to which it relates are irrelevant. Moreover, the decision indicated that “When the plain language of the statute is precise and unambiguous, it is determinative” (id. at 565).
Additionally, in another decision rendered by the Court of Appeals, the Court focused on an agency claim that it could “engage in unilateral prescreening of those documents which it deems to be outside of the scope of FOIL” and found that such activity “would be inconsistent with the process set forth in the statute” [Capital Newspapers v. Whalen, 69 NY 2d 246, 253 (1987)]. The Court determined that:
“...the procedure permitting an unreviewable prescreening of documents - which respondents urge us to engraft on the statute - could be used by an uncooperative and obdurate public official or agency to block an entirely legitimate request. There would be no way to prevent a custodian of records from removing a public record from FOIL’s reach by simply labeling it ‘purely private.’ Such a construction, which would thwart the entire objective of FOIL by creating an easy means of avoiding compliance, should be rejected” (id., 254).
Based upon the decisions cited above, all of which were rendered by the State’s highest court, the RFP’s in my view constitute “records” subject to rights conferred by the Freedom of Information Law. Whether they are required to be made available in whole or in part is dependent on their content and the effects of disclosure.
As you are aware, FOIL is based on a presumption of access. Section 87(2) requires that all agency records be made available, except those records or portions thereof that fall within one or more of the grounds for denial appearing in paragraphs (a) through (l). I believe that two of the grounds for denial are pertinent to a determination regarding rights of access.
Section 87(2)(c) permits an agency to deny access insofar as disclosure “would impair present or imminent contract awards…” Based on the facts, that exception would not likely apply. In the case of an RFP, unlike a simple bid situation, an agency is seeking the best value rather than the lowest price of goods or services. That being so, it is difficult to envision how the disclosure of proposals that have been rejected would adversely impact or “impair” the District’s ability to reach an optimal agreement relative to any new proposals that are submitted. It might be contended, too, that disclosure would enhance the District’s ability to attract an appropriate or favorable proposal.
The other ground for denial of possible relevance is §87(2)(d), which permits an agency to withhold records or portions of records that "are trade secrets or are submitted to an agency by a commercial enterprise or derived from information obtained from a commercial enterprise and which if disclosed would cause substantial injury to the competitive position of the subject enterprise."
In my opinion, the question under section 87(2)(d) involves the extent, if any, to which disclosure would "cause substantial injury to the competitive position" of persons or firms responding to RFP's. If, for example, the records could be used to ascertain a unique business process or include significant and detailed financial information, it might be contended that certain aspects of the records might, if disclosed, cause substantial injury to an entity’s competitive position.
The concept and parameters of what might constitute a "trade secret" were discussed in Kewanee Oil Co. v. Bicron Corp., which was decided by the United States Supreme Court in 1973 (416 (U.S. 470). Central to the issue was a definition of "trade secret" upon which reliance is often based. Specifically, the Court cited the Restatement of Torts, section 757, comment b (1939), which states that:
"[a] trade secret may consist of any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers" (id. at 474, 475).
In its review of the definition, the court stated that "[T]he subject of a trade secret must be secret, and must not be of public knowledge or of a general knowledge in the trade or business" (id.).
In my view, the nature of the records and the area of commerce in which a profit-making entity is involved would be the factors used to determine the extent to which disclosure of the records would "cause substantial injury to the competitive position" of the enterprise. Therefore, the proper assertion of §87(2)(d) would be dependent upon the facts and, again, the effect of disclosure upon the competitive position of the entity to which the records relate.
In consideration of the nature of the business that is the subject of the RFP, it is doubtful that a denial of access based on §87(2)(d) could be justified. When a denial of access is challenged in a judicial proceeding, the agency has the burden of defending secrecy, and the courts have found that “speculation” concerning the potentially harmful effect of disclosure sought to be avoided via the assertion of an exception to rights of access is insufficient to justify a denial of access. In Markowitz v. Serio [11 NY3d 43 (2008)], the Court of Appeals focused on a denial of access based on §87(2)(d) and determined that the possibility of harm that is “theoretical” is inadequate, and that an agency “cannot merely rest upon a speculative conclusion that disclosure might potentially cause harm” (id., 50).
I hope that you find the foregoing to be of value and that I have been of assistance.
Robert J. Freeman