FOIL AO 19664 May 10, 2018
FROM: Robert J. Freeman, Executive Director
CC: Shoshana Bewlay (Shoshanah.Bewlay@its.ny.gov)
RE: FOIL Advisory Opinion
The staff of the Committee on Open Government is authorized to issue advisory opinions. The ensuing staff advisory opinion is based solely upon the information presented in your correspondence, except as otherwise indicated.
You have sought an advisory opinion concerning a response to your appeal following a denial of access to records maintained by the Office of Information Technology Services (ITS). Having reviewed ITS’ determination, I offer the following comments.
Among the issues is your contention that ITS improperly withheld records based on §87(2)(g) of the Freedom of Information Law (FOIL). As you are aware, that provision permits an agency to withhold portions of inter-agency or intra-agency materials consisting of advice, opinion, recommendation and the like. Concurrently, however, the same provision requires disclosure of other aspects of those materials. Subparagraph (i) of the cited provision requires the disclosure of “statistical or factual tabulations or data” found within those materials. In concluding that the records at issue do not consist of statistical or factual tabulations or data, reference was made to a decision, Dunlea v. Goldmark, rendered in 1976 by the Appellate Division in which it was held that:
“…the term statistical tabulation means a collection of or orderly presentation of numerical data logically arranged in columns and rows or graphically, and the term factual tabulation means a collection of statements of objective information logically arranged and reflecting objective reality, actual existence or an actual occurrence. Opinions, policy options and recommendations do not constitute statistical or factual tabulations” (54 AD2d 446, 448).
Dunlea involved so-called "budget worksheets," and it was held that numerical figures, including estimates and projections of proposed expenditures, are accessible, even though they may have been advisory, subject to change and were not reflective of objective reality. In that case, I believe that the records at issue contained three columns of numbers related to certain areas of expenditures. One column consisted of a breakdown of expenditures for the current fiscal year; the second consisted of a breakdown of proposed expenditures recommended by a state agency; the third consisted of a breakdown of proposed expenditures recommended by a budget examiner for the Division of the Budget. Although the latter two columns were merely estimates and subject to modification, they were found to be "statistical tabulations" accessible under FOIL as originally enacted. The Court was also aware of the fact that the records were used in the deliberative process and were not final, stating that:
"The mere fact that the document is a part of the deliberative process is irrelevant in New York State because §88 clearly makes the back-up factual or statistical information to a final decision available to the public. This necessarily means that the deliberative process is to be a subject of examination although limited to tabulations. In particular, there is no statutory requirement that such data be limited to 'objective' information and there no apparent necessity for such a limitation" (id. at 449).
While I am unfamiliar with the actual contents of the record sought, it appears that the holding in Dunlea may relate to the matter. In that case, numbers did not reflect reality, but rather estimates and projections that were subject to revision and change.
I agree that “factual data” is “objective information,” but according to Dunlea, “statistical” information need not be “objective.” That point has been made clear in more recent holdings. For example, in a decision involving responses to requests for proposals (RFPs), ratings were prepared by agency staff for the purpose of evaluating criteria use in analyzing the rfp’s. Even though the ratings consisted essentially of numerical figures assigned to opinions (e.g., 10 as great, 1 as terrible), it was held that they are statistical tabulations that must be disclosed [Professional Standards Review Council v. NYS Department of Health, 193 Ad2d 937 (1993)].
It is noted that several of the decisions, particularly those that consider “statistical or factual tabulations,” cite decisions rendered under the federal Freedom of Information Act. Preferable and more directly applicable are decisions rendered by the courts of New York when construing the New York FOIL.
The Court of Appeals in Gould v. New York City Police Department offered direction applicable in the instant situation, specifying repeatedly that a categorical denial of access to records is inconsistent with the requirements of FOIL. In that case, the Police Department contended that complaint follow up reports could be withheld in their entirety on the ground that they fall within the exception regarding intra-agency materials, §87(2)(g). The Court, however, wrote that: "Petitioners contend that because the complaint follow-up reports contain factual data, the exemption does not justify complete nondisclosure of the reports. We agree" (id., 276), and stated as a general principle that "blanket exemptions for particular types of documents are inimical to FOIL's policy of open government" (id., 275).
In the context of your request, the agency has engaged in a denial of access in a manner which, in my view, is equally inappropriate. I am not suggesting that the records must be disclosed in full. Rather, based on the direction given by the Court of Appeals in several decisions, records must be reviewed by the agency for the purpose of identifying those portions of the records that might fall within the scope of one or more of the grounds for denial of access.
Also pertinent is the direction given in Gould, supra, concerning the meaning of “factual data” in §87(2)(g)(i). The Court found that:
"...Although the term 'factual data' is not defined by statute, the meaning of the term can be discerned from the purpose underlying the intra-agency exemption, which is 'to protect the deliberative process of the government by ensuring that persons in an advisory role [will] be able to express their opinions freely to agency decision makers' (Matter of Xerox Corp. v. Town of Webster, 65 NY2d 131, 132 [quoting Matter of Sea Crest Constr. Corp. v. Stubing, 82 AD2d 546, 549]). Consistent with this limited aim to safeguard internal government consultations and deliberations, the exemption does not apply when the requested material consists of 'statistical or factual tabulations or data' (Public Officers Law 87[g][i]. Factual data, therefore, simply means objective information, in contrast to opinions, ideas, or advice exchanged as part of the consultative or deliberative process of government decision making (see, Matter of Johnson Newspaper Corp. v. Stainkamp, 94 AD2d 825, 827, affd on op below, 61 NY2d 958; Matter of Miracle Mile Assocs. v. Yudelson, 68 AD2d 176, 181-182).
I would conjecture that substantial elements of the records at issue consist of statistical or factual information that must be disclosed, unless a different exception to rights of access may justifiably be asserted. It is reiterated that, based on the direction given by the state’s highest court, agency staff are required to review the records in their entirety to determine which portions consist of statistical or factual information that must be disclosed.
Next, in the portion of the determination referenced as “Consultant vs. Contractor,” reference is made to your contention that IBM is not a consultant but rather is a contractor, and the agency concluded that “this is a distinction without a difference.” I believe that there is a difference. While a consultant might be retained to offer advice and recommendations regarding the nature of materials that should be used to pave the road, a contractor is the person or entity that actually paves the road. I believe, too, that the document describing the “Purpose of request for proposals” relating to the contract in question clearly indicates a function that differs from that of a consultant. Specifically, it states that:
“ITS is issuing this Request for Proposals (RFP) from responsive and responsible Contractors for managed services for service desk and End User Support Services to significantly improve the quality and timeliness of these Services to all New York State (‘State’ or ‘NYS’) customers of ITS. The selected Bidder will manage and deliver these Services and resources using industry best practices” (emphasis added).
From my perspective, an entity hired to “manage and deliver services” does not perform functions typically associated with a consultant; on the contrary, those functions are carried out by a contractor. Assuming the accuracy of my opinion, the communications between ITS and IBM would not fall within the exception concerning intra-agency materials.
Finally, I am unaware of the extent to which ITS withheld records on the basis of IBM’s contention that certain records fall within the scope of §87(2)(d) of FOIL, an exception to rights of access. That provision 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…” Therefore, the question under §87(2)(d) involves the extent, if any, to which disclosure would “cause substantial injury to the competitive position” of a commercial entity.
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.). The phrase “trade secret” is more extensively defined in 104 NY Jur 2d 234 to mean:
“...a formula, process, device or compilation of information used in one’s business which confers a competitive advantage over those in similar businesses who do not know it or use it. A trade secret, like any other secret, is something known to only one or a few and kept from the general public, and not susceptible to general knowledge. Six factors are to be considered in determining whether a trade secret exists: (1) the extent to which the information is known outside the business; (2) the extent to which it is known by a business’ employees and others involved in the business; (3) the extent of measures taken by a business to guard the secrecy of the information; (4) the value of the information to a business and to its competitors; (5) the amount of effort or money expended by a business in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. If there has been a voluntary disclosure by the plaintiff, or if the facts pertaining to the matter are a subject of general knowledge in the trade, then any property right has evaporated.”
In our view, the nature of record, the area of commerce in which a commercial entity is involved and the presence of the conditions described above that must be found to characterize records as trade secrets would be the factors used to determine the extent to which disclosure would “cause substantial injury to the competitive position” of a commercial 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.
Of possible relevance to the analysis is a decision rendered by the Court of Appeals, which, for the first time, considered the phrase “substantial competitive injury” in Encore College Bookstores, Inc. v. Auxiliary Service Corporation of the State University of New York at Farmingdale, (639 NYS2d 990, 87 NY2d 410 ). In that decision, the Court reviewed the legislative history of the Freedom of Information Law as it pertains to §87(2)(d), and due to the analogous nature of equivalent exception in the federal Freedom of Information Act (5 U.S.C. §552), it relied in part upon federal judicial precedent.
In its discussion of the issue, the Court stated that:
“FOIL fails to define substantial competitive injury. Nor has this Court previously interpreted the statutory phrase. FOIA, however, contains a similar exemption for ‘commercial or financial information obtained from a person and privileged or confidential’ (see, 5 USC § 552[b]). Commercial information, moreover, is ‘confidential’ if it would impair the government’s ability to obtain necessary information in the future or cause ‘substantial harm to the competitive position’ of the person from whom the information was obtained…”
“As established in Worthington Compressors v Costle (662 F2d 45, 51 [DC Cir]), whether ‘substantial competitive harm’ exists for purposes of FOIA’s exemption for commercial information turns on the commercial value of the requested information to competitors and the cost of acquiring it through other means. Because the submitting business can suffer competitive harm only if the desired material has commercial value to its competitors, courts must consider how valuable the information will be to the competing business, as well as the resultant damage to the submitting enterprise...” (Id., 419-420).
Lastly, it is reiterated that the courts, and particularly the Court of Appeals, have clearly confirmed that in order to meet the burden of proof in denying access to records, agencies must provide “persuasive evidence” that disclosure would cause the harm envisioned by an exception to rights of access. With specific respect to §87(2)(d). It was determined that a “speculative conclusion that disclosure might potentially cause harm” (Markowitz v. Serio, 11 NY3d 43, 51, 862 NYS2d 833 ) is insufficient to meet the burden of proof.
In an effort to encourage ITS to reconsider its determination, a copy of this opinion will be sent to its FOIL Appeals Officer.
I hope that I have been of assistance.