State Records Committee Appeal Decision 2017-12

BEFORE THE STATE RECORDS COMMITTEE OF THE STATE OF UTAH

LIBERTAS INSTITUTE, Petitioner, v.

UTAH STATE TAX COMMISSION, Respondent.

DECISION AND ORDER

Case No. 17-12

By this appeal, Petitioner, the Libertas Institute, seeks access to records held by Respondent, the Utah State Tax Commission (“Commission”).

FACTS

On December 9, 2016, Connor Boyack, President of the Libertas Institute (“Libertas”), made a request to the Commission for records pursuant to the Utah Government Records Access and Management Act (“GRAMA”). Mr. Boyack requested a copy of an agreement between the Commission and the online retailer Amazon regarding Amazon’s collection and remittance of sales tax for Utah consumers. In a letter dated December 20, 2016, Dolores Furniss, Disclosure Officer for the Commission, denied the records request finding that the information being requested was classified “protected” under GRAMA pursuant to Utah Code § 63G-2-305.

Mr. Boyack filed an appeal with the Commission, and in a letter dated January 11, 2017, Barry C. Conover, Executive Director of the Commission, denied Mr. Boyack’s appeal and affirmed the decision of Ms. Furniss. On January 30, 2017, Mr. Boyack and legal counsel for Libertas filed an appeal with the State Records Committee (“Committee”). On March 16, 2017, the Committee held a hearing where the parties were allowed to present their legal arguments. After considering all arguments by the parties, reviewing all written materials, and reviewing the subject records in camera, the Committee now issues the following Decision and Order.

STATEMENT OF REASONS FOR DECISION

1. GRAMA specifies that “all records are public unless otherwise expressly provided by statute.” Utah Code §63G-2-201(2). Records that are private, controlled, or protected under §§63G-2-302, -303, -304, or 305, are not public records. Utah Code §63G-2-201(3)(a).

2. Utah Code § 63G-2-305(15) states that records and audit work papers that identify audit, collection, and operational procedures and methods used by the Commission are protected records if properly classified by the Commission and if disclosure would interfere with audits or collections. Utah Code § 59-1-403(1) prohibits a tax commissioner, an agent, clerk, or other officer or employee of the Commission, to divulge or make known in any manner any information gained by that person from any return filed with the Commission.

3. Records that are prepared for or by an attorney, consultant, surety, indemnitor, insurer, employee, or agent of a governmental entity for, or in anticipation of litigation or a judicial, quasi-judicial or administrative proceeding, are protected records if properly classified by a governmental entity. Utah Code § 63G-2-305(18). Additionally, commercial information or nonindividual financial information obtained from a person is a protected record if properly classified by a governmental entity and: (1) Disclosure of the information could reasonably be expected to result in unfair competitive injury to the person submitting the information or would impair the ability of the governmental entity to obtain necessary information in the future; (2) The person submitting the information has a greater interest in prohibiting access than the public in obtaining access; and (3) The person submitting the information has provided the governmental entity with the information specified in Utah Code § 63G-2-309. Utah Code § 63G-2-305(2).

4. Contracts entered into by a governmental entity are normally public, but to the extent that a record is expressly exempt from disclosure, access may be restricted pursuant to Utah Code §§ 63G-2-201(3)(b), -302, -304, and -305. Utah Code § 63G-2-301(3)(d).

5. Counsel for the Commission argued that the requested records could not be disclosed pursuant to Utah Code §§ 63G-2-305(15), -305(2), -305(18), and 59-1-403(1). Counsel claimed that the contract entered into between the Commission and Amazon contained protected and non-disclosable information. Counsel also argued that the “Commission seeks this protection for all such agreements as made under negotiations for amnesty” pursuant to Utah Code § 59-12-128 (the Commission may grant “amnesty” to sellers who would otherwise be required to pay taxes).

6. Libertas argued that the contract should be a public record, and if the contract contained any trade secrets or injurious commercial or financial information, “the information should be redacted to allow taxpayers to see the terms of the Agreement.”

7. The Committee finds that Utah Code § 63G-2-305(15) does not apply to the requested records because it is simply a contract that does not identify any audit, collection, or operational procedure and method used by the Commission. Utah Code § 59-1-403(1) also does not apply because the contract does not constitute a “return” filed with the Commission. Further, the Commission cannot rely upon Utah Code § 63G-2-305(2) because Amazon did not provide a claim of confidentiality complying with the requirements of Utah Code § 63G-2-309 at the time it submitted the information to the Commission. See, Fife v. Orem City, Utah Fourth District Case No. 140400007 (Dec. 22, 2014).

8. The Committee is unconvinced that Utah Code § 63G-2-305(18) applies because there is no evidence that the contract was created in anticipation of litigation or a judicial, quasi-judicial or administrative proceeding. Virtually all documents created by governmental entities could become the subject of litigation. “Documents created as part of a government actor’s official duties receive no protection even if the documents are likely to be the subject of later litigation.” Schroeder v. Utah Attorney General’s Office, 2015 UT 77, ¶ 39, 358 P.3d 1075, quoting S. Utah Wilderness Alliance v. Automated Geographic Reference Ctr., 2008 UT 88, ¶ 24, 200 P.3d 643 (quotations omitted). Accordingly, attorney “work product” protection should be reserved for those records that would not have been generated but for the pendency or imminence of litigation. Id.

9. Accordingly, after having reviewed the written arguments of the parties, hearing testimony and arguments at the hearing, and reviewing the contract in camera, the Committee finds that the contract between the Commission and Amazon is a public record subject to the redaction of information that should remain non-public. The purpose of Utah Code § 63G-2-301(3)(d) is to allow the public to generally know the terms of contracts entered into by governmental entities. A review of the contract showed that after non-public information regarding specific personally identifiable information and the attachments to the agreement, are redacted or removed, the remainder of the contract can be disclosed to the public.

ORDER

THEREFORE, IT IS ORDERED THAT the appeal of Petitioner, Libertas Institute, is GRANTED as detailed above.

RIGHT TO APPEAL

A party to a proceeding before the Committee may seek judicial review in District Court of a Committee's Order by filing a petition for review of the Committee Order as provided in Utah Code § 63G-2-404. Utah Code § 63G-2-403(14). A petition for judicial review of a Committee Order "shall be filed no later than 30 days" after the date of the Committee Order. Utah Code § 63G-2-404(1)(a). The petition for judicial review must be a complaint which is governed by the Utah Rules of Civil Procedure, and include the Committee as a necessary party and contain the required information listed in Subsection -404(2). Utah Code § 63G-2-404(1) & (2). The court shall make its decision de novo, but shall allow introduction of evidence presented to the Committee, determine all questions of fact and law without a jury, and decide the issue at the earliest practical opportunity. Utah Code § 63G-2-404(6). In order to protect its rights on appeal, a party may wish to seek advice from an attorney.

PENALTY NOTICE

Pursuant to Utah Code § 63G-2-403(15)(c), if the Committee orders the governmental entity to produce a record and no appeal is filed, the government entity herein shall comply with the order of the Committee and shall: (1) Produce the record; and (2) File a notice of compliance with the Committee. If the governmental entity ordered to produce a record fails to file a notice of compliance or a notice of intent to appeal, the Committee may do either or both of the following: (1) Impose a civil penalty of up to $500 for each day of continuing noncompliance; or (2) Send written notice of the entity's noncompliance to the Governor for executive branch entities, to the Legislative Management Committee for legislative branch entities, and to the Judicial Council for judicial branch agencies’ entities. Utah Code § 63G-2-403(15)(d)(i). In imposing a civil penalty, the Committee shall consider the gravity and circumstances of the violation, including whether the failure to comply was due to neglect or was willful or intentional. Utah Code § 63G-2-403(15)(d)(ii).

Entered this 27th day of March 2017.

BY THE STATE RECORDS COMMITTEE

_____________________________________
DAVID FLEMING, Chairperson
State Records Committee