A. B. CHANDLER III, ATTORNEY GENERAL OF COMMONWEALTH OF KENTUCKY v. MARVIN E. STRONG, JR., SECRETARY OF THE CABINET FOR ECONOMIC DEVELOPMENT
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RENDERED: April 21, 2000; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1998-CA-002138-MR
A. B. CHANDLER III, ATTORNEY GENERAL
OF COMMONWEALTH OF KENTUCKY
APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE ROGER L. CRITTENDEN, JUDGE
ACTION NO. 97-CI-00947
v.
MARVIN E. STRONG, JR.,
SECRETARY OF THE CABINET
FOR ECONOMIC DEVELOPMENT
APPELLEE
OPINION
VACATING AND REMANDING WITH DIRECTIONS
** ** ** ** **
BEFORE:
BARBER, HUDDLESTON, AND MILLER, JUDGES.
MILLER, JUDGE:
A. B. Chandler, III, Attorney General of the
Commonwealth of Kentucky, brings this appeal from an August 10,
1998, Summary Judgment of the Franklin Circuit Court.
We vacate
and remand with directions.
The Cabinet for Economic Development is a program
cabinet enumerated in Kentucky Revised Statutes (KRS)
12.020(II)(5) and defined in KRS 12.010(9).
established under KRS 12.250(5).
The Cabinet was
It is governed by the Kentucky
Economic Development Partnership, a board established by
appointment, under KRS 154.10-010.
The mission and goals of the
Cabinet, operating through the board, are to implement long-term
strategic planning “that fosters sustainable growth in jobs and
incomes and enables communities, businesses, governments, and
individuals to compete in the global marketplace.”
020(1).
KRS 154.01-
Toward these ends, certain business entities are offered
significant incentives to locate in the Commonwealth.
To
encourage businesses to apply for the incentive programs, the
Cabinet agrees that confidential or proprietary information
contained in the application will not be disclosed except to the
extent required by law.
The matter before us springs from the Attorney
General's May 1, 1997, written request to Cabinet Secretary,
Marvin E. Strong, Jr., for inspection of documents in the
Cabinet's possession relating to economic incentives granted to
Alliance Research, Incorporated.
Alliance is a private
corporation which has, in the past, obtained economic incentives
from the Commonwealth of Kentucky administered by the Cabinet.
In early 1997, it became known that Alliance would close its
facility in Radcliff, Kentucky, and move that operation to West
Virginia.
Presumably, a number of Hardin County citizens lost
their jobs as a result thereof.
Being apprised of the facility's
closing in Radcliff, the Attorney General reckoned if same might
be inimical to Alliance's obligation under the economic incentive
package it received from the Cabinet.
He further perceived that
Alliance may be amenable to the state treasury.
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To satisfy his suspicion, the Attorney General directed
his May 1, 1997, request for a review of “all information and
documents in any way relating to economic incentives granted to
Alliance Research.”
According to the communication, the Attorney
General was acting “pursuant to KRS 15.020, and the common law.”1
The purpose was to ascertain if any incentive contracts between
the Commonwealth of Kentucky and Alliance were breached.
If so,
the Attorney General tells us, he is duty bound by the lawful
authority of his office to obtain recompense for the people.
Viewing the Attorney General's request under the
Kentucky Open Records Act (Open Records Act or the Act) (KRS
61.870-884), the Cabinet, through the Secretary, denied the
request under the confidential or proprietary information
exemption of the Act.
KRS 61.878(1)(c)(2).
The Cabinet reminded
the Attorney General that companies such as Alliance are required
to produce confidential documents from the operation of their
businesses in order to qualify for incentives.
The Cabinet also
reminded the Attorney General of the Cabinet's commitment to hold
such documents confidential.2
The Secretary maintained that he
and only he can determine the accessibility of the records.
The
Attorney General vigorously disagreed with the Secretary and
maintained that the Open Records Act has no application to the
request made in his official capacity.
1
Kentucky Revised Statutes 15.020 provides, inter alia, that
the Attorney General is the “chief law officer of the
Commonwealth.”
2
The Cabinet tells us the incentives granted to Alliance are
available for public inspection upon request.
-3-
On June 18, 1997, the Cabinet filed a Declaratory
Judgment action in the Franklin Circuit Court.
KRS Chapter 418.
In an August 10, 1998, Summary Judgment, the circuit court agreed
with the Cabinet by concluding:
The [statutory] powers granted the Attorney
General . . . do not give the office the
absolute right to compel the Cabinet to
provide the documents in contravention of the
provisions and spirit of the Open Records
Act. The powers of the Attorney General are
not unlimited. [citations omitted.] The
general powers outlined in KRS 15.060 are
subject to the specific limitations
established by the Open Records Act.
. . . .
[T]he Cabinet's motion for Summary Judgment
is SUSTAINED, and Declaratory Judgment is
hereby entered on behalf of the Cabinet . . .
. The Cabinet therefore may properly decline
to produce documents to the Attorney General
which fall within the relevant exemptions.
This appeal follows.
The Attorney General contends that the circuit court
committed error by granting summary judgment in favor of the
Cabinet.
In fact, the Attorney General asserts that it was he
who was entitled to summary judgment as a matter of law.
Summary
judgment is proper when there exists no material issue of fact
and the movant is entitled to judgment as a matter of law.
Ky.
R. Civ. P. (CR) 56; Steelvest, Inc. v. Scansteel Service Center,
Inc., Ky., 807 S.W.2d 476 (1991).
The Attorney General maintains entitlement to the
records by virtue of statutory and/or common law powers.
The
office of Attorney General is a parcel of our English heritage.
Once attorney for the English crown, in America, the Attorney
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General is counsel for the people.
See
Hancock v. Terry Elkhorn
Mining Company, Inc., Ky., 503 S.W.2d 710 (1973).
The office is
clothed with power and authority emanating from the Constitution,
legislative enactment, and the common law.
See Commonwealth v.
Paxton, Ky., 516 S.W.2d 865 (1974); Hancock v. Schroering, Ky.,
481 S.W.2d 57 (1972); Matthews v. Pound, Ky., 403 S.W.2d 7
(1966), and Johnson v. Commonwealth, ex rel. Meredith, 291 Ky.
829, 165 S.W.2d 820 (1942).
Sections 91 and 93 of the Kentucky
Constitution are given to the creation and duties of the office.
These sections authorize the Attorney General to perform such
duties as may be “prescribed by law.”
In KRS 15.020, our
legislature has provided that the Attorney General “shall
exercise all common law duties and authority pertaining to the
office of the Attorney General under the common law, except when
modified by statutory enactment.”
The Kentucky Supreme Court has
recognized that the Attorney General shall exercise all the
common law powers to the extent not modified by statute.
See
Commonwealth v. Paxton, 516 S.W.2d 865; Johnson v. Commonwealth,
165 S.W.2d 820.
Notwithstanding the foregoing, we are of the opinion
the resolution of the matter before us need not rest on the
Attorney General's common law power.
The Attorney General has
directed our attention to KRS 15.060 as statutory authority for
his request.
That section provides as follows:
15.060. Actions to collect and recover money
due Commonwealth.
The Attorney General shall:
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(1) With the assistance of the Auditor of
Public Accounts and the Revenue Cabinet,
investigate the condition of all unsatisfied
claims, demands, accounts and judgments in
favor of the Commonwealth.
(2) When he believes that any fraudulent,
erroneous or illegal fee bill, account,
credit, charge or claim has been erroneously
or improperly approved, allowed or paid out
of the Treasury to any person, institute the
necessary actions to recover the same. To
this end he may employ assistants and experts
to assist in examining the fee bills,
accounts, settlements, credits and claims,
and the books, records and papers of any of
the officers of the Commonwealth.
(3) Institute the necessary actions to
collect and cause the payment into the
Treasury of all unsatisfied claims, demands,
accounts and judgments in favor of the
Commonwealth, except where specific statutory
authority is given the Revenue Cabinet to do
so. (Emphasis added.)
The Attorney General argues the above statute grants his office
authority to inspect the requested documents relating to
Alliance's economic incentives.
The Attorney General
specifically relies upon subsection (2) which allows for
“assistants and experts to assist in examining . . . the books,
records, and paper of any of the officers of this Commonwealth.”
Upon the foregoing language, the Attorney General contends his
office, a fortiori, has the power to compel inspection of
documents possessed by officers of the Commonwealth.
To deny
such, he asserts, would render the statute meaningless.
In
contrast, the Cabinet argues that KRS 15.060(2) does not
specifically give the Attorney General the authority to compel
inspection of such documents but, rather, authorizes the
employment of assistants to inspect and martial same incident to
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civil or criminal proceedings.
are pending.
No civil or criminal proceedings
All parties agree that if such proceedings were
pending, the Attorney General could avail himself of traditional
subpoena power.
The Cabinet urges this Court to strictly interpret KRS
15.060(2).
We decline to do so.
In interpreting a statute, we
are to be guided by the intent of the legislature in enacting
same.
Davis v. Commonwealth Life Insurance Co., Ky., 284 S.W.2d
809 (1956).
We observe that no single word or sentence is
determinative, but, rather, the statute as a whole is to be
considered.
Democratic Party of Kentucky v. Graham., Ky., 976
S.W.2d 423 (1998).
Examining KRS 15.060 as a whole, it is clear
the legislature intended the Attorney General to act as a
protector of this Commonwealth's Treasury.
The legislature
clearly must have recognized that the Attorney General would
necessarily need to inspect sundry state documents in order to
perform his assigned duty.
We, therefore, agree with the
Attorney General that implicit in KRS 15.060(2) is authority to
compel inspection of documents possessed by other officers of the
Commonwealth.
Indeed, without the ability to inspect such
documents, the Attorney General would be virtually incapable of
carrying out his legislative mandate under KRS 15.060(2) - - that
of instituting actions to recover treasury funds.
It is well
recognized that a statute naturally carries with it all powers
necessary to its exercise.
Commonwealth, ex rel. Breckinridge v.
Nunn, Ky., 452 S.W.2d 381 (1970), and Dodge v. Jefferson County
Board of Education, 298 Ky. 1, 181 S.W.2d 406 (1944).
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We, thus,
interpret KRS 15.060(2) as empowering the Attorney General to
compel production of documents that are in the possession of
officers of the Commonwealth and are relevant to the recovery of
treasury funds.
In the case at hand, the Attorney General requested
production of the documents in order to ascertain whether
Alliance breached its incentive contract with the Cabinet and, if
so, whether Alliance owes monies to the Treasury.
We view such
request as squarely within the authority granted the Attorney
General under KRS 15.060(2).
The Cabinet, however, believes the
Open Records Act shields these documents from examination by the
Attorney General.
We disagree.
The circuit court held the documents in question were
protected from disclosure under a provision of the Act, namely
KRS 61.878(1)(c)(2)(b).
KRS 61.878(1) reads in relevant part as
follows:
(1)
The following public records are
excluded from the application of KRS
61.870 to 61.884 and shall be subject
to inspection only upon order of a
court of competent jurisdiction, except
that no court shall authorize the
inspection by any party of any
materials pertaining to civil
litigation beyond that which is
provided by the Rules of Civil
Procedure governing pretrial discovery:
. . . .
2.
Upon and after July 15, 1992,
records confidentially disclosed
to an agency or required by an
agency to be disclosed to it,
generally recognized as
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confidential or proprietary, which
are compiled and maintained:
. . . .
b.
In conjunction with an
application for or the
administration of
assessments, incentives,
inducements, and tax credits
as described in KRS Chapter
154; (Emphases added.)
The analysis, however, cannot end with a simple finding of
confidentiality under subsection (1)(c)(2)(b); we must proceed by
examining subsection 5 of the above statute which specifically
addresses the exchange of documents between public agencies:3
(5)
The provisions of this section shall in
no way prohibit or limit the exchange
of public records or the sharing of
information between public agencies
when the exchange is serving a
legitimate governmental need or is
necessary in the performance of a
legitimate government function.
[Emphasis added.]
We view subsection 5 as clear and unambiguous.
The
mandates set forth in KRS 61.878 shall not “prohibit or limit”
the exchange of information between public agencies if such
exchange “is necessary in the performance of a legitimate
government function.”
It is uncontroverted that the Attorney General
requested the confidential documents for the purpose of
determining whether Alliance breached its incentive contract with
the Cabinet and, if so, whether Alliance owed monies to the
3
Kentucky Revised Statutes 61.870(1) defines public agency,
in part, as “[e]very state or local government officer” and
“[e]very state or local government department, division, bureau,
board, commission, and authority.”
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Treasury.
In requesting said information, we think the Attorney
General was exercising a “legitimate government function” under
KRS 61.878(5).
The Attorney General was fulfilling his statutory
role as protector of the Treasury.
We observe the Attorney
General is restricted by the Cabinet's promise to Alliance of
non-disclosure and by operation of KRS 61.878(1)(c)(2)(b) from
revealing these documents publicly.
Nevertheless, we do not view
KRS 61.878(1)(c)(2)(b), nor the Cabinet's commitment of
confidentiality to Alliance, as removing the documents from the
purview of the Attorney General.
In sum, we are of the opinion that the circuit court
erred by granting summary judgment in favor of the Cabinet.
We
hold the Attorney General is entitled to inspect the Cabinet's
documents which bear upon the Attorney General's inquiry of
whether Alliance breached its incentive contract and perforce
owes monies to the Treasury.
We, thus, think it incumbent to
remand this matter to the circuit court for an in camera
inspection of the requested documents in order to determine their
relevancy to the Attorney General's inquiry.
If the documents
are relevant, the Attorney General is entitled to inspect same;
if the documents are not relevant, the Attorney General is not
entitled to inspect same.
Our opinion should not be misconstrued as passing upon
whether these documents are, or are not, subject to public
disclosure.
KRS 61.878(1)(c)(2)(b).
-10-
We only reach the issue of
whether the Attorney General is entitled to inspection of same
under the statutory authority of KRS 15.060.4
For the foregoing reasons, the judgment of the Franklin
Circuit Court is vacated and this cause is remanded with
directions to conduct an in camera review of the documents
requested and enter appropriate order(s) in conformance with this
opinion.
ALL CONCUR.
BRIEFS FOR APPELLANT:
BRIEF AND ORAL ARGUMENT FOR
APPELLEE:
Albert B. Chandler, III
Attorney General of Kentucky
Frankfort, Kentucky
Brent L. Caldwell
Stephen G. Amato
Lexington, Kentucky
James J. Grawe
Assistant Attorney General
Frankfort, Kentucky
BRIEF FOR AMICUS CURIAE:
James P. Benassi
Frankfort, Kentucky
BRIEFS AND ORAL ARGUMENT FOR
APPELLANT:
Scott White
Assistant Deputy Attorney
General
Frankfort, Kentucky
4
Nor, do we address the question of whether the Attorney
General by virtue of his common law power alone is entitled to
inspect confidential government held documents.
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