High Court: Firm Subcontracts Not Public Under Law
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MINNEAPOLIS (AP) – The state Supreme Court ruled Wednesday that a private business working on a construction project for a northern Minnesota school district does not have to make its subcontractor data public under open records laws.
The nuanced ruling in the case between Johnson Controls, Inc., and a small-town newspaper group could have significant impact on data access, experts said, as well as the public’s ability to see how government entities are spending funds.
“This decision has the potential to cause a lot of mischief,” said Jane Kirtley, media law and ethics professor at the University of Minnesota.
In 2010, the St. Louis County School District hired Milwaukee-based Johnson Controls for an $80 million school construction and renovation project. Johnson Controls hired a subcontractor to help with design. After the school district incurred extra costs, Ely-based Timberjay Newspapers asked to see the contract between Johnson Controls and its subcontractor, Architectural Resources, Inc.
Johnson Controls refused, arguing it was not subject to the Data Practices Act. The Supreme Court agreed.
“There is no provision in the Data Practices Act that makes a contract between two private businesses public,” Chief Justice Lorie Skjerven Gildea wrote for the majority.
Gildea said the government is required to provide clear notice in contracts with private businesses that the private entity is subject to open records laws if performing government functions. She said the school district did not include that notice in its contract with Johnson Controls.
“The Data Practices Act simply does not state that data held by a government contractor performing a government function are public,” the opinion said.
Marshall Helmberger, publisher and managing editor at Timberjay Newspapers, said the opinion clarifies rules going forward, and puts governments on alert that their contracts must include language that would make private entities subject to open records laws. He suggested the Legislature consider penalties for government entities that do not.
Mark Anfinson, an attorney for the newspaper, said many major contracts in the state already contain the required language, and this ruling will create “a powerful incentive” to make sure more do so in the future. He said he expects the Legislature will take a look at the Data Practices Act to avoid future issues.
Todd Wind, an attorney for Johnson Controls, said the ruling “struck a balance between the right to understand what the government is doing and respecting the confidential business rights of private entities. A contrary holding would have imposed a significant burden on Minnesota businesses.”
The majority did not weigh in on whether Johnson Controls was providing a government function by building schools, meaning an earlier appeals court finding on that issue stands. The appeals court ruled Johnson Controls was performing a government function.
Justices Alan Page and Wilhelmina Wright agreed with the outcome in this case, but disagreed with the majority’s blanket conclusion.
Page wrote that disclosure would depend on whether a contract calls for the private entity to perform a government function. He said in the case of Johnson Controls, it does not, so the company does not have to release its data. But he said the majority’s analysis of the plain language of open records statutes “leads to absurd results.”
He said under the majority’s interpretation, a government entity could keep data private by contracting out a particular government function to a private person, and then not include the required notice that it would be subject to open records laws.
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