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VIRGINIA FREEDOM OF INFORMATION ADVISORY COUNCIL
COMMONWEALTH
OF VIRGINIA |
AO-07-19
August
15, 2019
Michael
W.S. Lockaby
Guynn, Waddell, Carroll & Lockaby, P.C.
Salem, VA 24153
The staff of the Freedom of Information Advisory Council
is authorized to issue advisory opinions. The ensuing
staff advisory opinion is based solely upon the information
presented in your letter dated June 11, 2019.
Dear Mr. Lockaby:
You
asked for an advisory opinion related to the interpretation
of the recently enacted subdivision 32 of § 2.2-3705.6.
Factual
Background
The
provision of law at issue relates specifically to
the Virginia Telecommunications Initiative (VATI)
which is administered by the Virginia Department of
Housing and Community Development (DHCD). You note
in your letter that “VATI is a program through which
DHCD makes grants to local governments, which then
are required under the terms of the grant to partner
with private internet firms to provide internet in
unserved areas of the Commonwealth.” You also outlined
the different stages of the VATI program:
First,
the locality and its private partner must submit
a grant proposal to DHCD, including substantial
documentation and design information, showing the
unserved areas that the infrastructure would serve
and both (1) the technology and infrastructure to
be used including data showing capability and financial
feasibility, and (2) background information showing
that the area to be served is, in fact, currently
unserved. Second, these applications are posted
to DHCD's website, and other providers who believe
they currently are serving the area may submit challenges,
in which they must demonstrate that they are serving
the areas. Third, DHCD makes its grant—and both
the locality and DHCD keep significant amounts of
information and do regular audits to ensure compliance
with the provisions of the grant.
As you stated in your letter, there were problems
concerning the confidentiality of information that
was submitted in VATI applications, which led to the
introduction of Senate Bill 1492 by Senator A. Benton
Chafin in the 2019 Session. This bill passed and was
enacted by the Governor as Chapter 629 of the 2019
Acts of Assembly, adding subdivision 32 of §
2.2-3705.6 in the Freedom of Information Act.
Applicable
Law and Analysis
The policy of FOIA expressed in subsection B of §
2.2-3700 is to ensure "the people of the Commonwealth
ready access to public records in the custody of a
public body or its officers and employees. . . ."
The policy continues to state that "[u]nless
a public body or its officers or employees specifically
elect to exercise an exemption provided by this chapter
or any other statute . . . all public records shall
be available for inspection and copying upon request."
The policy further directs that FOIA "shall be
liberally construed to promote an increased awareness
by all persons of governmental activities and afford
every opportunity to citizens to witness the operations
of government," and that “any exemption from
public access to records . . . shall be narrowly construed
and no record shall be withheld . . . unless specifically
made exempt pursuant to this chapter or other specific
provision of law.”
The
provision of law at issue here is subdivision 32 of
§ 2.2-3705.6, which exempts certain information
from mandatory disclosure under FOIA at the discretion
of the public body, except where such disclosure is
prohibited by law. The subdivision states:
Information
related to a grant application, or accompanying
a grant application, submitted to the Department
of Housing and Community Development that would
(i) reveal (a) trade secrets, (b) financial information
of a grant applicant that is not a public body,
including balance sheets and financial statements,
that are not generally available to the public through
regulatory disclosure or otherwise, or (c) research-related
information produced or collected by the applicant
in the conduct of or as a result of study or research
on medical, rehabilitative, scientific, technical,
technological, or scholarly issues, when such information
has not been publicly released, published, copyrighted,
or patented, and (ii) be harmful to the competitive
position of the applicant. The exclusion provided
by this subdivision shall only apply to grants administered
by the Department, the Director of the Department,
or pursuant to § 36-139, Article 26 (§
2.2-2484 et seq.) of Chapter 24, or the Virginia
Telecommunication Initiative as authorized by the
appropriations act.
In
order for the information submitted by the applicant
and specified in this subdivision to be excluded
from the provisions of this chapter, the applicant
shall make a written request to the Department:
a.
Invoking such exclusion upon submission of the data
or other materials for which protection from disclosure
is sought;
b.
Identifying with specificity the data, information,
or other materials for which protection is sought;
and
c.
Stating the reasons why protection is necessary.
The
Department shall determine whether the requested
exclusion from disclosure is necessary to protect
the trade secrets or confidential proprietary information
of the applicant. The Department shall make a written
determination of the nature and scope of the protection
to be afforded by it under this subdivision.
In
your letter, you have asked four principal questions
in regards to this provision of law, which we will
outline and discuss individually.
Question
1: Under § 2.2-3705.6 (32), is information submitted
with a VATI application exempt from disclosure if
all criteria are met and the applicant invokes the
exemption?
First,
you ask if information submitted with a VATI application
would be exempt from disclosure under FOIA if the
applicant invokes the exemption and meets each of
the criteria listed in subdivision 32. As written,
subdivision 32 of § 2.2-3705.6 applies to “[i]nformation
related to a grant application, or accompanying a
grant application” that is submitted to the Department
as part of the VATI program. In regards to the interpretation
of statutes, the Court in Virginia has stated that
one is "bound by the plain meaning of that language
and must give effect to the legislature's intention
as expressed by the language used unless a literal
interpretation of the language would result in a manifest
absurdity."1 Looking at the plain
meaning of the statute, it is clear that the legislature
intended the statute to apply to any information related
to, accompanying, or appended to a VATI grant application.
So long as all other criteria are met, any information
submitted with a VATI application is exempt from disclosure
under FOIA, so long as the applicant properly invokes
the exemption.
Question
2: Are challenges to VATI applications exempt from
disclosure under § 2.2-3705.6 (32)?
Secondly,
you have asked if challenges to VATI applications
are also exempt from disclosure under FOIA. We conclude
that they are not. Returning to the plain meaning
of the statute, the language is clear that the exemption
applies to trade secrets, financial information, and
research-related information supplied to the Department
as part of the VATI program, if such disclosure is
“harmful to the competitive position of the applicant”
(emphasis added). As stated in your letter, other
providers may submit a challenge to a VATI application
if they believe they currently serve an area that
is represented in an application. You also noted that
some of your clients submitted FOIA requests to the
Department asking for the full text of the challenges,
but were told that the Department “[did] not consider
[their] request a Freedom of Information Act (FOIA)
request.” The Department then only provided a “very
small amount of heavily redacted information.” There
is no mention of challenges in the statute, and a
challenge to an application is submitted by an entity
other than the applicant. A challenge to a VATI application,
by its very nature, cannot contain proprietary information
that is harmful to the competitive position of the
applicant, because it contains the information of
the challenger, instead of the applicant. Although
it can be argued that a challenge contains information
related to an application, the statute makes it clear
that in order for proprietary information or trade
secrets to be protected under this exemption, such
information must have been submitted by the applicant
and the exemption must be invoked by the applicant
itself. Thus, information contained in a challenge
to a VATI application is not exempt from disclosure
under this exemption.
Question
3: Is information submitted as part of DHCD’s auditing
and verification process exempt from disclosure under
§ 2.2-3705.6 (32)?
You
stated in your letter that, as part of the process,
after the Department awards a grant to an applicant,
“both the locality and [the Department] keep significant
amounts of information and do regular audits to ensure
compliance with the provisions of the grant.” As we
have determined above, the plain meaning of the statute
dictates that the exemption applies to information
submitted as part of an application or related to
an application. Based on your explanation of the VATI
program process, the auditing and verification process
happens after an applicant is awarded a grant. Any
information submitted to the Department after a grant
has been awarded is, by its very nature, not information
related to an application; therefore, such information
would not be exempt from disclosure under the statute.
Question
4: Are there other provisions under FOIA that apply
to information shared between public and private partners?
Lastly,
you have asked whether there are other provisions
under FOIA that would exempt information shared between
public and private partners from disclosure. As you
noted, this would depend largely on the specific facts
of a situation and context; however, under §
2.2-3705.6 there are other provisions that would allow
for the protection of proprietary information and
trade secrets shared between public and private partners.
Subdivision
3 excludes from mandatory disclosure:
Proprietary information, voluntarily provided by
private business pursuant to a promise of confidentiality
from a public body, used by the public body for
business, trade, and tourism development or retention;
and memoranda, working papers, or other information
related to businesses that are considering locating
or expanding in Virginia, prepared by a public body,
where competition or bargaining is involved and
where disclosure of such information would adversely
affect the financial interest of the public body.
Therefore,
depending on the specific facts and context of a given
situation, proprietary information provided by a private
partner to a public partner pursuant to a promise
of confidentiality may be protected from mandatory
disclosure under FOIA.
In
addition, subdivision 19 excludes from mandatory disclosure:
[c]onfidential
proprietary information and trade secrets developed
by or for a local authority created in accordance
with the Virginia Wireless Service Authorities Act
(§ 15.2-5431.1 et seq.) to provide qualifying
communications services as authorized by Article
5.1 (§ 56-484.7:1 et seq.) of Chapter 15 of
Title 56, where disclosure of such information would
be harmful to the competitive position of the authority,
except that information required to be maintained
in accordance with § 15.2-2160 shall be released.
If
a private partner shares proprietary information or
trade secrets with a wireless service authority created
in accordance with the Virginia Wireless Service Authorities
Act, that information may also be protected from mandatory
disclosure under FOIA, but once again, context is
key.2
While
these two exemptions appear to be the most likely
to apply in the context of telecommunication services,
other exemptions might apply depending on the specific
facts of a given situation.
Thank
you for contacting this office. We hope that we have
been of assistance.
Sincerely,
Ashley
Binns
Staff Attorney
Alan
Gernhardt
Executive Director
1Bates
v. Commonwealth, 752 S.E.2d 746 (2014) (citations
and alteration omitted).
2Please
keep in mind that § 2.2-3705.6 protects certain
proprietary information and trade secrets from mandatory
disclosure, but allows a public body the discretion
to release such information if they so choose, unless
such disclosure is prohibited by law. This section
does not prohibit a public body from disclosing information
related to proprietary records or trade secrets. |