GREAT FALLS TRIBUNE COMPANY, INC., Petitioner and Appellant, v. RICK DAY, and THE STATE OF MONTANA, DEPARTMENT OF CORRECTIONS, Respondents and Cross-Appellants.
No. 98-216
Supreme Court of Montana
May 29, 1998
289 Mont. 155 | 959 P.2d 508 | 1998 MT 133 | 55 St. Rep. 524
Heard May 26, 1998. Submitted May 26, 1998.
For Respondent: Diana P. Leibinger-Koch (argued), Matthew A. Robertson, and David L. Ohler; Montana Department of Corrections; Helena.
For Amicus: Dal Smilie, Chief Legal Counsel; Montana Department of Administration; Helena.
JUSTICE TRIEWEILER delivered the opinion of the Court.
¶1 The petitioner, Great Falls Tribune Company, Inc., filed a petition in the District Court for the First Judicial District in Lewis and Clark County in which it sought an order restraining the respondent, Rick Day, as Director of the Department of Corrections for the State of Montana, from excluding members of the public from meetings of the Department‘s Private Prison Screening and Evaluation Committee. The District Court held that neither the petitioner nor other members of the public had a right to observe the deliberations of the committee during the negotiation phase of its work, but that once its negotiations had been completed, the process by which it arrives at its conclusions must be open to public observation. Both the Tribune and the Department of Corrections appeal from the District Court‘s order. We reverse that part of the District Court order which excludes the petitioner and other members of the public from the committee‘s deliberations.
¶2 The issue on appeal is whether
FACTUAL BACKGROUND
¶3 In 1997, the Montana Legislature enacted
¶4 On December 1, 1997, the Department published a Request for Proposal (RFP) for the development and operation of a 500-bed private, adult male prison facility pursuant to
Proposals must be opened so as to avoid disclosure of contents to competing offerors during the process of negotiation. A register of proposals must be prepared in accordance with rules adopted by the department and must be open for public inspection after contract award. After the contract is executed, proposal documents may be inspected by the public, subject to the limitations of the Uniform Trade Secrets Act, Title 30, chapter 14, part 4.
¶5 In response to the Department‘s RFP, five private companies submitted proposals for construction of a private correctional facility in Montana. Rick Day, Director of the Department of Corrections, appointed a twenty-one-member committee to review the proposals, evaluate them, and make recommendations to him regarding which company to select.
¶6 At the committee‘s orientation meeting on March 16, 1998, Day instructed the committee that:
Our goal is to select a new member of our partnership, a private prison contractor, through a neutral and objective process — a process which provides the best opportunity for Montana to obtain the most effective, professional, public safety-conscious, efficient prison service and which also provides evidence of strong local support. ...
This brings us to why we are here today. Each of you have been assigned to this extremely important committee. Your task will be to critically evaluate each submission. While performing your other jobs some of you must be prepared to make this assignment a three-or four-month priority. ...
State law requires that proposals be opened in a manner that avoids disclosure of contents to competing offerors, and prohibits the discussion of proposals which might reveal information to competing offerors (
§ 18-4-304, MCA ). What this means is that your work, evaluation, scoring and discussion is at this time confidential. Consequently, you cannot discuss this information with parties outside of this committee. In fact, if you are contacted you must advise the party that you cannot discuss the proposal information and you must immediately report this contact and any contact which may potentially influence the process to the Director‘s Office. Although sometimes difficult to understand, this process is designed by law and recognizes the proposers’ legitimate expectation of privacy in their proposals. Once the contract is signed the proposals and related documents are open to public inspection. ... The work you do will have a lasting effect on Montana corrections well into the next century.
(Emphasis added.)
¶7 The Great Falls Tribune, Inc., is a daily newspaper circulated throughout the state of Montana with its headquarters in Great Falls. On April 3, 1998, it petitioned the District Court to restrain Day and the Department‘s committee from holding its meetings in private and to require that all papers associated with the meetings be open to public inspection. The Tribune alleged that Day‘s directive to the committee that its work be done privately violates its rights guaranteed by
¶9 Following a hearing at which a reporter for the Tribune, two state officials, and three representatives from the private vendors testified, the District Court held that while the five vendors had no reasonable expectation of privacy after a contract has been awarded, they do have a reasonable expectation that their proposals will be kept confidential during the negotiation process. Without further analysis of the vendors’ privacy interest, as opposed to the public‘s interest in open government, the District Court then concluded that during the negotiation phase of the committee‘s work the committee may do its work privately and deny the public access to the vendors’ proposals. The District Court also concluded, however, that once the negotiations among the Department and the five vendors have been completed, the Department must open that part of the committee‘s deliberations which relate to its analysis of the proposals to public observation and make the vendors’ proposals available for public inspection, subject to a trade secret exception. The District Court held that to the extent
¶10 The Tribune appeals that part of the District Court‘s order which allows the Department to conduct negotiations in private. The Department appeals that part of the District Court‘s order which opened its deliberations to public inspection prior to the time that a contract is awarded.
DISCUSSION
¶11 Does
¶12 Whether
¶13 Furthermore,
[t]he constitutionality of a legislative enactment is prima facie presumed, and every intendment in its favor will be presumed, unless its unconstitutionality appears beyond a reasonable doubt. State ex rel. Mills v. Dixon (1923), 66 Mont. 76, 84, 213 P. 227, 229. The question of constitutionality is not whether it is possible to condemn, but whether it is possible to uphold the legislative action which will not be declared invalid unless it conflicts with the constitution, in the judgment of the court, beyond a reasonable doubt. Fallon County v. State (1988), 231 Mont. 443, 445-46, 753 P.2d 338, 339-40.
¶14 The Tribune‘s petition is based on its asserted right to examine the documents and observe the deliberations of public bodies.
No person shall be deprived of the right to examine documents or to observe the deliberations of all public bodies or agencies of state government and its subdivisions, except in cases in which the demand of individual privacy clearly exceeds the merits of public disclosure.
¶15 The Department‘s objection to the Tribune‘s inspection of its private prison proposals and to the observation of its committee meetings is based on the aforementioned provision in
¶16 Although this controversy was submitted to the District Court on the assumption that the Department‘s committee is a public body or agency, and on the further assumption that the proposals are documents of a public body, the Department has argued, for the first time on appeal, that its committee may, in fact, not be a public body to which
¶17 Pursuant to
Moreover, in a factually similar case, the Michigan Supreme Court determined that a selection committee and its advisory subcommittees organized to select a university president were “public bodies” under Michigan‘s Open Meetings Act. Booth Newspapers v. University of Michigan (Mich. 1993), 507 N.W.2d 422, 429. The Michigan definition of “public body” focused on the entity‘s ability to exercise governmental or proprietary authority. The Michigan Supreme Court held that the selection of a public university president constituted the exercise of governmental authority regardless of whether the authority was exercised by the nominating committee, the board or even the advisory subcommittees. Booth, 507 N.W.2d at 429. The same reasoning applies to the selection of the Commissioner in Montana. The “public or governmental” nature of the Committee‘s purpose is obvious. Further, the Committee is created and organized by state statute to perform its governmental function.
Common Cause, 263 Mont. at 331, 868 P.2d at 608 (emphasis added).
¶19 Furthermore, we conclude that the proposals submitted by private vendors to the Department‘s screening and evaluation committee are documents of a public body or agency within the meaning of
¶20 Having concluded that the Department‘s screening and evaluation committee is a public body and that the proposals which were submitted to it are public writings to which
This Court applies a two-part test to determine whether a person has a constitutionally protected privacy interest: whether the person involved had a subjective or actual expectation of privacy and whether society is willing to recognize that expectation as reasonable.
Missoulian v. Board of Regents (1984), 207 Mont. 513, 522, 675 P.2d 962, 967.
¶21 We have previously held that corporations do have an interest in privacy protected by the Montana Constitution, and that a govern-
¶22 The question in this case is whether the private vendors who submitted proposals had an actual expectation that all of the information in those proposals would be kept confidential. The Department contends that there was an actual expectation of privacy based on the assurances given in paragraph 1.1.4.2 of its RFP and the RFP‘s reference in paragraph 1.1.4.1 to
¶23 The Tribune contends that there could have been no actual expectation of privacy based on either the assurances in the RFP or the statutory or regulatory provisions relied upon. The Tribune points out that the RFP,
¶24 The record in this case includes testimony from two state officials and three representatives from vendors who had submitted proposals. This testimony demonstrates the actual reasons for excluding the public from the committee‘s meetings and the vendors’ actual expectations regarding ultimate disclosure of the proposals they submitted.
¶25 Sheryl Motl is a Bureau Chief in the Purchasing Bureau for the Department of Administration, and in that capacity works in the procurement process. She testified that it is important to the RFP process that the contents of proposals not be publicly scrutinized until the State can complete its negotiation process. She explained that it is important that competitors not know what one another have proposed if the State is going to get “the best deal.” She felt that if the process was open, the State would not be able to negotiate effectively. She conceded, however, that at the end of the negotiation process, after a vendor is chosen and a contract executed, the information included in
¶26 Janie Wunderwald is the Contract Manager for the Department of Corrections, and in that capacity prepared the Department‘s request for proposal. She testified that five companies responded to the request and provided twenty-six volumes of material, but that she knew of only one document in the twenty-six volumes which had been marked “trade secret.” She contended that the information included in the proposals would jeopardize security at the correctional facility if made public, but also acknowledged that after the contract is executed, all the proposals, except for those parts which constitute trade secrets or which relate to public safety would be released to the public. She admitted that the only reason the evaluations cannot be opened now, rather than in the future, is that it would jeopardize the Department‘s ability to negotiate the best possible deal for the taxpayers of Montana.
¶27 Brad Wiggins is the Director of Business Development for the Corrections Corporation of America, which is one of the vendors submitting a proposal to the Department. Michael Murphy represents Management and Training Corporation, and Lawrence Barreras represents Cornell Corrections. Both of those companies also submitted proposals. All three gentlemen testified before the District Court. Although they all testified that they expected their proposals to be confidential during the negotiation phase, none of them testified that their companies would not have submitted a proposal had they known they would be publicly disclosed, and all acknowledged that when they submitted their proposal they were aware that, pursuant to law in Montana, the proposal would be subject to public inspection after a contract was executed.
¶28 It is clear from the language of the Department‘s RFP, the terms of
¶29 While we are in no way critical of the Department‘s determination to get the “best deal” for the taxpayers of Montana, we must
¶30 The State‘s argument for privacy is analogous to the school board‘s argument in Great Falls Tribune v. Great Falls Public Schools (1992), 255 Mont. 125, 841 P.2d 502. In that case, the Tribune sought admission to a meeting of the board of trustees for the Great Falls public schools at which the board intended to discuss negotiations for a new collective bargaining agreement with teacher aides and library aides. The board contended that they were entitled to hold these meetings privately pursuant to
Article II, Section 9, of the Montana Constitution is unambiguous and capable of interpretation from the language of the provision alone. Great Falls Tribune v. District Court (1980), 186 Mont. 433, 437, 608 P.2d 116. Associated Press v. Board of Education (1991), 246 Mont. 386, 804 P.2d 376. In Associated Press, we notedArticle II, Section 9 , to be “unique, clear and unequivocal” and held that:We are precluded, by general principles of constitutional construction, from resorting to extrinsic methods of interpretation.
Associated Press, 246 Mont. at 391, 804 P.2d at 379. Great Falls Tribune, 255 Mont. at 129, 841 P.2d at 504.
¶31 We held that the board‘s asserted interest in effective collective bargaining did not involve a matter of individual privacy which would serve as an exception to the open meeting law and, therefore, that:
The collective bargaining strategy exception is an impermissible attempt by the Legislature to extend the grounds upon which a meeting may be closed. We conclude that
Sec. 2-3-203(4), MCA , is unconstitutional and the District Court is reversed.
Great Falls Tribune, 255 Mont. at 131, 841 P.2d at 505.
¶33 Furthermore, we conclude that the actual private vendors who are involved in this case had no reasonable expectation that the information included in their proposals, other than trade secrets, would remain confidential. They were all informed and were aware, prior to submitting their proposals, that the proposals would ultimately be available for public inspection. They were only led to believe that the proposals would be confidential while it was in the State‘s economic interest to avoid disclosure. We conclude that in this case there is no privacy interest in the entirety of the vendors’ proposals to balance against the merits of public disclosure. We therefore conclude that the petitioner, Great Falls Tribune Company, Inc., has a constitutional right pursuant to
¶34 This case involves the perception of State officials that private negotiations are in the State‘s short-term economic interest. However, the delegates to the Constitutional Convention made a clear and unequivocal decision that government operates most effectively, most
¶35 While on any given occasion there may be legitimate arguments for handling government operations privately, the delegates to our Constitutional Convention concluded that in the long-term those fleeting considerations are outweighed by the dangers of a government beyond public scrutiny. As we have in the past, with this decision, we reinforce that conclusion.
¶36 For these reasons, the judgment of the District Court is reversed in part and affirmed in part.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY, NELSON and REGNIER concur.
Due to unavoidable circumstances, and the urgency with which this opinion was issued, Justice William E. Hunt, Sr., was unable to sign the final opinion. However, he concurs with the result.
JUSTICE LEAPHART, concurring in part and dissenting in part.
¶37 I concur in the Court‘s conclusions that 1) the committee is a public body and an agency of the state government; and 2) the proposals submitted by the private vendors to the Department‘s screening and evaluation committee are documents of a public body within the meaning of
¶38 I dissent from the Court‘s conclusion that there is no privacy interest in the entirety of the vendors’ proposals. In so concluding, the Court has failed to recognize that, if the vendors were provided a procedure to assert and adjudicate claims of trade secret or constitutionally-protected privacy, such claims may encompass the entirety of any one vendor‘s proposal. There is an underlying assumption in the Court‘s opinion that the trade secrets, if any, would constitute only a small part of each proposal. Given the nature of the project (construction of a private prison), I would assume just the opposite. That is, each vendor is attempting to sell the State a package, the essence of which is security — securing the public and the prison personnel from the prisoners and the prisoners from one another. The security features of a proposal are achieved through various means: architectural
¶39 The parties did not litigate the question of what constitutes a “trade secret” nor do I purport to resolve that issue here. Suffice it to say that “trade secret,” as defined in the Uniform Trade Secret Act, is a very general and amorphous concept which includes information, formulae, patterns, devices, methods, techniques and processes.
¶40 As the Court points out, the vendors were aware that their proposals (with the exception of trade secrets) would be subject to public inspection once the contract was executed. However, until the prison vendors are given a chance to assert their claims to “trade secrets” and the trial court has had an opportunity to adjudicate those claims, I would not rule, as a matter of law, that a vendor has no privacy interest in the entirety of its proposal(s).
¶41
¶42 As pointed out above, the safety of the prison personnel, the prisoners and the public depends upon the architectural design, building construction materials, alarms, and staffing of the prison. The safety of those individuals will be greatly compromised if, for example, the designs, drawings, blueprints and alarms system plans are disclosed to the public and printed in the newspaper for consumption by prospective inmates. In my view, the vendors, in the interests of insuring the safety of their employees (as well as the public), have every reason to expect that their building plans, blueprints, alarm systems and staffing plans will remain confidential. Since it is society (through its legislature) that seeks to construct this private prison for its own protection, we would be hard pressed to conclude that society is not willing to recognize the legitimacy of the vendors’ safety concerns for the safety and security of their personnel.
¶43 In conclusion, I submit the real problem presented by this appeal lies in the procedural deficiencies of the Montana Procurement Act. The Act does not require that vendors mark materials as trade secrets upon submission, nor does it provide a method whereby the vendor can designate materials as trade secret or claim privacy interests before information is disclosed to the public after execution of the con-
¶44 Until such time as the legislature (or, in the absence of legislation, this Court) provides a mechanism for vendors to assert and specify privacy and secrecy claims and for the Department to balance those claims against the public‘s right to know, we should not be concluding that a trade secret is necessarily something less than the whole proposal or, in effect, denying a vendor the opportunity to assert a privacy interest in its safety/security features which could conceivably encompass the entirety or bulk of its proposal.