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January 2, 2020

Pa. Justices To Mull If Subcontractors' Docs Are Protected

Law360 (January 2, 2020, 8:53 PM EST) -- The Pennsylvania Supreme Court has agreed to mull whether documents about a potential municipal utility privatization plan that were shared with government subcontractors can be shielded from release under the state's open records law as protected internal deliberations.

The justices said Tuesday they would hear arguments following a Commonwealth Court ruling in April that determined that the state's Right To Know Law did not allow the Chester Water Authority to obtain material prepared by subcontractors, including McNees Wallace & Nurick LLC, to assist a contractor for the state's Department of Community and Economic Development with potential efforts to privatize the municipal utility.

In a one-page order, the justices said they would weigh "whether the Commonwealth Court erred in extending the internal, pre-decisional deliberative exception ... of the Right To Know Law to public information shared with agency subcontractors having no direct or proper contractual relationship with the agency."

The court did not comment on the case outside from laying out the questions it would consider, but Kevin Kent, an attorney with Conrad O'Brien representing the CWA, said he was pleased the justices had taken on the matter.

"These are extremely important issues," he said. "Our client is happy to see the Supreme Court review them and hopefully provide clear guidance, particularly given the breadth of the privileges asserted by the commonwealth to include not just a commonwealth agency, but also non-attorney consultants contracted by the commonwealth, those consultants' attorneys, and even to local cities to which the commonwealth is in many ways adverse."

According to court records, McNees Wallace and Fairmount Capital Advisors Inc. were both tapped as subcontractors as another company, Econsult Solutions Inc., worked on behalf of the DCED as receiver for the financially distressed Philadelphia-area city of Chester.

A paralegal with Conrad O'Brien filed a request under the Right to Know Law on behalf of CWA in November 2017 seeking documents exchanged among Econsult, McNees Wallace and Fairmount Capital that related to the potential monetization or privatization of the utility, according to court records.

The state's Office of Open Records ultimately found that certain records the firm requested were shielded under the Right to Know Law's protections on documents that reflect internal, predecisional deliberations.

Conrad O'Brien argued on appeal that the law's protections on those kinds of documents did not apply to the material it was seeking because documents shared with outside contractors could not be considered internal to a state agency.

But a three-judge Commonwealth Court panel ultimately ruled that the contractual relationship between the DCED and Econsult, and the subsequent contractual relationships between Econsult and the two subcontractors, served to extend the reach of the Right to Know Law's protections.

"Given this contractual relationship and the purpose for which it was formed, we conclude that it serves, rather than hinders, the RTKL to interpret 'internal to the agency' as including the predecisional, deliberative information that was exchanged between the department and Econsult, McNees, and Fairmount," the panel said.

A DCED spokesperson said that department "looks forward to the Supreme Court’s eventual resolution of this issue.”

The CWA is represented by Megan Guernsey and Kevin Kent of Conrad O'Brien PC.

The commonwealth is represented by Scott Longwell and Justin Zimmerman of the Department of Community and Economic Development.

The case is Finnerty v. Pennsylvania Department of Community and Economic Development, case number 45 EAP 2019, before the Pennsylvania Supreme Court.

--Editing by Adam LoBelia.


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