September 26, 2017

By: Melissa Chapaska

On September 21, 2017, the Pennsylvania Commonwealth Court issued an important and timely en banc decision in Baron v. Commonwealth Dep’t of Human Svcs., __ A.3d __ (Pa Cmwlth. 2017) confirming that the Right to Know law (RTKL) provides direct-interest participants the same automatic stay protection that it provides to agencies, which prohibits the release of records while an appeal of the decision of the Office of Open records is pending.

Pennsylvania’s RTKL provides the public with the right to access and obtain copies of records held by government agencies. The RTKL presents state agencies with the challenge of reviewing the requested records to determine whether one of the 30 enumerated exceptions to the RTKL protects the records from public disclosure. However, many times the records government agencies hold do not originate from the agency, but from a third-party.

For example, the Pennsylvania Department of Health, Office of Medical Marijuana, received a total of 457 applications from prospective medical marijuana growers/processors and dispensaries. These applications contained detailed information regarding applicants’ business plans, security plans, and personal information, and the applicants provided redacted versions to DOH. However, following an onslaught of RTKL requests for unredacted applications and subsequent decisions from OOR, medical marijuana applicants’ proprietary information is now at the mercy of vague protections provided to third parties under the RTKL statute. Given the irreversible consequences of release at stake, the Commonwealth Court’s September 21, 2017 decision in Baron regarding interested parties’ right to an automatic stay under Section 1301(b) of the RTKL is especially timely.

In Baron, the requester submitted a RTKL request to the Department of Human Services (DHS), requesting rates paid to nursing homes by managed care organizations (MCOs) participating in a Medical Assistance program. DHS informed the requester that it was not in possession of the records at issue and notified the MCOs of the request in accordance with Section 707(a) of the RTKL, which requires an agency to notify any third party that provided a record responsive to a RTKL request, and Section 707(b), which requires an agency to notify a third party who has identified records submitted to the agency as trade secrets or confidential proprietary information of a request that implicates those records.

The MCOs responded to DHS’s notice, claiming the records as exempt from public disclosure under the RTKL. Based on this claim DHS denied the request. The requester then appealed to the OOR, who notified interested third-parties and invited them to submit evidence in the appeal.

Notably, a third party with a direct interest in the record subject of a RTKL request is not automatically granted participant status in a requester’s appeal for access to a third-party’s records. Rather, to become a “Direct Interest Participant”, the third party pursuant to Section 1101(c) of the RTKL has 15 days following notice of the appeal to file a request to participate, which will only be granted if (1) no hearing has been held; (2) the appeals officer has not yet issued its order; and (3) the appeals officer believes the information the third-party can provide will be probative.

The MCOs in Baron filed Requests to Participate in accordance with Section 1101(c) and submitted evidence in support of their claimed exemptions. The OOR granted the MCOs the right to participate in the appeal, but rejected the MCOs claimed exemptions. OOR then issued an order granting the requester’s appeal and ordering DHS “to provide the requested records as directed,” without directing the MCOs in possession of the records to take any action.

The MCOs petitioned the Commonwealth Court for review of the OOR’s disclosure order, and, in response, the requester cross-petitioned for review (Consolidated Appeals). DHS failed to produce the records subject to OOR’s order, because, although DHS demanded the MCOs produce the requested documents, the MCO, Health Partners, refused; therefore, DHS was not in possession of the records to disclose.  Requester then filed an action in mandamus against the MCO and DHS based on DHS’s failure to release the records as directed by OOR. Specifically, the requester alleged that the disclosure order binds the third party MCOs to the same extent it binds DHS to disclose the records. The requester further argued that there was no automatic stay of disclosure pursuant to Section 1301(b) of the RTKL because the Consolidated Appeals did not meet the criteria set forth in Section 1301(a).

Following argument on preliminary objections, President Judge Mary Hannah Leavitt directed the parties to brief “whether the Consolidated Appeals triggered the automatic stay in Section 1301(b) of the RTKL” and the en banc court heard argument on the issue. On September 21, 2017, the Commonwealth Court issued a decision addressing Health Partners’ preliminary objections.

First, the court considered whether the requester stated an appropriate mandamus claim against Health Partners and DHS. As to Health Partners, the court agreed that mandamus is not an appropriate form of relief because (1) Health Partners is a private party, and (2) the OOR disclosure order did not mandate Health Partners to perform any action. While the court agreed that the disclosure order imposes a mandatory duty on DHS to disclose records, it held that requester could not sustain a mandamus action against DHS when the disclosure order was the subject of a pending appeal.

The court then considered whether disclosure of the records was automatically stayed pursuant to Section 1301(b) of the RTKL. Requester argued that the automatic stay Section 1301(b) provides did not apply because the appeals direct-interest participants filed did not meet the criteria set forth in Section 1301(a):

Within 30 days of the mailing date of the final determination of the appeals officer relating to a decision of a Commonwealth agency, a legislative agency or a judicial agency issued under section 1101(b) or the date a request for access is deemed denied, a requester or the agency may file a petition for review or other document as might be required by rule of court with the Commonwealth Court. The decision of the court shall contain findings of fact and conclusions of law based upon the evidence as a whole. The decision shall clearly and concisely explain the rationale for the decision.

65 P.S. § 67.1301.

Specifically, the requester argued that the criteria of Section 1301(a), and therefore the automatic stay Section 1301(b) provides, was not applicable to appeals direct-interest participants filed.  Requester further argued that because he did not file his cross-petition within the required 30 days, Commonwealth Court did not have jurisdiction under Section 1301.

First, the court addressed the enforceability of OOR’s disclosure order given the existence of pending appeals challenging the order. Rejecting requester’s strict interpretation of Section 1301(a), the Commonwealth Court found that requester’s reading was “overly-technical” and did “not account for the interplay of Section 1301 with court rules” and the court’s “inherent right to employ rule for procedure and practice before it so long as the rules do not conflict with the laws of the Commonwealth or United States.”

The court applied the rules of statutory construction and the policy interest of “judicial economy and just resolutions to avoid piecemeal legislation” to reject requester’s argument that Section 1301 does not apply to appeals direct-interest participants file when the requester or agency does not appeal within the statutory time-frame. The court noted that requester’s cross-petition complied with Pennsylvania Rule of Appellate Procedure 1512(a)(2) Because it was filed within 14 days of after Health Partners’ petition for review. The court concluded that by operation of Pa. R.A.P. 1512(a)(2), requester had additional time beyond the 30-day period provided by the RTKL to file his cross-petition.

However, the court explained:

Regardless of whether Petitioner challenged OOR’s final determination under Section 1301(a), the fact remains that the Direct-Interest Participants timely petitioned for review. Our RTKL jurisprudence recognizes such third-party appeals as proper. Dep’t of Educ. v. Bagwell, 131 A.3d 638 (Pa. Cmwlth. 2016) (Bagwell 2016); W. Chester Univ. v. Schackner (Bravo), 124 A.3d 382 (Pa. Cmwlth. 2015); see also SWB Yankees LLC v. Wintermantel, 45 A.3d 1029 (Pa. 2012) (accepting third-party contractor’s participation on appeal).

An agency cannot waive a third party’s right in nondisclosure by action or inaction. Bagwell 2016, 131 A.3d at 649 (“agencies are not permitted to waive a third party’s interest in protecting records.”). That DHS did not appeal does not impair Direct-Interest Participants’ appeal rights. On appellate review, the Disclosure Order is subject to reversal or modification, undermining any immediate right to relief or mandatory duty to disclose. Hence, any attempt to enforce an appealed final determination before disposition of the merits is premature.

Therefore, the court concluded, requester’s cross-petition satisfied the criteria of Section 1301(a) and Section 1301(b)’s automatic stay relieved DHS of its duty to disclose.

The court then looked forward, “mindful that Petitioner may withdraw or discontinue his challenge in the Consolidated Appeals” to determine whether the direct-interest participant’s petition for review triggered the automatic stay provision of 1301(b).

Relying on “the long-standing practice that permits third party participation in RTKL appeals,” the court concluded that a direct-interest participant’s petition for review triggers the automatic stay provision of 1301(b). The court reasoned that “it would be a waste of judicial resources to require a third party protecting a recognized interest in non-disclosure to file a motion for a stay pending appeal” and “would nullify our RTKL jurisprudence recognizing third-party appeal rights as on equal footing with that of the requester or an agency as specified in Section 1301(a) of the RTKL.”

Finding that requester failed to state a claim for mandamus relief, the Commonwealth Court dismissed requester’s mandamus claim.

The importance of the Baron decision as it relates to a third-party’s RTKL rights cannot be understated – the en banc court’s ruling is clear:

By necessary implication, the [automatic] stay [provided by Section 1301(b) of the RTKL] applies to all records at issue regardless of the basis for the exemption, who asserted it, or who preserved it. The alternative encourages piecemeal litigation, whereby parts of a final determination are enforced and others are disputed, creating confusion for the parties and the courts.

Returning to those concerned medical marijuana applicants we discussed earlier, what is the moral of story? Applicants, especially those winning permittees and those that intend to reapply for a permit in Phase II, need to be aware of the consequences of the release of their proprietary information. Applicants also need to be aware of the need to act quickly and strategically to protect their trade secrets, personal information, and security plans from public release. Based on Baron, an applicant who disagrees with an OOR decision that application information must be publicly disclosed should take its own appeal from OOR’s final determination, and thereby trigger the automatic stay pending review by the Commonwealth Court.

About the Author:

Melissa Chapaska, attorney at Hawke, McKeon & Sniscak, LLP, represents clients in regulatory matters before state agencies and courts.  Her practice focuses primarily on administrative agency applications and appeals, and transactional drafting.  Prior to joining the firm, Melissa interned with the United States Department of Justice and Pennsylvania Department of Labor & Industry.