Gray Media Grp., Inc. v. City of Charlotte

• Docket Number: COA23-154
• Decision Date: 12 September 2023
• Citation: Gray Media Grp., Inc. v. City of Charlotte, 892 S.E.2d 629 (N.C. App. 2023)
• Parties: GRAY MEDIA GROUP, INC., d/b/a WBTV, Plaintiff, v. CITY OF CHARLOTTE, THROUGH the CITY COUNCIL, Defendant.
• Court: North Carolina Court of Appeals

892 S.E.2d 629

GRAY MEDIA GROUP, INC., d/b/a WBTV, Plaintiff, v. CITY OF CHARLOTTE, THROUGH the CITY COUNCIL, Defendant.

No. COA23-154

Court of Appeals of North Carolina.

Filed September 12, 2023

Flannery | Georgalis, LLC, by Elizabeth F. Greene, and Ballard Spahr LLP, by Lauren P. Russell and Kaitlin M. Gurney (pro hac vice), for Plaintiff-Appellant.

Parker Poe Adams & Bernstein LLP, Charlotte, by Daniel E. Peterson, for Defendant-Appellee.

Stevens Martin Vaughn & Tadych, PLLC, by Elizabeth J. Soja and Michael J. Tadych, for Amici Curiae.

RIGGS, Judge.

"Government agencies and officials exist for the benefit of the people, and ‘an informed citizenry [is] vital to the functioning of a democratic society.’ " State Employees Ass'n of N.C. v. N.C. Dep't of State Treasurer , 364 N.C. 205, 210, 695 S.E.2d 91, 95 (2010) (quoting NLRB v. Robbins Tire & Rubber Co. , 437 U.S. 214, 242, 98 S.Ct. 2311, 2326-27, 57 L. Ed. 2d 159, 178 (1978) ). Fundamentally, "public records and public information compiled by the agencies of North Carolina Government, or its subdivisions are the property of the people. " N.C. Gen. Stat. § 132-1(b) (2021) (emphasis added). For that reason, the North Carolina General Assembly provided a means for fostering transparency and accountability in government through the Public Records Act, which provides broad access to public records. State Employees Ass'n of N.C. , 364 N.C. at 211, 695 S.E.2d at 95. The Act is intended to be liberally construed to ensure that governmental records be open and made available to the public, subject only to a few limited exceptions. DTH Media Corp. v. Folt , 374 N.C. 292, 300, 841 S.E.2d 251, 257–58 (2020)

In this appeal, Gray Media, LLC ("Gray Media") asks this Court to consider whether records held by a third party are subject to the Public Records Act. The trial court declared the issue moot and granted summary judgment to Defendant, City of Charlotte ("the City"), because the City voluntarily produced the documents. However, Gray Media requests that this Court provide declaratory relief related to this public records request made pursuant to the Public Records Act, N.C. Gen. Stat. §§ 132, et seq. (2021). Additionally, Gray Media appeals the trial court's denial of attorneys’ fees associated with its Public Records request.

Upon review, we hold that Gray Media's request for declaratory relief is not moot, and the requested records are public records as defined by N.C. Gen. Stat. § 132-1(a). Further, because we hold that the litigation compelled the release of the documents, Gray Media is entitled to reasonable attorneys’ fees. Therefore, we remand for summary judgment in favor of Gray Media and additional factfinding to determine the fee award pursuant to N.C. Gen. Stat. § 132-9(c).

I. FACTS & PROCEDURAL HISTORY

In April of 2020, the City executed a one-year contract ("Contract") with Ernst and Young ("EY") to advance more streamlined and effective local government operations. The contract included two (2) one-year renewal options to extend until March of 2023; the City exercised at least one of these renewal options and extended the contract to March 2022. The contract provided that the City would "have exclusive ownership of all reports, documents, designs, ideas, materials, concepts, plans, creative works, software, data, programming code, and other work product developed for or provided to the City in connection with this Contract, and all patent rights, copyrights, trade secret rights and other intellectual property rights relating thereto (collectively the ‘Intellectual Property’). " In the same paragraph of the contract, EY retained its ownership rights in "Preexisting IP," which it defined as "proprietary data, methodologies, processes, know-how, and trade services that [EY] owns in performing services under this Contract[.]"

The Contract also gave the City exclusive ownership of "Contract Data" defined as: "(a) all data produced or generated under this Contract for the benefit of the City and its customers; and (b) all data provided by, accessed through, or processed for the City under this Contract." The Contract gave the City access to Contract data through language requiring EY to "promptly provide the Contract data to the City in machine readable format upon the City's request at any time while the contract is in effect or within three years from when the contract terminates." The Contract states that work product, excluding confidential information of EY, shall be treated as public records under North Carolina law. Pursuant to the terms of the contract, EY agreed to treat Contract Data as Confidential Information and "not reproduce, copy, duplicate, disclose, or use the Contract Data in any manner except as authorized by the City in writing or expressly permitted by this Contract."

On 24 November 2020, the City and EY signed a statement of work ("SOW") under the Contract, which included having EY develop and deploy a survey focused on transformative leadership and high-performing council topics for the City Council members. In December 2020, EY deployed this survey by sending an email to each City Council member's work email address with a unique hyperlink to access and fill out the survey.

On 2 March 2021, WBTV reporter David Hodges, an employee of Gray Media, requested and received the contract and SOW as part of a public information request made pursuant to N.C. Gen. Stat. § 132-6. Mr. Hodges followed up on the same day, requesting the EY survey form and City Council member responses. The City immediately denied his request via email saying that "[w]e are not in possession of those surveys and EY used those surveys solely for the purpose of developing their recommendations." The City clarified its stance on 9 March 2021 in a letter stating the City Attorney's Office had "determined that documents that are solely in EY's possession are not subject to the Public Records Law." During April and May, the parties exchanged correspondence on the topic of whether the survey and responses were public records subject to disclosure. On 1 June 2021, the City sent Gray Media the final report that EY developed based in part on the survey information; however, the final report did not include the survey or survey responses.

Gray Media filed a complaint and petition for writ of mandamus on 29 June 2021. The City responded with a motion to dismiss, motion to strike, and request for a protective order on 27 August 2021. After a hearing on the issues, the trial court entered an order on 12 November 2021 granted the City's motion to dismiss in part and denied the motion in part; the trial court also directed Gray Media to amend its complaint in accordance with the order.

Gray Media filed an amended complaint on 23 November 2021 requesting relief declaring the documents were public records and a writ of mandamus requiring the City to comply with the Public Record Act. The City responded to the amended complaint on 24 January 2022 arguing inter alia that the requested records were not public records. As part of the discovery process following the amendment of the complaint, the City served EY with a subpoena duces tecum on 27 May 2022 requesting that EY produce the survey questions and responses no later than 3 June 2022. The City extended this deadline to 10 June 2022 in exchange for EY's agreement to accept service by email. Nine working days later, EY timely produced the requested material to the City on 10 June 2022; the City turned the survey questions and responses over to Gray Media on the same day. During oral argument on appeal, the City confirmed that this subpoena duces tecum was the first time the City requested the survey and responses from EY.

Prior to the production of the requested survey and responses, Gray Media filed a motion for summary judgment in April 2022. After production of the survey and responses, the City filed a motion for summary judgment in July 2022.

The trial court held a hearing on 18 August 2022 on the motions for summary judgment and entered an order on 11 October 2022 granting the City's motion for summary judgment and denying Gray Media's motion for summary judgment. The trial court found that:

(i) there is no genuine issue of material fact precluding entry of summary judgment; (ii) no genuine present controversy exists between the parties; (iii) as the Defendant has produced the records, Plaintiff's request for declaratory and injunctive relief is moot; (iv) there is no applicable exception to the mootness doctrine because while there is reasonable possibility that the Plaintiff may be subjected to the same action again, such action is capable of being fully litigated at that time.

Further, the trial court denied Gray Media's motion for attorneys’ fees. Gray Media timely appealed the order on 7 November 2022.

II. ANALYSIS

A. The Issue Is Not Moot

The trial court found that because the City had produced the requested records, the issue was moot and granted summary judgment for the City. On appeal Gray Media argues its request for a declaratory judgment that the requested documents are public records is not moot and is, in fact, "ripe for judicial review." In the alternative, Gray Media argues, even if the issue is moot, the issue is capable of repetition but evading review and, therefore, an exception to the doctrine of mootness. The City argues that this request for declaratory judgment is moot because, if rendered, such judgment could not have any practical effect on the existing controversy. We hold that the issue is not moot.

1. Standard of Review

While the trial court granted summary judgment based upon a finding of mootness, the North Carolina Supreme Court has held that "the proper procedure for a court to take upon a determination that a case has become moot is dismissal of the action rather than entry of summary judgment." Roberts v. Madison County Realtors Assn., 344 N.C. 394, 399, 474 S.E.2d 783, 787...