Great Falls Trib. v. Mont. Public Ser. Com., 02-301.

• Decision Date: 18 December 2003
• Docket Number: No. 02-301.,02-301.
• Citation: 319 Mont. 38,2003 MT 359,82 P.3d 876
• Parties: The GREAT FALLS TRIBUNE; the Billings Gazette; the Montana Standard; the Helena Independent Record; the Missoulian; Big Sky Publishing, Inc., d/b/a the Bozeman Daily Chronicle; the Montana Newspaper Association; the Miles City Star; the Livingston Enterprise; Yellowstone Public Radio; the Associate Press, Inc.; and the Montana Broadcasters Association, Petitioners and Appellants, v. The MONTANA PUBLIC SERVICE COMMISSION, Respondent and Cross-Appellant, and The Montana Power Company, n/k/a Northwestern Energy, LLC, Intervenor and Respondent.
• Court: Montana Supreme Court

82 P.3d 876

2003 MT 359

319 Mont. 38

The GREAT FALLS TRIBUNE; the Billings Gazette; the Montana Standard; the Helena Independent Record; the Missoulian; Big Sky Publishing, Inc., d/b/a the Bozeman Daily Chronicle; the Montana Newspaper Association; the Miles City Star; the Livingston Enterprise; Yellowstone Public Radio; the Associate Press, Inc.; and the Montana Broadcasters Association, Petitioners and Appellants, v. The MONTANA PUBLIC SERVICE COMMISSION, Respondent and Cross-Appellant, and The Montana Power Company, n/k/a Northwestern Energy, LLC, Intervenor and Respondent.

No. 02-301.

Supreme Court of Montana.

Orally Argued and Submitted January 16, 2003.

Decided December 18, 2003.

Peter Michael Meloy and Jennifer S. Hendricks (argued), Meloy Law Firm, Helena, for Appellants.

Robin A. McHugh (argued), Montana Public Service Commission, Helena, for Respondent.

Marjorie L. Thomas, Michael P. Manion (argued), Northwestern Energy, LLC, Butte, for Intervenor.

John Alke (argued), Hughes, Kellner, Sullivan & Alke, Helena (Qwest Corporation and Montana-Dakota Utilities Company), Larry M. Elison, Matthew Clifford, Gold Canyon, AZ, for Amici.

MCLEAN¹, District Judge.

¶ 1 The Appellant media entities (hereinafter "the media") appeal from the Memorandum and Order of the First Judicial District Court, Lewis and Clark County, granting the media partial relief by concluding that certain documents filed by the Montana Power Company ("MPC") with the Montana Public Service Commission ("PSC") should be disclosed to the public, but denying the media access to certain other documents filed by MPC with the PSC under the PSC's Protective Order. After due consideration, this matter is reversed and remanded for further proceedings consistent with this Opinion.

¶ 2 We restate the issues on appeal as follows:

¶ 3 1. Whether the District Court erred by failing to correctly balance the public's constitutional right of access to documents filed by the MPC with the PSC against the MPC's constitutional right of privacy.

¶ 4 2. Whether the media was required to exhaust its administrative remedies before filing an action in the District Court.

¶ 5 3. Whether the PSC's procedural rules unconstitutionally shift the burden of proof to the public, thus creating an impermissible presumption of confidentiality.

¶ 6 4. Whether the District Court's interpretation and application of the statutory definition of "trade secret" was correct.

¶ 7 5. Whether the District Court's conclusions were correct regarding the confidentiality of the documents which the court found were constitutionally protected from public disclosure.

BACKGROUND

¶ 8 The Montana Power Company, now known as Northwestern Energy, LLC, is the electric distribution services provider for the western two-thirds of the state of Montana. As such, the MPC is required by Rule 38.5.6007, ARM, and by statute at § 69-8-210(3), MCA, to act as the default supplier for that service territory.

¶ 9 On October 29, 2001, MPC filed its default supply portfolio docket with Montana's PSC, seeking PSC approval of its portfolio docket for the fiscal year beginning July 1, 2002. MPC's portfolio docket consisted of a package of long-term, mid-term and spot market purchases. Filing with the PSC is statutorily required of public utility companies under Title 69, Montana Code Annotated, to enable the PSC to determine whether the costs of MPC's default supply portfolio have been "prudently incurred" and should be "fully recoverable in rates." Section 69-8-210(4)(a), MCA.

¶ 10 Before filing the required portfolio docket with the PSC, MPC made a motion to the PSC for a protective order to prevent public disclosure of parts of MPC's supply purchase contracts with third party suppliers, some of which are subject to confidentiality provisions. MPC represented to the PSC that the information for which MPC was seeking a protective order contained constitutionally protected trade secrets and confidential proprietary information that have economic value to MPC and/or its default supply customers, bidders and contract holders by virtue of their confidentiality. MPC also requested the PSC protective order be drafted broadly enough to cover any other confidential information that may be requested during the review process to avoid any procedural delays in obtaining more protective orders during the process.

¶ 11 The PSC issued the requested protective order. The MPC filed the default supply contracts under the protection of the Order and provided redacted versions of the contracts to the public. Other documents have since been filed under the PSC Protective Order in response to data requests made during the PSC filing and review process.

¶ 12 On November 2, 2001, Mike Dennison, a reporter with Petitioner Great Falls Tribune, sought to examine certain documents and information deemed confidential by MPC which MPC had submitted to the PSC for approval. Mr. Dennison was informed by the PSC that the documents he sought were subject to the PSC Protective Order but that he could challenge MPC's claims of confidentiality by filing a motion with the PSC in accordance with Rule 38.2.5008, ARM.

¶ 13 Rather than filing such motion with the PSC, the Great Falls Tribune, along with the other named media entities, filed an action with the Montana First Judicial District Court, Lewis and Clark County, seeking disclosure of information from purchase and sale agreements contained in MPC's portfolio docket regarding certain electricity contractors, suppliers, projects and other information purporting to fall within the parameters of the PSC Protective Order. Other information sought by the media included documents such as exhibits, charts, tables, calculations, work papers, studies and bid information which were provided to the PSC in response to data requests from the PSC, the Montana Consumer Counsel and other interested parties involved with the review and approval process of MPC's default portfolio docket. By Memorandum and Order entered March 1, 2002, the District Court denied the motions of the PSC and MPC to dismiss the court action based on the District Court's conclusion that the PSC failed to properly apply the Montana Constitution, Article II, Section 9 constitutional balancing test set forth in Mt. States, Etc. v. Dept. of Pub. Serv. Reg. (1981), 194 Mont. 277, 284-86, 634 P.2d 181, 186-87, to determine whether individual documents are constitutionally protected from public disclosure under Montana's "individual privacy" provision, and that only the courts have jurisdiction to rule on constitutional issues.

¶ 14 Following a three-day evidentiary court hearing on the merits on March 20, 21, and 22, 2002, the District Court issued a Memorandum and Order dated April 29, 2002, wherein the District Court ruled on the confidentiality of several categories of documents located in MPC's portfolio docket. While doing so, the court acknowledged the existence of the constitutional balancing test set forth in Mt. States for determining whether documents are constitutionally protected from public disclosure under the right of privacy provision. However, the court noted that the MPC did not argue before the court that the documents were protected under the Mt. States constitutional balancing test as "privacy rights." Rather, the MPC argued that the information was comprised of "property rights" protected by constitutional "due process."²

¶ 15 The media appealed to this Court, alleging that the District Court (1) failed to apply the Article II, Section 9 constitutional balancing test to each challenged document; (2) adopted a presumption of privacy which unconstitutionally shifted the burden of proof from MPC to the public; and (3) adopted an excessively broad definition of "trade secret" in evaluating whether documents filed by MPC were constitutionally protected from public disclosure.

¶ 16 In response, MPC represents that the District Court heard the evidence, reviewed each challenged document, and correctly applied the constitutional balancing test to each document before categorizing the documents for purposes of efficiently summarizing the court's analyses in its written decision.

¶ 17 In addition to the briefs filed by the PSC and MPC in this appeal, amicus briefs have been filed jointly by Qwest Corporation and Montana-Dakota Utilities Company, both of whom are utility companies which are regulated by the PSC, and by University of Montana Constitutional Law Professor Emeritus, Larry Elison.

STANDARD OF REVIEW

¶ 18 Under the current posture of this case, there are no material questions of fact which must be determined before this Court entertains the media's constitutional challenges. Therefore, we review the District Court's conclusions of law to determine whether they are correct. Brady v. Montana Dept. of Justice, 1999 MT 153, ¶ 6, 295 Mont. 75, ¶ 6, 983 P.2d 292, ¶ 6.

DISCUSSION

ISSUE ONE

¶ 19 Whether the District Court erred by failing to correctly balance the public's constitutional right of access to documents filed by MPC with the PSC against MPC's constitutional right of privacy.

¶ 20 The Article II, Section 9 constitutional balancing test is founded on this Court's legal conclusion in the Mt. States case that a business entity's trade secrets and confidential proprietary information are constitutionally protected from public disclosure under the "right of privacy" provision of the Montana Constitution, which provides:

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.

Art. II, Sec. 9, Mont. Const. (emphasis added).

¶ 21 In assuming in Mt. States that the framers of Article II, Sections 9 and 10 surely intended non-human entities to have the same constitutional rights to...