Iowa Film Prod. Servs. v. Iowa Dep't of Econ. Dev.

• Decision Date: 27 July 2012
• Docket Number: No. 10–1719.,10–1719.
• Parties: IOWA FILM PRODUCTION SERVICES; Mississippi Films, Inc.; Polynation Pictures, Inc.; Field of Screams, LLC; Underground Films, Inc.; Ticket Out Productions; TriCoast Iowa Productions, LLC; GPX Development, LLC; September Productions LLC; Lucky MP, LLC; and Recess Film Production, LLC, Appellees, v. IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT, Appellant, and Des Moines Register & Tribune Company, Intervenor.
• Court: Iowa Supreme Court

818 N.W.2d 207

IOWA FILM PRODUCTION SERVICES; Mississippi Films, Inc.; Polynation Pictures, Inc.; Field of Screams, LLC; Underground Films, Inc.; Ticket Out Productions; TriCoast Iowa Productions, LLC; GPX Development, LLC; September Productions LLC; Lucky MP, LLC; and Recess Film Production, LLC, Appellees,

v.IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT, Appellant,andDes Moines Register & Tribune Company, Intervenor.

No. 10–1719.

Supreme Court of Iowa.

July 27, 2012.

Thomas J. Miller, Attorney General, Jeffrey S. Thompson, Deputy Attorney General, Adam Humes, Assistant Attorney General, for appellant.

Jonathan C. Wilson, Scott M. Brennan, and Sarah E. Crane of Davis, Brown, Koehn, Shors and Roberts, P.C., Des Moines, for appellees.

MANSFIELD, Justice.

This case requires us to decide whether filmmakers receiving tax credits from the State of Iowa under the State's tax credit program can enjoin the State from releasing summaries of their films' final budgets to the public. We conclude they cannot. On this record, the budget summaries do not qualify as trade secrets under Iowa Code section 22.7(3) (2009). Nor can they be considered “[r]eports to governmental agencies which, if released, would give advantage to competitors and serve no public purpose” under Iowa Code section 22.7(6). Finally, the filmmakers have failed to meet section 22.8's requirements for injunctive relief by demonstrating disclosure would “clearly not be in the public interest” and would “substantially and irreparably injure any person or persons.” Accordingly, we reverse the judgment of the district court and remand for further proceedings.

I. Facts and Procedural History.

In 2007, the Iowa General Assembly created the Film, Television, and Video Project Promotion Program (the “Film Program”).¹See 2007 Iowa Acts ch. 162, § 1 (codified as amended at Iowa Code §§ 15.391–.393 (2009)). The purpose of the Film Program was

to assist legitimate film, television, and video producers in the production of film, television, and video projects in the state and to increase the fiscal impact on the state's economy of film, television, and video projects produced in the state.

Iowa Code § 15.392. In the fall of 2009, after an audit uncovered abuses, the governor administratively suspended the Film Program. The program was legislatively suspended in April 2010. See 2010 Iowa Acts ch. 1138, § 5 (codified at Iowa Code § 15.393(5) (2011)).

While it was in operation, the Film Program was administered by the Iowa Department of Economic Development (IDED). SeeIowa Code § 15.393(1) (2009). Filmmakers had to register their projects with IDED. Id. To be registered, a project had to be “a legitimate effort to produce an entire film ... or ... video segment in the state,” had to spend at least $100,000 in Iowa, and had to “have an economic impact on the economy ... sufficient to justify assistance under the program.” Id. § 15.393(1)( a)–( b).

Projects registered with IDED under the Film Program were eligible to receive two separate twenty-five percent transferable tax credits. See id. § 15.393(2)( a )(1), ( b )(1).² The Film Program was promoted (inaccurately, according to the State) as “half-price filmmaking.”

Plaintiffs Iowa Film Production Services, Mississippi Films, Inc., Polynation Pictures, Inc., Field of Screams, LLC, Underground Films, Inc., Ticket Out Productions, TriCoast Iowa Productions, LLC, GPX Development, LLC, September Productions LLC, Lucky MP, LLC, and Recess Film Production, LLC (collectively “Producers”) all sought to take part in the Film Program. Each of them completed an “Application for Registration” and submitted it to IDED. SeeIowa Admin. Code r. 261–36.3 (2009).

The application form required information to be provided regarding: the project title, a synopsis of the project, the production company to receive incentive, lead production names and contacts, production dates, production type, format, distribution, current production budget, qualified in-state expenditures, and a schedule of project investors.

In addition, the application asked the filmmaker to indicate whether there was information in the application “for which the business [was] requesting confidential treatment.” If so, the application referred the filmmaker to the following notice:

NOTICE TO APPLICANTS—OPEN RECORDS

PLEASE NOTE: UPON SUBMISSION OF A SIGNED APPLICATION, THE CONTENTS AND ATTACHMENTS TO THIS APPLICATION FOR REGISTRATION IN THE IOWA FILMS TELEVISION AND VIDEO PROJECT PROMOTION PROGRAM ARE PUBLIC RECORDS WHICH ARE AVAILABLE FOR PUBLIC INSPECTION AND COPYING.

INFORMATION SUBMITTED WITH THIS APPLICATION MAY BE TREATED CONFIDENTIAL IF:

(1) IT MEETS THE LEGAL REQUIREMENTS FOR CONFIDENTIAL STATUS, AND

(2) THE APPLICANT FILES A WRITTEN REQUEST FOR CONFIDENTIALITY, AND

(3) THE DEPARTMENT ISSUES WRITTEN CONFIRMATION THAT THE INFORMATION MEETS THESE REQUIREMENTS AND WILL BE TREATED AS CONFIDENTIAL.

IF NO REQUEST FOR CONFIDENTIAL TREATMENT OF RECORDS IS MADE, THE DEPARTMENT WILL PROCEED AS IF THE APPLICANT HAS NO OBJECTION TO DISCLOSURE TO MEMBERS OF THE PUBLIC.

Iowa's Open Records Law. The Iowa Department of Economic Development (IDED) is a state agency and it is subject to Iowa's Open Records law (Iowa Code, Chapter 22). Treatment of information submitted to IDED in this application is governed by the provisions of the Open Records law. All public records are available for public inspection. Some public records are considered confidential and will not be disclosed to the public unless ordered by a court, the lawful custodian of the record, or by another person duly authorized to release the information.

Legal requirements for confidential treatment of public records.

The information submitted as part of this application information will be available for public inspection, unless a request for confidentiality has been submitted by the applicant in the required form and approved in writing by IDED. Following are the classifications of records which are recognized as confidential under Iowa law and which are most frequently applicable to business information submitted to IDED:

Trade secrets [Iowa Code § 22.7(3).]

Reports to governmental agencies which, if released, would give advantage to competitors and serve no public purpose. [Iowa Code § 22.7(6).]

....

Communications not required by law, rule or regulation made to IDED by persons outside the government to the extent that IDED could reasonably believe that those persons would be discouraged from making them to the Department if they were made available for general public examination. [Iowa Code § 22.7(18).]In addition, the notice listed “Helpful Resources,” which included links to the Iowa Open Records law, IDED administrative rules, and the Iowa Attorney General's website.

After this notice, the application set forth instructions for completing a “Request for Confidential Treatment Form.” Both an example of a completed form and a blank form were provided. The instructions stated, “IDED will review the request and provide written confirmation to you of its approval or denial.”

The form required the filmmaker to “state which section(s) of the application you want kept confidential” and to indicate a “[l]egal basis for [the] request.” Several potential grounds for confidential treatment could be checked including the three statutory grounds already noted—Iowa Code sections 22.7(3), (6), and (18). A catchall option was also provided: “Other (provide legal citation e.g. reference to a state or federal law not listed above).”

The sample completed form included a request that “[b]udget and in-state expenditures sections and all investor contact names and numbers” be kept confidential. It had only the section 22.7(18) box checked, with the following explanation:

Releasing the exact amounts budgeted for “talent”, “producer” or “director” or other above-the-line costs would give an unfair advantage to competitors and serves no public purpose. If our competitors knew how much of the total project budget was allocated to these categories they would be able to undercut negotiating strength otherwise present in private agreements.

The ensuing paragraphs of the application contained various statements and certifications. Among other things, the filmmaker was required to acknowledge and agree that its books would be subject to audit and that it would be required to sign a contract. Finally, just before the signature block, the application contained a multiparagraph “Certification & Release of Information”:

Certification & Release of Information

....

I [the applicant] understand that certain information submitted to IDED related to this application may be subject to Iowa's Open Record Law (Iowa Code, Chapter 22).

I understand this application is subject to final approval by IDED and the Project may not be initiated until final approval is secured.

I hereby certify that all representations, warranties, or statements made or furnished to IDED in connection with this application are true and correct in all material respect[s].

Below the signature block was a section entitled, “For IDED use only.” In that section, IDED could indicate “Application approved” or “Application denied.” As noted, each of the Producers submitted at least one completed application to IDED. In several instances, but not all, IDED completed this internal use section and marked “Application approved.” In any event, it is not disputed that each of the Producers' applications was approved.³

Each of the Producers also completed a “Request for Confidential Treatment” form as part of its application. The legal grounds given for the requests were either section 22.7(6)—“[r]eports to governmental agencies which, if released, would give advantage to competitors and serve no public purpose”—or section 22.7(18):

[c]ommunications not required by law, rule or regulation made to IDED by persons outside the government to the extent that IDED could reasonably believe...