Madeiros v. N.Y.S. Educ. Dep't

• Decision Date: 17 October 2017
• Citation: 30 N.Y.3d 67,86 N.E.3d 527,64 N.Y.S.3d 635
• Parties: In the Matter of Pamela A. MADEIROS, Appellant, v. NEW YORK STATE EDUCATION DEPARTMENT et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

30 N.Y.3d 67

86 N.E.3d 527

64 N.Y.S.3d 635

In the Matter of Pamela A. MADEIROS, Appellant,

v.NEW YORK STATE EDUCATION DEPARTMENT et al., Respondents.

Court of Appeals of New York.

Oct. 17, 2017.

Greenberg Traurig, LLP, Albany (Cynthia E. Neidl of counsel), for appellant.

Eric T. Schneiderman, Attorney General, Albany (Jeffrey W. Lang, Barbara D. Underwood and Andrew D. Bing of counsel), for respondents.

OPINION OF THE COURT

STEIN, J.

The question before us is whether the Freedom of Information Law exempts from disclosure certain records compiled by respondent New York State Education Department relating to municipalities' plans for auditing special education preschool provider costs. We hold that the materials at issue, as redacted, are exempt from disclosure under Public Officers Law § 87(2)(e)(i).

I.

The board of every school district is responsible for providing special education services and programs to preschool-age children with disabilities (see Education Law § 4410[2] ; see generally Education Law § 4401 ). Such programs are often furnished by private providers approved by respondent New York State Education Department (hereinafter, the Department) (see Education Law §§ 4401[2] ; 4410[9]; 8 NYCRR 200.20 ). Each county and New York City (for the counties contained therein) is charged with the costs of sending resident children to these special education preschool programs (see Education Law § 4410[1][g] ; [11][a] ). The tuition rates charged by such programs are set by the Department—based on financial statements submitted by the provider, as well as state and municipal audits, which establish, among other things, the costs of administering such programs—and municipalities are reimbursed by the State for a statutory percentage of the costs paid out to providers (see id.§ 4410[10], [11][b][i] ; 8 NYCRR 200.9 ).

The Office of the State Comptroller conducted a series of audits of approved preschool special education programs. These audits revealed widespread fraud and abuse in the reporting of allowed costs, and ultimately prompted several criminal prosecutions and professional disciplinary investigations. As a result, in 2013, the legislature amended Education Law § 4410 in an attempt to increase fiscal oversight and, specifically, to incentivize municipal audits of such programs. Although municipalities were already authorized to perform audits of programs for which they bore fiscal responsibility, the 2013 amendments further permitted municipalities to recover overpayments and retain all disallowed costs discovered (L. 2013, ch. 57, § 1, part A, § 24; see Education Law § 4410[11][c][i], [ii] ; 8 NYCRR 200.18 ). The amendments to section 4410 also required the Department to "provide guidelines on standards and procedures to municipalities and boards, for fiscal audits of [preschool] services or programs" (L. 2013, ch. 57, § 1, part A, § 24; see Education Law § 4410[11][c][i] ). In addition to complying with that statutory mandate, the Department amended its regulations to require municipalities to submit, for approval by the Department, new "detailed audit plan[s] and audit program[s]" consistent with the Department's guidelines prior to undertaking any audits after a specific date ( 8 NYCRR 200.18 [b][2], [3] ). Once approved, a municipality's audit plan is valid for five years (see id.).

Shortly after the enactment of the statutory and regulatory amendments relating to Education Law § 4410, petitioner Pamela Madeiros submitted a request to the Department pursuant to the Freedom of Information Law (see generally Public Officers Law art. 6 [FOIL] ), seeking disclosure, as relevant here, of "any and all [ Education Law § 4410(11)(c) and 8 NYCRR 200.18 ] audit standards in [the Department's] possession, including any audit program and audit plan submitted by a municipality or school district ..., whether approved, not approved, disapproved, pending or such other status." The Department denied petitioner's request in its entirety, asserting that the records were exempt from disclosure pursuant to Public Officers Law § 87(2)(e) because disclosure "would interfere with investigations of compliance with the provisions of the reimbursable cost manual and the preschool special education rate setting system." Petitioner administratively appealed, and the Department failed to respond within the statutory time frame, thereby constructively denying her appeal (see Public Officers Law § 89[4][a] ).

Petitioner subsequently commenced the instant CPLR article 78 proceeding, seeking a judgment vacating the denial of her FOIL request and directing the Department to provide her with the records sought. Petitioner also requested attorneys' fees pursuant to Public Officers Law § 89(4)(c).

Before answering the petition, the Department released to petitioner 55 pages of documents responsive to her FOIL inquiry. The documents consisted of the New York City and Onondaga County audit plans, the contents of which were partially redacted, certain unredacted Department records relating to the regulatory amendments, and the guidelines promulgated by the Department for fiscal audits of preschool providers undertaken by municipalities. After disclosing these documents, the Department answered the petition and sought dismissal of the proceeding, arguing that: petitioner's claim was moot in light of its disclosures; the redactions were permitted under both section 87(2)(e) and (g) of the Public Officers Law ; and petitioner had failed to demonstrate her entitlement to attorneys' fees. The Department submitted unredacted copies of the documents to the trial court for in camera review.

Supreme Court granted the petition only to the limited extent of requiring the Department to disclose two previously redacted pages due to the Department's failure to invoke Public Officers Law § 87(2)(g) as a basis for its administrative denial, upheld the remainder of the redactions, and otherwise dismissed the proceeding. Supreme Court reasoned that the majority of the Department's redactions were appropriate under Public Officers Law § 87(2)(e) because the audit plans contained non-routine audit techniques and procedures compiled for law enforcement purposes, and disclosure would interfere with law enforcement investigations (see Public Officers Law § 87 [2] [e][i], [iv] ). Supreme Court did not award petitioner attorneys' fees. On petitioner's appeal, the Appellate Division affirmed ( 133 A.D.3d 962, 18 N.Y.S.3d 782 [3d Dept.2015] ),^* and we granted petitioner leave to appeal ( 27 N.Y.3d 903, 2016 WL 1313253 [2016] ).

II.

FOIL generally "requires government agencies to ‘make available for public inspection and copying all records' subject to a number of exemptions" ( Matter of Harbatkin v. New York City Dept. of Records & Info. Servs., 19 N.Y.3d 373, 379, 948 N.Y.S.2d 220, 971 N.E.2d 350 [2012] ; quoting Public Officers Law § 87[2] ). FOIL is based on a presumption of access in accordance with the underlying "premise that the public is vested with an inherent right to know and that official secrecy is anathematic to our form of government" (Matter of Fink v. Lefkowitz, 47 N.Y.2d 567, 571, 419 N.Y.S.2d 467, 393 N.E.2d 463 [1979] ; see Matter of Data Tree, LLC v. Romaine, 9 N.Y.3d 454, 462, 849 N.Y.S.2d 489, 880 N.E.2d 10 [2007] ). The exemptions set forth in the statute are interpreted narrowly in order to effect the purpose of the statutory scheme (see Matter of Data Tree, 9 N.Y.3d at 462, 849 N.Y.S.2d 489, 880 N.E.2d 10 ).

This appeal centers on the meaning and interpretation of the exemption embodied in Public Officers Law § 87(2)(e). Pursuant to this provision, an agency may deny public access to records or portions thereof that, as relevant here, "are compiled for law enforcement purposes and which, if disclosed, would" either "interfere with law enforcement investigations or judicial proceedings" (subparagraph [i] ) or "reveal criminal investigative techniques or procedures, except routine techniques and procedures" (subparagraph [iv] ). Petitioner argues that the courts below erred in concluding that the Department's redactions of the documents responsive to her FOIL request are exempt pursuant to either of these provisions. More specifically, petitioner asserts that any records relating to municipal audit plans were not compiled for law enforcement purposes, do not relate to and would not interfere with a law enforcement investigation or judicial proceeding, and are not criminal investigative techniques. Petitioner further contends that she is entitled to attorneys' fees because she has substantially prevailed in this proceeding given the Department's belated disclosures following its commencement. In response, the Department urges us to affirm the Appellate Division order under either subparagraph (i) or (iv) of section 87(2)(e), and disputes petitioner's claim that she is entitled to attorneys' fees.

III.

Initially, we reject the Department's reliance on Public Officers Law § 87(2)(e)(iv) —pertaining to non-routine criminal investigative techniques—because the Department failed to invoke that particular exemption in its denial of petitioner's FOIL request. "[J]udicial review of an administrative determination is limited to the grounds invoked by the agency" and "the court is powerless to affirm the administrative action by substituting what it considers to be a more adequate or proper basis" ( Matter of Scherbyn v. Wayne–Finger Lakes Bd. of Coop. Educ. Servs., 77 N.Y.2d 753, 758, 570 N.Y.S.2d 474, 573 N.E.2d 562 [1991] [internal quotation marks and citations omitted]; see Matter of National Fuel Gas Distrib. Corp. v. Public Serv. Commn. of the State of N.Y., 16 N.Y.3d 360, 368, 922 N.Y.S.2d 224, 947 N.E.2d 115 [2011] ; Matter of Scanlan v. Buffalo Pub. School Sys., 90 N.Y.2d 662, 678, 665 N.Y.S.2d 51, 687 N.E.2d 1334 [1997] ). It is also settled that the "agency relying on the applicability of [a FOIL] exemption[ ] ... ha[s] the burden of...