Office Planning Group, Inc. v. Baraga-Houghton-Keweenaw Child Dev. Bd.

• Decision Date: 08 June 2005
• Docket Number: Docket No. 125448. COA No. 6.
• Citation: 697 N.W.2d 871,472 Mich. 479
• Parties: OFFICE PLANNING GROUP, INC., Plaintiffs-Appellee, v. BARAGA-HOUGHTON-KEWEENAW CHILD DEVELOPMENT BOARD, Defendant-Appellant.
• Court: Michigan Supreme Court

697 N.W.2d 871

472 Mich. 479

OFFICE PLANNING GROUP, INC., Plaintiffs-Appellee, v. BARAGA-HOUGHTON-KEWEENAW CHILD DEVELOPMENT BOARD, Defendant-Appellant.

Docket No. 125448. COA No. 6.

Supreme Court of Michigan.

Argued November 10, 2004.

Decided June 8, 2005.

Tercha & Daavettila, PLLC (by Robert T. Daavettila), Houghton, MI, for the plaintiff.

Johnson, Rosati, LaBarge, Aseltyne & Field, P.C. (by Marcia L. Howe), Farmington Hills, MI, for the defendant.

YOUNG, J.

Plaintiff is a disappointed bidder that seeks disclosure from defendant of bid documents under 42 U.S.C. 9839(a), a provision of the federal Head Start Act¹ that requires Head Start agencies to provide for "reasonable public access" to information. Defendant Head Start agency contends that the act does not create a private cause of action to enforce its provisions. We hold that the Head Start Act does not contemplate a private cause of action seeking disclosure of the contested bid documents under § 9839(a). Accordingly, we reverse the judgment of the Court of Appeals and enter judgment in favor of defendant.

I. FACTS AND PROCEDURAL HISTORY

Defendant, Baraga-Houghton-Keweenaw Child Development Board, Inc., is a private, nonprofit organization that is designated as a Head Start² agency under 42 U.S.C. 9836(a).³ Defendant operates Head Start programs in Baraga, Houghton, and Keweenaw counties. In January 2001, defendant solicited bids for office supplies and furniture. Plaintiff, a private, for-profit corporation, submitted a bid. Defendant conducted an open meeting at which its building committee reviewed the bids and made a recommendation to its board of directors. Defendant accepted the lowest bid at the open meeting. Rodney Liimatainen, defendant's executive director, notified plaintiff's branch manager, Jack Hamm, that plaintiff's bid had exceeded the lowest bid by $10,000.

Hamm, suspicious that the lower bidders had offered lesser-quality merchandise, requested copies of all the bids submitted. Liimatainen informed Hamm that the details of the bids were unavailable for inspection by the public because the other bidders did not want the information disseminated. Liimatainen acknowledged, however, that there might be small discrepancies in quality, manufacturer, and type of product among the bids submitted. In an attempt to compel defendant to disclose copies of the bids, Hamm then submitted written requests to defendant under the Michigan Freedom of Information Act (FOIA).⁴ Defendant refused the requests on the basis that it was a private corporation that was not subject to the FOIA. Plaintiff also requested copies of the submitted bids from the Department of Health and Human Services (HHS), the federal agency responsible for administering the Head Start Act.

In April 2001, plaintiff filed an action under the FOIA⁵ demanding a complete copy of each bid. Plaintiff later filed an amended complaint alleging that it was additionally entitled to disclosure of the bid information under unspecified "federal legislation which requires disclosure of information by parties supplying service under the so-called Head Start Program." In subsequent motion papers, plaintiff indicated that the federal legislation on which it relied was 42 U.S.C. 9839(a), which provides, in relevant part:

Each [Head Start] agency shall also provide for reasonable public access to information, including public hearings at the request of appropriate community groups and reasonable public access to books and records of the agency or other agencies engaged in program activities or operations involving the use of authority or funds for which it is responsible.

After the commencement of the litigation, various HHS officials issued memoranda indicating that defendant was not required under the FOIA or the Head Start Act to provide plaintiff with access to the bid information. In a letter to defendant, a program officer in the Chicago regional office of the HHS advised defendant that Head Start grantees are not subject to the FOIA provisions. The program officer further noted that, under § 9839(a) and its corresponding HHS regulation, 45 C.F.R. 1301.30,⁶ defendant was not required to disclose specific information regarding the selection of a supplier; rather, it was required only to disclose general information such as copies of its written procurement procedures. Similarly, in a letter to plaintiff's counsel, the director of the HHS Office of Public Affairs, FOI/Privacy Acts Division, stated that the FOIA did not apply to defendant; however, the director noted that defendant had provided plaintiff with a copy of the policy it followed in conducting its procurement activities and with background documents addressing its source of funding.

The director also wrote a letter advising defense counsel that defendant was not subject to the requirements of the federal Freedom of Information Act.⁷ The director further advised counsel that defendant was bound by any provisions incorporated into the grant language regarding its obligations to make information concerning its activities available to the public, but that defendant had already complied with those requirements.

Finally, in a letter written to Congressman Bart Stupak, who had apparently come to plaintiff's aid in seeking the bid documents, the director of the HHS Office of Family and Child Development stated that defendant had reasonably complied with the requirements of § 9839 and 45 C.F.R. 1301.30 by providing plaintiff with a copy of its procurement procedures, and that defendant was under no further obligation to provide documents with specific commercial information it received through the competitive bid process.

Citing these HHS memoranda, defendant moved for summary disposition, arguing that it was not subject to the Michigan FOIA or the federal FOIA and that defendant had exceeded any obligation it had to supply plaintiff with information under 42 U.S.C. 9839(a).

The trial court granted defendant's motion for summary disposition to the extent that plaintiff sought relief under the Michigan FOIA and the federal FOIA.⁸ The court, however, sua sponte granted summary disposition in favor of plaintiff under MCR 2.116(I)(2) on the ground that the requested information was subject to disclosure under § 9839(a). The court, observing that § 9839(a) required that a Head Start agency grant "reasonable public access" to its books and records, opined that

[a] demand that information be provided outside of working hours would not be reasonable. A demand that an agency exhaustively search for something that the requesting party cannot properly identify would not be reasonable. As recognized by the Michigan Freedom of Information Act, it would likely not be reasonable to expect an agency to create a record, such as a compilation or summary, when no such record exists. And it may well not be reasonable to demand that an employee's personnel file or disciplinary record be disclosed.

In the present situation, a denial by the Plaintiff of a written request to review specified, existing and readily accessible written bids is certainly not compliant with a requirement of providing reasonable public access. That would be true regardless of who made the request, but the case is even more compelling when the requesting party has a genuine, identifiable reason for the information sought, as did the Plaintiff.

In summary, Defendant's denial of Plaintiff's request to review and obtain copies of the bids in question was in violation of the Federal requirement that Plaintiff provide for reasonable public access to information, including reasonable public access to books and records of the agency, involving the use of funds for which the Plaintiff is responsible.

The Court of Appeals affirmed.⁹ Noting that the state courts shared concurrent jurisdiction to decide a case involving the Head Start Act because the act did not provide for exclusive federal jurisdiction,¹⁰ the panel rejected the reasoning of federal case law holding that the Head Start Act does not provide a private cause of action.¹¹ The panel, citing Long v. Chelsea Community Hosp., 219 Mich.App. 578, 557 N.W.2d 157 (1996), and Forster v. Delton School Dist., 176 Mich.App. 582, 585, 440 N.W.2d 421 (1989), held that a private cause of action could be inferred under § 9839(a) because the statute did not provide adequate means to enforce its provisions:

The statute in question, 42 U.S.C. 9839(a), requires Head Start agencies to provide reasonable public access to their books and records, but it does not provide any means of enforcing this specific provision. Although the Head Start Act requires agencies to open their books and records to the department secretary or the United States Comptroller General for audit and examination, 42 U.S.C. 9842, Congress specifically provided for public access to the books and records, not simply to the audits prepared by these other entities. Therefore, we conclude an implied private cause of action exists.¹²

The panel concluded that the trial court did not err in granting summary disposition for plaintiff because defendant had not complied with the "reasonable public access" requirement of § 9839(a). The panel, noting that defendant had failed to suggest why it would be unreasonable to disclose the requested information, held that because the information was readily available and could be produced on short notice, it was covered by the statutory directive to provide "reasonable public access."¹³ The panel rejected defendant's contention that the bidders did not have notice that the bids would be disclosed, stating that the statute itself provided that notice; the panel also rejected defendant's argument that public policy dictated against interpreting the statute to require disclosure of the bids.¹⁴ Finally, the panel held that it was not required to defer to the interpretation of § 9839(a) set forth in the letters written by HHS officials,...