SPRINGFIELD TERMINAL v. Agency of Transp., 01-447.

• Decision Date: 01 November 2002
• Docket Number: No. 01-447.,01-447.
• Parties: SPRINGFIELD TERMINAL RAILWAY COMPANY v. AGENCY OF TRANSPORTATION, and Green Mountain Railroad Corp., Vermont Railway, Inc., Northern Vermont Railroad Company, Intervenors.
• Court: Vermont Supreme Court

816 A.2d 448

SPRINGFIELD TERMINAL RAILWAY COMPANY v. AGENCY OF TRANSPORTATION, and Green Mountain Railroad Corp., Vermont Railway, Inc., Northern Vermont Railroad Company, Intervenors.

No. 01-447.

Supreme Court of Vermont.

November 1, 2002.

Christopher D. Roy of Downs Rachlin Martin, PLLC, Burlington, for Plaintiff-Appellant.

William H. Sorrell, Attorney General, and Thomas R. Viall, Assistant Attorney General, Montpelier, for Defendant-Appellee.

Mark D. Oettinger of Lisman, Webster, Kirkpatrick & Leckerling, Burlington, for Intervenor-Appellee Northern Vermont Railroad Company.

Eric R. Benson, Burlington, for Intervenors-Appellees Green Mountain Railroad Corporation and Vermont Railway, Inc.

Present: AMESTOY, C.J., MORSE, JOHNSON and SKOGLUND, JJ.

SKOGLUND, J.

Plaintiff Springfield Terminal Railway Company ("STR") appeals from the superior court's grant of summary judgment in favor of defendant Vermont Agency of Transportation ("VTrans"). STR argues that the superior court improperly granted summary judgment by incorrectly interpreting 1 V.S.A. § 317(c)(9)¹ to exempt from mandated public disclosure under Vermont's Access to Public Records Act specific financial information submitted to VTrans in response to requests for proposals to provide rail freight service in the state. We find that § 317(c)(9) exempts from public disclosure the financial information submitted to VTrans and, therefore, affirm the superior court's grant of summary judgment.

In February 2000, VTrans issued a request for proposals, seeking a rail freight operator to provide freight service over a railroad line running from White River Junction to Wells River. The proposal request specifically required that each bidding operator submit detailed information regarding corporate finances, in addition to a general technical proposal. In response to VTrans's request, intervenors Northern Vermont Railroad Company, Green Mountain Railroad Corporation, and Vermont Railway (collectively the "intervenors") submitted proposals containing the required financial information. STR also submitted a proposal, but omitted the required financial information, stating that it did not "believe that the State of Vermont or the Agency of Transportation has the expertise necessary to accurately assess the requested information, nor does [STR] believe that its financial ability to operate this line should be open to question." STR instead proposed to post a bond to ensure its ability to meet its operating and maintenance obligations to the line.

STR's proposal was initially deemed nonresponsive and rejected by VTrans. STR appealed the rejection of its proposal to the Secretary of Transportation, who reversed the initial decision and allowed STR's proposal to be considered by VTrans's selection committee. The selection committee ultimately chose a proposal submitted by intervenor Northern Vermont Railroad Company ("NVR"). The Secretary of Transportation ratified the selection, and the parties then negotiated a long-term operating agreement.

Prior to the selection of NVR's proposal, STR submitted by letter dated March 16, 2000, a request to inspect and/or copy public records relating to the selection, solicitation, and recruitment of entities to operate the rail line. On April 6, 2000, VTrans responded by producing some of the requested documents, but withheld from disclosure other documents, claiming them as exempt from Vermont's Access to Public Records Act pursuant to 1 V.S.A. § 317. VTrans wrote:

Generally speaking, we consider copies of the proposals submitted to the Agency by potential operators in response to the [request for proposals] notice to be confidential under 1 V.S.A. § 317(b)(15) (exemption from records relating to negotiation of contracts) until such time as the Secretary of Transportation has confirmed the selection committee's recommendation in favor of a particular operator. Furthermore, we consider financial information submitted by potential operators to be confidential on an ongoing basis under 1 V.S.A. § 317(b)(6) (exemption for financial information submitted in connection with agency business), 317(b)(7) (exemption for information relating to finances of an individual or a private corporation), and § 317(b)(9) (exemption for proprietary information known only to certain individuals within a commercial concern).

Most relevant to this appeal is VTrans's refusal to disclose specific financial information submitted by the intervenors. This withheld financial information included balance sheets, income statements, profit and loss statements, statements of retained earnings, statements of cash flows, and five or six year freight and passenger flow projections. At the request of intervenor Green Mountain Railroad Corporation, VTrans also withheld information including the names of current and potential shippers, stockholder information, and employee information.

On May 17, 2000, STR again requested access to the intervenors' proposals. On April 26, 2000, VTrans denied STR's request, again maintaining the information as exempt from disclosure. STR responded by filing for an injunction in superior court on July 8, 2000, seeking an order requiring VTrans to produce the withheld documents pursuant to 1 V.S.A. §§ 315-320, Vermont's Access to Public Records statutes. On July 24, 2000, a hearing was held to address several issues, including previously filed motions to intervene. At this hearing, STR's attorney admitted that STR sought disclosure of the financial information submitted to VTrans because it desired the "business and other information" of its competitors and that they were "being nosey."

In October 2000, VTrans and the intervenors filed motions for summary judgment. STR responded by filing a crossmotion for summary judgment on November 15, 2000. The superior court issued an order on January 31, 2001 dismissing STR's complaint and finding that the financial information sought by STR was exempt from disclosure pursuant to 1 V.S.A. § 317(c)(9). STR filed a motion for reconsideration on March 7, 2001, arguing that the intervenors' voluntary submission of the financial information to VTrans constituted a waiver of confidentiality. The superior court denied reconsideration on August 24, 2001. This appeal followed. Our review of summary judgment is de novo. This Court uses the same standard as the trial court. We will affirm summary judgment "if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law." Granger v. Town of Woodford, 167 Vt. 610, 611, 708 A.2d 1345, 1346 (1998) (mem.); V.R.C.P. 56(c).

The relevant issue in this appeal is whether the financial information provided to VTrans by the intervenors and ultimately sought by STR is exempt from public disclosure under Vermont's Access to Public Records Act. See 1 V.S.A. §§ 315-320. We have an established method for analyzing appeals arising under the Public Records Act. See Trombley v. Bellows Falls Union High School, 160 Vt. 101, 106-07, 624 A.2d 857, 861 (1993) (stressing that the Court's approach to the Public Records Act is similar to that for open meeting law cases). The Public Records Act represents and exhibits a strong policy favoring access to public documents and records. Id. Exceptions to that general policy of disclosure are listed in 1 V.S.A. § 317(c). We construe these exceptions strictly against the custodians of records and resolve any doubts in favor of disclosure. Id. (citing Caledonian Record Publishing Co. v. Walton, 154 Vt. 15, 20, 573 A.2d 296, 299 (1990)). The burden of showing that a record falls within an exception is on the agency seeking to avoid disclosure. Finberg v. Murnane, 159 Vt. 431, 434, 623 A.2d 979, 981 (1992). The agency meets that burden by making a specific factual showing and not merely by averring conclusory claims. Id. at 438, 623 A.2d at 983.

Unless an exception pursuant to § 317(c) applies, STR is entitled to access the records that it seeks; the financial information submitted to VTrans with the intervenors' proposals qualifies as a public record potentially subject to disclosure. See 1 V.S.A. §§ 315, 317(b) (establishing that "certain public records shall be made available" and defining a public record as "all papers ... or any other written or recorded matters ... produced or acquired in the course of agency business"). To avoid disclosure of the submitted financial documents, VTrans relied upon § 317(c)(9), which exempts from public inspection and copying:

trade secrets, including, but not limited to, any formulae, plan, pattern, process, tool, mechanism, compound, procedure, production data, or compilation of information which is not patented, which is known only to certain individuals within a commercial concern, and which gives its user or owner an opportunity to obtain business advantage over competitors who do not know it or use it.

1 V.S.A. § 317(c)(9). The superior court concluded that the financial information sought by STR qualified as a "compilation of information" included within the § 317(c)(9) statutory exemption. On appeal, STR argues that the statutory language of § 317(c)(9) exempting "trade secrets" from public disclosure does not encompass the submitted financial information to which STR seeks access under the Public Records Act. To support its argument, STR suggests that the financial information submitted to VTrans by the intervenors does not qualify as a trade secret within the scope of § 317(c)(9) because: (1) the submitted financial information is not proprietary in the nature of intellectual property; (2) the Legislature did not expressly include "financial information or bid documents" in the language of the statute; and (3) the financial information was voluntarily disclosed by the intervenors to VTrans. We disagree. To resolve this appeal, we must, for the first time, construe the statutory language of § 317(c)(9). Our primary objective in...