SWB Yankees LLC v. Wintermantel

• Decision Date: 29 May 2012
• Citation: 45 A.3d 1029
• Parties: SWB YANKEES LLC, Appellant v. Gretchen WINTERMANTEL and The Scranton Times Tribune, Appellees.
• Court: Pennsylvania Supreme Court

45 A.3d 1029

SWB YANKEES LLC, Appellant

v.Gretchen WINTERMANTEL and The Scranton Times Tribune, Appellees.

Supreme Court of Pennsylvania.

Argued Nov. 29, 2011.

Decided May 29, 2012.

Adam D. Brown, Joseph Kernen, Jayne Anderson Risk, DLA Piper US LLP, Philadelphia, for SWB Yankees, LLC.

Joseph Owen Haggerty Jr., John Timothy Hinton Jr., Haggerty, McDonnell, O'Brien & Hinton, LLP, Scranton, for Gretchen Wintermantel and Scranton Times Tribune.

Emily J. Leader, PA School Boards Association, Inc., for Appellant Amicus Curiae PA School Board Association.

Jillian M. Petrosky, Robert J. Tribeck, Rhoads & Sinon, L.L.P., Harrisburg, for Appellant Amicus Curiae Pennsylvania Foundations Association.

Melissa Bevan Melewsky, Pennsylvania Newspaper Association, for Appellee Amicus Curiae PA Newspaper Association.

CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, ORIE MELVIN, JJ.

OPINION

Justice SAYLOR.

This appeal concerns the application of Pennsylvania's recently revamped Right–to–Know Law to certain documents in the possession of a private entity serving as the management agent for a municipal authority in the operation of a minor league baseball stadium.

Background

In 1985, the Board of Commissioners of Lackawanna County formed the Multi–Purpose Stadium Authority of Lackawanna County (the “Stadium Authority” or the “Authority”), invoking the Municipality Authorities Act of 1945.¹ According to its Articles of Incorporation, the Authority's main purpose is:

To acquire, by gift, purchase, construction or in any other lawful manner, and to own, hold, manage, maintain, lease and operate a multi-purpose stadium situate in Lackawanna County, including but not limited to, real estate, rights of way, easements, equipment, personal property, both tangible and intangible, and any other asset deemed appropriate by the Authority to generate revenue to retire debt incurred by such Authority....

Certificate of Incorporation of Multi–Purpose Stadium Authority of Apr. 25, 1985, at 3. The Stadium Authority subsequently acquired a minor league baseball team, renamed the Scranton/Wilkes–Barre Red Barons, which became affiliated with the Phillies of Major League Baseball's National League. After capital was raised via bonds and other public financing, the Authority constructed the Lackawanna County Stadium, now known as PNC Field (and hereinafter as the “Stadium”), to serve as the home field for the franchise.

From 1989 to 2006, the Authority managed all projects at the Stadium, including the day-to-day operations of the Red Barons. The Authority also entered into contracts with various food service providers for concessions at the Stadium. However, in 2006, the Phillies ended their affiliation with the Red Barons; a new one with the New York Yankees ensued; and the Red Barons became the Scranton/Wilkes–Barre Yankees.

In the same time period, the Authority consummated a management agreement with Mandalay Baseball Properties, LLC, a private entity, which vested Mandalay with the overall management and control of the day-to-day operations of the baseball club and the Stadium. Per the terms of the contract, Mandalay also assumed total responsibility for, inter alia, concessions and agreed to pay the Stadium Authority, for the duration of the agreement, the greater of $125,000 or 33.33% of the collected net income before income taxes each year.

Mandalay and the New York Yankees later formed a joint venture management company known as SWB Yankees LLC (“Appellant”), and the Stadium Authority and Appellant entered into a replacement management agreement. Under the contract, and as relevant here, Appellant became the sole and exclusive manager of all baseball operations and other entertainment activities and events conducted at the Stadium. In such functions, Appellant was made “an agent of [the Stadium Authority] for the purpose of [baseball operations and certain other activities]”; furthermore, the agreement provided that “the actions of [Appellant] taken in accordance with such authority shall bind [the Authority] and the Team.” Management Agreement of Apr. 4, 2007, § 1.2(a). Appellant also was given plenary authority over, among other things, concession sales, while accepting the obligation to make reasonable and prudent expenditures relating to baseball operations. See id. In addition, Appellant was required to make a yearly payment to the Stadium Authority in an “amount equal to one-third ... of the Collected Net Income attributable to such Fiscal Year (the ‘Annual Payment’); provided, however, that the amount of each Annual Payment shall not be less than ... [$125,000].” Id. § 2.9 (emphasis in original).

In 2009, Appellant terminated a then-existing food service contract for concessions at the Stadium. After soliciting bids from various concessionaries and reportedly receiving competing proposals, Appellant contracted with Legends Hospitality LLC.²

Shortly thereafter, Gretchen Wintermantel, a reporter for the Scranton Times Tribune (collectively “Appellees”), submitted a request to the Stadium Authority seeking “access to and copies of all names and the bids submitted to [Appellant] for a concessionaire contract at [the Stadium].” Appellees invoked the Right–to–Know Law,³ which generally provides for access to “public records,” defined as non-exempt and non-privileged “records” of a Commonwealth or local agency.⁴ The enactment, in turn, defines the term “record” broadly to encompass:

Information, regardless of physical form or characteristics, that documents a transaction or activity of an agency and that is created, received or retained pursuant to law or in connection with a transaction, business or activity of the agency. The term includes a document, paper, letter, map, book, tape, photograph, film or sound recording, information stored or maintained electronically and a data-processed or image-processed document.

65 P.S. § 67.102.

On behalf of the open-records officer, see65 P.S. § 67.502, the Stadium Authority's solicitor denied the request, stating that the Authority did not possess such information. The solicitor recognized that the Right–to–Know Act applies to certain records in the possession of third parties, such as Appellant, as follows:

A public record that is not in the possession of an agency but is in the possession of a party with whom the agency has contracted to perform a governmental function on behalf of the agency, and which directly relates to the governmental function and is not exempt under this act, shall be considered a public record of the agency for purposes of this act.

65 P.S. § 67.506(d)(1) (emphasis added). According to the solicitor, however, Appellant was not performing a governmental function on behalf of the Stadium Authority. Thus, he concluded that the information was not considered a public record of the Authority for purposes of the Law.

Appellees appealed to the Office of Open Records, taking the position that any action by Appellant as the Stadium Authority's agent is public business. See65 P.S. § 67.1101. In response, the Authority argued that Appellant's function—baseball park management—was non-governmental, and thus, disclosure of its records under Section 506(d)(1) was not implicated. In this regard, the Authority referenced an area of the law which has evolved to determine whether contracts of a governmental entity are binding upon a successor governing body. See, e.g., Mun. Auth. of Borough of Edgeworth v. Borough of Ambridge Water Auth., 936 A.2d 538, 548 (Pa.Cmwlth.2007). In such context, a common-law distinction between “governmental” and “proprietary” functions has been employed to distinguish from ordinary contracts those particular agreements which are so intertwined with policymaking choices as to warrant the opening of an avenue for relief, so as not to impede succeeding government decision-makers. See Program Admin. Servs., Inc. v. Dauphin Cnty. Gen. Auth., 593 Pa. 184, 196, 928 A.2d 1013, 1020 (2007) (explaining that “the governmental-functions test was originally directed to bad faith efforts on the part of ‘lame duck’ governing bodies to ‘handcuff’ their successors”). See generally Janice C. Griffith, Local Government Contracts: Escaping from the Governmental/Proprietary Maze, 75 Iowa L.Rev. 277, 299–304 (1990) (discussing the historical development of the governmental/proprietary test).

The Office of Open Records granted the appeal and directed the Authority to provide Appellees with the requested information. In her opinion, the appeals officer explained that she regarded the governmental-proprietary distinction as inapposite to the open-records arena. In this regard, she observed that, under that test, the Stadium Authority's entire purpose ( i.e., owning and running a baseball park) might also be considered non-governmental, although, indisputably, the Authority is a local governmental agency. Thus, the appeals officer reasoned that “[t]he test in this case is not whether or not baseball or Stadium operations are governmental functions in a vacuum.” In re Wintermantelv. Multi–Purpose Stadium Auth. of Lackawanna Cnty., No. AP 2009–0184, slip op. at 6 (OOR May 6, 2009). Rather, she explained, the work the Stadium Authority itself performs is “a crucial aspect” in considering whether Appellant performs a governmental function. Id. (“The test under [Section 506(d)(1) ] is whether or not an agency has contracted out functions that it would otherwise have to perform[.]” (emphasis in original)). Highlighting the explicit agency relationship between the Authority and Appellant, the appeals officer's rationale proceeded as follows:

The OOR finds that the [Management] Agreement transfers essentially all functions to [Appellant], and is precisely the kind of arrangement the RTKL targets in [Section 506(d)(1) ] and that the records of [Appellant] are exactly the type required to be disclosed. To hold otherwise would permit a local agency, expressly subject to the...