Tenn. Valley Printing Co. Inc. v. Health Care Auth. of Lauderdale County

• Decision Date: 29 October 2010
• Docket Number: 1090945.
• Citation: 61 So.3d 1027
• Parties: TENNESSEE VALLEY PRINTING COMPANY, INC., and Michelle Rupe Eubanksv.HEALTH CARE AUTHORITY OF LAUDERDALE COUNTY and the City of Florence d/b/a Coffee Health Group.
• Court: Alabama Supreme Court

61 So.3d 1027

TENNESSEE VALLEY PRINTING COMPANY, INC., and Michelle Rupe Eubanks

v.HEALTH CARE AUTHORITY OF LAUDERDALE COUNTY and the City of Florence d/b/a Coffee Health Group.

1090945.

Supreme Court of Alabama.

Oct. 29, 2010.

Dennis R. Bailey and Bethany L. Bolger of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for appellants.Larry B. Moore and Ian Michael Berry of Moore & Trousdale, P.C., Florence, for appellee.Dennis R. Bailey and Bethany L. Bolger of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for amicus curiae Alabama Press Association, in support of the appellants.Marc James Ayers, Deane K. Corliss, and James F. Henry of Bradley Arant Boult Cummings LLP, Birmingham; and Gregg Brantley Everitt, gen. counsel, Alabama Hospital Association, for amicus curiae Alabama Hospital Association, in support of the appellee.Stanley Rodgers, Joe W. Campbell, George E. Knox, Jr., and Jeffrey T. Kelly of Lanier Ford Shaver & Payne PC, Huntsville, for amicus curiae Health Care Authority of the City of Huntsville, in support of the appellee.BOLIN, Justice.

The Tennessee Valley Printing Company, Inc., which publishes the TimesDaily newspaper in Florence, and one of its reporters, Michelle Rupe Eubanks (hereinafter collectively referred to as “the TimesDaily”), appeal from the trial court's judgment holding that the Health Care Authority of Lauderdale County and the City of Florence d/b/a Coffee Health Group (“the Health Care Authority”) do not have to disclose certain records requested by the TimesDaily pursuant to the Open Records Act, § 36–12–40, Ala.Code 1975.

Facts and Procedural History

The Health Care Authority was organized pursuant to the Health Care Authorities Act of 1982 (“the HCA”), codified at § 22–21–310 et seq., Ala.Code 1975. It is a public corporation that owns the Eliza Coffee Memorial Hospital in Florence and the Shoals Hospital in Muscle Shoals. In fiscal years 2008 and 2009, the Health Care Authority failed to meet the financial covenants of bonds it had issued to the public. The Health Care Authority hired a financial consultant, FTI Consulting, Inc., to study the operations and business prospects of the two hospitals owned by the Health Care Authority and to make recommendations for improvement. In June 2009, FTI delivered its report to the board of directors of the Health Care Authority. The Health Care Authority then began to search for a transaction partner that would allow it to retire the bond indebtedness and to provide additional capital for operating the two hospitals. The Health Care Authority received four bid proposals from potential partners. The Health Care Authority promised the potential partners that their bids would be confidential. On February 15, 2010, Eubanks requested all electronic-mail correspondence between the employees of the two hospitals, the Health Care Authority board of directors, and any elected official regarding the sale of the two hospitals. On February 23, 2010, the board of directors of the Health Care Authority met and voted 10 to 1 to accept the proposal received from RegionalCare Hospital Partners, Inc.¹ Eubanks made several oral and written requests for information, including the four proposals, the letter of intent from RegionalCare, the report issued by FTI, and any preliminary draft of any contract for the sale of the two hospitals.

On March 10, 2010, the TimesDaily filed a verified complaint for declaratory and injunctive relief against the Health Care Authority. The TimesDaily alleged that the Health Care Authority had been engaged in efforts to sell and/or to transfer the management of two hospitals subject to the Health Care Authority's control and that, as a governmental entity, the Health Care Authority's records regarding the proposed sale and/or transfer of public assets were subject to the Open Records Act. The TimesDaily further alleged that the ownership and management of the hospitals was a matter of public concern and that the Health Care Authority had refused to provide information regarding the proposed sale and/or transfer of management. On March 11, 2010, the TimesDaily filed a motion for a temporary restraining order, seeking to delay a proposed vote by the Florence City Council on a letter of intent from RegionalCare to purchase the publicly owned hospital properties under the Health Care Authority's jurisdiction. That same day, the TimesDaily amended its complaint to petition for a writ of mandamus requiring the Health Care Authority to allow it to inspect and copy certain requested records regarding the proposed sale.

On March 12, 2010, the Health Care Authority filed an answer to the verified complaint, as amended, generally denying the allegations, and it filed a motion in opposition to the request for a temporary restraining order. On March 23, 2010, the trial court entered an order holding that the TimesDaily was not entitled to the requested information:

“[T]he legislature granted to Public Health Authorities, including the defendant, greater flexibility than other public entities and in exempting from the Open Meeting Act and ‘other similar law’ exempted their administrative and proprietary acts from the Open Records Act.² This however would not exempt government functions from the Open Records Act.

“The Court finds that the transaction in question is an administrative or proprietary act and the requested records are therefore not subject to the Open Records Act. To find otherwise would make to no avail the flexibility envisioned by the Legislature in [§] 22–21–312(3) and the exemption in [§] 22–21–316.”The TimesDaily timely appealed. In its brief on appeal, the TimesDaily does not refer to its request for the report from FTI. The Health Care Authority recognized this omission in its brief, and, in its reply brief, the TimesDaily does not refer to its request for the FTI report. We will assume, therefore, that the TimesDaily is no longer seeking access to that report.

Discussion

The issue is whether the Health Care Authority, which was established pursuant to the HCA, has to disclose to the TimesDaily records regarding the sale of the assets of two hospitals under its control, in accordance with the Open Records Act.

Section 36–12–40, the Open Records Act, provides, in pertinent part, that “[e]very citizen has a right to inspect and take a copy of any public writing of this state, except as otherwise provided by statute.”

“The Open Records Act is remedial and should therefore be liberally construed in favor of the public. As we stated in Chambers v. Birmingham News Co., 552 So.2d 854, 856 (Ala.1989):

“ ‘It is clear from the wording of [the Open Records Act] that the legislature intended that the statute be liberally construed. In addition, we note, statutes intended for the public benefit are to be construed in favor of the public. Gant v. Warr, 286 Ala. 387, 240 So.2d 353 (1970).’ ”

Water Works & Sewer Bd. of Talladega v. Consolidated Publ'g, Inc., 892 So.2d 859, 862 (Ala.2004). “[T]he party refusing disclosure shall have the burden of proving that the writings or records sought are within an exception and warrant nondisclosure of them.” Chambers v. Birmingham News Co., 552 So.2d 854, 856–57 (Ala.1989).

The term “public writing” is not defined in the Open Records Act. However, in Stone v. Consolidated Publishing Co., 404 So.2d 678, 681 (Ala.1981), this Court stated with regard to § 36–12–40 that a “ ‘public writing’ ... is such a record as is reasonably necessary to record the business and activities required to be done or carried on by a public officer so that the status and condition of such business and activities can be known by [the] citizens.”

In creating a State Records Commission, the legislature in § 41–13–1, Ala.Code 1975, defined the term “public records”:

“As used in this article, the term ‘public records' shall include all written, typed or printed books, papers, letters, documents and maps made or received in pursuance of law by the public officers of the state, counties, municipalities and other subdivisions of government in the transactions of public business and shall also include any record authorized to be made by any law of this state belonging or pertaining to any court of record or any other public record authorized by law or any paper, pleading, exhibit or other writing filed with, in or by any such court, office or officer.”

Although § 41–13–1 is included in Title 41, which regulates the retention and disposal of public records, “we doubt the Legislature intended to make a distinction between a ‘public writing’ and a ‘public record.’ ” Stone v. Consolidated Publ'g, 404 So.2d at 680. This Court has applied the definition from Stone in several cases. See Ex parte Gill, 841 So.2d 1231, 1233–34 (Ala.2002); Birmingham News Co. v. Muse, 638 So.2d 853, 854 (Ala.1994); and Chambers v. Birmingham News Co., 552 So.2d at 856.

In the HCA, the legislature authorized the creation of health-care authorities as public corporations in order to effectuate its intent, which it set out in § 22–21–312, Ala.Code 1975:

“The Legislature hereby finds and declares:

“(1) That publicly-owned (as distinguished from investor-owned and community-nonprofit) hospitals and other health care facilities furnish a substantial part of the indigent and reduced-rate care and other health care services furnished to residents of the state by hospitals and other health care facilities generally;

“(2) That as a result of current significant fiscal and budgetary limitations or restrictions, the state and the various counties, municipalities, and educational institutions therein are no longer able to provide, from taxes and other general fund moneys, all the revenues and funds necessary to operate such publicly-owned hospitals and other health care facilities adequately and efficiently; and

“(3) That to enable such publicly-owned hospitals and other health care facilities to continue to operate...