TRIBUNE REVIEW v. WESTMORELAND HOUS. AUTH.

• Decision Date: 01 October 2003
• Citation: 833 A.2d 112,574 Pa. 661
• Parties: TRIBUNE-REVIEW PUBLISHING COMPANY, Appellee v. WESTMORELAND COUNTY HOUSING AUTHORITY, Appellant.
• Court: Pennsylvania Supreme Court

833 A.2d 112

574 Pa. 661

TRIBUNE-REVIEW PUBLISHING COMPANY, Appellee v. WESTMORELAND COUNTY HOUSING AUTHORITY, Appellant.

Supreme Court of Pennsylvania.

Argued March 4, 2003.

Decided October 1, 2003.

Mike Adams, for Westmoreland County Housing Authority, Appellant.

Ronald D. Barber, H. Yale Gutnick, Pittsburgh, for Tribune Review Pub. Co., Appellee.

BEFORE: CAPPY, C.J., and CASTILLE, NIGRO, NEWMAN, SAYLOR, EAKIN and LAMB, JJ.

OPINION

Justice NEWMAN.

The Westmoreland County Housing Authority (Housing Authority) appeals the decision of the Commonwealth Court holding that a confidential settlement agreement between the Housing Authority's insurer and a complainant ending a federal civil rights suit is a public record subject to disclosure under the Right-to-Know Act (Act).¹ We conclude that the Commonwealth Court correctly determined that the agreement is a public record and, therefore, affirm the Order of the Commonwealth Court.

FACTS AND PROCEDURAL HISTORY

The facts underlying this appeal are undisputed. An employee filed a civil complaint in federal district court against the Housing Authority alleging, inter alia, that the Executive Director of the Housing Authority subjected her to gender discrimination and a hostile work environment. The insurer, the Housing And Redevelopment Insurance Exchange (HARIE), a reciprocal insurance exchange made up of subscribing housing authorities within the Commonwealth, defended the Housing Authority and its Executive Director.

HARIE provided both defense and indemnification in the federal action even though the insurance contract between HARIE and the authority did not cover claims arising out of "discrimination pertaining to age, race, or sex." (Policy endorsement FD-1.) Not only did HARIE defend the authority, HARIE declined to collect the $1,000 deductible required by the policy.² Pursuant to the terms of the insurance policy, HARIE retained exclusive control of the defense. A settlement was brokered by HARIE that involved the payment of an undisclosed sum of money to the complainant and the execution of a reciprocal non-disclosure agreement. No copy of the confidential settlement agreement has been provided to the Housing Authority or to its Executive Director. At the time of the lawsuit, the authority paid HARIE a premium of $3,150.00 per year for coverage of one million per loss. There is no evidence on the record that the premium was raised as a result of the lawsuit or settlement.

Following the settlement and dismissal of the suit, Tribune-Review requested that the Housing Authority make the documents related to the settlement available to it for inspection. The Housing Authority refused to comply with the request because it was of the opinion that the lawsuit settlement documents were: (1) governed by a confidentiality agreement; (2) in the possession and control of HARIE; (3) did not involve the expenditure of public funds; and (4) were not "public records" under the Act. The Housing Authority also argued that it should not be required to produce the settlement documents because the confidentiality provision contained within the agreement was material to the settlement and should not be abrogated. Essentially the Housing Authority argued that the public interest in promoting settlements, coupled with the need for efficiency in conducting government business, outweighs the public interest in disclosure.

After the Housing Authority refused to supply a copy of the settlement agreement, Tribune-Review appealed the denial to the Westmoreland County Court of Common Pleas, which relied on Morning Call, Inc. v. Lower Saucon Township, 156 Pa. Cmwlth. 397, 627 A.2d 297 (1993), to find that the agreement was a public record subject to disclosure. The Housing Authority appealed this determination to the Commonwealth Court. The Commonwealth Court also relied on Morning Call to find that the settlement agreement is a public record of a public agency subject to disclosure.

The Housing Authority raises three questions in its appeal to this Court: (1) whether the Commonwealth Court erred in failing to follow, or even address, the precedent set by this Court in Dynamic Student Servs. v. State Sys. of Higher Educ., 548 Pa. 347, 697 A.2d 239 (1997); (2) whether the Commonwealth Court erred regarding the nature of the relationship between the Housing Authority and its independently licensed insurance company; an error, which it argues will potentially result in significant future litigation within the Pennsylvania judicial system; and (3) whether this Court should find that the Commonwealth Court failed to resolve the inherent conflict created by the Common Pleas decision, whereby compliance with the Act causes a breach of contract between the two parties to the settlement agreement that is the subject of the Right to Know request, when those two parties are not parties in this case. As these issues are closely related, we will address them simultaneously.

DISCUSSION

The question as to whether a municipality must disclose a particular document to the public has been resolved by the General Assembly in favor of the public by balancing the fundamental public interest in disclosure against the governmental interest in confidentiality. The common law right of a party to inspect public records was codified by the General Assembly in 1957 as the Right-to-Know Act. The intent of the Act is to ensure the availability of government information to citizens of the Commonwealth by permitting access to official information. 65 P.S. § 66.2. Thus, in recognition of the fundamental nature of the public right to know, Tribune-Review had the burden of establishing that the requested material was a public record. If successful, then the Housing Authority, as the public entity, had the burden of proving that the record should not be disclosed.

In the instant matter, the Housing Authority was sued in federal court by one of its employees in a civil rights action in the Western District of Pennsylvania. The Housing Authority was represented by HARIE, which reached a settlement with the employee, prompting dismissal of the federal action.

Section 2 of the Act provides that, "Every public record of an agency shall, at reasonable times, be open for examination and inspection by any citizen of the Commonwealth of Pennsylvania." 65 P.S. § 66.2. Further, Section 1 of the Act defines an agency as, "any State or municipal authority or similar organization created by or pursuant to a statute which declares in substance that such organization performs or has for its purpose the performance of an essential government function." 65 P.S. § 66.1(1). There is no dispute that the Housing Authority is an agency within this Commonwealth as that term is defined in the Act. We also conclude, as did the Commonwealth Court, that HARIE is not an agency within this Commonwealth pursuant to the Act. The Act goes on to define a "public record" with reference to receipt and disbursement of public funds, procurement of materials and services, and actions of the agency affecting substantive rights. 65 P.S. § 66.1(2). The only records expressly excluded from the Act's definition of "public record" are only those that come within the purview of the "investigative records" and the "statutes, orders and decrees" exclusions. 65 P.S. § 66.1(2).

The Act provides that "every public record of an agency" shall be available for examination. 65 P.S. § 66.2. Because the Housing Authority is an agency, as that term is defined in the Act, it is incumbent upon us to determine if the document at issue is a "public record" pursuant to that Act. The Housing Authority deems it to be a document outside the purview of the Act and unavailable for disclosure. It asserts that litigation settlement documents in the possession of the Attorney-in-Fact of its risk insurer are not "public records" within the meaning of the Act.³

Section 1 of the Act, 65 P.S. § 66.1, constitutes a liberal definition of a "public record" in that it applies to a wide range of documents that contain information relating to disbursement of public funds or an action of an agency that fixes the rights or obligations of individuals. The terms of the settlement of a federal civil rights action, which are based upon acts of the Housing Authority and its employees under color of state law, can only fall within the disclosure requirements of the Act as a "public record." This is so, notwithstanding the confidentiality agreement, inasmuch as the settlement agreement at issue involved conduct of the agency in its official capacity. Therefore, the agreement that settled the litigation involved the release from liability of a public entity by one of its employees for an act or omission of that public entity in its official capacity, and is a "public record" within the meaning of the Act. See Morning Call, Inc. v. Housing Auth. of the City of Allentown, 769 A.2d 1246 (Pa.Cmwlth.2001)

. The issue presented in the instant matter only arises where a settlement agreement is negotiated and retained by an insurer.

Numerous courts in this country have determined that a settlement document involving a public body that has acted within its official capacity contains information relating to the conduct of the public's business. See State ex rel. Cincinnati Enquirer v. Dupuis, 98 Ohio St.3d 126, 781 N.E.2d 163 (2002)

(proposed settlement agreement between city and Dept. of Justice is public record); Guy Gannett Publ'g Co. v. Univ. of Maine, 555 A.2d 470 (Me. 1989) (settlement agreement with former coach is public record); Daily Gazette Co. v. Withrow, 177 W.Va. 110, 350 S.E.2d 738 (1986),

subsequently limited by statute, Daily Gazette v. West Va. Dev. Office, 206 W.Va. 51, 521 S.E.2d 543 (1999); News & Observer Publ'g Co. v. Wake Co. Hosp. Sys., Inc., 55 N.C.App. 1, 284 S.E.2d 542 (1981)

cert. denied, 459 U.S. 803, 103 S.Ct. 26, 74 L.Ed.2d 42 (1982); Yakima Newspapers, Inc. v. City...