Verizon N.Y. Inc. v. N.Y.S. Pub. Serv. Comm'n

• Decision Date: 31 July 2014
• Citation: 991 N.Y.S.2d 841
• Court: New York Supreme Court
• Parties: In the Matter of the Application of VERIZON NEW YORK INC., Petitioner, for a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules v. NEW YORK STATE PUBLIC SERVICE COMMISSION, et al., Respondents.

991 N.Y.S.2d 841

In the Matter of the Application of VERIZON NEW YORK INC., Petitioner, for a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules

v.NEW YORK STATE PUBLIC SERVICE COMMISSION, et al., Respondents.

Supreme Court, Albany County, New York.

July 31, 2014.

Greenberg Traurig, LLP, (Henry M. Greenberg, Esq., Cynthia L. Neidl, Esq., Adam W. Silverman, Esq.), Albany, for Petitioner.

Kimberly Harriman, Acting General Counsel, Public Service Commission, (Jonathan D. Feinberg, Esq., Solicitor, Lindsey N. Overton, Esq., Assistant Counsel), Albany, for Respondents.

Richard Brodsky, Esq., White Plains, for Amici Curiae.

JAMES H. FERREIRA, J.

This is a special proceeding pursuant to CPLR article 78 commenced by Verizon New York Inc. (hereinafter "petitioner" or "Verizon"), a New York corporation. Respondents are the New York State Public Service Commission (hereinafter "the Commission"), Kathleen H. Burgess, as Secretary to the Commission (hereinafter "the Secretary"), the New York State Department of Public Service (hereinafter "DPS") and Donna M. Giliberto, as Records Access Officer (hereinafter "RAO") for DPS. In this proceeding, petitioner seeks to: (1) overturn a final appeal determination by the Secretary, issued December 2, 2013, upholding a determination by the RAO that certain documents submitted by petitioner to respondents during the course of a regulatory proceeding were not exempt from disclosure as trade secrets or confidential commercial information pursuant to the Freedom of Information Law (see Public Officers Law art. 6 [hereinafter "FOIL"] ); and (2) preclude respondents from publicly disclosing said documents in response to a FOIL request by third parties appearing in the underlying regulatory proceeding.

The Verified Petition, Affirmation in Support and Memorandum of Law in Support were filed December 16, 2013.¹ By Order to Show Cause on consent, signed December 16, 2013 by the Honorable Thomas A. Breslin, J.S.C., respondents' underlying determinations were stayed, and disclosure of the documents at issue by respondents to the public or to any third parties was barred pending a final determination of this proceeding and any appeal that may be commenced thereupon. The Verified Petition was returnable on March 14, 2014. A Verified Answer and Memorandum of Law were filed by respondents on February 26, 2014. By Letter Decision and Order dated March 27, 2014, this Court granted, in part, a motion brought by Richard Brodsky, Esq., on behalf of Communication Workers of America, District 1, Common Cause, Consumers Union and the Fire Island Association (hereinafter "the Brodsky Group"), for permission to appear in the proceeding as amici curiae.² The Court also granted oral argument on the Petition, and heard such argument on April 10, 2014.³

Procedural Background

Between May and September 2013, DPS staff issued a series of interrogatories and document production requests to petitioner as part of an underlying regulatory proceeding involving a tariff filing by petitioner.⁴ In that tariff filing, petitioner sought to amend its tariff to allow it to discontinue its current wireline service offerings in the western portion of Fire Island, New York and offer, in the alternative, Verizon Voice Link (hereinafter "VVL"), a wireless service, as its sole service offering in the area.⁵ Petitioner responded to the information requests by providing DPS staff with written replies and exhibits (Verified Petition ¶ 17). Petitioner also submitted certain information to the RAO with a specific request, pursuant to Public Officers Law § 89(5)(a)(1), that such information be treated by the Commission and DPS as "trade secret and confidential commercial information" pursuant to FOIL (Affirmation in Support, Exhibit A, letters dated June 17, 2013, July 22, 2013 and August 15, 2013). Petitioner specifically sought an exemption from disclosure pursuant to Public Officers Law § 87(2)(d) and 16 NYCRR 6–1.3 (see id. ).⁶ On or about September 13, 2013, the Brodsky Group submitted comments to the Commission in Case 13–C–0197 (see id., Exhibit B). These comments included objections to petitioner's request for confidentiality and non-disclosure of certain information, and referenced its "assertion of [its] rights" under FOIL (id. at II).⁷ By letter dated September 23, 2013, the RAO informed petitioner and the Brodsky Group that the latter's comments, insofar as its objections to petitioner's confidentiality claims were concerned, would be treated as a request for the records under Public Officers Law § 87 and that access to the records would be determined in accordance with Public Officers Law § 89(5) (see id., Exhibit C). In addition, the RAO listed the various categories of information that the Brodsky Group had sought to be disclosed under FOIL, including the information at issue in this proceeding: (1) information relating to actual costs incurred or projected to be incurred by petitioner in connection with providing wireline and wireless services on Fire Island; and (2) "[m]arketing and training materials used on Fire Island or elsewhere in New York relating to Voice Link service" (id. ). Finally, the RAO informed petitioner that she would consider whether the information sought to be withheld by petitioner was exempt from disclosure, and permitted petitioner to submit a Statement of Necessity on that point under Public Officers Law § 89(5)(b)(1) and (2) (see id. ).

On October 4, 2013, petitioner submitted redacted versions of certain interrogatory responses per the RAO's September 23, 2013 letter (see id., Exhibit H). The information redacted falls into two categories: cost and network information (hereinafter "Cost Information") and petitioner's VVL methods and procedures (hereinafter "M & P Information") (see Verified Petition ¶ 26). The eight pages of Cost Information include "detailed costs for specific network components" (id. ¶ 29), and contain cost estimates, data and studies related to deploying the VVL wireless services on a portion of Fire Island, as well as two alternative wireline networks known as Digital Loop Carrier (hereinafter "DLC") and Fiber to the Premises (hereinafter "FTTP") (see id. ¶ 28). The M & P Information concerns 13 documents (331 pages in total)⁸ used by petitioner in connection with offering VVL.⁹ Petitioner describes these documents as "scripts for call center representatives; training materials; and similar documents, all of which are intended to inform, instruct, and advise Verizon's employees on various aspects of how they should interact with current and prospective VVL customers" (id. ¶ 30).

On October 7, 2013, petitioner submitted a Statement of Necessity in accordance with the RAO's request and Public Officers Law § 89(5)(b)(2). Petitioner argued, among other things, that the Cost Information and M & P Information are exempt from disclosure because they contain "non-public, competitively-sensitive information—including information related to Verizon's network costs and its proprietary processes and procedures for marketing and administering a competitive product offering—and ... disclosure ... would create a windfall for Verizon's competitors" (id. ¶ 24). On October 11, 2013, the Brodsky Group submitted comments to the Secretary and the RAO opposing petitioner's request to keep the information confidential. The Brodsky Group argued that petitioner's "windfall" argument was without merit and its proof of "substantial competitive injury" was insufficient, speculative and conclusory (Affirmation in Support, Exhibit M). On October 24, 2013, Brodsky informed the RAO by e-mail that he formally rejected the redacted copies submitted by petitioner as "insufficient and not fulfilling [his FOIL] request" (id., Exhibit N).

In a determination dated November 4, 2013, the RAO concluded that the Cost Information and the M & P Information submitted by petitioner were not exempt from disclosure pursuant to Public Officers Law § 87(2)(d). While the RAO found that the Cost Information and part of the M & P Information (three of the 13 documents) "fit[ ] within the definition of trade secret" (id., Exhibit I at 12), she determined that petitioner "offered no factual support" to satisfy the second prong of a two-part test, namely that "disclosure would cause substantial injury to the competitive position of the subject enterprise" (id. at 13). Noting that petitioner had not "met the burden of proof it bears pursuant to [Public Officers Law] § 89(5)(e)" and that "[m]ere conclusory allegations, without factual support, are insufficient to sustain non-disclosure," the RAO found that "the information claimed by Verizon to be trade secrets or confidential commercial information does not warrant an exception from disclosure" (id. at 13, 15–16).¹⁰

On November 15, 2013, petitioner filed an appeal to the Secretary seeking reversal of that portion of the RAO's determination which related to the Cost Information and M & P Information (see id., Exhibit O). Petitioner submitted with its appeal the declarations of: (1) Dr. William E. Taylor, an economist; (2) Robert Wheatley II, Verizon's Executive Director of Financial Planning and Analysis and a person with experience in pricing and finance; and (3) Thomas MacNabb, Verizon's Director of Operations in the National Operations organization and project director for VVL (see id., Exhibits J, K and L). The Brodsky Group submitted a letter, dated November 22, 2013, in support of the RAO's determination, arguing, among other things, that the declarations were broad and conclusory and that the appeal failed to set forth any "specific and particularized justification for denying access" (id., Exhibit P at 2).

On December 2, 2013, the Secretary issued a decision denying petitioner's appeal and upholding the RAO's decision in its entirety (hereinafter "Appeal Determination") (see id., Exhibit Q). The Secretary concluded that, "[u]nder FOIL case law, the burden...