Title: Zackery v. Water Works and Sewer Board of the City of Gadsden
Citation: N/A
Docket Number: SC-2023-0530
State: Alabama
Issuer: Alabama Supreme Court
Date: February 23, 2024

Rel: February 23, 2024 
 
 
 
 
 
 
 
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern 
Reporter.  Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 
300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other 
errors, in order that corrections may be made before the opinion is printed in Southern Reporter. 
 
 
SUPREME COURT OF ALABAMA 
 
OCTOBER TERM, 2023-2024 
 
_________________________ 
 
SC-2023-0530 
_________________________ 
 
Fred Zackery 
 
 v.  
 
Water Works and Sewer Board of the City of Gadsden 
 
 
Appeal from Etowah Circuit Court 
(CV-16-900676) 
 
SELLERS, Justice. 
 
 
Fred Zackery appeals from a judgment of the Etowah Circuit Court 
holding that the Water Works and Sewer Board of the City of Gadsden 
SC-2023-0530 
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("the Board") does not have to immediately disclose confidential 
settlement agreements requested by Zackery pursuant to the Open 
Records Act, § 36-12-40 et seq., Ala. Code 1975.  We affirm. 
I. Facts 
In September 2016, the Board commenced an action against 
various carpet and chemical manufacturers ("the defendants"), alleging 
that those defendants had caused the Board's raw water intake to become 
contaminated with perfluoroalkyl and polyfluoroalkyl substances known 
as "PFAS."  The substance of the relief sought by the Board was funding 
for technology to remediate PFAS from its drinking water. The Board 
ultimately settled with all the defendants before the scheduled trial. At 
the request of the Board and the defendants, the trial court entered a 
protective order providing that the terms of the settlements would 
remain confidential between the parties. The Board thereafter issued a 
press release informing its customers that it had approved a proposal 
from an engineering firm to design, bid, and oversee the construction of 
a new water-treatment facility; that the cost of the water-treatment 
facility would be paid from the settlement funds received from the 
defendants; and that the preliminary cost of the project, including 
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contingencies, was approximately $80 million. According to the Board, 
the settlement funds will also be used for the long-term operation and 
maintenance of the new water-treatment facility.              
In November 2022, Zackery, a citizen of Gadsden and the manager 
of a local radio station, filed a motion to intervene in the underlying 
action pursuant to Rule 24(a), Ala. R. Civ. P., for the sole purpose of 
seeking disclosure of the settlement agreements entered into between the 
Board and the defendants pursuant to the Open Records Act. The trial 
court entered an order granting Zackery's motion to intervene, indicating 
that the underlying action would remain open pending resolution of his 
claim under the Open Records Act.  Following two evidentiary hearings 
and an in camera inspection of all the settlement agreements, the trial 
court entered a judgment finding that, although the settlement 
agreements fell within the scope of the Open Records Act, the Board did 
not have to disclose them until after it had accepted a bid for the 
construction of the water-treatment facility as required by Alabama's 
Competitive Bid Law, § 41-16-50 et seq., Ala. Code 1975.  See § 41-16-
50(a), Ala. Code 1975 (requiring that public agencies covered by the 
Competitive Bid Law must award contracts to "the lowest responsible 
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bidder"); see also Bessemer Water Serv. v. Lake Cyrus Dev. Co., 959 So. 
2d 643, 649 (Ala. 2006) (noting that the purpose of competitive bidding 
by sealed bids is to "guard[] against opportunities for corruption in the 
procurement of contracts for public-works projects").  The trial court 
certified its judgment as final, pursuant to Rule 54(b), Ala. R. Civ. P.   
This appeal followed. 
II.  Standard of Review 
On appeal, the parties concede that the settlement agreements are 
subject to the Open Records Act. The trial court, however, denied 
immediate disclosure of the settlement agreements subject to the Open 
Records Act based on a judicially created exception; thus, we apply the 
excess-of-discretion standard of review to that ruling.  Health Care Auth. 
for Baptist Health v. Central Alabama Radiation Oncology, LLC,  292 So. 
3d 623, 627-28 (Ala. 2019).   
III.  Discussion 
Zackery contends that the settlement agreements in this case are 
public records and that the trial court exceeded its discretion in denying 
him immediate access to those agreements in violation of the Open 
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Records Act.1  Section 36-12-40, Ala. Code 1975, a part of the Open 
Records Act, provides, in relevant part, that "[e]very citizen has a right 
to inspect and take a copy of any public writing of this state, except as 
otherwise expressly provided by statute."  In the absence of a specific 
statute exempting public records from inspection, this Court must apply 
a rule-of-reasoning balance test: 
"This is not to say, however, that any time a public official 
keeps a record, though not required by law, it falls within the 
purview of § 36-12-40.  McMahan v. Trustees of the University 
of Arkansas, 255 Ark. 108, 499 S.W.2d 56 (1973).  It would be 
helpful for the legislative department to provide the 
limitations by statute as some states have done. Absent 
legislative action, however, the judiciary must apply the rule 
 
1Zackery contends in the alternative that the settlement 
agreements are judicial records.  It is well settled that judicial records 
fall within the scope of the Open Records Act.  See Holland v. Eads, 614 
So. 2d 1012, 1014 (Ala. 1993) ("It has long been the rule of this State to 
allow public inspection of judicial records.").  There is, however, no 
evidence in the record to indicate that the settlement agreements were 
filed with the trial court, which would make them judicial records.  See 
Thompson v. State, 153 So. 3d 84, 107 (Ala. Crim. App. 2012) (noting that 
once documents have been filed in court, they become judicial records 
subject to public disclosure).  See also Enprotech Corp. v. Renda, 983 F.2d 
17, 20 (3d Cir. 1993) (holding that, because the "Settlement Agreement 
ha[d] not been filed with, placed under seal, interpreted or enforced by 
the district court," it was not a judicial record). Zackery represents that 
the settlement agreements presumably contained confidentiality 
provisions and that, at the time the trial court entered the protective 
order, it was unaware of the settlement amounts. Accordingly, we 
construe the settlement agreements to be public records.   
 
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of reason. State v. Alarid, 90 N.M. 790, 568 P.2d 1236 (1977).  
Recorded information received by a public officer in 
confidence, sensitive personnel records, pending criminal 
investigations, and records the disclosure of which would be 
detrimental to the best interests of the public are some of the 
areas which may not be subject to public disclosure. Courts 
must balance the interest of the citizens in knowing what 
their public officers are doing in the discharge of public duties 
against the interest of the general public in having the 
business of government carried on efficiently and without 
undue interference."       
 
Stone v. Consolidated Publ'g Co., 404 So. 2d 678, 681 (Ala. 1981) 
(emphasis added).  Because the purpose of the Open Records Act is to 
permit the examination of public records, the exceptions set forth in 
Stone should be strictly construed.  Allen v. Barksdale, 32 So. 3d 1264, 
1274 (Ala. 2009).  Questions involving the exceptions to the Open Records 
Act "are factual in nature and are for the trial judge to resolve."    
Chambers v. Birmingham News Co., 552 So. 2d 854, 856 (Ala. 1989). 
Finally, "the party refusing disclosure shall have the burden of proving 
that the writings or records sought are within an exception and warrant 
nondisclosure of them."  Id. at 856-57.  
The Board concedes that the settlement agreements fall within the 
scope of the Open Records Act; however, it relies on an exception to the 
Act, i.e., that disclosure of the settlement agreements would be 
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detrimental to the best interests of the public.  Specifically, the Board 
argues that disclosure of the settlement amounts before the competitive-
bid process is initiated and completed could drive the bids upwards, 
increasing the cost of the project. Such a scenario, argues the Board, 
would leave fewer settlement dollars available to fund the cost of the 
future operation and maintenance of the new water-treatment facility, 
thus requiring its customers to pay more for their drinking water.  In 
support of its argument, the Board relies on the testimony of Brian Kylie 
Pate, the chief executive officer of InSite Engineering, LLC.  Pate 
testified that the Board had selected his firm to, among other things, 
design, bid, and oversee the construction of the water-treatment facility 
that the Board intended to build.  Pate indicated that his firm had 
estimated the preliminary cost of the project, including contingencies, to 
be approximately $80 million and that he assumed the bids would be at 
or below that amount.  Pate opined that, while he agreed that the 
settlement amounts should be disclosed to the public, disclosure should 
not occur until after the competitive-bid process had occurred. 
Specifically, Pate explained that, if the contractors bidding on the project 
knew the total amount of funds available for the project, i.e., the top end 
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of the budget, "they would probably bid a little bit less competitively."  
Dennis Chad Hare, the general manager of the Board, testified that he 
had never seen a situation in which the bid process for a project had been 
adversely impacted by general knowledge of the total budget for the 
project.  However, he stated that, in this case, the situation involving a 
new water-treatment facility was different and that, in his opinion, it 
would be detrimental to the best interests of the Board's customers if the 
settlement amounts were disclosed before a contract was awarded.  After 
considering the testimony and conducting an in camera review of all the 
settlement agreements, the trial court entered a judgment stating, in 
relevant part:  
"Generally, the intent of the Alabama Competitive Bid 
Law …  is to protect the public from collusion and prevent 
contracts awarded solely on the basis of favoritism.  See 
Glencoe Paving Co. v. Graves, 94 So. 2d 872 (Ala. 1957).  
There is an inherent tension between the disclosure required 
under the Open Records Act and the Competitive Bid Law's 
intent to avoid collusion among bidders.  It is apparent that 
the settlement funds obtained through this lawsuit will allow 
[the Board] to not only construct a new water treatment 
facility, but also to operate that facility.  If the total budget 
available to [the Board] for the new facilities were made 
public through disclosure of the settlement documents prior 
to open bids for construction, the bidders could all raise their 
bid prices to capture more of the settlement funds, thus 
harming the public interest by reducing funds for future 
operation and maintenance.  Simply put, every dollar that 
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could be saved on construction costs[] will allow [the Board] 
to operate the facility for longer … without passing along 
those costs to its rate payers.  It is unarguably in the public's 
best interest to avoid unnecessary rate increases for drinking 
water. 
 
"…. 
 
"The Court agrees with the parties that eventual 
disclosure of the settlement agreements is required under the 
Alabama Open Records Act.  However, it is not in the best 
interest of the public to do so before completion of the 
competitive bid process required by the Alabama Competitive 
Bid Law."      
 
(Emphasis added.)    
 
 We recognize that the public's interest in access to public records 
is particularly important where, as here, one of the parties to the action 
is a public entity. However, applying the rule-of-reasoning test, courts 
"must balance the interest of the citizens in knowing what their public 
officers are doing in the discharge of public duties against the interest of 
the general public in having the business of government carried on 
efficiently and without undue interference." Stone, 404 So. 2d at 681.  In 
this case, it is undisputed that the Board seeks to protect its customers 
from the possibility of future rate hikes that would likely occur if the 
competitive-bid process is influenced by immediate disclosure of the 
Board's total budget for the water-treatment project.  As previously 
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indicated, the Board seeks to use the settlement funds not only for the 
construction of a water-treatment facility, but also for the long-term 
operation and maintenance of that facility.   After hearing the testimony 
and conducting an in camera review of all the settlement agreements, the 
trial court obviously recognized the sensitive nature of the settlements, 
thus agreeing that it would not be in the best interests of the citizens of 
Gadsden if the settlement amounts were disclosed before a contract for 
the project was awarded pursuant to the Competitive Bid Law.  
Nonetheless, the trial court determined that, once a contract for the 
project was awarded, any justification for maintaining the confidentiality 
of the settlement amounts would no longer exist. Cf. Chambers, 552 So. 
2d at 855 (affirming trial court's judgment that held that the disclosure 
of certain documents was not detrimental to the best interests of the 
public because the documents neither contained a request to be kept 
confidential nor contained sensitive material that would require an 
exception to disclosure).  Based on the facts presented, we conclude that 
the trial court did not exceed its discretion in holding that an exception 
to the Open Records Act was present, which justified nondisclosure of the 
SC-2023-0530 
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settlement agreements until after the competitive-bid process was 
complete.  
 Zackery also contends that the protective order making the 
settlement amounts confidential is due to be vacated because, he says, 
the trial court failed to comply with the procedural requirements set forth 
in Holland v. Eads, 614 So. 2d 1012 (Ala. 1993), before entering that 
order.  Holland holds that, "if a motion to seal is filed, then the trial court 
shall conduct a hearing" and "shall not seal records except upon a written 
finding that the moving party has proved by clear and convincing 
evidence that the information contained in the document sought to be 
sealed" falls within one of the six categories stated in Holland.  Id. at 
1016. Zackery did not raise this issue at either of the evidentiary 
hearings.  Rather, he states that he raised the issue in his "proposed 
order and final judgment," in which he "pointed  out" that the leading 
case on the "sealing of court documents" is Holland.  Although Zackery 
raised the issue in his proposed order and final judgment, the trial court 
did not address the argument in its final judgment, nor did Zackery raise 
the issue in a proper postjudgment motion. Accordingly, we find that the 
issue is not preserved for our review. See Andrews v. Merritt Oil Co., 612 
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So. 2d 409, 410 (Ala. 1992) ("This court cannot consider arguments raised 
for the first time on appeal; rather, our review is restricted to the 
evidence and arguments considered by the trial court."); and Green v. 
Taylor, 437 So. 2d 1259, 1260 (Ala. 1983) (stating that "[t]he rationale 
behind ... the general rules regarding the necessity for post-trial motions 
is that, ordinarily, issues not raised before the trial court may not be 
raised for the first time on appeal").  Even if Zackery had preserved this 
issue for appellate review, however, it appears that Holland is 
inapplicable insofar as it concerns the procedure a trial court must follow 
before entertaining a motion to seal judicial records.  In this case, there 
is no motion to seal in the record, nor is there any indication that the trial 
court placed the settlement agreements under seal. As previously 
indicated, there is also no evidence to indicate that the settlement 
agreements were filed with the trial court, thus making them judicial 
records. See note 1, supra. Further, it is beyond the scope of this opinion 
to compare, contrast, or distinguish the actions necessary for a court to 
properly seal records versus those necessary for a court to enter a 
protective order to limit disclosure of specific case information.         
IV.  Conclusion 
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Based on the foregoing, we affirm the judgment of the trial court 
holding that the settlement agreements between the Board and the 
defendants are not required to be disclosed until after the competitive-
bid process required by the Competitive Bid Law is complete.   
AFFIRMED. 
Wise, Mendheim, and Stewart, JJ., concur. 
Parker, C.J., and Shaw and Bryan, JJ., concur in the result. 
Mitchell and Cook, JJ., recuse themselves.