Court Opinion

ID: 4390660
Source: CourtListenerOpinion
Date Created: 2019-04-25 13:40:24.609655+00
Date Added: 2024-06-11T14:51:49.430289
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Nolan Finnerty,                                    :
                              Petitioner           :
                                                   :
                                                   :
                       v.                          :      No. 1090 C.D. 2018
                                                   :      Argued: March 14, 2019
Pennsylvania Department of                         :
Community and Economic                             :
Development,                                       :
                       Respondent                  :

BEFORE:        HONORABLE RENÉE COHN JUBELIRER, Judge
               HONORABLE PATRICIA A. McCULLOUGH, Judge
               HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY
JUDGE COHN JUBELIRER                                   FILED: April 25, 2019

      Nolan Finnerty (Requester) petitions for review of a Final Determination of
the Office of Open Records (OOR) issued July 11, 2018, denying in part his appeal
of the Pennsylvania Department of Community and Economic Development’s
(Department) partial denial of his request for records under the Right-to-Know
Law (RTKL).1 Requester argues that OOR erred when it determined that the
Department properly invoked the internal, predecisional deliberation exception as
to certain records because those records were not internal to the Department but

      1
          Act of February 14, 2008, P.L. 6, 65 P.S. §§ 67.101-67.3104.
were shared with subcontractors of the Department. For the reasons set forth in
Finnerty v. Pennsylvania Department of Community and Economic Development,
__ A.3d __, (Pa. Cmwlth., No. 801 C.D. 2018, filed April 25, 2019) (Finnerty I),2
we disagree and conclude that these records remained “internal to the agency”
because the records were exchanged between the Department and outside
contractors with whom the Department had a contractual relationship to assist it in
bringing the City of Chester (the City) out of financially distressed status.
McGowan v. Pa. Dep’t of Envtl. Prot., 103 A.3d 374, 381 (Pa. Cmwlth. 2014).
      Requester also challenges the Department’s withholding of certain records
under the privilege of attorney-client communications and, relatedly, the attorney
work-product doctrine. However, at oral argument, the Department’s Counsel
represented, and Requester’s Counsel agreed, that the records withheld as
privileged attorney-client communications and under the attorney work-product
doctrine had been disclosed to Requester. Therefore, we conclude that, as a result
of that disclosure, Requester’s challenges based on the attorney-client
communications privilege and attorney work-product doctrine have been rendered
moot, and none of the exceptions to the mootness doctrine apply.

I.    Factual Background
      Since 1996, pursuant to the Municipalities Financial Recovery Act 3 (Act
47), the City has been determined to be a financially distressed municipality.
Under Section 221 of Act 47, 53 P.S. § 11701.221, the Department is authorized to
appoint and compensate a consultant who will act as a coordinator in preparing and

      2
          Finnerty I was argued seriately with this case.
      3
          Act of July 10, 1987, P.L. 246, as amended, 53 P.S. §§ 11701.101-11701.712.

                                               2
addressing the municipality’s financial problems. In February 2016, following a
request for proposals (RFP), the Department entered into a contract (Contract) with
EConsult Solutions Inc. (EConsult) to act as the Act 47 Coordinator for the City.
(Reproduced Record (R.R.) at 181a-215a.) At the time of the Contract, EConsult
had been serving as the Act 47 Coordinator for the City since September 2015
under a contract with the Department. (Id. at 364a.) Under the terms of the RFP,
which were incorporated into the Contract, EConsult was responsible for
implementing the Recovery Plan for the City, working closely with municipal
officials, maintaining close contact with the Department and providing the
Department with progress reports regarding the Recovery Plan implementation,
consulting with employee collective bargaining groups, attending meetings as
directed by the Department and requested by the City, consulting with state and
federal agencies as necessary, and applying for grants as provided by Act 47. (Id.
at 209a.) In Article XIII of the Contract, EConsult promised not to enter into any
subcontract for the activities identified in the Contract without the prior written
approval of the Department. (Id. at 200a.) Appended to the Contract was a
budget, which allotted payment to Fairmount Capital Advisors (Fairmount), as a
financial consultant, and McNees, Wallace and Nurick (McNees), as legal counsel,
for subcontract work they were to perform related to EConsult’s activities as Act
47 Coordinator.    (Id. at 214a, 224a.)       The budget stated that Fairmount and
McNees would bill hourly through EConsult. (Id.)

      A.    The Request under the RTKL and the Department’s Responses
      On November 28, 2017, the Department received, via email, a request from
Requester, a paralegal with the law firm of Conrad O’Brien, P.C., under the RTKL.

                                          3
The request consisted of 25 subparts and requested, inter alia, copies of specific
records, including documents exchanged between and among the Department, the
City, EConsult, McNees, and Fairmount discussing the City and the Chester Water
Authority (CWA).4 (Id. at 9a-10a.)

       4
           Specifically, the request, as relevant to this appeal, was as follows:

       1.        Copies of all communications, including letters and emails, between [the
               Department] and any Chester City Officials . . . from July 1, 2015 to the
               present.
       2.        Copies of all communications, including letters, reports, memoranda, and
               emails, between McNees . . . and any Chester City Officials . . . from July 1,
               2015 to the present.
       3.        Copies of all communications, including letters, reports, memoranda, and
               emails, between E[C]onsult . . . and/or Fairmount . . . and any Chester City
               Officials . . . from July 1, 2015 to the present.
       4.        Copies of all communications, including letters, reports, memoranda, and
               emails, between the [Department] and [another law firm] discussing the City
               of Chester and/or the [CWA] from July 1, 2015 to the present.
       5.        Copies of all communications, including letters, reports, memoranda, and
               emails, directly or indirectly exchanged between the [Department] and
               Steven W. Smith, Esquire discussing the City . . . and/or the [CWA] from
               July 1, 2015 to the present.

                                                  ***
       9.     Copies of all communications, including letters and emails, between [the
            Department] and David Unkovic, Esquire discussing the City . . . and/or the
            [CWA] from July 1, 2015 to the present.
      10. Copies of all communications, including letters, reports, memoranda, and
            emails, between Marita Kelly and/or Jamar Kelly and David Unkovic,
            Esquire discussing the City . . . and/or the [CWA] from July 1, 2015 to the
            present.
      11. Copies of all communications, including letters, reports, memoranda, and
            emails, between [the Department] and Adam Santucci, Esquire discussing
            the City . . . and/or the [CWA] from July 1, 2015 to the present.
      12. Copies of all communications, including letters, reports, memoranda, and
            emails, between Marita Kelly and/or Jamar Kelly and Adam Santucci,
            Esquire discussing the City . . . and/or the [CWA] from July 1, 2015 to the
            present.
(Footnote continued on next page…)
                                                   4
_____________________________
(continued…)
       13. Copies of all communications, including letters, reports, memoranda, and
           emails, between [the Department] and Brooke Queenan discussing the City
           . . . and/or the [CWA] from July 1, 2015 to the present.
       14. Copies of all communications, including letters, reports, memoranda, and
           emails, between Marita Kelly and/or Jamar Kelly and Brooke Queenan
           discussing the City . . . and/or the [CWA] from July 1, 2015 to the present.
       15. Copies of all communications, including letters, reports, memoranda, and
           emails, between [the Department] and Stephen Mullin discussing the City
           . . . and/or the [CWA] from July 1, 2015 to the present.
       16. Copies of all communications, including letters, reports, memoranda, and
           emails, between Marita Kelly and/or Jamar Kelly and Stephen Mullin
           discussing the City . . . and/or the [CWA] from July 1, 2015 to the present.
       17. Copies of all communications, including letters, reports, memoranda, and
           emails, between [the Department] and Andrea Mannino discussing the City
           . . . and/or the [CWA] from July 1, 2015 to the present.
       18. Copies of all communications, including letters, reports, memoranda, and
           emails, between Marita Kelly and/or Jamar Kelly and Andrea Mannino
           discussing the City . . . and/or the [CWA] from July 1, 2015 to the present.
       19. Copies of all communications, including letters, reports, memoranda, and
           emails, between [the Department] and Daniel Connelly discussing the City
           . . . and/or the [CWA] from July 1, 2015 to the present.
       20. Copies of all communications, including letters, reports, memoranda, and
           emails, between Marita Kelly and/or Jamar Kelly and Daniel Connelly
           discussing the City . . . and/or the [CWA] from July 1, 2015 to the present.
       21. A copy of any report or analysis related to any potential monetization of the
           [CWA].
       22. Copies of minutes from any meetings related to the City . . . since July 1,
           2015.
       23. Copies of notes taken, memoranda prepared, or agendas in connection with
           any meetings related to the City . . . since July 1, 2015.
       24 Copies of all communications, including letters, reports, memoranda,
           agendas, and emails, related to the City[’s] . . . Act 47 Recovery
           Coordinator’s report setting forth the financial condition of the City . . . and
           the Recovery Coordinator’s recommendation since July 1, 2015.
       25. Copies of all communications, including letters, reports, memoranda, notes,
           and emails between [the Department], E[C]onsult . . ., McNees . . . and/or
           Fairmount . . . and the auditor general regarding the City . . . and[/]or the
           [CWA] since July 1, 2015.

(R.R. at 9a-11a.)

                                                5
      Following statutorily invoked and agreed-upon extensions for responding,
the Department issued its response, denying the request, in part, on the ground that
certain requested records, as pertinent to the issues raised on appeal, constituted
internal, predecisional deliberations, consisting of “internal staff and contractor
recommendations, comments to letters, reports and presentations, negotiation
strategy, projections of cash flow, draft policy and budget proposals, that played a
role in the Department’s Act 47 decision making process.” (Id. at 18a-19a.)
Specifically, as Jennifer Fogarty, the Open Records Officer for the Department
later affirmed (Fogarty Affirmation), the Department withheld the following
records:

      [The Department] redacted portions of several emails between the Act
      47 Team and [the Department] that reflect impressions,
      recommendations, and proposals related to the City’s proposed
      budget, addressing issues of debt service priorities, pension payments,
      debt financing and refinancing strategy, revenue sources, and labor
      negotiations and labor issues prior to a final decision of how to advise
      City Officials. These portions of records were redacted under the
      internal predecisional deliberation exemption . . . because they reflect
      [the Department’s] communications with its contractor and their
      counsel addressing budget recommendations.

      [The Department] redacted portions of several email records between
      E[C]onsult staff, [the Department] staff, McNees attorneys, and the
      City’s Chief Financial Officer as internal predecisional deliberation of
      [the Department] staff with a City Official. The redacted text reflects
      City budget recommendations and impressions relating to City
      staffing, debt service payments, pension payments, and other issues
      related to achieving a balanced budget. These communications reflect
      the internal predecisional deliberations between the staff of one
      agency with the staff of another agency . . . .

      [The Department] redacted certain portions of emails between
      E[C]onsult staff and McNees attorneys that request legal analysis
      and/or advice or that consist of McNees’s legal advice and
      impressions . . . . Some of the redacted emails of McNees’ responses

                                         6
       . . . [are] also exempt as predecisional agency deliberations with its
       counsel because the advice relates to subject matter for which McNees
       was hired under the City Act 47 contract.
                                         ***
       [The Department] withheld a series of 346 pages of emails exchanged
       between the Act 47 Coordinator Team, City Officials, the City
       Solicitor, the City Financial Advisor, [the Department], underwriter’s
       counsel, bond counsel and other professionals necessary to the bond
       transaction dated between June 2017 and late August 2017, leading up
       to and relating to a City August 2017 bond issuance. The withheld
       records reflect the confidential impressions, recommendations, draft
       notices, disclosure documents, ordinances and term sheets, comments
       to draft documents, financing strategy, and proposals related to an
       upcoming bond transaction exchanged between the City’s financial
       advisor, [the Department] staff, E[C]onsult, the Act 47 Coordinator,
       McNees counsel, City Officials, the City’s solicitors, the City’s
       financial advisor, bond counsel, and other professionals necessary to
       the closing of the transaction. These communications were internal to
       the bond transaction group and predecisional to the bond
       issuance . . . .

       [The Department] did not provide an attachment from an email dated
       November 22, 2017, sent by . . . a McNees attorney, to [the
       Department] staff and Act 47 Coordinator staff . . . . [The
       Department] did not provide the attachment based on [the] internal
       predecisional communications exemption . . . .
                                          ***
       Requiring [the Department] to release the redacted portions of
       sensitive records as outlined above would severely compromise [the
       Department’s] ability to assist distressed cities with their fiscal
       problems under Act 47, by making it less likely that such information
       will be provided to [the Department]. [The Department] must have
       the ability to redact internal predecisional communications . . . it
       receives related to the City’s fiscal condition for [the Department] to
       be an effective partner with E[C]onsult, the Act 47 Coordinator, in
       providing sound advice to City Officials.

(Id. at 69a-71a.)5

       5
         The Department later produced a privilege index identifying, as relevant to this appeal,
the following records or portions thereof which it withheld: Bates No. 100002, 100006, 100014,
100016-18, 100023-30, 100032-39, 100045, 100047, 100049-52, 100054-70, 100072-85,
(Footnote continued on next page…)
                                               7
      B.     Requester’s Appeal to OOR
      Requester filed an appeal under the RTKL with OOR, arguing that the
Department had not provided sufficient information to meet its burden of showing
that the records were exempt from disclosure. (Id. at 4a-5a.) In response, the
Department submitted the Fogarty Affirmation, recounted above. Requester then
submitted a memorandum of law arguing that the internal, predecisional
deliberation exception did not apply because the withheld records were not
maintained internally to one agency or among several agencies, but were “shared
by and between the Department, EConsult, McNees, and Fairmount . . . , the City
. . . and/or unexplained third parties.” (Id. at 84a.) Records that were shared or
maintained externally had to be disclosed.
      The OOR Appeals Officer (Appeals Officer) requested supplemental
submissions addressing, inter alia, the issue of whether records created or received
by third-party subcontractors were internal to the agency. (Id. at 290a.)
      The Department argued that the internal, predecisional deliberation
exception applied because the withheld records involved the Department’s
communications with both EConsult and McNees and were generated at the
Department’s express direction for the purpose of discussing, studying, and
weighing various approaches to the challenges facing the City. (Id. at 359a.)
      In further support, the Department offered affidavits from Adam L. Santucci,
an attorney and member with McNees, and Stephen Mullin, the President and
Principal of EConsult, which were almost identical. Santucci and Mullin stated

_____________________________
(continued…)
100089-104, 100107-22, 100124, 100126-46, 100160-64, 100166-68, 100172, 200006, 200024-
25, 200028-30, 200032-43, 200045-47, 200185-228, 200242-44, 200246-51, 200291, 200293-
300, 200305-06. (Exemption Index, R.R. at 296a-300a; Final Determination at 18-20.)

                                          8
that when the RFP was issued, EConsult and Fairmount “invited McNees to
contribute to a joint response to the RFP, whereby McNees would provide the
necessary legal experience.” (Id. at 362a, 366a.) With McNees part of the Act 47
Coordinator team, “it was believed that a full-service Recovery Coordinator would
be created to provide all aspects of municipal finance, public policy, legal counsel
and economic development consultation throughout the implementation of the
recovery plan.” (Id.) McNees’ role was to advise the Department on the Recovery
Plan’s compliance with Act 47, providing “guidance, legal advice, legal strategy
and recommendations to EConsult and Fairmount,” which are the Department’s
agents, so that the Department could help the City implement the Recovery Plan
and exit its financially distressed municipality status. (Id.) In particular, McNees
was expected first to consult with EConsult and Fairmount in order to identify and
recommend legal options for reducing the past and future liability of the City. In
addition, McNees was to evaluate recommendations from other members of the
Act 47 team to ensure they complied with the law. In other words, legal and
financial matters were intertwined.     In order to make recommendations and
analyze the recommendations of others, McNees had to “obtain and consider
feedback from EConsult, Fairmount,” and the Department. (Id.)
      In a supplemental memorandum of law, Requester argued that records
shared by an agency with its contractors, subcontractors, third parties, or
consultants were not internal to the agency. (Id. at 371a.) Requester argued that
the internal element of the exception was not satisfied based on an agency
relationship because EConsult and Fairmount were not agents of the Department.
Requester asserted that the Department and EConsult have divergent interests, and
that the Contract expressly disclaimed any agency relationship between the

                                         9
Department and EConsult. (Id. at 372a.) Therefore, there was no basis “to include
either E[C]onsult or Fairmount . . . within the . . . internal designation” of the
exception. (Id. at 374a.)
       At OOR’s request, the Department provided a supplemental attestation
identifying individuals copied on records submitted for OOR’s in camera review
including financial professionals and their attorneys who had “no contract with [the
Department] or Act 47 Coordinator.” (Id. at 429a-32a.)

       C.     OOR’s Final Determination
       OOR, citing its own case law that records shared by an agency with those it
has a contractual relationship are internal to the agency, concluded that records
“exchanged by various Department and City officials, the Act 47 Coordinator
Team, and legal and financial experts contracted to assist with the City’s Act 47
plan” were considered internal. (Final Determination at 16, 20.) This included
“consultants and contractors retained to provide professional legal and financial
services in furtherance of the City’s Recovery Plan.” (Id. at 20.) However, OOR
concluded that any records shared with the individuals identified in the
Department’s supplemental attestation that did not have a contractual relationship
with the Department, such as “various banking and bond professionals, as well as
other ‘outside financial accounts, auditors, and asset managers,’” were not
considered internal. (Id. at 21 (footnotes omitted).)
       Requester now petitions this Court for review.6

       6
         Our standard of review of a final determination of OOR under the RTKL is de novo,
while our scope of review is plenary. Bowling v. Office of Open Records, 75 A.3d 453, 477 (Pa.
2013). “[W]e may substitute our own findings of facts for that of the agency or rely upon the
record created below.” Pa. State Police v. Muller, 124 A.3d 761, 763 n.2 (Pa. Cmwlth. 2015).

                                             10
II.   Appeal to this Court
      As in Finnerty I, Requester argues that OOR erred in concluding that the
Department properly invoked the internal, predecisional deliberation exception
because records shared with outside contractors cannot be considered internal to
the agency. Requester notes that the RTKL “is silent as to contractors of a non-
agency in a manner similar to the relationship between McNees and Fairmount . . .
to E[C]onsult,” but that because exceptions under the RTKL should be interpreted
narrowly, internal records should be limited to records shared within the agency or
among several agencies. (Requester’s Brief (Br.) at 26.) Further, OOR’s own case
law that considers records shared where there is a contractual relationship between
the agency and a contractor is inapposite as McNees and Fairmount were
EConsult’s contractors, not the Department’s. While the internal, predecisional
deliberation exception has been extended to agents of the agency, “OOR did not
and could not conclude that E[C]onsult, McNees and/or Fairmount . . . were agents
of the Department.” (Id. at 28.) Rather, EConsult is an independent contractor of
the Department, while McNees and Fairmount have some “unknown and unclear”
relationship with EConsult. (Id.) As such, Requester asserts that OOR erred in
insulating the withheld records from disclosure under the internal, predecisional
deliberation exception.
      The Department argues that records are internal if the agency has a
contractual relationship with the party with whom communications are shared.
The Department asserts that a contractual relationship exists between it, EConsult,
Fairmount, and McNees, as they are all bound by the Contract, which obliges them
to assist the Department with the financial and legal aspects of the Recovery Plan.
It would serve no compelling public interest and undermine the purpose of the

                                        11
internal, predecisional deliberation exception to require disclosure of records
shared between an agency, a contractor, and an essential subcontractor. Therefore,
the Department argues OOR correctly concluded that the Department properly
invoked the internal, predecisional deliberation exception.7
       For the reasons we articulated in Finnerty I, we conclude that OOR correctly
determined that the Department properly invoked the internal, predecisional
deliberation exception to the withheld records. Finnerty I, __ A.3d at __, slip. op.
at 13-19.      The evidence established that there was a contract between the
Department, EConsult, McNees, and Fairmount.                       The Department engaged
EConsult, McNees, and Fairmount, pursuant to Act 47, to assist the Department in
implementing the Recovery Plan to relieve the distressed status of the City. The
withheld records contain communications between Department, EConsult,
McNees, and Fairmount that were internal to the Department, and Requester does
not otherwise challenge those communications as either not deliberative or
predecisional.      As such, the Department satisfied its burden of proof on the
internal, predecisional deliberation exception to the withheld records and thus, we
affirm OOR’s Final Determination concluding that the Department properly
invoked the internal, predecisional deliberation exception to the withheld records.

       7
            In Requester’s reply brief, he argues that the internal, predecisional deliberation
exception does not apply to “[a]ny records shared between McNees, Fairmount . . ., E[C]onsult,
the City officials, [and] the City’s financial advisor and/or solicitor” because those records “are
not ‘internal’ to the Department.” (Requester’s Reply Br. at 8.) Because this issue is raised for
the first time in Requester’s reply brief, it is waived. Karkalas v. Dep’t of State, Bureau of Prof’l
& Occupational Affairs, 71 A.3d 395, 398 n.8 (Pa. Cmwlth. 2013).

                                                12
III.   Conclusion
       For the foregoing reasons, we affirm the Final Determination of OOR
concluding that the Department properly invoked the internal, predecisional
deliberation exception to the withheld records.

                                      _____________________________________
                                      RENÉE COHN JUBELIRER, Judge

                                        13
       IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Nolan Finnerty,                          :
                      Petitioner         :
                                         :
                                         :
                      v.                 :     No. 1090 C.D. 2018
                                         :
Pennsylvania Department of               :
Community and Economic                   :
Development,                             :
                       Respondent        :

                                   ORDER

      NOW, April 25, 2019, the Final Determination of the Office of Open
Records issued July 11, 2018, holding that the Pennsylvania Department of
Community and Economic Development properly invoked the internal,
predecisional exception is AFFIRMED.         The remainder of Nolan Finnerty’s
petition for review is DISMISSED AS MOOT.

                                    _____________________________________
                                    RENÉE COHN JUBELIRER, Judge