Court Opinion

ID: 9956205
Source: CourtListenerOpinion
Date Created: 2024-04-01 14:10:34.491101+00
Date Added: 2024-06-11T08:15:42.429570
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Luzerne and Susquehanna Railway                 :
Company                                         :
                                                :
               v.                               :   No. 833 C.D. 2022
                                                :   Submitted: February 6, 2024
Luzerne County Redevelopment                    :
Authority, Reading Blue Mountain                :
and Northern Railroad Company                   :
                                                :
Appeal of: R. J. Corman Railroad                :
Company/Luzerne and Susquehanna                 :
Line, LLC, the successor of the                 :
Petitioner, Luzerne and Susquehanna             :
Railway Company                                 :

BEFORE:        HONORABLE MICHAEL H. WOJCIK, Judge
               HONORABLE LORI A. DUMAS, Judge
               HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE DUMAS                                                     FILED: April 1, 2024

               R.J. Corman Railroad Company/Luzerne and Susquehanna Line, LLC
(L&S, or Appellant) appeals from the order entered in the Court of Common Pleas
of Luzerne County (trial court), affirming in part and reversing in part an order issued
by the Office of Open Records (OOR), and ordering the disclosure of certain railroad
operating agreements as financial records pursuant to the Right-to-Know Law
(RTKL).1 After careful review, we vacate the trial court’s order and remand for the

      1
          Act of February 14, 2008, P.L. 6, 65 P.S. §§ 67.101-67.3104.
trial court to hold an evidentiary hearing or conduct an in camera review of the
operating agreements.
                                       I. BACKGROUND2
                On June 26, 2020, Reqiester submitted a RTKL request to the Luzerne
County Redevelopment Authority (the Authority).3 In relevant part, Requester
sought operating agreements between the Authority, Luzerne County Rail
Corporation (LCRC),4 and railway operators.5 The Authority refused to provide the

        2
           Unless otherwise stated, we base the recitation of facts on the trial court’s findings of fact
and conclusions of law, as well as its addendum to its findings of fact and conclusions of law, to
the extent those findings and conclusions are supported by the record. See Findings of Fact &
Conclusions of Law, 7/7/22; see also Addendum, 1/5/23. We note further that Reading Blue
Mountain and Northern Railroad Company (Requester) has submitted prior, similar requests that
resulted in several appeals to the OOR and the trial court. See, e.g., Reading Blue Mountain
Northern Railroad v. Luzerne County Redevelopment Authority and Luzerne and Susquehanna
Railway Co., OOR Dkt. AP 2020-0039. The resolution of these prior requests does not impact our
current analysis. Additionally, we have limited our description of the factual and procedural
background of this case to focus on the issues preserved for our review.
         3
           The Authority is an independent governmental agency created pursuant to the Urban
Redevelopment Law, Act of May 24, 1945, P.L. 991, as amended, 35 P.S. §§ 1701-1719.2. Its
mission is “to work with Luzerne County and its municipalities to assist in improving the quality
of life and property for residents through eminent domain, the administration of grant programs,
tax abatement programs, delinquent tax buyback programs, and the acquisition of the short line
railroad that serves Luzerne County, and a portion of Lackawanna County.” See Luzerne County
Redevelopment Authority Official Website, https://www.luzernecountyredevelopment.org/ (last
visited Mar. 28, 2024).
         4
           LCRC is a Pennsylvania nonprofit corporation whose function is to “preserve rail service
in and around Luzerne County,” largely on rail lines that had been formerly operated by a defunct
company. See Pet. for Rev., 10/19/20, at Ex. 2.
         5
           Items 7 and 8 of the request sought, specifically: “[a]ny and all operating agreements by
and between [the Authority], [LCRC], and the company, entity, and/or individual that currently
operates its rail lines,” and “[a]ny and all operating agreements by and between [the Authority],
the LCRC, and the company, entity, and/or individual that has operated its rail lines from January
1, 1994 to the present.” See Findings of Fact & Conclusions of Law, 7/7/22. In addition to these
items, Requester also sought minutes of the Authority related to RTKL requests and the operating
agreements, records related to the Authority’s OOR appeals officer, communications between the
Authority and LCRC, and by-laws of the Authority and LCRC. See Findings of Fact &

                                                   2
agreements on the basis that they contained confidential proprietary information
exempt from public access.6
               In August 2020, Requester appealed to the OOR. While this matter was
pending, Appellant was granted leave to participate.                  Appellant submitted an
affidavit from its president, Steven May, who attested that the requested operating
agreements were private contracts between Appellant and LCRC that contained
confidential proprietary information. See Pet. for Rev., 10/29/20, at Ex. 3. In
response, Requester argued that the operating agreements were financial records of
the Authority and, thus, not subject to the exemption. The OOR granted the appeal
and ordered the Authority to produce the documents. See Final Determination,
9/18/20, at 7-8.
               Appellant petitioned the trial court for review, contending that the
requested documents were not records of the Authority and were also exempt from
public disclosure as confidential and proprietary information under Section

Conclusions of Law, 7/7/22, at 1-7. The Authority provided most of this requested information,
which is not relevant to this appeal.
        6
          See Section 708(b)(11) of the RTKL, 65 P.S. § 67.708(b)(11). This exception exempts a
record that “constitutes or reveals a trade secret or confidential proprietary information” from
public access. See id. Confidential, proprietary information is defined as: “[c]ommercial or
financial information received by an agency: (1) which is privileged or confidential; and (2) the
disclosure of which would cause substantial harm to the competitive position of the person that
submitted the information.” See Section 102 of the RTKL, 65 P.S. § 67.102. Courts consider the
“efforts the parties undertook to maintain its secrecy.” Pa. Pub. Util. Comm’n v. Friedman, 293
A.3d 803, 825 (Pa. Cmwlth. 2023) (cleaned up). Additionally, the entity seeking to prevent
disclosure must show “substantial harm” to its competitive position by establishing “(1) actual
competition in the relevant market; and[ ] (2) a likelihood of substantial competitive injury” based
on the release of the information. Dep’t of Corr. v. Maulsby, 121 A.3d 585, 590 (Pa. Cmwlth.
2015).

                                                 3
708(b)(11) of the RTKL.7 During the pendency of the petition, the trial court did
not hold an evidentiary hearing or view the operating agreements.
               On July 7, 2022, the trial court reversed in part and affirmed in part
OOR’s decision and made a number of additional findings. See Order, 7/7/22, at 1-
2. The trial court affirmed the OOR’s finding that Appellant had not proven the
records were confidential proprietary information, rejected OOR’s finding that
Appellant was collaterally estopped from introducing May’s affidavit, and found
that the requested documents were financial records of the Authority which were not
exempt from disclosure under the RTKL.8, 9 See id. at 2.
               Accordingly, the trial court ordered the Authority to provide Requester
with the records within 30 days of the date of the order with appropriate redactions.
See id. Appellant timely appealed to this Court.
                                          II. ISSUES
               On appeal, Appellant asserts that the trial court erred by determining
that railroad operating agreements between two private entities are financial records
of a government agency that is not a party to such agreements, does not possess such
agreements, and does not operate the freight railroad subject to such agreements.
See Appellant’s Br. at 4. Additionally, Appellant contends that the trial court erred

       7
          Appellant’s petition for review further explained that the documents at issue were not
records of the Authority but were rather “a private agreement between two private parties.” See
Pet. for Rev., 10/19/20, at 5.
        8
          The trial court also affirmed OOR’s finding that the request was not duplicative and
burdensome. See Order, 7/7/22, at 1-2. This finding is not at issue in the current appeal.
        9
          The trial court reversed the decision regarding collateral estoppel because the prior
decision had been made on procedural, not substantive, grounds, and which did not result in a final
judgment on the merits. See Findings of Fact & Conclusions of Law, 7/7/22, at 16-17.

                                                4
by determining that the operating agreements were not exempt from public
disclosure because they were confidential proprietary information. See id.10
                                     III. DISCUSSION11
                                     A. RTKL Generally
               Under the RTKL, information is only subject to disclosure if it is a
“public record.” Section 301(a) of the RTKL, 65 P.S. § 67.301(a). Pursuant to
Section 305, however, records in the possession of a local agency shall be presumed
public unless (1) exempt from disclosure under Section 708 of the RTKL; (2)
protected by a privilege; or (3) exempt under any other federal or state law or
regulation or judicial order. See Sections 305 and 708 of the RTKL, 65 P.S. §§
67.305, 67.708; see also Allegheny Cnty. Dep’t of Admin. Servs. v. A Second Chance,
Inc., 13 A.3d 1025, 1035 (Pa. Cmwlth. 2011).
               The RTKL defines “records” as “[i]nformation, regardless of physical
form or characteristics, that documents a transaction or activity of an agency” and
that is “created, received, or retained pursuant to law” or in connection with a
“transaction, business or activity” of that agency. Section 102 of the RTKL, 65 P.S.

       10
            Rule 2119(a) provides that an “argument shall be divided into as many parts as there are
questions to be argued; and shall have at the head of each part—in distinctive type or in type
distinctively displayed—the particular point treated therein, followed by such discussion and
citation of authorities as are deemed pertinent.” Pa.R.A.P. 2119(a). “The purpose of this rule is
to facilitate the reader’s comprehension of the arguments being made.” Robinson v. Schellenberg,
729 A.2d 122, 124 (Pa. Cmwlth. 1999). It is not this Court’s function to develop a party’s
arguments, and a party’s failure to adhere to Rule 2119 and properly develop an argument may
result in waiver. C.M. v. Pa. State Police, 269 A.3d 1280, 1285 (Pa. Cmwlth. 2022); City of Phila.
v. Workers’ Comp. Appeal Bd. (Calderazzo), 968 A.2d 841, 846 n.4 (Pa. Cmwlth. 2009). Here,
despite raising two issues in its statement of questions, Appellant’s brief has multiple subheadings
which do not accurately reflect the arguments, or the order of said arguments, raised therein.
         11
            “When reviewing an order of the trial court regarding the RTKL, we must determine
whether the findings of fact are supported by [substantial] evidence or whether the trial court
committed an error of law or an abuse of discretion in reaching its decision.” City of Harrisburg
v. Prince, 288 A.3d 559, 567 n.7 (Pa. Cmwlth. 2023) (cleaned up).

                                                 5
§ 67.102. The RTKL defines financial records specifically as “[a]ny account,
voucher or contract” dealing with “the receipt or disbursement of funds by an
agency” or “an agency’s acquisition, use or disposal of services, supplies, materials,
equipment or property.” See id. A financial record can also be the “salary or other
payments or expenses paid to any officer or employee of an agency” or “a financial
audit report.” See id. Certain types or categories of records are exempt from
disclosure, but financial records are not among them. See Section 708(b)-(c), 65
P.S. § 67.708(b)-(c).
             The agency receiving a RTKL request bears the burden of proving that
the record is exempt from disclosure by a preponderance of the evidence. Section
708(a)(1) of the RTKL, 65 P.S. § 67.708(a)(1). A preponderance of the evidence is
such evidence as would lead a factfinder to find that the existence of a contested fact
is more probable than the nonexistence of the contested fact. Off. of the Dist. Att’y
of Phila. v. Bagwell, 155 A.3d 1119, 1130 (Pa. Cmwlth. 2017). If an agency does
not have the records in its possession, it may deny the request and offer proof that
the record does not exist. Smith Butz, LLC v. Pa. Dep’t of Env’t Prot., 142 A.3d
941, 945 (Pa. Cmwlth. 2016).
             In appeals involving a local agency, Section 1101(b)(1) of the RTKL
charges an OOR appeals officer with the obligation of determining, in the first
instance, whether an agency has met its burden of proof. 65 P.S. § 67.1101(b)(1)
(“[T]he appeals officer shall make a final determination.”). “Testimonial affidavits
found to be relevant and credible may provide sufficient evidence in support of a
claimed exemption.” McGowan v. Pa. Dep’t of Env’t Prot., 103 A.3d 374, 381 (Pa.
Cmwlth. 2014); see also Hodges v. Pa. Dep’t of Health, 29 A.3d 1190 (Pa. Cmwlth.

                                          6
2011). However, conclusory affidavits are not sufficient to justify an exemption.
Off. of Governor v. Scolforo, 65 A.3d 1095, 1104 (Pa. Cmwlth. 2013).
               In appeals from the determination of the OOR appeals officer, the
requester or local agency may petition for review in the court of common pleas in
which the agency is located. See Section 1302(a) of the RTKL, 65 P.S. § 67.1302(a).
In such matters, the trial court is “the ultimate finder of fact able to conduct full de
novo review of appeals from decisions made by RTKL appeals officers.” Bowling
v. Off. of Open Recs., 75 A.3d 453, 474 (Pa. 2013).
                                     B. Financial Records
                                 1. The parties’ arguments
               Appellant contends that the operating agreements are not financial
records of the Authority. See Appellant’s Br. at 14. In support of this contention,
Appellant asserts that there was no evidence that the Authority possessed, received,
obtained, controlled, reviewed, or approved the operating agreements, or that the
Authority had oversight over the operation of the freight railroad.12 See id. at 20.
According to Appellant, the trial court erred by failing to conduct an in camera
review of the requested operating agreements. See id. at 30-31.
               In response, Requester contends that the trial court’s broad
interpretation of financial records is appropriate and includes records bearing a

       12
           Appellant raises additional arguments related to Section 506(d)(1), 65 P.S. §
67.506(d)(1), and contends that the records are not accessible because they are “downstream”
contracts. See Appellant’s Br. at 29. The term “downstream” contracts, as used in the instant
matter and in Dental Benefit Providers, Inc. v. Eiseman, 124 A.3d 1214 (Pa. 2015), references
contracts concerning an entity that does not contract directly with a government agency, but, rather,
contracts with an entity that does contract with a government agency. See, e.g., Eiseman, 124 A.3d
at 1223 (referencing “third-party records downstream from actual Commonwealth agency
contracts”). Based on our disposition of the instant appeal, an in-depth discussion of these
arguments is unnecessary at this time.

                                                 7
sufficiently close relationship to “fiscally related”13 categories. See id. at 5-6 (citing
City of Harrisburg v. Prince, 219 A.3d 602, 612 (Pa. 2019)). Thus, according to
Requester, because the operating agreements are contracts related to the use of
property owned by the Authority, the agreements are appropriately considered
financial records under the RTKL. See id. at 6-7. Requester contends that in camera
review was unnecessary, and that Appellant had ample time to request an in camera
review but did not. See id. at 43-45.
                                         2. Analysis
              As noted, supra, a record is information, regardless of physical form or
characteristic, documenting a transaction or activity of an agency that is created,
received, or retained pursuant to a transaction, business, or activity of that agency.
Section 102 of the RTKL, 65 P.S. § 67.102. A financial record is a contract dealing
with the use of an agency’s property. See id. A public record is a record, including
a financial record, that is not exempt under Section 708, is not exempt from
disclosure under any other Federal or State law, regulation, or judicial order, and is
not protected by a privilege. See id.
              Further, a record in the possession, custody, or control of a local agency
shall be presumed to be a public record unless it is privileged or statutorily exempt.
See 65 P.S. § 67.305. However, it is well settled that “agencies are not permitted to
waive a third party’s interest in protecting” certain records, and a third party may
submit evidence “to show an interest in shielding certain information from

       13
          Prince noted that financial records could encompass “not merely accounts, vouchers and
contracts but also records bearing a sufficiently close connection to such ‘fiscally related’
categories, so long as they also ‘deal with the receipt or disbursement of funds by an agency.’”
Prince, 219 A.3d at 612 (citing LaValle v. Off. of Gen. Counsel, 769 A.2d 449, 456 (Pa. 2001)).

                                               8
disclosure.” See Pa. Dep’t of Educ. v. Bagwell, 131 A.3d 638, 650 (Pa. Cmwlth.
2015).
             Financial records are not exempt from disclosure under the RTKL. See
Sections 708(b)-(c), 65 P.S. § 67.708(b)-(c). The meaning of financial records “is a
broad one” and includes not only accounts, vouchers, and contracts, but also records
“bearing a sufficiently close connection to such ‘fiscally related’ categories” as long
as the records also “deal with the receipt or disbursement of funds by an agency.”
See Prince, 219 A.3d at 612. Financial records may also deal with the use of
property. See Section 102 of the RTKL, 65 P.S. § 67.102.
             In Prince, the Pennsylvania Supreme Court considered whether a
spreadsheet created by the City of Harrisburg “to show the receipt of funds from
donors . . . to the Protect Harrisburg Legal Defense Fund” constituted a financial
record under the RTKL. Prince, 219 A.3d at 604. The Court noted that courts
should broadly construe the “account, voucher or contract” category to effectuate
expanded access to information about the activities of government. See id. at 615.
The Court concluded that, pursuant to precedent, the term had multiple acceptable
definitions and that to satisfy the statutory definition of a financial record, the
spreadsheet at issue “need only bear a close connection to an account.” See id. at
615-16. The Court determined that the spreadsheet was an account. See id. In so
doing, the Court noted that the spreadsheet reflected a list of monetary donations and
contained an enumeration of check amounts received by the City for a fund which
was described as a “subaccount/line item.” See id. at 616. Therefore, the Court
examined the contents of the spreadsheet and made a fact-specific finding that it was
an account. See id.

                                          9
              Instantly, we may infer that the trial court made a finding that the
operating agreements are records. See, e.g., See Findings of Fact & Conclusions of
Law, 7/7/22, at 19-24. The trial court found that the Authority, an independent
governmental agency subject to the RTKL, retains ownership of land, including the
rail lines and railroad rights of way. See id. at 19. Further, while the court
recognized that the Authority was not a party to the requested operating agreements,
the court also found that the land subject to the operating agreements is owned by
the Authority.14 See id. Accordingly, the operating agreements were contracts that
related to the Authority’s use of its land. See id. Therefore, per the RTKL definition
of financial records, the trial court concluded that the operating agreements were
subject to disclosure. See id. at 22-23, 28. Further, the trial court observed that the
Authority had never denied having possession of those records, and accordingly,
they were presumed public. See Addendum, 1/5/23, at 3.
              There are several issues with the trial court’s findings. First, the trial
court found that the Authority was not a party to the agreements, and that the
agreements were between Appellant and LCRC. However, the initial request was
for operating agreements between the Authority, the LCRC, and Appellant. The
request, with a conjunctive “and,” was for an agreement between three parties.
Nevertheless, the trial court made a finding that the Authority was not a party to the
agreements. Arguably, operating agreements between the LCRC and Appellant are
not responsive to the original request.
              Regardless, we cannot discern whether or not the operating agreements
were financial records of the Authority or between whom the operating agreements
were made, because they are not contained within the original record sent by OOR

       14
         The Authority had assigned LCRC the right to use the railroad lines but did not transfer
ownership of either the land or the railroad lines. See id.

                                               10
to the trial court, nor are they provided in the original record of the trial court itself.
It is unclear between whom the operating agreements were signed, whether they
were responsive to the request, or the exact nature of said agreements. There is no
indication, either, that the trial court reviewed the operating agreements prior to
issuing its ruling. Indeed, the trial court did not hold, nor did Appellant request, in
camera review: the trial court, in a telephone hearing, noted that if no one filed a
brief requesting an evidentiary hearing, it did not know whether such a hearing was
absolutely necessary.15 See Notes of Testimony, 11/18/21, at 18.
               While the trial court is correct that the statutory definition of a financial
record includes contracts concerning an agency’s use of its land, it is unclear from
the pleadings whether the operating agreements constitute such contracts. As in
Prince, a reviewing court must be able to determine whether the contents of the
requested record bear “a sufficiently close connection” to a fiscally related category.
See Prince, 219 A.3d at 612. Where the trial court has not reviewed the operating
agreements, it cannot do so. Further, this Court cannot review the operating
agreements, as they are not contained in the original record. Accordingly, we cannot
conclude that the trial court’s findings were supported by substantial evidence of
record. See Prince, 288 A.3d at 567 n.7.
                                    IV. CONCLUSION
               For the foregoing reasons, we vacate the trial court’s order and remand
to the trial court to hold an evidentiary hearing or conduct an in camera review of
the operating agreements. The trial court shall then issue additional findings and

       15
          The factfinder may conduct an in camera review as a “valuable tool to discern the
propriety of a claimed exemption to disclosure,” “if beneficial.” McKelvey v. Pa. Dep’t of Health,
255 A.3d 385, 412-13 (Pa. 2021).

                                               11
conclusions relevant to whether the operating agreements are responsive to the
request and constitute financial records of the Authority.

                                          LORI A. DUMAS, Judge

                                         12
         IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Luzerne and Susquehanna Railway       :
Company                               :
                                      :
            v.                        :   No. 833 C.D. 2022
                                      :
Luzerne County Redevelopment          :
Authority, Reading Blue Mountain      :
and Northern Railroad Company         :
                                      :
Appeal of: R. J. Corman Railroad      :
Company/Luzerne and Susquehanna       :
Line, LLC, the successor of the       :
Petitioner, Luzerne and Susquehanna   :
Railway Company                       :

                                   ORDER

      AND NOW, this 1st day of April, 2024, the order of the Court of Common
Pleas of Luzerne County, dated July 7, 2022, is VACATED. This matter is
REMANDED for further proceedings consistent with this memorandum opinion.
      Jurisdiction relinquished.

                                      LORI A. DUMAS, Judge