Court Opinion

ID: 9785227
Source: CourtListenerOpinion
Date Created: 2023-08-30 21:11:08.626281+00
Date Added: 2024-06-11T07:36:12.568762
License: Public Domain

Smith, J.
(concurring). The majority concludes that Regulation 90 reports are available to the public only if the Freedom of Information Law (FOIL) makes them so. It also concludes that the insurers have failed to show that the reports are exempt from FOIL.
I disagree with both conclusions. I think that Regulation 90, by its own force, makes the reports “public record.” But if I were to consider the FOIL issue, I would find that the insurers had made an ample showing that disclosure of the records “would cause substantial injury to [their] competitive position” within the meaning of Public Officers Law § 87 (2) (d). Ironically, I end up agreeing with the majority’s result—but only because the majority’s two errors, as they affect this case, cancel each other out.
I
Regulation 90 requires insurers to submit certain reports and says: “every such report shall be public record” (11 NYCRR *52218.7 [d]). The majority holds that this means only that the records are public unless a FOIL exemption applies. If that is all it means, the authors of the regulation were wasting their time writing the words, because all records of state agencies are public unless a FOIL exemption applies. But “public record” and “subject to FOIL” do not mean the same thing.
A public record, in ordinary speech, refers to a record that any member of the public can look at and copy. Deeds on file at the county clerk’s office are public records; so are the pleadings filed in most litigations. A clerk who is the custodian of public records will show them to anyone who walks into his or her office—or, if the office is technologically advanced, the documents may be available online to anyone with a computer. This is very different from documents subject to FOIL—as to which members of the public may only submit a FOIL request, which will be dealt with, often in cumbersome and time-consuming fashion, by the official assigned by the agency to deal with such things.
The majority cites Matter of Xerox Corp. v Town of Webster (65 NY2d 131 [1985]) and Matter of New York Tel. Co. v Public Serv. Commn. (56 NY2d 213 [1982]) for the proposition that “public records” and “subject to FOIL” have the same meaning. That is not what these cases hold. Xerox interpreted General Municipal Law § 51, a statute enacted before FOIL, which declared a broad category of documents to be “public records.” We held that, since the Legislature was “presumably aware of General Municipal Law § 51 at the time it enacted FOIL,” the later statute “must be read as having engrafted . . . certain limitations” on the earlier one (65 NY2d at 132). New York Tel. Co. involved a statute saying that all proceedings, documents and records of the Public Service Commission “shall be public records” (Public Service Law § 16 [1]). We held that, while the proceedings of the Commission are generally public, the statute does not prohibit the Commission from making exceptions for evidence “which falls within the category of trade secrets”— just as a court, whose proceedings are generally public, might put some sensitive information under seal (56 NY2d at 219). New York Tel. Co. says nothing about FOIL.
Xerox and New York Tel. Co. stand for the proposition that, where a broad category of material is declared to be “public record,” exceptions may be made, based on FOIL exemptions or simply on public policy. That proposition has no relevance to this case, for Regulation 90 establishes as “public record” not a *53broad category to which the insurers ask for an exception but the precise documents that they want to keep confidential for six years: reports showing insurers’ agents, brokers, policies and applications broken down by zip code. The insurers are seeking not an exception to the “public record” requirement but the virtual nullification of it.
I would hold that reports under Regulation 90 are public, as the regulation says they are, and would not reach any question under FOIL.
II
If I did reach the FOIL issue, however, I would hold that the documents in issue here are exempt from disclosure under Public Officers Law § 87 (2) (d), because they “are submitted to an agency by a commercial enterprise . . . and ... if disclosed would cause substantial injury to the competitive position of the subject enterprise.”
The insurers’ submissions make a specific and persuasive showing of competitive injury. The affidavit of Eric Webster, an official of intervenor State Farm Mutual Automobile Insurance Company, explains in detail how a State Farm competitor could gain an advantage from State Farm’s Regulation 90 reports. Such a competitor, Webster says, would compare and merge its zip code data with State Farm’s, would use that data to estimate its and State Farm’s market share in each zip code, would determine from that which areas to target, would do a targeted marketing campaign, and would use the results to create a statistical model to guide future marketing. Webster adds that Regulation 90 reports would help competitors assess the weaknesses and strengths of particular State Farm agents’ performance, using techniques that Webster describes at length. He also explains how, by tracking changes disclosed by the reports in “risk placement” between State Farm and an affiliated company, a competitor could detect a new State Farm marketing strategy, for example “a shift toward[ ] youthful, higher risk customers in specific zip codes.” Affidavits submitted by officials of the other insurer intervenors also contain explanations of the harm they will suffer.
The insurers’ factual submissions total 19 pages. The majority brushes them aside in three sentences. It says their showing “is theoretical at best” (majority op at 51), but that is true only in the sense that any attempt to predict the consequences of disclosure must be theoretical. The statute requires such a pre*54diction. The exemption created by section 87 (2) (d) is available only on a showing that the information “if disclosed would cause substantial injury.”
The majority mentions only one of the insurers’ points, which it chooses to call their “key argument” (majority op at 51). The majority then responds with the unsupported assertion that “it has not been shown that zip code data, without more, would necessarily put the insurer at a competitive disadvantage” (id.). But that is exactly what the insurers have shown, in extensive detail—and even without that showing, it would be self-evident that a business can get a substantial advantage from information about its competitor’s success or lack of it in particular locations.
I have little doubt that insurers will suffer some significant competitive injury from the public disclosure of Regulation 90 reports. I would order those reports disclosed anyway, because I read the regulation as a policy determination by the Insurance Department, acting under the authority given it by the anti-redlining statute (Insurance Law § 3429), that the reasons for making this information public outweigh the insurers’ legitimate reasons for keeping it confidential. But the majority’s attempt to pretend that no policy choice need be made, because no competitive injury has been shown, simply ignores the record.
Chief Judge Kaye and Judges Ciparick, Graffeo, Read and Jones concur with Judge Pigott; Judge Smith concurs in result in a separate opinion.
Order reversed, etc.