FOI Advisory Council Opinion AO-07-19
AO-07-19
August 15, 2019
Michael W.S. Lockaby
Guynn, Waddell, Carroll & Lockaby, P.C.
Salem, VA 24153
The staff of the Freedom of Information Advisory Council is authorized to issue advisory opinions. The ensuing staff advisory opinion is based solely upon the information presented in your letter dated June 11, 2019.
Dear Mr. Lockaby:
You asked for an advisory opinion related to the interpretation of the recently enacted subdivision 32 of § 2.2-3705.6.
Factual Background
The provision of law at issue relates specifically to the Virginia Telecommunications Initiative (VATI) which is administered by the Virginia Department of Housing and Community Development (DHCD). You note in your letter that “VATI is a program through which DHCD makes grants to local governments, which then are required under the terms of the grant to partner with private internet firms to provide internet in unserved areas of the Commonwealth.” You also outlined the different stages of the VATI program:
First, the locality and its private partner must submit a grant proposal to DHCD, including substantial documentation and design information, showing the unserved areas that the infrastructure would serve and both (1) the technology and infrastructure to be used including data showing capability and financial feasibility, and (2) background information showing that the area to be served is, in fact, currently unserved. Second, these applications are posted to DHCD's website, and other providers who believe they currently are serving the area may submit challenges, in which they must demonstrate that they are serving the areas. Third, DHCD makes its grant—and both the locality and DHCD keep significant amounts of information and do regular audits to ensure compliance with the provisions of the grant.
As you stated in your letter, there were problems concerning the confidentiality of information that was submitted in VATI applications, which led to the introduction of Senate Bill 1492 by Senator A. Benton Chafin in the 2019 Session. This bill passed and was enacted by the Governor as Chapter 629 of the 2019 Acts of Assembly, adding subdivision 32 of § 2.2-3705.6 in the Freedom of Information Act.
Applicable Law and Analysis
The policy of FOIA expressed in subsection B of § 2.2-3700 is to ensure "the people of the Commonwealth ready access to public records in the custody of a public body or its officers and employees. . . ." The policy continues to state that "[u]nless a public body or its officers or employees specifically elect to exercise an exemption provided by this chapter or any other statute . . . all public records shall be available for inspection and copying upon request." The policy further directs that FOIA "shall be liberally construed to promote an increased awareness by all persons of governmental activities and afford every opportunity to citizens to witness the operations of government," and that “any exemption from public access to records . . . shall be narrowly construed and no record shall be withheld . . . unless specifically made exempt pursuant to this chapter or other specific provision of law.”
The provision of law at issue here is subdivision 32 of § 2.2-3705.6, which exempts certain information from mandatory disclosure under FOIA at the discretion of the public body, except where such disclosure is prohibited by law. The subdivision states:
Information related to a grant application, or accompanying a grant application, submitted to the Department of Housing and Community Development that would (i) reveal (a) trade secrets, (b) financial information of a grant applicant that is not a public body, including balance sheets and financial statements, that are not generally available to the public through regulatory disclosure or otherwise, or (c) research-related information produced or collected by the applicant in the conduct of or as a result of study or research on medical, rehabilitative, scientific, technical, technological, or scholarly issues, when such information has not been publicly released, published, copyrighted, or patented, and (ii) be harmful to the competitive position of the applicant. The exclusion provided by this subdivision shall only apply to grants administered by the Department, the Director of the Department, or pursuant to § 36-139, Article 26 (§ 2.2-2484 et seq.) of Chapter 24, or the Virginia Telecommunication Initiative as authorized by the appropriations act.
In order for the information submitted by the applicant and specified in this subdivision to be excluded from the provisions of this chapter, the applicant shall make a written request to the Department:
a. Invoking such exclusion upon submission of the data or other materials for which protection from disclosure is sought;
b. Identifying with specificity the data, information, or other materials for which protection is sought; and
c. Stating the reasons why protection is necessary.
The Department shall determine whether the requested exclusion from disclosure is necessary to protect the trade secrets or confidential proprietary information of the applicant. The Department shall make a written determination of the nature and scope of the protection to be afforded by it under this subdivision.
In your letter, you have asked four principal questions in regards to this provision of law, which we will outline and discuss individually.
Question 1: Under § 2.2-3705.6 (32), is information submitted with a VATI application exempt from disclosure if all criteria are met and the applicant invokes the exemption?
First, you ask if information submitted with a VATI application would be exempt from disclosure under FOIA if the applicant invokes the exemption and meets each of the criteria listed in subdivision 32. As written, subdivision 32 of § 2.2-3705.6 applies to “[i]nformation related to a grant application, or accompanying a grant application” that is submitted to the Department as part of the VATI program. In regards to the interpretation of statutes, the Court in Virginia has stated that one is "bound by the plain meaning of that language and must give effect to the legislature's intention as expressed by the language used unless a literal interpretation of the language would result in a manifest absurdity."1 Looking at the plain meaning of the statute, it is clear that the legislature intended the statute to apply to any information related to, accompanying, or appended to a VATI grant application. So long as all other criteria are met, any information submitted with a VATI application is exempt from disclosure under FOIA, so long as the applicant properly invokes the exemption.
Question 2: Are challenges to VATI applications exempt from disclosure under § 2.2-3705.6 (32)?
Secondly, you have asked if challenges to VATI applications are also exempt from disclosure under FOIA. We conclude that they are not. Returning to the plain meaning of the statute, the language is clear that the exemption applies to trade secrets, financial information, and research-related information supplied to the Department as part of the VATI program, if such disclosure is “harmful to the competitive position of the applicant” (emphasis added). As stated in your letter, other providers may submit a challenge to a VATI application if they believe they currently serve an area that is represented in an application. You also noted that some of your clients submitted FOIA requests to the Department asking for the full text of the challenges, but were told that the Department “[did] not consider [their] request a Freedom of Information Act (FOIA) request.” The Department then only provided a “very small amount of heavily redacted information.” There is no mention of challenges in the statute, and a challenge to an application is submitted by an entity other than the applicant. A challenge to a VATI application, by its very nature, cannot contain proprietary information that is harmful to the competitive position of the applicant, because it contains the information of the challenger, instead of the applicant. Although it can be argued that a challenge contains information related to an application, the statute makes it clear that in order for proprietary information or trade secrets to be protected under this exemption, such information must have been submitted by the applicant and the exemption must be invoked by the applicant itself. Thus, information contained in a challenge to a VATI application is not exempt from disclosure under this exemption.
Question 3: Is information submitted as part of DHCD’s auditing and verification process exempt from disclosure under § 2.2-3705.6 (32)?
You stated in your letter that, as part of the process, after the Department awards a grant to an applicant, “both the locality and [the Department] keep significant amounts of information and do regular audits to ensure compliance with the provisions of the grant.” As we have determined above, the plain meaning of the statute dictates that the exemption applies to information submitted as part of an application or related to an application. Based on your explanation of the VATI program process, the auditing and verification process happens after an applicant is awarded a grant. Any information submitted to the Department after a grant has been awarded is, by its very nature, not information related to an application; therefore, such information would not be exempt from disclosure under the statute.
Question 4: Are there other provisions under FOIA that apply to information shared between public and private partners?
Lastly, you have asked whether there are other provisions under FOIA that would exempt information shared between public and private partners from disclosure. As you noted, this would depend largely on the specific facts of a situation and context; however, under § 2.2-3705.6 there are other provisions that would allow for the protection of proprietary information and trade secrets shared between public and private partners.
Subdivision 3 excludes from mandatory disclosure:
Proprietary information, voluntarily provided by private business pursuant to a promise of confidentiality from a public body, used by the public body for business, trade, and tourism development or retention; and memoranda, working papers, or other information related to businesses that are considering locating or expanding in Virginia, prepared by a public body, where competition or bargaining is involved and where disclosure of such information would adversely affect the financial interest of the public body.
Therefore, depending on the specific facts and context of a given situation, proprietary information provided by a private partner to a public partner pursuant to a promise of confidentiality may be protected from mandatory disclosure under FOIA.
In addition, subdivision 19 excludes from mandatory disclosure:
[c]onfidential proprietary information and trade secrets developed by or for a local authority created in accordance with the Virginia Wireless Service Authorities Act (§ 15.2-5431.1 et seq.) to provide qualifying communications services as authorized by Article 5.1 (§ 56-484.7:1 et seq.) of Chapter 15 of Title 56, where disclosure of such information would be harmful to the competitive position of the authority, except that information required to be maintained in accordance with § 15.2-2160 shall be released.
If a private partner shares proprietary information or trade secrets with a wireless service authority created in accordance with the Virginia Wireless Service Authorities Act, that information may also be protected from mandatory disclosure under FOIA, but once again, context is key.2
While these two exemptions appear to be the most likely to apply in the context of telecommunication services, other exemptions might apply depending on the specific facts of a given situation.
Thank you for contacting this office. We hope that we have been of assistance.
Sincerely,
Ashley Binns
Staff Attorney
Alan Gernhardt
Executive Director
1Bates v. Commonwealth, 752 S.E.2d 746 (2014) (citations and alteration omitted).
2Please keep in mind that § 2.2-3705.6 protects certain proprietary information and trade secrets from mandatory disclosure, but allows a public body the discretion to release such information if they so choose, unless such disclosure is prohibited by law. This section does not prohibit a public body from disclosing information related to proprietary records or trade secrets.
