December Newsletter

Data Used By Outside Governmental Agency Not Subject To Sunshine Law Request 

ITSA is a public governmental agency created pursuant to a St. Louis City Ordinance “responsible for the planning, development, coordination and implementation of timely, reliable, cost-effective municipal technology and information services for use by City government and City employees, citizens and businesses.”  ITSA supplies technological support services for assorted databases, including payroll information, owned by its government clients, including the Collector of Revenue for the City and the Circuit Attorney of the City of St. Louis (Relators), as well as the City of St. Louis, (City) and other public agencies.

Relators pay an annual fee to the City of St. Louis in exchange for ITSA’s processing of a variety of their electronic data, including payroll.  The payroll data provided to ITSA generally includes name, social security number, address, rate of pay, and hours worked.  ITSA enters the data into its program, launches its program to process the data, and then delivers the results back to the Comptroller.  The Comptroller provides the data to the individual city agencies, who check the results for accuracy, make any corrections, and gives the data back to the Comptroller who sends it to ITSA, which generates a file of the processed data that is submitted to the City’s Treasurer who electronically transmits the payroll funds to the bank to cause the city agencies’ employees to be paid.

The St. Louis Post Dispatch (Newspaper) submitted a Sunshine Law request to the office of the Comptroller for the City of St. Louis (the Comptroller), asking for the 2009 and 2010 payroll records of all employees paid through the Comptroller’s payroll system (payroll records).  The Comptroller told Newspaper that it had received approval of the City Counselor to fulfill Newspaper’s request and was working with ITSA who advised Newspaper that it had all of the requested payroll records in its possession but some city agencies wanted the Newspaper to secure consent of agencies in releasing their respective employees’ records via their custodians of records.  ITSA agreed to release payroll records for 22 city agencies but did not release payroll records for 10 city agencies, which including Relators.

Newspaper next made a “final” Sunshine Law request to ITSA for all city agencies’ public employees’ payroll records.  ITSA than notified Newspaper and all city agencies that it intended to produce all payroll records it possessed unless legal action was taken to stop it.  Relators filed a Petition in Mandamus in the Circuit Court of the City of St. Louis seeking a preliminary and permanent writ of mandamus to prohibit ITSA from producing payroll records relating to their respective employees.  The circuit court issued a Preliminary Order in Mandamus and ITSA provided the payroll records for all city agencies other than Relators to Newspaper.  Newspaper intervened in the mandamus action and filed an Answer and Suggestions in Opposition to the Petition in Mandamus, which ITSA moved to quash.  ITSA also filed a Declaratory Judgment counterclaim against Relators and cross-claim against Newspaper raising two issues: (1) whether ITSA must provide, upon Newspaper’s request, payroll data of employees of public agencies other than itself which it has in its possession for data processing purposes; and (2) whether records reflecting accrued vacation pay, compensatory time and sick pay for public employees (accrued pay records) are public salary records subject to disclosure pursuant to the Sunshine Law.

The circuit court’s Order and Judgment held that (1) the payroll records of Realtor’s may only be obtained from ITSA through a request to realtor’s Custodian of Records, and (2) pay records for accrued sick time, vacation time and compensatory time are not open records, which decision was appealed to the Eastern District.

The Eastern District reasons that Section 610.023 provides that a public agency’s custodian of records is responsible for the care and keeping of that agency’s records and that  “Each public governmental body is to appoint a custodian who is to be responsible for the maintenance of that body’s records.”  The request for access to the records of a specific public agency, such as the Collector or the Circuit Attorney, shall be acted upon only when the request is received by the custodian of records for that agency.  The intent of the General Assembly in enacting the statute is to make the custodian of records of an agency the gatekeeper of that agency’s records.  Therefore, ITSA is not required to produce the records of Relators and is prohibited from the dissemination of records of any agency other than those of ITSA itself.  The court distinguishes this case from other cases (which held that some records held by another governmental agency were covered by the Sunshine law) on the grounds that ITSA was engaged in data processing, which does not constitute “retention” or “legal control” of the records.

Newspaper also argued on appeal that the accrued pay records of public employees for accrued sick time, vacation time and compensatory time are open records subject to disclosure under the term “salary” and are not “individually identifiable personnel records” protected from disclosure by the Sunshine law. The Eastern District found that the records are open and subject to disclosure under the Sunshine Law if the accrued time is available to the employee in the form of a payment from state treasury funds or convertible into money coming from the “public coffers.”

The court reasons: “The public does not have a legitimate interest in knowing about leave time that is not convertible into money to be paid from the public coffers, whether it be because the leave time itself remains an option; the public agency does not have a policy or practice of reimbursing its employees for unused leave; or another reason that takes it outside the simple, straightforward guideline set forth above, and makes the information protected under Sections 610.021(13) and or (14).”  Furthermore, Section 610.024.1, provides that  “If a public record contains material which is not exempt from disclosure as well as material which is exempt from disclosure, the public governmental body shall separate the exempt and nonexempt material and make the nonexempt material available for examination and copying.”  Since the Newspaper did not make a request for separation of open and closed records further review to determine whether or not the records requested by the Newspaper are open or closed was not available.  State of Missouri, ex rel. Gregory v. Information Technology Services Agency of the City of St. Louis, (ED98789, 10/15/13)

Comment Howard: To me, this is a very troubling case based on the court’s statement that “data processing records” submitted by one governmental agency to another governmental agency for the purpose of processing are not “records” under the Sunshine law.  The definition of a record under 610.010 is “all records” including electronic records of the governmental body.  The statement in the decision that the Newspaper did not request separation of closed from open records is questionable, as we shall see in the next case since the burden of separating closed from open records falls on the governmental agency.  Seemingly this decision really rests on submitting the request to the custodian of the records and not a third party providing some sense of order to the process.

City Has Obligation To Separate Closed Records And Burden To Show Closed Records Are Exempt From The Sunshine Law. 

Laut and Soellner (Appellants) each had some form of a personal relationship with one or more employees of the City of Arnold’s Police Department.  They developed a good faith belief that one or more of these employees of the City had improperly accessed Appellants’ confidential records contained in an electronic law enforcement database called the Regional Justice Information System (REJIS).  In September of 2010, Laut made a complaint to the City regarding two City Police Department employees, dispatcher Darnell and Rodgers, and their access to REJIS.  The City’s Chief of Police subsequently ordered an Internal Affairs investigation for the purpose of determining the fitness of Darnell and Rodgers to perform their job duties.

Appellants’ counsel sent a letter under the Sunshine Law requesting the disclosure of records regarding the following: 1. Improper use of REJIS by Darnell or Rodgers, limited to improper use related to Appellants; 2. Communications of City employees with other law enforcement agencies regarding background checks of Appellants; 3. Reasons for employment termination of Darnell, specifically as it relates to Appellants, with any other reasons redacted; and 4. Reasons for employment disciplinary action of Rodgers, with any other reasons redacted.

The City responded by the letter, stating that the records requested by Appellants’ were exempt from disclosure under the personal exception in 610.021.3 and .13 of the Sunshine Law because it related to the firing or disciplining of employees and contained “personal information” and identifiable personnel information of an employee.  Appellants filed a petition in circuit court requesting that the trial court order the City to produce the requested records and find the City liable for civil penalties as well as costs and reasonable attorney’s fees under Section 610.100.6, because the City purposely violated the Sunshine Law.  Both parties moved for summary judgment.  The City did not provide the responsive documents to the trial court for in camera review.  The trial court denied Appellants’ motion and granted the City’s motion for summary judgment, finding that the information sought by Appellants was exempt from disclosure under 610.021.3 and 610.021.13, which judgment was appealed to the Eastern District.

With respect to the request for records pertaining to the reasons for employment termination of Darnell and disciplinary action against Rogers the court concludes that the request for records in paragraphs 3 and 4 above are clearly within the exception in 610.021.3 and .13 because the records pertain to personal information relating to the “performance or merit of individual employees.”

With respect to the request for records pertaining to the improper use of REJIS by Darnell or Rodgers or communications of city employees with other law enforcement agencies regarding background checks of Appellants the court concludes that such records could include information that is closed or open.  In determining how to respond to a request that could include open and closed records the court starts it analysis by noting that 610.021 is permissive. “Thus, the threshold question for determining whether a document may be exempt from disclosure is first, whether disclosure of that document is otherwise required by law.”

Under 610.024 the city upon receiving a request for a record is obligated to separate exempt from non-exempt information, and disclose the portions of the documents that are open to the public to the person making the request.  In situations where the city claims the records are exempt it can ask the trial court to make an in camera inspection to determine if the records are exempt.  Since the trial court did not make an in camera inspection of the records, based on the City’s exemption claim the case is remanded for further proceedings.  Laut v. City of Arnold(ED99424, 12/3/2013.)

 Comment Howard: This case seems to offers a sharp contrast to State of Missouri, ex rel. Gregory v. Information Technology Services Agency of the City of St. Louis, discussed above.  In the St. Louis case the court relies on a distinction that data processing records are not records covered by the Sunshine Law (Interesting!) and by requiring the person requesting the records (Newspaper) to submit the request directly to the city agency even though ITSA is a public governmental agency under the sunshine law.  In this case, the custodian is required to separate open and closed records.  The Arnold case provides a straightforward and useful analysis of how to handle a request for records that contain closed and open information.


A Law That Takes Away A Vested Right Is Retrospective And Is Prohibited.

Defendant was charged and convicted with possession of a firearm by a convicted felon.  The Circuit Court granted defendant’s motion to dismiss the charge based on claim that the retroactive application of an amended statute, which made it unlawful to possess a firearm following conviction for any felony violated the provisions in the Missouri Constitution that prohibits laws, that are “Retrospective.”  The statute in effect at the time of the earlier/prior conviction for possession of controlled substance only made it unlawful to possess a firearm if defendant had a prior conviction for a  “dangerous felony;” therefore, the trial court concluded that application of the new statute violated Missouri’s constitutional prohibition against retrospective laws by increasing the penalty. The State appealed to the Missouri Supreme Court.

The Missouri Supreme Court held that if a law is criminal in nature it is not retrospective based on an extensive historical analysis of the Missouri Constitution.  When Article 1, Section 13 of the Missouri Constitution was enacted in 1820 the prohibition against enacting “ex-post facto laws” prohibited criminal laws from being ex post facto and laws that were “retrospective in its operation;” therefore, by applying rules of statutory construction the prohibition against laws that were retrospective in nature had to mean something different than an ex post facto law otherwise it would have been redundant.  In this case the court concludes that the new law was criminal in nature.

The first step in the analysis is to determine if the law under consideration is criminal in nature.  In determining if the law is criminal the court should look to the text of the statute and its structure to determine legislative intent.  If the law is criminal in nature the analysis of the phrase “retrospective in nature” ends because the term ex post facto and retrospective as used in the Missouri Constitution are mutually exclusive.  The term “retrospective in their operation” as used in the Missouri Constitution is a term, which relates to civil rights and proceedings in civil causes.  A law shall not considered to be retrospective,  “unless they impair rights that are vested.”

Determining if a right is vested requires further examination.  For example, a law requiring the owner of a private dam to get a permit from the state is not retrospective because the law protects the public from the collapse of the dam much like the replacement of wooden fire escapes where the intent is to protect the public from an ongoing dangerous situation.  On the other hand, a law that completely eliminated a party’s defense to a cause could not be applied retrospectively.  A law that established a new cap on non-economic damages that was applied to a claim that accrued prior the passage of the law violated the constitutional provision with respect to retrospective laws. A city ordinance that imposed a new assessment for work previously performed by a city contractor violated the retrospective provision of the Missouri Constitution.  State v. Honeycutt, 2013 WL 6188568 (Mo.), (SC92229, 11/26/13)

Comment Howard: The import of this case to local government is very significant because determining if rights have been vested is part of our everyday practice.  Even though a law may appear to be retrospective in nature it may not violate the constitutional prohibition against retrospective laws unless the law impairs vested rights.  If you have a case with an allegation that the law is retrospective in nature this case is the definitive legal authority on the topic. Judges love history and the analysis in this case is great, filled with a long historical record going back to 1820 and beyond to the common-law.


Driver Charged With DWI May Withdraw Refusal To Take Blood Test. 

Rothwell whose driver’s license was revoked by the director of revenue filed an appeal in Circuit Court seeking to reinstate his driver’s license.  The trial court found that Rothwell was arrested for driving while intoxicated and while initially agreeing to submit to a breath sample for chemical testing, withdrew his consent resisting the effort of a nurse to take a blood sample.  Rothwell was then transported to St. Luke’s Hospital to obtain a blood sample where he voluntarily agreed to give a blood sample.

The trial court found that Rothwell, while initially refusing to submit to chemical testing of his breath and blood, acquiesced in the giving the blood sample at the hospital; therefor, Rothwell did not refuse to provide a sample of his blood for chemical testing and his drivers license was reinstated.  The State appealed to the Western District, which held that under section 577.041 a driver’s license cannot be administratively revoked if the driver voluntarily submits to chemical testing that yields a satisfactory measure of the driver’s blood alcohol content.  This construction of Section 577.041 is consistent with the statute’s purpose of encouraging consent to chemical testing so the police are able to collect admissible evidence of intoxication.  Rothwell v. Director of Revenue, (WD76060, 12/10/13)

Enhancement Of Attorney Fees: 

The enhancement of the award of attorney fees  (discussed in last months MMAA newsletter) by a multiplier of two in Zweig v.  MSD under Article X, Section 23 resulted in a breathtaking 4.3 million dollar plus award of attorney fees and more when you factor in the fees to be awarded for the appeal, which is certain to encourage suits against local government not only under the Hancock Amendment but also under other statutes like the Sunshine Law where attorney fees are allowed against local government.

MSD and the MML in support of MSD won on the attorney enhancement issue in the court of appeals but when MSD filed its brief and the MML filed its amicus brief in support of MSD in Zweig the Court had not ruled in Berry v. Volkswagen Group of America, Inc., 397 S.W.3d 425 (Mo. banc 2013), which rejected the same arguments made by MSD and the MML.  Having recently rejected the same arguments made by an MSD and the MML in the Berry case the court in Zweig made it very clear that it would not again review this issue although they did discuss the reasons for rejecting the MSD and the MML arguments.

Since local government lawyers will be facing claims for enhancement of attorney fees you may find it useful to review Berry v. Volkswagen Group of America, Inc. for a more in depth discussion of how the enhancement rule come into play.  Factors in the MSD case based on the earlier decision in Berry are considered to be important in determining whether or not to enhance the lodestar by using a multiplier in the MSD case were as follows:

First, unless the court abused its discretion in the enhancement of the attorney’s fees they are affirmed although the court is required to make a record concerning the reasons for enhancing the lodestar.  In other words, it will be nearly impossible to reverse the trial court’s decision with respect to enhancement of attorney fees if the trial court follows the rules established by the Supreme Court in Berry.

The trial court in making this determination should not consider hourly rates used to calculate the lodestar.  The hourly rates used to calculate the loadstar should not reflect the risk to legal counsel assumed in taking the case on a contingent fee basis since this is opportunity cost in undertaking representation such as a value of not being able to undertake representation of other clients and the impact of the representation of counsel on other cases.  In other words, if your normal hourly rate is $300 per hour you cannot use a $600 per hour rate in the calculation of the lodestar and then ask for an enhancement of that rate.

The enhancement of the attorney fee requires a court to make findings supporting the enhancement.  In the MSD case the trial court specifically made findings showing that the representation impacted the other work of counsel that it could undertake; that the Counsel accepted the representation on a contingent fee basis for the recovery of fees already paid by customers, thereby assuming the risk of receiving no compensation for the time invested or reimbursement for expenses advanced if it did not succeed in getting a refund, although the attorneys still had a claim for reimbursement under the constitution since they did not give up that claim.

In the MSD case counsel for the ratepayers undertook the representation including associated risks of 25% of the total amount of stormwater user charges refunded, a claim that they lost, which ironically seemed to be a factor in the court’s decision granting a multiplier of two times the loadstar.  The court also considered the substantial investment in the MSD case by opposing counsel given the tenacious defense of MSD in similar Hancock challenges in the past.  It also considered the fact that enhancement of the lodestar by use of a multiplier would ensure adequate representation for future taxpayers claims under the Hancock Amendment.

Considering that local governments can get hit with substantial attorney fees that can be enhanced special attention needs to be paid to decisions that involve statutes where attorney fees can be awarded against local   government.  This will result in a more cautious and careful analysis considering the consequences to our clients.

UPDATE: House Bill 103

On Friday, December 20, 2013, Judge Jon E. Beetem of the Cole County Circuit Court issued a stay order in litigation brought by the Missouri Municipal League challenging the constitutionality of portions of House Bill 103 (2012) passed during the last legislative session. Specifically, Judge Beetem stayed the effectiveness of the provision in HB103 which purported to strip the jurisdiction of municipal courts in certain circumstances related to compliance with provisions in the law commonly referred to as the Mack’s Creek Law which limits the amount of general revenue a municipality may derive from fines for traffic violations.

Judge Beetem’s order reads: “The effectiveness of the following language contained in Mo. REV. STAT. §302.341.2, enacted by House Bill 103 (2012), is hereby stayed pending resolution of this case:

Any city, town, village, or county which fails to make an accurate or timely report, or to send excess revenues from such violations to the director of the department of revenue by the date on which the report is due to the state auditor shall suffer an immediate loss of jurisdiction of the municipal court of said city, town, village, or county on all traffic-related charges until all requirements of this section are satisfied.”

It should be noted that the loss of jurisdiction provision in HB103 was self-executing. No particular state official was charged with enforcing that statutory provision, therefore no state official needed to be enjoined. Under the circumstances it was possible to achieve an agreed-upon order with the Missouri Attorney General’s Office that the effectiveness of the law is stayed. The stay order should provide sufficient assurance for any municipal court judge or circuit court judge (on trial de novo) that the municipal courts jurisdiction remains intact pending final outcome of the case.

Note that this order does not suspend the municipalities’ obligation to file the reports or pay over excess revenue as stated elsewhere in the statutes.

A hearing on the motion for preliminary injunction and judgment on the pleadings has been scheduled for March 11, 2014 at 9 a.m.”

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