December Newsletter (Issue 12-2016)

Knowing Violation Of The Sunshine Law

sunshine-smileyFacts: The ACLU requested public records from the Department of Corrections (Department) related to persons who had applied to be witnesses to executions (witness execution program), for a twelve-month period.  The representative of the Department, designated to respond to all records requests related to executions, was the Department’s deputy general counsel, Mr. Matt Briesacher (“Briesacher”).  Briesacher testified at trial that he had been working on Sunshine Law requests in his role with the Department for five years, and responding to such requests was “a substantial part of [his] duties” during the past two years.  Briesacher responded to the ACLU’s request that responsive records would be provided within three weeks.

When the Department produced the records on July 2014, the records were heavily redacted.  The redacted  information from the records included applicants’ responses to questions regarding contact information, place of employment, social security numbers, and criminal history.  After the ACLU, requested that the Department explain its authority for redacting the witness applications, Briesacher cited section 610.021(14) (“protected by law” from disclosure), as authority for redacting all other personal information of the applicants, specifically noting a concern for “the applicants’ right to privacy.”

On September 2, 2014, the ACLU filed suit against the Department, seeking to compel the Department to disclose the records without redactions (except for social security numbers), and also alleging that the Department’s failure to do so from the outset was a “knowing or purposeful violation of the Sunshine Law.”  A trial was scheduled for July 24, 2015.  Two days before the trial, over a year after the initial requests and months after many execution witness applicants had consented to producing the information requested by the ACLU, the Department produced additional records, some of which were still heavily redacted and some of which were newly un-redacted.

The trial court entered judgment in favor of the ACLU.  In its judgment, the trial court explained that “[t] he case law is clear that reliance on [section 610.021(14)], that excludes records that “are protected from disclosure by law” from production under the Sunshine Law is not a valid reason for not producing the records.  This section has been interpreted, in a number of cases, to require a statute that protects the information, not some “penumbral’ right to privacy”.  The trial court also noted that the Department’s “right to privacy” redaction explanation appeared to the trial court to be nothing more than “an afterthought,” and consequently, the trial court placed no credibility in the Department’s attempt to belatedly and purportedly rely upon this basis for redacting information, information that the trial court noted was “[t]he type of information . . . released by the Department of Revenue Driver’s License Bureau on a daily basis and is available online from Casenet to the general public.”  The trial court also found it coincidental that the Department was producing a large quantity of previously redacted records forty-eight hours prior to trial; ultimately concluding: “The [trial court] finds, by a preponderance of the evidence, that the failure of [the Department] to produce the records . . . to be a knowing violation of the Sunshine Law.” Accordingly, as part of its judgment, the trial court imposed a fine of $500 plus attorney’s fees and costs in the amount of $5,145.

The Department appealed to the Western District contending that it did not “knowingly” violate the Sunshine Law and that the trial court erred by applying a strict liability standard in the imposition of fines, attorney’s fees, and costs.

Opinion – Knowing Violation: On appeal the Department contended that Section 610.021 (14), which allows a governmental agency to exclude production of records that are “protected from disclosure by law” was a sufficient basis, to show that the Department did not act “knowingly,” even though the reason given was incorrect as a matter of law.  In order to prove that a governmental agency “knowingly” violated the Sunshine Law it is necessary to prove that the governmental agency did more than just not producing the record.  The standard for “knowingly” violating the Sunshine Law is less than the evidence to show there was a “purposeful” violation, which requires proof of a “conscious design, content, or plan to violate the law… with an awareness of the probable consequences.”  The trial court found that there was no purposeful violation of the Sunshine Law.  However, the trial court made specific findings of fact that showed the Department “knowingly” violated the law.

The Western District, noted that the term “protected by law” has been construed in a number of cases holding that the word “law” means statute “not some ‘penumbral’ right [to privacy].”  In addition, the persons providing the information to be in the witness program voluntarily applied to the Department showing that they had no reasonable expectation of privacy and information that was redacted was available from other public sources.

Based upon the overwhelming evidence cited by the trial court the Western District affirmed the judgment.  American Civil Liberties Union of Missouri Foundation v. Missouri Department Of Corrections, (WD79619, 11/22/16)

Comment Howard: The meaning of the word “knowingly” seems elusive.  What is clear, from the opinion of the court, was that the Department acted in bad faith as shown by the frivolous claims the Department made, not only as to the law but the delay in producing documents.  The evidence showed that the failure to produce the records was “knowingly” made by the Department.  The reason given by the Department that the law protected the records was clearly contrary to the case law interpreting Section 610.021(14) and was at best “disingenuous.”

Employee Handbook Does Not Create a Contract For Employment

how-to-write-an-employee-handbookFacts: The MU Veterinary Health Center (VHC) employed Ms. Reed from January 2004 to March 2011, as a veterinary technician, serving in multiple departments.  Ms. Reed worked in the VHC’s radiology service from 2004-2006, transferring to the ophthalmology service in November 2006.  Each year, the ophthalmology service’s entire faculty and resident clinicians evaluated Ms. Reed.  In January 2009, Ms. Reed received an average score of 3.2 out of 4, containing mixed comments and suggestions for improvement.  In February 2010, Ms. Reed received an average score of 2.7 out of 4 on her annual evaluation for the 2009 calendar year.   She again received mixed remarks.   Ms. Reed’s 2009 evaluation documented an unexpected “subtle decline” in her performance.  In May 2010, a “precipitous decline” was noticed.  The May 2010 evaluation noted numerous performance issues that had previously been raised.  When she received the May 2010, review she was notified that she had been placed on a six-month probation to allow her to correct the identified deficiencies.  In October 2010, at the conclusion of her probation, Ms. Reed’s progress had not improved.  Because she had not been evaluated during her probation, she was issued a written review that her probation was extended until January 2011.  The written notice identified previously noted deficiencies.  In mid-February 2011, Ms. Reed received a two-day suspension for failing to improve her performance by the end of her review period.  Ms. Reed’s poor performance continued after her suspension, and she was terminated on March 3, 2011, for unsatisfactory performance and unprofessional behavior.

After her termination, Ms. Reed filed suit against the University and Dr. Giuliano and Dr. Pearce.  Ms. Reed’s lawsuit asserted a Wrongful Discharge in Violation of Public Policy Based on Breach of Contract) and Tortious Interference with a Business Expectancy.  At the close of Ms. Reed’s evidence, the trial court granted defendants’ motion for directed verdict on her wrongful discharge and tortious interference claims.

Opinion: Ms. Reed appealed the judgment denying her claim for wrongful discharge in violation of public policy based on breach of contract and tortious interference with business expectancy to the Western District.  The Western District analyzed both claims together, since they were closely related.

The Western District noted that without a statement of duration, an employment relationship is at-will, which is terminable at any time by either party with no liability for breach of contract because there is, no contract.  If there is no duration expressed, the contract must place a limit on the employer’s right to discharge at-will; otherwise, the employee is an at-will employee.

The University argued that the employee’s manual (Manual) of the University failed to establish any duration in the employment relationship because the policy could be changed at any time.  The Manual created no property rights in the job because the University maintained the right to discharge the employee with or without cause at any time.  Ms. Reed failed to demonstrate the essential elements of a contract were in place (offer, acceptance and consideration).  Under Missouri law employee handbooks are “self-imposed policies providing a nonexclusive list of facts for which an employee might be subject to discipline.”  Terms and conditions of at-will employment relationship are not enforceable as contractual duties.

There was no tortious interference with the employment relationship because the individuals being sued were officers or agents of the University, who were acting for the University.  Therefore, Drs. Giuliano and Pearce were Ms. Reed’s supervisors, not a third party.  In order for there to be tortious interference with an employment relationship, a third party must interfere with business expectancy.  Reed v. The Curators Of The University Of Missouri, (WD79371, 11/15/16)

Comment Howard: Even though the law on employee manuals is well established, this case it is an excellent primer on whether or not an employee manual can create a property right or a contract for the employee’s services.

Burden of Proof Is On Applicant to Show Facilities Are Not Located In the 100-Year Flood

UnknownThe matter of Trenton Farms RE, LLC v. Missouri Department Of Natural Resources, Hickory Neighbors United, Inc., (WD79527, 11/22/16) involved an application by Trenton Farms for a permit to operate a swine concentrated animal feeding operation (CAFO), in Gundy County, Missouri.  The opinion by the Western District decided what is a “continuing authority” under the Clean Water Act (CWA).  Also, the decision by the Clean Water Commission, (CWC) overruling the granting of the permit by DNR, showed a massive failure by DNR to properly process the application in accordance with the law.  In addition, the Western District held that the burden of proof was on the applicant and DNR to show “manure storage structures, confinement buildings, open lots, composting pads and other manure storage areas in the production area” were not located in the 100-year flowed.

Continuing Authority and Proof of Facilities Located in the 100-year flood: After DNR and the Administrative Hearing Commission (AHC) determined that the facilities were not located in the 100-year flood the CWC found massive failures by DNR and the applicant, to properly identify where the facilities were located.  First, the maps presented with the application were located in another County.  In addition, the certification described the area as “the manure management barns” whereas the state law required certification that the “confinement buildings, open lots, composting pads, and other manure storage areas in the production area” be protected from the 100-year flood, which was not certified.

Furthermore, the engineer who certified the documents, for the applicant, only sealed some of the documents, leading the CWC to conclude that there was no certification by an engineer with respect to documents that were germane to the determination of the hundred-year flood.  By law an engineer’s seal applies only to documents that are sealed.

What is a Continuing Authority?: Even though the Western District based its decision on the failure of the applicant and DNR to present documents showing that the facilities in the 100-year flood were protected, the court gratuitously addressed the question of what constitutes a “Continuing Authority” based on the likelihood that this issue could arise in future proceedings.  The phrase “Continuing Authority” is not defined in the regulations.  All the evidence showed that DNR has historically interpreted this requirement to simply mean that there had to be a permanent organization to satisfy the “Continuing Authority” requirement.  No financial information has ever been required for new permits or renewals.  Based on this evidence, the Western District concluded that no proof other than showing that there was “…a permanent organization that exist, which will serve as the continuing authority for the operation maintenance and modernization of the facility for which the application is made” is required.  In The Matter Of: Trenton Farms RE, LLC v. Missouri Department Of Natural Resources, Hickory Neighbors United, Inc., (WD79527, 11/22/16)

Comment Howard: This case shows that the work of a state agency like DNR, which is underfinanced, understaffed, underpaid and overworked, should be carefully reviewed to make sure that they have complied with all the technical terms of the law.  What is fascinating, about this case is that none of the errors by the applicant and DNR were discovered until the hearing before the CWC.  Obviously, someone decided to fly spec the documents and uncovered massive failures by DNR and the applicant.

Writ Of Mandamus Explained

Local government lawyers need to have a working framework for certain extraordinary writs such as mandamus.  Even though the Western District dismissed the writ of mandamus filed against the Missouri Department of Insurance for failure to state a cause of action the court provides an excellent outline of the elements needed to state a claim for a writ of mandamus.  You may want to bookmark the excellent opinion written by Judge Mitchell in Bartlett v. Missouri Department Of Insurance, (WD79411, 11/29/16)

Meaning of the Word “Annually”

police-cars-2The driver of a motor vehicle Michael Sled (Driver) was arrested for driving while intoxicated and was given the Breathalyzer test on August 13, 2013.  The Driver objected to the admission of the Breathalyzer test because a proper foundation had not been laid for it’s the admission.

In order to suspend a license, the Director of Revenue (Director) must establish “that at the time of a driver’s arrest: (1) there was probable cause for arresting the driver for violating an alcohol-related offense; and (2) the driver’s BAC exceeded the legal limit of 0.08 percent.”  Proof that the BAC exceeded the legal limit may be in the form of the results of a Breathalyzer test if the proper foundation for the result is established.

To establish a prima facie foundation for admission of breathalyzer test results, the Director must demonstrate the test was performed: (1) by following the approved techniques and methods of DHSS [Department of Health and Senior Services]; (2) by an operator holding a valid permit; (3) on equipment and devices approved by DHSS. The rule defining the standard simulator solutions requires annual checks be used in conjunction with the standard simulator solution.  The law requires verification between January 1, 2013, and December 31, 2013, and annually thereafter.  This case turns on whether or not “annually” means within 365 days from the date of the last test when it was administered or once in each calendar year.

Driver argued that while the 2014 maintenance inspections showed that the “thermostat” for the Simulator had been checked in 2013; however, there was no evidence that it was checked in 2014.  Director’s counsel argued that the December 2013 certification was sufficient to cover the Simulator up to December 20, 2014.  The trial court held that the Directors revocation of the Drivers license was invalid because a proper foundation had not been laid for introduction of the results of the Breathalyzer test because the Simulator had not been checked in calendar year 2014. The Director appealed to the Southern District, which reversed.

Opinion: The Southern District held that the word “annually” as used in the law referred to a time within 365 days from the date that it was last checked.  The Southern District reasoned but since the word “annually” was not defined and no definition is provided in other administrative regulations relating to the determination of blood-alcohol content the word would be given its plain and ordinary meaning as derived from the dictionary.  Cases interpreting the word “annually” support the interpretation by the Director.  In addition, the interpretation urged by the Driver could create an absurd result in certain situations.  The law does not use the word “year,” which supports the argument that testing “annually” refers to a test within a period of 365 days.  Based upon the above analysis the Southern District  held that the certification of the Simulator must be within 365 days of its previous certification.  This interpretation is consistent with the interpretation of “annually” provided by the Western District.  Sledd v. Director of Revenue, (SD34272, 11/29/16)

City Cannot Contract Away Duty to Enforce Sign Ordinance

unknownLamar Company v. City of Columbia, (WD79267, 12/6/16), is an extremely important 40-page opinion dealing with some of the most fundamental rules of local government law. The facts are complicated and highly contested making it easy to get lost in the forest.  I will concentrate on the key issues decided by the court with a minimal background concerning the fact.

Facts: Lamar is an outdoor advertising company that acquired Whiteco Metrocom, Inc. (“Whiteco”), another outdoor advertising company, in 1999.  As Whiteco’s successor, Lamar assumed Whiteco’s rights and obligations described in a May 1998 Stipulation for Settlement Agreement (“Agreement”) between Whiteco and the City of Columbia (City).

The Agreement resolved a 1994 lawsuit filed by Whiteco after the City denied four applications for permits to erect new billboards.  Whiteco claimed that the denial of the applications was arbitrary and capricious, and that City’s billboard ordinances were unlawful in light of Missouri’s Billboard Act (Act), which established restrictions on outdoor signs erected within 660 feet of the nearest edge of the right-of-way of any highway.

On May 6, 2014, Lamar applied for permits to either rebuild in the same location, or to remove and relocate to new locations, eight of the forty-two billboards described in the Agreement.  On May 27, 2014, and June 2, 2014, the City denied the applications in writing.  Lamar appealed to the City’s Board of Adjustment (BOA) based on a settlement agreement executed by the City in 1998, which exempts permits to replace 42 signs owned by Whiteco “from all city ordinances but wind load [sic] and electrical requirements.”  Lamar argued that the Agreement required City to approve its applications even though the signs did not meet the requirements of the City’s billboard ordinance.  Lamar’s appeal to the BOA did not challenge the determination that Lamar’s applications failed to meet the requirements of City’s billboard ordinance.  The City’s BOA denied Lamar’s request for an appeal because determining the enforceability of the Agreement exceeded the scope of matters that could be heard by the BOA.

On June 24, 2014, Lamar filed suit against City, City’s Community Development Director, and the City’s Building and Development Manager.  The Petition sought a declaratory judgment that the Agreement was valid and enforceable, and entitled Lamar to the permits for which it had applied; a judgment for breach of contract (the Agreement) with a remedy of specific enforcement; a judgment for breach to issue the applied for permits should the Agreement be declared valid and enforceable; a judgment for breach of the Agreement with a remedy of monetary damages; and a writ of mandamus.  The Petition did not challenge City’s determination that Lamar’s permit applications did not meet the requirements of City’s billboard ordinance.

The City and the individual defendants asserted an affirmative defense that the Agreement was void ab initio because it impermissibly contracted away City’s police powers.  Lamar filed an avoidance to this affirmative defense, alleging that City was equitably estopped from denying the validity and enforceability of the Agreement asking for monetary damages and a writ of mandamus compelling city officials to issue the permits.

The parties filed cross-motions for summary judgment.  The trial court granted the City’s motion and Lamar appealed to the Western District.

Opinion: The is Agreement Void: Lamar contended that the Agreement was not void ab initio because the Agreement was lawful when enacted, was supported by consideration and was approved in writing as required by Section 432.070.  The Western District concluded that the contract was not within the scope of a governmental entity’s power under Section 432.070, because a contractual obligation that required the City to authorize the replacement or relocation of billboards, without regard to its Sign Code was void ab initio.  The plain language of the Agreement prohibited the City from enforcing its billboard ordinance, except wind load and electrical requirements, should Whiteco or its successors apply to rebuild in the same location, or to relocate in a new location, any of the forty-two billboards identified in the Agreement.

With respect to the 1998 Agreement the court notes that at the time it was entered into the City had the authority to adopt regulations with respect outdoor advertising that were more restrictive than the height, size, lighting and space provisions of the Missouri Billboard Act.  Therefore, the Agreement restricted the right of the City to adopt ordinances that were more restrictive than state law.  In other words, the contract surrendered or contracted away governmental functions, because it exceeded the scope of a governmental entity’s powers, and was void.

Refusal By the City to Enforce Agreement Impaired a Contract: Lamar argued that the trial court erred in finding that the Agreement was void ab initio because it addressed matters not necessary to the exercise of the City’s police powers such that refusing to enforce the Agreement impaired a contract. Lamar argued that the purpose of the City in entering into the Agreement was to salvage its Sign Code and limited the ability to construct new advertising signs,” which was in fact accomplished and was consistent with the exercise of the city’s police power.  This argument failed because in 1998, Section 71.288 gave the City a lawful right to impose regulations more restrictive than state law.

Equitable Estoppel: Lamar argued that the City is equitably estopped from denying the validity and enforceability of the Agreement, having accepted the benefits and to conclude otherwise would result in manifest injustice.

Whether or not the doctrine of equitable estoppel applies depends upon the facts and circumstances of each case.  The Western District noted that in Missouri the law is well settled that cities cannot be held liable either on a theory of estoppel or implied contract, by reason of accepting and using the benefits derived from a void contract.  To allow otherwise would permit local officials to abrogate their duties as they saw fit and leaving the public with no protection from greed or graft.  Lamar argued that the doctrine of equitable estoppel could be applied against a governmental agency in “exceptional circumstance.”  The Western District noted, “where statutory and charter provisions relating to municipal contracts are not complied with, the doctrine is not applicable and the municipality is not estopped.”  There is no reason or authority for the proposition that the doctrine of equitable estoppel can be employed to enforce a municipal contract that is void ab initio, even in the face of “exceptional circumstances,” which did not exist in any event.

Evidence In The Record Did Not Show There Was Not A Significant Difference Between The Permits Requested And The Sign Code: Lamar argued that there was no support in the record to establish that the Agreement hindered public health, welfare, or safety or for the Judgments conclusion that a “significant variance” existed between the City’s billboard ordinance and the billboard applications, which Lamar sought.  The Western District explained that the City’s zoning authority is an exercise of police powers.  Once the City has established this there is a violation of Section 432.070.   The Lamar Company, LLC, v. City of Columbia, (WD 79267, 12/6/16)

Comment Howard: This is a very well written opinion by Judge Martin covering in detail the arguments.  I would expect that an attempt would be made to appeal this decision to the Missouri Supreme Court.  You should stay tuned on this issue.  If upheld the reasoning in this case would become the standard for contracts that are void because they contract away the legislative authority.

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