Opinion
101851/2016
06-19-2018
EMPIRE HEALTHCHOICE ASSURANCE, INC., Petitioner, v. CLEMENT, Victoria as Records Access Officer for the Metropolitan Transportation Authority-MTA Headquarters, Thomas Prendergast, as Records Access Appeals Officer for the Metropolitan Transportation Authority, Respondents.
David Morgen, Hinman Straub, 121 State Street, Albany NY 12207 Leslie Fagen, Gregory Laufer, Arianna Markel, Paul Weiss Rifkind Wharton & Garrison, 1285 Ave of the Americas, New York NY 10019-6064
David Morgen, Hinman Straub, 121 State Street, Albany NY 12207
Leslie Fagen, Gregory Laufer, Arianna Markel, Paul Weiss Rifkind Wharton & Garrison, 1285 Ave of the Americas, New York NY 10019-6064
Carmen Victoria St. George, J.
After respondents awarded an insurance contract to Aetna instead of petitioner, petitioner submitted a Freedom of Information Law (FOIL) request in which it sought "any and all relevant records related to awardee selection for Contract No. 15118-0100 addressing medical benefits." On October 4, 2016, respondents rejected the request for its vagueness but provided petitioner with a copy of the Staff Summary. Petitioner immediately submitted a second FOIL request, in which it sought, as is relevant here, "[s]coring sheets/analysis and supporting documentation related to such scores associated with the RFP for [Aetna]" and the member disruption analyses. Respondents denied the second request by email on October 10, 2016, stating that the scoring sheet and accompanying analysis are "non-final intra-agency records that reflect opinions, evaluations and recommendations." Aon Consulting, Inc. (Aon) prepared some of the documents on behalf of the agency, the letter continued, and under the prevailing law they were considered agency records which also were exempt under this exception. Petitioner appealed the decision on October 12, 2016. On November 7, 2016, the MTA denied the appeal. Petitioner then commenced this proceeding (Empire I), which challenges the denial except as it relates to the member disruption analysis.
Public Officers Law (POL) §§ 84 -90.
Request for proposals.
It is also pertinent that petitioner commenced another Article 78 challenging a related FOIL request. That proceeding, Empire Healthchoice Assurance, Inc. v. Clement (Sup Ct, NY County, Jaffe, J., Index No. 150148/2017 [Empire II] ) is before Justice Barbara Jaffe. This Court does not address the disclosure of information relating to the cost avoidance analysis or to other issues which are before Justice Jaffe. On March 20, 2018, Justice Jaffe issued a decision directing an in camera review of the documents the respondents had withheld. ( Empire II , 2018 NY Misc LEXIS 996, 2018 NY Slip Op 30489 [U], *11-12 [Sup Ct NY County 2018] ).
On January 17, 2018, this Court issued an interim order in Empire I . It noted that, according to petitioner, because the reports relied on raw data, their request should be granted in its entirety; and that, according to respondents, all the material, including the raw data, is exempt from disclosure because it was used in their decision-making process. The Court concluded that the "backup factual and statistical data to a final determination of an agency is not exempt" (citing CAT*ASI , 195 Misc 2d at 459 ), but "intra-agency predecisional material including, inter alia , subjective comments, opinions and recommendations by respondent's employees in making the award determination... may be redacted" (id. ). The Court stated that respondents must provide a blank copy of the scoring sheets and the raw data—that is, the statistical or factual tabulations or data—that Aon used in its analysis. It further stated that respondents could redact those portions of the documents which relate to Aon's analysis, on which respondents relied in reaching their decision to award the contract to Aetna, and that it need not provide any evaluative documents on which they relied.
Furthermore, the Court concluded that respondents' description of the reports did not enable the Court to meaningfully distinguish between disclosable and exempt materials. Accordingly, it required respondents to submit all relevant documents (except Aetna's RFP response and the evaluative tools, methodology and underlying data used in the cost avoidance analysis), to this Court for in camera review. It further directed respondents to provide to the Court and to petitioner a more particularized response to their arguments in favor of exemption—one in which they distinguish between disclosable and exempt portions of the materials, and it allowed petitioner to serve and file a response that is not to exceed ten pages.
The MTA Position.
Marina Elliot, a deputy chief procurement officer, professional services category management, in the MTA's procurement department submits an affidavit in support of the MTA. She notes that Aon relied on confidential and proprietary information which should be excluded from production, and adds that the MTA used specific portions of Aon's projects, evaluations, and opinions in its deliberations and discussions. Accordingly, the MTA asks that the following pages be deemed exempt from disclosure:
Pages 2, 4, 8-9, 11, and 15 in Tab C.1.
Pages 3-4, 11-12, 15, and 18 in Tab C.2.
Tab C.3.
Tab C.5.
The entirety of Tab C.8.
Pages 2, 4-5, 9-13, 15-19, 21, 23-28, 30-37, 39-42 in Tab C.9.
Tab C.10.
Tab C.11.
Tab C.12.
Tab C.13—C.18.
Pages 2, 4-6, 10-23, and 25-28 in Tab C.20.
Pages 8-20, 22-23, 25-27, 29-30, 32-33, 35-37, 44, 46-48, 50-53, and 57-58 in Tab C.21.
Pages 8-20, 22-23, 25-27, 29-30, 32-33, 35-37, 44, 46-48, 50-53, and 57-59 in Tab C.22.
Respondents also seek to protect all but the first page of the papers in Tab A, and all the papers in Tab Bs and D, from disclosure.
The McCabe/Aon Position.
Subsequently, respondents and petitioner provided the Court with the requested materials. Respondents submitted a binder with 22 items for the in camera review. In addition, they submitted the affidavit of Kenneth J. McCabe, a senior vice president at Aon in the employee benefits department. McCabe stated that it regularly provides health and benefits consulting services to its clients and these services help the clients select an appropriate health care plan. McCabe states that in the course of providing these services "Aon utilizes proprietary and confidential procedures, formulas, methodologies, analytics, models, calculations, tools, databases and other compilations of information" (McCabe Aff., ¶ 8). He contends that the following materials comprise trade secrets and competitive information which are exempt from disclosure: 1) Aon's health plan network discount database, with which it analyzes insurer's proposals and helps clients maximize cost reductions as well as savings; 2) its "health care market and participant trend guidance," which uses confidential analytics and methodologies; 3) its claims models, which rely on its resources as well as the confidential methods already described; 4) its analyses of the various health care providers; and 5) Aon's guidance concerning the various proposals, which are "based on Aon's institutional experience and expertise" (id. , ¶ 9). He states that these materials are highly confidential and are not made available to Aon's competitors. He indicates that Aon spends millions of dollars each year developing this confidential information, which provides it with a competitive edge among health care consultants, and that disclosure of the material would cause substantial injury to Aon.
Furthermore, McCabe states, it used confidential materials as well as trade secrets in evaluating the health care plans insurers submitted to the MTA in response to the MTA's RFP. He points out that Aon and the MTA entered into confidentiality agreements which related to information that the MTA provided to Aon and information that Aon provided to the MTA. He notes that petitioner and the two other insurance companies marked their materials "confidential," and that Aon entered into confidentiality agreements with each of the carriers. According to McCabe, around February 10, 2016, after the parties signed these agreements, Aon prepared reports and analyses for the MTA, which he calls "the Aon work product." He states that the Aon work product includes Aon trade secrets and confidential information, as well as carrier confidential information. Accordingly, Aon labelled the documents "Proprietary & Confidential," and it often added additional language prohibiting the MTA from distributing the materials to third parties.
Aetna Life Insurance Company, and United Healthcare Insurance Company responded to the RFP.
Based on the above and on his examination of the 22 items produced for in camera review, McCabe asserts that the following items should not be produced:
Page 12 in Tab C.2
Tab C.3, C.5, C.10, 11, 12, 15, 16, 17, and 18
Pages 8-31, 34-37, 40-48, and 50-56 in Tab C.8.
Pages 10-12, 13, 15-19, 21, 23-28, 30-37, and 39-42 in Tab C.9.
Pages 4-6, 9-23, and 25-28 in Tab C.20.
Pages 8-31, 32-37, 44-48, 50-58 in Tab C.21.
Pages 8-31, 34-37, 40-48, and 50-56 in Tab C.22.
Pages 2-18 in Tab D.
Legal Arguments.
Respondents submit a memorandum of law in support of their position. In this memorandum, respondents clarify the scope of their in camera submissions, consistent with the statements of Justice Lucy Billings at oral argument and the interim order of this Court. They have provided the blank scoring sheet, which the MTA indicates it will give to petitioner; the scoring sheet which the selection committee members completed; certain documents the selection committee received to assist in its analysis; and Aon's July 7, 2017 cost avoidance analysis. They stress that they have not provided the documents which are the subject of the proceeding before Justice Jaffe, or the member disruption analysis which is not demanded in the petition. Finally, based on petitioner's statement that it is only interested in the documents pertaining to the winning contract, respondents provide only the RFP submissions of Aetna, which was awarded the contract. Respondents argue that the completed scoring sheets are exempt from review because the information therein, although numerical in form, "constitute[s] opinions and evaluations" (Respondent's Mem of Law, p 9 [citation and internal quotation marks omitted] ) which the executive committee reviewed while it prepared its recommendation to the MTA.
At oral argument, and pursuant to the Court's directive, respondents stated they would provide petitioner with copies of the materials it had agreed to turn over—that is, the documents contained at Tabs C.4, C.6, C.7, and C.19, along with the pages in the remaining Tabs. Respondents additionally represented, in their memorandum of law, that the MTA will produce the blank scoring sheet used by the selection committee.
--------
In opposition to respondents' memorandum, petitioner raises several arguments. It argues that respondents waived its trade secret argument because it did not raise it in the administrative proceeding. It states that in Empire II , Justice Jaffe ruled that "[h]aving failed to identify the trade secrets exemption in their decision denying petitioner's appeal as to Aetna's RFP, respondents may not raise it in response to the petition" ( Empire II , 2018 NY Misc LEXIS 996, 2018 NY Slip Op 30489 [U], *11-12 [Sup Ct NY County 2018] (citing Matter of Madeiros v. New York State Educ. Dept. , 30 NY3d 67, 75 [2017] [Madeiros] ). It further argues that Aon's materials involve only statistical data and facts, which are not exempt from disclosure. It relies on New York 1 News v. Office of the President (231 AD2d 524, 525 [2nd Dept 1996] ) for the proposition that while deliberative materials exchanged for discussion purposes are exempt, memoranda which solely contain factual observations are not. It cites Professional Standards Review Council of America v. New York State Dept of Health (193 AD2d 937, 940 [3rd Dept 1993] [Professional Standards] ), which held that backup factual data as well as statistical data is not exempt while "subjective comments, opinions and recommendations" are not.
Determination
The Court already discussed the prevailing law in its interim order. Briefly, under FOIL, government agencies must make their records available for public inspection and copying unless they fall within a limited number of exemptions (Madeiros , 30 NY3d at 531). Courts interpret the mandate broadly, as "the public is vested with an inherent right to know and that official secrecy is anathematic to our form of government" (id. [citation and internal quotation marks omitted] ). The agency which seeks an exemption has the burden of establishing its applicability (See Luongo v. Records Access Officer, Civilian Complaint Review Board , 150 AD3d 13, 18 [1st Dept 2017] ).
The intra-agency exemption at POL § 87 [2 ] [g] does not relate to materials which are "statistical or factual tabulations or data" or a "final agency policy or determinations" ( Professional Standards , 193 AD2d at 939-40 ), but does exempt "predecisional material, prepared to assist an agency decision maker ... in arriving at his decision" (Matter of Xerox Corp. v. Town of Webster , 65 NY2d 131, 132 [1985] [citations and internal quotation marks omitted]; see Matter of Correction Officers' Benevolent Assn v. New York City Dept of Corrections , 157 AD3d 643, 644 [1st Dept 2018] ). Moreover, this exclusion extends to reports prepared by outside consultants such as Aon ( id. at 133 ; see Miller v. New York State DOT , 58 AD3d 981, 984 [3rd Dept 2009] ). The exemption enables "individuals within an agency to exchange their views freely, as part of the deliberative process" ( Waterford , 18 NY3d at 658 ) and extends to "records which consist of opinions, advice, valuations, deliberations, proposals, policy formulations, conclusions or recommendations" ( Rothenberg v. City University of New York , 191 AD2d 195, 195 [1st Dept], lv denied , 81 NY2d 710 [1993] ).
Contrary to respondents' contention, the statistical and factual data on which respondents relied are not exempt from disclosure (see Thomas v. Condon , 128 AD3d 528, 528 [1st Dept 2015] ). Public Officers Law § 87 (2) (g) expressly states that "statistical or factual tabulations or data" are not exempt as inter-agency or intra-agency materials. Presumably, agencies share statistical or factual data because the data might be useful in the decision-making process. Thus, respondents' analysis would render the exception to the exemption virtually meaningless.
The Court also rejects petitioner's argument that it should ignore the trade secret argument because respondents did not raise it in the administrative proceeding. The Court of Appeals in Madeiros found that the respondent had waived the position that the material in question pertained to non-routine criminal investigative techniques because it had not asserted this position earlier, and stated that to allow the agency to raise a new argument at this stage "would be contrary to our precedent, as well as to the spirit and purpose of FOIL" ( Madeiros , 30 NY3d at 75 ). The case is distinguishable from the one at hand, however, because in that instance the agency asserted an exemption on its own behalf. "Although review of an administrative determination is generally limited to the grounds invoked by the agency at the time of its determination, this principle of administrative law [does] not preclude [this Court] from addressing the... newly raised exemption" where, as here "the confidentiality rights of third parties not before the court are implicated by the disclosure determination" ( Rose v. Albany County District Attorney's Office , 111 AD3d 1123, 1125-26 [3rd Dept 2013] [citing, inter alia, Matter of Johnson Newspaper Corp. v. Stainkamp , 61 NY2d 958, 960-61 [1984] ). Furthermore, this is not inconsistent with the decision in Empire II . The court in Empire II found that the respondents could not raise the trade secrets exemption, but the court did consider the objection as asserted by nonparty Aetna (see Empire II , 2018 NY Slip Op 30489 [U], *7-10, 13).
Applying these principles, the Court makes the following determinations:
The pages contained under Tab A must be disclosed. Aon does not claim this material is protected as a trade secret. Moreover, the Court has directed respondents to produce the blank scoring sheet, and instructions concerning how to fill out the sheets are not part of the deliberative process—not, as respondents argue, "pre-decisional communications" which reveal the MTA's deliberative process (Respondents' Mem of Law, at p 9).
The pages contained under Tab B are exempt from disclosure. Although the pages in question consist of the scores the bidders received and appear to be raw numbers, they instead reflect the reactions of the scorers to various aspects of the bidders' presentation and proposal.
In Tab C.1, respondents need not disclose pages 8-9 and pages 11-12, but must provide copies of the remaining pages.
In Tab C.2, respondents must disclose pages 1-4 and 8-9, but the remainder of the pages are exempt from disclosure.
The pages in Tab C.3 are exempt from disclosure.
As neither respondents nor Aon object to the disclosure of the documents at Tab C.4, these pages shall be disclosed.
The page at Tab C.5 is exempt from disclosure.
As neither respondents nor Aon object to the disclosure of the documents at Tabs C.6 and 7, these pages shall be disclosed.
Respondents must provide pages 1-5 of Tab C.8, but need not provide the remaining pages.
There is no objection to the disclosure of pages 1, 3, 6-8, 14, 20, 22, 29 and 38 at Tab C.9, so these pages shall be disclosed. In addition, respondents shall produce pages 2 and 5.
Tabs C.10-18 are exempt from disclosure.
Respondents have indicated that they shall produce the document at Tab C.19.
There is no objection to the production of pages 1, 3, 7-8, and 24 at Tab C.20, so respondents shall provide these pages. Respondents also must produce page 2, but the remainder of the pages are excludable.
At Tab C.21, there is no objection to the production of pages 1-7, 38-43, and 49 (most or all of which are blank pages) so these pages shall be produced. In addition, respondents should provide the financial data at pages 35-36, as there is no accompanying analysis on those pages. The remainder of the pages at Tab C.21 are excludable.
At Tab C.22, there is no objection to the production of pages 1-7, 38-39, and 49 (most or all of which are blank pages) so these pages shall be produced. In addition, pages 35-36 shall be produced with the commentary at the bottom of each page redacted.
The pages in Tab D are excluded from disclosure.
In addition, the Court notes that there are other pages which were intentionally left blank but which either Aon or respondents included in their list of purportedly exempt pages. The Court does not direct respondents to provide these blank pages, but does direct them to include a list of all blank pages they do not produce, so that petitioner has a better understanding of the actual number of substantive pages which respondents are withholding. Respondents also shall produce any additional pages they are willing to disclose, even if not listed above. Therefore, it is
ORDERED that respondents shall produce the documents as provided in this order within 45 days of the date of entry.