The Shepherd Co. case arises out of the International Union of Painters and Allied Trades’ (the “Union”) request to
inspect and copy payroll records in the possession of the Metropolitan School District of Warren Township (the “School”). The Union claimed that the payroll records were “public records” subject to disclosure under APRA. Shepherd Co. and the School contended that the payroll records were trade secrets and confidential financial information that fell under exceptions within the APRA.
Pursuant to the APRA, Shepherd Co. made an informal inquiry of the Public Access Counselor (PAC) regarding disclosure of the records. Later, the Union requested a formal advisory opinion from the PAC. Both times, the PAC concluded that the records did not need to be disclosed. Specifically, the PAC’s formal advisory opinion concluded that the records were “trade secrets” and “confidential financial information” that were exempt from disclosure under the APRA.
In October of 2008, the Union filed a complaint against the School only seeking to compel disclosure under the APRA. The School moved to add Shepherd Co. as a necessary party. The trial court denied that motion, but it granted Shepherd Co.’s subsequent motion to intervene. The parties filed cross-motions for summary judgment. In its motion, the Union requested prevailing party attorneys’ fees pursuant to a provision in the APRA. After a hearing, the trial court entered judgment in favor of the Union and against the School and Shepherd Co. In a subsequent hearing on Union’s request for attorneys’ fees, the trial court awarded the Union $20,234 in attorneys’ fees against the School and the Union, jointly and severally.
time, an argument on the appropriate weight to be given to the PAC’s advisory opinion and an argument challenging the constitutionality of the attorneys’ fees award. The trial court denied the Union’s motion to correct error and awarded Union an additional $2,425 in attorneys’ fees.
Shepherd Co. appealed. The Court of Appeals held that a private entity like Shepherd Co. is not liable for attorneys’ fees under the APRA and that the School, the public agency, was solely liable. Shepherd Properties Co. v. Int’l Union of Painters, 950 N.E.2d 321, 325 (Ind. Ct. App. 2011). On rehearing, the Court of Appeals acknowledged two prior cases finding that a private party may be liable for the prevailing party’s attorneys’ fees in an action to compel disclosure under the APRA. However, the Court of Appeals ultimately concluded that the “APRA does not include language providing for payment of attorneys’ fees by an intervenor, and [we] will not write into the statute such a provision.”
The Union appealed to the Indiana Supreme Court. The Supreme Court acknowledged that the “APRA does not include language providing for payment of attorney’s fees by an intervenor” and determined that it did not have authority to “write into the statute such a provision.” Shepherd Co., 202 Ind. LEXIS 636 at *13. Nevertheless, the Supreme Court concluded that “private parties may be held liable for a substantially prevailing plaintiff’s attorneys’ fees under the APRA” because the “APRA does not include language explicitly precluding attorney’s fees from a third party.” Id. at *14. The Supreme Court further concluded that “the trial court did not abuse its discretion in awarding fees against the public agency and the intervening private entity, jointly and severally.” Id. at *19. According to the Supreme Court, there was no meaningful distinction between Shepherd Co. as an intervenor in the APRA litigation and other private-party defendants who also oppose disclosure. Id. at *14-15. After Shepherd Co. succeeded in its motion to intervene, Shepherd Co. was treated the same as if it was originally named as a defendant in the lawsuit and, as an intervening party, had equal standing with the School. Id. at *15.
Public agencies and private parties should be aware of the risk associated with refusing disclosure. The private party also needs to be aware of the potential risk of joint and several liability for prevailing party attorneys’ fees. Perhaps a less costly and risky route for all concerned is to propose disclosure contemporaneous with a protective order to maintain the confidential character of trade secrets or financial information.
Categories: Access to Public Records Act