The opinion
STATE OF MAINE SUPERIOR COURT
CUMBERLAND, ss STATE OF MAtNlYIL ACTION
Cumberland, 55, Clerl[)COffldleET NO. CV-IO-096 . ",./'
JUN 07 2010 ~E ( - _ ! ' I,~'
PETER ANASTOS,
Plaintiff
RECEIV6f.IDER ON TOWN'S
v. MOTION FOR SUMMARY
JUDGMENT
TOWN OF BRUNSWICK
Defendants
BEFORE THE COURT
Defendant Town of Brunswick (hereinafter the "Town" or "Brunswick")
has filed a motion for summary judgment pursuant to M.R. Civ. P. 56 on Plaintiff
Peter Anastos's (hereinafter"Anastos") Complaint for Relief Pursuant to the
Freedom of Access Act. 1 M.R.S. § 409(1).
BACKGROUND
Anastos is employed in the hospitality industry and is the principal of a
full service inn located in the Town of Brunswick. Anastos filed this Complaint
on March 5, 2010 after the Town refused to provide him with a copy of a
feasibility study related to the Maine Street Station Project (the "Project") on the
ground that the study includes confidential information. Anastos alleges that by
denying his request for the study, the Town violated his right to inspect public
records pursuant to 1 M.R.S. § 408(1). Anastos seeks an order from the court
requiring the Town to provide him with a copy of the study.
On January I, 2007, the Town entered into a joint development agreement
(the "JDA") with JHR Development of Maine, LLC ("JHR") for the development
of the Maine Street Project. As part of the Project JHR proposes to construct a
54-room inn. The Project as proposed by JHR and approved by the Tmvn
Planning Board, also includes five 111ixed-use buildings, which combine
commercial and residential uses. The Project is included in the Development
Program! approved by the Town Council on March 1,2010.
The Development Program is described as an effort "to sustain and
enhance Brunswick's historical and vibrant traditional downtown business
district." Eldridge Aff., Ex. 1 at 1. The "core of the Development Program is the
Maine Street Project". [d. The inn is described as the "impetus for continued
development of the Maine Street Station Project." [d. In Section 2.2(C) of the
JDA, the Town agreed to assist JHR in obtaining approval of a tax increment
financing ("TIF") agreement from the Town Council if JHR deemed a TIF to be
necessary and the need for a TIF was demonstrated according to commercially
reasonable standards. 2 In 2009, JHR began the application process for a TIF with
respect to the proposed inn.
On January 13, 2010, JHR attorney John Moncure and JHR project
manager Mike Lyne met with Town officials, specifically Town Manager Gary
Brown, Director of Finance John Eldridge, and Director of Economic and
Community Development David Markovchick. Hilary Rockett, the Manager of
JHR, participated in the meeting by phone. During the meeting the
representatives of JHR expressed the need for a TIF, including credit
1 The Development Program for The Brunswick Downtown Municipal Development and
Tax Increment Financing District. Eldridge Aff, Ex. 1.
2 Tax increment financing allows municipalities to promote economic development by
earmarking property tax revenue from increases in assessed values within a designated
TIF financing district. Municipalities may LIse tax increment financing to help finance a
municipality's formally adopted development program. See 30-A M.R.S. §§ 5221-5235.
Tax increment tinancing allows a municipality to "retain all or part of the tax increment
revenues generated from the increased assessed value of a tax increment financing district
for the purpose of financing the development program. 30-A M.R.S. § 5227(1).
2
enhancement, in order to proceed with development of the inn. Rockett
explained that JHR had commissioned the Pinnacle Advisory Group to complete
a study (the "Study") evaluating the feasibility of the proposed inn as part of the
Project. According to Rockett, JHR had commissioned the Study, "[i]n order to
assess the market for and viability of including a hotel in the Project." Rockett
Aff., <j[ 5. During the meeting, Rockett also explained that JHR commissioned the
Study to evaluate the inn from a business planning perspective and for use in
obtaining private financing for the inn.
According to Rockett: Pinnacle conducted an independent evaluation of
the local Brunswick lodging market to determine the market capacity of the
proposed inn. The assessment incorporated an examination of the subject site,
the characteristics of the proposed inn, a review of existing and projected
economic conditions, and an analysis of competitive supply and demand in the
regional lodging market. Based on this analysis, Pinnacle made projections and
recommendations with respect to occupancy levels, room rates, market
segments, and other financial considerations, all based on Pinnacle's experience
in the lodging industry. The assessment provides recommendations as to how
best to posi tion the proposed inn to capture lodging demand in the defined
market area. The results of the analysis are set forth in the Study. JHR considers
the Stud y to be an integral part of its overall business plan for the inn, and "the
core, independently produced document upon which all decisions relating to the
financing and investment necessary to the development of the inn will be based."
Rockett Aff., <j[ 6.
At the January 13, 2010 meeting, the Town requested a copy of the Study
in order to evaluate the need for a TIF. After the conclusion of the meeting, JHR
...,
j
provided a copy of the Study to the Town. According to JHR, the Study "vas
provided to the Town as part of the negotiations over the terms of the TIF in
order to demonstrate the importance, and commercially reasonable basis for the
Town to enter into a credit enhancement agreement in support of the inn. JHR
considered the Study to be confidential at the time it provided the study to the
Town.
David Markovchick, the Town's Director of Economic and Community
Development, reviewed the Study and observed that the Study presents the inn's
proposed operating cost structure, expenses, revenue, and operating
profitability. Markovchick also observed that the Study contains projected
occupancy rates based on market projections developed through market analysis
conducted specifically for JHR and the proposed inn. John Eldridge, the Town's
Director of Finance, reviewed the Study and observed that the Study contains
inn-specific financial information, concerning the inn's projected operating cash
flow, that identify the sources of revenue, including room rates, and
expenditures, including salaries. Eldridge also observed that the Study contains
projected occupancy rates based on market analysis conducted specifically for
JHR and the inn project.
On February 19, 2010, Anastos sent a letter and an email to the Town
asking the Town for a copy of the Study. The Town forwarded a copy of
Anastos's letter to JHR. After receiving Anastos's request, the Town evaluated
its obligations under the Freedom of Access Act ("FOAA"). In discussing how to
4
respond to Anastos's request, Markovchick expressed his professional opinion:l
to Tmvn Manager Gary Brown and Director of Finance Eldridge that the Study
incorporates a market strategy, based on analysis conducted specifically for JHR,
that provides JHR with market differentiation compared to competitors without
such information. This market differentiation, Markovchick observed, provides
JHR with an advantage over competitors by best positioning JHR to obtain
business targeted at specific market segments. Markovchick also explained to
Brown and Eldridge that, in his professional opinion, the Study contains
sensitive financial information specific to the proposed inn. Markovchick
explained that the Study would be of value to a competitor because the
information it contains could be used by a competitor to develop a strategy to
take business away from the inn before it was even built. Eldridge also
recognized the sensitivity of the information contained in the Study and believed
the information provides a competitive advantage to its holder, JHR, and could
be used to JHR's detriment if obtained by a competitor.
Through its counsel, JHR requested that the Town not provide a copy of
the Study to Anastos because JHR considered the Study to be confidential and
not subject to disclosure under FOAA, stating "we strongly object to the release
of the hotel study which was submitted for your confidential consideration."
Counsel for JHR explained that JHR believes the Study is confidential because it
contains proprietary information and trade secrets and because disclosing it
would give a competitive advantage to a competitor and disclose anticipated
3 The Town's statement of material facts states that Markovchick' s "professional
opinion" is based on over two decades of experience working to assist in the financing of
projects.
5
room rates and occupancy rates to the detriment of JHR. In his request that the
Town not release the Study, counsel for JHR included the following statement:
"We respectfully request that you provide us with sufficient notice so that we
may pursue our remedies if you believe you are required to disclose this
important information." Eldridge Aff., Ex. 2.
After internal discussions and considerations of JHR's request that the
Study not be publicly disclosed because of the proprietary information it
contains, the Town determined that: (1) the Study gives JHR an opportunity to
obtain a business or competitive advantage over a competitor who does not have
access to the information in that Study; and (2) if the Study is released to the
public it would result in a significant detriment to JHR by disclosing its business
strategy and enabling competitors to position themselves to take business from
the inn.
By letter dated February 26, 2010, the Town's attorney informed Anastos
that the Town would not be providing Anastos a copy of the Study. The Town's
attorney stated the reason for the denial in the letter. The letter explains that
FOAA provides a general right to inspect public records, defines the term
"public records," and excludes from the definition of public records any records
that have been designated confidential by statute. The letter further explains that
the Town believes the Study is a record that is designated confidential by statute,
specifically by 4 M.R.S. § 13119-A, and quotes section 13119-A in full. The letter
also explains why the Town believes the Study is not a public record pursuant to
1 M.R.S. § 402(3)(B).
Anastos participated in the Brunswick Town Council's review of the
credit enhancement agreement application filed by JHR. After his request for
6
access was denied, Anastos continued to participate and attend public hearings.
During a public hearing on the application for the credit enhancement agreement
on March 1, 2010, members of the Town Council referred to the feasibility study.
In addition to speaking against the credit enhancement agreement, Anastos
submitted a letter to the Town Council outlining the reasons for his opposition.
The letter discussed occupancy rates in the Brunswick area and it also included
an attachment compiled by STR Global, a company that tracks hotels worldwide,
setting forth occupancy rates for the Brunswick area, and showing a decrease in
occupancy over the prior 12 months to 45% of capacity. During the Town
Council's public hearing on JHR's application for a TIF credit enhancement
agreement, Eldridge stated that Markovchick had a telephone conversation with
JHR's financing bank during which the bank's representative stated that the bank
would not finance JHR's proposed inn without the TIF credit enhancement
agreement.
According to Anastos, during the Town Council public hearing, two
Town Councilors stated that they felt that the Study should not have been
confidential and one stated that he would vote against the credit enhancement
agreement for that reason. The Town agrees that one Town Councilor thought
the information from the Study should have been made public, but according to
the Town, the other Town Councilor's statements in the record do not support
the conclusion that he thought the Study should have been made public.~
Additionally, Anastos claims that the first time JHR requested that the Study be
~ The referenced "other Town Councilor" was Councilor Pols. Councilor Pols stated:
"He was uncomfortable that the Council gets to read information from the inn feasibility
study that cannot be shared. That tipped him over the edge so he cannot support the
proposal." Eldridge Aff, Ex. 1, App. A-I, p. 5.
7
treated as confidential was February 22, 2010, after Anastos had requested access
to the document. The Town denies Anastos's assertion, and says JHR always
regarded the Study as confidential.
DISCUSSION
I. Standard of Review
Summary judgment should be granted if there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law. M.R.
Civ. P. 56(c). In considering a motion for summary judgment, the court should
consider the facts in the light most favorable to the non-moving party, and the
court is required to consider only the portions of the record referred to and the
material facts set forth in the parties' Rule 56(h) statements. E.g., JOllllSOl1 v.
McNeil, 2002 ME 99, <]I 8, 800 A.2d 702, 704. A contested fact is "material" if it
could potentially affect the outcome of the suit under the governing law. Inkel v.
Livingstoll, 2005 ME 42, <]I 4, 869 A.2d 745, 747. A fact is "genuine" if there is
sufficient evidence supporting the claimed fact to require a fact-finder to choose
between competing versions of facts at trial. Id. For the purposes of summary
judgment, factual disputes and ambiguities must be resolved against the movant.
Nevertheless, when the facts offered by a party in opposition to summary
judgment would not, if offered at trial, be sufficient to withstand a motion for
judgment as a matter of law, summary judgment should be granted. Rodriguc v.
Rodriguc, 1997 ME 99, <]I 8, 694 A.2d 924, 926.
II. Was the Study properly considered confidential by the Town?
In enacting the Freedom of Access Act (FOAA), 1 M.R.S. §§ 401-410, the
Maine Legislature declared that in general, public records are to be "open to
public inspection." 1 M.R.S. § 401. Section 408 of the Act states: "Except as
8
othenvise provided by statute, every person has the right to inspect and copy
any public record ...." 1 M.R.S. § 408(1). The Act is to be "liberally construed
and applied to promote its underlying purposes and policies." 1 M.R.S. § 401.
"A corollary to such liberal construction of the Act is necessarily a strict
construction of any exceptions to the required public disclosures." Glly Gallllet
Pub. Co. v. Ulliv. of Maille, 555 A.2d 470,471 (Me. 1989). However, just as when
interpreting a statute, in FOAA cases thc court looks to the language of the
statute itself to determine the statute's meaning and the legislative intent. Davric
A1aille Corp. v. Maille Dept. o.fTmlls., 606 A.2d 201, 202 (Me. 1992).
Undcr FOAA "Public Records" include:
any written, printed or graphic material or any mechanical or
electronic data compilation from which information can be
obtained, directly or after translation into a form susceptible of
visual or aural comprehension, that is in the possession or custody
of an agency or public official ... and has been received or
prepared for use in connection with the transaction of public or
governmental business ....
1 M.R.S. § 402(3). There are a few exceptions to the definition of public records
under FOAA. [d. Among those exceptions, FOAA excludes from the definition
of public records those "[r]ccords that have been designated confidential by
statute." 1 M.R.S. § 402(3)(A)." The burden of demonstrating that a public record
5 FOAA also excludes fi'om the definition of public records those "[r]ecords that
would be within the scope of the privilege against discovery or use as evidence
recognized by the courts of this States in civil or criminal trials if the records or
inspection thereof were sought in the course of a court proceeding." I M.R.S. ~
402(3)(8). In footnote 2 of the Town's summary judgment motion, the Town
claims that in addition to being a proprietary document under 5 M.R.S. § 13119
A( I), the Study is exempt from disclosure based on Rule 507 of the Maine Rules
of Evidence and Rule 26 of the Maine Rules of Civil Procedure. However, for
this action the Town relies solely on its argument based on 5 M.R.S. ~ 13119
A(1).
9
comes within an exception to the general rule of public disclosure is on the
political entity denying the FOAA request. TOLLm of Burlington v. Hasp. Adll1in.
Dist. No.1, 2001 ME 59, 9f 13, 769 A.2d 857, 861. In this case, the Town has
submitted the Study to the court for in mil/em review permitting the court to
evaluate if Anastos's FOAA request for the Study was properly denied.
Springfield Tenninal Raihuay Co. v. Dept. of Trails., 2000 ME 126, err 7, 754 A.2d 353,
356.
Title 5 M.R.S. §§ 13119 -13119-C provides public inspection exceptions for
certain confidential records. Section 13119-A(1) provides an exception for
records that contain proprietary information. The Town argues that Anastos's
FOAA request for the Study was properly denied based on 5 M.R.S. § 13119-A(1).
Title 5 M.R.S. § 13119-A provides in relevant part:
The following records are confidential for purposes of Ti tIe 1,
section 402, subsection 3, paragraph A and are not open for public
inspection:
1. PROPRIETARY INFORMATION. Information that is provided
to or developed by the department or a municipality that has to do
with a program of assistance and is included in a business or
marketing plan or a grant application or provided or developed to
fulfill reporting requirements, as long as:
A. The person to vvhom the information belongs or pertains
requests that it be designated as confidential; and
B. The department or municipality determines that the
information gives the person making the request
opportunity to obtain business or competitive advantage
over another person who does not have access to that
information or will result in loss of business or other
significant detriment to the person making the request if
access is provided to others ....
5 M.R.S. § 13119-A. As explained by the Town, there are four elements that must
be satisfied for a document to qualify as confidential proprietary information
under 5 M.R.s. § 13119-A(1). The four elements that must be satisfied are:
10
1. The information that is provided tol developed by the
municipality must pertain to a program of assistance;
2. The information is included in a business or marketing plan or a
grant application or provided or developed to fulfill reporting
requirements;
3. The person to whom the information belongs or pertains
requests that it be designated as confidential; and
4. The Town determines that the information gives the person
making the request opportunity to obtain business or
competitive advantage over another person who does not have
access to that information or will result in loss of business or
other significant detriment to the person making the request if
access is provided to others.
Each of these elements is satisfied.
First, the TIF credit enhancement is program of assistance. Under section
13119, a "program of assistance" means" any financial or technical assistance
program established or authorized by the department or a municipality and
providing assistance to persons for the improvement and development of
housing, community and economic opportunities." 5 M.R.S. § 13119(4). At the
Town's request, JHR provided the Study to the Town, so the Town could
evaluate JHR's need for a TIF credit enhancement for the inn under the joint
development agreement. The Town authorized this financial assistance program
through the Development Program, see supm II. 1, and it aims to improve and
develop housing, community, and economic opportunities.
Second, the Study is part of a business or marketing plan or a grant
application developed to fulfill reporting requirements. JHR hired the Pinnacle
Advisory Group to complete the Study to evaluate the feasibility of the proposed
inn as part of the Project. The Study was commissioned "to assess the market for,
and viability of, including a hotel in the [Project]." The Study provides detailed
recommendations of how best to position the proposed Inn to capture lodging
demand in a defined market area. SMF, err 15. Third, JHR regards the study as
1]
confidential and requested that the Town designate the Study as confidential.
And fourth, the Town determined that the Study gives JHR the opportunity to
obtain business and a competitive advantage, and that disclosing the study
would result in a significant detriment to JHR because it could be used by JHR's
competitors. For these reasons, the Study qualifies as a confidential record
containing proprietary information under section 13119-A(l).
Anastos argues that the Town's finding that the Study contains some
confidential information, such that it would qualify as a confidential document
containing proprietary information, is not a sufficient reason to deny access to
the entire document. Anastos cites section 13119-B and argues that the Town
must review the Study and release all portions of those documents that do not
fall within the confidentiality exception of section 13119-A(l). Section 13119-B
provides:
Notwithstanding section 13119-A, the department or the
municipality shall make available, upon request, to any person
reasonably describing the records to which access is sought or, if no
request is made, in any manner and at any time that the
department or municipality determines appropriate, the following
informati on:
1. Certain limited information. The following must be released
after provision of assistance:
A. Names of recipients of or applicants for business
assistance, including the principals, if applicable;
B. Types and general terms of assistance provided to those
recipients or requested by those applicants;
C. Descriptions of projects and businesses benefiting or to
benefit from the assistance provided;
D. Number of jobs and the amount of tax revenues projected
or resulting in connection with a completed project; and
E. Amounts and names of recipients of assistance provided
under a program of assistance.
2. Subject to waiver. Any information pursuant to \"'aiver
determined satisfactory by the department must be released.
12
3. Available to public. Information that the department
determines has already been made available to the public must
be released.
4. Not otherwise confidential. Any information not otherwise
confidential under section 13119-A or other applicable law must
be released.
5 M.R.S. § 13119-B.
The court disagrees with Anastos's argument that the Town is required to
excise confidential information and release a redacted version of the Study. The
plain language of the statute says that confidential proprietary information is not
open for public inspection. 5 M.R.S. § 13119-A(l). Section 13119-B(4) states
"[a]ny information not otherwise confidential under section 13119-A or other
applicable law must be released./I These provisions suggest that once a
document is determined to be confidential proprietary information, the entire
document becomes unavailable for public inspection. Section 13119-A(1)
protects more than trade secrets that could simply be redacted from a
"confidential document" before it is released to the public. It does not matter
whether the protected information includes trade secrets or readily available
public information. Section 13119-A(1) protects the entire work product from
public disclosure - it protects the selection, collection, organization and analysis
of information from which commercially advantageous business conclusions are
drawn.
The legislative history further supports the conclusion that the Study
should remain confidential. The statute was introduced as "An Act to Extend
Confidentiality Status to Certain Records of Applicants for Housing,
Community, or Economic Development Activities./I L.D. 1842 (l15th Legis.
1991). The statement of facts states:
13
This bill protects such [personal financial information], such as tax
returns or financial statements, from public disclosure when
submitted under a state or local program for housing, community
or economic development. Certnill competitive bllsiness illformntioll is
nlso protected.
Id. Statement of Facts (emphasis added). The bill was proposed and drafted by
the Deparhnent of Economic and Community Development (DECO). In a letter
to the chairpersons of the Joint Standing Committee on Housing and Economic
Development, the DECO wrote the following:
The definition of "trade secrets", which is part of the statute
preventing industrial and business espionage, is too narrow when
applied to public disclosure. Under trade secret definition, the
information must not be readily ascertainable by proper means by
other persons. Thus, if a business applied for assistance and
submitted a detailed marketing plan which it had paid a consultant
to do, that marketing plan would not be a trade secret and would
be released to the public, even though its release could be of great
benefit of the applicant's competitors, at no cost to them. We
believe such circumstances deter applicants from seeking State or
municipal assistance, or deter submission of detailed information in
applications. The definition in LD. 1842 would protect that
applicant's marketing plan from public release, so long as the
applicant requested confidentiality and the state or local agency
found that the information either gives its owner a competitive
advantage or that release would result in loss of business or other
significant detriment.
Letter from M. LaFaver, DECO, to Hon. R. Melendy and Hon. J Brannigan,
Chairpersons, Hous. And Econ. Dev. Comm., pp. 1-2 (May 21, 1991). The Study
that JHR submitted to the Town is exactly the type of market plan the DECO
sought to protect from public disclosure, and the Legislature agreed by enacting
the DECO's proposed legislation into law.
From the court's perspective, Anastos simply wants the Study to gain a
business advantage at the expense of work that was commissioned by JHR.
While Anastos disagrees with providing public assistance for JHR's proposed
14
inn, his arguments supporting public disclosure of the Study overlook the fact
that releasing the Study could result in a competitive disadvantage to ]HR.
For the reasons set forth above,
The court GRANTS the Town's motion for summary judgment.
Dated at Portland, Maine this __ __ day of ----+-J~=-"---'----~,2010.
z,---#t
1/
~/
Itc'1bert E. Crowley
Justice, Superior Court
\5
Date Filed Action Answer Due Date: Docket No.
03-5-10 FREEDOM OF ACCESS CV-10-96
Scheduling Order Discovery Jury o Statement Length of Rule 16(b) 0
Issued: Deadline: Fee Pd. o Filed: Trial: Rule 16(c) 0
Non-Jury o Order to File
Statement:
Plaintiff(s) Defendant(s)
PETER ANASTOS
vs.
Plaintiffs Attomey(s) Defendant's Attomey(s)
/(·~,.I.; :'t:., 11 ~'L' :/'Y; nf 2/:,':;'
KENNETH M COLE III ESQ
NATALIE L BURNS ESQ .FiJi 1_ {r',c II1Gi ,>,,1(.( {'5 1 jr;
Action and Comments Est Time Not Reached Cont
r',
J