stating “the language [in Section 506(d)(1)] is plain that all contracts that governmental entities enter into with private contractors necessarily carry out a ‘governmental function’ — because the government always acts as the government”
How later courts described this case
- stating “the language [in Section 506(d)(1)] is plain that all contracts that governmental entities enter into with private contractors necessarily carry out a ‘governmental function’ — because the government always acts as the government”
- holding that Office of Open Records lacks authority to participate in appeals of its decisions because as an adjudicatory body, “it is not aggrieved by the release of another’s agency records.”
- holding that the OOR is not a party to appeals of its decisions because it has no interest in the release of another agency’s records
- dismissing OOR as a party; holding OOR may not appeal decisions pertaining to its adjudications because it is not an interested party as to the disclosure of the information sought
Written by the judges who cited it.
The opinion
CONCURRING OPINION BY
President Judge LEADBETTER.
I join in parts III (regarding fees and costs) and IV (regarding OOR’s standing to participate in appeals from its decisions) of the well-written majority opinion. Furthermore, I concur in the result reached as to the remaining issues. My disagreement with the majority lies in its statement that, “all contracts that governmental entities enter into with private contractors necessarily carry out a “governmental function” — because the government always acts as the government.” 1
Respectfully, I suggest that this interpretation is far too broad, for it renders the term “governmental function” meaningless. If all government contracts with third parties necessarily relate to performance of a governmental function, the General Assembly need only have said disclosure was required for all public records “in the possession of a party with whom the agency has contracted.” Instead, the statute reads, “in the possession of a party with whom the agency has contracted to perform, a governmental function....” 65 P.S. § 67.506(d)(1) 2 (emphasis added). I believe these words were intended to have meaning, and we must determine what that meaning is, not sweep it away entirely. Surely, government agencies enter into some, if not many, contracts that do not implicate a governmental function. If a prison contracts with a private company to provide food service in one of its institutions, that would appear likely to encompass a governmental function, because prisoners must be fed. On the other hand, if General Services contracts with that company to operate a cafeteria in the Capitol for the convenience of the general public and state employees, is that a government function? 3 I doubt it, but that sort of nuance is not presented here, and I do not believe we need to become embroiled in all the possible variations of government contracts in order to decide this case. 4
*509 As noted by the majority, before the OOR the Pocono Record claimed that the Foundation itself qualified as an agency or that it was the alter ego of the University. 5 That argument has substantial merit. Indeed, the Foundation is staffed by University employees, and its Executive Director holds a dual position as Vice President for University Advancement. See Reproduced Record (R.R.) at 58a. It operates out of offices in University buildings, and the University provides clerical assistance, bookkeeping services, telephone and computer services. R.R. at 58a-59a. The Foundation was established “to perform the functions of and carry out the purposes of the University,” and to “advance the charitable, educational and scientific purposes of the [University].” R.R. at 57a-58a. It manages the University’s endowment and distributes scholarships to University students. R.R. 57a. Finally, the Notes to the Foundation’s financial statements state that, “[t]he Foundation is a component unit of East Stroudsburg University, and its financial statements are included as such in the financial statements of the University.” R.R. at 26a.
Nonetheless, the elements of the established alter-ego doctrine, which has its basis in corporate law, are generally described in terms that do not relate easily to government entities, 6 although we have put this round peg into the square hole in other circumstances. See, e.g., 500 James Hance Court v. Prevailing Wage Appeals Bd., 983 A.2d 792 (Pa.Cmwlth.2009); Mosaica Educ., Inc. v. Prevailing Wage Appeals Bd., 925 A.2d 176 (Pa.Cmwlth.2007); Lycoming County. Moreover, the alter-ego doctrine carries a strong presumption against piercing the corporate veil, Lycoming County, 627 A.2d at 248, which would be inconsistent with the underlying presumption of open access in the new Right-to-Know Law (Law). 65 P.S. § 67.701. Thus, rather than revisit that doctrine here, I would simply hold that any time a non-profit corporation, or other form of private entity, is created and supported by a government agency and that entity’s sole function is performing services for the benefit of the agency, and which the agency would otherwise perform, it is an instrumentality which should itself be treated as a public agency for purposes of disclosure requirements of the Law. Accordingly, I agree with the result reached by the majority, both as to the donor information as well as the minutes. 7
Judge LEAVITT joins in this concurring opinion.
. The majority also, without discussion, accepts the view of the OOR that Section 506(d)(1), 65 P.S. § 67.506(d)(1), requires production of documents created by third party contractors containing information about those contractors’ activities in performance of the "governmental function," where such a contract is found to exist. This may be an accurate interpretation of the actual statutory language, to wit: "[a record of a Commonwealth or local agency] that is not in the possession of an agency, but is in the possession of a party with whom the agency has contracted ...” Id., although Section 102, 65 P.S. § 67.102, defines a "record” as "[information, regardless of physical form or characteristics, that documents a transaction or activity of an agency....” (Emphasis added). While we may so hold, in a case in which it is at issue before us, interpretation of this language bears thoughtful consideration and should not be summarily assumed.
. Right-to-Know Law, Act of February 14, 2008, PL. 6, 65 P.S. §§ 67.101-67.3104.
. Both this hypothetical example and the present case, in which the government agency is a university, manifest that whether or not a particular function is governmental will vary depending on the nature of the contracting agency.
. We are here faced with a new statute which embodies not only new rules, but an entirely new conceptual and procedural framework. Many of these new concepts are provided in statutory language susceptible of multiple interpretations. Compounding the problem, the new Office of Open Records (OOR) is being overwhelmed by a deluge of requests which must be decided now. Under these circumstances, there is an understandable temptation to rush to fill in the details left blank in the new law and provide immediate interpretive guidance in the form of sweeping black letter rules. Nonetheless, I believe it is necessary to take our time and address these questions with a narrow focus on the facts presented in each case and avoid broad pro *509 nouncements which may prove unworkable or unwise in different circumstances.
. This argument was abandoned on appeal to this court in favor of the "governmental function” argument.
. "Factors which may justify piercing the corporate veil [under an alter-ego theory] include undercapitalization, failure to adhere to corporate formalities, substantial intermingling of corporate and personal affairs, and use of the corporate form to perpetrate a fraud.” Lycoming County Nursing Home Ass'n., Inc. v. Prevailing Wage Appeal Bd., 156 Pa.Cmwlth. 280 , 627 A.2d 238, 243 (1993).
.Had an alter ego or similar theory been argued in this appeal I would have voted to reverse entirely as to the Minutes and order their complete disclosure as well, subject to redaction of any privileged or exempt information they contained. However, since no such argument was presented on appeal, I would limit disclosure of the Minutes in accordance with the majority decision.