Utility Management Group, LLC v. Pike County Fiscal Court , 531 S.W.3d 3 ( 2017 )

RENDERED: NOVEMBER 2, 2017
TO BE PUBLISHED
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2015-SC-000680-DG .
UTILITY MANAGEMENT GROUP, LLC APPELLANT
ON REVIEW FROM COURT.OF APPEALS
v. CASE NO. 2013-CA-000929-MR
PIKE CiRCUIT COURT NO. ll-CI-01286
PIKE COUNTY FISCAL COURT APPELLEE
OPINION OF THE COURT BY JUSTICE HUGHES
AFFIRMING AND REMANDING ·
Appellant Utility Management Group, LLC (UMG), a privately-owned
limited liability company, provides management and operational services to
Mountain Water District (the District), a water district created pursuant to
Kentucky Revised Statute (KRS) Chapter 74. Residents of the unincorporated
areas of Pike County pay the District for water and sewer services provided to
them through infrastructure and equipment owned by the D~strict, and the
District in turn pays UMG a monthly fee specified in the parties' contract. A
January 2011 audit of the District by former Auditor of Public Accounts Crit
Luallen revealed that from the c;:ontract's inception in July 2005 through June
2010 the District paid UMG.over $36 million. The Auditor had limited success
in obtaining business records from UMG regarding the actual costs of the
services UMG provided, so in March 2011 the Pike County Fiscal Court made
an Open Records request pursuant to KRS 61.870 and 61.872. When UMG
declined to produce the requested- documents on grounds it was a "wholly
private entity," Pike County pursued and Secured an Attorney General opinion,
11-0RD-143, finding UMG subject to the Open.Records Act, KRS 61.870-.884
(the Act) and requiring production. On UM G's judicial appeal, the Circuit -
Court rejected the Attorney General's analysis and, having additionally found
part of the statute unconstitutionally vague, concluded that UMG had no
disclosure obligation under the Act. The Court of Appeals reversed, holding
that UMG was subject to the Act as it existed at the time of the initial request
and denial in March 2011 and further that the statute was not
unconstitutionally vague. On discretionary review, we affirm the Court of
Appeals' opinion remanding this matter to Pike Circuit Court for entry of an _
order requiring UMG to comply with the Open Records Act.
RELEVANT FACTS
The District was established in 1986 through the merger of three
separate water districts, and is a public utility subject to the Public Service
Commission. KRS 278.015. Beginning July 3, 2005, the District's Board of
Commissioners entered into a five-year contract with UMG whereby UMG
would perform the operations, management and maintenance of the District for
an annual fe~ of $6,819,000, subject to annual adjustment for an increase in
customers and changes in the Consumer Price Index. In the year preceding
the aforementioned Attorney General's Opinion, 11-0RD-143 (Sept. 14, 2011),
the annual fee was approximately $7.6 million. U_nder the contract, the
2
. ·•
District retained ownership of all equipment and infrastructure but transferred
all of its personnel and water district responsibilities to UMG.
UMG was organized in Keritucky in August 2004 and the District was its
first client. The record reflects that as of the date of this litigation (and
apparently throughout its existence) UMG had only one other client, the City of
Pikeville. Under an approximat~ly $4 million annual contract with the City of
Pikeville, UMG providt:(S water and sewer se.rvices, garbage pickup, street
services and parks maintenance. Although the record is less than clear, it
appears that UMG has never contested that all or essentially all of its income is
derived from its contracts with the District and the City of Pikeville.
An audit of the DistriGt by the Auditor of Public Accounts produced a
January 27, 2011 report raising significant concerns about the District and its
contract with UMG.l On March 4, 2011, an Assistant Pike County Attorney, on
behalf of Pike County Fiscal Court, asked UMG to produce business records
pertaining to the District/UMG contract from January 7, 2005 through the
present. When UMG declined, Pike County sought and obtained an Attorney
Gene:r:al Opinion. '
In 11-0RD-143, the Attorney General noted that KRS 61.870(1)(h), as it
then existed, defiried a "public agency" subject to the Act to include "any body
which derives at least twenty-five percent (25%) of its funds expended by it in
the Commonwealth .of Kentucky from state or local authority funds." The
1(The report is available at http://www.auditor.ky.gov/Public/Audit
Reports/Archive/201 lMountainWaterDistrict.pdf.)
3
Attorney General opined that UMG met that definition because (1) its only
known sources of revenue were the funds derived under its contracts with the
District and the City of Pikeville; (2) the District and the City were public
. agencies col~ecting statutorily auth.orized fees and thus the monthly contract
payments tQ UMG were properly characterized as "state or local authority
...
funds;" and (3) UMG necessarily derived at least 25% (and probably all) of the
funds expended by it in Kentucky from state or local authority funds.2 The
Attorney General concluded that UMG was thus required to comply with the
Act and to the extent it objected to production of individual documents it was
necessary to identify in writing the applicable exception under KRS ·
61.878(l)(a)-.(n).
UMG filed a Complaint and Petition for D~claratkm of Rights in Pike
Circuit Court on Septe:r;nber 28, 2011. While the case was pending, the
. I
General Assembly amended KRS 61.870(1)(h), effective July 12, 2012. The new
.provision provides:
Any body which, within any fiscal year, derives at least twenty-five
percent (25%) of its funds expended by it in the .Commonwealth of
· Kentucky from state or local authority funds. However, any funds
derived from a state or local authority in compensation for goods or
services that are provided by a contract obtafned through a public
competitive procurement process shall not be included in the
determination of whether a body is a public agency under this
subsection.
/
2 The Attorney General did not specifically address whether UMG was a "body,"
but implicitly found as much. · ·
4
If applicable, the highlighted amendment language removes UMG from the
coverage of the Act because 'its contracts with the District and the City of
Pikeville were ostensibly pursuant to a public competitive procurement
process.a Following briefing, the Circuit Court concluded that the 2012
amendment was remedial and therefore applied retroactively. Alternatively, it
held that the "body" referred to in the earlier version of KRS 61.870(1)(h)
(hereafter referred to as the 1994 version) meant a "public body," not a private
business entity, and in any event the statUtory definition was
unconstitutionally vague.
The Court of Appeals rejected all of the circuit court's conclusions. It
found the 2012 amendment to be substantive.and therefore not retroactive.
Analyzing the 1994 version of KRS 61.870(1)(h), it cop.eluded that considered in
the context of other provisions of the Act, the word "body" necessarily included
a private business entity such as UMG and, finally, that the statute was not
void for vagueness.
ANALYSIS
I. UMG is a "Body" Subject to the Open Records Act.
The Open Records Act was adopted in 1976 with a preamble stating that
"access to information concerning the conduct of the peoples' business is a
fundamental and necessary right of every citizen in the Commonwealth of
3 The Auditor's report identified several concerning irregularities in the
competitive bid pr~cess with respect to the District's award of the UMG contract but
given our resolution of this case we need not address further whether the UIVIG
contract was the product of a truly public competitive procurement process.
5
Kentucky." 1976 Ky. Acts Chapter 273. The Act applies to any entity
qualifying as a "public agency" under KRS 61.870(1) including state or local
government officials, departments, commissions, boards and special district
boards. As noted, the initial focus in this case is the 1994 version of KRS
61.870(l)(h), which refers to a "body" that derives at least 25% of the funds it
expen.ds in Kentucky from "state or local .authority funds." In construing ·
"body," the circuit court focused on the absence of any reference in the Act to
companies, corporations, limited liability companies or other private business
entities and the use of the word "body" in several parts o'r KRS 61.870 as
referencing clearly governmental bodies. See, e.g., KRS 61.870(1)(d) "every
county and city governing body ... ;" KRS 61.870(\1.)(g) "any body created by
state or local authority in any branch of government.... " That court
concluded, erroneously, that construing "body" to include a "private, non-
governmental business is clearly inconsistent with a plain reading of the
balance of the statute."
As often stated, our primary goal in construing statutes is to give effect to
·the intent of the General Assembly and we derive that intent, to the extent
possible, from the language the legislature chose, employing statutory
definitions if they are provided and otherwise construing terms "as generally
understood in the context of the matter under consideration." Shawnee
Telecom Res., Inc. v. Brown, 354 S.W.3d 542, 551 (Ky. 2011). "We presume
that the General Assembly intended for the statute to be construed as a whole,
for all of its parts to have meaning, and for it to harmonize with related
6
statutes." Id. citing Hall v. Hospitality Res., Inc., 276 S.W.3d 775 (Ky. 2008).
Vife also presume that legisl~tors "did not intend an absurd statute or an
unconstitutional one.'" Id. If the statute is truly ambiguous or frustrates a
plain reading, only then do we resort to extrinsic aids such as legislative
history or the 'construction of similar statutes (especially model or uniform
statutes) by other courts. Id .
. There is no definition of "body"4 in the Open Records Act but the word is
illuminated by the definition of "public record" in KRS 61.870(2) which
provides:
"Public record" means all books, papers, maps, photographs,
cards, tapes, discs, diskettes, recordings, software, or other
documentation regardless of physical form or characteristics,
which are prepared, owned, used, in th.e possession of or. retained
by a public agency. "Public record" shall not include any records
owned or maintained by or for a body referred to in subsection (1)(h)
of this section that are not related to functions, activities, programs,
or operations funded by state or local authority; ·
(Emphasis supplied). As the Court of Appeals aptly noted, state and local
govern.mental bodies function solely for governmental purposes so the second
sentence of KRS 61.870(2) is logically unnecessary if the Act does not
encompass some private entities. Stated differently, state and local
governmental bodies would not maintain records that are "not related to
functions, activities, programs or, operations funded by state or local
authority." Id. (emphasis supplied). Similarly, it is difficult to fathom why the
.4 The "generally understood" meaning, Shawnee Telecom, 354 S.W.3d at 551, of
the word "body" is discussed infra in the context of UMG's constitutional challenge to
KRS 61.870(l)(h):
7
KRS 61.870(1)(h) reference to a body deriving at least 25% of its funds from
state or local authority funds would be necessary if non-governmental entities
were entirely excluded from the Act since state and local governmental entities
derive all, or virtually all, of their funds from the government.
Considering the statute as a whole, we are compelled to conclude that a
private entity such as UMG can indeed be. a "body" as encompassed
.
by KRS
61.870(1)(h),5 leading to the.inquiry of whether UMG derives at least 25% of its
funds from "state or local authority funds." While the parties note that the
1994 version did not contain a time period for which to calculate the
percentage, that timing concern is irrelevant in this case because it is
undisputed that UMG derives all or virtually all of its revenues from the
District and the City of Pikeville. As the Attorney General correctly observed:
UMG has only two known sources of revenue--contracts with
MWD [the District] and the City, both of which are indisputably
public agencies within the meaning of KRS 61.870(1), and which
are statutorily authorized to collect fees paid by consumers for the
services provided. Upon receipt by each public agency, regardless
of the source or purpose for which such funds are paid, those
'- funds take on a public character and can be properly characterized
as 'state or· local authority funds,' a phrase which is comprehensive
and includes fee revenues generated by MWD and the City. UMG
is then compensated with public funds for performing certain
services through, or on behalf of, MWD and the City.
s This is consistent with the Attorney General's interpretation of the term
through the years. On several occasions, a private entity has been held subject to the
Open Records Act. See 10-0RD-062 (Keeton Corrections, Inc.-Paducah); 04-0RD-111
(Kentucky Baptist Homes for Children, Inc.); 02-0RD-222 (Seven Counties Services,
Inc.).
8
Given these undisputed f~cts, the mo_nies UMG expends in its solely Kentucky-
based business are necessarily "state or local authority" funds and UMG is a
"body" qualifying as a "public agency" under KRS 61.870(1)(h). As a "public
agency," UMG was obligated to produce "public· records" pursuant to the Act, at
least as it existed in 1994, upon request by the Pike County Fiscal Court. This
is certainly not "an absurd result," Shawnee Telecom, 354 S.W.3d at 551, the
construction to be avoided in statutory construction, given the wholly public
nature of UM G's business activities. Of course, UMG insists the 1994
definition does not apply following the General Assembly's amendment of KRS
61.870(1)(h) so we turn next to that amendment and its effect, if any, on the
issue before us.
. .
II. The 2012 Amendment to KRS 61.870(1(h) is not Retroactive.
In Comm. Dept. of Agriculture v. Vinson, 30 S.W.3d 162, 168 (Ky. 2000),
this Court recognized the time-honored "fundamental principle of statutory
construction in Kentucky" that bans the retroactive application of statutory
amendments. "Kentucky law prohibhs the amended version of a statute from
being applied retroactively. to events which occurred prior to the effective date
of the amendment unless the amendment expressly provides for retroactive
application." Id. As our General Assembly has pointedly stated: "No statute
shall be construed to· be retroactive, unless expressly so declared." KRS
· 446.080(3). With this directive, our Court has held there are no mandatory
"magic words" for retroactive legislation but the legislature ."must expressly
manifest its desire that a statute apply retroactively." Baker v. Fletcher, 204
9
S.W ..3d 589, 597 (Ky. 2006). Unq~estionably, we recognize a "strong
presumption" that statutes operate pz:-ospectively. Vinson, 30 S.W.3d at 168.
UMG seeks to override this presumption and secure the application of
the 2012 amendment to KRS 6L870(1)(h) to the Pike County Fiscal Court's
2011 Open Records request on the grounds that the amendment was
"remedial" and thus can be applied retroactively. In Vinson, 30 S.W.3d at 168,
this Court noted that
-
substantive
.
amendments to the law, "amendments which
change and redefine the out-of-court.rights, obligations and duties of persons
in their transactions with others" come with the rule that statutory
amendments are not to be applied retroactively. So-called "remedial"
amendments are not, however, covered by the presumption against
retroactivity. Id. A remedial statute generally expands "an existing remedy
without affecting the substantive basis, prerequisites, or circumstances giving
rise to the remedy." Kentucky Ins. Guar. Ass'n v. Jeffers, 13 S.W.3d 606, 609
(Ky. 2000). As explained in Moore v. Stills, 307 S.W ..3d 71, 81 (Ky. 2010):
Among the "remedial" enactments are statutory amendments that
clarify existing law or that codify judicial precedent. Because such
amendments do not impair rights a party possessed when he or
she acted or give past conduct or transactions new substantive
legal consequences, they do not operate .retroactively and thus do
not come within the rule against retroactive legislation.
(Citations omitted).
Without a doubt, the 2012 amendment to KRS 61.870(1)(h) effected a
substantive change in the law. Prior to that time, a "body" which met the 25%
expenditure test was subject to the Act but after the· amendment, designated
10
effective as of July 12, 2012, a body which derives its public funds from a
contract issued in a public competitive procurement process is no longer
covered. "Out-of-court rights, obligations and duties," Vinson, 30 S.W.3d at.
168, are manifestly affected by such a change in the law. More precisely, UMG
was plainly covered by the 1994 version of the statute but it would seemingly
avoid Open Records Act obligations altogether under the 2012 version because
its contract with the District (~d with the City of Pikeville) was 09tained
following what was ostensibly "a public competitive procurement process."
Stated conversely, prior to the 2012 amendment the Pike County Fiscal Court
had a right to request and receive documents from UMG while. post-
amendment it would not.
In an effort to avoid the obviously substantive nature of the 2012
amendment, UMG argues that the 2012 amendment really did "clarify existing
law." Moore, 307 S.W.3d at 81. UMG points to~ 2009 Jefferson Circuit Court
opinion regarding the perceived unconstitutionality of the 1994 version of KRS
61.870(1)(h) and a "bill summary" for the 2012 amendment that appeared on
the Kentucky General Assembly's website. Neither of these extraneous matters·
supports the conclusion that the 2012 amendment was simply "clarifying" as to
the "bodies" identified in KRS 61.870(1)(h). that are subject to public records
disclosure obligations.
Beginning with the bill. summary, UMG focuses on the following language
regarding H.B. 496 (2012):
Retain original provisions, except change the requirement that the
company derive at least 25 percent of its funds expended by it in
11
the Commonwealth wi~hin the current fiscal year to within any
fiscal.year; clarify that the exclusion applies to funds derived from
a state or local authority in compensation for goods or services
provided by a contract obtained through a public competitive
procurement process.
See http://www.lrc.ky.gov/record/ 12rs/hb496.htm (emphasis addedL A
review of the relevant website establishes that the "clarify" language does not·
refer to clarifying the existing 1994 definition. Rather, the original 2012 bill
directed to the statute was followed by a House Committee Substitute (HCS)
and that HCS was intended to clarify the language in the 2012 proposed
amendment then under consideration. Whereas the original 2012 bill simply
stated, "public procurement process" the HCS added
.
the word "competitive." ~
In any event, the clarification reference in the bill summary appears in the
context of clarifying an exclusion ("clarify that the exclusion applies to ... ) and
there were no exclusions in the 1994 version of KRS 61.870( 1)(h). To the
extent the bill summary is entitled to any deference, a debatable proposition, it
clearly says nothing about the 2012 legislative enactment clarifying the existing .
1994 statute.
As for the 2009 Jefferson Circuit Court opinion; 6 that court appropriately
identified a shortcoming in the 1994 version of KRS 61.870(1)(h), i~e., the
absence of any timeframe for which to assess the 25% expenditure threshold.
In some instances, including the. case before that circuit court, the time frame
for determining whether a body has the requisite level of public fund
6 Chilton v. MA. Mortenson Co., Case No. 09..:cI-02749 (Jefferson Circuit Court,
Div. 13 Nov. 24, 2009). ·
12
expenditures could be determinative,
.
e.g.,. the 25% threshold may be met for
the preceding three years but not the preceding year alone. The -2012
legislation addressed this specific concern by adding the language "within any
fiscal year," leading to the logical interpretation that if the records sought are
for a fiscal year in which the 25% threshold is met, there is an obligation to
produce. There is no indication that this part of the 2012 amendment, which
addre~sed an obvious omission from the original statute, was prompted by the
Jefferson Circuit Court opinion but, in anievent, the clarification of this one
troubling timeframe issue does not convert the 2012 amendment as a whok
into a remedial statute. While it is plausible to deem the "in any fiscal year"
language remedial, it is not at all plausible to deem the remainder of the 2012
amendment removing certain bodies that receive public funds from the ambit
of the Open Records Act remedial. That change is indisputably substantive
and simply cannot be applied retroactively.
Finally, we note UMG cites authority from other jurisdictions7 for the
general proposition that until this matter is fully concluded by final opinion of
this Court, the Pi_ke County Fiscal Court's right, if any, to UMG's records has
not "vested" and, accordingly, applying the 2012 amendment would not really
be a retroactive application of the law. Given th~ language employed by our
General Assembly in the Open Records Act, we find these out-of-state decisions
unpersuasive. Our statute reflects that even if the requester is denied the
1Deal v. Coleman, 751 S.E.~d 337 (Ga. 2013); Houston Indep. School Dist. v.·
Houston Chronicle Pub. Co., 798 S.W.2d 580 (Tex. App. 1990).
13
public records requested and has to pursue them through an appeal to the
· Attorney General
. and even all levels of the .Kentucky Court of Justice, as the
'
,Pike County Fiscal Court has done in this case, the right to inspect Vests at the
time of the original, statutorily authorized request.
KRS 61.87;2(1) provides that "all public records shall be open for
inspection by any person" and KRS 61.872(2) elaborates that "any person shall
have the right to inspect public records." (emphasis supplied). ·The public
agency that maintains the r~cords has essentially three business days to
respond. See KRS 61.880. ·If inspection is denied, there .is recourse to the
Office of the Attorney General pursuant to KRS 61.880 followed by a judicial
remedy pursuant to KRS 61.882. In subsection (5) of the judicial appeal
statute, the General Assembly provided for the recovery of costs and attorney
fees by a requester who successfully pursues an Open Records Act appeal. The
General Assembly further detailed that "it shall be within the discretion of the
court to award the person ~n amount not to ex;ceed twenty-five dollars ($25) for
. each day that he was denied the 'right to inspect or copy said public record."
KRS 61.882(5). We read this to mean that the inspection right exists and fully
' '
vests when a person first seeks and is denied-public records which are
statutorily subject to the Open Records Act. Here, the Pike County Fiscal
Court's right to the records it sought from·UMG vested in March 2011, weU
before the 2012 amendment of KRS 61.870(1)(h).
14
III. The 1994 Version of KRS 61.870(1)(h) Was Constitutional.
_,
With UMG plainly subject to the Open Records Act as it existed in March
2011 and unable to avail itself ~f the 2012 apiendment, the· remaining question
for our consideration is whether KRS 61.880(1)(h) in its 1994 form was
constitutional. The circult court found the statute unconstitutionally vague
and unintelligible, primarily due to the lack of definitions for the terin "body"
and the phrase "state or local authority funds." The Court of Appeals rejected
this analysis, and we do as well. Turning to the constitutionality issue, we are.
ever mindful of the presumption that the statutes we address are
constitutional. Curd v. Ky. State Bd. of Licensure, 433 S.W.3d 291, 305 (Ky.
2014).
As this Court noted in Bd. of Trustees of the Judicial Form Ret. Sys. v.
Atty Gen. of Commonwealth, 132 S.W~3d 770, 778 (Ky. 2003):
The void-for-vagueness doctrine is most often applied in the
context of the First Amendment, the criminal law, and punitive
civil laws. However, while statutes affecting those areas should
receive the most rigorous review and are most commonly held void
for vagueness, non-punitive civil, regulatory, or spending statutes
are also invalid if they are so unintelligible as to be incapable of
·judicial interpretation. In that circumstance, the statute often is ·
declared void for "unintelligibility" or "uncertainty" as opposed to
"vagueness."
(Citations omitted). The latter "void-as-unintelligible" doctrine is most aptly
reflected in our predecessor Court's statement in Folks v. Barren Cty., 232
S.W.2d 1010, 1013 (Ky. 1950): "But where the law-making body, in framing the
law, has .not expressed its intent intelligibly, or in language that the people
upon whom it is designed to operate or whom it affects can understand, or
15
from which the courts can deduce the legislative will, the statute will be
declared to be inoperative and void."
As the Bd. of Trustees Court explains, the constitutional foundation for
the void-for-vagueness doctrine is the First Amendment for laws that constrain
speech and the Due Process Clause of the Fifth and Fourteenth Amendments
for criminal laws. 132 S.W.3d at 781. The constitutional basis for the void-for-
unintelligibility doctrine is not found in the Bill of Rights but rather the
bedrock principle of separation of powers. Id. at 780-81. See Ky. Const.§ 27
(providing for separation of powers among executive, legislative and judicial
branches of government); Ky. Const.§ 28 (prohibiting any branch from
exercising powers committed to the other two branches);. Ky. Const§ 29
(vesting legislative power in General Assembly). Where a statute is
unintelligible, the courts cannot interpret it but instead must speculate about
the legislative intent: such judicial speculation is effectively unauthorized
judicial legislation. 132 S.W.3d at 781. See Sullivan v. Brawner, 36 S.W.2d
364, 368 (Ky. 1931) (When a court is "left in the dark with no lights furnished
by the statute to dissipate that darkness" it cannot engage in conjecture lest it
"allocate to itself legislative functions"). In Bd. of Trustees, this Court
\
appropriately noted that faced with that situation-judicial legislating due to
unintelligibility-the proper course is to declare the chalienged statute ·
unconstitutional and give the General Assembly the opportunity to pass a new,
intelligible statute. 132 S.W.3d at 781.
16
Turning to the 1994 versio~ of KRS 61.870( 1)(h) and recognizing that is
does not involve speech or criminal law, we consider the void-as-unintelligible
doctrine. The question posed is whether the people the statute affects can
understand it and the courts can deduce the legislature's will. Folks, 232
S.W.2d at 1013. The answer is yes, most certainly.
'
The absence of a definition for the word "body~ does not render
unintelligible the phrase "any body which derives at least twenty-five percent
(25%) of its funds expended by it in .the Commonwealth of Kentucky from state
or local authority funds." A common definition of the term "body" in the legal
sense is "a group of individµals regarded as an entity; a corporation." See
American lferitage Dictionary of the English Language (5th ed. 2011). and
Webster's II New College Dictionary (1995). Similarly, it is common sense that
funds or monies held by a state or local authority (such as funds held by the
District arid the City of Pikeville, both ·of which are public agencies within the
meaning of KRS 61.870(1)(h)) constitute "state or local authority funds." The
·1994 statute could have been dr'afted more precisely, perhaps, but that is not
the test of constitutionality under the void-for-vagueness doctrine,·
Commonwealth v. Kash, 967 S.W.2d 37, 43 (Ky. App. 1997), nor should it be
when the issue is whether the statute is void-a,s-unintelligible. If people it
affects can understand it and courts such as this one can interpret it without
17
great difficulty, the statute must be deemed constitutional. KRS 61.870(1)(h)
in its challenged form was and is constitutional. s
CONCLUSION
At the time of Pike County Fiscal Court's 2011 Open Records Act
request, UMG was a "public agency" subject to the Act pursuant to KRS
61.870(1)(h) because it was "a body which derives at least twenty-five percent
(25%) of its funds expended by it in the Commonwealth of Kentucky from state
or local author~ty funds." The 2012 amendment to KRS 61.870(1)(h) was a
substantive amendment and, consequently, does not apply retroactively to
relieve UMG of its disclosure obligation in response to the Pike County Fiscal
Court's request. Finally, the challenged 1994 version of KRS 61.870(1)(h) was
and is constitutional: it is sufficiently intelligible that people can understand it
and the courts can discern legislative intent withmJt resort to judicial
speculation. Accordingly, we affirm the Court of Appeals' conclusion that UMG
must respond to the Pike County Fiscal Court's March 2011 Open Records Act
request, and remand this matter to Pike Circuit Court for entry of an order
consistent with this Opinion.
Minton, C.J.; Keller, VanMeter, and Venters, JJ., concur. Wright, J.,
dissents by separate opinion in which Cunningham, J., joins.
s UMG raises in this Court, for the first time, an equal protection claim, a claim
not included in its Complaint and Petition for Declaration of Rights and not addressed
by either of the lower courts. As we have regularly observed, appellate courts are -
'"without authority to review issues not raised in or decided by the trial court.m Ten
Broeck DuPont, Inc. v. Brooks, 283 S.W.3d 705, 734 (Ky. 2009) citing Regional Jail
Authority v. Tackett, 770 S.W.2d 225, 228 (Ky. 1989). We do not address this
eleventh-hour argument.
18
WRIGHT, J., DISSENTING: When the Pike County Fiscal Court
~equested records from UMG, a privately-owned, for-profit Kentucky limited
liability corporation, UMG replied to the request stating that, as a private
entity, it was not subject to the Open Records Act. TI:iis case turns on this
Court's application of KRS 61.870(h). As that statute existed at the time of the
request, it defined "public agency" to include "any body which derives at least
twenty-five percent (25%) of its funds expended by it in the Commonwealth of
Kentucky from state or local· authority funds." Since the litigation in the
present case began, the General Assembly has amended the statute. The
amendment specifically excludes funds "provided by a contract obtained
through a public competitive procurement process" from consideration in
·.... ' .
determining whether a body is a public agency. UMG's funds are obtained
through such a competitive procurement process. Therefore, under the
amendment, UMG would be excluded.
This case turns on which version of the statute applies. The majority
holds the pre-amendment version applies; however, I respectfully disagree and,
therefore, dissent. While the statute does not explicitly provide for its
retroactive application, this Court has recognized an exception to the
presumption against retroactivity. "[S]tatutory amendments that do not affect
·substantive rights, amendments often referred to as 'remedial,' do not come
within the rule prohibiting retroactive application." Moore v. Stills, 307 S.W.3d
71, 80-81 (Ky. 2010) (internal citation and quotations omitted). "[S]tatutory
amendments that clarify existing law" are remedial in nature because "such
19
amendments do not impair rights a party poss~ssed when he or she acted or
\ '
give past conduct or transactions new substantiVe legal consequences." Id. at
81.
"Here, the General Ass~mbly merely clarified its definition of public
agency. The Legislature knew it needed to do so be~~use of the ambiguity of
the statute. In fact, Rep:r;:esentative Johnny Bell (the arriendment's primary
sponsor) even said as much during committee hearings on- the amendment. He
stated:
What -this legislation is attempting to do is to protect private
industry, private entities. What is happening is there has been,
what I feel like, a misinterpretation of the original legislation. If
you read that legislation, it's not very good~ It's not very well
written, in my opinion as an attorney. It's now been held by a
Louisville judge [in Chilton v. MA. Mortenson Co., Case No. 09-CI-
027.49 (Jefferson Circuit Court, Div. 13 Nov. 24, 2009)] to be all
overbroad and vague . . . . I would have liked to have changed a lot
of it, but because of the scrutiny, I decided not to do that. So, w.e
done a very minute change, which in essence states that someone
that goes through a public, competitive procurement process, that
is already open to the public wholeheartedly, anyone can see that,
any competitive bid in the state is open to the public .... So, we
felt like, due to the Louisville judge's holding and the disagreement
with the interpretation that we needed to do some minute
clarification to protect private entities.
The Legislature was looking at cases in which a large, out-of-state
company with a contract for close to $250 million with the state was not
considered a "public agency" (and, therefore, not subject to open records
requests), while a smaller, in-state private LLC with a fraction of the revenue
from local-government contracts would be subject to open up its books. This is
. ,
an absurd result. But, by a simple clarification of the statutory language', the
General Assembly could avoid it.
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This clarification did not impair the rights of the Fiscal Court. Rather, it
merely provided a better frame of reference to the bodies to which the
legislature had always intended the statute to apply. This only makes sense.
The public competitive procurement process is already, as its name indicates,
open to the public. What the public ·is doing with its funds through this
process is not closed in any way-_and the' details surrounding said process are
certainly available to the public through an ope_n records request. However,
the legislature never intended the books of the private companies engaging in
the public co~petitive procurement process to be subject to such a request.
The fact that the Act never so much as mentions private companies lends
credence to this assertion.
Because the Fiscal Court never had a right to these records, no rights
would be impaired by the retroactive application of the amendment. Therefore,
the clarification the General Assembly made to the Open Records Act was
remedial in nature and should be applied retroactively.
Furthermore, regardless of whether UMG was subject to the Open
Records Act, the Fiscal Court's request was overbroad. It requested "copies of
[UMG's] checks and all expenses since the.original contact [sic] between
Mountain Water and UMG."· It also sought "a list of expenditures including
check number, date, amount and payee for all checks written from January 7,
2005 to present." In fact, the Fiscal Court's own attorney admitted during oral
that an overbroad interpretation could be given to the request. Contrary to the
request, KRS 61.870(2) plainly provides: "'Public record' shall not include any
21
records owned or maintainep by or for a body referred to in subsection.(l)(h) of
this section that are not related to . functions, activities, programs, or operations
.
funded
.
by state"-or local authority .. ; ." KRS 61.870(2). Therefore, the request
exceeded the parameters of the Act.
For these reasons, I respectfully dissent.
Cunningham, J., joins.
COUNSEL FOR APPELLANT:
Kevin Crosby Burke
Jamie Kristin Neal
Burke Neal PLLC
;
COUNSEL FOR APPELLEE: .
John Doug.Hays
David Seth Kaplan
Casey Leigh Hinkle .
Kaplan & Partners LLP
22