PA Public Utility Commission v. Sunrise Energy, LLC , 177 A.3d 438 ( 2018 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Pennsylvania Public Utility :
Commission, :
Petitioner :
: No. 503 C.D. 2017
v. :
: Argued: December 4, 2017
Sunrise Energy, LLC, :
Respondent :
BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION BY
JUDGE McCULLOUGH FILED: January 12, 2018
The Pennsylvania Public Utility Commission (PUC) petitions for review
of the March 27, 2017 final determination of the Office of Open Records (OOR),
granting Sunrise Energy, LLC (Sunrise) access to certain information held by the PUC
and related to an identified Commonwealth Court proceeding.
Facts and Procedural History
On October 17, 2016, David Hommrich, on behalf of Sunrise (together,
the Requester), submitted a request to the PUC pursuant to Pennsylvania’s Right to
Know Law (RTKL),1 seeking all email and correspondence between the PUC staff and
First Energy Corporation (First Energy) regarding the case of Sunrise Energy, LLC v.
First Energy Corporation (Pa. Cmwlth., No. 1282 C.D. 2015, October 14, 2016), from
1
Act of February 14, 2008, P.L. 6, 65 P.S. §§67.101-67.3104.
the past year. The PUC identified 64 emails in response to the request, and explained
that, while the PUC was not a party to the related litigation, it participated as amicus
curiae. The PUC denied the request on November 22, 2016, asserting that the
requested documents were protected from disclosure by both the attorney-work-
product doctrine and the attorney-client privilege. The Requester appealed the PUC’s
denial to the OOR on December 9, 2016. (Reproduced Record (R.R.), 503 C.D. 2017,
at Item No. 2.)
The basis of the appeal was limited to the issue of whether the requested
documents were protected by the attorney-work-product doctrine. The PUC again
argued that the emails and correspondence were protected because they related to the
PUC’s submission of an amicus brief on behalf of First Energy. The PUC noted that
the communications related to ongoing litigation between the Requester and First
Energy regarding the Alternative Energy Portfolio Standards Act (AEPS Act),2 and
that it believed that the Requester would ultimately pursue litigation against the PUC
to challenge its implementation of the AEPS Act. Further, the PUC contended that the
Requester lacked standing to bring the appeal because Sunrise was not named in the
original request, and that the issue should be resolved before the court of common pleas
as a discovery issue, rather than by the OOR. To support its position, the PUC
submitted the affidavits of its Open Records Officer, Deputy Chief Counsel, and
Assistant Counsel.
In its brief, the Requester contended that the PUC did not sufficiently
demonstrate that the requested materials constituted attorney-work-product, and, even
if the doctrine applied, the PUC waived the privilege by exchanging the requested
emails with First Energy. In its response brief, the PUC countered that it shared a
2
Act of November 30, 2004, P.L. 1672, 73 P.S. §§1648.1–1648.8.
2
common legal interest with First Energy, and noted that the common interest doctrine
serves as an exception to the waiver of the attorney-work-product doctrine.
On March 27, 2017, the OOR issued its final determination, which granted
the Requester’s appeal and directed the PUC to provide all responsive records to the
Requester within 30 days. (Petitioner’s brief, at Appendix A.) In the final
determination, the OOR determined that (1) the Requester had standing to appeal the
PUC’s denial of the request; (2) although the responsive emails constituted attorney-
work-product, that privilege was waived; and (3) article V, section 10(c) of the
Pennsylvania Constitution3 does not protect the records from public disclosure in this
instance. The PUC timely appealed the OOR’s final determination to the
Commonwealth Court.
On appeal,4 the PUC raises four issues: (1) whether emails between PUC
attorneys and counsel for First Energy, for the purpose of representing the PUC’s
shared interest in First Energy’s legal position on jurisdiction under the AEPS Act and
which were not disclosed to third parties, constitute attorney-work-product excluded
from the RTKL’s definition of a public record; (2) whether PUC attorneys waived the
attorney-work-product privilege where the attorneys, representing the PUC’s legal
interest in pending litigation and as amicus curiae supporting a third party’s legal
position on jurisdiction against a common adversary, generated email communication
containing the attorneys’ factual and legal analysis with the third party’s counsel; (3)
whether the order issued by the OOR infringes upon the Pennsylvania Supreme Court’s
exclusive authority to regulate the practice of law by narrowing the application of the
3
PA. CONST. art. V, §10(c).
4
“This Court’s standard of review of a final determination of the OOR is de novo and our
scope of review is plenary.” Hunsicker v. Pennsylvania State Police, 93 A.3d 911, 913 n.7 (Pa.
Cmwlth. 2014).
3
attorney-work-product doctrine for state agency attorneys and otherwise compelling
the disclosure of information subject to the Supreme Court’s rules of confidentiality;
and (4) whether Sunrise lacks standing as a “requester” to appeal under the RTKL,
where the original RTKL request named David N. Hommrich as the requester and was
not filed in Hommrich’s official capacity as an officer of Sunrise.
Discussion
Initially, we note that the objective of the RTKL “is to empower citizens
by affording them access to information concerning the activities of their government.”
SWB Yankees LLC v. Wintermantel, 45 A.3d 1029, 1042 (Pa. 2012). Pursuant to
section 305 of the RTKL, a record in the possession of a Commonwealth agency, such
as the PUC in this case, shall be presumed to be a public record unless the record is (1)
exempt under section 708 of the RTKL; (2) protected by a privilege; or (3) exempt
from disclosure under any other federal or state law or regulation or judicial order. 65
P.S. §67.305.
Whether the Emails Constitute Attorney-Work-Product
Section 102 of the RTKL defines “public record,” in pertinent part, as “[a]
record including a financial record of a Commonwealth or local agency that . . . is not
protected by a privilege.” 65 P.S. §67.102. In turn, a “privilege” is defined as “the
attorney-work product doctrine, the attorney-client privilege, the doctor-patient
privilege, the speech and debate privilege or other privilege recognized by a court
interpreting the laws of this Commonwealth.” Id. The agency bears the burden to
prove, by a preponderance of the evidence, that a record contains privileged material
and, hence, is protected from disclosure. 65 P.S. §67.708(a)(1); Office of the District
4
Attorney of Philadelphia v. Bagwell (Bagwell IV), 155 A.3d 1119 (Pa. Cmwlth. 2017).
Further, “[r]elevant and credible testimonial affidavits may provide sufficient evidence
in support of a claimed exemption; however, conclusory affidavits, standing alone, will
not satisfy the burden of proof an agency must sustain to show that a requester may be
denied access to records under the RTKL.” Bagwell IV, 155 A.3d at 1120 (citing
McGowan v. Pennsylvania Department of Environmental Protection, 103 A.3d 374,
381 (Pa. Cmwlth. 2014); Heavens v. Pennsylvania Department of Environmental
Protection, 65 A.3d 1069, 1074 (Pa. Cmwlth. 2013)).
The “work-product privilege only applies to records that are the work-
product of an attorney, and may extend to the product of an attorney’s representative
secured in anticipation of litigation.” Bagwell v. Pennsylvania Department of
Education (Bagwell I), 103 A.3d 409, 415 (Pa. Cmwlth. 2014) (citing Rittenhouse v.
Board of Supervisors, (Pa. Cmwlth., No. 1630 C.D. 2011, filed April 5, 2012)).
Pursuant to the Pennsylvania Rules of Civil Procedure:
[T]he work product doctrine provides that a party may obtain
discovery of material prepared in anticipation of litigation or
trial by a party’s attorney, but discovery “shall not include
disclosure of the mental impressions of a party’s attorney or
his or her conclusions, opinions, memoranda, notes or
summaries, legal research or legal theories.”
Id. (quoting Pa.R.C.P. No. 4003.3).
The attorney-work-product doctrine acknowledges that “attorneys need a
certain degree of privacy, free from unnecessary intrusion by opposing parties and their
counsel.” Hickman v. Taylor, 329 U.S. 495, 510-11 (1947). Thus, the attorney-work-
product doctrine serves the purpose of safeguarding the mental processes of an
attorney, as well as the materials prepared by agents of that attorney. Bagwell I, 103
A.3d at 416.
5
With respect to the RTKL, we have held that the attorney-work-product
doctrine not only “protects the mental impressions, theories, notes, strategies, research
and the like created by an attorney in the course of his or her professional duties,
particularly in anticipation or prevention of litigation from disclosure,” but also “any
material prepared by the attorney in anticipation of litigation, regardless of whether it
is confidential.” Id. (internal citations and quotation marks omitted). Our Supreme
Court has established that materials constituting attorney-work-product are not subject
to compulsory disclosure under the RTKL. See LaValle v. Office of General Counsel,
769 A.2d 449, 459 (Pa. 2001) (decided under Pennsylvania’s former RTKL).
In support of its argument that the identified emails constitute attorney-
work-product, the PUC produced three affidavits. The PUC’s Open Records Officer,
Rosemary Chiavetta, Esq., avers in her affidavit that the subject emails were drafted
and sent by and between counsel for the PUC and counsel for First Energy, and that
they related to ongoing litigation between First Energy and Sunrise. She further
asserted that all communication sent by PUC’s counsel was related to the PUC’s legal
interest in that ongoing litigation, as well as potential litigation against the PUC. The
affidavit of the PUC’s Deputy Chief Counsel, Robert Young, Esq., reflects the same.
On the other hand, Sunrise submits that the identified emails do not
constitute attorney-work-product, primarily because the PUC was not a party to the
ongoing litigation between First Energy and Sunrise. Sunrise also argues that First
Energy, which is not a party to the instant matter, generated a number of the relevant
emails, and that, with respect to those emails, the PUC cannot assert the attorney-work-
product privilege. Sunrise also asserts that the affidavits submitted by the PUC
contained bald assertions, and were insufficient to demonstrate that the documents
were protected by the attorney-work-product doctrine.
6
The OOR found that the attorney-work-product doctrine was applicable
to the emails in this case. In doing so, it cited language from the PUC’s affidavits, and
ultimately concluded that the PUC “established that some of the responsive e-mails
contain the legal and factual analysis of its attorneys.” (Petitioner’s brief, at Appendix
A.) However, the OOR did not specifically address Sunrise’s argument that the
affidavits were too “conclusory and vague” to demonstrate, by themselves, that the
emails were protected by the attorney-work-product doctrine.
We considered the sufficiency of affidavits to establish the attorney-work-
product privilege in Pennsylvania Department of Education v. Bagwell (Bagwell III),
131 A.3d 638 (Pa. Cwmlth. 2016). In Bagwell III, the Pennsylvania Department of
Education appealed the final determination of the OOR which directed the disclosure
of certain emails pursuant to the RTKL. In support of its argument, the Department of
Education presented affidavits regarding the content of the requested documents,
arguing that disclosure of those documents was precluded by the attorney-work-
product doctrine; however, it did not submit a privilege log to either the OOR or the
Court. We found that “[a]s a result, neither [the] OOR nor this Court had sufficient
information to evaluate the exemptions.” Id. at 658 (citing Office of the Governor v.
Davis, 122 A.3d 1185 (Pa. Cmwlth. 2015) (en banc)). We found the affidavits of the
Department of Education to be “conclusory and vague” because they did not “describe
the records with any particularity as to how the privilege supports non-disclosure or
redaction . . . of allegedly responsive records.” Id.
In the case before us, the PUC identified numerous emails that were
responsive to Sunrise’s request. Relying on the PUC’s affidavits, the OOR merely
determined that “some” of the identified emails constituted attorney-work-product.
This determination was made without reviewing the content of each email and, more
7
importantly, without consideration of the fact that certain emails were drafted and sent
by counsel for First Energy. With respect to those emails, the attorney-work-product
privilege is First Energy’s to assert and cannot be asserted by the PUC on behalf of
First Energy.
In Bagwell III, we looked to federal case law to explain that standing to
challenge the disclosure of privileged records generally “inures to the person or entity
holding the privilege to preserve it.” 131 A.3d at 648 (citing In re Grand Jury, 705
F.3d 133 (3d Cir. 2012)). We held that “attorney privileges constitute a sufficient
interest to allow a privilege holder standing to appeal an order directing disclosure of
allegedly privileged material.” Bagwell III, 131 A.3d at 648.
Next, we acknowledged the “traditional” test for standing, which
“requires a party seeking to challenge an agency action to show a ‘direct and substantial
interest [and] a sufficiently close causal connection between the challenged action and
the asserted injury’ so the interest qualifies as immediate.” Id. at 649 (quoting DeFazio
v. Civil Service Commission of Allegheny County, 756 A.2d 1103, 1105 (Pa. 2000)).
We ultimately concluded that the privilege holder, which was not a party to the action
before us, was able to show a sufficient nexus to the disclosure dispute to give it
standing to challenge the final determination of the OOR. This was because the
privilege holder would be aggrieved by the disclosure of documents implicating its
attorney-client and attorney-work-product privileges.
The same is true here. First, it is undisputed that First Energy was not
notified of this disclosure dispute and, therefore, has not participated in the proceedings
to date. It is also undisputed that at least some of the emails identified by the PUC in
response to Sunrise’s request constitute the work product of First Energy. Thus, First
8
Energy may be aggrieved if some of its work product is disclosed to Sunrise without
its consent.
In fact, section 1101(c) of the RTKL requires that an interested party, such
as First Energy, be notified of the appeal of a final determination of the OOR:
(1) A person other than the agency or requester with a direct
interest in the record subject to an appeal under this section
may, within 15 days following receipt of actual knowledge
of the appeal but no later than the date the appeals officer
issues an order, file a written request to provide information
or to appear before the appeals officer or to file information
in support of the requester’s or agency’s position.
(2) The appeals officer may grant a request under paragraph
(1) if:
(i) no hearing has been held;
(ii) the appeals officer has not yet issued its
order; and
(iii) the appeals officer believes the information
will be probative.
(3) Copies of the written request shall be sent to the agency
and the requester.
65 P.S. §1101(c)(1)-(3).
Based upon the fact that the OOR did not review the content of the
identified emails to determine which entity held the attorney-work-product privilege
with respect to each email, and because First Energy did not have the opportunity to
protect its interests in its own attorney-work-product, we will remand this matter to the
OOR to review the actual content of the responsive emails held by the PUC. To
facilitate this process on remand, the PUC shall (1) notify First Energy of its ability to
participate, pursuant to section 67.1101(c) of the RTKL; and (2) submit a privilege log
to the OOR for in camera review.
9
Waiver of the Attorney-Work-Product Privilege
The attorney-work-product doctrine is not absolute; rather it is a qualified
privilege that can be waived. Bagwell I, 103 A.2d at 417 (citing Commonwealth v.
Kennedy, 876 A.2d 939, 945 (Pa. 2014)). Once disclosed to a third party, the privilege
is deemed waived. “[W]hen waiver is the focus of a dispute, the burden is shifted to
the party asserting the waiver.” Bagwell I, 103 A.2d at 418. Whether the attorney-
work-product privilege has been waived is determined based upon the particular
circumstances of each case. Id. (citing United States v. Nobles, 422 U.S. 225, 238-40
(1975)).
We further explained the burden of proving waiver:
[T]he RTKL requires a requester to address an agency’s
grounds for denial [of production], thus imposing some
burden on a requester. 65 P.S. § 67.1101(a); Dep’t of Corr.
v. Office of Open Records, [18 A.3d 429 (Pa. Cmwlth.
2011)]. Also, the presumption of public nature does not
apply in cases of privileged records. See 65 P.S. §
67.305(a)(2). Thus, if a privilege is established, a record is
exempt as to the privileged information. An agency lacks the
discretion to provide access to a privileged record. See
Section 506(c) of the RTKL, 65 P.S. §67.506(c).
Bagwell I, 103 A.2d at 420-21.
A few Pennsylvania courts have applied the common interest doctrine, or
joint defense privilege, as an exception to waiver; however, these cases address the
common interest doctrine with respect to the attorney-client privilege:
As a policy matter, the joint defense doctrine is highly
desirable because it allows for greater efficiency in the
handling of litigation. Frequently, co-defendants with
essentially the same interests must retain separate counsel to
avoid potential conflicts over contingent or subsidiary issues
in the case. To avoid duplication of efforts, such defendants
10
should be able to pool their resources on matters of common
interest. This can be done most effectively if both counsel
can attend and participate in interviews with each other’s
clients. . . . With multi-party cases becoming so frequent,
and with litigation costs spiraling upwards-some would say
out of control, the courts should not deny defendants the
ability to pool their resources and coordinate their efforts on
issues of common interest.
Although many issues concerning the joint defense or
common interest privilege have yet to be addressed by our
courts, various decisions have emphasized that a shared
common business interest or an interest that is solely
commercial is insufficient to warrant application of the
privilege.
In re Condemnation by City of Philadelphia in 16.2626 Acre Area, 981 A.2d 391, 397-
98 (Pa. Cmwlth. 2009). To demonstrate that the common interest doctrine applies, four
elements must be shown:
(1) the parties’ agreement to same; (2) a common-interest in
the litigation or a jointly shared litigation strategy; (3) the
communications were made pursuant to such agreement, and
(4) the continued confidentiality of the communications, i.e.,
the communications were not disclosed to other third parties
such that the privileges were waived.
Rosser Int’l, Inc. v. Walter P. Moore & Assocs., Inc., No. 2:11-CV-1028, 2013 WL
3989437, at *19 (W.D. Pa. Aug. 2, 2013).
The PUC argues that it did not waive the attorney-work-product privilege
by sharing the emails with First Energy because (1) it participated in the prior litigation
as amicus curiae in support of First Energy; and (2) it shared a common legal interest
with First Energy, thus excepting it from waiver. The PUC noted that the emails were
sent to and from counsel, and that the PUC shared the same legal interest as First
Energy because both entities faced challenges under the AEPS Act.
11
Sunrise counters that, even if the emails were found to constitute attorney-
work-product product, the privilege was waived because the PUC shared the records
with First Energy, which is not a party to the current litigation. Sunrise also reiterates
that, because First Energy generated at least some of the emails, the PUC could not
assert the attorney-work-product privilege with respect to those emails. Finally,
Sunrise contends that the PUC did not satisfy the requirements of the common interest
doctrine.
Because we are remanding this matter to the OOR to determine whether
any of the subject emails are protected from disclosure based upon the attorney-work-
product doctrine, it is not necessary for us to determine whether such privilege has been
waived or whether the common interest doctrine applies in this case. Such a
determination only becomes relevant if the emails held by the PUC are, in fact,
attorney-work-product.
Article V, Section 10(c) of the Pennsylvania Constitution
The PUC next argues that the order issued by the OOR infringes upon the
Pennsylvania Supreme Court’s exclusive authority to regulate the practice of law by
narrowing the application of the attorney-work-product doctrine for state agency
attorneys and otherwise compelling the disclosure of information subject to the
Supreme Court’s rules of confidentiality. Article V, section 10(c) of the Pennsylvania
Constitution5 has been interpreted as vesting in the Supreme Court the exclusive power
to govern the conduct of attorneys practicing law in this Commonwealth.
In support of its argument, the PUC cites our prior decision in City of
Pittsburgh v. Silver, 50 A.3d 296, 300-01 (Pa. Cmwlth. 2012), wherein we held that
5
PA. CONST. art. V, §10(c).
12
correspondence related to the negotiation of a settlement of pending litigation was not
subject to public access under the RTKL because the disclosure of such documents
would violate Rule 1.6 of the Pennsylvania Rules of Professional Conduct.
In turn, pursuant to its constitutional power under article V, section 10(c),
our Supreme Court promulgated Rule 1.6(a) of the Pennsylvania Rules of Professional
Conduct which provides, in pertinent part, that “[a] lawyer shall not reveal information
relating to representation of a client unless the client gives informed consent, except
for disclosures that are impliedly authorized in order to carry out the representation.”
Pa.R.P.C. 1.6(a). In addition, comment 3 to Rule 1.6(a) provides:
The principle of client-lawyer confidentiality is given effect
by related bodies of law: the attorney-client privilege, the
work product doctrine and the rule of confidentiality
established in professional ethics. The attorney-client
privilege and work-product doctrine apply in judicial and
other proceedings in which a lawyer may be called as a
witness or otherwise required to produce evidence
concerning a client. The rule of client-lawyer confidentiality
applies in situations other than those where evidence is
sought from the lawyer through compulsion of law. The
confidentiality rule, for example, applies not only to matters
communicated in confidence by the client but also to all
information relating to the representation, whatever its
source. A lawyer may not disclose such information except
as authorized or required by the Rules of Professional
Conduct or other law.
Pa.R.P.C. 1.6 cmt. (3).
However, the PUC misinterprets the Silver holding. In Office of Open
Records v. Center Township, 95 A.3d 354 (Pa. Cmwlth. 2014), we noted that “Silver’s
holding cannot reasonably be extended to deprive the OOR of subject matter
13
jurisdiction to determine, as a threshold matter, whether documents are privileged and
exempt from disclosure under the RTKL.” 95 A.3d at 360. We explained:
At its core, then, the issue in Silver concerned a clash
between the RTKL, which permits disclosure of information
protected by the ethics-based rule of confidentiality, and
Pa.R.P.C. 1.6, which prohibits such disclosure. It is against
this backdrop, and the fact that disclosure of the settlement
negotiations violated the ethics-based rule of confidentiality,
that this Court concluded, sua sponte, that our Supreme
Court’s authority under Article V, Section 10(c) trumped the
RTKL’s requirement that the documents should be disclosed
and that the OOR lacked subject matter jurisdiction to order
disclosure.
Center Twp., 95 A.3d at 361. We expressly noted that Silver “stands for the limited
proposition that the RTKL cannot mandate and the OOR cannot order the disclosure
of settlement documents when that disclosure would contravene the ethics-based rule
of confidentiality in Pa.R.P.C. 1.6.” Id. Thus, we concluded that “there is no
jurisdictional or constitutional impediment that would prohibit the OOR from
analyzing documents and determining whether they fulfill the requirements necessary
to be considered privileged documents for purposes of the RTKL.” Id. at 365.
Therefore, PUC’s argument that the OOR’s final determination infringes
upon the Pennsylvania Supreme Court’s exclusive authority to regulate the practice of
law necessarily fails.
Standing of the Requester to Appeal
Finally, the PUC argues that the Requester did not have standing to appeal
the PUC’s denial of disclosure to the OOR. Specifically, the PUC contends that
Hommrich’s request for production under the RTKL was made in his individual
14
capacity—not in his capacity as an officer on behalf of Sunrise—and that, as such,
Hommrich cannot bind Sunrise.
Section 1101(a)(1) of the RTKL provides that “a requester may file an
appeal with the [OOR]” if a request for access to records is denied. 65 P.S.
§67.1101(a)(1). A “requester” is defined in section 102 of the RTKL as “[a] person
that is a legal resident of the United States and requests a record” pursuant to the RTKL.
65 P.S. §67.102.
While it is true that Hommrich failed to expressly indicate that his requests
were being made on behalf of Sunrise, he made that clarification on appeal. As
explained by the OOR, the PUC did not produce any evidence to indicate that
Hommrich is not, in fact, an officer or employee of Sunrise. Thus, we find that
Hommrich’s initial error was not fatal to his standing to appeal, and that he satisfies
the definition of a “requester” under the RTKL.
Conclusion
Based on the foregoing, we find that this disclosure dispute must be
remanded to the OOR to determine, on an individual basis, whether the emails
identified by the PUC constitute attorney-work-product of either the PUC or First
Energy. To do so, the PUC is directed to, first, notify First Energy of the disclosure
dispute and invite First Energy to participate, and, second, submit a privilege log to the
OOR. We also find that Hommrich had standing to bring this appeal on behalf of
Sunrise, and that the PUC’s argument with respect to article V, section 10(c) of the
Pennsylvania Constitution must fail.
15
Therefore, we vacate the OOR’s final determination and remand the
matter to the OOR to complete the record.
________________________________
PATRICIA A. McCULLOUGH, Judge
16
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Pennsylvania Public Utility :
Commission, :
Petitioner :
: No. 503 C.D. 2017
v. :
:
Sunrise Energy, LLC, :
Respondent :
ORDER
AND NOW, this 12th day of January, 2018, the final determination of
the Office of Open Records (OOR) is vacated. The matter is remanded to the OOR
for further proceedings consistent with this opinion.
Jurisdiction relinquished.
________________________________
PATRICIA A. McCULLOUGH, Judge