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Blue Sky West, LLC v. Maine Revenue Services

Supreme Court of Maine

August 20, 2019


          Argued: May 16, 2019

          William H. Dale, Esq. (orally), and Mark A. Bower, Esq., Jensen Baird Gardner & Henry, Portland, for appellant Somerset County.

          Gordon R. Smith, Esq. (orally), Verrill Dana, LLP, Portland, for cross-appellant Blue Sky West, LLC.

          Aaron M. Frey, Attorney General, and Thomas A. Knowlton, Asst. Atty. Gen. (orally), Office of the Attorney General, Augusta, for appellees Department of Administrative and Financial Services and Maine Revenue Services


          HJELM, J.

         [¶1] In a judgment entered in December of 2018, the Superior Court (Kennebec County, Murphy, J.) concluded that the Department of Administrative and Financial Services (DAFS) had issued correct decisions regarding two requests for public records submitted to it by Somerset County pursuant to Maine's Freedom of Access Act, 1 M.R.S. §§ 400-414 (2018). In the requests, which were made in December of 2016 and October of 2017, the County sought records concerning valuation information that Blue Sky West, LLC, had submitted to Maine Revenue Services (MRS) as part of the State's assessment of taxes on property that Blue Sky owns in Somerset County.[1] The court concluded that DAFS properly determined that the records responsive to the County's 2016 request are public records subject to inspection and copying, see 1 M.R.S. §§ 402(3), 408-A, but that the records responsive to the 2017 request are confidential by statute and thus are not public records, see id. §402(3)(A).

         [¶2] The County appeals the part of the court's judgment concluding that the 2017 records are not subject to public disclosure, and Blue Sky cross-appeals the part of the judgment concluding that the 2016 records are subject to disclosure. We affirm the judgment.

         I. BACKGROUND

         [¶3] The following facts are taken from the stipulated record submitted to the court.

         [¶4] Blue Sky owns and operates a wind power project, a portion of which is located in the unorganized territory of Somerset County. That portion of the project was supported in part through a municipal development and tax increment financing district (TIF) approved by the State in early 2015 on application by the County. See 30-A M.R.S. §§ 5221-5235 (2018). In April of 2016, MRS, acting as the property tax assessor for the unorganized territory of the State, see 36 M.R.S. § 302 (2018), requested valuation information about the wind power project from Blue Sky's then parent company, SunEdison, Inc. See 36 M.R.S. §706 (2017).[2] In June, SunEdison responded to that request by furnishing records (the 2016 records) comprising an itemized list of project costs, which included confidentially negotiated pricing between Blue Sky and its vendors. Significantly for our purposes, when submitting the 2016 records to MRS, SunEdison did not label them as containing confidential information.

         [¶5] Six months later, in December of 2016, the County submitted a FOAA request to DAFS seeking all public records associated with MRS's valuation of Blue Sky's wind power project.[3] See 1 M.R.S. § 408-A. Though it was not legally obligated to do so, DAFS notified Blue Sky of the County's request. In early 2017, Blue Sky sent two letters to DAFS. In the first letter, Blue Sky asserted that the records sought by the County are confidential pursuant to section 706, which states that "[information provided by the taxpayer in response to [a section 706] inquiry that is proprietary information, and clearly labeled by the taxpayer as proprietary and confidential information, is confidential and is exempt from [disclosure pursuant to FOAA]." Then, apparently concerned that when SunEdison submitted the records to MRS they had not been marked or otherwise designated as confidential, in its second letter to DAFS Blue Sky purported to "label" the 2016 records post hoc as proprietary and confidential. Based on this attempt to label the records as confidential, Blue Sky objected to the disclosure of the 2016 records to the County. See 1 M.R.S. § 402(3)(A).

         [¶6] In April of 2017, DAFS informed Blue Sky of its determination that the 2016 records do not fall clearly within any exemption to FOAA's definition of public records, see id. § 402(3), and that it planned to allow the County to inspect those records after the expiration of seven days unless otherwise directed by a court. Blue Sky promptly filed a complaint in the Superior Court naming DAFS and MRS as defendants and the County as a party in interest, and requesting a declaratory judgment that the 2016 records are not subject to disclosure pursuant to FOAA.[4]

         [¶7] Meanwhile, in early 2017, MRS had made a second, separate section 706 request for Blue Sky to provide additional valuation information regarding the wind power project. Blue Sky provided MRS with documents satisfying that request (the 2017 records). The 2017 records contain the same type of information as contained in the 2016 records, but this time Blue Sky marked its submission "Confidential pursuant to 36 M.R.S. § 706."

         [¶8] The following October, the County submitted a second FOAA request to inspect all public records associated with MRS's valuation of Blue Sky's wind power project, including all public records relating to MRS's 2017 assessment of the project. DAFS concluded that, to the extent that the County's second request encompassed the 2016 records the County had already sought, DAFS's response would be governed by the outcome of the pending court proceeding. As to the 2017 records, DAFS denied the County's request, concluding that those records are made confidential by section 706 and thus are exempt from FOAA's definition of public records.[5] See 1 M.R.S. § 402 (3) (A).

         [¶9] In the pending Superior Court action relating to the 2016 records, the County filed a cross-claim against DAFS and MRS, seeking judicial review of DAFS's denial of the County's request to inspect the 2017 records. The procedural bases cited by the County to support its claim for relief were the Maine Administrative Procedure Act, see 5 M.R.S. §§ 8001-11008 (2018), and Maine Rule of Civil Procedure 80C.

         [¶10] Pursuant to an order issued by the court, the parties filed a joint record consisting of stipulated facts and a number of documentary exhibits, [6]and MRS filed the 2016 and 2017 records under seal for the court's in camera review. A month later, Blue Sky and the County filed what they designated as cross-motions for summary judgment based on the previously filed record.[7]See M.R. Civ. P. 56.

         [¶11] In the motions, Blue Sky and the County each requested that the court determine whether the 2016 and 2017 records are public records subject to inspection and copying. See 1 M.R.S. §§ 402(3), 408-A. Blue Sky argued that the records contain trade secrets and are therefore exempt from public inspection pursuant to FOAA for two reasons: first, because trade secrets submitted to a tax assessor pursuant to section 706 are protected by that statute as proprietary information, [8] see infra ¶ 39; see also 1 M.R.S. § 402(3)(A); and second, because the records are privileged as trade secrets within the meaning of Maine Rule of Civil Procedure 26(c)(7) and Maine Rule of Evidence 507 and thus are not subject to inspection pursuant to FOAA itself, see 1 M.R.S. § 402(3)(B). The County contended that neither set of records falls within an exemption from public inspection pursuant to FOAA. See id. §§ 402(3), 408-A.

         [¶12] DAFS and MRS submitted written argument asserting that although the records are not protected from public inspection as trade secrets, they could be exempt from FOAA inspection for a different reason, namely, that they comprise "production, commercial or financial information the disclosure of which would impair the competitive position [of Blue Sky] and would make available information not otherwise publicly available," and are therefore "proprietary information" as defined by section 706. DAFS and MRS contended that the 2017 records, which Blue Sky had clearly labeled as confidential, are exempted from public inspection on that basis, see 1 M.R.S. § 402 (3) (A), but that because Blue Sky had not clearly marked the 2016 records as confidential, those records do not qualify for protection pursuant to section 706 and are subject to public inspection, see 1 M.R.S. § 408-A.

         [¶13] In December of 2018, based on a stipulated record, the court entered a judgment that had the same outcome as DAFS's decisions. The court concluded that neither set of records contains trade secrets and that therefore the records are not exempt from disclosure on that basis. The court also concluded, however, that both sets of records contain "proprietary information" in the form of "production, commercial or financial information" as those terms are used in section 706, see infra ¶ 39. Because of that and because Blue Sky had clearly labeled the 2017 records as confidential, the court determined that those records are not subject to inspection. See 1 M.R.S. §402(3)(A). But because the 2016 records were not similarly labeled, the requirements for statutory confidentiality created by section 706 were not fully satisfied, and those records therefore are not exempt from disclosure.[9] See 1M.R.S. §§402(3), 408-A.

         [¶14] The County and Blue Sky each appealed the judgment. See 5 M.R.S. § 11008; 14 M.R.S. § 1851 (2018).


         A. Standards of Review

         [¶15] The County's and Blue Sky's appeals come before us by way of differing statutory appellate procedures, so we must begin by addressing the applicable standards of review.

         [¶16] We first consider the process used by the parties, which led to the issuance of the judgment. The parties presented their contentions to the court nominally as cross-motions for summary judgment. Ordinarily, this would require the court to determine only if there were genuine issues of material fact that would require a trial or other further proceedings for resolution. See Scott v. Fall Line Condo. Ass'n, 2019 ME 50, ¶ 5, 206 A.3d 307. It is evident, however, that the parties intended for the court to fully adjudicate their claims on the merits. No party cited the standard that the court would apply to a summary judgment motion, and no party asserted that there were factual disputes that needed to be adjudicated other than by having the court apply dispositive legal principles to the facts garnered from the stipulated record.[10]

         [¶17] That is what the court did. The reasoning in the court's judgment was faithful to the approach associated with a merit-based analysis and not consistent with a summary judgment analysis. For example, the court concluded that Blue Sky had "not met its burden" of demonstrating that the records at issue contain trade secrets. Moreover, on appeal, the County asserts that the parties' presentations to the trial court are properly viewed as requests for entry of a judgment-not necessarily a summary judgment-based on a stipulated record, see supra n.10. Blue Sky does not dispute that characterization, nor, more generally, does Blue Sky address the judgment ...

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