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Louisville/Jefferson County Metro Government v. The Courier-Journal, Inc.

Court of Appeals of Kentucky

August 9, 2019

LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT APPELLANT
v.
THE COURIER-JOURNAL, INC. APPELLEE

          APPEAL FROM JEFFERSON CIRCUIT COURT HONORABLE SUSAN SCHULTZ GIBSON, JUDGE ACTION NO. 18-CI-001430

          BRIEFS FOR APPELLANT, LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT: Michael J. O'Connell Jefferson County Attorney Annale R. Taylor Assistant Jefferson County Attorney

          BRIEF FOR APPELLEE: THE COURIER-JOURNAL, INC.: Jon L. Fleischaker Michael P. Abate Andrea N. Aiken

          ATTORNEY FOR ORAL ARGUMENT: Michael P. Abate

          BRIEF FOR AMICUS CURIAE, KENTUCKY CABINET FOR ECONOMIC DEVELOPMENT; THE KENTUCKY ASSOCIATION FOR ECONOMIC DEVELOPMENT; AND GREATER LOUISVILLE, INC.: Jessica A. Burke General Counsel Kentucky Cabinet for Economic Development Frankfort, Kentucky ATTORNEY FOR ORAL ARGUMENT: Annale R. Taylor

          BEFORE: GOODWINE, LAMBERT, AND MAZE, JUDGES.

          OPINION

          MAZE, JUDGE:

         Louisville/Jefferson County Metro Government (Louisville Metro) appeals from a summary judgment order by the Jefferson Circuit Court directing it to disclose an economic development proposal pursuant to an Open-Records request by the Courier-Journal, Inc. (the Courier-Journal). Louisville Metro argues the documents at issue were exempt from disclosure because they were related to the prospective location of a business or industry and because they were merely a preliminary offer that was never adopted into a final action. We conclude that neither of these exceptions apply to the documents at issue in this case. Hence, we affirm.

         The underlying facts of this case are not in dispute. On September 7, 2017, Amazon.com, Inc. (Amazon) announced its intention to construct a second headquarters somewhere in North America, referred to as "HQ2." As part of that announcement, Amazon emphasized its anticipated $5 billion investment in the construction of HQ2 and the creation of up to 50, 000 jobs. Amazon also launched a competitive bidding initiative to identify potential locations for HQ2. The initiative included a request for proposals (RFP) setting out the criteria and specifications for bids.

         Amazon encouraged communities to provide a variety of financial incentives for the project. Its suggestions included incentives for "land, site preparation, tax credit/exemptions, relocation grants, workforce grants, utility incentive/grants, permitting and fee reductions," and noted that special incentive legislation may be required to achieve a competitive incentive proposal. All proposals were to include a summary of the incentive offered, total value of the incentives, timetable for Amazon to realize the benefits of the incentives, and details about conditions or recapture provisions associated with the incentives. The RFP emphasized that the incentive packages would be "significant factors in the decision-making process" and the extent of which those incentives could "offset initial capital outlay and ongoing operational costs" by Amazon could be "critical decision drivers."

         In response to Amazon's announcement, Louisville Metro prepared a proposal for the HQ2 project. Louisville Metro submitted its final HQ2 proposal on October 18, 2017 (the Proposal). The Proposal consisted of hundreds of pages of text, promotional videos and an interactive website. The Proposal cost an estimated $170, 000 to prepare, $70, 000 of which were paid by tax dollars.

         Amazon received more than 238 proposals from cities across Canada, the United States and Mexico. On January 18, 2018, Amazon announced that it had narrowed the field of HQ2 proposals to 20 finalists, and Louisville Metro was no longer being considered for the HQ2 site.

         After Amazon's announcement of the finalists, Courier-Journal reporter, Phillip Bailey, submitted an Open Records Request to Louisville Metro, seeking "[a] copy of Louisville Forward's[1] competitive bid proposal submitted to Amazon.com, Inc. for its headquarters including but not limited to correspondence, documents and associated partners." On February 7, 2018, Louisville Metro provided a heavily redacted version of a 118-page Proposal that omitted all information about the economic incentives and the prospective HQ2 site locations offered to Amazon. Louisville Metro asserted that the remaining portions of the Proposal were exempt from disclosure under the exceptions found in the Open Records Act (ORA). First, Louisville Metro argued that the Proposal was preliminary in nature under KRS[2] 61.878(1)(i) & (j). Second, Louisville Metro argued that KRS 61.878(1)(d) permits agencies to withhold records pertaining to the prospective locations of a business or industry where no previous disclosures have been made of the business' or industry's interest in locating within the Commonwealth.

         On March 9, 2018, the Courier-Journal filed a complaint in the Jefferson Circuit Court in an effort to obtain full disclosure of the Proposal. Eventually, the matter proceeded to cross-motions for summary judgment. In a memorandum and order entered on September 24, 2018, the circuit court granted the motion by the Courier-Journal and denied the motion by Louisville Metro. The court found that the Proposal was no longer exempt as preliminary after Amazon announced that Louisville Metro was no longer in consideration. Likewise, the court found that KRS 61.878(1)(d) was not applicable because Amazon's interest in relocating was publicly ...


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