Stromberg Metal Works, Inc. v. University of Maryland

Citations: 887 A.2d 1085; 166 Md. App. 190; 2005 Md. App. LEXIS 299Docket: 2673, September Term, 2004

Court: Court of Special Appeals of Maryland; December 6, 2005; Maryland; State Appellate Court

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Stromberg Metal Works, Inc. (Appellant) appealed a decision from the Circuit Court for Prince George's County, which denied its motion for attorney's fees after the Court of Appeals allowed access to documents from the University of Maryland under the Maryland Public Information Act (MPIA). The case arose from a complaint by Stromberg, a subcontractor on a renovation project at the University, seeking production of reports from the Department of Architecture, Engineering, and Construction (AEC Reports). The University had initially provided redacted copies of these reports, withholding specific financial information based on claims of executive privilege, deliberative process privilege, and confidentiality of commercial information.

Stromberg's legal action aimed to compel the University to release the unredacted reports. The circuit court granted summary judgment in favor of the University, which prompted Stromberg to appeal. The Court of Appeals later focused on whether the financial data in the AEC Reports was protected under the asserted privileges and ultimately sided with Stromberg, granting access to the information. However, the circuit court's denial of attorney's fees was upheld on appeal, with the appellate court finding no abuse of discretion or legal error in the lower court's ruling.

Joyce Hinkle and another individual were responsible for managing the AEC Report, which consists of multiple spreadsheets detailing information about the University’s construction projects. Each project report, including the one for the Stamp project, provides comprehensive financial data such as original budgets, approved funding changes, current expenses, encumbrances, estimated completion costs, final cost forecasts, budget variances, and key project timelines. A consolidated spreadsheet summarizes the projected budget, final cost forecast, budget overages, and project schedule status.

In a court opinion from July 27, 2004, it was determined that certain privileges did not apply to redacted information in the documents requested by the appellant. The court specifically noted that the records did not contain sensitive diplomatic or security information and did not involve the deliberative processes of high-level officials. The AEC reports were prepared for the Director of the AEC, who was not deemed part of the decision-making process relevant to the claimed privileges.

Regarding the deliberative process privilege, the court referenced federal interpretations of the Freedom of Information Act, emphasizing that protected communications must be pre-decisional and related to the formulation of governmental policies. While a redacted cost figure was considered pre-decisional, it was ruled largely factual and not indicative of deliberative processes, thus allowing for its disclosure. The court remanded the case to the circuit court to permit the appellant to inspect the specific forecasted total cost information for the Stamp Student Union project.

On September 21, 2004, the appellant filed a motion for attorney fees under the Maryland Public Information Act (MPIA), claiming entitlement to $62,546 in fees and costs due to a substantial victory in the public information action. The University contested this claim, asserting that the appellant failed to demonstrate entitlement to such an award. During a December 10, 2004 hearing, the appellant argued the importance of public benefit, highlighting that the construction project was publicly funded and that the requested information was undisputedly a public record.

The University misapplied specific exemptions under the Public Information Act, particularly concerning a public construction project that experienced significant cost and schedule overruns, which were of interest to the University community, contractors, and the public. The Appellant, a sub-subcontractor not privy to prime contract discussions, sought records to ascertain whether the University had authorized public funding for a project that was over 22 months behind schedule and nearly 30 percent over budget. The University argued that the Appellant's interest was primarily commercial—focused on payment for work—suggesting this undermined a claim for attorney fees, as such fees are typically granted to those without a commercial interest. The University also contended that the withheld information did not significantly contribute to public interest, asserting that only a subjective project manager's assessment was redacted, while factual data was disclosed. Lastly, the University defended its decision to withhold information as legally reasonable, stating that losing a case does not equate to an unreasonable position, and that their stance was not entirely unjustified according to legal standards.

The Court of Appeals agreed with the University that the documents in question could be protected under the deliberative process privilege but acknowledged that they were pre-decisional. It noted that the case hinged on the subjective judgment of the project manager regarding the claim's possibility. While the court would allow the protection of the project manager's opinion if it could be separated, it determined that the number in dispute would not disclose this subjective thinking. Consequently, the University was found to have taken a reasonable position.

In its January 4, 2005 Memorandum, Opinion, and Order, the court outlined a two-step process for awarding counsel fees. First, it confirmed that the appellant had substantially prevailed, making them eligible for an award. Second, it assessed three factors from *Kirwan v. The Diamondback* regarding entitlement to fees: 1) public benefit from the suit, 2) the complainant's interest in the information, and 3) the agency's legal basis for withholding the information. The court concluded: 1) no public benefit was derived beyond the appellant's gain, 2) the appellant's interest was private and pecuniary, and 3) the agency had a reasonable legal basis for withholding the information. Thus, the court denied the motion for counsel fees.

The appellant subsequently appealed the court's denial of attorney's fees, arguing that the court misapplied the law and factors involved. The University countered that the court acted within its discretion, properly applying the relevant factors. The law states that awarding counsel fees under the Maryland Public Information Act (MPIA) is at the trial judge's discretion, and absent an abuse of that discretion or a significant legal error, such determinations are typically upheld on appeal.

The MPIA establishes a public policy favoring the disclosure of government documents, providing that all individuals have a right to access government affairs unless it results in unwarranted privacy invasions. The statute is to be construed to facilitate public inspection with minimal cost and delay.

The statute defines 'public record' broadly and mandates that custodians grant access to such records, as outlined in Section 10-613(a). However, Sections 10-615 to 10-617 specify records that are exempt from disclosure, and Section 10-618 addresses permissible denials. Judicial review is available under the Maryland Public Information Act (MPIA) for parties denied access to records (Md.Code 10-623(a)). Complainants who substantially prevail in their requests may have their legal costs covered (Md.Code 10-623(f)), provided they can show that pursuing the lawsuit was necessary for obtaining the information and that a causal connection exists between the lawsuit and the agency's compliance. A complainant does not need to recover all requested documents, just key ones.

Factors for determining entitlement to attorney fees include the public benefit of the suit, the complainant's interest in the information, and the legal justification for the agency's denial. In the relevant case, the court confirmed that the appellant substantially prevailed and was eligible for fees but ultimately ruled against awarding them, stating that the appellant did not meet the burden of demonstrating entitlement based on the specified factors. The circuit court exercised its discretion appropriately in rendering this decision.

The appellant argues that the court's findings lack thoroughness and amount to mere 'bald conclusions,' but this is refuted. The court based its findings primarily on the appellant's motivation for the suit, identifying it as a pecuniary interest rather than a public benefit. The Maryland MPIA mirrors federal FOIA case law, leading the court to review relevant federal decisions. In Crooker v. United States Parole Commission, the First Circuit awarded attorney's fees under FOIA, noting that the public benefit of the requested documents was substantial and significant to societal interests. However, the current case contrasts sharply; the disclosure of the construction project's costs would not provide a similar broad public benefit. The appellant's interest appears to be solely to secure payment for its work. The appellant references Shermco Industries v. Secretary of the U.S. Air Force, where a fee award was granted due to unreasonable government actions. Unlike Shermco, the current case lacks evidence of unreasonable behavior on the part of the University, which had cooperatively honored prior requests. While the Court of Appeals found no basis for denying access under the MPIA, it did not imply that the University acted unreasonably in withholding the information.

The Court of Appeals did not find that the University acted unreasonably or lacked legal basis for withholding cost information, as it did not express such a conclusion in its opinion. Appellant cited McDonnell v. United States to argue that personal interest in government records does not preclude the recovery of counsel fees if public benefit from disclosure exists. However, McDonnell is distinguishable because it involved historically significant documents related to a federal investigation, where the public benefit was clear. In contrast, no evidence was presented to demonstrate that disclosing the project's cost would significantly benefit the public or outweigh the appellant's personal interests or the University's rationale for withholding. The circuit court evaluated the motions and arguments regarding attorney's fees and, exercising discretion, ruled against granting them, which the appellate court affirmed. The appellant's total legal fees exceeded $62,500, but this amount did not include fees related to the current motion for recovery. The University’s counsel stated that their compliance with the appellant’s requests was reasonable, noting that thousands of documents were produced and that the withholding of the cost figure was based on the belief it was protected under the deliberative process privilege.

Section 10-611(g)(1) defines a public record as any original or copy of documentary material created or received by a State government unit or political subdivision in connection with public business, encompassing various forms such as cards, computerized records, correspondence, drawings, film, maps, photographs, recordings, and tapes. The Maryland Public Information Act (MPIA) aims to allow public inspection of state and political subdivision records, paralleling the Freedom of Information Act (FOIA), with federal court interpretations of FOIA serving as persuasive authority for MPIA cases.

In a relevant court ruling, it was determined that the Plaintiffs, comprising a corporation and an individual, primarily sought the release of documents for private commercial interests and did not qualify for special court consideration based on financial status. The court criticized the Defendants for making unreasonable exemption claims regarding withheld documents and found that the Plaintiffs largely prevailed on the merits, leading to an award of attorney fees.

Additionally, the district court clarified that there is no presumption against disclosing witness statements from FBI investigations and that federal law does not permit withholding juvenile records under FOIA. It emphasized that the government must ensure the legibility of produced documents, even if it incurs additional costs to the plaintiffs.