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Wednesday, December 14, 2005

Ind. Decisions - Appeals ruling may open more records to public

"Appeals ruling may open more records to public: Knightstown can't hide documents private firm created on its behalf" is the headline to this story today in the Indianapolis Star, by Bill McCleery. Some quotes:

A small-town dispute that started with the firing of a police dispatcher has led to a court ruling bolstering access to public records statewide.

The Indiana Court of Appeals ruled Tuesday that a weekly newspaper had a right to see details of a settlement that Knightstown reached with the former employee.

Knightstown officials had kept secret most details of the 2003 settlement with GiGi Steinwachs, the former dispatcher. After she was fired in 2002, Steinwachs sued the town, saying she had been sexually harassed, physically assaulted and intimidated on the job.

The appeals court ruling overturned a county court ruling that the town's insurance carrier, not the town itself, was party to the settlement and therefore the settlement was not subject to Indiana's open records laws.

"Knightstown focuses on the argument that the definition of public record does not include documents created by private individuals acting on behalf of a public agency," wrote Judge Patricia A. Riley for the three-judge appeals court. "This distinction is without merit." * * *

The Knightstown Banner, with a weekly circulation of 2,000 newspapers, has taken a watchdog stance in its coverage of local government and schools, challenging closed meetings and seeking public records in Knightstown, a community of 2,000 about 38 miles east of Indianapolis in Henry County.

"I've talked to many major newspapers that know they should be fighting these battles, but because it requires such major resources, they let things slide," said Kelly McBride, a consultant with the Poynter Institute, a journalism training center in St. Petersburg, Fla.

"I just think it's darned impressive that a small newspaper would devote the financial resources to fighting such a big fight."

The Banner's victory means the defendants -- Knightstown and its insurance carrier -- will be responsible for paying the paper's legal bills, said Kurt Webber, the newspaper's attorney. * * *

An attorney for Knightstown's insurance carrier criticized the court's decision. "We think the court has painted the public record issue with too broad a brush," said Steven D. Pearson, a Chicago-based attorney representing Governmental Interinsurance Exchange."

We think that if this decision is allowed to stand, it will have the unintended consequence of inhibiting parties from engaging in good-faith settlement negotiations and therefore have a chilling effect on the ability to settle cases."

He said he would consult with clients on whether to take the case to the Indiana Supreme Court, which then would choose whether to hear it.
Knightstown officials also want time to digest the court decision before deciding on their next move, said Jim Broderick, Town Council president.

Here is the ILB entry on yesterday's ruling, Knightstown Banner, LLC v. Town of Knightstown, et al.

Here is an Inside Indiana Business story on the case, written by Kyle Elyse Niederpruem before the ruling came down, but still of interest:

The attorney representing the town argued that insurance companies will never be able to settle claims if settlement terms become public. A private contract attorney for a private insurer also has no obligation to maintain a record, as would a public agency. But the local newspaper that brought the case to the trial court argues that public money used to settle public lawsuits involving public employees is matter of public record—period.

In a narrowly drawn opinion of the Public Access Counselor’s office in 2004, former PAC Michael Hurst wrote that the insurance company wasn’t acting as an agent of the town but rather as an independent contractor. He states that the insurance company did not exercise the “power of government in theory or in practice.”

Though the case tickles on the edges of attorney-client privilege and subscriber agreements with insurance firms, the three-judge panel cut to the quick on what is public. Without knowing where the money went or how it was spent, Judge John Baker pointed out the settlement could have been spent on “faucets.”

“You approved $5,000 of the town’s money for what?” Baker asked attorneys representing the town and insurance company. “What was the money for, sir? Did the town buy faucets? How do I know?” Without disclosure, as Judge Patricia Riley pointed out, “the public has no knowledge” how its money was spent.

Without divulging all terms of the settlement, the questions from the judges quickly honed in on government accountability. A larger settlement that remains secret could potentially indicate some culpability on the part of public employees and raises a question whether those employees were properly disciplined or should have been discharged, for example.

To the core of disclosure, lawyers can subvert the public records law by stamping documents “work product” and there have been some well-published instances brought to light by media over the years—particularly with municipal and state agencies.

The popular wave of privatized government services will likely result in similar legal challenges in Indiana as long as accountability remains the bottom line for citizens paying for those services.

As pointed out in the last two paragraphs of this Nov. 11, 2005 ILB entry, many settlements involving governmental units in Indiana currently are not made available to the public. Will the Knightstown ruling have legs?

[See also this Oct. 12, 2005 entry, about a settlement in a school case, where the Indianapolis Star reported: "The settlement agreement also prohibits either side from releasing it publicly unless required by law. The Indianapolis Star obtained a copy Tuesday after sending a public records request to the school district."]

Posted by Marcia Oddi on December 14, 2005 09:44 AM
Posted to Ind. App.Ct. Decisions