Are the names of insurance carriers that cover a Delaware county's public officials public records?

Official title

03-IB21 Re: Freedom of Information Act Complaint Against New Castle County

Plain-English summary

An attorney asked New Castle County for the names, addresses, and policy numbers of whatever insurance carriers cover the County's public officials. The County refused, arguing the policy details were confidential commercial information and, separately, that the request related to pending or potential litigation.

The AG rejected the confidentiality argument in general terms: routine insurance details like the insurer's identity, premiums, and coverage terms relate to how public money is spent, a core purpose of FOIA, and there was no showing that revealing them would competitively harm the insurer, so as a general matter this kind of information is public. But the AG still sided with the County on the facts of this specific request. The attorney's client, a county council member, was being sued by a third party and had demanded the County defend him, which the County had refused; the AG found the client had a realistic, foreseeable claim against the County over exactly that insurance coverage, based on the attorney's own demand letter and retained counsel, which was enough of an objective sign of likely litigation with a clear connection to the records requested. The AG was careful to note this ruling turned on who was asking and why, not on any general rule that county insurance contracts are secret.

Currency note

This opinion was issued in 2003. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Are the details of a Delaware government's liability insurance policy generally public information?

Yes, according to this opinion, at least for routine terms like the insurer's name, address, and policy number. The AG found this kind of information relates to how public funds are spent and doesn't qualify as the kind of confidential commercial or financial information that competitors could exploit.

Can a government agency withhold its insurance information from someone who has a pending legal dispute connected to that coverage?

Yes, according to this opinion, when the requester has a realistic, foreseeable claim against the agency specifically involving that insurance coverage. The AG found the potential-litigation exemption applied here because the requester's client had already demanded the county provide legal representation, and that demand and his retained counsel were objective signs that a dispute over the coverage itself was likely.

If a public records exemption applies to one requester because of their specific legal situation, does that mean the same records are secret for everyone else?

No, according to this opinion. The AG explicitly noted that its finding turned on the identity of the requester and the foreseeable litigation connected to this particular request, and that the same insurance records could be public for someone else asking for a different reason.

Background and statutory framework

Delaware's FOIA opens public records to citizen inspection, 29 Del. C. § 10003(a), while exempting "[t]rade secrets and commercial or financial information obtained from a person which is of a privileged or confidential nature," 29 Del. C. § 10002(d)(2), and records pertaining to pending or potential litigation, id. § 10002(d)(9). Drawing on the federal case law, the AG applied Gregory v. FDIC for the general purpose of the confidential-commercial-information exemption (avoiding embarrassing disclosures of assets and finances) and Judicial Watch v. Export-Import Bank for placing the burden on the government to show a real competitive harm from disclosure, a showing the County didn't make here. The AG instead treated routine insurance terms as tied to the expenditure of public funds, following West Virginia's Daily Gazette Co. v. Withrow and Pennsylvania's Associated Builders & Contractors v. Pennsylvania Department of General Services, both recognizing a strong public interest in records showing how public money funds insurance or settles claims.

On potential litigation, the AG applied its own two-part nexus test (litigation must be reasonably foreseeable, and there must be a clear connection between the specific records and the specific dispute), citing Koyste v. Delaware State Police on FOIA's limits against circumventing normal discovery, and Georgia's Claxton Enterprises for the objective factors that show litigation is realistically likely, including a demand letter and retained counsel, both of which were present here through the requester's own correspondence with the County Attorney.

Citations

• 29 Del. C. § 10003(a) (public records open to citizen inspection)
• 29 Del. C. § 10002(d)(2) (trade secrets and confidential commercial or financial information exemption)
• Id. § 10002(d)(9) (pending or potential litigation exemption)
• Gregory v. FDIC, 470 F. Supp. 1329, 1334 (D.D.C. 1979) (federal district court; purpose of confidential financial information exemption)
• Judicial Watch v. Export-Import Bank, 108 F. Supp.2d 19, 27 (D.D.C. 2000) (federal district court; government must show likely competitive harm from disclosure)
• Daily Gazette Co. v. Withrow, W.Va. Supr., 350 S.E.2d 738, 743 (1986) (state supreme court; public interest in how public funds or insurance premiums settle claims)
• Associated Builders & Contractors v. Pennsylvania Department of General Services, Pa. Cmwlth., 747 A.2d 962, 966 (2000) (state appeals court; insurance policies tied to public expenditures are public records)
• Koyste v. Delaware State Police, Del. Super., C.A. No. 00C-08-088-JEB (Sept. 18, 2001) (FOIA cannot be used to circumvent normal discovery rules)
• Claxton Enterprises, Ga. App., 549 S.E.2d 870, 874 (2001) (state appeals court; objective factors showing a realistic and tangible threat of litigation)

Source

• Landing page: https://attorneygeneral.delaware.gov/2003/10/06/03-ib21-re-freedom-of-information-act-complaint-against-new-castle-county/
• Original PDF: not linked from landing page

Original opinion text

Del. Op. Atty. Gen. 03-IB21 (Del.A.G.), 2003 WL 22669566

Office of the Attorney General

State of Delaware

Opinion No. 03 – IB21

October 6, 2003

Re: Freedom of Information Act Complaint Against New Castle County

*1 Thomas S. Neuberger, Esquire

Two East Seventh Street, Suite 302

Wilmington, DE 19801-3707

Dear Mr. Neuberger:

Our Office received your Freedom of Information Act ("FOIA") complaint on June 23, 2003 alleging that New Castle County ("the County") violated FOIA by not providing you with the names, addresses, and policy numbers of any insurance carriers which underwrite public official coverage for the County.

By letter dated June 30, 2003, we asked the County to respond to your complaint. We received the County's response on July 9, 2003. The County contends that the information you requested is exempt from disclosure under FOIA for two reasons: (1) "the [insurance] coverage information contained in the policy contains confidential commercial or financial details"; and (2) the information requested "falls within the pending or potential litigation exception."

Relevant Statutes

FOIA requires that "[a]ll public records shall be open for inspection and copying by any citizen of the State during regular business hours by the custodian of the records for the appropriate public body." 29 Del. C. § 10003(a).

FOIA exempts from disclosure any "[t]rade secrets and commercial or financial information obtained from a person which is of a privileged or confidential nature." 29 Del. C. § 10002(d)(2). FOIA also exempts from disclosure "records pertaining to pending or potential litigation which are not records of any court." Id. § 10002(d)(9).

Legal Authority

A. Confidential Commercial or Financial Information

FOIA's exemption for confidential commercial or financial information protects "'individuals from a wide range of embarrassing disclosures'." Att'y Gen. Op. 87-IO31 (Nov. 4, 1987) (quoting Gregory v. FDIC, 470 F. Supp. 1329, 1334 (D.D.C. 1979)). For example, the "release of information regarding one's assets, profits and losses, stock holdings, loans and collateral" are confidential financial information exempt from disclosure under FOIA. Att'y Gen. Op. 87-IO31. See also Att'y Gen. Op. 96-IB30 (Sept, 25, 1996) (tax returns of parents of children applying for scholarships exempt from disclosure under FOIA).

The FOIA exemption for confidential commercial or financial information may apply "when the government requires a private party to submit information as a condition of doing business with the government." Judicial Watch v. Export-Import Bank, 108 F. Supp.2d 19, 27 (D.D.C. 2000). To fall within the exemption, the government has the burden of showing that disclosure of the information "is likely to cause substantial harm to the competitive position of the person from whom the information was obtained." Judicial Watch, 108 F. Supp.2d at 29. In Judicial Watch, the federal district court held that the government had met its burden. "When an applicant has submitted its export insurance application to the Bank, the requested transaction is in a highly competitive state. Other U.S. exporters and foreign competitors may be competing simultaneously for the same transaction or project. Thus, financial and technical details of the proposed transaction are confidential, and, if released, could harm the submitter's commercial interests." Id. at 29.

*2 There is no evidence in the record to suggest that disclosure of any information contained in the County's public official insurance policy might cause competitive harm to the insurer. The routine information contained in an insurance contract — premiums, scope of coverage, deductibles — relate to the expenditure of public funds, a core FOIA function. The public has a right to know whether claims against the County's public officials may be settled "'with public funds or with insurance proceeds generated by publicly financed insurance premiums.'" Att'y Gen. Op. 02-IB24 (Oct. 1, 2002) (quoting Daily Gazette Co. v. Withrow, W.Va. Supr., 350 S.E.2d 738, 743 (1986)). See Associated Builders & Contractors v. Pennsylvania Department of General Services, Pa. Cmwlth., 747 A.2d 962, 966 (2000) ("Because the purchase of insurance constitutes the disbursement of funds by an agency, any construction insurance policies for the Keystone Project are public records.").

We determine that an insurer's name, address, and policy number are not "commercial or financial information obtained from a person which is of a privileged or confidential nature." 29 Del. C. § 10002(d)(2).

B. Pending Litigation

The County contends that the pending litigation exemption under FOIA applies because Renee Sutton has sued your client, Robert S. Weiner, in Superior Court for invasion of privacy and slander. According to the County, Mr. Weiner has formally notified the County of his "claim that he was being sued for actions allegedly arising from his official duties as an elected official and that he expected the County to assume his client's defense. The County has officially declined to provide representation to Mr. Weiner asserting that these actions did not arise out of his official duties. Therefore, in addition to the existing litigation against Mr. Weiner, litigation against the County for refusing to provide representation in connection with Ms. Sutton's claim is likely to occur in light of his expectation of representation."

FOIA's pending litigation exemption may apply if a party to a lawsuit is trying to use FOIA to circumvent the rules of discovery. See Koyste v. Delaware State Police, Del. Super., C.A. No. 00C-08-088-JEB (Sept. 18, 2001) (Babiarz, J.) (plaintiff "is attempting a circuitous route around the normal discovery rules"). For the pending litigation exemption to apply, there must be a sufficient nexus between the records requested under FOIA and the subject matter of the litigation. Arguably, there may be a nexus between the Sutton litigation and the defendant's entitlement to representation at the County's expense. But if the insurance information you requested from the County is relevant to the Sutton litigation, then your remedy is through third-party discovery. If the County successfully moves to quash a third-party subpoena on the ground of relevance, then necessarily there is no nexus between the insurance information you requested and the subject matter of the lawsuit. In either event, FOIA's pending litigation exemption does not apply.

C. Potential Litigation

*3 For the potential litigation exemption to apply, "FOIA requires a two-part analysis: first, litigation must be likely or reasonably foreseeable; and second, there must be a clear nexus between the documents requested under FOIA and the subject matter of the potential litigation." Att'y Gen. Op. 02-IB30 (Dec. 2, 2002)). If Mr. Weiner sues the County to compel the County to afford him legal representation in the Sutton lawsuit, then there would be a clear nexus between a public official insurance policy and the subject matter of a lawsuit brought by Mr. Weiner. The legal issue, then, is whether such litigation is likely or reasonably foreseeable.

"A realistic and tangible threat of litigation is one that can be characterized with reference to objective factors" such as: (1) a formal demand letter or some comparable writing that represents the party's claim and manifests a solemn attempt to sue; (2) previous or pre-existing litigation between the parties or proof of ongoing litigation concerning similar claims; or (3) proof that a party has retained counsel with respect to the claim at issue and has expressed an intent to sue." Claxton Enterprises, 549 S.E.2d 870, 874 (2001).

By letter dated May 20, 2003, you made a demand on behalf of your client to the County Attorney to "provide counsel to defend [Ms. Sutton's] claim to Mr. Weiner and file a timely answer." We believe that retaining counsel and this demand letter are objective criteria of a reasonable and tangible threat of litigation by Mr. Weiner over the scope of the County's public official insurance coverage policy.

Our determination that the insurance information you requested is exempt from disclosure under FOIA's potential litigation exemption is not at odds with our determination, earlier in this opinion, that a public body's insurance contracts may be public records under FOIA in other contexts. The potential litigation exemption turns on the identity of the requestor and the purpose of the request in light of reasonably foreseeable litigation. Where those criteria are not satisfied, a public body's insurance contracts may be public records unless exempted under another provision of FOIA.

We do not express any opinion whether Mr. Weiner, as a member of the New Castle County Council, might have standing to access the insurance information he has requested as a public official and potential beneficiary under the policy. That is a question of local law which is not within our jurisdiction under FOIA.

Conclusion

For the foregoing reasons, we determine that the County did not violate the public records requirements of FOIA by refusing to provide you with documents that contain the names and addresses of insurers and the insurance policy numbers because the records containing that information fall within the potential litigation exemption under FOIA.

Very truly yours,

W. Michael Tupman

Deputy Attorney General

Approved

Malcolm S. Cobin

*4 State Solicitor

Del. Op. Atty. Gen. 03-IB21 (Del.A.G.), 2003 WL 22669566