| Matter of City of Schenectady v O'Keeffe |
| 2008 NY Slip Op 03380 [50 AD3d 1384] |
| April 17, 2008 |
| Appellate Division, Third Department |
| In the Matter of City of Schenectady, Appellant, v James J.O'Keeffe, as Records Appeals Officer of the New York State Board of Real Property Services, etal., Respondents. |
—[*1] Andrew M. Cuomo, Attorney General, Albany (Julie S. Mereson of counsel), for James J.O'Keeffe, and another, respondents. Bond, Schoeneck & King, P.L.L.C., Albany (Stuart F. Klein of counsel), for NiagaraMohawk Power Corporation, respondent.
Kavanagh, J. Appeal from a judgment of the Supreme Court (Connolly, J.), enteredSeptember 4, 2007 in Albany County, which dismissed petitioner's application, in a proceedingpursuant to CPLR article 78, to review a determination of respondent New York State Board ofReal Property Services denying petitioner's Freedom of Information Law requests.
Respondent Niagara Mohawk Power Corporation is a public utility which has been granted aspecial franchise allowing it to occupy and use public rights-of-way within the City ofSchenectady, Schenectady County for the transmission of electricity and gas to its customers. Asa utility, Niagara Mohawk must provide the Office of Real Property Services (hereinafter ORPS)with cost and inventory data identifying and tracking all of its property assets that are employedalong the rights-of-way and used to transmit and distribute electricity. With this data, ORPSprepared an assessment for the value of this franchise (hereinafter special franchise full value[*2]assessment) which is given to a municipality to calculate thetax to be paid by the utility for the use of these rights-of-way (see generally RPTL art 6).Niagara Mohawk maintains that disclosure of this data to potential competitors would severelycompromise its competitive position, and it has requested that it be exempt from disclosure toany third party pursuant to the Public Officers Law § 87 (2) (d).
In February 2007, after receiving this data regarding inventory and cost of these assets fromNiagara Mohawk, ORPS issued a notice of tentative special franchise full value assessment topetitioner and invited it and other interested parties to submit complaints regarding its calculationpursuant to procedures set forth in the Real Property Tax Law.[FN1] Petitioner did not file a complaint, but instead, on February 8, 2007, filed a request pursuant tothe Freedom of Information Law (see Public Officers Law art 6 [hereinafter FOIL])seeking full disclosure of all data provided to ORPS by Niagara Mohawk that was used tocalculate the assessment.[FN2] The request was denied and, after an unsuccessful administrative appeal, petitioner commencedthis CPLR article 78 proceeding challenging the denial of its FOIL request. Supreme Courtdismissed the petition, prompting this appeal.
We affirm. Supreme Court found that ORPS did not abuse its discretion in according tradesecret status to the data in question. While there is a presumption of access accorded todocuments held by a public agency that are used by it in the execution of its administrativeresponsibilities, that presumption is subject to certain narrowly defined exceptions (seeMatter of Encore Coll. Bookstores v Auxiliary Serv. Corp. of State Univ. of N.Y. atFarmingdale, 87 NY2d 410, 417 [1995]; Matter of Sunset Energy Fleet v New York StateDept. of Envtl. Conservation, 285 AD2d 865, 865-867 [2001]). One such exceptionspecifically provides that an agency may deny a request for disclosure of records in its possessionthat "are trade secrets or are submitted to an agency by a commercial enterprise or derived frominformation obtained from a commercial enterprise and which if disclosed would causesubstantial injury to the competitive position of the subject enterprise" (Public Officers Law§ 87 [2] [d]). For this exception to apply, it must be established that the commercialenterprise that provided the data is in actual competition with other entities, and that release ofthe information would likely cause it substantial competitive injury (see Matter of EncoreColl. Bookstores v Auxiliary Serv. Corp. of State Univ. of N.Y. at Farmingdale, 87 NY2d at421).
Petitioner argues that there simply is not sufficient information in the materials submitted byNiagara Mohawk for ORPS to have concluded that the release of this data would cause the utilitysubstantial competitive injury (see Matter of Encore Coll. Bookstores v Auxiliary Serv. Corp.of State Univ. of N.Y. at Farmingdale, 87 NY2d at 421). We disagree. [*3]There can be little doubt that this data, as described by the record,has significant commercial value not only to the utility, but to potential competitors as well. Itincludes a detailed inventory of the age, cost and extent of the property employed by NiagaraMohawk along these rights-of-way, and tracks the construction, installation and retirement of thisproperty which is used to transmit and distribute electricity to its customers. The importance ofthis data is underscored by the fact that it is used, in part, to determine the regulated rate that theutility may charge for its services. In addition, compiling it is a costly and complex endeavor thatentails an exhaustive review of the cost and value of Niagara Mohawk's physical assets that areemployed along the rights-of-way. The value of such information to a potential competitor,especially public entities that are actively involved in attempting to acquire these assets byeminent domain, is self-evident and its disclosure would almost assuredly complicate, if notcompromise, Niagara Mohawk's competitive position. That reality provides ample support for thedetermination that the trade secret exemption was properly applied to petitioner's request seekingdisclosure.
Nor do we agree with petitioner's claim that ORPS failed to give an adequate explanation forits decision to deny petitioner's FOIL request. By letter, ORPS enclosed summary level data forthe property covered by this assessment. It explained that the data requested is "often. . . submitted . . . with a claim of confidentiality" and that as a resultof utility deregulation and municipal takeovers of utility service, utility companies have claimedthat disclosure "would cause substantial injury to their competitive position." It included copiesof letters that it had received from Niagara Mohawk which expounded on the utility's positionthat the data be accorded trade secret status. This information provided sufficient detail toexplain why ORPS determined that this data was exempt from disclosure pursuant to PublicOfficers Law § 89 (5) (c) (2).
Finally, Supreme Court properly denied petitioner's request for counsel fees and otherlitigation costs (see Public Officers Law § 89 [4] [c]; Matter of Troy Sand &Gravel Co. v New York State Dept. of Transp., 277 AD2d 782, 786 [2000], lvdenied 96 NY2d 708 [2001]). All of petitioner's remaining claims have been reviewed andfound to be lacking in merit.
Cardona, P.J., Carpinello, Lahtinen and Malone Jr., JJ., concur. Ordered that the judgment isaffirmed, without costs.
Footnote 1: The tentative full value ofNiagara Mohawk's special franchise within the City for the 2007 tax year as assessed by ORPS is$41,849,582.
Footnote 2: Petitioner also sought valuationdata for other special franchise owners, respondents Verizon and Time Warner Cable. The FOILrequests with respect to these special franchise owners are not the subject of this appeal.