Texas Supreme Court invalidates AG opinion that certain private entities contracting with City are subject to PIA

GREATER HOUSTON PARTNERSHIP v. KEN PAXTON 13-0745 (Tex. June 26, 2015)

This is a Public Information Act (“PIA”) case where the Texas Supreme Court holds that contrary to the Attorney General’s interpretation, certain private entities contacting with the state are not subject to disclosure requirements of the PIA.

Here, Greater Houston Partnership (“GHP”), a nonprofit corporation providing economic-development services to the City and other clients pursuant to quid pro quo contracts, contests whether it is a “governmental body” in whole or in part under the PIA. Consistent with its business model, GHP contracted to provide consulting, event planning, and marketing services to the City of Houston, pursuant to an “Agreement for Professional Services.” A requestor, Jenkins, sought a copy of GHP’s check register asserting GHP is supported, in part, by public funds and therefore subject to the PIA. The AG opined GHP was a governmental body subject to the PIA. The trial court found GHP was a governmental entity and the court of appeals agreed.

The Court first went through the history of the PIA and the important public purpose it supports. However, it focused on statutory construction and held the focus on the inquiry is what does “supported. . . by public funds” mean under the PIAs definition of a governmental entity. While the court expressly stated it was very mindful of the liberal-construction clause of the Act, “liberal-construction objectives do not permit a construction of the Act untethered from its statutory moorings.” The Court then went through a detailed analysis of the statutory language using various statutory construction principles. The court ultimately held that to qualify as being “supported” by public funds means the entity must be “sustained” by public funds and rely heavily and such funds for its existence. This does not mean “maintained” by public funds as all entities in contract with the State use funds for maintenance.  “Sustained” ensures the Act “encompasses only those private entities dependent on the public fisc to operate as a going concern.”  The Act also focuses on entities in the definition section which “describe ostensibly private entities deputized by the government to provide services traditionally considered governmental prerogatives or responsibilities. Thus, although nominally private, each is in fact acting as a quasi-public entity performing a core governmental function.”   The Court held that while its ruling is based on the statutory language, the concepts are consistent with other states. Based on its reading GHP does not qualify as a governmental entity subject to the PIA.

Justice Boyd’s dissent asserts the Act is ambiguous and the court should defer to the AG for guidance. The majority took issue with that. The dissent went through the history of the PIA and the AG’s various opinions. Based on that and the statutory language, Justice Boyd would conclude GHP was a governmental entity for purposes of the PIA.

If you would like to read this opinion click here. Justice Guzman delivered the opinion of the Court, in which Chief Justice Hecht, Justice Green, Justice Lehrmann, Justice Devine, and Justice Brown joined. Justice Boyd delivered a dissenting opinion, in which Justice Johnson and Justice Willett joined.