OPRA-Third Party Rights, Administrative Procedure

OPRA-Third Party Rights, Administrative Procedure and Due Process Property Rights


On November 28, 2008 the Appellate Division decided Gill v. N.J. Department of Banking and Insurance, (A-0886-07T1) and reached a common sense result on the rights of third parties to protect disclosure of confidential information contained in government records that have been requested pursuant to the Open Public Records Act, N.J.S.A. 47:1A-5 (“OPRA”). The basic holding of the court was that GEICO was permitted to participate in an administrative hearing conducted by the Government Records Council (“GRC”), in order to protects its claim that marketing and underwriting information submitted to the Department of Banking and Insurance (“DOBI”) were proprietary and should not be released since they were submitted with an expectation that they would be used only by the DOBI and would be otherwise confidential. OPRA specifically states that “trade secrets and proprietary commercial or financial information obtained from any source” are not government records subject to disclosure under the Act. N.J.S.A. 47:1A-1.1.

The case, in large part, is the product of the procedural avenue chosen by the party requesting GEICO’s insurance rating information, state Senator Nina Gill, when the DOBI denied her records request. Rather than appealing to the Superior Court, Sen. Gill filed her appeal with the GRC, the government agency created to deal with OPRA issues and appeals. GEICO then filed a motion with the GRC seeking to intervene to in the proceeding to protect its confidential, proprietary information. The GRC denied GEICO’s request on the basis that only the record requester and the government agency had standing before it. GIECO filed an appeal with the Appellate Division.

The appeals court pointed out that if Sen. Gill had filed her appeal in a court of law, the rules regarding intervention would have applied and the only issue would have been whether the trial court correctly applied that body of law. However, since the case was now an administrative proceeding, the rule of court did not apply and the court had to look elsewhere for guidance. Since the GRC took the position that neither OPRA nor its regulations, N.J.A.C. 5:105-1 et seq provided for participation by third parties, it had no authority or duty to allow GEICO or anyone else to participate in its proceedings.

The Appellate Division saw a serious flaw in this approach. As an administrative agency, GRC’s proceedings in contested matters are governed by the Administrative Procedures Act, N.J.S.A. 52:14B-1 to 24, and the regulations promulgated under the APA specifically provide for intervention motions by persons “who will be substantially, specifically and directly affected by the outcome of a contested case.” N.J.A.C. 1:1-16.1(a). It was the GRC’s failure to apply this process to GEICO’s application that resulted in the reversal of the GRC’s decision.

But the case also included a surprising twist. OPRA record requests may implicate the due process clauses of both the federal and state constitutions! The Appellate Division pointed out that since “both the federal and state constitutions prohibit the state (or local governments) from depriving a person of its property without due process of law as noted in In re Freshwater Wetlands Statewide Gen. Permits, 185 N.J. 452, 466 (2006)” the GRC’s failure to allow GEICO to protect “its property rights in proprietary trade secret information” constituted a due process violation. As such, the failure of the GRC to afford interested parties with a mechanism to intervene (i.e., “to be heard”) was fatal to its position.

This case raises an interesting point. What happens if a local government agency releases confidential trade secret or proprietary commercial or financial information to a requestor without notifying the property holder of the request? Isn’t that just as constitutionally flawed as the GRC’s refusal to permit GEICO to protect its property rights? Indeed, it seems that OPRA’s failure to have any mechanism in place to protect the rights of intellectual property holders is a serious flaw that places local governments squarely between the demands of records requesters and the due process rights of such property owners. One thing is certain, the next wave of OPRA litigation will be even more interesting.
-Tom Barron

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