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Authority of Municipalities to Disclose Verizon’s Quarterly Franchise Reports to Cablevision Pursuant to FOIL

The Appellate Division, Second Department decided two cases last week, Matter of Verizon New York, Inc. v. Devita and Matter of Verizon New York, Inc. v. Mills on the issue of whether quarterly franchise reports submitted to municipalities by Verizon are exempt from disclosure under the Freedom of Information Law (FOIL). The cases basically held that disclosure of the detailed revenue and customer information contained in quarterly reports filed with municipalities fell within the exemption from disclosure provided in (Public Officers Law section 87(2)(d)). However, the court also held that, since FOIL favored disclosure, it is a matter of discretion whether the municipalities actually disclose the information and remitted both matters to the municipal officials to decide, in their discretion, whether to release the information.

In the Devita case, Verizon sought to enjoin both the Village of Laurel Hollow and the Town of Hempstead from releasing the quarterly reports in response to a FOIL request from Cablevision. Due to the procedural history of the two claims the Court remitted the matter to the municipalities for a determination. In the Mills case, which involves the Village of Elmsford, the Village had actually determined to release the information to Cablevision. The court’s decision in Mills not only mirrored the determination in the Devita case, also remitting the matter, but it expanded upon the analysis.

In the Mills case the Village sent a letter to Verizon advising it intended to release the information stating the Village ” “did not intend to become an arbiter of pending disputes between Verizon and Cablevision” and Verizon sued to block the release.

The court noted Public Officers Law § 87(2)(d) “allows an agency to deny access to records submitted by a commercial enterprise ‘which if disclosed would cause substantial injury to the competitive position of the subject enterprise’.” It further found that “Verizon met its burden of demonstrating that its franchise reports fell squarely within the statutory exemption to FOIL disclosure under Public Officers Law § 87(2)(d) for records ‘which if disclosed would cause substantial injury to the competitive position of the subject enterprise.’ Moreover, Verizon offered the required ‘particularized and specific’ justification for the denial of Cablevision’s request’.”

But the Court also found that the exemptions should be “narrowly interpreted” and therefore it is a matter of discretion as to whether the information should actually be released. Although the Village had originally decided to release the information, the Court went on to hold that merely being unwilling to be the “arbiter of pending disputes” was not a valid reason for the Village to grant access and remitted the matter so that the Village could issue a reasoned decision demonstrating that it had considered “the facts underlying Cablevision’s FOIL request and Verizon’s opposition to it.”

No doubt there will be further litigation over this issue.