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Court Holds Documents Exchanged Between Federal and State Agencies May Be Exempt From FOIL, But Settlement Documents Exchanged WIth Corporation Are Not

A court held that documents exchanged between the EPA and the New York DEC may be exempt from disclosure under the Freedom of Information Law (FOIL) as inter-agency communications, but additional documents exchanged as part of the settlement negotiations with General Electric are subject to disclosure. In Town of Waterford v. New York Department of Environmental Conservation, the lower court held that the exemption from disclosure of inter-agency communications, contained in Public Officers Law section 87 (2)(g), does not apply to communications between state and federal agencies, but that documents prepared for settlement purposes were not subject to disclosure. The Appellate Division disagreed on both points.

With respect to the issue of inter-agency exemption applying to communications between state and federal agencies, the Court held, while generally the law favors disclosure of documents, the claim that “this exemption can never be applied to a communication with a federal agency, no matter its content or context – is dramatically at odds with the very purpose for which this exemption was enacted and one that, on these facts, is not in the public interest.’

The Court reviewed the history of the underlying project at issue, which is to clean up PCBs in the Hudson River resulting from industrial activities. The Court noted the EPA, Department of Health (DOH) and DEC all have statutory authority to address the issues and had worked cooperatively toward a resolution since 1984. Thus, the Court concluded:

“Here, the relationship that has existed for more than 25 years among these state and federal agencies on this project is statutorily based and memorialized by contractual agreements which, in effect, require that they work together to address the threat posed by PCB contamination in the Hudson River. In terms of this project, respondent, DOH and the EPA share a common objective, and by law as well as by contract are required to work as one unit to achieve that objective (compare Matter of Tuck-it-Away Assoc., L.P. v Empire State Dev. Corp., 54 AD3d 154, 164 [2008], affd 13 NY3d 882 [2009]). Under the circumstances, communications among them may well be part of the deliberative process and qualify for protection of the intra-agency or inter-agency exemption. Since Supreme Court, as previously noted, limited its decision to an interpretation of the phrase “intra-agency/inter-agency materials,” we must remit this matter for the court to conduct an in camera review of the materials at issue to determine whether they otherwise qualify as exempt communications under Public Officers Law § 87 (2) (g).”

On the issue of whether documents prepared as part of settlement negotiations between the EPA and General Electric are exempt from disclosure, the Court held those documents are not exempt. Instead the Court stated:

“respondent points to no statute that specifically exempts documents that are created as part of settlement negotiations. CPLR 4547 provides that evidence regarding settlement negotiations is “inadmissible as proof of liability for or invalidity of the claim or the amount of damages,” but says nothing as to the disclosure of that information. Even if we were to agree with respondent that these records were created as part of an effort to reach a negotiated settlement, CPLR 4547 is not a rule designed to limit the scope of discovery and does not provide that settlement discussions are confidential or would be otherwise exempt under FOIL”

Steven Silverberg.