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Law barring release of coal company tax records is unconstitutional

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    NMU         MONTANA         Freedom of Information         Jun 23, 2000    

Law barring release of coal company tax records is unconstitutional

  • The state high court held that a rule restricting access to coal company tax records unconstitutionally makes all records exempt without case-by-case consideration.

The state Supreme Court struck down a rule that limited access to historically public tax records about the coal industry.

Coal producers do not have a significant privacy interest at stake to warrant foreclosing public access to tax information, the court ruled June 20.

Since 1975, the state has levied a special tax on the coal industry, and information supplied by the coal industry on the amount of coal produced and the amount of tax paid had historically been made public by the state. But in 1993, the state Department of Revenue issued a rule that restricted public access to much of that information.

Several Montana news organizations made a request for the coal-tax information in January 1994. When the Department of Revenue denied the request, the news organizations brought suit in July 1994 to compel the state to release the information.

In December 1998, the state trial court in Helena found that the rule was a proper exercise of the Department of Revenue’s power. Under Montana’s constitution, a governmental body may withhold only those records whose release would violate an individual’s privacy rights. The Department of Revenue properly balanced the coal industry’s privacy interests against the public’s right to know when it created the rule, the trial court found.

The Supreme Court reversed, finding that the rule was unconstitutional on its face. The constitution’s guarantee of access to government information requires the government to weigh the competing interests on a case-by-case basis. The rule, the high court said, was unconstitutional because it foreclosed access to coal-tax information in all cases.

The Supreme Court also found that the coal industry’s purported privacy argument — that public access to the coal-tax information would injure their economic competitiveness — was minimal given the public’s interest in and historical right of access to the coal-tax records. The court also found that the coal producers supplied the information to the state with no expectation that it would be kept confidential.

Finding that the news organizations’ efforts to enforce the constitutional guarantee of access to government records benefitted the entire state, the court ordered the state to pay the news organizations’ legal bills. The case was remanded to the trial court to determine the amount the news organizations incurred in legal fees.

(Associated Press v. Montana Department of Revenue; Media Counsel: Karl Englund) BB


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