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Private contractor not subject to public records act

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NEWS MEDIA UPDATE   ·   OHIO   ·   Freedom of Information   ·   Jan. 4, 2007

NEWS MEDIA UPDATE   ·   OHIO   ·   Freedom of Information   ·   Jan. 4, 2007


Private contractor not subject to public records act

  • The state Supreme Court ruled that a nonprofit corporation that receives public money to provide mental health services does not have to release records to an Ohio newspaper.

Jan. 4, 2007  ·   A private nonprofit corporation that contracts with a county mental health board is not subject to the Ohio Public Records Act, despite receiving almost all of its money from taxpayers, the state Supreme Court has ruled.

In the 4-3 decision issued late last month, the high court determined that Nova Behavioral Health Inc. was not a public institution and did not have to disclose personnel files to an Ohio newspaper, relying on a similar case decided in October.

In April 2005, a reporter for The (Canton, Ohio) Repository requested the personnel file of a Nova employee, shortly after he was suspended following allegations that he used sexually suggestive counseling techniques with female patients.

The Stark County Mental Health Board, which is funded by state and local taxes and federal subsidies, contracted with Nova to run mental health services. The private company received 92 percent of its funding from the county board, the opinion states, and was driven out of business when it lost its contract with the county.

When Nova refused to provide the documents, the Repository sued, asking the court to force the company to turn over the file.

The newspaper’s case became more difficult after the high court devised a four-part test in October in the case State ex rel. Oriana House Inc. v. Montgomery, in which the court ruled 4-3 that a different nonprofit corporation that ran a halfway house under a state contract did not have to disclose records to the state auditor.

The test considers whether the company performs a governmental function, the level of government funding, the extent of government involvement or regulation, and whether the entity was created by the government or to avoid the public records act.

“As you might imagine, that would be a very difficult burden to meet,” said Richard Panza, the attorney who represented the Repository.

In ruling against the newspaper, the majority wrote that by providing mental health services, Nova was not performing a historically governmental function because state law requires county mental health boards to contract out those services and “generally prohibits” the county boards from providing the services themselves.

But the majority agreed with the newspaper that Nova was performing a government function by acting as a “safety net” for uninsured and underinsured residents.

“Providing mental health care for the uninsured and compensating for the inadequacy of benefits in commercial health-insurance plans is not a function commonly performed by private entities,” Justice Paul Pfeifer wrote for the majority.

However, the majority said that the county board did not supervise the day-to-day operations of Nova’s facility and that the company was not created by the government. Therefore, it said the only factor “wholly in the Repository’s favor” was Nova’s level of government funding.

Chief Justice Thomas Moyer, writing for the three dissenting justices, said even though the county board did not control Nova’s daily operations, both state law and Nova’s contract with the county board required extensive regulation of the private company, which was required to allow the county access to records relating to payments, claims and services rendered under its contract.

The dissenting justices also disagreed with the finding that mental health services were not traditionally a responsibility of the state, citing federal and state laws and a history of state-run hospitals dating back to the 1800s.

The dissenters wrote that the question of whether a company was created by the government should receive “very little weight” in the court’s balancing test, while the level of government funding should receive more consideration than the other factors.

“A private entity that receives the level of public funding that Nova received should not be permitted to keep the public from knowing how it has managed its public responsibilities,” Moyer wrote.

Panza said the recent cases affect the public’s ability to obtain non-financial records from companies with similar contracts.

Oriana and Nova make it extremely difficult for anyone to have access to the inner organizational workings of a private not-for-profit, even though they are performing a governmental function and are entirely funded by public monies,” Panza said.

(State ex rel. The Repository v. Nova Behavioral Health Inc., Media Counsel: Richard D. Panza, Wickens, Herzer, Panza, Cook & Batista Co., Avon, Ohio)RG

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