Supreme Court: JCI can keep contract secret
ST. PAUL – St. Louis County School District’s failure to include a notice that contracts with contractors must be public — a legal requirement — provided a loophole for Johnson Controls Inc. to keep information private, according to the Minnesota Supreme Court. The ruling, issued on Wednesday, was unanimous although two of the justices differed with some portions of the decision.
“The government is required to provide clear notice in contracts for the performance of a government function that a private business performing such a function is subject to the requirements of the Data Practices Act and that the businesses must comply with those requirements as if it were a government entity,” Chief Justice Lorie Gildea stated in the ruling. Because the school district did not provide such notice, Gildea continued, JCI was not required to release the materials.
Gildea did not challenge the Appeals Court’s ruling that JCI was engaged in a government function, but said the district’s failure to include a notice was the reason the materials requested were not public.
Justices Alan Page and Wilhelmina Wright disagreed with the court’s conclusion, but said JCI was not required to turn over the requested data. They argued that JCI had not contracted with the district to perform a government function, a position that conflicts with past rulings by the Court of Appeals and the Supreme Court’s most recent majority ruling.
The Timberjay filed suit after JCI refused to provide a copy of the architectural contract and other related documents on a $78.8 million restructuring project for the district.
Timberjay publisher Marshall Helmberger said in the past, the public notice has been implied even if it wasn’t included in contracts. That was also the opinion of the Court of Appeals and Department of Administration, which ruled that JCI had to provide the materials that the Timberjay requested.
“But the Supreme Court disagreed and said it had to be included because no other provisions in the Data Practices Act applied to private companies,” said Helmberger.
Attorney Mark Anfinson, who represented the Timberjay in the dispute, said the ruling puts the public and media on alert to ensure that disclosure provisions are included when public bodies sign contracts with private contractors. He said state contracts routinely include such language, but smaller governmental entities, such as school districts and cities, sometimes fail to abide by the law, and overlook the contract provision. That’s what happened in the case of JCI, and it has allowed the company to escape the reach of the state’s data practices law.
“If the lack of notice alone is enough to excuse, who’s going to write it into a contract?” he asked. “It’s companies like JCI that draw them up.”
Both Helmberger and Anfinson said keeping the public in the dark on contracts hampers an ability to hold officials accountable.
“The point here is this decision could seriously reduce the ability of citizens to monitor government contracting,” said Anfinson. He noted that public contracts regularly entails billions in taxpayer money every year, which makes it critical for the public to maintain access to key details.
Helmberger said that’s why public watchdogs will need to do more to ensure that governmental bodies comply with the notice provision required under the law. He suggested the Legislature also consider adopting some form of penalty for public bodies that fail to abide by this provision of the law in their public contracts.
“Without some kind of penalty it’s too easy for these smaller boards or councils to ignore the law,” said Helmberger.