Vol. 82, No. 4, April 2009
Clarity Needed on Open Meetings and Public Records Laws
I have just read Christa Westerberg’s article, “Getting the Best of Both Worlds: Open Government and Economic Development,” in the February Wisconsin Lawyer. I think her belief that “the path to strong economic development and open government is no longer so treacherous” due to recent case law, is somewhat optimistic.
Many municipalities and economic development corporations are busy trying to understand, and react to, State of Wisconsin v. Beaver Dam Area Development Corp. and other cases referred to in the article. As the article notes, the court in Beaver Dam failed to provide any definitive guidance regarding when an economic development corporation is subject to the Open Meetings Law (and, by extension, the Public Records Law). Such corporations and the municipalities with which they work therefore have little option but to consider – and hopefully guess correctly – the extent to which their circumstances resemble those in Beaver Dam. Municipalities and economic development corporations may restructure their relationships in reaction to this case law. This may be inevitable given the law, and it may not be possible to develop a bright-line test absent legislation, but it is not necessarily a cause for celebration.
Open government is extremely important. Economic development corporations attempt to benefit local communities by facilitating communications between businesses and local governments. Businesses sometimes desire that information regarding their products, processes, and finances not be divulged to the public or to their competitors. Local governments are interested in bringing business, jobs, and taxes to their communities. It is important that all know the extent to which Wisconsin’s open government laws apply to dealings and communications between business and local government.
The recent cases raise many questions regarding the application of these laws, which are not easily answered. Businesses may be wary of dealing with economic development corporations if they are subject to the open government laws. How much economic assistance, if any, may a municipality grant such a corporation, before the open government laws apply? If a municipality grants such assistance, to what extent may it impose controls on the manner in which public funds are used by those corporations before they are subject to the laws? If it requires regular reports from such a corporation, is the corporation being made a quasi-governmental body? If municipal officials participate in such a corporation’s board of directors, with or without a vote, or otherwise participate in the corporation’s activities, will this render the corporation quasi-governmental? May a public official or employee work for an economic development corporation?
There are of course exceptions to the Open Meetings and Public Records laws, but I think that most will agree that their application is not always easily determined. And, a municipality’s interpretation of those laws is always subject to challenge, just as the interpretations made by economic development corporations will, now, be subject to challenge.
So, I greet these recent cases less enthusiastically than does Attorney Westerberg, and I hope that the courts and the legislature will shortly provide us all with greater clarification.
John M. (“Jack”) Bruce,
Schober, Schober & Mitchell S.C., New Berlin
Recent Decisions Hinder Rather than Benefit Economic Development
Attorney Westerberg’s article “Getting the Best of Both Worlds: Open Government and Economic Development” erroneously portrays the recent Wisconsin Supreme Court decision in State of Wisconsin v. Beaver Dam Area Development Corp. (BDADC) as positive for economic development. That decision is positive only for those who wish to disrupt legitimate economic development efforts via litigation.
The pursuit of many economic development opportunities – including business expansion and location decisions – requires absolute confidentiality lest the projects never get off the ground. Any negotiated agreements are subject to normal legislative process – including the Open Meetings and Public Records laws – before being officially adopted as local government policy.
The court found in the Beaver Dam case that based on the totality of the circumstances, the BDADC resembles a governmental corporation and, therefore, is a quasi-governmental corporation subject to the state’s Open Meetings and Public Records laws. The court opined that other situations involving local economic development corporations would have to be determined on the basis of a case-by-case analysis.
The decision provides little in terms of guidance for economic development corporations wishing to operate independently of the Wisconsin Open Meetings and Public Records laws. According to the decision, if an economic development entity does not wish to operate as a quasi-governmental corporation, it may attempt to structure itself in such a manner that it does not resemble a governmental corporation based on the totality of the circumstances.
Under the court’s decision, however, the economic development entity does so at its own peril. If the entity fails to choose the proper structure, given the lack of any clear guidance from the court, the entity and its members (private sector volunteers) may be subject to fines and sanctions, including the payment of attorney fees, for failing to comply with the Open Meetings and Public Records laws. In other words, the decision provides no safe harbor for local, nonprofit organizations acting with a good-faith belief that they are not “quasi-governmental corporations.” An entity must either choose to comply with the Open Meetings and Public Records laws or risk the imposition of sanctions if its good-faith belief is later determined to be incorrect by a court.
Also disturbing is the majority’s treatment of the relative “importance” it gives to economic development, including such development’s apparent subservient status to open meetings and public records considerations. The court gives lip service to “… the realities of economic development and the need, at times, for flexibility and confidentiality,” but, as noted above, the court attaches greater emphasis to what an economic development corporation looks like than what its functions are and what power it has, or does not have, to bind governmental bodies.
The application of the Open Meetings and Public Records laws to local, nonprofit, economic development corporations will present obstacles to the appropriate pursuit of economic development and enormous compliance burdens. Rules of compliance that make sense for governmental bodies (for which the Open Meetings and Public Records laws were intended) can provide virtually insurmountable burdens to small corporations, many of which have a staff of one.
Finally, the dissent in the Beaver Dam case articulates the lack of guidance provided by the majority: “However, the majority fails to provide realistic guidance on how a non-profit economic development corporation can avoid conducting business in the fishbowl of the open meetings and public records statutes without severing its cooperative relationship with its municipal beneficiary and paying for all of its economic development initiatives with private money.”
For a more in-depth discussion, please see “Wisconsin Supreme Court Delivers a Blow to Economic Development Activities,” at www.hamilton-consulting.com/updates/08july_beaverdam-critique.html.
The Hamilton Consulting Group LLC, Madison
The Rise of Computer Tyranny
In the last issue (literally and figuratively) of Inside the Bar, our State Bar announced, with apparent and obvious glee, as follows: 1) that on and after July 1, 2009, the requirement of e-filing of appellate briefs by attorneys, in addition to filing of paper briefs; and 2) that no hard copy of Inside the Bar will be available after the December 2008 edition.
Our Wisconsin Supreme Court, the courts of appeal, and the State Bar are funded by revenues derived from taxation and from the dues of the regulated members of the State Bar and, by reason thereof, they all possess massive amounts of IT staff, hardware, software, Web sites, and email addresses, ad nauseum.
The Bar and the appellate courts can now spew out massive amounts of directives, mandates, requirements, and rules and regulations, available only to those lawyers and law firms that possess the appropriate computer technology and the necessary staff to operate the IT systems.
What about the lawyers and law firms that decided, for any number of reasons, to not embrace and involve themselves in the abyss and entanglements of the computer? These lawyers and law firms are now in the backwash of the legal profession and are relegated to have only second- and third-class standing in the profession, if any at all.
By reason of the involvement of the supreme court, the court of appeals, and the State Bar in the embracing of and requirements now in process regarding computer technology for the practice of law, it is foreordained that it will be interpreted that to practice law without a computer is either unethical or professional malpractice, or both.
The courts and the State Bar have abandoned the small law firms and solo practitioners for their own purposes of comfort and convenience that computer technology brings to them, for whatever reason. Shame on all of you for abandoning the small and solo practitioners who are now being sacrificed at the altar of the computer.
I have been practicing law for more than 42 years, and by reason of the nature of my practice, its revenues and purposes, I determined not to get involved in the age of technology, which I despise because of its impersonal nature and attitude toward people. I am now being discriminated against by the very organizations that regulate me and to which I am forced to pay monies to finance the regulation of my own professional demise. The State Bar and the supreme court have done me no favors in their push for the primacy and tyranny of the computer.
Ted B. Johnson,
Law Offices of Ted B. Johnson Ltd., Fox Point
Doing without Jury Trials Leads to Democracy’s Demise
Our State Bar president would have us avoid jury trials. (See “Doing without Jury Trials” in the February issue.) “The first thing we do, let’s kill all the lawyers” has now been modified so that we just commit suicide. Besides jury trials is the right to access to courts in a democratic system of laws. We can’t afford this any longer, so just stop.
“The fault my dear Brutus lies not in our stars but in ourselves.” A democratic system apparently has a limited value, at least financially, but all the while we ask our soldiers to commit to the ultimate sacrifice, and that is apparently okay. How can these things be too expensive financially but worth dyng for?
ADR is simply a tax on the people in that the arbiter must be paid by the participants. Maybe we ought to just tax those who vote so that we might be able to afford what it will take to avoid hanging chads. Whatever it is that requires so much of the government’s financial capital had better be very important to justify what this will lead to.
Lawrence G. Polzin,
Lawrence Polzin Law Office, Hales Corners
Response: Attorney Polzin reads my piece to mean that I want to avoid jury trials and, inferentially, that I support the suspension of jury trials in New Hampshire in favor of arbitration. That is an unfortunate mistaking of my point in writing the article. I do not see arbitration as a means to replace the guarantee of trial by jury at all. Indeed, I don’t understand the apparent willing acceptance of this decision in New Hampshire. My other point in the piece is simply this: We do ourselves as a profession and our clients a disservice if we are not willing to look in creative ways at new tools and techniques to solve our client’s problems, not just because state funding is in crisis, but because clients want and need those tools.
Diane S. Diel, President,
State Bar of Wisconsin