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09/30/94 WILLIAM R. COOPER v. ILLINOIS DEPARTMENT

September 30, 1994

WILLIAM R. COOPER, PLAINTIFF-APPELLANT,
v.
ILLINOIS DEPARTMENT OF THE LOTTERY AND DESIREE GLAPION ROGERS, DIRECTOR, ILLINOIS DEPARTMENT OF THE LOTTERY, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. Honorable John Hourihane, Judge Presiding.

Petition for Leave to Appeal Denied February 1, 1995.

McNULTY, Murray, Cousins, Jr.

The opinion of the court was delivered by: Mcnulty

JUSTICE McNULTY delivered the opinion of the court:

Plaintiff William Cooper brought an action against defendant Illinois Department of the Lottery (IDL) seeking disclosure of certain information under the Illinois Freedom of Information Act (FOIA). (5 ILCS 140/1 (West 1992).) The circuit court of Cook County granted summary judgment for defendant and plaintiff appeals. No issues are raised on the pleadings.

Plaintiff submitted a written request for certain records in the possession of defendants to further his study of whether the IDL is living up to its statement of policy: that its "advertising content and practices do not target with the intent to exploit specific groups or economic classes of people." (20 ILCS 1605/7.8a (West 1992).) Specifically, plaintiff requested the following information:

"(1) portions of a media plan developed by Bozell, Inc. (the "Bozell Plan") to advertise and promote the Illinois State Lottery (the "State Lottery") for the years 1988 through 1990; (2) a list of all vendors of State Lottery tickets ("Lottery Agents") in the City of Chicago with monthly sales data; and (3) copies of all current (1990) State Lottery publications intended for public distribution."

IDL responded to Cooper's request by stating that: (1) the Bozell Plan was not a "public record" within the terms of Illinois Freedom of Information Act (FOIA), and would not be disclosed; (2) agent-specific lottery sales information was proprietary financial information, the disclosure of which could cause competitive harm to agents, and therefore exempt from disclosure under Section 7(1)(g). IDL complied with Cooper's third request. IDL offered as alternative documents the list of all Chicago lottery agents, and gross sales information by zip code for fiscal years 1988 to present.

Cooper filed a complaint for injunction against IDL and moved for summary judgment. IDL responded to Cooper's motion, and also moved for summary judgment. The parties' cross motions for summary judgment were argued before the trial Judge with respect to disclosure of the lottery agent sales information. At the time of hearing on the cross motion for summary judgment, the record shows that Cooper had pared his information request to: (1) annual gross sales data for the geographical location of each Chicago lottery outlet and (2) details of the Bozell plan encompassing lottery advertising in all media including when and where it ran and the cost of ad placement (but not ad production). Cooper argued that public policy favored disclosure of the information requested and that no FOIA exemptions applied.

The trial Judge ruled in defendant's favor on the ground that vendor-specific lottery sales data were exempt from disclosure as trade secret and financial information that is proprietary or confidential under section 7(1)(g) and as a clearly unwarranted invasion of lottery agents' and taxpayers' privacy under the provisions of sections 7(1)(b)(iii) and (iv) of FOIA. The court also ruled, after in camera inspection, that the "Communications Plan Recommendations" (the Bozell plan) was exempt from disclosure under section 7(1)(r) as recommendations pertaining to the financing and marketing transactions of the public body as well as section 7(1)(g)'s exemption for certain trade secrets and commercial or financial information that is proprietary, privileged or confidential, or where disclosure may cause competitive harm.

We must decide whether the circuit court properly granted summary judgment for defendant because the requested information was exempt from disclosure under the Illinois Freedom of Information Act.

The FOIA provides, in pertinent part:

"Pursuant to the fundamental philosophy of the American constitutional form of government, it is declared to be the public policy of the State of Illinois that all persons are entitled to full and complete information regarding the affairs of government and the official acts and policies of those who represent them as public officials and public employees consistent with the terms of this Act. Such access is necessary to enable the people to fulfill their duties of discussing public issues fully and freely, making informed political judgments and monitoring government to ensure that it is being conducted in the public interest." 5 ILCS 140/1 (West 1992).

There is a presumption that public records be open and accessible, subject only to exemptions that are to be narrowly construed. (Carbondale Convention Center, Inc. v. Carbondale (1993), 245 Ill. App. 3d 474, 614 N.E.2d 539, 185 Ill. Dec. 405, citing Bowie v. Evanston Community Consolidated School District No. 65 (1989), 128 Ill. 2d 373, 378, 538 N.E.2d 557, 559, 131 Ill. Dec. 182.) Although section 7 of the Act provides an extensive list of exemptions to disclosure, the burden of proof is on the governmental agency to establish that the documents in question are exempt from disclosure. ( Wayne County Press, Inc. v. Georgia Isle (1994), 200 Ill. Dec. 874, Ill. App. 3d , 636 N.E.2d 65; Carbondale, citing Baudin v. City of Crystal Lake, (1989), 192 Ill. App. 3d 530, 535, 548 N.E.2d 1110, 1113, 139 Ill. Dec. 554.) "To meet this burden and to assist the court in making its determination, the agency must provide a detailed justification for its claim of exemption, addressing the requested documents specifically and in a manner allowing for adequate adversary testing." (Emphasis in original.) (Carbondale, citing Baudin, 192 Ill. App. 3d at 535, 548 N.E.2d at 1113.) "Reliance upon self-determination by public officials and public employees as to what should and what should not be disclosed to the public would frustrate the purpose of the FOIA." ( Hoffman v. Department of Corrections (1987), 158 Ill. App. 3d 473, 476, 511 N.E.2d 759, 761, 110 Ill. Dec. 582.) The purpose of FOIA is "to permit the public to decide for itself whether government action is proper." (Emphasis in original.) Washington Post Co. v. United States Dept. of Health, & Human Services (D.C. Cir. 1982), 223 U.S. App. D.C. 139, 690 F.2d 252, 264.

I

We first address plaintiff's request for the Bozell Plan. On review, defendant no longer contends that the Bozell plan is not a public record, as it is clearly within the definition set forth in section 140(2)(c). Rather, defendant contends that this material is exempt under sections 7(1)(g) and 7(1)(r) of the Illinois FOIA.

A

Section 7(1)(g), the "trade secret" exemption, exempts: "trade secrets and commercial or financial information obtained from a person or business where such trade secrets or information are proprietary, privileged or confidential, or where disclosure of such trade secrets or information may cause competitive harm." (5 ILCS 140/7(1)(g).)

The legislature patterned the Illinois law after the Federal Freedom of Information Act, (5 U.S.C. § 552) and case law construing the Federal statute should be used in Illinois to interpret our own FOIA. ( Roulette v. Department of Central Management Services (1986), 141 Ill. App. 3d 394, 490 N.E.2d 60, 95 Ill. Dec. 587, citing House Debates, H.B. 234, 83d General Assembly, May 25, 1983, at 184.) Case law construing the Federal statute suggests that information is confidential only if disclosure would either inflict substantial competitive harm on the supplier of the information or impair the recipient agency's ability to induce people to submit similar information to it in the future. ( General Electric Co. v. United States Nuclear Regulatory Commission (7th Cir. 1984), 750 F.2d 1394.) We note that a minor impairment cannot overcome the disclosure mandate of FOIA. ( Washington Post Co. v. United States Dept. of Health & Human Services (7th Cir. 1982), 690 F.2d 252.) "To show substantial competitive harm, the agency must show by specific factual or evidentiary material that: (1) the person or entity from which information was obtained actually faces competition; and (2) substantial harm to a competitive position would likely result from disclosure of the information in the agency's records." Calhoun v. Lyng (5th Cir. 1988), 864 F.2d 34.

The Illinois Lottery, the entity from which the information is sought, does not face competition. Rather, it is a monopoly. In an attempt to circumvent this problem, IDL invokes the interest of Bozell in the ideas and recommendations it developed. However to the extent that IDL is reluctant to release the disputed material on Bozell's behalf rather than its own behalf, the exemption on which it relies is inapplicable. IDL concedes that 7(1)(g) was patterned after the Federal FOIA and consistent construction was intended. The purpose of the federal exemption is "to protect information that a private individual wishes to keep confidential for his own purposes, but reveals to the government under the express or implied promise by the government that the information will be kept confidential [emphasis added]" ( Benson v. General Services Administration (W.D. Wash. 1968), 289 F. Supp. 590, 594.) The pleadings and record here are devoid of any reason for the trial court to conclude that the data requested about the Bozell plan was furnished to the lottery in confidence, or that disclosure of the plan would inflict competitive harm on Bozell, the provider. We conclude that the Bozell Plan, commissioned and paid for by the IDL, is not the type of confidential business information that section 7(1)(g) exempts. The only difference between this provision in the Illinois FOIA and the Federal FOIA exemption is the addition of the word "proprietary" before the words "privileged or confidential."

Extrapolating from the language difference between the wording of the Federal and State FOIA trade secrets exemption, IDL concludes that Cooper's reliance on Benson fails to recognize both the "proprietary" language under the Illinois FOIA and the Federal case law interpretation of "confidential" to include competitive harm or agency difficulty in obtaining such information.

First, IDL asserts that the relevant inquiry is whether Bozell is in competition with other businesses, not whether the Illinois Lottery is a monopoly. In Benson, the court rejected the GSA's contention that certain appraisal reports it commissioned from a private entity were protected under the Federal trade secrets FOIA exemption, 5 U.S.C. § 552(b)(4) stating:

"the exemption is meant to protect information that a private individual wishes to keep confidential for his own purposes * * * The appraisal report, on the other hand, is kept confidential by the appraiser on the client's behalf, not on his own behalf, and the client here is GSA. Thus the exemption does not apply to the appraisal report." 289 F. Supp. at 594.

The Illinois legislature has declared "it is our intention that case law interpretations under Federal FOIA should guide * * * the courts in Illinois" in construing section 207(g) [now 5 ILCS 140/7(1)(g)]. Debates in the Illinois House of Representatives 83rd General Assembly (May 25, 1983) at 184.

The Benson court correctly concluded that where the government has commissioned a private entity to prepare a report, it may not invoke its own status as a "client" to withhold the report as "confidential." To conclude otherwise would emasculate the disclosure requirements of FOIA.

IDL's focus on the word "proprietary" in the Illinois FOIA trade secrets exemption does not weaken the authority of the holding in Benson, but rather further supports the logic upon which it is based. IDL assumes that "Bozell has a proprietary interest in the ideas and recommendations it developed," when, in fact, if anyone has a "proprietary" interest in the Bozell plan, it is the IDL who commissioned and paid for the plan. Unlike the usual 7(g) case, where a third party's trade secrets are submitted in the course of bidding on a government project or in response to an agency's investigation under its regulatory authority, the "business strategies and information" quoted in IDL's brief at page 22, citing Debates at 184, are those of IDL and not Bozell. See e.g. Orion Research, Inc. v. EPA (1st Cir. 1980), 615 F.2d 551; Timken Co. v. U.S. Customs Service (D.D.C. 1981), 531 F. Supp. 194; and Teich v. FDA (D.D.C. 1990) 751 F. Supp. 243.

IDL's final argument that the Bozell plan is exempt as a trade secret or information of a proprietary, privileged or a confidential nature under section 7(1)(g) is that while there is only one Illinois Lottery, there are neighboring State lotteries and multi-State lotteries from which the plan should be kept confidential in Bozell's and the Department's interests. This rationale is incomprehensible in light of the fact that the Illinois Lottery Act explicitly provides than one of the duties of the Director of the Lottery is "to enter into an agreement or agreements with the management of state lotteries operated pursuant to the laws of other states for the purpose of creating and operating a multi-state lottery game wherein a separate and distinct prize pool would be combined to award larger prizes to the public than could be offered by several state lotteries individually * * *." (20 ILCS 1605/9(h) (West 1992).) The Act encourages interstate cooperation to the mutual benefit of all rather than fostering exclusionary competitiveness of one state against others.

In summary, IDL has alleged no facts in its pleadings to support its Conclusion that disclosure of the Bozell Plan will have a chilling effect on receipt of information from advertising agencies it ...


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