Frederick v. City of Falls City

Nebraska Supreme Court·Decided January 16, 2015·No. S-13-275·Published

Opinion

864 289 NEBRASKA REPORTS

David Leon Frederick, appellee, cross-appellee, and cross-appellant, v. City of Falls City, a city and political subdivision of the State of Nebraska, appellee and cross-appellant, and Falls City Economic Development and Growth Enterprise, Inc., appellant and cross-appellee.

___ N.W.2d ___

Filed January 16, 2015. No. S-13-275.

1. Judgments: Statutes: Appeal and Error. Questions of law and statutory interpretation require an appellate court to reach a conclusion independent of the decision made by the court below.

2. Mandamus: Proof. A party seeking a writ of mandamus under Neb. Rev. Stat.

§ 84-712.03 (Reissue 2008) has the burden to satisfy three elements: (1) that the requesting party is a citizen of the state or other person interested in the examination of the public records, (2) that the documents sought are public records as defined by Neb. Rev. Stat. § 84-712.01 (Reissue 2014), and (3) that the requesting party has been denied access to the public records as guaranteed by Neb. Rev. Stat. § 84-712 (Cum. Supp. 2012).

3. Administrative Law: Pretrial Procedure: Records. A four-part functional equivalency test is the appropriate analytical model for determining whether a private entity which has an ongoing relationship with a governmental entity can be considered an agency, branch, or department of such governmental entity within the meaning of Neb. Rev. Stat. § 84-712.01(1) (Reissue 2014), such that its records are subject to disclosure upon request under Nebraska’s public records laws. The factors to be considered in applying this test are (1) whether the private entity performs a governmental function, (2) the level of governmental funding of the private entity, (3) the extent of government involvement with or regulation of the private entity, and (4) whether the private entity was created by the government.

4. Pretrial Procedure: Evidence: Proof. In applying the functional equivalency test to determine whether a private entity is the equivalent of a public agency, branch, or department, it is not necessary that an entity strictly conform to each factor, but the factors should be considered and weighed on a case-bycase basis.

Appeal from the District Court for Richardson County: Daniel E. Bryan, Jr., Judge. Vacated and reversed, and remanded with directions.

Jerald L. Rauterkus and Bonnie M. Boryca, of Erickson & Sederstrom, P.C., L.L.O., for appellant.

FREDERICK v. CITY OF FALLS CITY 865 Cite as 289 Neb. 864

Michael R. Dunn, of Halbert, Dunn & Halbert, L.L.C., for appellee City of Falls City.

Stephen D. Mossman, J.L. Spray, and Joshua E. Dethlefsen, of Mattson, Ricketts, Davies, Stewart & Calkins, for appellee David Leon Frederick.

David J.A. Bargen, of Rembolt Ludtke, L.L.P., for amicus curiae League of Nebraska Municipalities.

Heavican, C.J., Wright, Connolly, Stephan, McCormack, Miller-Lerman, and Cassel, JJ.

Stephan, J. The issue presented in this appeal is whether certain documents in the possession of a private corporation which has an ongoing contractual relationship with a city are “public records” within the meaning of Neb. Rev. Stat. §§ 84-712 (Cum. Supp. 2012) and 84-712.01 (Reissue 2014). Falls City Economic Development and Growth Enterprise, Inc. (EDGE), a Nebraska nonprofit corporation, provides economic development services to the City of Falls City, Nebraska, and other entities. A Nebraska citizen asked EDGE to produce documents relating to a specific economic development project , and EDGE denied the request on the ground that the requested documents were not public records as defined by § 84-712.01(1). The citizen then brought this action for a writ of mandamus pursuant to Neb. Rev. Stat. § 84-712.03 (Reissue 2008) to compel production of the requested documents . Except for certain documents which it determined to be privileged, the district court granted the writ. EDGE appealed, and Falls City cross-appealed, aligning itself with EDGE. The citizen also cross-appealed, contending the district court erred in not requiring production of all of the requested documents. We vacate and reverse the writ of mandamus and the order awarding attorney fees, and remand the cause with directions to dismiss.

866 289 NEBRASKA REPORTS

I. BACKGROUND

1. Parties

David Leon Frederick is a Nebraska citizen and a resident of Richardson County, Nebraska. EDGE is a mutual benefit corporation incorporated under the Nebraska Nonprofit Corporation Act1 in 2006 by eight private individuals, none of whom are employed by Falls City. According to its articles of incorporation, EDGE was formed “[t]o operate as a nonprofit corporation for the purpose of encouraging economic development and growth and improving business conditions” in Falls City, Nebraska, and the surrounding area, and to “engage in any lawful activity permitted under the Nebraska Nonprofit Corporation Act.” EDGE employs an executive director and one part-time assistant. Neither are employees of Falls City.

EDGE is governed by a 21-member board of directors, which includes the mayor of Falls City and one member of the city council. The Falls City administrator is an ex-officio member of EDGE’s board. Each director is required to sign a confidentiality agreement which provides that he or she shall keep confidential all information obtained as a result of the performance of duties as a Director of EDGE, including but not limited to all information obtained regarding the identity or characteristics of prospects, contracts , terms of any agreements, terms or existence of any proposals, financial matters, and the subject matter and contents of any Board or Committee meetings.

Directors do not have access to all information maintained by the corporation.

EDGE receives both public and private funding. During the first 9 months of 2012, it received $85,840.23 from Falls City, $20,000 from Richardson County, and $77,215 from private entities.

EDGE performs services for Falls City and Richardson County which include hosting, communicating with, and

1 See Neb. Rev. Stat. §§ 21-1901 to 21-19,177 (Reissue 2012 & Cum. Supp. 2014).

FREDERICK v. CITY OF FALLS CITY 867 Cite as 289 Neb. 864

negotiating with business development prospects; encouraging development activities of existing and new businesses; and promoting the image of the city and county regionally and nationally. EDGE also performs services that benefit its private investors, such as workforce training workshops, hosting business prospects, and arranging meetings between investors and business prospects and leaders from other communities.

EDGE and Falls City have entered into various agreements, including a memorandum of understanding dated December 19, 2011. This document recites that Falls City and EDGE “desire to work together to implement an aggressive, targeted approach to creating a positive image of Falls City and marketing the community as a preferred business location that will generate new wealth and create quality employment opportunities .” This document defines the relationship between Falls City and EDGE as serving the purpose of undertaking the planning and implementation of the City’s economic development marketing and new business development recruitment, the retention and expansion of existing businesses and entrepreneurial development as well as other economic development serv­ices designed to strengthen the competitiveness of the business climate and expand economic development in the City.

The memorandum of understanding specifies the services which EDGE agreed to provide in furtherance of this objective and is revocable by either party giving 60 days’ written notice.

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Frederick v. City of Falls City, (Neb. 2015).

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