Sheil v. Horton

[Cite as Sheil v. Horton, 2018-Ohio-1720.]
WILLIAM B. SHEIL Case No. 2017-00772PQ
Requester Special Master Jeffery W. Clark
v. REPORT AND RECOMMENDATION
JOHN HORTON
Respondent
{¶1} The Cuyahoga Community College Foundation is a tax-exempt, nonprofit
entity incorporated in 1973 to solicit, receive, and hold public contributions for the
benefit of the Cuyahoga Community College (Tri-C). (Court’s Exh.1 at 19-23, Articles of
Incorporation.) Tri-C Foundation manages large sums of money in endowments and
other accounts, and periodically transfers funds to Tri-C for distribution as scholarships
and for other purposes. (Response, Exh. 1 Affidavit of Megan O’Bryan (O’Bryan Aff. I)
at ¶ 5-6, 9-10; Sur-reply Affidavit of Megan O’Bryan (O’Bryan Aff. II) at ¶ 7.) The
financial and administrative relationships between Tri-C and Tri-C Foundation are
detailed in the Articles of Incorporation, the O’Bryan Affidavits, the Tri-C Basic Financial
Statements For the Fiscal Years Ended June 30, 2017 and 2016, Note 17 – Discretely
Presented Component Unit (Court’s Exh. at p. 314-325.), and the Tri-C Foundation
Audit for 2017/2016. (Court’s Exh. at p. 30-59.)
{¶2} In June 2017, Tri-C Foundation engaged actress Octavia Spencer to speak
at the annual Presidential Scholarship Luncheon fundraiser. (O’Bryan Aff. I at ¶ 13.) On
August 21, 2017, requester William Sheil, a reporter for WJW-TV, sent an email to
respondent John Horton, Media Relations Manager, Tri-C Integrated Communications
Department, confirming “we made a request for the contract between Tri-C and
Octavia Spencer for her upcoming appearance at a Tri-C luncheon * * * under Ohio’s
1 The court had requester’s January 25, 2018 affidavit and attachments paginated for ease of
reference. The resulting document, filed on April 6, 2018, is referenced as “Court’s Exh.”
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Open Records Act.” (Complaint at 2.) Horton responded that the contract was between
Tri-C Foundation and Ms. Spencer and, “[b]ased upon the advice of counsel, the
Foundation is unable to provide the contract. Ohio law establishes that the
Cuyahoga Community College Foundation is not the functional equivalent of a
public entity and is not subject to the Ohio Public Records Act.” (Id. at 4.) On
September 19, 2017, Sheil filed his complaint alleging denial of access to public records
in violation of R.C. 149.43(B). On November 22, 2017, Horton filed his response, adding
as a basis for denial that the contract constitutes a trade secret. Sheil filed a reply on
January 25, 2018 and Horton filed a sur-reply on February 26, 2018. Horton filed a copy
of the contract, under seal, on March 7, 2018.
{¶3} Ohio’s Public Records Act, R.C. 149.43, provides a remedy for production of
records under R.C. 2743.75 if the court of claims determines that a public office has
denied access to public records in violation of R.C. 149.43(B). The policy underlying the
Public Records Act is that “open government serves the public interest and our
democratic system.” State ex rel. Dann v. Taft, 109 Ohio St. 3d 364, 2006-Ohio-1825,
848 N.E.2d 472, ¶ 20. Therefore, the Public Records Act “is construed liberally in favor
of broad access, and any doubt is resolved in favor of disclosure of public records.”
State ex rel. Cincinnati Enquirer v. Hamilton Cty., 75 Ohio St. 3d 374, 376, 662 N.E.2d
334 (1996). Claims under R.C. 2743.75 are determined using the standard of clear and
convincing evidence. Hurt v. Liberty Twp., 5th Dist. Delaware No. 17CAI050031,
2017-Ohio-7820, ¶ 27-30.
{¶4} This case presents two issues: (1) whether Tri-C Foundation is subject to
the Public Records Act, and (2) if so, whether its contract with a speaker for a
fundraising event may be withheld as a trade secret. The evidence establishes (1) that
Tri-C Foundation is subject to the Public Records Act, and (2) the speaker contract
contains no material that falls under the definition of trade secret.
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Tri-C Foundation is a Public Institution, and Therefore a Public Office
{¶5} The Public Records Act applies to “records kept by any public office.”
R.C. 149.43(A)(1). As used in the Act,
“Public office” includes any state agency, public institution, political
subdivision, or any other organized body, office, agency, institution, or
entity established by the laws of this state for the exercise of any function
of government.
(Emphasis added.) R.C. 149.011(A). The mere fact that it is a private, non-profit
corporation does not preclude an entity from being a public office. State ex rel. Freedom
Communications, Inc. v. Elida Community Fire Co., 82 Ohio St. 3d 578, 579, 697 N.E.2d
210 (1998). A private entity is a public institution under R.C. 149.011(A), and thus a
public office for purposes of the Public Records Act, when it serves as the “functional
equivalent of a public office.” State ex rel. Oriana House, Inc. v. Montgomery, 110 Ohio
St.3d 456, 2006-Ohio-4854, 854 N.E.2d 193, ¶ 21-26. Under the functional equivalence
test, the court must analyze all pertinent factors, including but not limited to:
(1) whether the entity performs a governmental function,
(2) the level of government funding,
(3) the extent of government involvement or regulation, and
(4) whether the entity was created by the government or to avoid the
requirements of the Public Records Act.
Id. at ¶ 25. The analysis begins with the presumption that private entities are not subject
to the Public Records Act absent a showing by clear and convincing evidence that the
private entity is the functional equivalent of a public office. Id. at ¶ 26. No single factor
is dispositive – all pertinent factors must be weighed and balanced in each case,
mindful of the policy of openness that underlies the Public Records Act. Id. at ¶ 23;
State ex rel. Repository v. Nova Behavioral Health, Inc., 112 Ohio St. 3d 338, 2006-
Ohio-6713, 859 N.E.2d 936, ¶ 24, 38-39.
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Application of Functional Equivalency Test to Tri-C Foundation:
A. Performance of Governmental Function
{¶6} This factor asks whether the entity performs a traditionally governmental
function. Oriana House at ¶ 28. “Governmental function” includes the provision of a
system of public education. R.C. 2744.01(C)(2)(c). Public institutions of higher learning
such as Tri-C and its component units are part of this traditional function, including their
receipt of funding from the state and other sources. R.C. 3358.08(C); R.C. 3358.09;
Ohio Constitution, Article VIII, Section 2(e), (f). “The receipt and solicitation of gifts * * *
is an indispensable function of any institution of higher learning.” State ex rel. Toledo
Blade Co. v. Univ. of Toledo Found., 65 Ohio St. 3d 258, 262, 602 N.E.2d 1159 (1992).
{¶7} Tri-C Foundation solicits and receives public donations, to be distributed as
scholarships to persons attending Tri-C and for other purposes benefiting Tri-C.
(O’Brien Aff. I at ¶ 5; Court’s Exh. at 41.) The Tri-C Foundation thus performs an
indispensable sub-function within Tri-C’s traditional governmental education function.
This factor weighs strongly in favor of Tri-C Foundation’s status as the functional
equivalent of a public office.
B. Level of Government Funding
{¶8} Courts have expressed the level of government funding as the percentage
of an entity’s total revenues that come from public sources. See Oriana House at ¶ 32;
Nova Behavioral at ¶ 32. Respondent asserts that Tri-C Foundation received $227,268
of contributed services from Tri-C in fiscal year 2017 for “administrative, general, and
fundraising expenses.” (Response at 6; O’Bryan Aff. I at ¶ 32.) Respondent applies this
value against the $9.2 million that Tri-C Foundation collected in contributions, grants,
and special events revenue, and claims that government funding was only 2.47 percent.
(Response at 6; O’Bryan Aff. I at ¶ 33.)
{¶9} While contributions, grants and special event receipts are “revenue” as an
accounting concept, almost all such revenue collected by Tri-C Foundation is destined
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for Tri-C. These moneys no more “fund” the Foundation than if they were artworks or
real estate physically collected and transferred, intact, to Tri-C. A more meaningful
measure of government funding of a fund-raising entity is the percentage of its
operational expenses that come from public sources. The Foundation’s Statement of
Activities for fiscal year 2017 shows expenses for Administration and General $193,027,
Special Events $72,628, and Fundraising $447,328, for a total of $712,983. (Court’s
Exh. at 38.) Applying the $227,268 received from Tri-C against this figure, the
government funded portion of Tri-C Foundation’s operating expenses is a more
substantial 32 percent.
{¶10} Moreover, even using the broad concept of “revenue” as all moneys
received, Tri-C Foundation revenues consist mostly or entirely of public money. “Public
money” is defined by R.C. 117.01(C) to mean “any money received, collected by, or due
a public official under color of office, as well as any money collected by any individual
on behalf of a public office or as a purported representative or agent of the public
office.” (Emphasis added.) “Public money” includes money raised by a nonprofit
corporation for a public office. 2016 Ohio Atty. Gen. Ops. No. 2016-013 at *68-70.
Under this definition, it appears that 100 percent of Tri-C Foundation’s total revenues
come from public sources.
{¶11} Regardless, there is no threshold amount of government funding for an
entity to be considered the functional equivalent of a public office. In this case, most or
all of Tri-C Foundation’s operating expenses are funded by a combination of direct
government contributions from Tri-C, and a portion of the public moneys it has
collected. Despite any ambiguity as to whether receipt of “public moneys” equates with
“public sources,” I find that this factor weighs moderately to strongly in favor of the
foundation’s status as the functional equivalent of a public office.
Case No. 2017-00772PQ -6- REPORT AND RECOMMENDATION
Extent of Government Involvement or Regulation
{¶12} While Tri-C does not control the day to day activities of Tri-C Foundation,
the two are closely intertwined. Tri-C Foundation is co-located with Tri-C in Tri-C
facilities, where it is administratively involved with Tri-C by using contributed Tri-C staff
time, technological services, office services, and office equipment. (O’Bryan Aff. I at ¶
25-32.) Tri-C Foundation is listed on the Tri-C web site as a Tri-C Administrative
Department.2 In Tri-C’s Organizational Chart, Tri-C Foundation and the Vice President
of Development compose a unit directly under the President of the College. (Court’s
Exh. at 226.3) Tri-C Foundation uses Tri-C email addresses through Tri-C servers. The
Tri-C Foundation web presence is entirely on the Tri-C web site.4 Tri-C Foundation
apparently has no paid employees of its own. (Court’s Exh. at 85; O’Bryan Aff. I at
¶ 30-32; O’Bryan Aff. II at ¶ 10.)
{¶13} Tri-C Foundation is so fiscally intertwined with Tri-C that it must be reported
as “a component unit of” Tri-C in its audit filings. (Court’s Exh. at 202, 236). As
explained in Tri-C’s Basic Financial Statements, Fiscal Years 2017 and 2016, Note 1 –
Summary of Significant Accounting Policies:
Component units are legally separate organizations for which the College
is financially accountable or for which the nature and significance of their
relationship with the College are such that exclusion would cause the
College’s financials to be misleading. GASB Statement No. 39.
Determining Whether Certain Organizations Are Component Units,
requires the College to reflect the [Tri-C Foundation] as a discretely
presented component unit in the financial statements based on the
significance of the relationship with the College. * * *
The economic resources received or held by the Foundation that the
College is entitled to or has the ability to access are significant to the
College.
2 http://www.tri-c.edu/administrative-departments/index.html. (Accessed April 16, 2018.)
3 Tri-C FY 2018 Approved Budget Book, p. 13. http://www.tri-c.edu/about/documents/budget-
book.pdf (Accessed April 16, 2018.)
4 http://www.tri-c.edu/give/index.html. (Accessed April 16, 2018.)
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(Court’s Exh. at 261.) The economic resources that Tri-C “is entitled to or has the ability
to access” are received and held pursuant to the purpose stated in Tri-C Foundation’s
articles of incorporation: “To receive, hold, invest, and administer property of any kind,
including money” for distribution to, or for the benefit of, Tri-C. (Id. at 20.) The court is
not persuaded by respondent’s contrary statement that “[t]he Foundation does not hold
funds for the College or in the College’s name. (O’Bryan Aff. I at ¶ 8.) In addition to
outside donors in 2017, Tri-C Foundation recognized $870,874 from Tri-C itself in the
form of contributions and special events revenue, e.g., external parking revenue and
funds for special events sponsorships. (O’Bryan Aff. II at ¶ 9.) The majority of all
Tri-C Foundation revenue ultimately becomes available to Tri-C for scholarships and
other purposes, in annual amounts determined by Tri-C Foundation. (O’Bryan Aff. I at
¶ 5, 9-12; O’Bryan Aff. II at ¶ 7.)
{¶14} These entities are involved in other ways. Although respondent asserts that
Tri-C Foundation does not currently exercise all of its available corporate functions
(Sur-reply at 4; O’Bryan Aff. II at ¶ 6.), the purposes established in the Articles of
Incorporation include (in addition to fundraising):
1. To make expenditures for charitable, scientific, literary or education
purposes for the benefit of Tri-C, including to make expenditures for
any normally accepted function of colleges,
2. To acquire, construct, equip, furnish, repair, remodel, renovate,
enlarge, improve, maintain and operate buildings, structures, and
facilities, and to acquire real estate in conjunction therewith for the use
of Tri-C, its staff, faculty, students, or any organization thereof or
related or affiliated thereto,
3. To establish and maintain programs for the purpose of financially
assisting, directly or indirectly, by gift, loan, guaranty, or otherwise
students attending Tri-C,
4. To engage in and conduct special activities on behalf of Tri-C, its staff,
faculty, students, or any organization thereof or related or affiliated
thereto.
5. To attempt to influence legislation.
Case No. 2017-00772PQ -8- REPORT AND RECOMMENDATION
(Court’s Exh. at 20-22.) Tri-C and Tri-C Foundation thus have additional, significant
areas of mutual involvement available at their discretion. For example, Tri-C Foundation
spent $100,000 to $200,000 supporting lobbying efforts on behalf of Tri-C in each of
fiscal years 2014-2016. (Court’s Exh. at 100-102, 137-140, 172-175.)
{¶15} Finally, Tri-C is guaranteed substantial involvement in the governance of
Tri-C Foundation through four ex officio positions for Tri-C officers on the
Tri-C Foundation Board of Directors. (O’Bryan Aff. I, Exh. A.)
{¶16} This factor weighs moderately in favor of Tri-C Foundation’s status as the
functional equivalent of a public office.
C. Whether Entity was Created by the Government or to Avoid the
Requirements of the Public Records Act
{¶17} In August 1973, Tri-C’s then-Vice President of Finance, Dante Biello,
incorporated the Tri-C Foundation. (Court’s Exh. at 19-23, Articles of Incorporation.)
Biello also signed as the agent for statutory service, giving as the service address,
“Cuyahoga Community College District, 2214 East 14th Street.” (Id. at 24.) See State ex
rel. Luken v. Corp. for Findlay Mkt. of Cincinnati, 2012-Ohio-2074, 972 N.E.2d 607, ¶ 25
(1st Dist.) (“Because the city requested the creation of a nonprofit corporation to
manage and operate Findlay Market, we * * * find that the city created CFMC.”). There
is no evidence that the foundation was created to avoid the Public Records Act.
{¶18} The broad purposes of the Foundation are exclusively for the benefit of the
Board of Trustees of the Cuyahoga Community College District. (Court’s Exh. at 19-23.)
The articles provide that “[u]pon any dissolution of the corporation all of the
corporation’s property of every nature and description shall be paid over and transferred
to the Board of Trustees of the Cuyahoga Community College District * * *.” (Id. at
22-23.) Thus, in its birth, its life, and even in its death, the Tri-C Foundation was created
solely to serve Tri-C.
{¶19} This factor weighs strongly in favor of Tri-C Foundation’s status as the
functional equivalent of a public office.
Case No. 2017-00772PQ -9- REPORT AND RECOMMENDATION
Weighing of Factors
{¶20} The four primary Oriana House factors all weigh in favor of the Tri-C
Foundation as the functional equivalent of a public office. The foundation was created to
perform the governmental function recognized in Toledo Foundation, supra, and
performs that function with substantial or complete governmental funding. Tri-C is
closely involved with Tri-C Foundation in its housing, personnel, technical and other
administrative operations, auditing, and governance. By the terms of its incorporation,
Tri-C Foundation could not exist apart from Tri-C. In purpose and practice it is an alter
ego of Tri-C. Weighing and balancing these factors, I find clear and convincing evidence
that Tri-C Foundation is the functional equivalent of a public office.
Functional Equivalence – Additional Factors
{¶21} The Oriana House list of factors is non-exhaustive, and the court may
consider additional pertinent information. Oriana House at ¶ 22-25. The following
additional information reinforces Tri-C Foundation’s status as the functional equivalent
of a public institution:
Tri-C Foundation is Treated as a Public Office by the Auditor of State
{¶22} R.C. 117.10(A) provides that “the auditor of state shall audit all public
offices as provided in this chapter.”5 R.C. 117.11 then details the timing, scope, and
manner of public office audits. The language defining “public office” in R.C. 117.01(D) is
identical to that in R.C. 149.011(A). Only public offices are audited under R.C. 117.11.
{¶23} In 2016, the Ohio Auditor of State (AOS) requested an opinion from the
Attorney General as to whether private nonprofit corporations acting as major
gift-receiving and soliciting arms of public colleges and universities were subject to audit
as “public offices.” 2016 Ohio Atty. Gen. Ops. No. 2016-013. The Auditor’s request
explained that nearly all state colleges and universities in Ohio are now supported by
5 R.C. 117.10 separately provides for audits of certain private entities.
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foundations established as private nonprofit corporations under R.C. Chapter 1702.6
While cautioning that the determination of whether a public college or university
foundation is a “public office” is fact-dependent, the Attorney General advised the AOS
that
a public college or university foundation established as a private nonprofit
corporation under R.C. Chapter 1702, the primary purpose of which is to
solicit and receive, on behalf of a state college or university, gifts,
donations, and bequests made for the benefit or use of the state college or
university, and which is responsible for keeping records of donations for
the state college or university,7 is an entity established by the laws of this
state for the exercise of a function of government, and is, therefore, a
public office under R.C. 117.01(D).
Id. at *5. The Attorney General found the language of R.C. 117.01(D) identical to
that in 149.011(A), and referred to public records cases in reaching his opinion. While
the Attorney General’s determination that particular entities are public offices under
R.C. 117.01(D) is not determinative of the question of whether the entities are public
offices under R.C. 149.011(A), the reasoning of the opinion is persuasive.
{¶24} In 2017 the AOS reviewed the Independent Auditor’s Report of the
Tri-C Foundation for fiscal year 2017 and advised Tri-C Foundation that, “[b]ased
upon this review, we have accepted these reports in lieu of the audit required by
Section 117.11, Revised Code.” (Court’s Exh. at 193.) The AOS treatment of
Tri-C Foundation as a public office subject to audit under R.C. 117.11, using a definition
of “public office” identical to that in public records law, supports the finding that it is the
functional equivalent of a public office. See State ex rel. Dist. 1199 v. Lawrence Cty.
Gen. Hosp., 83 Ohio St. 3d 351, 353, 699 N.E.2d 1281 (1998) (pre-Oriana House case
6 R.C. Chapter 1702 Nonprofit Corporation Law. Tri-C Foundation was incorporated “under the
Non-Profit Corporation Law of the State of Ohio.” (Court’s Exh. at 20.)
7 This phrase is an apparent reference to the holding in Toledo Found. at 263 that “the solicitation
and receipt of donations for the [University], and keeping records of that activity, are government
functions.” Tri-C Foundation keeps records of its activity in the solicitation and receipt of donations for
Tri-C.
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finding “this conclusion, that the [entity] is a ‘public office’ subject to R.C. 149.43, is
supported by the other uncontroverted evidence here, [including] treatment by the
State Auditor of the [entity] as a public office for purposes of R.C. 117.11.”).
{¶25} I find that the Attorney General’s analysis of college and university
foundation status as public offices under statutory language identical to R.C.
149.011(A), and the Auditor’s specific finding that Tri-C Foundation is a public office
under that language, both weigh strongly in favor of Tri-C Foundation’s status as the
functional equivalent of a public office.
Toledo Blade v. University of Toledo Foundation
{¶26} Horton seeks to distinguish this case from State ex rel. Toledo Blade Co. v.
Univ. of Toledo Found., 65 Ohio St. 3d 258, 263, 602 N.E.2d 1159 (1992). (Sur-reply
at 9-10.) Although a pre-Oriana House case, the factors considered in Toledo
Foundation were not overruled. Instead, the Court noted that it had “considered factors
similar to the factors in the functional-equivalency test in making the determination” in
cases including Toledo Foundation. Oriana House at ¶ 24. The Court summarized the
pertinent factors in Toledo Foundation as: “A private nonprofit corporation that acts as a
major gift-receiving and soliciting arm of a public university and receives support from
public taxation is a ‘public office’ pursuant to R.C. 149.011(A).” Id. It is thus significant
that there is no material distinction between the facts here and those in
Toledo Foundation.
{¶27} The University of Toledo Foundation (UT Foundation) articles of
incorporation provided that its sole purpose was “to receive, hold, invest and administer
property and to spend funds for the benefit of the university.” Toledo Foundation at 261.
UT Foundation “employed and paid its own staff, paid rent to the university for its office
space, and was supported by private donations.” Id. Two predecessor foundations had
operated out of university office space without paying rent, and the university had paid
the wages and benefits of their employees. Id. After consolidation of the two into the
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UT Foundation, the university continued to pay retirement system benefits on behalf of
foundation employees who had previously been university employees. Id. at 262. The
new foundation held $17 million in endowed funds in the name of the university, and
$23 million in its own name. Id. The conclusion drawn from these facts was that “the
foundation is not a mere supplementary benefactor of the university. It is a major gift-
receiving and soliciting entity of the university, and its transaction records do document
its activities.” Id.
{¶28} The Tri-C Foundation articles of incorporation also include the purpose to
receive, hold, invest and administer funds for Tri-C. Unlike the UT Foundation,
Tri-C Foundation does not pay rent for office space in Tri-C property, or pay for Tri-C
staff time, office services, or office equipment, which is accounted for only by an internal
charge-back (described as “consideration for the Foundation’s fundraising and donor
engagement”). (O’Bryan Aff. I at ¶ 25, 28, 31.) The contributed services of Tri-C staff
necessarily include all benefits they receive, including retirement benefits. Notably, the
UT Foundation had no members of the University of Toledo on its staff, and had no
members of the university on its board of trustees. Toledo Foundation at 267 (Holmes,
J. dissenting). In contrast, Tri-C is guaranteed four ex officio seats on the
Tri-C Foundation Board of Directors, and Tri-C Foundation uses the contributed time of
Tri-C employees as its staff, including that of the current president of the
Tri-C Foundation, Tri-C Vice President of Development Megan O’Bryan. (O’Bryan Aff. I
at ¶ 2.) As a pertinent factor in making a functional equivalence determination, the
Oriana House Court noted that “[a]t least one court has factored in whether the entity’s
officers and employees are government officials or government employees.” (Citation
omitted.) Oriana House at ¶ 22. If anything, the facts regarding Tri-C Foundation are
stronger than those in Toledo Foundation in favor of functional equivalence.
{¶29} The other factor mentioned in Toledo Foundation was that it received
support from public taxation. As its basis for finding in the affirmative, the Court noted
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only that rent-free use of public buildings supported by public taxation constitutes
support by public taxation, citing State ex rel. Fostoria Daily Review Co. v. Fostoria
Hosp. Assn., 40 Ohio St. 3d 10, 12, 531 N.E.2d 313 (1988). Toledo Foundation at 261.
See generally State ex rel. Dist. 1199 v. Lawrence Cty. Gen. Hosp., 83 Ohio St. 3d 351,
699 N.E.2d 1281 (1998). Neither party describes how the Tri-C host facility was funded,
but to the extent taxpayer money was involved, for example by the retirement of bond
issues through public taxation, Tri-C Foundation has been supported by public taxation.
Id. Similarly, the contributed use of the email system and server; technology support;
and the time of six Tri-C resource development staff, the Tri-C Executive Director for
Accounting and Financial Operations, and Ms. O’Bryan, also constitute “government
funding,” whether from taxpayer moneys or other public college funds. (O’Brien Aff. I at
¶ 25-32; O’Bryan Aff. II at ¶ 10.)
{¶30} This additional pertinent information weighs moderately to strongly in favor
of Tri-C Foundation’s status as the functional equivalent of a public office.
Requirement of Liberal Interpretation in Favor of Disclosure
{¶31} Even were this question closer, the court must construe R.C. 149.43
liberally in favor of broad access in weighing the factors. Oriana House at ¶ 35.
In addition, “doubts as to the ‘public’ status of any entity should be
resolved in favor of finding it subject to the disclosure statute.”
(Citation omitted.) State ex rel. Strothers v. Wertheim, 80 Ohio St. 3d 155, 156, 684
N.E.2d 1239 (1997). The Supreme Court has explained that:
We adopted the functional-equivalency test in Oriana House because it is
best suited to the overriding purpose of the Public Records Act, which is
“to allow public scrutiny of public offices, not of all entities that receive
funds that at one time were controlled by the government.” Id. at P 36. By
homing in on the functional realities of a particular contractual
arrangement, the functional-equivalency test provides greater protection
against unintended public disclosures while affording a more suitable
framework for determining the extent to which an entity has actually
assumed the role of a governmental body.
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State ex rel. Repository v. Nova Behavioral Health, Inc., 112 Ohio St. 3d 338, 2006-
Ohio-6713, 859 N.E.2d 936, ¶ 24. This is not a case where Tri-C Foundation merely
received funds that at one time were controlled by the government. Providing public
access to this contract, which represents a substantial expenditure of public moneys by
a major gift-receiving and soliciting entity for a government function, clearly serves the
policy of openness that underlies the Public Records Act.
Tri-C Foundation as a “Person Responsible for Public Records” of Tri-C
{¶32} A private entity that is not the functional equivalent of a public office may
still be subject to the same responsibility, as a “person responsible for public records.”
R.C. 149.43(B)(1) and (C)(1) require either “a public office or the person responsible for
public records” to produce requested records. “This language ‘manifests an intent to
afford access to public records, even when a private entity is responsible for the
records.’” State ex rel. Cincinnati Enquirer v. Krings, 93 Ohio St. 3d 654, 657, 758
N.E.2d 1135 (2001). A separate, private entity is “a person responsible for public
records” under the Public Records Act where:
(1) the private entity prepares records in order to carry out a public
office’s responsibilities;
(2) the public office is able to monitor the private entity’s performance,
and
(3) the public office has access to the records for this purpose.
State ex rel. Carr v. Akron, 112 Ohio St. 3d 351, 2006-Ohio-6714, 859 N.E.2d 948, ¶ 36.
A private entity may be a person responsible for public records regardless of whether it
is acting as the public office’s agent. State ex rel. Mazzaro v. Ferguson, 49 Ohio St. 3d
37, 39, 550 N.E.2d 464 (1990).
Prepares Records to Carry Out Public Office’s Responsibilities
{¶33} As noted above, the receipt and solicitation of gifts is an indispensable
function, and therefore an accepted responsibility of any institution of higher learning.
Toledo Foundation at 262. More broadly, responsibilities of any public office include
Case No. 2017-00772PQ -15- REPORT AND RECOMMENDATION
exercising management of financial resources, such as investment authority. State
ex rel. Toledo Blade Co. v. Ohio Bur. of Workers’ Comp., 106 Ohio St. 3d 113,
2005-Ohio-3549, 832 N.E.2d 711, ¶ 21-22. The Presidential Scholarship Luncheon is a
long-standing and important fundraising event of Tri-C Foundation. (O’Bryan Aff. I at
¶ 11, 14; O’Bryan Aff. II at ¶ 8.) Tri-C Foundation creates records including the
speaker’s contract to document its general fundraising responsibility, and by extension
the responsibility of Tri-C to solicit and receive gifts for its education function.
Respondent’s statement that “[t]he Presidential Scholarship Luncheon is not a
responsibility of the Foundation or of the College” conflates the general responsibility to
document fundraising, with the responsibility to hold any particular event. (O’Bryan
Aff. II at ¶ 8.)
Public Office Able to Monitor Performance
{¶34} Tri-C occupies four ex officio seats on the Tri-C Foundation board.
Common purposes of ex officio seats for public offices include a guaranteed presence
to monitor activity. Since the Tri-C Foundation Board’s Directors have control over the
property and all the business and financial affairs of the Foundation (O’Bryan Aff. I at ¶
7.), the Tri-C officers’ ex officio seats provide it with regular opportunity to monitor
Tri-C Foundation’s performance. The accounting rules tying Tri-C Foundation to Tri-C
as its “component unit” provide additional monitoring of overall performance through
joint audit reports. While there is no evidence that Tri-C specifically monitored the
contract with Ms. Spencer (O’Bryan Aff. I at ¶ 36-52.), it was clearly aware through its
involved staff of the scheduling and planning of the Presidential Scholarship Luncheon.
Public Office has Access to the Records for this Purpose
{¶35} The records at issue are kept in a Tri-C facility, under lock in the office of
Tri-C Vice President Megan O’Bryan. (O’Bryan Aff. I at ¶ 50.) The amount of the
speaker fee is also presumably reflected in the check ledger and other accounting
entries in Tri-C Foundation’s financial books and records. According to its Form 990
Case No. 2017-00772PQ -16- REPORT AND RECOMMENDATION
filings, these financial records are kept by Tri-C’s Executive Director, Accounting and
Financial Operations, who is not a director or officer of Tri-C Foundation. (Court’s Exh.
at 84, 122; O’Bryan Aff. II at ¶ 10.) Tri-C had access to the requested record, and
demonstrated access in Horton’s unquestioning response to the court’s order that the
Tri-C Foundation contract be filed under seal. See S/O ex rel. Am. Ctr. for Econ. Equal.
v. Jackson, 2015-Ohio-4981, 53 N.E.3d 788, 796, ¶ 33 (8th Dist.) (production of other
records of performing entity demonstrated public office’s access).
Horton’s Actions Consistent with “Person Responsible For” Records
{¶36} Sheil made his request for a contract “between Tri-C and Octavia Spencer”
to Tri-C Media Relations Manager John Horton. Instead of declining to accept the
request or forwarding it, Horton responded on behalf of Tri-C Foundation. (Complaint at
4.) Horton does not assert that he has separate employment with the Tri-C Foundation,
and has not disputed the jurisdiction of this court over him in connection with the
request. Horton’s actions were appropriate for a person acting on behalf of an
entire office and its subdivisions. State ex rel. Consumer News Servs. v.
Worthington City Bd. of Ed., 97 Ohio St. 3d 58, 65, 2002-Ohio-5311, 776 N.E.2d 82,
¶ 23, 40. Were Tri-C Foundation an entirely separate office, Horton could have
forwarded the request and moved to be dismissed from this action. See State
ex rel. Keating v. Skeldon, 6th Dist. Lucas No. L-08-1414, 2009-Ohio-2052 (finding
assistant prosecutor and county public affairs liaison not “persons responsible” for
records of county dog warden).
{¶37} Tri-C Foundation President O’Bryan’s behavior also reflects the intertwining
of Tri-C and Tri-C Foundation. The Spencer contract identifies the “client” as “Ms.
Megan O’Bryan, Vice President, Development & Tri-C Foundation,” the italicized text
representing her position at Tri-C. The section of Background labeled “About the
Organization:” begins “From the Client:” and then describes only Tri-C history, statistics,
facilities, and programs, not those of Tri-C Foundation. In signing for
Case No. 2017-00772PQ -17- REPORT AND RECOMMENDATION
Tri-C Foundation, O’Bryan uses a combination of her college and foundation titles: “VP,
Cuyahoga County Community College Foundation.”
{¶38} Fundamentally, “governmental entities cannot conceal information
concerning public duties by delegating these duties to a private entity.” Krings, 93 Ohio
St.3d 654, 659, 758 N.E.2d 1135 (2001). The public has a “right of access to public
records, regardless of where they are physically located, or in whose possession they
may be.” Mazzaro, 49 Ohio St. 3d 37, 40, 550 N.E.2d 464 (1990). The Supreme Court
recognizes the significant public interest in, and right to know, from whom donations to
institutions of higher learning come, and how they are spent:
No one would dispute the significant legitimate public purpose served by
government in establishing and supporting institutions of higher education.
The University of Toledo is a public institution and the solicitation and
receipt of donations for the university, and keeping records of that activity,
are government functions. There is, moreover, significant public interest in
knowing from whom donations come and how that relates to where the
university, as a public institution, chooses to spend its money.
Nondisclosure by the foundation would obscure the sometimes significant
link between a gift and its eventual use.
State ex rel. Toledo Blade Co. v. Univ. of Toledo Found., 65 Ohio St. 3d 258, 263, 602
N.E.2d 1159.
{¶39} Tri-C District created the Tri-C Foundation to delegate a responsibility to
fund scholarships and other student assistance. Tri-C monitors Tri-C Foundation
performance, and has demonstrated access to its records, making the foundation a
“person responsible for public records” in a relationship of quasi-agency. State ex rel.
ACLU v. Cuyahoga Cty. Bd. of Comm’rs, 128 Ohio St. 3d 256, 2011-Ohio-625,
943 N.E.2d 553, ¶ 52-54.
Application of Claimed Exception
{¶40} Respondent asserts that even if Tri-C Foundation is determined to be
subject to the Public Records Act, the withheld contract is subject to protection as a
Case No. 2017-00772PQ -18- REPORT AND RECOMMENDATION
trade secret under the Ohio Uniform Trade Secrets Act,8 which is “a state law exempting
trade secrets from disclosure under R.C. 149.43.” State ex rel. Perrea v. Cincinnati Pub.
Sch., 123 Ohio St. 3d 410, 2009-Ohio-4762, 916 N.E.2d 1049, ¶ 19. Respondent bears
the burden of proof to establish the applicability of the claimed exception:
Exceptions to disclosure under the Public Records Act, R.C. 149.43, are
strictly construed against the public-records custodian, and the custodian
has the burden to establish the applicability of an exception. * * *
A custodian does not meet this burden if it has not proven that the
requested records fall squarely within the exception.
State ex rel. Cincinnati Enquirer v. Jones-Kelley, 118 Ohio St. 3d 81, 2008-Ohio-1770,
886 N.E.2d 206, ¶ 10.
Ohio Uniform Trade Secrets Act
R.C. 1333.61(D) provides that:
“Trade secret” means information, including the whole or any portion or
phase of any scientific or technical information, design, process,
procedure, formula, pattern, compilation, program, device, method,
technique, or improvement, or any business information or plans, financial
information, or listing of names, addresses, or telephone numbers, that
satisfies both of the following:
(1) It derives independent economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its
disclosure or use.
(2) It is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy.
An in camera inspection is usually necessary to determine if a claim of trade secret has
merit. State ex rel. Besser v. Ohio State Univ., 87 Ohio St. 3d 535, 541-542, 721 N.E.2d
1044 (2000) (“Besser I”).
8 Although Horton did not cite this exemption in his response to Sheil’s request, he is permitted to
raise it in defense of this litigation. “The explanation [provided when denying a request] shall not preclude
the public office * * * from relying upon additional reasons or legal authority in defending an action
commenced under division (C) of this section.” R.C. 149.43(B)(3).
Case No. 2017-00772PQ -19- REPORT AND RECOMMENDATION
The following factors are to be used in analyzing a trade secret claim:
(1) The extent to which the information is known outside the business;
(2) the extent to which it is known to those inside the business, i.e., by the
employees; (3) the precautions taken by the holder of the trade secret to
guard the secrecy of the information; (4) the savings effected and the
value to the holder in having the information as against competitors;
(5) the amount of effort or money expended in obtaining and developing
the information; and (6) the amount of time and expense it would take for
others to acquire and duplicate the information.
State ex rel. Besser v. Ohio State Univ., 89 Ohio St. 3d 396, 732 N.E.2d 373, 399-400
(2000) (“Besser II”).
Contents of Contract
The contents of the contract between Tri-C Foundation and Ms. Spencer are set forth
under the following categories and topic titles:
Speaker BACKGROUND
Fees
Expenses About the Organization
Client Website
Event Name About the Event
Appearance Date Audience Profile
Location: Venue
Speech Title/Topic Hotel
Timetable Speaker’s Attire
Audience’s Attire
CONTRACT REQUIREMENTS Previous Speakers
Sponsors
Exclusivity
Additional Requirements CONTACT INFORMATION
Media
Recording Instructions Pre-Event Contact
Technical Requirements Onsite Contact
PAYMENT
Case No. 2017-00772PQ -20- REPORT AND RECOMMENDATION
Tri-C does not assert any other express or incorporated terms of this contract, but did
attach a “Speaking Engagement Proposal for Octavia Spencer,” which, together with
the contract form as it existed on June 14, 2017, appears to have been the bid
document for this speaking engagement.
Scope of Claimed Exception
{¶41} Respondent does not allege that the contract would reveal any “scientific or
technical information, design, process, procedure, formula, pattern, compilation,
program, device, method, technique, or improvement.” Respondent asserts only that the
terms are “business information that (1) derives independent economic value, and (2) is
the subject of efforts that are reasonable under the circumstances to maintain its
secrecy.” (Response at 9-10.)
Respondent Fails to Identify Specific Information as Trade Secret
{¶42} When trade secret is asserted as an exception, “[a]n entity claiming trade
secret status bears the burden to identify and demonstrate that the material is included
in categories of protected information under the statute.” (Emphasis added.) Besser II at
398-400; Perrea at ¶ 25. Respondent does not identify any term with particularity as
trade secret other than “fees” paid. (Response at 12; O’Bryan Aff. I at ¶ 37-38.) I find
that respondent has not met his initial burden under the statute to identify material
claimed as included in a category of protected information, other than fees paid.
{¶43} Similarly, respondent has not identified any portion of the included
Speaking Engagement Proposal for Octavia Spencer as trade secret, or submitted any
evidence in support. The proposal does not contain a proposed fee amount. I find that
respondent fails to meet his burden to show that any portion of the Speaking
Engagement Proposal for Octavia Spencer constitutes trade secret. See Besser II at
400-401.
Case No. 2017-00772PQ -21- REPORT AND RECOMMENDATION
Respondent Fails to Demonstrate Specific Information as Trade Secret
{¶44} “An entity claiming trade secret status bears the burden to identify and
demonstrate that the material is included in categories of protected information under
the statute * * *.” (Emphasis added.) Besser II at 400; Perrea, supra. A proponent’s
“reliance on conclusory affidavit statements is insufficient to satisfy its burden to identify
and demonstrate that the records withheld and portions of records redacted are
included in categories of protected information under R.C. 1333.61(D).” Besser II at
400-404.
{¶45} Applying the Besser factors to this contract, the evidence shows that:
(1) Most of the information in the contract (parties, scheduling, topic, etc.)
is already known outside of Tri-C Foundation. The fee information is
also known outside – by the speakers bureau and Ms. Spencer, with
no legal limitation on their ability to disclose the information to others.
{¶46} On review in camera, the contents of the following contract topic titles were
either advertised in advance, became public knowledge at the event, or were otherwise
known by the public at the time of the request: Speaker, Client, Event Name,
Appearance Date, Location, Speech Title/Topic, Timetable, Technical Requirements;
and all topics under the categories Background and Contact Information; as well as the
signature lines. On their face, these items have no plausible independent economic
value to others, and respondent offers no argument to the contrary.
{¶47} Publicly available information as to Ms. Spencer’s speaking fee includes
her March 2017 Kent State University contract posted online,9 and her fee range
advertised through multiple speakers bureaus.10 As to the fee paid here, Tri-C
Foundation made no effort to control disclosure of contract terms by the other party,11
9 https://localtvwjw.files.wordpress.com/2017/05/contract.pdf (Accessed April 16, 2018.)
10 https://www.celebrityspeakersbureau.com/talent/octavia-spencer-2/ “Fee Range: $50,000 -
$100,000” (Accessed March 27, 2018.); http://speakerbookingagency.com/talent/octavia-spencer/ “Fee
Range: $50,000 - $100,000” (Accessed April 16, 2018.)
11 Although the contract restricts publication of the speaker’s participation until full execution of
the contract and payment of the deposit, those actions were to be completed by July 21, 2017, well
Case No. 2017-00772PQ -22- REPORT AND RECOMMENDATION
and there is no evidence that the Washington Speakers Bureau or Ms. Spencer are
restricted by Tri-C from disclosure of its contract terms to anyone. As an indicator of Ms.
Spencer’s inclination to disclose, her contract with Kent State University provided that
“Speaker may disclose the amount of the Fee for ‘quote’ purposes.” (Court’s Exh. at
16.)
(2) All information known outside Tri-C Foundation is also known by those
inside, except that the amount of the fee is known to only a few
persons inside Tri-C Foundation.
{¶48} O’Bryan testifies that she alone participated in contract negotiations for the
speaker, that no other Foundation staff has a copy of or access to the contract, and that
the Board is not typically aware of the specific terms of the speakers’ contracts.
(O’Bryan Aff. I at ¶ 46-52.) Most or all of the other information in the contract would be
well known to those inside Tri-C Foundation as part of their jobs, or, as with the
attending public, would become known at the time of the event.
{¶49} Respondent alleges that “certain speakers are also reluctant to speak if the
terms of their contracts will be publically [sic] available.” (O’Bryan Aff. at ¶ 39.) However,
unlike her recent contract with Kent State University, the Spencer contract with Tri-C
contains no enduring confidentiality clause.12
(3) Tri-C Foundation has taken no precautions to guard the information
other than as noted in factor (2). Respondent provides no evidence
that either Octavia Spencer or the Washington Speakers Bureau
consider the fee amount to be a trade secret of theirs.
Tri-C Foundation may never seek the speaking services of Ms. Spencer again, but
Ms. Spencer continues to hold her future speaking services out to the public, and it is
before the August 21, 2017 public records request. This only notes the absence of effort to protect, since
information cannot meet the statutory trade secret definition merely by its reference in an agreement of
confidentiality in any case. State ex rel. Plain Dealer v. Ohio Dep't of Ins., 80 Ohio St. 3d 513, 527,
687 N.E.2d 661 (1997).
12 A non-disclosure agreement with a public office is invalid in any case. State ex rel. Findlay
Publ. Co. v. Hancock Cty. Bd. of Commrs., 80 Ohio St. 3d 134, 137, 684 N.E.2d 1222 (1997); State ex rel.
Gannett Satellite Info. Network v. Shirey, 78 Ohio St. 3d 400, 403, 678 N.E.2d 557 (1997).
Case No. 2017-00772PQ -23- REPORT AND RECOMMENDATION
she, if anyone, who would have an interest in protecting dissemination of the fee she
charges for the various negotiating advantages respondent alleges. However,
respondent provides no evidence that Ms. Spencer has ever claimed her fee, or any
other speaking contract term, as a trade secret. As noted above, public evidence of her
fee for Kent State University and the public posting of her fee range show just the
opposite.
(4) Respondent provides no evidence of any savings achieved, or the
value to the holder in having the information as against competitors,
other than conclusory hypothetical statements.
{¶50} Respondent relies on only the following conclusory statements regarding
the economic value of keeping its payment to Ms. Spencer secret from the public:
36. If information related to the terms of the contracts for the Presidential
Scholarship Luncheon, including Ms. Spencer’s, were publically [sic]
available, the Foundation would be forced to match or beat previous
contract terms in future speakers’ contracts,
37. In my experience, knowledge by speakers of terms of previous
contracts would impair the Foundation’s ability to pay speakers the
lowest fee possible because potential speakers often utilize previous
contracts as benchmarks when negotiating their speaking fees.
38. Without secrecy regarding the terms of speaker contracts speakers
would be able to command higher fees from the Foundation for
speaking at the Presidential Scholarship Luncheon.
39. Certain speakers are also reluctant to speak if the terms of their
contract will be publically [sic] available, so the public disclosure of
contract terms will impede the Foundation’s ability to contract with the
speaker it may want for future Presidential Scholarship Luncheons.
40. From my current and my previous executive experience, I understand
that other organizations would be better positioned to negotiate for
speakers if the terms of the Foundation’s contracts were publicly
available as these other organizations will be aware of the terms we
have offered and be able to meet or surpass them.
Case No. 2017-00772PQ -24- REPORT AND RECOMMENDATION
(Response at 12; O’Bryan Aff. I at ¶ 36-40.) Notably lacking is any factual evidence or
expert testimony to support these conclusions. See Besser II at 402. Nor does
respondent attempt to quantify the economic value of withholding the information.
{¶51} Respondent does not explain how disclosure of Ms. Spencer’s fee would
affect Tri-C Foundation’s negotiations with future speakers who have different and
unique values, such as sports figures, former presidents, poets, and journalists
(categories of past Tri-C speakers). See State ex rel. Toledo Blade Co. v. Ohio Bureau
of Workers’ Comp., 106 Ohio St. 3d 113, 2005-Ohio-3549, 832 N.E.2d 711, ¶ 26-28
(Pfeifer, J. concurring). Instead, respondent states only the conclusion that disclosure of
the fee it paid Ms. Spencer would force Tri-C Foundation to match those terms in future
speaker’s contracts, as an established minimum. (O’Bryan Aff. I at ¶ 36.) Respondent
also argues that disclosure of this year’s fee will enable other organizations to best them
in bidding wars for future speakers. (O’Bryan Aff. I at ¶ 40.) Given the wide variables of
speakers, dates, fee ranges, host organizations, audiences, alternates and other
factors, both of these hypotheticals are strained.
{¶52} The special master is not persuaded that the fee paid for this single, unique
speaking engagement derives any independent economic value from being kept secret.
See Besser II at 400-402.
(5) Respondent provides no evidence of the amount of effort or money
expended in “obtaining and developing” the fee it paid in this instance;
(6) Respondent provides no evidence of the amount of time and expense
it would take for others to acquire and duplicate the information.
{¶53} Respondent makes no attempt to quantify the amount or value of Tri-C
contributed staff time spent deciding on the fee Tri-C Foundation would offer, or the
amount or value of time it would take others to settle on making the same fee offer.
The Besser Factors do not Support a Finding of Trade Secret in this Case
{¶54} The statutory and Besser factors are unsupported by any factual evidence,
except for confidentiality of the contract within Tri-C Foundation. Respondent cites no
Case No. 2017-00772PQ -25- REPORT AND RECOMMENDATION
case precedent where a personal service fee is held to be a trade secret of a public
office hiring the person, citing only cases involving customer lists and reusable civil
service exam questions. Respondent offers no example from 25 years of this event
where withholding past fee information has enabled Tri-C Foundation to negotiate lower
future fees. Review of the contract in camera fails to convince the special master that
competitor institutions would accomplish any significant savings of time or expense by
knowing the specific fee paid by Tri-C Foundation in this instance. I find that respondent
has provided no evidence to demonstrate that the amount of the fee paid to
Ms. Spencer “derives independent economic value, actual or potential, from not being
generally known.”
{¶55} I conclude that respondent fails to show that any part of the Spencer
contract falls squarely within the definition of trade secret.
Conclusion
{¶56} Upon consideration of the pleadings and attachments, I find by clear and
convincing evidence that Tri-C Foundation is the functional equivalent of a public office,
and a person responsible for public records. I further find respondent has failed to show
that any material in the requested contract constitutes trade secret. I therefore
recommend that the court ORDER respondent to provide Sheil with an unredacted copy
of the contract as submitted under seal. I further recommend that Sheil be entitled to
recover the amount of the filing fee and any other costs associated with the action that
he has incurred. R.C. 2743.75(F)(3)(b).
{¶57} Pursuant to R.C. 2743.75(F)(2), either party may file a written objection
with the clerk of the Court of Claims of Ohio within seven (7) business days after
receiving this report and recommendation. Any objection shall be specific and state with
particularity all grounds for the objection. A party shall not assign as error on appeal the
court’s adoption of any factual findings or legal conclusions in this report and
recommendation unless a timely objection was filed thereto. R.C. 2743.75(G)(1).
Case No. 2017-00772PQ -26- REPORT AND RECOMMENDATION
JEFFERY W. CLARK
Special Master
Filed April 16, 2018
Sent to S.C. Reporter 5/4/18