PennLive v. Dept of Health (Apl of: Terrapin LLC)

[J-66A-C-2020]
IN THE SUPREME COURT OF PENNSYLVANIA
MIDDLE DISTRICT
BAER, C.J., SAYLOR, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.
WALLACE MCKELVEY AND PENNLIVE : No. 3 MAP 2020
AND THE PATRIOT-NEWS :
: Appeal from the Order of the
: Commonwealth Court at No. 186 CD
v. : 2018 dated June 4, 2019 reversing
: in part and affirming in part the
: decision of the Office of Open
PENNSYLVANIA DEPARTMENT OF : Records at No. AP 2017-1443 dated
HEALTH, AND MISSION PENNSYLVANIA, : January 11, 2018.
LLC, KW VENTURES HOLDING, LLC, :
CRESCO YELTRAH, LLC, SMPD : ARGUED: September 15, 2020
MANUFACTURING, LLC/SMPB RETAIL, :
LLC AND TERRAPIN INVESTMENT FUND, :
1, LLC (DIRECT INTEREST :
PARTICIPANTS) :
:
:
:
:
:
APPEAL OF: TERRAPIN INVESTMENT :
FUND 1, LLC :
WALLACE MCKELVEY AND PENNLIVE : No. 4 MAP 2020
AND THE PATRIOT-NEWS :
: Appeal from the Order of the
: Commonwealth Court at No. 187 CD
v. : 2018 dated June 4, 2019 reversing
: in part and affirming in part the
: decision of the Office of Open
PENNSYLVANIA DEPARTMENT OF : Records at No. AP 2017-1443 dated
HEALTH, AND MISSION PENNSYLVANIA, : January 11, 2018.
LLC, KW VENTURES HOLDING, LLC, :
CRESCO YELTRAH, LLC, SMPD : ARGUED: September 15, 2020
MANUFACTURING, LLC/SMPB RETAIL, :
LLC AND TERRAPIN INVESTMENT FUND, :
1, LLC (DIRECT INTEREST :
PARTICIPANTS) :
:
:
:
:
:
APPEAL OF: SMPD MANUFACTURING, :
LLC AND SMPB RETAIL, LLC :
WALLACE MCKELVEY AND PENNLIVE : No. 5 MAP 2020
AND THE PATRIOT-NEWS :
: Appeal from the Order of the
: Commonwealth Court at No. 189 CD
v. : 2018 dated June 4, 2019 reversing
: in part and affirming in part the
: decision of the Office of Open
PENNSYLVANIA DEPARTMENT OF : Records at No. AP 2017-1443 dated
HEALTH, AND MISSION PENNSYLVANIA, : January 11, 2018.
LLC, KW VENTURES HOLDING, LLC, :
CRESCO YELTRAH, LLC, SMPD : ARGUED: September 15, 2020
MANUFACTURING, LLC/SMPB RETAIL, :
LLC AND TERRAPIN INVESTMENT FUND, :
1, LLC (DIRECT INTEREST :
PARTICPANTS) :
:
:
:
:
:
APPEAL OF: PENNSYLVANIA :
DEPARTMENT OF HEALTH :
OPINION
JUSTICE TODD DECIDED: July 21, 2021
In this appeal by allowance, we consider the contours of the Pennsylvania Right-
to-Know Law (“RTKL”)1 with respect to the disclosure of information contained in
applications to grow, process, or dispense medical marijuana pursuant to the
1 65 P.S. §§ 67.101-67.3104.
[J-66A-C-2020] - 2
Pennsylvania Medical Marijuana Act (“Medical Marijuana Act”).2 For the reasons that
follow, we affirm in part, vacate in part, and remand for further proceedings.
I. Facts
As described more fully below, the General Assembly enacted the Medical
Marijuana Act to establish a framework for the legalization of medical marijuana in the
Commonwealth. Appellant, the Department of Health (“Department”), is the agency
responsible for administering the statute, and it promulgated temporary regulations to aid
in this endeavor.3 28 Pa. Code §§ 1131.1 et seq. Relevantly, beginning in 2017, the
Department established a general application process for businesses seeking to operate
as medical marijuana organizations, with additional criteria specific to those acting as
either a grower/processor (“GP”) or a dispensary (“DS”). The applications for this
inaugural issuance of permits required extensive information pertaining to various facets
of the applicant’s intended business, including, inter alia, financial and operational
capabilities; community impact plans; site and facility plans; the verification of an
applicant’s principals, operators, financial backers, and employees; a description of the
business activities in which the applicant intended to engage; and a statement that the
applicant was able to maintain effective security and prevent diversion or other illegal
conduct related to their medical marijuana business. 35 P.S. § 10231.602(a). This
information was used to evaluate the relative capabilities of competing applicants for the
award of DS and GP permits. The Department received dozens of permit applications
2 35 P.S. §§ 10231.101-10231.2110.
3 The Medical Marijuana Act authorized the Department to promulgate temporary
regulations for the prompt implementation of the statute. 35 P.S. § 10231.1107. The
temporary regulations concerning the initial application process, 28 Pa. Code § 1141.21et seq., became effective October 29, 2016, and originally were to expire under a sunset
provision on May 17, 2018. The regulations were amended on January 13, 2017, and
again on May 17, 2018, and ultimately expired on May 12, 2020.
[J-66A-C-2020] - 3
composed of thousands of pages. In June 2017, it awarded 12 GP permits and 27 DS
permits, including a GP permit to Appellant Terrapin Investment Fund 1, LLC (“Terrapin”);
and a DS permit to Appellants SMPB Retail, LLC and SMPD Manufacturing, LLC
(collectively, “Harvest”).
Prior thereto, in May 2017, PennLive reporter Wallace McKelvey, PennLive, and
the Patriot-News (collectively, “Appellees”) requested disclosure of all of the medical
marijuana business permit applications pursuant to the RTKL. The Medical Marijuana
Act, as well as the Department’s temporary regulations, explicitly provide that permit
applications are public records subject to disclosure under the RTKL. See 35 P.S. §
10231.302(b); 28 Pa. Code § 1141.22. Additionally, in the application instructions, the
Department advised all applicants to submit redacted and unredacted copies of their
applications, stating that the redacted versions of the applications would be posted on the
Department’s website. As discussed below, the RTKL places a duty to disclose records
sought by a requester on the governmental agency, here the Department, unless the
records are exempt, privileged, or fall into an exemption under the statute. 65 P.S. §§
67.706, 708(b).4 Furthermore, the Department’s regulations provided that information
that falls within an exemption to the RTKL, or is “considered to be confidential proprietary
information by other law,” or is “[i]nformation regarding the physical features of, and
security measures installed in, a [medical marijuana] facility” is not subject to disclosure
except by court order. 28 Pa. Code § 1141.22(b)(8), (9).
On July 10, 2017, the Department denied Appellees’ RTKL request, in part,
referring Appellees to the redacted copies of the GP applications which had been posted
on its website, and denied access to the DS applications, which had not yet been posted.
4 While the RTKL uses the terms “exemption” and “exception,” and variations thereof,
seemingly interchangeably, for simplicity, we will use the term “exemption.”
[J-66A-C-2020] - 4
As described more fully below, the Department, inter alia, did not independently review
the applicants’ redactions, but accepted all applicants’ redactions that they deemed
confidential or proprietary, or otherwise subject to redaction under the RTKL. This
resulted in a disparity in redactions across the various applications.
II. Procedural History
A. Office of Open Records
On July 26, 2017, Appellees appealed to the Office of Open Records (“OOR”),5
limiting their appeal to records regarding the Department’s partial denial of two successful
GP applications ― Cresco Yeltrah, LLC (“Cresco”) and Appellant Terrapin ― and four
successful DS applications ― Cresco, KW Ventures Holding, LLC (“KW Ventures”),
Mission Pennsylvania II, LLC (“Mission”), and Appellant Harvest. For ease of
identification, these six permit awardees that are the subject of Appellees’ RTKL request
will be referred to as “Applicants.”
Appellees asserted that the Department lacked a legal basis for its redactions,
particularly given the disparity in redactions among applications. Appellees also
maintained that the OOR should conduct an in camera review of the records, require the
Department to submit a privilege log identifying the reasons why the redacted material
was exempt from disclosure, and conduct a hearing so that they could confront any
evidence offered by the Department or third-party participants. The OOR invited parties
to supplement the record and directed the Department to notify any third parties of their
ability to participate in the appeal, 65 P.S. § 67.1101(c), but declined Appellees’ request
for in camera review.
5 If a request for access to records is denied, the requester may file an appeal with the
OOR, stating the grounds upon which the requester asserts the information constitutes a
public record. 65 P.S. § 67.1101(a)(1).
[J-66A-C-2020] - 5
For its part, the Department notified the Applicants of their right to participate in the
proceedings, and all asked to do so. Additionally, the Department submitted a position
statement, with a supporting affidavit of Director of the Office of Medical Marijuana John
Collins, which described the redactions and the Department’s redaction process. Collins
explained that the Department redacted only information that the Applicants had marked
in their applications as confidential proprietary information; as personal and financial
information; or as information related to building and infrastructure security. Collins noted,
however, that the Department did not make its own assessment; rather, it relied upon the
redacted versions of Applicants’ applications due to the sheer volume of records sought
in Appellees’ request. He also offered that the Department added redactions if necessary,
and posted the redacted applications on its public website. As a result, there was disparity
in the degree to which individual applications were redacted, with entire sections of
applications redacted in some instances, and not in others.
Due to the Department’s limited review of the applications, including the fact that
the Department did not review the applications in unredacted form prior to asserting its
exemptions, and concluding that the Department did not conduct a good faith effort to
determine if the redacted information was subject to public access, on September 11,
2017, the OOR stayed the matter until November 20, 2017 (as requested by the
Department), in order to allow the Department to evaluate the propriety of Applicants’
redactions, assert any applicable exemptions, and submit supporting evidence. On
November 9, 2017, the Department provided a revised response explaining that it
removed redactions it deemed to be improper, whether made by the Applicants or the
Department, but retained redactions of information that Applicants had characterized as
trade secrets, confidential proprietary information, or security information, claiming that it
was unable to stand in the shoes of an applicant when assessing these exemptions. The
[J-66A-C-2020] - 6
Department also provided legal argument regarding the redactions it made, as well an
exemption log as to each application,6 but did not submit affidavits describing the
information redacted or the risks of disclosure, and suggested that the OOR determine
the merits of the redactions by holding a hearing or by conducting in camera review; the
OOR declined to do so.
The OOR granted Applicants’ request to participate and provided them until
December 13, 2017 to submit additional evidence beyond what the Department or
Applicants had already submitted. Terrapin timely submitted additional evidence in
support of its exemptions, including another brief and four affidavits regarding, inter alia,
the confidential nature of its financial information; its infrastructure and physical security;
and the maintenance of its trade secrets. Harvest did not initially make additional
submissions, but later attempted to submit additional argument and more detailed
exemption logs; however, the OOR did not consider the additional submission, finding it
to be untimely and unsworn.
In its Final Determination dated January 11, 2018, after noting the “multiple
opportunities to submit evidence,” OOR Final Determination at 13, the OOR determined
that because Mission, KW Ventures, and Harvest did not submit “competent evidence,”
their submissions did not prove the applicability of any claimed exemptions, id. at 14. As
Terrapin and Cresco did submit affidavits in support of their exemptions, the OOR
proceeded to the merits of Applicants’ arguments. As to Cresco’s claim that it performed
a public safety or public protection activity, the OOR, after finding a lack of support for
Cresco’s position and noting its conclusory affidavits, found that Cresco failed to establish
that “the operation of a medical marijuana growing and processing facility constitutes a
6 The Department verified its exemption logs by asserting merely that the records withheld
were described in the log, but without further elaboration.
[J-66A-C-2020] - 7
public safety or public protection activity,” and, thus, did not fall within the RTKL’s
exemption for records maintained in connection with law enforcement or public safety
activities. Id. at 17 (citing 65 P.S. § 67.708(b)(2)). The OOR also found that Cresco did
not meet its burden of establishing that its application information (the entire application)
was exempt from disclosure as endangering the safety or physical security of Cresco’s
facility, as a trade secret, or as confidential proprietary information, again noting the
conclusory nature of Cresco’s affidavits and its mere referencing of general categories of
information without explaining how these categories would be exempt from disclosure.
Id. at 21-22.
As to Terrapin’s assertion that the disclosure of details regarding security and
surveillance features of Terrapin’s facility would endanger the safety or physical security
of that facility, and its redactions of certain application sections in toto, the OOR stressed
that Terrapin did not point to any “specific” security-sensitive information that should be
redacted, and while noting that the application “could conceivably contain security-
sensitive information,” Terrapin’s affidavit had not provided “enough evidence” for the
OOR to make this determination. Id. at 25-27 (citing 65 P.S. § 67.708(b)(3) (excepting
from disclosure critical systems endangering the safety or physical security of the
building)). The OOR went on to note that, in any event, the entirety of the application
section could not be withheld merely because it contained some exempt information. As
the Department and Terrapin, according to the OOR, did not provide a detailed analysis
of these sections to determine which portions would threaten infrastructure security, the
OOR found Terrapin failed to meet its burden of proving the redacted information was
subject to exemption.
Turning to Terrapin’s assertion that certain information contained trade secrets and
confidential proprietary information, 65 P.S. § 67.708(b)(11), and its affidavits addressing
[J-66A-C-2020] - 8
its formulas, methods, growing processes, and techniques, the OOR found that Terrapin
had established the economic value of the material sought to be exempt from disclosure
as well as the confidential nature of the information, including steps taken to preserve the
confidentiality, and, thus, met its burden in proving the information contained trade
secrets. However, the OOR found Terrapin did not explain why the description of the
type of medical marijuana products that would be produced was a trade secret. OOR
Final Determination at 30-31.
Finally, the OOR addressed Terrapin’s claim that the entirety of its financial
information constituted a trade secret or confidential proprietary information. While noting
that Terrapin treated this information as confidential, the OOR rejected Terrapin’s
assertions for its perceived failure to demonstrate that the disclosure of such material
would cause substantial harm to Terrapin’s competitive position, how competitors could
use the information for their economic enrichment, as well as for failing to provide specific
evidence in support of its redactions. Id. at 33.
As to the Department’s exemptions, regarding the physical features of a facility,
and the security measures installed therein, the OOR found the Department’s affidavit
and exemption logs submitted in support thereof to be conclusory in nature, and in tension
with the exemptions sought by Applicants, noting that it “is unclear how one applicant’s
response can necessitate the entire redaction of a Section under the regulation, while
another’s only implicates a few words being redacted.” Id. at 49. As such, the OOR
concluded that neither the Department nor Applicants met their burden regarding these
exemptions.
Ultimately, after considering the evidence submitted — which the OOR found
deficient in many respects — the OOR granted Appellees access to most of the
information contained in the applications, but allowed exemptions as to Terrapin’s trade
[J-66A-C-2020] - 9
secrets, and, on constitutional grounds, upheld the redaction of certain of Applicants’
personal information, including, dates of birth, drivers license and passport photographs,
personal identification numbers, banking account numbers, organ donor status,
telephone numbers, email addresses, and residential street addresses.7
B. Commonwealth Court
The Department and Applicants filed petitions for review with the Commonwealth
Court, asserting various claims of error with respect to, inter alia, the OOR’s application
of the exemptions under the RTKL to their respective applications.8 Additionally, the
Department requested that the Commonwealth Court allow it to supplement the record to
assert and support its own exemptions. The Commonwealth Court consolidated the
matters. While the Department and Applicants appealed the OOR decision to the
Commonwealth Court, only the Department, Terrapin, and Harvest were granted review
in our Court. Thus, the discussion of the Commonwealth Court’s decision will focus
primarily on the issues involving these parties.
A unanimous, en banc, Commonwealth Court, reversed in part, affirmed in part,
and remanded to the OOR. Mission Pennsylvania, LLC v. McKelvey, 212 A.3d 119 (Pa.
Cmwlth. 2019). Preliminarily, the court considered, and ultimately rejected, requests to
supplement the record filed by the Department and Mission, finding that the Department
and some Applicants were at fault for any alleged inadequacy in the record because they
had ample opportunity to submit evidence to the OOR, yet failed to do so sufficiently.
Specifically, the court emphasized that, by issuing a stay in this matter, the OOR had
given the Department additional time and opportunity to raise any applicable exemptions
7 The OOR declined to make a finding regarding whether the Department acted in bad
faith. OOR Final Determination at 54; see 65 P.S. § 67.901.
8 Appellees did not cross appeal as to the OOR’s upholding of various redactions.
[J-66A-C-2020] - 10
or to remedy any deficiencies in its review process, but the Department did not do so,
instead responding with a submission that was substantially similar to its prior submission.
The court further cautioned that allowing the submission of additional evidence at the
judicial review stage would undermine the presumption of openness attendant to the
RTKL, as doing so would permit agencies to withhold records, without legal ground to do
so, until reaching a court. Accordingly, in light of the foregoing considerations, the court
denied the requests to supplement the record.
1. Department Deference to Applicants’ Redactions
Turning to the merits of the Department’s and Applicants’ claims, the
Commonwealth Court first emphasized that the Medical Marijuana Act expressly provides
that permit applications are public records subject to the RTKL; thus, the court stressed
that, upon receipt of a request for information, the governmental agency is obliged to
assess the public status of the requested records, and disclose such records, unless
exempt. The court explained that the burden is on the governmental agency to specify
the reasons for denying access to the records, and prove any asserted exemptions, and
that the agency, or a third party, must prove a RTKL exemption by a preponderance of
the evidence. 65 P.S. § 67.708(a)(1). According to the Commonwealth Court, an agency
may not delegate its disclosure duty or burden of proof to a third party, or voluntarily rely
on a third party’s redactions, even if such third party is best suited to provide the most
detailed proof. Thus, the court rejected the Department’s contention that it was
permissible to rely on Applicants’ redactions, and noted that, as a result of the
Department’s deference, Applicants’ level of redaction varied widely.
As an additional preliminary matter, the court underscored that only three parties
offered evidence to establish their respective exemptions. The Department provided the
affidavit of Program Director John Collins; Cresco submitted an affidavit authored by
[J-66A-C-2020] - 11
General Counsel John Figone (“Figone Affidavit”), and Terrapin provided multiple
affidavits. Harvest, KW Ventures, and Mission did not submit evidence. Thus, with
respect to these applicants, the court found the redactions were unsubstantiated, except
to the extent the evidence applied to all applicants.
2. Facility Security Exemption
The Commonwealth Court proceeded to examine the OOR’s review of the RTKL
exemptions.9 The court first considered the physical features and facility security
exemption. See 65 P.S. § 67.708(b)(3) (allowing exemption from disclosure of
information to protect physical security including location or configuration of critical
systems and security measures of permitted facilities). The Commonwealth Court
explained that, to invoke this exemption, the proponent must show that the disclosure of
the records, rather than the records themselves, would create a reasonable likelihood of
endangerment to the safety or physical security of certain structures. Mission
Pennsylvania, 212 A.3d at 133-34 (citation omitted). The court concluded that the OOR
erred in finding that no applicant had met its evidentiary burden to prove the exemption.
The court highlighted that Terrapin had submitted an affidavit from its Director of
Information Technology, James Wenzl (the “Wenzl Affidavit”), which explained that
Terrapin had redacted information in its application related to its surveillance and physical
security systems in order to protect against unauthorized entry into the facility, or the theft
or loss of marijuana seeds, plants, and products; and to protect the security and safety of
information describing the manner in which its patient data information is transmitted, the
location of its surveillance systems, and the process by which it intends to transport its
products. The court further noted that the affidavit detailed the danger posed by
9 As Appellees did not file a cross appeal to the Commonwealth Court, the court did not
disturb the redactions that OOR upheld on the basis of a constitutional right to privacy.
Thus, these redactions are not at issue in this appeal.
[J-66A-C-2020] - 12
disclosure of Terrapin’s security measures, including credible threats of diversion, theft,
and black-market activity within the medical marijuana industry. Based on the foregoing,
the court opined that the Wenzl Affidavit provided sufficient detail about Terrapin’s facility
security to warrant redactions to not only Terrapin’s application, but to the other
applicants’ applications as well, as the security threats detailed in the Wenzl Affidavit were
industry-wide. Thus, the court reversed the OOR’s final determination regarding its
application of the facility security exemption. The court, however, also determined that
Terrapin’s sweeping redaction of entire sections of its application was improper, and
concluded that Terrapin was entitled to redact “only the locations of security and
surveillance measures and the description of the processes for transmitting patient data
and transporting products.” Mission Pennsylvania, 212 A.3d at 134 (emphasis original)
(stressing the limited redactions to be allowed).
Further, while the court found it “tempting” “to apply this exemption to all
[applicants] to the same extent it applies to Terrapin, it explained that doing so would
undermine the evidentiary requirements of the RTKL,” as an exemption requires evidence
unless the facts are uncontested or clear from the face of the RTKL request or the
exemption asserted. Id. at 135. Thus, the court found only security information set forth
in “competent evidence” could be redacted. Id. The Commonwealth Court concluded the
Department’s logs, verified by its open records officer, were such competent evidence,
and supported its redactions in applications submitted by Mission, KW Ventures, and
Harvest. While the Commonwealth Court determined that the Department’s description
of its redactions satisfied its burden regarding this exemption, the court also pointed out
that the Department offered no evidence as to the “reasonable likelihood of endangering
the safety” as Section 708(b)(3) of the RTKL requires. See 65 P.S. § 67.708(b)(3). The
court continued, however, noting that, as to this “reasonable likelihood” requirement, the
[J-66A-C-2020] - 13
record as a whole contained sufficient evidence regarding the dangers unique to the
medical marijuana industry to extend Terrapin’s proof of industry-wide risks beyond
Terrapin’s submissions to the other applicants.
Specifically, the court explained, inter alia, that Terrapin’s Wenzl Affidavit
established that disclosure of specified security information has a reasonable likelihood
of endangering the security of facilities engaged in the “legal cannabis industry.” Mission
Pennsylvania, 212 A.3d at 135 (citing Wenzl Affidavit at ¶ 8). Based on the risks inherent
in this cash-based industry, the court determined that disclosure of security measures
and locations of surveillance systems presented a credible threat to the security of
facilities that amounts to more than mere speculation. As the record taken as a whole
contained adequate evidence satisfying the reasonable likelihood requirement, the
Commonwealth Court upheld the Department's minimal redactions under Section
708(b)(3) of the RTKL from the applications of Mission, KW Ventures, and Harvest.
Moreover, as to Cresco, the court noted that Figone attested that its “application contains
detailed descriptions of its security protocols and surveillance systems[,] [s]chematic
drawings [that] disclose the location of each of the video surveillance cameras, primary
power hook-ups, facility access points, [and] of the vault and other designated high-
security areas.” Id. at 135-36 (emphasis original) (citing Figone Affidavit at ¶ 12). This,
according to the court, sufficiently described “schematic drawings” and “detailed
descriptions of . . . surveillance systems” justifying redaction. Id. at 136. As a result, the
court concluded that this information was an allowable redaction from Cresco’s
application. Thus, the Commonwealth Court reversed the OOR’s determination, that no
applicant established an exemption under the facility security exemption, and allowed
certain redactions pursuant thereto.
3. Trade Secret and Confidential Proprietary Information Exemption
[J-66A-C-2020] - 14
Next, the Commonwealth Court considered the OOR’s application of the trade
secret and confidential proprietary information exemptions. 65 P.S. § 67.708(b)(11). The
court determined that the OOR properly applied the trade secret exemption only to
Terrapin, and correctly found the confidential proprietary information exemption
inapplicable to Applicants. Noting that Applicants each provided varying degrees of
evidence in support of their redactions on these grounds, the court separately reviewed
the evidence as to each applicant when considering whether they satisfied the
exemptions.
With respect to the trade secret exemption, id. § 67.102 (defining “Trade secret”),
the court explained that, in order to support the redactions on this ground, Applicants
were required to establish that (1) the information they sought to protect derived economic
and competitive value from not being generally known to the public; and (2) was subject
to reasonable efforts to maintain the information’s secrecy. Mission Pennsylvania, 212
A.3d at 136. In conducting this inquiry, the court ultimately complimented Terrapin’s
evidence as the “model” for establishing the exemption. Id. at 137. Specifically, the court
noted that Terrapin provided affidavits from its Director of Cultivation, Ian Peak, regarding
its growing and harvesting processes, and an affidavit from its Director of Infused Product
Manufacturing, Jef Frick, which detailed its extraction and production processes. The
court determined that these affidavits sufficiently established that the processes
described therein were trade secrets, and, thus, that similar processes described by
Applicants in their respective applications were likewise trade secrets. Thus, the court
found the affidavits submitted by Terrapin satisfied the first prong of the trade secret
exemption for all applicants. Nevertheless, the court concluded that only Terrapin could
avail itself of the exemption because it was the only party that submitted evidence of its
reasonable efforts to maintain the secrecy of its processes, a necessary second
[J-66A-C-2020] - 15
component in establishing trade secret status. Accordingly, the court affirmed the OOR’s
application of the trade secrets exemption only to Terrapin.
Finally, as to Applicants’ alleged confidential proprietary information, 65 P.S. §
67.708(b)(11), the court concluded that none of the Applicants established the exemption.
Noting that such information must be privileged or confidential, and that disclosure would
cause substantial harm to the parties’ competitive position, id. § 67.102 (defining
“Confidential proprietary information”), the court emphasized that “[t]he measures
undertaken to maintain secrecy of the information are important indicators of its
confidential nature.” Mission Pennsylvania, 212 A.3d at 137. As none of the Applicants
other than Terrapin submitted evidence regarding the steps they took to maintain secrecy,
the court determined that they failed to establish the confidential nature of the information.
Thus, it only considered the application of the exemption to Terrapin. Id. at 138.
The court pointed out that Terrapin redacted a significant number of pages of
information, including all organizational documents, a diversity plan, security information,
business history, capital requirements, and community impact. Id. While Terrapin had
submitted an affidavit from its Director of Government Affairs, Shawn Coleman (“Coleman
Affidavit”) as to the confidential nature of its financial information, the court found the
Coleman Affidavit to be flawed because it failed to describe the information’s contents
sufficiently to allow for total redaction. Moreover, the court determined that the Coleman
Affidavit described Terrapin’s efforts to maintain the confidentiality of “any and all financial
information” generally, without alleging any facts to sufficiently establish the confidentiality
of the information or describing any of the subject matter Terrapin sought to protect. Id.The Commonwealth Court reasoned that, “[i]n removing all indicators of subject matter,
[J-66A-C-2020] - 16
there is no context for evaluating the redacted content;” thus, it concluded that Terrapin
did not establish that the redactions were warranted under this exemption. Id.10
In sum, the Commonwealth Court reversed the OOR’s Final Determination
regarding the sufficiency of the evidence submitted regarding certain security information,
as the record evidence, taken as a whole, supported the facilities’ security exemption for
all applicants, upheld the Department’s minimal redaction of the applications submitted
by Mission, KW Ventures, and Harvest, as set forth in the Department’s logs, and upheld
the OOR’s determination in all other respects.
C. Appeal to this Court
We granted allocatur, limited to three aspects of the RTKL with respect to
applications filed pursuant to the Medical Marijuana Act. First, we granted allocatur on
an issue raised by the Department as to whether the RTKL, and the Commonwealth
Court’s approach thereunder, failed to create a workable standard for dealing with
“iterative redactions”11 in the absence of statutory guidance.12 We also granted
10 The Commonwealth Court also considered Appellees’ charge that the Department
acted in bad faith, but, although the court concluded that the Department did not comply
with the RTKL, it believed a bad faith determination would require judicial fact-finding, and
it was not in a position to decide that question. Mission Pennsylvania, 212 A.3d at 138-
39.
11 The Department repeatedly employs the phrase “iterative redactions” without further
elaboration, or suggestion that it constitutes a term of art. We understand this phrase to
mean simply the repetitive process of redacting information sought pursuant to a RTKL
request.
12 Prior to oral argument, the Department and Appellees entered into a joint stipulation
that the Commonwealth Court’s opinion below does not preclude the Department from
making additional redactions to the medical marijuana DS and GP applications as would
otherwise be permitted by the Section 708(b)(3) of the RTKL and Section 1141.22(b)(9)
of the temporary regulations promulgated under the Act, regarding building security. This
stipulation, according to the parties, resolves part of the issue as raised by the Department
in this appeal that the Commonwealth Court’s decision failed to protect building security
of Applicants. Joint Stipulation, 9/11/20, at 1-2. We agree, and based upon this
[J-66A-C-2020] - 17
consideration of the question raised by Harvest as to whether similarly-situated applicants
should be treated similarly, even without an individual applicant providing an independent
submission of evidence, or be provided an opportunity to supplement the record. Finally,
we granted Terrapin’s request to review whether it provided substantial evidence of
competitive harm and security-related issues associated with disclosure of financial
information in this uniquely cash-based business, which, according to Terrapin,
constituted confidential proprietary information. We will address these issues seriatim.13
III. Analysis
A. Governing Law
As each of the issues on which we granted allocatur requires interpretation of the
RTKL and the Medical Marijuana Act, our analysis is governed by the Statutory
Construction Act of 1972 (“Statutory Construction Act”). 1 Pa.C.S. §§ 1501-1991. Unlike
its federal counterpart, our General Assembly has expressly provided direction regarding
how the judiciary is to discern its statutory intent. Pursuant to the Statutory Construction
Act, the overriding object of all statutory interpretation “is to ascertain and effectuate the
intention of the General Assembly” in enacting the statute under review. Id. § 1921(a). If
statutory language is “clear and free from all ambiguity, the letter of it is not to be
stipulation, do not address the Department’s argument regarding security-related
redactions.
13 Interpretation of the RTKL, including addressing the proper role of the Department in
assessing exemptions under the RTKL, the degree to which similarly-situated providers
of information should be treated similarly, and analyzing its exemptions to disclosure raise
pure questions of law, and, thus, our standard of review is de novo and our scope of
review is plenary. Bowling v. Office of Open Records, 75 A.3d 453, 477 (Pa. 2013);
Reese v. Pennsylvanians for Union Reform, 173 A.3d 1143, 1153 (Pa. 2017). As to
whether the OOR or the Commonwealth Court properly declined requests to supplement
the record or perform an in camera review of information submitted in the application
process, our standard of review is for an abuse of discretion, and our scope of review is
plenary. See ACLU v. Pennsylvania State Police, 232 A.3d 654, 670 (Pa. 2020).
[J-66A-C-2020] - 18
disregarded under the pretext of pursuing its spirit.” Id. § 1921(b). Thus, when the words
of a statute have a plain and unambiguous meaning, it is this meaning which is the
paramount indicator of legislative intent. However, in situations where the words of a
statute “are not explicit,” the legislature's intent may be determined by considering any of
the factors enumerated in Section 1921(c). DEP v. Cumberland Coal, 102 A.3d 962, 975
(Pa. 2014).
In addition to the guideposts set by the Statutory Construction Act, an
understanding of the Medical Marijuana Act and the RTKL is essential to resolving all
three issues before us. Thus, we turn to an overview of these statutes.
As noted above, in 2016, the General Assembly enacted the Medical Marijuana
Act. While marijuana remains illegal at the federal level, the legislature made certain uses
or possession of medical marijuana, as set forth in the statute, lawful within the
Commonwealth. 35 P.S. §§ 10231.303, 10231.304. Through the Medical Marijuana Act,
the General Assembly sought to create a “[p]rogram of access to medical marijuana which
balances the need of patients to have access to the latest treatments” to mitigate suffering
with the need to promote patient safety, provide a safe and effective delivery system, and
to promote research into the effectiveness and utility of medical marijuana. Id. §
10231.102(3)(i). In furtherance of these goals, the legislature established a framework
for the growing, processing, and dispensing of medical marijuana in Pennsylvania.
Specifically, the Medical Marijuana Act tasks the Department with the implementation and
administration of the Act. See id. § 10231.301(a). The Department is charged with
issuing DS and GP permits, ensuring medical marijuana businesses comply with the
Medical Marijuana Act, and registering practitioners; it also has regulatory and
enforcement authority over the growing, processing, sale, and use of medical marijuana.
Id. § 10231.301(a)(1-3)(i).
[J-66A-C-2020] - 19
The Act provides for a detailed permit application and renewal process for growers,
processors, and distributors. See id. § 10231.601-10231.616. The information required
in an application for an initial permit is extensive, and includes, inter alia, financial
information, a history of prior activities in the medical marijuana industry, and criminal
history record checks of principals, financial backers, operators and employees.14
14 Specifically, Section 602 mandates the following information in an initial application for
a permit:
(a) Application.--An application for a grower/processor or dispensary permit to grow,
process or dispense medical marijuana shall be in a form and manner prescribed by the
department and shall include:
(1) Verification of all principals, operators, financial backers or employees of a medical
marijuana grower/processor or dispensary.
(2) A description of responsibilities as a principal, operator, financial backer or employee.
(3) Any release necessary to obtain information from governmental agencies, employers
and other organizations.
(4) A criminal history record check. Medical marijuana organizations applying for a permit
shall submit fingerprints of principals, financial backers, operators and employees to the
Pennsylvania State Police for the purpose of obtaining criminal history record checks and
the Pennsylvania State Police or its authorized agent shall submit the fingerprints to the
Federal Bureau of Investigation for the purpose of verifying the identity of the principals,
financial backers, operators and employees and obtaining a current record of any criminal
arrests and convictions. Any criminal history record information relating to principals,
financial backers, operators and employees obtained under this section by the
department may be interpreted and used by the department only to determine the
principal's, financial backer's, operator's and employee's character, fitness and suitability
to serve as a principal, financial backer, operator and employee under this act. This
paragraph shall not apply to an owner of securities in a publicly traded corporation if the
department determines that the owner of the securities is not substantially involved in the
activities of the medical marijuana organization.
(5) Details relating to a similar license, permit or other authorization obtained in another
jurisdiction, including any suspensions, revocations or discipline in that jurisdiction.
(6) A description of the business activities in which it intends to engage as a medical
marijuana organization.
(7) A statement that the applicant:
[J-66A-C-2020] - 20
To carry out its responsibilities, including the application process, the Department
is authorized to promulgate regulations, id. § 10231.310(b), including the promulgation of
temporary regulations, id. §10231.1107. Under this authority, the Department
promulgated temporary regulations and established an application process for
businesses seeking permission to operate as a medical marijuana organization. See 28
Pa. Code §§ 1131.1-1191.33. As noted above, the temporary regulations regarding the
initial application process have expired. See supra note 3.
Importantly for purposes of this appeal, with respect to documents filed under the
Medical Marijuana Act, including applications, Section 302(b) provides that “[a]pplications
for permits submitted by medical marijuana organizations” are “public records and shall
(i) Is of good moral character. For purposes of this subparagraph, an applicant shall
include each financial backer, operator, employee and principal of the medical marijuana
organization.
(ii) Possesses the ability to obtain in an expeditious manner the right to use sufficient
land, buildings and other premises and equipment to properly carry on the activity
described in the application and any proposed location for a facility.
(iii) Is able to maintain effective security and control to prevent diversion, abuse and other
illegal conduct relating to medical marijuana.
(iv) Is able to comply with all applicable Commonwealth laws and regulations relating to
the activities in which it intends to engage under this act.
(8) The name, residential address and title of each financial backer and principal of the
applicant. Each individual, or lawful representative of a legal entity, shall submit an
affidavit with the application setting forth:
(i) Any position of management or ownership during the preceding 10 years of a
controlling interest in any other business, located inside or outside this Commonwealth,
manufacturing or distributing controlled substances.
(ii) Whether the person or business has been convicted of a criminal offense graded
higher than a summary offense or has had a permit relating to medical marijuana
suspended or revoked in any administrative or judicial proceeding.
(9) Any other information the department may require.
35 P.S. § 10231.602.
[J-66A-C-2020] - 21
be subject to the [RTKL].” 35 P.S. § 10231.302(b)(1). The Department’s temporary
regulations likewise provided that applications are “public records . . . subject to disclosure
under the [RTKL].” 28 Pa. Code § 1141.22(a).
The RTKL is remedial legislation to facilitate government transparency and
promote accountability. Pennsylvania State Police v. Grove, 161 A.3d 877, 892 (Pa.
2017); Bowling v. Office of Open Records, 990 A.2d 813, 824 (Pa. Cmwlth. 2010) aff’d
75 A.3d 453 (Pa. 2013). While enacted in 2008, the 2009 iteration of the statute
dramatically expanded the public’s access to government documents and demonstrated
an intent on the part of the General Assembly to expand government transparency. Levy
v. Senate of Pennsylvania, 65 A.3d 361, 381 (Pa. 2013). The RTKL is “designed to
promote access to official government information in order to prohibit secrets, scrutinize
the actions of public officials, and make public officials accountable for their actions.”
Pennsylvania State Education Association v. Commonwealth Department of Community
& Economic Development, 148 A.3d 142, 155 (Pa. 2016). For this reason, the law must
be construed to maximize access to public records that are in an agency's possession.
Moreover, because the law is remedial legislation, and encourages the maximization of
disclosure, the exemptions from disclosure must be strictly construed. ACLU, 232 A.3d
at 656.
As to the disclosure requirements of the RTKL, by its express terms, a
“Commonwealth agency shall provide public records in accordance with this act.” 65 P.S.
§ 67.301. A record “in the possession of Commonwealth agency . . . shall be presumed
to be a public record” unless it is exempt under Section 708, privileged, or exempt from
disclosure under other federal or state law or judicial order. Id. §§ 67.305(a), 67.701. At
the initial request stage, an agency is required to assess the public status of requested
records, and, if applicable, specify reasons for denying access with “citation of supporting
[J-66A-C-2020] - 22
legal authority.” Id. § 67.903. When parts of a record are public – meaning not exempt
by another law, privilege or exemption under Section 708(b), id. § 67.708(b) – an agency
“shall grant access to” the public parts of the record pursuant to its disclosure duty. Id. §
67.706. Thus, by its plain and unambiguous language, the RTKL places the statutory
duty of disclosure solely on the government agency.
Related thereto, the RTKL places the burden on the governmental agency to
discern what parts of a record are subject to access and what parts are properly exempt,
and, through redaction, disclose those parts subject to access:
If an agency determines that a public record, legislative record
or financial record contains information which is subject to
access as well as information which is not subject to access,
the agency's response shall grant access to the information
which is subject to access and deny access to the information
which is not subject to access. If the information which is not
subject to access is an integral part of the public record,
legislative record or financial record and cannot be separated,
the agency shall redact from the record the information which
is not subject to access, and the response shall grant access
to the information which is subject to access. The agency may
not deny access to the record if the information which is not
subject to access is able to be redacted. Information which an
agency redacts in accordance with this subsection shall be
deemed a denial under Chapter 9.
Id.
There are, however, statutory exemptions to the presumption of disclosure. Id. §
67.708. While the RTKL provides for numerous exemptions, three Section 708
exemptions are the focus of the matter sub judice: the facility security exemption, the
trade secrets exemption, and the confidential proprietary information exemption.
First, with respect to the facility security exemption, records regarding “building
plans or infrastructure records that expose or create vulnerability through disclosure of
the location, configuration or security of critical systems, including public utility systems,
structural elements, technology, communication, electrical, fire suppression, ventilation,
[J-66A-C-2020] - 23
water, wastewater, sewage and gas systems” are exempt from disclosure. Id. §
67.708(b)(3)(iii).15 In applying this exemption, as noted above, the Commonwealth Court
explained that, for this exemption to apply, the act of disclosing the records, rather than
the records themselves, must create a reasonable likelihood of endangerment to the
safety or physical security of certain structures. Mission Pennsylvania, 212 A.3d at 134.
Additionally exempt from disclosure is “[a] record that constitutes or reveals a trade
secret or confidential proprietary information.” 65 P.S. § 67.708(b)(11). “Trade secret” is
defined as:
Information, including a formula, drawing, pattern,
compilation, including a customer list, program, device,
method, technique or process that:
(1) 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; and
(2) is the subject of efforts that are reasonable under
the circumstances to maintain its secrecy.
Id. at § 67.102. Additionally, “Confidential proprietary information” is defined as:
Commercial or financial information received by an agency:
(1) which is privileged or confidential; and
(2) the disclosure of which would cause substantial harm to
the competitive position of the person that submitted the
information.
Id.
With respect to discerning and establishing exemptions, the RTKL provides that
“[t]he burden of proving that a record of a Commonwealth agency or local agency is
exempt from public access shall be on the Commonwealth agency or local agency
15 Similarly, the relevant temporary regulation also provided that: “the following
information is considered confidential, is not subject to the [RTKL,] and will not otherwise
be released . . . unless pursuant to court order . . . information regarding the physical
features of, and security measures installed in, a facility.” 28 Pa. Code § 1141.22(b)(9).
[J-66A-C-2020] - 24
receiving a request by a preponderance of the evidence.” 65 P.S. § 67.708(a)(1). The
RTKL does not allow an agency to delegate its disclosure duty or burden of proof to third
parties. Furthermore, it is presumed that Commonwealth agencies will act in good faith
in discharging their statutory duties under the RTKL. See Office of Governor v. Donahue,
98 A.3d 1223, 1239 (Pa. 2014).
Mindful of the presumption of disclosure of agency records, but that such records
may include sensitive information submitted by private parties such as trade secrets and
confidential proprietary information, Section 707(b) requires the governmental agency to
notify third parties of a request for trade secrets or confidential proprietary information,
and gives such parties the opportunity to provide input to, and be notified of, the agency’s
determination. 65 P.S. § 67.707(b). Moreover, decisional law allows third parties to raise
and defend exemptions to protect information that they believe is exempt from disclosure.
Commonwealth, Department of Education v. Bagwell, 131 A.3d 638 (Pa. Cmwlth. 2016);
Office of the Governor v. Bari, 20 A.3d 634 (Pa. Cmwlth. 2011). Further, “agencies are
not permitted to waive a third party's interest in protecting the records.” Bagwell, 131
A.3d at 650.
With these foundations in hand, we turn to the issues upon which we granted
allocatur.
B. Appeal of the Department – RTKL Exemption Standards
The first issue that we will consider, raised by the Department, is whether the
Commonwealth Court failed to create a workable standard for dealing with repetitive
redactions in the absence of statutory guidance. Initially, the Department stresses the
difficulties that government agencies face when confronted with third-party trade secret
and confidential proprietary information redactions under the RTKL. The Department
points to a lack of guidelines to address these redactions, noting that, without regulations,
[J-66A-C-2020] - 25
resolution of the redaction process has been determined through fact-specific litigation.
The Department offers that it has consistently taken the position that it is unable to
unilaterally assess and determine the propriety of redaction of trade secret and
confidential and proprietary information. According to the Department, only the owner of
the trade secret can identify and assert the secrecy or confidentiality of records. Related
thereto, the Department also argues that the Commonwealth Court’s opinion places the
Department “in the impossible position of having to affirmatively declare whether certain
records constitute a trade secret or confidential proprietary information, despite the fact
that [it is] not permitted to waive a third party’s interest in protecting its records.”
Department of Health Brief at 13 (citation omitted).
The Department maintains that this is an unworkable standard that forces it to
make decisions on highly technical material when it lacks the resources to do so, and,
according to the Department, only the individual applicant understands what constitutes
a trade secret. Here, the Department allowed all applicants to defend their redactions,
and, as the inquiry focuses on whether the information contained a secret of peculiar
importance to the business, and of competitive value to the owner, it was the successful
applicants who were better suited to object to certain disclosures, rather than the
government agency overseeing the industry. The Department complains that
governmental agencies face an unfair burden when faced with third-party assertions of a
trade secret or proprietary information exemption, as they must make definitive
determinations regarding highly technical information without the necessary tools. The
Department argues that the Commonwealth Court should have permitted the parties to
[J-66A-C-2020] - 26
supplement the record, and asks this Court to remand to the Commonwealth Court with
instructions to permit supplementation of the record.16
Appellees maintain that the Commonwealth Court properly placed the disclosure
duty and burden of proof on the Department, citing various statutory provisions discussed
above, including 65 P.S. § 67.901, which obliges the implicated agency to make a good
faith determination about whether the requested record is a public record and to make
any determinations regarding the validity of asserted exemptions. Appellees also offer
that the Commonwealth Court correctly rejected the Department’s attempt to shift the
burden of proof to Applicants, as to do so would be inconsistent with the terms of the
RTKL. Related thereto, Appellees contend that supplementation of the record is not
warranted here, as the Department and Applicants received a full and fair opportunity,
indeed, numerous opportunities, to participate and to submit evidence and argument
16 Amicus Pennsylvania Cannabis Coalition, a trade organization whose mission is to
protect and preserve Pennsylvania’s emerging medical marijuana market, argues that the
redacted information in the applications should be exempt from disclosure under the
RTKL’s safety and security exemption, as well as its trade secrets and confidential
proprietary information exemption. Emphasizing that Pennsylvania’s medical marijuana
industry is in its infancy, highly competitive, and cash based, Amicus suggests that
disclosure of this information will be particularly detrimental to applicants. Amicus further
asserts that evidence demonstrating the applicability of these exemptions should apply
to all applicants because these issues are industry-wide. In this regard, Amicus maintains
that requiring individual proof from similarly-situated applicants regarding substantially
similar information creates the risk that applicants will be treated unequally and lead to
the disclosure of sensitive information that would affect all applicants. By example,
Amicus points to Terrapin’s affidavits regarding financial information justifying exemptions
and contends that the rationales contained therein should extend to all successful
applicants. Thus, according to Amicus, individual proofs of entitlement to exemptions are
not required where evidence in the record supports an exemption. Furthermore, Amicus
submits that the Commonwealth Court failed to address the dilemma encountered by the
Department, where the Department is unable to redact particular portions of an
application section because the applicant redacted all of the section. Amicus asserts that
this Court should reverse the Commonwealth Court’s decision, or, alternatively, remand
to that court to reopen the record for additional evidence or to conduct an in camera
review of the evidence.
[J-66A-C-2020] - 27
before the OOR. Specifically, Appellees note that, after finding that the Department failed
to independently review Applicants’ redactions, and that the applications had been
inconsistently redacted, the OOR issued a stay to allow the Department and Applicants
more time to review the applications, issue revised responses, and provide exemption
logs. Appellees point out that, after receiving submissions, as well as the Department’s
notification that it did not independently review Applicants’ redactions, but was deferring
to the OOR as fact finder, the OOR gave Applicants additional time to supplement the
record, during which only Terrapin made an additional submission. Indeed, Appellees
emphasize that Applicants received “extraordinary due process” during the OOR
proceedings, and that the Commonwealth Court properly found that that the Department
and Applicants had a full and fair opportunity to support their redactions and to participate
in the OOR proceedings. Appellees Brief at 17, 24. According to Appellees, the
Commonwealth Court’s decision was a straightforward application of existing substantive
and procedural law.17
We initially note that Appellees made a request for certain successful applications
submitted under the Medical Marijuana Act, which were expressly classified as public
records under the terms of that statute, and, thus, subject to the RTKL. Under the plain
language of the RTKL, the Department was the agency charged with responding to
Appellees’ RTKL request, and, as such, bore the sole burden of granting access to that
information that was subject to disclosure, and supporting any grounds for denial of any
17 Amicus Pennsylvania News Media, which represents over 300 daily and weekly
newspapers and other media organizations across the Commonwealth, emphasizes the
need for prompt resolution of records disputes under the RTKL. Amicus contends prompt
access to the information sought by Appellees is especially important in order to allow the
public to scrutinize the new medical marijuana industry. Amicus suggests that access to
these records would reveal conflicts of interest in the permit process, arbitrary
governmental action, and compliance with the applicable legal and regulatory framework.
Amicus also maintains that the record should not be reopened, as such delay only thwarts
prompt access to records.
[J-66A-C-2020] - 28
information that was exempt or privileged. That a third party may be best suited to provide
the most detailed proof of an exemption does not relieve an agency of its statutory burden.
Based upon the language of the Medical Marijuana Act and the RTKL, we reject
any attempt by the Department to shift this burden of analysis, assessment, and either
disclosure or redaction to third parties. This is particularly true here, as an agency's duty
of disclosure may conflict with a private party’s interest in the protection of information.
Furthermore, simply because a request under the RTKL is for a large number of records
does not mean that agency is excused from performing its statutory mandate to determine
whether exemptions apply. See Pennsylvania State System of Higher Educ. v. Ass'n of
State College and University Faculties, 142 A.3d 1023, 333 (Pa. Cmwlth. 2016). Rather,
a governmental agency, as the Department did here, may request an extension of time
in which to comply with a RTKL request.
Here, the Department did not fulfill its statutory mandate by independently
reviewing Applicants’ redactions. Indeed, it did not even review the unredacted versions
of the applications. Rather, the Department allowed Applicants to redact any information
they deemed to be proprietary, confidential, or otherwise subject to redaction, and, as
noted above, merely added its own redactions, resulting in widely varying redactions for
similar information. Moreover, it created the potential for unreviewed over-redaction.
Simply stated, to effectuate the mandate of the RTKL and its underlying purposes, a
government agency cannot blindly defer to the determinations of private entities as to
what information is exempt from disclosure under the RTKL.
We fully appreciate the magnitude of the task of reviewing Applicants’
submissions, including both the difficult job of discerning whether certain information
constitutes security-related information, trade secrets, or confidential proprietary
information, as well as the voluminous nature of the applications. Furthermore, we are
[J-66A-C-2020] - 29
cognizant of the unique nature of the nascent medical marijuana industry in our
Commonwealth. Nevertheless, the language of the RTKL is plain and unambiguous,
placing the burden and responsibility on the governmental agency to independently
evaluate and discern the validity of claimed exemptions to disclosure in the first instance,
including those made by third parties. Thus, in responding to a RTKL request, we
emphasize that a government agency may not delegate its disclosure duties or defer to
the redactions of third parties.
Here, the Department’s failure to independently review Applicants’ redactions was
not in accord with the mandate of the RTKL, neither at the request stage, nor later during
the administrative phase before the OOR. Thus, we reject the Department’s request to
alleviate it of its burden to independently review what records are subject to disclosure,
or exempt from release. While the Department indicated that it was deferring to the
OOR’s fact-finding to determine the propriety of the asserted exemptions, and suggested
in camera review or the submission of affidavits, the RTKL simply does not generally
permit this type of delegation.
Additionally, we reject the Department’s request for supplementation of the record.
We note that the Department received numerous opportunities to submit evidence and
argument before the OOR, and chose not to take advantage of those opportunities.
Indeed, the Department largely failed to take advantage of the stay the OOR issued to
allow the Department additional time to review the applications and provide revised
responses. Instead of fulfilling its statutory mandate, it notified the OOR that it again did
not independently review Applicants’ redactions, but was deferring to the OOR.
Accordingly, we reject the Department’s request to be relieved of its obligations under the
RTKL, as well as its request to supplement the record, and affirm the Commonwealth
Court’s decision in this regard.
[J-66A-C-2020] - 30
C. Appeal of Harvest – Similar Treatment of Applicants
The second issue we consider, raised by Harvest, is whether the Commonwealth
Court erred in treating similarly-situated applicants differently on the same record.
Harvest suggests that, in cases where, as here, the evidence presented applies industry-
wide, the OOR, in the first instance, should have considered the record as a whole when
considering exemptions under the RTKL, rather than finding that Applicants are entitled
to varying degrees of protection. That is, according to Harvest, despite varied
submissions by Applicants, evidence of industry practice should sufficiently support
exemptions for all of them. Related thereto, Harvest asserts that public policy supports
establishing uniform redactions across the applications in this case, as, otherwise, the
Department will be required to comb through thousands of pages of applications just to
determine whether a single redaction is appropriate.
In support of its exemptions, Harvest emphasizes that it is not performing a
governmental function, and that its relationship with the Department concerns only the
submission and approval of its application. Thus, according to Harvest, because third-
party information has been submitted to a governmental agency, the RTKL’s disclosure
requirements should be narrowly construed and its exemptions broadly construed.
Harvest continues, contending that the uniquely competitive nature of the medical
marijuana industry, as well as the significant effort and funds expended in developing,
arranging, and presenting the extensive information in its application, establish that the
application itself is a trade secret containing confidential information, even without sworn
testimony. Harvest suggests that allowing disclosure of the application would cause it to
suffer a substantial competitive disadvantage because competitors could simply copy the
information from its application to obtain their own permits. In support thereof, Harvest
stresses the measures taken to prevent disclosure of its application, including limiting
[J-66A-C-2020] - 31
access, password protected electronic storage of information, and confidentiality
agreements for employees, contractors, and other third parties.
Alternatively, Harvest argues that, even if the entire application does not constitute
a trade secret, the application nevertheless contains trade secrets as well as confidential
proprietary information that is customarily, and actually, treated as private. Thus, Harvest
submits that such information should be exempt from disclosure. Harvest also claims that
its application contains security information that should be exempt from disclosure under
the RTKL. Harvest argues that, despite the Commonwealth Court finding that Terrapin’s
affidavits supported security-related redactions, it improperly allowed only Terrapin to
redact such information. According to Harvest, where consideration of the record as a
whole, including industry-wide evidence, would support security-related redactions, then
such redactions should be applied uniformly to all applicants, and such security-related
information should be uniformly exempt from disclosure.
Finally, Harvest emphasizes that, in cases where the record is insufficient to
determine whether the requested material is exempt from disclosure, the Commonwealth
Court may permit the parties to supplement the record with additional evidence. Harvest
maintains that, due to the unique nature of the medical marijuana industry, as well as the
fact that this is a case of first impression, the Commonwealth Court should have permitted
the parties to submit additional evidence in support of their redactions. Harvest suggests
that this was particularly appropriate in this case given that the OOR did not conduct a
hearing on this matter or an in camera review of the evidence. Thus, Harvest asserts
that, in the interest of justice, this Court should remand for further fact-finding if our Court
finds the current record inadequate.
Appellees initially contend that, as a general matter, Harvest’s assertions regarding
the unique nature of the medical marijuana industry do not justify the broad scope of its
[J-66A-C-2020] - 32
redactions, and they suggest that such information has already been disclosed to the
public via other applications which were redacted far less than the applications at issue
in the instant case. Appellees additionally argue that the applications are not exempt in
their entirety as trade secrets or confidential proprietary information, as the Medical
Marijuana Act explicitly provides that the applications are public and subject to the RTKL.
See 35 P.S. § 10231.302(b)(1). In this regard, Appellees maintain that Harvest cannot
credibly assert that it intended to keep secret or confidential the entire contents of its
application made public by the RTKL. Appellees further emphasize that each Applicant
bears the burden of establishing that the contents of their respective applications are
exempt. They point out that, while the Commonwealth Court credited Terrapin’s affidavit
in concluding its processes to cultivate and manufacture marijuana products were trade
secrets, such information did not establish that other Applicant’s applications, including
Harvest’s, contained such information. Likewise, Appellees note that the Commonwealth
Court held that Terrapin’s affidavit established the first prong of the trade secrets
exemption for all successful applicants. However, Appellees highlight that the court found
that Harvest failed to submit evidence of the competitive value of the information or efforts
taken for maintaining its secrecy, and, thus, due to this lack of evidence, the
Commonwealth Court properly determined that Harvest did not prove that its redactions
constituted trade secrets or confidential proprietary information.
Indeed, Appellees assert that, with respect to Harvest’s argument that the
Commonwealth Court’s opinion treated similarly-situated Applicants differently based on
the same record, Appellees maintain that Applicants are responsible for any disparity in
the results below, as Harvest redacted dramatically more information than other
applicants. Moreover, Appellees point out that Terrapin provided far more detailed
evidence than the other applicants, including Harvest, in support of its redactions.
[J-66A-C-2020] - 33
Appellees further maintain that there is no basis on which to conclude that Terrapin’s
evidence represents an entire industry. Additionally, with respect to Harvest’s attempt to
assert that its information was exempt from disclosure under the confidential proprietary
information exemption, Appellees argue that Harvest merely provided an exemption log
in support of its claim, which offered no information with respect to how it maintains the
confidentiality of the redacted information or the alleged harm resulting from disclosure.
Finally, Appellees maintain that the Commonwealth Court did not abuse its
discretion in refusing to allow Applicants to supplement the record because adequate due
process was afforded to them during the administrative process before the OOR.
Appellees argue that Harvest has offered no legitimate justification why a remand to
supplement the record is necessary, and they claim that “[i]t is time to bring an end to the
unreasonable three-year delay to access of information in [a]pplications made expressly
public by the Act.” Appellees’ Brief at 28.
Initially, we reject Harvest’s sweeping assertions that, because it is not performing
a governmental function, and because an application containing third-party information
submitted to a governmental agency is at issue, the RTKL’s disclosure requirements
should be narrowly construed, and its exemptions broadly construed. There is simply no
authority supporting Harvest’s novel suggestion of reversing the RTKL’s presumption of
disclosure and narrow construction of exemptions. The RTKL, by its plain terms, as well
as our case law, holds to the contrary. See 65 P.S. § 67.301; ACLU, 232 A.3d at 656.
Likewise, we dismiss Harvest’s claim that, in this instance, because of the uniquely
competitive nature of the medical marijuana industry, its application, in toto, is a trade
secret containing confidential information. As offered above, by its plain terms, the RTKL
mandates the disclosure of records in the possession of a government agency unless an
exemption applies, 65 P.S. §§ 67.305(a), 67.701, and, under the Medical Marijuana Act,
[J-66A-C-2020] - 34
applications filed with the Department are expressly deemed to be public records. 35
P.S. § 10231.302(b).
Turning to Harvest’s assertion that, where evidence contained in the record as a
whole implicates the entire industry, it should apply to every applicant, we first note that
the governmental agency asserting an exemption bears the burden of proving that
exemption applies. See 65 P.S. § 67.901 (placing duty on agency to make determination
whether requested record is subject to disclosure). If the agency denies a request
asserting an exemption from disclosure, the RTKL provides an opportunity for a third party
to defend its claim before the OOR. Id. § 67.1101(c)(1). Related thereto, the agency or
third party must prove a RTKL exemption applies “by a preponderance of the evidence.”
Id. § 67.708(a)(1). Thus, again by its terms, the RTKL places the burden of disclosure,
or proving an exemption from disclosure, on the governmental agency and individual third
parties. Additionally, we find nothing in the RTKL that would mandate in every
circumstance the collective use of information to establish an exemption. Moreover, such
a collective use requirement would be contrary to legal processes in general, which
require parties to offer competent evidence to establish their claims.
Rather than mandating application of all record evidence for each alleged
exemption, we believe that it is within the discretion of the OOR or the Commonwealth
Court to give broader significance to the record as a whole when it relates to industry-
wide issues. Indeed, in this matter, the Commonwealth Court applied certain information
used by one applicant to satisfy a requirement for an exemption for every applicant, and
for other requirements found individualized support was necessary. Specifically, as the
Commonwealth Court explained, three parties submitted evidence to prove their asserted
exemptions: the Department, Cresco, and Terrapin. As noted above, the Department
submitted an affidavit and logs, Cresco submitted an affidavit, and Terrapin submitted
[J-66A-C-2020] - 35
multiple affidavits. By contrast, KW Ventures, Harvest, and Mission did not submit
evidence. Thus, the Commonwealth Court concluded, as a general matter, that the
redactions of these latter entities’ applications were unsubstantiated, except to the extent
the proffered evidence applied to every applicant.
Even more to the point, regarding the facility security exemption, the
Commonwealth Court noted that, while certain parties failed to submit evidence, the
Department’s logs, as well as the record as a whole contained dangers unique to the
medical marijuana industry, and, thus, applied these industry-wide risks to every
applicant. Mission Pennsylvania, 212 A.3d at 135.
Conversely, with respect to the trade secret exemption, the court determined that
the OOR properly applied the trade secret exemption only to Terrapin, and correctly found
the confidential proprietary information exemption inapplicable to every applicant. Rather
than rejecting outright any exemption by those applicants who offered no evidence to
substantiate their exemptions, the court reviewed the evidence as to each applicant when
considering whether they satisfied the exemptions. With respect to the trade secret
exemption, the court, finding Terrapin’s presentation to be exemplary, determined that its
affidavits sufficiently established that the processes described therein were trade secrets,
and extended that record evidence to similar processes described by the other
applications. Thus, the court concluded that the affidavits submitted by Terrapin satisfied
the first prong of the trade secret exemption for every applicant. Nevertheless, the court
concluded that only Terrapin could avail itself of the exemption because it was the only
party that submitted evidence of its reasonable efforts to maintain the secrecy of its
processes, a necessary second component in establishing trade secret status ― and
requiring individualized assessment. Accordingly, the court affirmed the OOR’s
application of the trade secrets exemption to only Terrapin. Similarly, as to Applicants’
[J-66A-C-2020] - 36
alleged exemption for confidential proprietary information, the court concluded that none
of the Applicants established the exemption, emphasizing that “[t]he measures
undertaken to maintain secrecy of the information are important indicators of its
confidential nature.” Id. at 137. This assessment, consistent with court’s trade secret
analysis, required individualized evidence of each applicant’s efforts in this regard. Id.As no applicant other than Terrapin submitted evidence regarding these steps to maintain
secrecy, the applicants other than Terrapin failed to establish the confidential nature of
the information.
In light of the above, we hold that the Commonwealth Court properly analyzed the
exemptions to disclosure under the RTKL, and did not abuse its discretion in finding
certain information to be industry-wide in nature, and, thus, applicable to all applicants,
and other information to be applicant-specific, necessitating individualized assessment.
This is especially true with respect to efforts to maintain the secrecy of information, which
would necessarily differ by applicant. These are individualized determinations, which the
Commonwealth Court properly recognized required individualized evidence to support.
While the RTKL does not prohibit the use of industry-wide information to support
an exemption for similarly-situated individuals, it also does not mandate its use in all
instances. Indeed, to adopt Harvest’s approach would place the primary burden on the
OOR or the Commonwealth Court to discern the applicability of evidence to similarly-
situated entities, and would stand on its head the burden the RTKL places on the agency
and individual third parties to establish exemptions from disclosure. Related thereto, we
reject the assertion that requiring individualized proof of exemption, especially with
respect to security, would jeopardize and harm the public. Rather, requiring individual
applicants to meet their burden upholds the plain language of the RTKL and the Medical
Marijuana Act. Here, Harvest offered no evidence; yet, it benefitted from certain industry-
[J-66A-C-2020] - 37
wide evidence, through the introduction of evidence of others, in support of its claimed
exemptions. However, because it provided no evidence regarding other matters requiring
individualized proof, and no explanation for its failure to do so, the Commonwealth Court
properly denied such exemptions.
Finally, we reject Harvest’s request for a remand for additional fact-finding. The
Commonwealth Court properly determined that it is the parties’ burden to submit evidence
to establish material facts. To the extent Harvest believes that the record is inadequate,
we find that it had a full opportunity to participate in the proceedings and to provide
evidence and argument to the OOR. Indeed, the OOR allowed Harvest additional time
to do so after Appellees highlighted the deficiencies in the Department’s and Applicants’
prior submissions, yet only Terrapin offered additional proofs. Harvest offered no reason
for neglecting to submit its own evidence. While the Commonwealth Court or the OOR
may permit the introduction of additional evidence, conduct a hearing, or engage in in
camera review of information, herein, we find the OOR allowed for ample notice, time,
and opportunity for Harvest to develop its record in support of its claim of exemptions. Id.
at 130.
We observe that allowing evidence to be supplemented at each stage of the
proceedings undercuts the RTKL’s goals of openness and providing expedient access to
information. To allow a party to initially withhold evidence, but then introduce new
evidence at later stages of the proceedings, would significantly delay the disclosure of
often time-sensitive information, as well as frustrate the underlying policy of the RTKL.
Thus, we conclude that the Commonwealth Court did not abuse its discretion in declining
to permit Harvest to provide supplemental evidence or to remand to OOR to reopen the
record.
D. Appeal of Terrapin – Confidential and Proprietary Information
[J-66A-C-2020] - 38
Finally, we address the issue raised by Terrapin as to whether the Commonwealth
Court, in considering whether the financial information submitted in an application under
the Medical Marijuana Act was confidential and proprietary, erred by disregarding
evidence of competitive harm and the significant security issues associated with the
disclosure of financial information in the cash-based medical marijuana industry.
Initially, Terrapin stresses that the medical marijuana industry is atypical. Terrapin
explains that, under the federal Controlled Substances Act, 21 U.S.C. §§ 801 et seq., the
cultivation, possession, and distribution of marijuana is illegal. As a consequence of the
federal restrictions on the use of marijuana, the industry, which is legal in various states,
like Pennsylvania, is cash-based. Because marijuana is illegal at the federal level, the
United States Department of the Treasury and Department of Justice have provided
guidance to financial institutions that service state marijuana businesses. Terrapin offers
that the federal guidelines for financial institutions address public safety concerns for cash
operating businesses. To comply with these guidelines, financial institutions that deal
with the marijuana industry have compliance protocols for their customers’ due diligence
and “Suspicious Activity Reporting for ‘verified lawful transactions of a medical marijuana
business and ongoing customer monitoring for business compliance.’” Terrapin Brief at
15 (quoting Coleman Affidavit at ¶ 19). Terrapin thus argues that the financial information
submitted in its application falls within the confidential proprietary information and safety
and security information exemptions to disclosure under the RTKL. According to
Terrapin, it presented substantial, uncontested evidence that its financial information is
confidential, that it has undertaken efforts to maintain its secrecy, and that its disclosure
would result in competitive harm. Terrapin submits that disclosure of confidential financial
information could negatively impact its banking relationships, jeopardize the financial
[J-66A-C-2020] - 39
security of the medical marijuana industry, and endanger the physical security of facilities
and the public.18
Specifically, Terrapin emphasizes that the financial information that it submitted to
the Department does not deal with the Department’s receipt or disbursement of funds, or
with the Department’s acquisition, use, or disposal of services, supplies, materials,
equipment, or property, which would be subject to disclosure. Thus, Terrapin contends,
the information is not a “financial record” under the RTKL.19 Rather, Terrapin offers that
its financial information was submitted to the Department to demonstrate that Terrapin
was financially responsible and capable of establishing and operating a facility.
Terrapin further contends that it presented substantial and uncontested evidence
to the OOR in the form of its Coleman Affidavit, noted above, detailing competitive and
security concerns with respect to disclosure of its financial information, including that
Terrapin has developed unique industry-specific business practices that were proprietary
in nature. Terrapin also submits that the Coleman Affidavit explained that, because the
medical marijuana industry is entirely cash-based, Terrapin must maintain strict
confidentiality with regard to its financial and security protocols in order to protect the
18 Additionally, Terrapin notes that the United States Supreme Court recently broadened
the protections for confidential business records under the Freedom of Information Act
(“FOIA”) in Food Marketing Inst. v. Argus Leader Media, 139 S.Ct. 2356 (2019), holding
that commercial or financial information which is both customarily and actually treated as
private by its owner and provided to the government under an assurance of privacy is
“confidential” under FOIA. Terrapin maintains that this Court should follow the same
standard, suggesting that the provision of FOIA at issue in Food Marketing closely
resembles the trade secret and confidential proprietary exemptions under the RTKL.
Compare 5 U.S.C. § 552(B)(4) with 65 P.S. § 67.708(b)(11). We denied allowance of
appeal with respect to whether Food Marketing is applicable to this case, and, in any
event, find the RTKL provides sufficient guidance to resolve this appeal.
19 The RTKL’s definition of “[p]ublic record” includes a “[f]inancial record” which is defined
as “[a]ny account, voucher or contract dealing with (i) the receipt or disbursement of funds
by an agency; or (ii) an agency’s acquisition, use or disposal of services, supplies,
materials, equipment or property.” 65 P.S. § 67.102.
[J-66A-C-2020] - 40
stability of its banking services, and protect against robbery and injury to its staff and
customers. Moreover, Terrapin adds that it has put measures into place to ensure the
confidentiality of its financial information. Thus, Terrapin asserts that it established that
its financial information was exempt as confidential proprietary information, 65 P.S. §
67.708(b)(11), and as implicating security concerns, id. § 67.708(b)(3).
Terrapin criticizes the OOR for considering only whether Terrapin had presented
evidence that its financial information was confidential and disregarding its evidence
related to security concerns as “not relevant to the exception at hand.” OOR Final
Determination at 33. While recognizing that the Commonwealth Court below found that
the evidence supporting the confidential proprietary information and safety and security
information exemption under the RTKL may be intertwined, Terrapin maintains that the
court failed to address the limited nature of the OOR’s review and did not consider the
safety implications of disclosure. Terrapin also challenges the Commonwealth Court’s
failure to address the OOR’s error in this regard and requests either reversal of the
Commonwealth Court’s decision or a remand for in camera review by the OOR of the
information regarding nondisclosure.
As noted above, Appellees reject any sweeping assertions regarding the cash-
based nature of the medical marijuana business as allowing for extensive redactions, and
emphasize that the applications are not exempt in their entirety as trade secrets or
confidential proprietary information, as the Medical Marijuana Act explicitly provides that
the applications are public and subject to the RTKL. Additionally, Appellees underscore
that Applicants bear the burden of establishing that the contents of their applications are
exempt, and submit that Terrapin did not prove that its financial information constituted
confidential proprietary information falling within the exemption. Specifically, Appellees
note that, to establish the existence of confidential proprietary information, Terrapin
[J-66A-C-2020] - 41
needed to establish actual competition in the relevant market and a likelihood of
substantial injury upon the release of the information. According to Appellees, the
Commonwealth Court routinely upholds exemptions for trade secrets and confidential
proprietary information when a third party submits an affidavit to the OOR with facts
supporting each element of the exemption. Appellees maintain that Terrapin did not meet
its burden in this regard, as the fact that the medical marijuana industry is extremely
competitive does not, by itself, substantiate Terrapin’s extensive redactions.
Initially, we reject Terrapin’s assertion that its financial information is not a
“financial record” and, thus, not subject to disclosure under the RTKL. Again, by its clear
terms, the Medical Marijuana Act provides that “[a]pplications for permits submitted by
medical marijuana organizations” are “public records and shall be subject to the [RTKL].”
35 P.S. § 10231.302(b)(1). Thus, regardless of whether the information contained therein
also constitutes a “financial record” under the RTKL, applications are, by definition, public
records for purposes of the RTKL.20
20 In his concurring opinion, Justice Dougherty raises an aspect of the RTKL regarding
“financial records” which he submits impacts the review of Appellant Terrapin’s financial
information in this case. Justice Dougherty astutely notes that the RTKL seemingly treats
“financial records” differently than the general category of public records with respect to
allowable exemptions from disclosure. According to the concurrence, if Terrapin’s
financial information constitutes “financial records,” then certain claimed exemptions may
not be available to Terrapin. The concurrence suggests that the parties and the lower
tribunals have “overlooked” this aspect of the litigation. Concurring Opinion (Dougherty,
J.) at 3. While Justice Dougherty certainly may be correct in his statutory analysis, and,
in another matter, this feature of the RTKL may constitute a relevant inquiry regarding
allowable exemptions, it does not alter our analysis and remand in the matter sub judice.
First, with respect to Terrapin’s petition for allowance of appeal, our Court limited our
grant of allocatur to a single question: “In considering whether financial information
submitted in a medical marijuana application was ‘confidential and proprietary,’ whether
the Commonwealth Court erred in disregarding substantial evidence of ‘competitive harm’
and of the significant security issues associated with disclosure of financial information in
a unique cash-based business.” Mission Pennsylvania, LLC v. McKelvey, 224 A.3d 1089,
1089-1090 (Pa. 2020) (order). Thus, the sole question on which we granted allocatur
[J-66A-C-2020] - 42
However, as to the OOR’s and the Commonwealth Court’s analysis of Terrapin’s
asserted exemptions, we find that the lower tribunals failed to recognize the potentially
intertwined nature of financial information and safety and security information in a
nascent, uniquely cash-based, and highly competitive industry such as that for growing,
processing, and dispensing medical marijuana. Here, Terrapin’s Coleman Affidavit
described not only the potential impact of the disclosure of financial information on the
physical security of its facilities, including an increase in robberies and burglaries, and
threats or injury to staff and customers, but the potential impact upon the stability of its
banking relationships.
was largely one of the sufficiency of the evidence, and not the distinct issue of whether
the financial information in question constituted “financial records” under the RTKL.
Appellees did not raise the question of whether the financial information, included as part
of Terrapin’s application, constituted “financial records,” and they have not claimed that
Terrapin’s financial information is comprised of “financial records,” which would, in turn,
limit the scope of Terrapin’s claimed exemptions. Terrapin, for its part, as noted above in
the context of the broader issue of the disclosure of public records, contends its financial
information does not constitute “financial records” under the RTKL, and Appellees do not
dispute Terrapin’s asserted status of its financial information. Related thereto, there is no
suggestion in the lower tribunal’s determinations that Terrapin’s financial information
constitutes “financial records” which limit Terrapin’s claimed exemptions. Thus, based
upon our limited grant of allocatur, the argument of the parties, and the lower tribunals’
decisions, the only relevant issue before our Court is whether Terrapin offered substantial
evidence in support of its claimed exemptions. We have answered that singular question
today and have remanded for further proceedings.
Additionally, and contrary to the concurrence’s assertion, we in no way are suggesting
that Terrapin’s financial information constitutes a “financial record.” Concurring Opinion
at 4-5. Rather, we are merely rejecting Terrapin’s broader suggestion that, because its
financial information is not a “financial record,” such information is globally not subject to
disclosure under the RTKL. As noted above, this information is part of Terrapin’s
application, which, by the plain terms of the Medical Marijuana Act, constitutes a public
record that is subject to the RTKL. 35 P.S. § 10231.302(b)(1).
Thus, while Justice Dougherty’s analysis of the exemptions available regarding “financial
records” is well taken, our statutory analysis is consistent with the issue on which we
granted allocatur, the positions of the parties, and the treatment of this litigation by the
lower tribunals.
[J-66A-C-2020] - 43
Furthermore, the OOR disclosed the information without conducting in camera
review or otherwise evaluating the basis of the claimed exemption. Rather than
considering both the confidential nature of the financial information and the safety and
security concerns regarding its disclosure, the OOR rejected any safety and security
concerns, finding they were “not relevant to the exemption at hand.” OOR Final
Determination at 33. Similarly, we conclude that the Commonwealth Court failed to
appreciate the security-related reasons for exemption of Terrapin’s financial information
from disclosure. While the burden is on the governmental agency or the third-party
entities to raise and defend all of their proffered exemptions from disclosure, once a party
raises and supports an exemption, it is the duty of the OOR, and then the Commonwealth
Court, to review the various proffered reasons for nondisclosure and determine their
validity, based upon a preponderance of the evidence.
Related thereto, in ACLU, supra, we recently explained that, under the RTKL, the
reviewing court – here, the Commonwealth Court – is the ultimate finder of fact, enjoys
the broadest scope of review, and retains plenary authority to expand the record beyond
that developed before the OOR. ACLU, 232 A.3d at 663-64. Indeed, we emphasized the
availability of in camera review as a valuable tool to discern the propriety of a claimed
exemption to disclosure, and that our Court has “blessed” such review to consider
application of various privileges. Id. at 665-66, 669.
We find that, after Terrapin supported its proffered exemptions regarding
disclosure of confidential financial information, citing to competitive harm and security
implications with affidavit and argument – indeed, in a presentation the Commonwealth
Court found to be exemplary – it was incumbent upon the OOR, and, ultimately, the
Commonwealth Court, to consider the alleged exemptions applicable to such financial
information, to review the information at issue – in camera if beneficial – and to fully
[J-66A-C-2020] - 44
consider the reasons proffered to support exemption from disclosure. See id. at 669-70;
Office of Open Records v. Center Township, 95 A.3d 354, 367 (Pa. Cmwlth. 2014) (noting
authority of OOR to conduct in camera review to render a reasoned decision); Office of
the Governor v. Bari, 20 A.3d 634, 648 (Pa. Cmwlth. 2011) (offering that OOR should
“take all necessary precautions” including in camera review, when considering a claim of
confidential proprietary information). Thus, we find that the lower tribunals’ failure to do
so constituted an abuse of discretion.
As a result, we hold that the OOR and the Commonwealth Court did not appreciate
the potentially intertwined nature of confidential financial information and safety and
security information in the medical marijuana industry, and did not fully consider whether
Terrapin’s assertions regarding its financial information satisfied the confidential
proprietary information and facility security exemptions. Accordingly, we remand to the
Commonwealth Court for reconsideration of this matter.
IV. Conclusion
Thus, for the above-stated reasons, we affirm the Commonwealth Court’s decision
in two aspects. First, in light of the plain language of the RTKL, we agree the court
properly rejected the Department’s request to be relieved of its obligations to review all
requests and determine what parts of a record are subject to disclosure and what parts
are subject to redaction, as well as its request to supplement the record. Second, we
agree the court properly rejected Harvest’s contention that, because it is not performing
a governmental function, the RTKL’s disclosure requirements should be narrowly
construed, and its exemptions broadly construed, and its assertion that its entire
application should be deemed to be exempt from disclosure. Additionally, we find that
the Commonwealth Court properly considered Harvest’s claimed exemptions to
disclosure under the RTKL, and did not abuse its discretion in finding certain information
[J-66A-C-2020] - 45
to be industry-wide in nature, and, thus, applicable to all applicants, including Harvest,
and other information to be applicant-specific, necessitating individualized assessment.
We vacate, however, the Commonwealth Court’s decision with respect to
Terrapin’s claim that it presented sufficient evidence that detailed competitive and security
concerns with respect to disclosure of its financial information. We find that, after Terrapin
supported its proffered exemptions regarding the disclosure of confidential financial
information, citing to competitive harm and security implications with affidavit and
argument, it was incumbent upon the OOR, and, ultimately, the Commonwealth Court, to
consider the alleged exemptions applicable to such financial information. Additionally,
we find that it was necessary for the OOR, and ultimately, the Commonwealth Court, to
review the information at issue – in camera if prudent – and to consider fully the reasons
proffered by Terrapin to support its claimed exemptions from disclosure. Thus, we
remand this matter regarding Terrapin to the Commonwealth Court for reconsideration in
this regard.
Accordingly, we affirm in part, vacate in part, and remand for proceedings
consistent with our decision today. Jurisdiction relinquished.
Chief Justice Baer and Justices Saylor, Donohue, Wecht and Mundy join the
opinion.
Justice Dougherty files a concurring opinion.
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