In a fitting climax to Sunshine Week, 2018, the Kentucky Supreme Court heard oral argument on March 15 in Department of Revenue v. Mark F. Sommer. The question before the Court is whether the public has a right to know how the Department of Revenue interprets Kentucky’s tax laws in recurring taxpayer protests.

In October, 2017, the Bluegrass Institute Center for Open Government filed an amicus curiae, or friend of the court, brief in which it urged the Kentucky Supreme Court to affirm a Court of Appeals’ opinion recognizing that right.

The Bluegrass Institute Center for Open Government is not a party to the appeal but filed the brief “because it has an immediate and direct interest in ensuring that interpretation of the Open Records Law, the issue that lies at the heart of this appeal, continues to reflect the legislatively and judicially recognized presumption of openness for the public good.”

The case involves a 2012 open records request submitted to the Finance and Administration Cabinet,  Department of Revenue, for copies of unappealed “final rulings” in tax protests brought under KRS 131.110. Revenue issues these final rulings when the tax issues cannot be resolved through the informal dispute resolution process found in KRS 131.110. It has consistently denied the public access to the rulings based on taxpayer privacy and, in this case, the assertion that redaction of personal information from the rulings would impose an unreasonable burden.

The Court of Appeals determined that production of the unappealed final rulings “is not prohibited by any provision of law.” “Quite the contrary,” the court reasoned, as long as the rulings are “suitably redacted by the Department of Revenue to protect taxpayer privacy,” production “is required by our Open Records Act.”

“[T]he substantive portions of final rulings,” the court observed, “contain a wealth of information relative to the implementation of our tax laws” to which the public has been denied access under Revenue’s “unreasonably and overly broad view of KRS 131.190(1)(a) and KRS 131.081(15).” The court rejected Revenue’s claims and concluded that “great bodies of information related to the reasoning and analysis of the Department of Revenue with respect to its task in administration of our tax laws . . . can indeed be made public without jeopardizing the privacy interests of individual taxpayers.”

In her introductory comments to the justices, counsel for the Department of Revenue characterized the case as one that “tests the integrity of taxpayer privacy laws.” These laws, she was quick to point out, are based on assurances of taxpayer confidentiality which, in turn, promote taxpayer candor and frank discussion. The confidentiality statutes upon which the Department relies, she concluded, erect an absolute barrier to public disclosure of the rulings even if all personal identifiers are redacted.

Sommer’s counsel responded that Kentucky’s laws support “twin goals”: taxpayer privacy and the public’s right to know.  It was her position that neither goal must be sacrificed if the ostensibly conflicting laws are properly harmonized in an opinion of the Court requiring disclosure of properly redacted final rulings that “de-identify” the taxpayer.

Blanket nondisclosure of  the body of “secret law” that guides or does not guide -- even this issue is disputed -- Revenue’s handling of taxpayer protests, Sommer’s counsel concluded, serves neither goal. Disclosure of redacted final rulings, on the other hand, will ensure the public’s right to know that Revenue uniformly and consistently interprets and applies tax laws, provide guidance to taxpayers, reduce litigation and promote efficiency.

As I’ve previously stated, “I learned long ago not to try to predict the likely outcome of a case based on the Court’s interaction with counsel.”

At Thursday’s oral argument, the justices focused on the absence of any language in Kentucky taxpayer privacy laws that “make confidential” the final rulings in their entirety, but expressed concern about the challenges associated with meaningful redaction. They seem to give little credence to Revenue’s argument that redaction of the one or two final ruling issued weekly would constitute an unreasonable burden, but questioned how these redactions should be made without specific guidance.

Sommer's counsel asserted that the appellate courts have provided ample guidance in past opinions balancing the public’s right to know against personal privacy rights and defining the scope of permissible redaction.

Department of Revenue v. Sommer is, in fact, the most recent in a long line of open records cases that reflect the tension between these often competing rights and interests. Even the staunchest open government advocates acknowledge the legitimacy of the policies that support the statutory exceptions to the presumption of openness which informs our open record law. These policies are often forgotten in the rancorous arguments for and against public access.

The issue is again before Kentucky’s highest court in a case that will settle, at least in this factual context, whether privacy rights and the public’s right to know can be harmonized. How better for Kentucky to conclude the annual celebration of open government and the principle that “Access to information concerning the conduct of the peoples' business is a fundamental and necessary right of every citizen.”