Town of Burlington v. Hospital Administrative District No. 1

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Town of Burlington vs. Hospital Administrative District No. 1 Number: 2001 ME 59 16, 769 A.2d 857 Year: 2001 State: Maine Court: Maine Supreme Judicial Court Other lawsuits in Maine Other lawsuits in 2001 Precedents include: This case established a functional equivalency test within Maine for entities to be considered functional equivalents to political subdivisions or public bodies. The criteria include: If the entity was performing a public function. If the entity was government funded. If the entity was controlled by a governing body. If the entity was created by legislation. The court specified that not all criteria are required but that all criteria are considered.

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Town of Burlington v. Hospital Administrative District No. 1 was a case before the Maine Supreme Judicial Court in 2001 concerning the applicability of open records laws to private corporations.

Important precedents

This case established a functional equivalency test within Maine for entities to be considered functional equivalents to political subdivisions or public bodies. The criteria include:

1. If the entity was performing a public function.
2. If the entity was government funded.
3. If the entity was controlled by a governing body.
4. If the entity was created by legislation.

The court specified that not all criteria are required but that all criteria are considered.

Background

• Hospital Administrative District #1 (HAD 1) was created as a quasi-municipal corporation by the legislature in 1967 and was charged with opening and maintaining a hospital in order to account for the needs of the 14 cities within the district. It is governed by a board of directors, elected by voters within the HAD 1 district. If a vacancy occurs between elections, a new member is appointed by municipal leaders. As a quasi-municipal corporation, the hospital is free to use tax dollars in order to pay back debt accrued. HAD 1 is allowed to do this through the issuance of bonds or direct taxation. HAD 1 is responsible for issuing an annual report to the citizens within the district and upon dissolution, all the property and assets of HAD 1 are to be liquidated to the cities within the district. HAD 1 also shares the same exemptions from tort claims as municipal subdivisions.
• HAD 1 opened Penobscot Valley Hospital and contracted with Quorum, a Delaware based hospital management company, in order to manage and operate the hospital. It is primarily funded with revenue from the Hospital but has issued bonds in the past.
• In 1993, the legislature modified the legislation enabling HAD 1 to include the requirement that the administrative records of the district and any corporation employed by the district for the purposes of managing district facilities are subject to the Maine Freedom of Access Act.
• In 1999 the Town of Burlington, a member of the district, requested records from HAD #1 including records relating the district's contract with Quorum and compensation information for a number of major hospital administrators who were quorum employees.
• HAD 1 and Quorum rejected the request, arguing that once the town was in possession of the records, they would officially become public and would thereby reduce the Hospital's competitive position within the region.
• The town filed suit and the district court ruled in favor of the town.
• HAD 1 and Quorum appealed the decision.

Ruling of the court

The trial court ruled in favor of the town, determining that the 1993 change in the enabling legislation rendered the records subject to the Maine Freedom of Access Act. They also went on to reject the hospital's trade secret exemption and ruled that the change in enabling legislation was not unconstitutional.

The Supreme Court affirmed the decision of the trial court. The court first established a criteria for determining whether the hospital is a public body by turning to legal action in other states, including Connecticut Humane Society v. FOIC, News and Observer Publishing Co. v. Wake County Hospital System and Cleveland Newspapers, Inc. v. Bradley County Memorial Hospital. The courts criteria included:

1. If the entity was performing a public function.
2. If the entity was government funded.
3. If the entity was controlled by a governing body.
4. If the entity was created by legislation.

The court chose to focus on these four criteria in an effort to establish a functional equivalence test to determine if HAD 1 was in fact a public body. The court established the following facts about HAD 1:

1. It served the public function of providing for the public health.
2. Its funding has come from bonds and it has the power to tax if need be.
3. The control of HAD 1 is in the hands of the voting population.
4. It was created by the legislature.

Based on these facts, the court determined that HAD 1 was in fact a public body subject to the records law. The court went on to determine that the contracts and compensation records in question were in fact public records under the law. The court went on to concur with the trial court that, because no attempt had been made in the past to keep the compensation of the administrators a secret, it was not considered a trade secret under the law and thus not exempt. Based on these factors, the court affirmed the decision of the trial court and ordered the records released.

See also

• Maine Freedom of Access Act

External links

• Ruling of the Court

Footnotes

Maine sunshine lawsuits
Lawsuit Year Town of Burlington v. Hospital Administrative District No. 1 2001