Johnson Controls, Inc., of Milwaukee, is managing a $79 million construction project for St. Louis County schools.
A case before the Minnesota Supreme Court has broad implications on whether documents held by a private company should be made public if the work the firm is doing is funded by taxpayers.
Johnson Controls, Inc., of Milwaukee, is managing a $79 million construction project for St. Louis County schools. Johnson Controls hired a subcontractor, Architectural Resources Inc., of Hibbing. The companies have refused to release their business contract to Timberjay Newspaper, which sued to get access to the document under the Minnesota Government Data Practices Act.
Timberjay editor Marshall Helmberger said examining the contract could help the district determine whether it could recover any of cost overruns.
"There were a significant number of architectural problems — things that had to go back and be redone through the change order process because there were designs that were not up to state code," he said. "Unfortunately, this ended up increasing the cost of the project."
Johnson Controls argues the contract contains trade secrets and is not subject to the state's open records law.
During oral arguments Monday, attorneys for Johnson Controls said its subcontract with an architectural firm to design new schools and remodel others was not subject to Minnesota's open records law because the agreement wasn't carrying out a government function.
The Minnesota Government Data Practices Act says the government must provide data to the public, and when the government hires a third party to complete its functions, that third party is subject to open records requests. The question is, what is a government function?
"It is something the government has historically done or by statute is responsible to do. If they transfer that, and the notice is in the contract, they will be treated as if they were a government entity," argued Todd Wind, an attorney for Johnson Controls.
Wind said deciding to build schools and deciding what facilities they should have is a government function, but the design and other details is not.
The Timberjay newspaper cited the Data Practices Act when asking Johnson Controls for a copy of its subcontract with Architectural Resources. The newspaper's attorney, Mark Anfinson, argued that Johnson Controls' definition makes it difficult for the public to ensure their tax dollars are being well spent.
"Theirs is profoundly narrow," Anfinson said of the definition. "Once you go (Johnson Controls') way or any other more complex and nuanced rule about defining government function, who are the winners and who are the losers? I'll tell you who are the losers. The public for sure."
But Johnson Controls and the architectural firm, Architectural Resources, argued that subcontract agreements between private companies can contain trade secrets and information they want to keep out of the hands of their competitors.
"There's no stopping point," attorney Steven Lindemann argued on behalf of Architectural Resources. "That's what makes this case so difficult and so concerning to the design and construction community."
Attorney Dean Thomson, who has represented the Minnesota Associated General Contractors, said state law clearly states that government officials have to provide access to certain information, but it's different when a private company holds the information.
"You have a lot of proprietary data that one contractor wouldn't want his competitors to know," he said. "If contractor X has proprietary pricing in his contract, what would prevent contractor Y from filing a data practices act request and saying I want to see all the pricing that contractor x has? We'd get into all sorts of arguments about what has to be produced and what doesn't have to be produced. Currently, we don't have that."
Thomson expects that if the Supreme Court rules in the newspaper's favor, it would change the way private contractors work with public entities, Minnesota Public Radio News reported (http://bit.ly/ZLTyOn).
"It's a tremendous cost to organize information with the idea that it may need to be produced at a moment's notice," he said. "You'll get less construction for your public dollar because part of that dollar will be spent trying to keep track of documents so they can be produced."
Last fall, the Minnesota Court of Appeals concluded that Johnson Controls performed a governmental function, so project records are public data under state law.
Monday's case was argued before 600 students at Roseville Area High School.