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Texas Supreme Court Protects “Private” Entities from the Purview of the Texas Public Information Act

“A private entity engaged in economically delicate work should not be subjected to invasive disclosure requirements merely because it counts the government as one client among many.”

On June 26, 2015, the Texas Supreme Court clarified what it means to be a “governmental body” for purposes of the Texas Public Information Act (“TPIA”).  Upon request, the TPIA requires “governmental bodies” to disclose “public information.”  Tex. Gov’t Code §§ 552.002(a), 552.021.  That is, only “governmental bodies” are subject to the TPIA.  The TPIA lists eleven specific “governmental bodies,” such as county commissioners, municipalities, and school district board trustees.  Tex. Gov’t Code § 552.003(1)(A).  The TPIA also includes a catchall provision, defining a “governmental body” as an organization “that spends or that is supported in whole or in part by public funds.”  Id.

In Greater Houston Partnership v. Paxton, the Texas Supreme Court examined whether the Greater Houston Partnership (“GHP”) was a “governmental body” under the TPIA because it receives public funds. The Attorney General, the trial court, and the Court of Appeals all determined that GHP was a “governmental body” subject to the TPIA because GHP “is supported in whole or in part by public funds.”  The Texas Supreme Court, however, disagreed. No. 13-0745 (Tex. June 26, 2015), opinion available here.

GHP provides event planning, consulting, and other economic development-oriented services to 2,100 member entities, which include the City of Houston.  GHP contracts with its members, and thus is paid by its members, with public funds.  Nevertheless, GHP disputed its characterization as a “governmental body” claiming it simply received “public funds [as] compensation for vendor services provided pursuant to an arm’s-length contract with the City.”

All of the parties before the Court agreed that GHP received “public funds.”  Accordingly, the narrow issue presented for the Court’s review was whether GHP was “supported in whole or in part” by public funds.  The TPIA, however, does not define what it means to be “supported” by public funds, and resorting to the dictionary, the Court determined that “supported” must mean “sustenance, maintenance, or both.”[1]

Stating such an interpretation would “injudiciously apply public transparency laws to private businesses merely because they receive public funds under a contract with the government,” the Court rejected that “support” equated to “maintenance.”  Rather, the Court determined that within the context of the TPIA, “support” must mean “sustenance” in order to ensure that an entity subject to the TPIA is an entity “whose existence is predicated on the continued receipt of government funds.”

In sum, the Court limited the definition of “governmental bodies,” which includes organizations “supported in whole or in part by public funds,” to only those organizations with a “financially dependent relationship” on a governmental body.  Finding that GHP received only a small portion of its revenue from government contracts, and was therefore not “supported by public funds,” the Court concluded that GHP was not subject to the disclosure requirements of the TPIA.

Many organizations “supported in whole or in part by public funds” once believed to be subject to the TPIA, may in fact be immune from its disclosure requirements.  Consequently, if your company or organization receives notice of a TPIA request, it would be wise to contact counsel well-versed in handling such matters before responding.  Between Greater Houston Partnership, and the Boeing decision, the Texas Supreme Court has made it much easier for private parties—even those receiving public funds—to protect information from disclosure under the TPIA.

[1]               In its analysis, the Texas Supreme Court necessarily rejected the approach from Kneeland v. Nat’l Collegiate Athletic Ass’n, 850 F.2d 224 (5th Cir. 1988).  The Kneeland test provided that an entity receiving public funds is a “governmental body” under the TPIA “1. unless the private entity’s relationship with the government imposes a specific and definite obligation to provide a measurable amount of service in exchange for a certain amount of money as would be expected in a typical arms-length contract for services between a vendor and purchaser; 2. if the private entity’s relationship with the government indicates a common purpose or objective or creates an agency-type relationship between the two; or 3. if the private entity’s relationship with the government requires the private entity to provide services traditionally provided by governmental bodies.”  Greater Houston P’ship v. Abbott, 407 S.W.3d 776, 783 (Tex. App.—Austin 2013, pet. granted), overruled by Greater Houston P’ship v. Paxton, No. 13-0745 (Tex. June 26, 2015).

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