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HomeMy WebLinkAboutCOM 0075.017 2002-2004 JUNG &VASSAR, P.C. ATTORNEYS AT LAW A LAW CORPORATION ~.F 75770 HUALALAI ROAD, SUITE # D-274 KAILUA-KONA, Fd 96740 FRANCIS L IUNG (N), DC & HO (BOR) ]26-0852 WASHPOGTOP O BOX 8 THOMAS W. VASSAR (MD, V A, tK d M) FAX (BOB) 326-7900 E~Mail junglaw@gm.nel ARLINGTON. VIRGR4IA 22219-2548 (703)4652142 FAX (703)465-2146 vassarlaw@hIXmail.com BEFORE THE HAWAII COUNTY COUNCIL June 18, 2003 Testimony of Francis L. Jung, Esquire Appearing on Behalf of PFI Rubbish Services, Inc. in Opposition to the Adoption and Enactment of Draft 7, Bi1136 Amending Chapter 20- 46(cl of the Hawaii County Code RelatinP to the Refuse Fees Mr. Chairman, members of the Hawaii County Council and staff, my name is Francis L. Jung. I am an attorney and a senior member of the law firm of Jung & Vassar, P.C. located here in Kona. I am appearing and testifying today on behalf of PFI Rubbish Services, Inc., a collector of residential solid waste, regazding the proposed draft 7 of Bill 36 requiring solid waste haulers to provide the County of Hawaii with Confidential Customers Lists on a monthly basis for the purpose of~ auditing the validity of claimed tipping fee credits. The Present Method of Auditing Customer Lists Solid waste haulers now pay a tipping fee to the County of Hawaii directly in proportion to the amount of waste they deposit in County sanitary landfills. Currently, the County of Hawaii provides a credit to haulers based upon the number of residential units serviced. This tipping fee credit is based upon the fact that taxes are already paid by residents for the privilege of utilizing County sanitary landfills which aze, in turn, subsidized by County taxes. In order to verify the number of resident customers and tipping fee credits earned by solid waste collectors, the County audits the books of collection companies in order to determine and verify the actual number of customers under contract who are serviced and billed by the solid waste collection company. Comm. No Ref. To: CI I def. mate "CESTIMONY OF FRANCIS L. JUNG, ESQUIRE June 1 S, 2003 Page Two The New Proposal The new proposal would not eliminate in house audits of customer lists by County officers but would require solid waste collection companies to divulge and release to the County of Hawaii confidential customer lists on a monthly basis for auditing on an ad hoc basis as and when determined by County officials. Linder the proposed new procedure, the County of Hawaii would not only collect this information but would also be obligated to maintain and protect confidential business information placed in its hands. The Proposed Requirement is Overly Broad. The present system of auditing customer lists through the use of in house audits is more than adequate for the purpose of establishing the validity of the amount and number of tipping fee credits owed to residential solid waste collectors. This inspection method alone is sufficient to protect the confidentiality of customer lists and still provides the County with the ability to verify the accuracy of tipping fee credits claimed by haulers. The proposed draft amendment, on the other hand, increases the amount of monthly paperwork to residential solid waste collectors and hence increases the probability of rate increases to consumers. Moreover, the accumulation and storage of such customer lists creates added personal and storage costs for the County of Hawaii not to mention the potentiality for lawsuits. Customer lists are highly confidential. Should certain solid waste collectors gain access to such lists, they could receive an unfair advantage over competing companies. It would not take an intentional act on the part of County employees to accomplish such a result. The mere negligence of an employee in failing to lock a file cabinet, the co-mingling of files, or even the failure to turn off a computer could result in unauthorized and/or unintended access to such information. If so, the County of Hawaii could be held liable for negligence for not protecting the confidentiality of business customer lists which aze not readily available to the public but, to the contrary, are confidential material entrusted to County officials for safekeeping. See, OIP Opinion Letter 94-14 dated August 1 Q 1994, attached hereto. TESTIMONY OF FRANCIS L. JUNG, ESQUIRE June 18, 2003 Page Three In short, the proposed ordinance draft seeks information in a form not needed by the County of Hawaii, creates a duty not needed by the County of Hawaii, and subjects the County of Hawaii to liability which is certainly not needed by the County of Hawaii. Accordingly, it is respectfully requested that the proposed draft not be adopted or enacted by this body. Thank you far your time and consideration. Respectfully submitted, JUNG & VASSAR, P.C. A Law Corporation F CIS L. JUNG Counsel to PFI Rubbis Servi s, Inc. Jun 18 03 07:10a TYLER 808 3256452 p.4 Office of Information Practices Opinions Page I of 4 Office of Information Practices Opinions Honorable Yukio Kitagawa July 27, 1996 Page August 10, 1994 The Honorable Yukio Kitagawa Chairperson, Board of Agriculture 1428 S. King Street Honolulu, Hawaii 96814-2512 Attention: E,arry M. Nakahara, Manager Plant Quarantine Branch Dear Mr. Kitagawa: Re:Records Concerning the Importation of Green Coffee Beans This is in response to your memorandum dated February 23, 1994 [o Attorney General Robert A. Marks requesting an opinion concerning the public's right to inspect and copy the above-referenced government records. In accordance with established protocol, your letter was forwarded to the Office of Information Practices ("OIP") for the issuance of an advisory opinion. ISSUE PRESENTED Whether, under the Uniform Information Practices Act (Modified), chapter 92F, Hawaii Revised Statutes ("UIPA"), import permits, inspection reports, shipping manifests, and invoices maintained by the Department of Agriculture concerning the importation of green coffee beans into the State must be made available for public inspection and copying upon request. BRIEF ANSWER Yes. However, information in the import permits, inspection reports, shipping manifests, and invoices that reveals the price or quantity of the imported green coffee beans constitutes "confidential commercial and financial information" because the disclosure of this information would likely result in substantialharm to the competitive position of the importer. Consequently, all information in the aforementioned records that reveals quantity or price is protected by the UIPA's "frustration of a legitimate govemment function" exception and must be segregated from the requested records before they aze disclosed. FACTS The State Department of Agriculture, Plant Quarantine Branch, regulates the quazantine of plant and non-domestic animals imported into the State. Records maintained by the Department regazding the importation of green coffee beans include import permits, inspection reports, shipping manifests, and invoices. Importers of green coffee beans must file an "Import Permit" ("Permit") with the Plant Quarantine Branch. A blank copy of the Permit is attached as Exhibit "A." The Permit authorizes the importation of a certain quantity of a commodity, in this case, green coffee beans, within a certain time period. Other information contained on the Permit includes the date of the permit, the permit number, conditions of importation, the name and address of the shipper, and the name, address, and telephone number of the importer. The form also contains signature lines for the Chief Plant Inspector, and the Chairperson of the Board of Agriculture. http://64.29.92.28/RW/L.egal Reseazch/Hawaii/Info/94-14.htm 5129/03 Jun 18 03 07:06a TYLER 808 3256452 p.4 Office of Information Practices Opinions Page 2 of 4 The Permit may also contain remarks indicating the date and time when the coffee bean shipment was inspected and whether the shipment requires fumigation. Some of the Permits also contain notes concerning the date and time the shipment was fumigated, the type and amotmt of fumigant used, the name of the fumigator, and the date and time the fumigant was exhausted from the shipment. The Plant Quarantine Branch requires all imported green coffee brans to be treated to prevent the spread of coffee rust disease. Importers may either fumigate the beans before shipping, in which case there must be a certification of treatment attached to the shipment, or importers may arrange for a pesticide applicator to fumigate the beans at the port of entry in Hawaii. Untreated beans are quarantined until treated by a pesticide applicator. The Plant Quarantine Branch's Inspection Report, a blank copy of which is attached as Exhibit "B," contains the following information: I. Port 2. Arrival date 3. Ship 4. Origination of ship 5. Shipment number 6. Baggage Claim Check number 7, Inspection date/time 8. Name of inspector 9. Permit number and date 10. Commodity and amount 11. Remarks 12. Consignor's name and address 13. Consignee's name and address 14. Pest found 15. Treatment 16. Chazges (dollar amount) 17. Disposition (Passed, Treated, Pending, Returned to Shipper, or Destroyed) 18. Date delivered 19. Time 20. Person who delivered 21. Signature of importer or agent 22. Remazks/Additional Commodity The Plant Quarantine Branch also requires all imported shipments of green coffee beans to be accompanied by an invoice or shipping manifest listing the amount and type of coffee beans being shipped. The sample invoices that were provided for the OIP's review contained the following types of information: I.Name, address, and telephone number of the consignor 2.Name and address of the purchaser 3.Invoice number 4.Invoice date S.Ship 6.Ship date 7.Due date 8.Terms of shipping 9.Customer Identification Numbcr ] O.Purchase Order date 11.Seller's order number 12.Name of salesman 13.Product identification 14.Description of product lS.Amount ordered 16.Amount shipped 17.UniUMeasure (of shipment) 18.Unit price 19.Amount 20.Tax 21. Total The Plant Quarantine Branch also maintains copies of shipping manifests relating to imported green coffee beans. Samples of these shipping manifests provided for the OIP's review contained tfie following types of information: 1. Name and address ofconsignor Z. Name and address of consignee 3. Destination 4. Route 5. Delivering Carrier 6. Car number 7. Number of packages 8. Description of articles 9. Weight of each unit 10. Freight charges [ 1. Total weight 1 Z. Total freight charges In a request to Larry Nakahaza, Manager of the Department of Agriculture's Planf Quazantine Branch, dated February 8, 1994, Jeff Citron, Legislative Chairman ofthe Kona Coffee Council, requested copies of"permits issued to all companies that brought shipments of green coffcc" to the Big Island. He also requested copies of all the invoices, shipping manifests, packing slips or orders slips that were shipped with the coffee beans. DISCUSSION Under the UIPA, "[a]ll government records are open to public inspection unless access is restricted or closed by law." Haw. Rev. Stat. 0 92F- L 1(a) (Sapp. 1992). Further, section 92F-11(b), Hawaii Revised Statutes, provides that "[e]xcept as provided in section 92F-13, each agency upon request by any person shall make government records available for inspection and copying during regular business hours." http://64.29.92.28/RW/Legal_Research/[-iawaii/Infol94-14.htm 5129/03 Jun 18 03 07:10a TYLER 808 3256452 p.3 Office of Information Practices Opinions Page 3 of 4 Of the five exceptions to required agency disclosure in section 92F-13, Hawaii Revised Statutes, only one exception possibly applies to the records at issue here. Section 92F-13(3), Hawaii Revised Statutes, states that the UIPA does not require the disclosure of"[g]overnment records that, by theirnature, must ldential in order for the government to avoid the frustration of a legitimate v lion." ~ One examp a prove e y a re of informatlo o ec y rs stration" exc°~tion is "trade secrets or confidential commercial and financial information." See S. Stand. Comm...~p. No/ 2580, 14th Leg., 1988 Reg. Sess., Haw. S.J. 1093, 1095 (1988). f- The federal Freedom of Information ct, .S.C. 0 552 (1988} ("FOIA"), contains a similar exemption for "trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential." S U.S.C. oS52(b)(4) (1988). [In several previous OIP opinion letters, we found guidance incase law applying Exemption 4 of FOIA when determining whether information constitutes "confidential Commercial and financial information." See OIP Op. Ltr. No. 92-17 (Sept. 2, 1992); OIP Op. Ltr. No. 93-L (April 8, 1993).] Determining whether commercial or financial information in a requested record is "confidential" has been the critical issue in most Exemption 4 litigation. The applicable standard for determining whether such information is "confidential" is set forth in a two-part test created by the Court of Appeals for the District of Columbia Circuit in National Pazks & Conservation Association v_ Morton, 498 F.2d 765 (D.C. Cir. 1974): To summarize, commercial or financial matter is "confidential" for purposes of the exemption if disclosure of the information is likely to have either of the following effects: (1) to impair the Government's ability to obtain necessary information in the future; or (2) to cause substantial harm to the competitive position of the person from whom the information was obtained. National Pazks at 770. The OIP has applied this two-part test in previous opinion letters to determine whether commercial and financial information is "confidential." ~ OIP Op. Ltr. No. 92-17 (Sept. 2, 1992); OIP Op. Ltr. No. 91- 29 (Dec. 23, 1991); and OLP Op. Ltr. No. 90-21 (June 20, 1991). We do not believe that the first prong of the two-part National Parks test applies to the facts presented. Disclosure of the records is not likely to impair the government's ability to obtain necessary information in the future because the importer is required to submit the records in ordtt to import the coffee beans into the State. See OIP Op. Ltr. No. 91-16 at I 1 (Sept. 19, 1991) and cases cited therein. However, we must determine whether the second prong of the National Pazks test would apply to protect certain information contained in the records requested. The records provided for the OIP's review include information such as quantity and price of the beans shipped. We believe that this information, if disclosed, could result in substantial harm to the competitive position of the importer. Under federal case law, price and quantity information has been found to be protected under the second prong of the National Parks test. In Timken. Gompan~ v. United States Customs Service, 491 F. Stipp. 557 (D.D.C. 1980), the District Court of Columbia held that the disclosure of the price and quantity of roller bearings imported from Japan would cause competitive injury to both importer and exporter because the information would enable competitors and customers to estimate profit margins and production costs, and thereby give competitors insight into the company's competitive strengths and weaknesses. Thus, the court found that the price and quantity data was protected from disclosure by Exemption 4 of the federal FOIA. See also Braintree Electric Licht Department v Department of Enema, 494 F. Stipp. 287, 289 (D.D.C. 1980) (selling prices, inventory balances, thrupui charges, profit margins, purchase activity, freight charges, and cost of goods sold are protected under Exemption 4). Consequently, we are of the opinion that any information'revealing the quantity or price of the green coffee beans imported into the State should be segregated from the import permits, the inspection reports, the shipping manifests, and the invoices before they are disclosed to the public. However, the http://64.29.92.28/RW/Legal_ Research/I-IawaiVInfo/94-14.htm 8/29/03 Jun 18 03 07:06a TYLER 808 3256452 p.5 Office of Information Practices Opinions Page 4 of 4 remaining information in the records would not constitute "confidential commercial and financial information" and, therefore, should be made available for public inspection and copying upon request. As a final note, we observe that section 92F-12(a)(13), Hawaii Revised Statutes, which specifically makes public "[r]osters of persons holding licenses or permits granted by anagency that may include name, business address, type of license held, and status of the license," does not apply to the present situation. The records requested concern the importation of green coffee beans, not a roster of the Import Permit holders. CONCLUSION The UIPA's "frustration of a legitimate government function" exception, which protects "confidential commercial and financial information;' applies to the quantity and price information in the import permits, the inspection reports, the shipping manifests, and the invoices concerning the importation of green coffee beans into the State. This information must be segregated from the records before they aze made publicly available under the UIPA. Very truly yours, Stella M. Lee Staff Attorney APPROVED: Kathleen A. Callaghan Director SMLsc Attachments c: IeffCitron Kona Coffee Council OIP Op. Ltr. No. 94-14 BACK ~ Home I Ab~ut_HSBA ~ Hawaii f;esoun:es ~ Othcr Reso~w ces I Contact H$BA I GnpAia Version ITest-Onh Version. http://64.29.92.28/RW/Legal Reseazch/Hawaiillnfo/94-14.htm 5!29/03