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Westrom v. Minnesota Dep't of Labor and Industry

September 02, 2004

TORREY WESTROM, RESPONDENTS (C9-03-128), DENNIS WESTROM, ET AL., RESPONDENTS (C0-03-129),
v.
MINNESOTA DEPARTMENT OF LABOR AND INDUSTRY, APPELLANT (C9-03-128).



Heard, considered, and decided by the court en banc.

SYLLABUS BY THE COURT

1. Administrative orders that reflect conclusions based on investigative data, and the objections made to those orders by the subject of the investigation, qualify as "data collected" by the agency and, if they are part of an "active investigation," are confidential or protected nonpublic civil investigative data that are not accessible to the public.

2. The classification of civil investigative data, under Minn. Stat. § 13.39, subd. 2 (2002), as being "confidential data on individuals" or "protected nonpublic data" overrides the definitions of those terms that would otherwise be applicable under Minn. Stat. § 13.02, subds. 3 and 13 (2002).

3. Civil investigative data loses its character as protected nonpublic or confidential data on the commencement of an administrative contested case proceeding based on the investigation.

4. The privacy of data collected in an investigation undertaken pursuant to the workers' compensation act is not governed by that act, but by the more specific provisions of the government data privacy act.

The opinion of the court was delivered by: Hanson, Justice.

Dissenting, Page, J.

Affirmed.

OPINION

These consolidated appeals arise out of two separate actions that seek damages pursuant to the Minnesota Government Data Practices Act (MGDPA), Minn. Stat. §§ 13.01-.99 (2002). They are based on the release to the news media by appellant, the Department of Labor and Industry (DOLI), of orders and objections that are alleged to be confidential or protected nonpublic civil investigative data. The district court granted DOLI's motions for summary judgment, concluding that the released documents were "public" documents under the MGDPA and that the claims against DOLI should be dismissed with prejudice. The court of appeals reversed, holding that data reflected in the orders and objections were confidential or protected nonpublic data that should not have been released. Westrom v. Minn. Dept. of Labor & Indus., 667 N.W.2d 148, 153 (Minn. App. 2003). We affirm.

In July 1997, DOLI's Investigative Services Unit (ISU) began an internal investigation of Trendsetters Construction Company (Trendsetters) and WBC Construction (WBC), two companies that were owned by the individual respondents, who are members of the Westrom family (respondents will be referred to collectively as "the Westroms"). The investigation was made under Minn. Stat. § 176.181, subd. 3 (2002), to determine whether the two companies had obtained all compulsory workers' compensation insurance coverage. The ISU completed its internal investigation on March 6, 1998, and forwarded the investigation file to DOLI's Penalty Administrator. The Penalty Administrator calculated a monetary penalty and forwarded his recommendation to the Director of the Special Compensation Fund (Director)*fn1.

To this point in the investigation, no contact had been made with the Westroms and there is no indication in the record that they were aware of the investigation. On March 25, 1998, by way of an Order to Comply and Penalty Assessment, the Director notified respondents Dennis, Torrey, and Trevor Westrom,*fn2 and Trendsetters and WBC, that the ISU of DOLI had determined that the Westroms had violated Minn. Stat. § 176.181, subd. 2 (2002), because they "did not have workers' compensation insurance for the period 05/01/96 to 06/30/97." The order directed the Westroms to obtain insurance and assessed a monetary penalty.

The Westroms submitted written objections to the order, alleging that Trendsetters had inadvertently allowed its insurance to lapse but had obtained new insurance; that Torrey Westrom did not direct or control the activities of any employees of Trendsetters during the alleged violation period; that WBC is a partnership and the only respondent who had a partnership interest in it was Trevor Westrom; and that WBC "had no employees during the times at issue" and was exempt from any compulsory workers' compensation insurance requirements.*fn3

After the objections were submitted, the Attorney General's office submitted discovery requests to the Westroms in July 1998. On September 24 and 25, 1998, DOLI issued two Amended Orders to Comply and Penalty Assessments, one applicable to Trendsetters and the other to WBC. The Westroms submitted written objections to the amended orders. With respect to Trendsetters, the Westroms alleged that Torrey Westrom did not direct or control the activities of any employee and was thus entitled to dismissal as an individual; that Trendsetters maintained workers' compensation coverage in November 1995; and that any lapse in coverage was inadvertent and was remedied as soon as the error was discovered. With respect to WBC, the Westroms alleged that Dennis Westrom and Torrey Westrom were not affiliated with WBC and should be dismissed from the action as individuals and that WBC was not required to carry workers' compensation insurance because it had no employees during the penalty period.

As early as October 19, 1998, DOLI released copies of the amended orders of September 24 and 25, 1998, and the objections to those orders, to various news organizations. DOLI has not shown in the record that on the date of that release the orders and objections had already been filed as part of a Petition for Expedited Hearing with the Office of Administrative Hearings, which would have commenced an administrative proceeding. Minn. Stat. § 176.181, subd. 3(b) (2002). In fact on October 19, 1998, an Assistant Attorney General sent the Westroms a letter informing them that DOLI had not filed a Petition for an Expedited Hearing as of that date and reiterating DOLI's willingness to "resolve these matters in an informal settlement conference." On October 26 and 27, 1998, DOLI released additional copies of the orders and objections to other news organizations. Again, the record does not disclose whether a Petition for an Expedited Hearing had been filed by those dates.

On December 28, 1998, the Westroms wrote to the Assistant Attorney General, requesting "a copy of any and all materials in your file, other than, of course, your personal notes and your correspondence with your client" in connection with "this investigation[.]" The Westroms also asked for clarification on "the status of this file under the Data Privacy Act" and inquired whether "that status [would] change now that the matter [was] filed for hearing[.]"*fn4 The record does not contain any other information regarding the filing of a Petition for Expedited Hearing on these matters.*fn5

On April 28, 1999, the Assistant Attorney General wrote the Westroms a second letter responding to their December 1998 request for clarification. The Westroms interpret the Assistant Attorney General's response of that date to state that "the matter was still 'pending' and was an 'active investigation.'" This may be a fair inference, but the letter was more general, stating:

As I mentioned in [my February 22, 1999,] letter, all documentation retained by a state agency is presumed "public" unless classified to the contrary by Minnesota Statutes Chapter 13. As I understand the Data Practices Act, all documents maintained by a state agency during an active investigation or while a matter is "pending," is "protected nonpublic data" in the case of data not on individuals or "confidential" in the case of data on individuals.

The statute allows an agency discretion, however, to make any data classified as "confidential" or "protected nonpublic" available to the public if "access will aid the law enforcement process, promote public health or safety or dispel widespread rumor or unrest." Minn. Stat. § 13.39, subd. 2. [sic] (1998). At this time, I do not foresee invoking that discretion. If you [sic] client's confidentiality is of great concern, you may want to seek a protective order barring the agency from responding to a data practice request.

On February 20, 2000, pursuant to a request by the Westroms, the Commissioner of the Department of Administration, the state agency charged with the primary responsibility for enforcing and administering the MGDPA, issued an advisory opinion concluding that the documents released by DOLI were active investigative data under Minn. Stat. § 13.39 (2002), and that DOLI's release of these documents violated the protections of the MGDPA. According to the Commissioner, "[t]he process had not yet reached a conclusion but DOLI still released data about X while his/her appeal was pending." On August 4, 2000, pursuant to a request by DOLI, the Attorney General contradicted that conclusion in an advisory opinion that the orders and objections were public data within the meaning of Minn. Stat. § 13.39.

In January 2002, the Westroms commenced this action against DOLI for damages under the MGDPA. The district court granted DOLI's motion for summary judgment, concluding that the orders and objections were public documents, the release of which was permitted by the MGDPA. The court of appeals reversed, holding that data reflected in the orders and objections was confidential or protected nonpublic data. We granted DOLI's petition for further review.

We review a grant of summary judgment to determine whether there are any genuine issues of material fact and whether the district court erred in applying the law to the facts. Jorgensen v. Knutson, 662 N.W.2d 893, 897 (Minn. 2003). When a district court grants summary judgment after applying the law to undisputed facts, we review the legal conclusion de novo. Lefto v. Hoggsbreath Enters., Inc., 581 N.W.2d 855, 856 (Minn. 1998). Statutory construction is also reviewed de novo. State v. Colosimo, 669 N.W.2d 1, 8 (Minn. 2003). We must, however, view the evidence in the light most favorable to the party against whom summary judgment was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).

I.

The Westroms argue that the orders and objections released by DOLI reflect civil investigative data that are confidential or protected nonpublic data under Minn. Stat. § 13.39, subd. 2(a) (2002). DOLI argues that the data in the orders and objections are not civil investigative data because (1) DOLI did not "collect" these orders and objections; (2) the orders and objections were created after the investigation was complete, and, therefore, were not a part of the fact-finding or investigative process; and (3) the orders and objections do not fit within the statutory definition of either "confidential data" or "protected nonpublic data." DOLI also claims that the orders and objections constitute public documents under sections of the Workers' Compensation Act. Minn. Stat. §§ 175.10, 175.24 (2002). Review of these claims requires us to analyze and compare several provisions of the MGDPA.

Overview of the MGDPA

All state agencies are required to "make and preserve all records necessary to a full and accurate knowledge of their official activities." Minn. Stat. § 15.17, subd. 1 (2002). Under subdivision 4 of section 15.17, access to these records is governed in relevant part by section 13.03 of the MGDPA. Section 13.03 provides in part:

Upon request to a responsible authority or designee, a person shall be permitted to inspect and copy public government data at reasonable times and places * * *.

If the responsible authority or designee determines that the requested data is classified so as to deny the requesting person access, the responsible authority or designee shall inform the requesting person of the determination * * * and shall cite the specific statutory section, temporary ...


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