National Sunshine Week started yesterday. That’s not a celebration of daylight saving time, which started the same day. But the two could be connected. Yesterday’s annual conversion to daylight saving time is supposed to give everyone some extra literal sunshine toward the end of the day. Sunshine Week is an occasion to remind ourselves of the extra figurative sunshine in our governance – ensured in many states through legislation enacted in the 1970s.
Sunshine Week is an occasion to remind ourselves that open government is good government.
Michigan has two laws that are key to open government: the Open Meetings Act (OMA) and the Freedom of Information Act (FOIA). Both of these laws rely crucially on good faith. For example, the FOIA allows a public body to deny access to certain public records – like those that are protected by the attorney-client privilege.
If a record is requested and then denied based on the attorney-client privilege, a requester has no way of judging whether the assertion of privilege is appropriate. A requester relies on the good faith of government officials that privilege is not inappropriately extended to records that are not in fact protected by privilege. A requester can resort to a lawsuit, which under Michigan case law can result in the review of the records by a judge to confirm – or refute – the public body’s assertion of privilege. But few requesters have the wherewithal to file a lawsuit over a FOIA denial.
Here at The Ann Arbor Chronicle, we’re celebrating Sunshine Week by laying out a recent occasion when we requested records under the FOIA, were denied the records, appealed to the city administrator, were denied under the appeal, but then were able to obtain some of the records by other means. The record in question is an email written by Ann Arbor city attorney Stephen Postema. This provides an opportunity to evaluate independently, without filing a lawsuit, whether the city inappropriately asserted attorney-client privilege in denying access to a record.
We consulted on the matter with an attorney, Marcia Proctor, who agreed to analyze the relevant factors in a hypothetical scenario. Proctor is former general counsel of the Michigan Bar Association, a specialist in legal ethics, whose practice specializes in professional responsibility for lawyers and judges.
We first present the hypothetical scenario, followed by a brief discussion of the relevant factors in the scenario identified by Proctor. We then present the text of the email and apply the various tests outlined by Proctor. We reach the conclusion that the city inappropriately asserted attorney-privilege to the document.
We then evaluate whether a different exemption provided by the FOIA might apply. That exemption allows a public body to withhold communications internal to the body – to the extent that they are non-factual and preliminary to a final decision by the body. In the balancing test prescribed by the state statute, we reach a different conclusion than the city did: We think the public interest in disclosure outweighed any interest the city had in shielding this frank internal communication from public view.
Finally, we urge the city council to weigh in on the city’s administrative policy on FOIA response, which is currently being revised. It’s important for councilmembers to set the overarching principle that guides the city’s FOIA responses. And we think that guidance should be biased in favor of disclosure.
Here’s the hypothetical scenario we outlined for Proctor:
The results of a city’s annual financial audit are presented to the city’s audit committee at a regularly scheduled public meeting. Among the items in the report, and highlighted by the auditor orally, are instances of an employee who claimed mileage reimbursements while at the same time receiving a vehicle allowance. The auditor characterizes the instances as a “double dip” and violation of city policy. The records produced under a FOIA request identify the employee as the city attorney. The city attorney reports directly to the city council, and serves at the council’s pleasure.
Sometime after the meeting, the city attorney writes an email to all city councilmembers, the chief financial officer and the city administrator, addressing his reimbursements identified in the audit report.
Subsequently a second meeting of the audit committee is convened, in part to discuss the mileage reimbursements. The records produced under a second FOIA request exclude the city attorney’s email, and an appeal to the city administrator challenging the denial is unsuccessful.
Factors to Consider
Proctor identified four key factors to consider, in evaluating whether the email described in the hypothetical scenario might have attorney-client privilege properly attached. Summarizing Proctor, in Michigan the attorney-client privilege attaches to information satisfying the following factors:
- The information is a communication;
- The communication is made in confidence by a client to his or her attorney (or by the attorney to his client);
- In the communication, the attorney is acting as legal advisor;
- The communication must be for the purpose of obtaining legal advice on some right or obligation.
In the hypothetical, Proctor noted that the record in question is an email communication, thus satisfying Factor 1.
With respect to Factor 2, Proctor identified as relevant whether all the parties copied on the email – representatives of finance and administration – are ongoing clients in the scope of the city attorney’s duties. Although it wouldn’t be unusual for finance and administrative staff to be included in the scope of the city attorney’s duties, Proctor notes that if the city attorney’s duties don’t cover giving advice to those staff, then communications that include a third party are generally not privileged. She also identified as relevant whether there was a label or some other indication that the communication was made in confidence. Based just on the limited facts in the hypothetical scenario, Proctor couldn’t conclude whether Factor 2 would be satisfied.
For Factor 3, Proctor highlighted that attorney-client privilege applies just when the lawyer is acting as legal advisor to the client in the matter. In the hypothetical scenario, she observed, it’s the city attorney’s own conduct that appears to be the core subject matter of the communication – given that the auditor’s report has called into question whether the city attorney’s mileage reimbursements were proper. Proctor noted that under lawyer ethics rules, a conflict of interest between a client’s interest and the lawyer’s own interests can prevent a lawyer from advising the client. But if the lawyer is not advising the client as the client’s lawyer, then the communication cannot be privileged.
Also related to Factor 3, Proctor notes that a lawyer might be asked to perform a variety of functions beyond providing legal advice – including providing input on business, financial or political issues. The email described in the hypothetical scenario, Proctor observed, appears to relate to the business duties of the audit committee. It’s only when the lawyer is acting as a lawyer for the client that a communication can be privileged, Proctor stressed.
Under Factor 4, Proctor indicated that if the purpose of the email is merely to explain the city attorney’s own past acts, not to advise the city council on some right or obligation, then the attorney-client privilege would not apply. The attorney-client privilege only protects the legal advice requested or provided, Proctor notes, and does not protect underlying facts relating to the subject matter.
Here we note that Proctor’s identification of the relevant factors in the hypothetical scenario should not be construed as Proctor making any claims about anyone’s professional conduct.
City Attorney’s Email
The hypothetical scenario is consistent with an actual recent scenario. How do the four relevant factors apply to the actual text and context of the email? We think that application of the four factors leads to the clear conclusion that the email in question was improperly withheld under Michigan’s FOIA under the exemption covering the attorney-client privilege.
City Attorney’s Email: Full Text
We’ve numbered the paragraphs for ease of reference.
1. From: Postema, Stephen
Sent: Fri 1/18/2013 5:03 PM
To: Postema, Stephen; *City Council Members (All)
Cc: Powers, Steve; Crawford, Tom
Subject: RE: Privileged and Confidential: FW: File: A05-01217 Litigation Updates Mayor and Council:
2. This is to inform you that I am back in the office after a restful vacation in Costa Rica with two of my children. However, I came back with a bad case of bronchitis. My body is clearly not used to all that rest.
3. It is always interesting to find what issues have arisen when one leaves. When I came in on Wednesday, I met briefly with Tom Crawford to discuss e a copy of the audit report. I had never seen the audit report, much less the paragraph on “reimbursement” issues, although Tom had discussed just in general terms the issue with me on December 31st when he asked about my contractual provisions and I gave him the appropriate paragraphs.
4. I will provide you additional information in a longer memo, but the audit report is obviously incorrect:
5. First, there is no violation of City policy as stated. Tom and I called the auditor on Wednesday to inquire what City policy he was referring to. (Steve Powers agreed that we should call the auditor.) The auditor didn’t know off the top of his head and reviewed the file. I spoke with him today and he admitted that there was no violation of City policy in the files he reviewed and the statement was incorrect. However, he is going to talk to his associates further, and let us know if he has missed anything. Any one-second review of the City’s mileage policy demonstrates that the auditor’s statement is incorrect.
6. Second, in any case, the terms of my agreement with the Council is my contract which was specifically negotiated. It calls for a car allowance (not a mileage allowance) and separately for travel reimbursement. This is no surprise to anyone. I have followed mileage reimbursement procedure for almost a decade. (Although I rarely file them even when entitled to.)
7. Amazingly, as to my contract, the auditor confirmed for me that he had not been informed of my contract, nor had he reviewed it, but that it would certainly be relevant. I told him I appreciated his candor.
8. Third, the fact that an auditor has put an incorrect statement in an audit report without even checking whether a City policy is in fact violated or whether another document (such as a contract) may govern the situation raises a host of concerns in my mind, but that is for Steve Powers and Tom Crawford to deal with in the bigger audit picture.
9. As to the specific issue of the incorrect statements in the audit report, Tom and I will be dealing with the auditor on this correction.
10. Fourth, the third sentence of the paragraph is also incorrect: “the City became aware of this situation during the year..” The City and the finance department has always been aware of my contract, as is the whole City, as the contract is FOIAed all the time and is posted on the internet.
11. Fifth, there seems to be a question about my decision to give up the car allowance. I thought about this issue in September as I completed my year end report. I then made this proposal in early October to Councilmember Higgins as I always have done. I did this because the raise I was due this past fall, would have put me in a situation where I had a similar salary to the City Administrator – but still a car allowance. If the City Administrator did not have a car allowance, I thought it best for me to forgo mine – just as a leadership issue. (Steve Powers wouldn’t have cared about the issue, as he is not like that, but I just thought this was the right thing to do.)
12. There was no discussion with the admin. Committee on my part about this first. I just thought it was a reasonable proposal that made good policy sense. It was not because of any issue or problem with a car allowance. Related to this, I have to manage a whole department, and I have other things to spend this car allowance money on in the upcoming budget as I am down two FTEs from when I started this job, and things are always tight.
13. Finally, I will provide additional information to the Council as we resolve this issue. In the meantime, I request that this information not be made public while this is ongoing. It is always a sensitive issue when an auditor has made a factually incorrect statement in an audit, particularly one stating that a violation of City policy has occurred. Tom Crawford will be providing a formal written response the audit, which will include this issue. Obviously, the audit committee will also be involved at the next audit committee meeting.
14. I’m sorry for delay from Wednesday when I reviewed this issue, but I wanted to get an understanding of what was going on here from the auditor’s side before I wrote you.
15. I have been informed that the reporting on this issue has not bothered to link the actual reimbursement policy at issue nor mention the actual terms of my contract. When appropriate I will address this issue also.
16. As always, please contact me with any questions or concerns.
17. Stephen K. Postema
Ann Arbor City Attorney
City Attorney’s Email: Ann Arbor Chronicle’s Factor 1 Analysis
Factor 1 requires that the privileged information be a communication, and there’s no question that the email is a communication. So it’s uncontroversial that this factor is satisfied.
City Attorney’s Email: Ann Arbor Chronicle’s Factor 2 Analysis
Factor 2 requires that the communication be made in confidence and not include third parties who aren’t clients.
The email includes at least two indications that it was sent in confidence. First, the subject line includes “RE: Privileged and Confidential.” The subject line also includes reference to “Litigation Updates.” Because the email itself doesn’t include litigation updates, it’s possible that the subject line label was inadvertently recycled from a different email and that the label was not intentionally applied. But even if the label was recycled, we think it’s almost certain that the label reflects an intention that the email was sent in confidence.
Second, the body of the email, in paragraph (13), includes a statement from Postema that “I request that this information not be made public while this is ongoing.” Here it’s not clear what the antecedent is of “this information.” The phrasing as a “request” – that the recipients of the communication could choose to honor or not – seems to allow for the possibility that this is not meant as an attorney-client privileged communication. That’s supported by the qualification “while this is ongoing,” which implicates that it would be appropriate at some future time to disclose the information – which doesn’t seem consistent with attorney-client privilege.
But all this hinges on the intended antecedent of “this information.” And “this information” might plausibly be the fact that, according to the city attorney, the city’s independent auditor has characterized the audit report as containing an inaccuracy. That is, the referent of the phrase “this information” is plausibly not the city attorney’s email itself, but rather some of the facts contained in it. Based on the email itself, and the subsequent assertion of attorney-client privilege, we think it’s fair to conclude that it was Postema’s understanding that the email was sent in confidence.
And based on The Chronicle’s experience, it’s the general understanding among most city officials that employees of the city – in particular, top level staff like the city administrator or the chief financial officer – are considered ongoing clients of the city attorney’s office. So the fact that Steve Powers and Tom Crawford are included doesn’t exclude the communication from attorney-client privilege.
We think it’s fair to conclude that Factor 2 is satisfied.
City Attorney’s Email: Ann Arbor Chronicle’s Factor 3 Analysis
Factor 3 requires that the lawyer be acting in his capacity as the client’s legal advisor. However, the majority of the email appears to be confined to Postema’s reports on the content of conversations with others – including the auditor, who is not Postema’s legal client – and Postema’s explanations of his past actions. It’s difficult to see how attorney-client privilege could be extended to Postema’s report of a conversation he had with a non-client. Further, the explanation for Postema’s desire to eliminate his car allowance from his contract – which involves Postema’s theory of how his car allowance might be perceived when contrasted with the city administrator’s lack of a car allowance – doesn’t appear to involve a legal analysis or legal advice, but rather Postema’s theory of good leadership. So by sending this communication, Postema does not appear in any way to be acting as the council’s legal advisor.
The only paragraphs that might conceivably be construed as containing legal analysis or advice are paragraphs (6), (7) and (8). In those paragraphs, Postema might be considered to be offering an implicit legal opinion that his employment contract governs whether there was a policy violation, and an implicit opinion that his contract allows for both a vehicle allowance and mileage reimbursements.
But to the extent that Postema is acting as the city council’s legal advisor by writing the email, then he would have an apparent conflict in rendering this legal advice – because his own interest in establishing that he did nothing wrong obviously conflicts with the city’s interest in having a clear understanding of the facts, so that appropriate policy changes can be undertaken if necessary.
The most generous approach, we think, is to assume that Postema was adhering to his ethical obligation not to provide legal advice to a client on a matter in which he had a conflicting personal interest, in which he could reasonably anticipate could conflict with the city’s interest. But that forces the conclusion that he was not acting in his capacity as anyone’s lawyer by writing the email; thus, he was not making a communication to which attorney-client privilege properly applies.
It’s fair to conclude that Factor 3 is not satisfied.
City Attorney’s Email: Ann Arbor Chronicle’s Factor 4 Analysis
Factor 4 requires that the purpose of the communication be to provide legal advice on some right or obligation. The evaluation of Factor 4 is similar to that of Factor 3. In evaluating Factor 3, we noted that the email does not appear to contain much – if anything – in the way of legal analysis or advice. It’s confined to Postema’s explanation of his past actions and his reports of conversations with others.
Because the underlying facts related to the subject matter aren’t protected by privilege, it’s difficult to see how any of Postema’s reporting of facts concerning the audit are protected by attorney-client privilege.
It’s fair to conclude that Factor 4 is not satisfied.
In addition to citing the Michigan FOIA’s attorney-client privilege exemption in denying Postema’s email to The Chronicle, the city of Ann Arbor asserted another exemption allowed under the FOIA. That exemption allows a public body to withhold records that are communications internal to a public body – but only to the extent that they are non-factual and preliminary to a final determination of the body, and only to the extent that the public interest in disclosure is outweighed by the public body’s interest in frank communication.
First, it’s not clear how the “frank communication” exemption could apply to the entire text of the email. The exemption applies only to non-factual communication – and much of the content of the email recites factual information pertinent to the audit committee’s work. When a record contains information that does qualify for an exemption as well as information that does not qualify for an exemption, then the Michigan FOIA requires that the exempt information must be separated from the non-exempt information (i.e., it must be redacted), and the non-exempted information must be disclosed.
The only portions of Postema’s email that appear potentially to be eligible for redaction under Michigan’s FOIA are those portions where Postema appears to draw negative conclusions about the professional performance of the independent auditor. For example in paragraph (8), Postema writes:
… the fact that an auditor has put an incorrect statement in an audit report without even checking whether a City policy is in fact violated or whether another document (such as a contract) may govern the situation raises a host of concerns in my mind, …
If we confine ourselves to just those portions of the email where Postema is expressing his exasperation to the council about the auditor’s performance, the Michigan FOIA requires a balancing test to be applied: Does the city’s interest in frank communication among its agents outweigh the public’s interest in disclosure?
In weighing that balance, the city appears to have concluded that the city’s interest in shielding from public disclosure Postema’s attitudes toward the auditor’s performance outweighed the public’s inherent interest in disclosure. Obviously, we weighed the balance differently. We think the public interest is best served by revealing the character of the city attorney’s relationship to the city council as documented in his email.
And in his email, Postema appears to have selectively omitted factual aspects of his conversation with the auditor that tend to mitigate Postema’s apparent position. His position seems to be this: Even though there was no factual basis for doing so, the auditor still inserted the note about mileage reimbursements in his report.
What Postema omitted in his email to the council was a significant consideration, and one we think he certainly should have included – if his purpose was to apprise the council of relevant facts related to his investigation of how the audit was conducted.
In his email, Postema faithfully reported to the council the fact that the auditor had, in conversation with Postema, acknowledged the factual incorrectness of the phrasing in the report – the phrasing indicating that there’d been a violation of city policy. What Postema did not convey to the council was the fact that his conversation with the auditor, described in his email, included a statement by the auditor characterizing the situation as “illogical.” From the auditor’s email to Postema, recounting the same conversation [emphasis added]:
As I also stated in our conversations, from a business practices standpoint, our conclusion (with or without the existence of a policy) was it would be illogical and, therefore inappropriate, to make mileage reimbursements to persons having a car allowance. This conclusion is in the absence of knowledge of an agreement that would reasonably identify that payment of both mileage reimbursement and car allowance is acceptable and appropriate.
We think it’s to the city’s credit that this email from the auditor was included in the city’s official formal response to the auditor’s note.
But in his own communication to the council, Postema chose not to include this perspective on the auditor’s original conclusion – that the conclusion had been based on the idea that the mileage reimbursements were illogical, if not a violation of a written policy. At the January council audit committee meeting that followed Postema’s email, the auditor emphasized that there had not been a violation of a policy per se, because there was no written statement among the city’s policies that if an employee had a vehicle allowance, then the employee was not eligible for reimbursement for mileage.
For the auditor, it may have been self-evident that vehicle allowances are not compatible with mileage reimbursements – so self-evident that a written policy wouldn’t be needed. Whether Postema’s “travel” clause in his contract would cover ordinary mileage – for example, to drive to Lansing to represent the city in court – was not a question the city council audit committee wanted to entertain at its January meeting.
It’s worth noting that even in the revised version of the report, the auditor notes the problematic character of the reimbursements, observing that ”… in each instance the expense report was not subject to independent review and approval.” And the city’s own recommended policy revision includes a new procedure that would require the chair of the council administration committee to sign off on the mileage reimbursements for its two direct reports – the city attorney and the city administrator.
In addition to the omission of a relevant fact, Postema made an assertion in his email to the council that is factually wrong. In addition to the “violation of city policy” phrase, in paragraph (10), Postema disputes the accuracy of part of the auditor’s note:
Fourth, the third sentence of the paragraph is also incorrect: “the City became aware of this situation during the year..” The City and the finance department has always been aware of my contract, as is the whole City, as the contract is FOIAed all the time and is posted on the internet.
First, Postema’s reasoning here is muddled. Whether the finance staff had always been aware of his contract is not material to whether the city became aware of the issue of possibly inappropriate mileage reimbursements during the year.
Postema’s assertion is also refuted by the facts. In responding to a different request made under the FOIA, the city provided The Chronicle with a written statement from the auditor to a member of the city council’s audit committee. And that statement indicates that the issue of the city attorney’s mileage reimbursements had been brought to the auditor’s attention through a fraud risk questionnaire response, dated June 29, 2012, filled out by a member of the financial services staff.
It’s also significant that according to the auditor’s statement, the questionnaire response indicated that the issue had been raised previously, and that the city’s internal staff auditor had communicated the issue to the city’s CFO. This gives additional context to the auditor’s recommendation this year that the city consider having the internal staff auditor report directly to the city council audit committee, instead of to the CFO.
In any case, it’s evident that the auditor’s original report – stating that the city became aware of the situation during the year – was accurate, contrary to Postema’s assertion.
Conclusion: More Sunshine, Please
It’s in the public interest, we believe, for the public to understand the nature of the relationship between the current city council and the person who currently serves as the city attorney.
So we weighed the balance differently than the city did with respect to the “frank communication” FOIA exemption. We think it’s clear from Postema’s email that the city council – at least in this instance – did not receive a complete, accurate and unvarnished report from its city attorney about city business. And we think it’s important that the public be aware of that.
It’s not an appropriate use of Michigan’s FOIA exemptions to shield officials from embarrassment or to allow for needless denials of information. It’s our view that the city of Ann Arbor is routinely over-broad in its assertion of exemptions under the FOIA. And it’s our view that the city’s FOIA response procedures rely too heavily on input and control by the city attorney’s office. But we think it’s to the credit of the city of Ann Arbor that the administration is currently engaged in a revision to the administrative policy on FOIA response.
Given that it’s Sunshine Week, we call on the city council to weigh in on that administrative policy. We think the city council should weigh in on the basic overarching principle guiding the FOIA policy.
Currently, the guiding principle of the policy can be fairly paraphrased as follows:
(A) The city of Ann Arbor will produce no requested records, except those that the city is required by the FOIA to produce.
A better policy would be one that is biased in favor of disclosure. That guiding principle would be the following:
(B) The city of Ann Arbor will produce all requested records, except those records that the city is expressly prohibited from producing by some federal, state or local law.
We think (B) is a better starting point for an administrative policy. Even if the city council were to opt for (A), then the council should make that decision explicitly and openly as the governing body of the city – through a formal resolution put forth at an open meeting.
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