(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
THE BOARD OF EDUCATION OF NEWARK, ETC., ET AL. V. NEW JERSEY DEPARTMENT OF THE
TREASURY, DIVISION OF PENSIONS, ET AL. (A-67-95)
Argued January 16, 1996 -- Decided July 15, 1996
STEIN, J., writing for a unanimous Court.
The State Health Benefits Plan (Plan) provides health insurance to workers employed by
participating public entities. It is managed by the State Health Benefits Commission (Commission), which
functions within the Division of Pensions of the Department of Treasury (Division). Private health insurance
companies, Blue Cross/Blue Shield and Prudential Insurance Company, administer the Plan under contract
with the Commission. Participation in the Plan by local governmental employers is voluntary. The Plan is
"community-rated," which means that the risk is analyzed and the premiums are set based on the overall loss
experience of all of the participants, instead of calculating different premiums for each employer based on its
individual risk. Claims are paid by the Plan's private administrators and are reimbursed by the State. The
individual employees's records are maintained by claims administrators at Blue Cross/Blue Shield and
Prudential in a computerized data base. The files are listed by the social security number of the individual
employees, and are assigned a code denominating the file as belonging either to a State or local government
employee.
During the 1990-91 school year, the Board of Education of Newark (Board) paid the Division more
than $25 million in premiums for health insurance coverage for its employees. Other than salaries, health
benefits constitute the largest single expenditure in the Board's budget. In May 1991, the Board sought
various financial statistics concerning its participation in the Plan, including premiums paid by it, claims paid
for its employees, and administrative charges paid by it. The Board requested this information in order to
determine whether its continued participation in the Plan was an effective use of its funds allocated to
employee health benefits. The Commission denied the Board's request.
The Board brought an action in lieu of prerogative writ to compel the production of the requested
information. The Board alleged that it has the right to the information under New Jersey's Right-To-Know
Law and under the common-law right to inspect public documents. The Law Division initially denied cross-motions for summary judgment and ordered discovery on the issue of the feasibility and cost of extracting the
Board's claims experience data from the master data base of all employees covered by the Plan. Deposition
testimony of Prudential and Blue Cross/Blue Shield personnel involved in administering the Plan established
that: extracting the claims history of individual employees from the master data base is feasible; both
Prudential and Blue Cross/Blue Shield have produced the type of reports requested for private employers in
the past; and writing any necessary program to extract the information from the data base is a routine
matter. The record contains differing estimates of the cost and reliability of the finished report.
Based on the additional record, the Law Division held that it is feasible for the Commission to
produce the data subject to the Board's reimbursement to the producing party of the costs of reproducing
the information. The court noted that because the Commission is required to preserve the information to
carry out its statutorily imposed duty to prepare an annual report, the information is required by law to be
made, maintained or kept on file. As such, it is subject to disclosure under the Right-To-Know Law. The
court also held that the information is subject to disclosure under the common-law right to inspect public
documents because the Board has a legitimate interest in the information that outweighs any interest in
withholding it. Accordingly, the court granted summary judgment to the Board on both statutory and
common-law grounds, except as to information concerning the administrative costs the Board had paid.
The Appellate Division granted leave to appeal and affirmed on essentially the same grounds relied
on by the Law Division.
Before the Supreme Court on leave to appeal, the Commission argues that: the Board's claims
history does not exist as a distinct document or compilation and, therefore, it is not subject to the common-law or statutory rights of inspection; neither the common-law nor the Right-To-Know Law can be construed
to compel it to compile new information when existing records are not responsive to the Board's needs;
forcing it to extract the claims history for individual employers would constitute an unfair burden on a public
entity and impair the efficient administration of the Plan; and the Court lacks jurisdiction because the Board
first was required to exhaust its administrative remedies before making a direct appeal. The Board claims
that the Commission refuses to provide information on claims paid in order to discourage participating
employers from leaving the Plan. According to the Board, the Commission is concerned that employers
whose workers are better health risks than the average for the "community-rated" pool will choose to leave
the Plan and seek lower-cost insurance elsewhere. This will leave the Plan with participants who are poorer
risks, thereby jeopardizing the program's affordability. The Board argues that it has a compelling interest in
the information it seeks; and that the burden on the Commission would be minimal, noting that private
administrators have produced similar reports to other clients in the past. The Board also states that it is
willing to absorb the cost of extracting the information from the master data plan.
HELD: The Board of Education of Newark is not entitled to the information it seeks under the Right-To-Know Law. However, the information is subject to disclosure under the common-law right-to-inspect public documents.
1. The information that the Board ultimately seeks, the amount of claims paid on behalf of its own
employees, cannot constitute a Right-To-Know document because it is not required by law to be made,
maintained or kept on file. The Legislature has recently amended the Right-To-Know Law, however, to
provide that persons seeking access to records "maintained by a system of data processing" are entitled only
to printed copy of those records. The amendment applies retroactively to pre-enactment requests to inspect
public records. Therefore, even if the individual claims history were subject to the Right-To-Know Law, only
a printed copy of that data could be compelled to be produced. Nonetheless, only access to the
computerized data from which the Board's own claims experience may be extracted will satisfy the Board's
needs, and, such access is excluded from the mandate of the Right-To-Know Law. (pp. 9-12)
2. The common-law right to inspect extends to any document made by public officers in the exercise of
public functions. The records of claims paid are made by public officials in the exercise of their duties in
administering the Plan; therefore, they constitute common-law public records. The Board has an interest in
the information it seeks. The Commission has alleged no interest in preventing disclosure that would
outweigh the Board's need to obtain the information. Moreover, producing the Board's claims experience is
feasible and the Board will reimburse the Plan's private administrator for the expense of creating and
running the necessary computer programs. Further, the Commission's concern that better-than-average-risk
employers may leave the Plan is not a legitimate basis to withhold information from the Board. Thus, the
common-law balancing of interests weigh in favor of disclosure. (pp. 12-14)
3. Permitting the Board to retrieve its claims history would not require the Commission to generate new
information. However, any minimal amount of data created is justified by the overwhelming balance of the
interests in favor of the Board receiving the information it needs. Furthermore, the jurisdictional question is
moot in respect of any issues decided by the Appellate Division as a matter of law and affirmed by this
Court. Because those are the only issues properly before the Court, it need not address further the
Commission's jurisdictional argument. (pp. 14-16)
Judgment of the Appellate Division is AFFIRMED.
JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI and COLEMAN join in JUSTICE
STEIN's opinion. CHIEF JUSTICE WILENTZ did not participate.
SUPREME COURT OF NEW JERSEY
A-
67 September Term 1995
THE BOARD OF EDUCATION OF NEWARK, a
body corporate organized and
existing under the laws of the
State of New Jersey; EUGENE C.
CAMPBELL, Executive Superintendent
of Schools of the Board of
Education of Newark; and EUGENE C.
CAMPBELL, Individually,
Plaintiffs-Appellants,
v.
NEW JERSEY DEPARTMENT OF THE
TREASURY, DIVISION OF PENSIONS;
MARGARET M. McMAHON, Director of
Division of Pensions, Acting
Secretary of the State Health
Benefits Commission and/or
Custodian of Records; SAMUEL F.
CRANE, New Jersey State Treasurer;
WILLIAM G. SCHEUER, Commissioner of
the Department of Personnel and
Merit System Board, Division of
Pensions; SAMUEL F. FORTUNATO,
Commissioner of the Department of
Insurance; PATRICIA A. CHIACCHIO,
Secretary, State Health Benefits
Commission and as Custodian of
Records, State Health Benefits
Commission; JOHN DOE (a fictitious
individual), Custodian of Records,
State Health Benefits Commission,
Defendants-Respondents.
Argued January 16, 1996 -- Decided July 15, 1996
On appeal from the Superior Court, Appellate
Division, whose opinion is reported at
279 N.J. Super. 489 (1995).
Mark J. Fleming, Assistant Attorney General,
argued the cause for appellants (Deborah T.
Poritz, Attorney General of New Jersey,
attorney; Joseph L. Yannotti, Assistant
Attorney General, of counsel; Sue E.
Kleinberg, Deputy Attorney General and
Michael J. Haas, Senior Deputy Attorney
General, on the briefs).
Michael D. Bross and Adam H. Zipkin argued
the cause for respondents (Bross, Strickland,
Cary, Shapiro, Grossman and Icaza, attorneys;
Sheldon Bross, of counsel; Michael D. Bross
and Adam H. Zipkin, on the briefs).
The opinion of the Court was delivered by
STEIN, J.
Respondent, the Board of Education of Newark (Board),See footnote 1 is a
participating employer in the State Health Benefits Plan (Plan).
In 1991, the Board requested that appellant, the State Health
Benefits Commission (Commission), provide it with information on
medical claims paid by the Plan on behalf of the Board's
employees. The Commission denied the request and the Board
brought this action under the Right-to-Know Law, N.J.S.A. 47:1A-2, and under the common-law right to inspect public documents.
The Law Division granted summary judgment to the Board on both
grounds, and the Appellate Division affirmed.
279 N.J. Super. 489 (1995). We granted leave to appeal.
142 N.J. 440 (1995).
The Commission has access to the data base by modem. The files
are listed by the social security numbers of the individual
employees, and are assigned a code denominating the file as
belonging either to a State or local government employee. The
data base is not otherwise subdivided and the individual computer
files do not indicate to which employer a particular employee
belongs.
During the 1990-91 school year, the Board paid the Division
of Pensions more than $25,000,000 in premiums for health
insurance coverage for its employees. Currently, the cost
exceeds $40,000,000. Counsel represents that, other than
salaries, health benefits constitute the largest single
expenditure in the Board's budget. On May 21, 1991, the Board
wrote the Division asking for various financial statistics
concerning the Board's participation in the Plan, including
premiums paid by the Board, claims paid for Board employees, and
administrative charges paid by the Board. The Board sought the
information so that it could determine whether its continued
participation in the Plan was an effective use of its funds
allocated to employee health benefits. The Commission denied the
Board's requests. With regard to the benefits paid, the
Commission stated: "The claims experience of individual
participating employers is not available."
The Board brought this action in lieu of prerogative writ to
compel the production of the requested information. The
complaint alleges that the Board has a right to the information
under New Jersey's Right-to-Know Law, N.J.S.A. 47:1A-2, and under
the common-law right to inspect public documents. In the
interim, the Commission has agreed to provide only the
information concerning the premiums paid by the Board.
Initially, the Law Division denied cross-motions for summary
judgment and called for discovery on the issue of the feasibility
and cost of extracting the Board's claims experience data from
the master data base of all employees covered by the Plan.
Depositions were taken of Prudential and Blue Cross/Blue Shield
personnel involved in administering the Plan. The facts that
emerged are not in dispute.
The testimony established that extracting the claims history
of individual employers from the master data base is feasible.
To enable the private administrators to extract from the data
base the claims paid for Board employees, the Board must supply a
computer tape containing all of its employees' social security
numbers. A computer program would be written that would search
the master data base for the individual files that contain a
social security number appearing on the Board's list. The
program would then extract the claims paid for each individual
and add them together to generate the total amount of claims paid
for all Board employees. The confidentiality of the individual
records would be preserved, because only the total claims figure
would be supplied to the Board.
Indeed, the Law Division found that both Prudential and Blue
Cross/Blue Shield have produced that type of report for other
employers in the past, and that writing the necessary program to
extract the information is a routine matter. Claims reports are
generated for corporate accounts on a regular basis. Until 1991,
claims reports were prepared for participating public employers
in the Plan as well. As examples, the court noted reports that
had been generated for AT&T and for the County of Bergen. The
court found that the private administrators stopped providing
claims history reports only because a 1991 modification of their
contracts with the Commission prohibited them from doing so.
The record contains differing estimates of the cost and
reliability of the finished report. A representative of the
Commission testified that the cost would be $6,000 per 500
employees and that the accuracy of the result would be impaired
by erroneous social security numbers and turnover in the Board's
workforce. Prudential's computer systems manager assigned to the
Plan estimated an aggregate cost of $10,500 for the period from
the beginning of the 1989 school year to the date of the request
in May 1991 covering only the claims records administered by
Prudential. The Blue Cross/Blue Shield account executive for the
Plan testified that, prior to 1991, claims history reports had
been produced for other employers at a charge of $1,000 per month
of claims.
Based on the augmented record, the Law Division held that it
was "feasible" for the Commission to produce the data, "subject
to the Board reimbursing the producing party [for] the cost of
reproducing the information." The court found that the
Commission was required to preserve the information to carry out
its statutorily imposed duty to prepare an annual report. See
N.J.S.A. 52:14-17.27. Therefore, the court concluded that the
information was "required by law to be made, maintained or kept
on file," N.J.S.A. 47:1A-2, and thus subject to disclosure under
the Right-to-Know statute. The court also held that the
information should be disclosed under the common-law right to
inspect public documents, because the Board had a legitimate
interest in the information that outweighed any interest in
withholding it. Accordingly, the court granted summary judgment
to the Board on both the statutory and common-law grounds.
Summary judgment was denied with regard to the information
concerning the administrative costs the Board had paid, due to
unresolved issues of fact.
The Appellate Division granted leave to appeal the
interlocutory order and affirmed on essentially the same grounds
relied on by the Law Division.
279 N.J. Super. 489. Before this
Court, the Commission argues that the Board's claims history does
not exist as a distinct document or compilation and therefore
that information cannot be subject to the common-law or statutory
rights of inspection. The Commission claims that neither the
common law nor the Right-to-Know Law can be construed to compel
it to compile new information when existing records are not
responsive to a plaintiff's needs. The Commission maintains that
forcing it to extract the claims history for individual employers
would constitute an unfair burden on a public entity and impair
the efficient administration of the Plan.
The Board claims that the real reason the Commission refuses
to provide information on claims paid is to discourage
participating employers from leaving the Plan. In that
connection, the Commission confirms that if it is required to
provide claims experience information to participating employers
on demand, the employers whose workers are better health risks
than the average for the "community-rated" pool will choose to
leave the Plan and seek lower-cost insurance elsewhere. That
would leave the Plan with participants who are poorer risks, and
would jeopardize the program's affordability.
The Board asserts that it has a compelling interest in the
information that it seeks. It argues that the rule against
requiring public entities to produce or compile new records
should not be inflexibly applied. The burden on the Commission
would be minimal, the Board claims, noting that the private
administrators have produced similar reports for other clients in
the past. The State District SuperintendentSee footnote 2 has certified to
this Court that the Board is willing to absorb the cost of
extracting the information from the master data base.
The Commission also challenges the jurisdiction of the Law
Division over this matter. The Commission claims that under Rule
2:2-3(a)(2), the Board was required first to exhaust its
administrative remedies and then to appeal directly to the
Appellate Division from the state agency's final disposition.
The Commission notes that another participating municipal
employer seeking similar medical claims history information from
the Plan has pursued its request before the Office of
Administrative Law. See City of Vineland, supra,
95 N.J.A.R.2d 275.
The Right-to-Know statute extends only to documents that are
"required by law to be made, maintained or kept on file."
N.J.S.A. 47:1A-2. That requirement "'has been strictly
construed.'" Higg-A-Rella, Inc. v. County of Essex,
141 N.J. 35,
44 (1995) (quoting Home News Publishing Co. v. State,
224 N.J.
Super. 7, 11 (App. Div. 1988)). Last term, in Higg-A-Rella,
supra, we discussed computerized records and their status as
Right-to-Know documents. Higg-A-Rella was decided several months
after the Appellate Division ruled in this case, and thus the
lower courts were without the guidance our opinion might have
provided.
In concluding that the Board's claims experience is a Right-to-Know document, both lower courts relied on the fact that the
New Jersey State Health Benefits Program Act requires that the
Commission prepare an annual report "showing the fiscal
transactions of the program for the preceding year and stating
other facts pertaining to the plan." N.J.S.A. 52:14-17.27.
Clearly the annual report itself is a Right-to-Know document.
However, the Health Benefits Programs Act does not require that
the annual report list the claims paid for each employer
participating in the Plan. In fact, the annual report contains
only aggregate financial figures for all covered employees and
employers. There is no need for the Commission to compile the
claims histories of each participating employer to fulfill its
statutory duties with regard to the report.
Therefore, the information that the Board ultimately seeks,
the amount of claims paid on behalf of its own employees, cannot
constitute a Right-to-Know document because it is not required by
law to be "made, maintained or kept on file." N.J.S.A. 47:1A-2.
However, the status of the unsegregated data of individual claims
paid is a different question. Maintaining the data on the
individual claims paid is obviously necessary to prepare
aggregate figures for the annual report, and a computer program
could extract the Board's claims experience from the raw computer
records of individual employees. The question is whether the
Commission's need to preserve the individual claims records in
order to produce the annual report brings the individual records
within the ambit of the Right-to-Know Law.
The courts below reasoned that, because the Commission was
required to report its total claims paid in the annual report,
records of the individual claims were required to be made and,
therefore, were Right-to-Know records. We need not rule on
whether information that is created incidentally to the
production of a Right-to-Know document is itself covered by the
Right-to-Know Law. But see Higg-A-Rella, supra, 141 N.J. at 44
(holding that computerized tax records were not Right-to-Know
documents because they were "'merely a "convenient means" by
which the county board can perform its mandated functions'")
(quoting Higg-A-Rella, Inc. v. County of Essex,
276 N.J. Super. 183, 188 (App. Div. 1994) (quoting Atlantic City Convention Ctr.
Auth. v. South Jersey Publishing Co.,
135 N.J. 53, 64 (1994)));
Atlantic City Convention Ctr., supra, 135 N.J. at 63-64 (holding
that audio tape of Convention Center Authority executive session
was not Right-to-Know document where tape was made to assist in
preparation of official minutes); Asbury Park Press, Inc. v.
State,
233 N.J. Super. 375, 380-81 (App. Div.) (holding that
financial analysis prepared to assist public official in
performing statutory duties was not Right-to-Know document),
certif. denied,
117 N.J. 646 (1989).
That issue need not be reached because, after the Appellate
Division issued its opinion, the Legislature amended the Right-to-Know Law to provide that persons seeking access to records
"maintained by a system of data processing" are entitled only to
printed copies of those records. L. 1994, c. 140, § 8 (codified
at N.J.S.A. 47:1A-2.1). Relying on the Legislature's statement
that the amendment was intended to clarify the existing law, we
have held that the amendment applies retroactively to pre-enactment requests to inspect public records. Higg-A-Rella,
supra, 141 N.J. at 45 (citing Assembly State Government
Committee, Statement to Assembly Bill No. 972 (committee
amendments), at 3 (May 2, 1994)). Therefore, even if the
individual claims histories were subject to the Right-to-Know
Law, only printed copies of that specific data could be compelled
to be produced.
Obviously, a printed list of individual claims histories for
all the employees in the Plan is not what the Board seeks.
Indeed, the Board has argued that compiling the needed
information by hand from paper records would constitute an
insurmountable burden. Only access to the computerized data from
which the Board's own claims experience may be extracted will
satisfy the Board's needs. That access is excluded from the
mandate of the Right-to-Know Law by N.J.S.A. 47:1A-2.1.
Accordingly, we hold that the Board is not entitled to the
information it seeks under the Right-to-Know Law.
Several of our opinions set forth the legal principles governing the common-law right to inspect public records. See, e.g., Southern New Jersey Newspapers, Inc. v. Township of Mt. Laurel, 141 N.J. 56 (1995); Higg-A-Rella, supra, 141 N.J. 35. Those principles need not be restated in detail to resolve this appeal. The common-law right to inspect extends to any document
"made by public officers in the exercise of public functions,"
Nero v. Hyland,
76 N.J. 213, 222 (1978), and thus encompasses a
far broader range of documents than the Right-to-Know Law. Higg-A-Rella, supra, 141 N.J. at 46; Atlantic City Convention Ctr.,
supra, 135 N.J. at 60. Computerized records may be common-law
public records and subject to inspection and copying in
electronic form. Higg-A-Rella, supra, 141 N.J. at 47.
The common-law right to inspect is subject to two
qualifications:
First, the person seeking access must
establish an interest in the subject matter
of the material. Second, the citizen's
common-law right to gain access to [common-law] public records requires a balancing of
interests. . . . [A] plaintiff's common-law
right of access must be balanced against the
State's interest in preventing disclosure.
[Id. at 46 (internal quotations and citations
omitted) (first alteration in original).]
That the process be "'flexible and adaptable to different
circumstances'" is crucial to the correct application of the
common-law right. Techniscan Corp. v. Passaic Valley Water
Comm'n,
113 N.J. 233, 236 (1988) (quoting McClain v. College
Hosp.,
99 N.J. 346, 362 (1985)); accord Home News v. State, ___
N.J. ___, ___ (slip op. at 9) (1996); Higg-A-Rella, supra, 141
N.J. at 46-47.
We are essentially in accord with the lower courts' analysis
of the interests presented by the Board's attempt to gain access
to information regarding its claims experience. Clearly, the
records of claims paid are made by public officials in the
exercise of their duties in administering the Plan and thus
constitute common-law public records. That the Board has an
interest in the information it seeks cannot reasonably be
disputed. The Board's responsibility for the education of the
school children of Newark and the expenditure of a substantial
portion of the public funds available to it for health insurance
for Board employees elevates the Board's interest in its claims
history to one of public importance.
The Commission has alleged no interest in preventing
disclosure that would outweigh the Board's need to obtain the
information. The courts below correctly found no genuine dispute
that producing the Board's claims experience is feasible. No
confidential information need be released. The Board is prepared
to reimburse the Plan's private administrators for the expense of
creating and running the necessary computer programs. The
Commission's concern that better-than-average-risk employers will
leave the Plan is not a legitimate basis to withhold information
from the Board. The Health Benefits Programs Act provides that
participation in the Plan is voluntary. See N.J.S.A. 52:14-17.37; N.J.A.C. 17:9-1.5. The Commission may not compel
participants to remain in the Plan by depriving them of the
information necessary to make an informed decision.
Thus, the common-law balancing of the interests at stake
weighs overwhelmingly in favor of disclosure. The Commission
argues that as a matter of law it cannot be compelled to create a
new record under the common-law right of inspection. The
Commission relies on dictum in Southern New Jersey Newspapers,
Inc. v. Township of Mt. Laurel,
141 N.J. 56, 69 (1995), in which
we observed that "the general rule is that public agencies are
not required to produce new information even if the documents
available under the Right-to-Know Law and the common law are
unresponsive to a citizen's inquiry." We went on to note,
however, "that rigid adherence to that general rule might not
necessarily be appropriate in all cases." Ibid.
However, we reject the premise of the Commission's argument
that permitting the Board to retrieve its claims history would
require the Commission to generate new information. Rather, the
testimony of the Blue Cross/Blue Shield and Prudential
representatives demonstrates that the process of retrieving the
Board's claims information is better characterized as a selective
copying from the Commission's existing data base. The cost of
extracting the information will be borne by the Board and it will
be performed by the private administrators in the same manner as
for their private clients. No added burden will be placed on the
Commission. Furthermore, to the extent that aggregating the
claims history of Board employees may be said to generate a new
document, we believe that the minimal amount of data created is
justified by the overwhelming balance of the interests in favor
of the Board receiving the information it needs.
JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI and COLEMAN join in JUSTICE STEIN's opinion. CHIEF JUSTICE WILENTZ did not participate.
NO. A-67 SEPTEMBER TERM 1995
ON APPEAL FROM Appellate Division, Superior Court
ON CERTIFICATION TO
THE BOARD OF EDUCATION OF NEWARK, etc., et al.,
Plaintiffs-Appellants,
v.
NEW JERSEY DEPARTMENT OF THE TREASURY, DIVISION OF
PENSIONS; et al.,
Defendants-Respondents.
DECIDED July 15, 1996
Justice Handler PRESIDING
OPINION BY Justice Stein
CONCURRING OPINION BY
DISSENTING OPINION BY
Footnote: 1 On July 12, 1995, the Department of Education took over