In the Matter of Pamela A. Madeiros v. New York State Education Department

The question before us is whether the Freedom of

Information Law exempts from disclosure certain records compiled

by respondent New York State Education Department relating to

municipalities' plans for auditing special education preschool

provider costs. We hold that the materials at issue, as

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redacted, are exempt from disclosure under Public Officers Law §

87 (2) (e) (i).

I.

The board of every school district is responsible for

providing special education services and programs to preschoolage

children with disabilities (see Education Law §§ 4410 [2];

see generally Education Law § 4401). Such programs are often

furnished by private providers approved by respondent New York

State Education Department (hereinafter, the Department) (see

Education Law §§ 4401 [2]; 4410 [9]; 8 NYCRR 200.20). Each

county and New York City (for the counties contained therein) is

charged with the costs of sending resident children to these

special education preschool programs (see Education Law § 4410

[1] [g]; [11] [a]). The tuition rates charged by such programs

are set by the Department -- based on financial statements

submitted by the provider, as well as State and municipal audits,

which establish, among other things, the costs of administering

such programs -- and municipalities are reimbursed by the State

for a statutory percentage of the costs paid out to providers

(see id. § 4410 [10], [11] [b] [i]; 8 NYCRR 200.9).

The Office of the State Comptroller conducted a series

of audits of approved preschool special education programs.

These audits revealed widespread fraud and abuse in the reporting

of allowed costs, and ultimately prompted several criminal

prosecutions and professional disciplinary investigations. As a

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result, in 2013, the legislature amended Education Law § 4410 in

an attempt to increase fiscal oversight and, specifically, to

incentivize municipal audits of such programs. Although

municipalities were already authorized to perform audits of

programs for which they bore fiscal responsibility, the 2013

amendments further permitted municipalities to recover

overpayments and retain all disallowed costs discovered (L 2013,

ch 57, § 24 [ii]; see Education Law § 4410 [11] [c] [i], [ii]; 8

NYCRR 200.18). The amendments to section 4410 also required the

Department to "provide guidelines on standards and procedures to

municipalities and boards, for fiscal audits of [preschool]

services or programs" (L 2013, ch 57, § 24 [i]; see Education Law

§ 4410 [11] [c] [1]). In addition to complying with that

statutory mandate, the Department amended its regulations to

require municipalities to submit, for approval by the Department,

new "detailed audit plan[s] and audit program[s]" consistent with

the Department's guidelines prior to undertaking any audits after

a specific date (8 NYCRR 200.18 [b] [2], [3]). Once approved, a

municipality's audit plan is valid for five years (see id.).

Shortly after the enactment of the statutory and

regulatory amendments relating to Education Law § 4410,

petitioner Pamela Madeiros submitted a request to the Department

pursuant to the Freedom of Information Law (see generally Public

Officers Law art 6 [FOIL]), seeking disclosure, as relevant here,

of

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"any and all [Education Law § 4410 (11) (c)

and 8 NYCRR 200.18] audit standards in [the

Department's] possession, including any audit

program and audit plan submitted by a

municipality or school district . . . ,

whether approved, not approved, disapproved,

pending or such other status."

The Department denied petitioner's request in its entirety,

asserting that the records were exempt from disclosure pursuant

to Public Officers Law § 87 (2) (e) because disclosure "would

interfere with investigations of compliance with the provisions

of the reimbursable cost manual and the preschool special

education rate setting system." Petitioner administratively

appealed, and the Department failed to respond within the

statutory time frame, thereby constructively denying her appeal

(see Public Officers Law § 89 [4] [a]).

Petitioner subsequently commenced the instant CPLR

article 78 proceeding, seeking a judgment vacating the denial of

her FOIL request and directing the Department to provide her with

the records sought. Petitioner also requested attorneys' fees

pursuant to Public Officers Law § 89 (4) (c).

Before answering the petition, the Department released

to petitioner 55 pages of documents responsive to her FOIL

inquiry. The documents consisted of the New York City and

Onondaga County Audit Plans, the contents of which were partially

redacted, certain unredacted Department records relating to the

regulatory amendments, and the guidelines promulgated by the

Department for fiscal audits of preschool providers undertaken by

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municipalities. After disclosing these documents, the Department

answered the petition and sought dismissal of the proceeding,

arguing that: petitioner's claim was moot in light of its

disclosures; the redactions were permitted under both sections 87

(2) (e) and (g) of the Public Officers Law; and petitioner had

failed to demonstrate her entitlement to attorneys' fees. The

Department submitted unredacted copies of the documents to the

trial court for in camera review.

Supreme Court granted the petition only to the limited

extent of requiring the Department to disclose two previously

redacted pages due to the Department's failure to invoke Public

Officers Law § 87 (g) as a basis for its administrative denial,

upheld the remainder of the redactions, and otherwise dismissed

the proceeding. Supreme Court reasoned that the majority of the

Department's redactions were appropriate under Public Officers

Law § 87 (2) (e) because the audit plans contained non-routine

audit techniques and procedures compiled for law enforcement

purposes, and disclosure would interfere with law enforcement

investigations (see Public Officers Law § 87 [2] [e] [i], [iv]).

Supreme Court did not award petitioner attorneys' fees. On

petitioner's appeal, the Appellate Division affirmed (133 AD3d

962 [3d Dept 2015]),1 and we granted petitioner leave to appeal

1 During the pendency of petitioner's appeal, New York City

released to petitioner an unredacted copy of its audit plan and

program. Thus, insofar as petitioner sought disclosure of that

plan, her request for that specific relief with regard to those

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(27 NY3d 903 [2016]).

II.

FOIL generally "requires government agencies to 'make

available for public inspection and copying all records' subject

to a number of exemptions" (Matter of Harbatkin v New York City

Dept. of Records & Info. Servs., 19 NY3d 373, 379 [2012]; quoting

Public Officers Law § 87 [2]). FOIL is based on a presumption of

access in accordance with the underlying "premise that the public

is vested with an inherent right to know and that official

secrecy is anathematic to our form of government" (Matter of Fink

v Lefkowitz, 47 NY2d 567, 571 [1979]; see Matter of Data Tree,

LLC v Romaine, 9 NY3d 454, 462 [2007]). The exemptions set forth

in the statute are interpreted narrowly in order to effect the

purpose of the statutory scheme (see Matter of Data Tree, 9 NY3d

at 462).

This appeal centers on the meaning and interpretation

of the exemption embodied in Public Officers Law § 87 (2) (e).

Pursuant to this provision, an agency may deny public access to

records or portions thereof that, as relevant here, "are compiled

for law enforcement purposes and which, if disclosed, would"

either "interfere with law enforcement investigations or judicial

proceedings" (subdivision [i]) or "reveal criminal investigative

techniques or procedures, except routine techniques and

particular documents is rendered academic (see Matter of Fappiano

v New York City Police Dept., 95 NY2d 738, 749 [2001]).

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procedures" (subdivision [iv]). Petitioner argues that the

courts below erred in concluding that the Department's redactions

of the documents responsive to her FOIL request are exempt

pursuant to either of these provisions. More specifically,

petitioner asserts that any records relating to municipal audit

plans were not compiled for law enforcement purposes, do not

relate to and would not interfere with a law enforcement

investigation or judicial proceeding, and are not criminal

investigative techniques. Petitioner further contends that she

is entitled to attorneys' fees because she has substantially

prevailed in this proceeding given the Department's belated

disclosures following its commencement. In response, the

Department urges us to affirm the Appellate Division order under

either subdivision (i) or (iv) of section 87 (2) (e), and

disputes petitioner's claim that she is entitled to attorneys'

fees.

III.

Initially, we reject the Department's reliance on

Public Officers Law § 87 (2) (e) (iv) -- pertaining to nonroutine

criminal investigative techniques -- because the

Department failed to invoke that particular exemption in its

denial of petitioner's FOIL request. "[J]udicial review of an

administrative determination is limited to the grounds invoked by

the agency" and "the court is powerless to affirm the

administrative action by substituting what it considers to be a

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more adequate or proper basis" (Matter of Scherbyn v Wayne-Finger

Lakes Bd. of Coop. Educ. Servs., 77 NY2d 753, 758 [1991]

[internal quotation marks and citations omitted]; see Matter of

National Fuel Gas Distrib. Corp. v Public Serv. Commn. of the

State of N.Y., 16 NY3d 360, 368 [2011]; Matter of Scanlan v

Buffalo Pub. School Sys., 90 NY2d 662, 678 [1997]). It is also

settled that the "agency relying on the applicability of [a FOIL]

exemption[], . . . ha[s] the burden of establishing that the

. . . documents qualif[y]" for the exemption and, to meet that

burden, the agency must "'articulate particularized and specific

justification'" for denying disclosure (Matter of West Harlem

Bus. Group v Empire State Dev. Corp., 13 NY3d 882, 885 [2009],

quoting Matter of Fink, 47 NY2d at 571; see Public Officers Law §

89 [4] [b]).

Here, the Department's administrative denial cited to

Public Officers Law § 87 (2) (e), without referencing a specific

subdivision. However, the justification offered -- namely, that

disclosure would "interfere with investigations of compliance" --

plainly tracks the language of subdivision (i), not subdivision

(iv). The Department did not make any contemporaneous claim that

the requested materials constituted non-routine "criminal

investigative techniques" (Public Officers Law § 87 [2] [e]

[iv]). Because the Department did not rely on subdivision (iv)

in its administrative denial, to allow it do so now would be

contrary to our precedent, as well as to the spirit and purpose

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of FOIL.

IV.

The propriety of the Department's redactions of the

disclosed records, therefore, turns on whether the redacted

portions qualify for exemption under Public Officers Law § 87 (2)

(e) (i). This requires us to address both prongs of the

exemption: (1) whether the records were compiled for law

enforcement purposes; and (2) whether disclosure of the records

would interfere with law enforcement investigations or judicial

proceedings. We conclude that, under the circumstances presented

here, both of these prongs are satisfied and the records were

properly redacted.

As to the first prong, we are persuaded that the

records at issue were compiled for law enforcement purposes. The

phrase "law enforcement purposes" is not defined in the FOIL

statutes (see Public Officers Law § 86 [definitions]). "In the

absence of a statutory definition, 'we construe words of ordinary

import with their usual and commonly understood meaning, and in

that connection have regarded dictionary definitions as useful

guideposts in determining the meaning of a word or phrase'"

(Yaniveth R. v LTD Realty Co., 27 NY3d 186, 192 [2016], quoting

Rosner v Metropolitan Prop. & Liab. Ins. Co., 96 NY2d 475,

479-480 [2001]). To that end, "law enforcement" is generally

defined by Black's Law Dictionary as "[t]he detection and

punishment of violations of the law" (Black's Law Dictionary

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[10th ed 2014], law enforcement). It is undisputed that the

Department lacks jurisdiction to punish criminal violations of

the law. However, as the dictionary further provides, the term

"law enforcement" is "not limited to the enforcement of criminal

laws" (Black's Law Dictionary [10th ed 2014], law enforcement).

Consistent with this definition, we conclude that the

exemption set forth in Public Officers Law § 87 (2) (e) does not

apply solely to records compiled for law enforcement purposes in

connection with criminal investigations and punishment of

violations of the criminal law. Notably, the exemptions provided

in two of the subdivisions under section 87 (2) (e) expressly

apply only to "criminal" matters, a limitation that would be

superfluous if the term "law enforcement" was confined to

criminal matters at the outset (Public Officers Law § 87 [2] [e]

[iii], [iv]).

In addition, we have recognized that "'[f]ederal case

law and legislative history . . . are instructive'" when

interpreting Public Officers Law § 87 (2) (e) because the FOIL

law enforcement exemption is modeled on the federal counterpart

found in the Freedom of Information Act (Matter of Lesher v

Hynes, 19 NY3d 57, 64, quoting Matter of Fink, 47 NY2d at 572 n;

see generally 5 USC § 552 [FOIA]). Significantly in that regard,

the federal analogue exempting certain materials compiled for law

enforcement purposes has been held to encompass both civil and

criminal law enforcement matters (see e.g. Sack v U.S. Dept. of

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Defense, 823 F3d 687, 694 [DC Cir 2016]; Cooper Cameron Corp. v

U.S. Dept. of Labor, Occupational Safety and Health Admin., 280

F3d 539, 545 [5th Cir 2002]; Tax Analysts v I.R.S., 294 F3d 71,

77 [DC Cir 2002]; Rugiero v U.S. Dept. of Justice, 257 F3d 534,

550 [6th Cir 2001]; see also Milner v Department of Navy, 562 US

562, 582 [2011] [Alito, J. concurring] ["The ordinary

understanding of law enforcement includes not just the

investigation and prosecution of offenses that have already been

committed, but also proactive steps designed to prevent criminal

activity"]). The Committee on Open Government -- which issues

advisory opinions relating to FOIL obligations -- has also

recognized that "entities other than criminal law enforcement

agencies may in certain circumstances cite [Public Officers Law]

§ 87 (2) (e) as a basis for denial," providing, as an example, an

agency audit that uncovers possible illegality (Comm on Open Govt

FOIL-AO-7332 [1992]).

Our decision should not be read to hold that every

audit necessarily serves "law enforcement purposes" (Public

Officers Law § [2] [e]). The audits at issue here, however, are

not simply routine fiscal audits. The statutory scheme of

Education Law § 4410, as amended in 2013, and the Department's

regulations pertaining to municipal audit plans and audit

programs, indicate that these audits are specifically targeted at

ferreting out the improper and potentially illegal or fraudulent

reporting of costs by preschool special education providers. The

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goal of the statutory and regulatory scheme and, in particular

the 2013 amendments, is not only to ensure the establishment of

an accurate tuition rate, but also to encourage compliance with

the applicable reporting rules and curb existing fraud and abuse

(see generally Senate Introducer's Mem in Support, Bill Jacket, L

2013, ch 545 at 9). Thus, the obvious inference arising from the

statutory requirement that the Department issue guidelines for

municipalities in conducting these audits, is that the

legislature sought to increase the efficacy of audit procedures

in an effort to strengthen enforcement measures. Under these

circumstances, we conclude that the records sought by petitioner

were compiled for law enforcement purposes.

Turning to the second inquiry, we agree with the courts

below that the redactions made by the Department were necessary

to prevent interference with a law enforcement investigation (see

Public Officers Law § 87 [2] [e] [i]). We have cautioned that

"the purpose of [FOIL] is not to enable persons to use agency

records to frustrate pending or threatened investigations nor to

use that information to construct a defense to impede a

prosecution" (Matter of Fink, 47 NY2d at 572). Here, the

Executive Coordinator for Special Education explained that the

Department's redactions were imperative because releasing

specific methods and procedures used by auditors in particular

counties would supply providers subject to audit with "a roadmap

to avoid disclosure of inappropriate costs" and would enable such

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providers to more effectively conceal fraudulent and criminal

activities, thereby undermining the audit process. In other

words, "disclosure of th[e redacted] procedures would give rise

to a substantial likelihood that violators could evade detection

by deliberately tailoring their conduct in anticipation of

avenues of inquiry to be pursued by agency personnel" (Matter of

Fink, 47 NY2d at 572).

To the extent petitioner claims that Public Officers

Law § 87 (2) (e) (i) is inapplicable because there were no

ongoing audits at the time that she submitted her FOIL request,

her argument is unpersuasive. While an agency may not rely on

section 87 (2) (e) (i) to refuse disclosure of records upon a

wholly speculative claim of potential interference with an

unspecified future investigation to which the documents may or

may not be relevant (see Church of Scientology of N.Y. v State of

New York, 61 AD2d 942, 943 [1st Dept 1978], affd on other grounds

46 NY2d 906, 907 [1979]), that is not the case here. Rather, the

municipal audits of special education preschool providers were

expressly encouraged by statute and were plainly contemplated in

the near future.

A municipality must submit an audit plan for approval

as the necessary first step to conducting an audit (see 8 NYCRR

200.18). That is, the very purpose of a municipality's

submission of an audit plan to the Department for approval is to

obtain authorization to conduct such investigations. We have

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previously recognized that section 87 (2) (e) (i) applies to

prospective investigations (see Matter of Lesher, 19 NY3d at 68

[observing that disclosure may be required where there was "no

longer any pending or potential law enforcement investigation"

(emphasis added)]; see also Sussman v U.S. Marshals Serv., 494

F3d 1106, 1114 [DC Cir 2007] [under FOIA, the interference need

not be with an ongoing investigation, as disclosure may be

refused if it would interfere with a reasonably anticipated

proceeding]; Lynch v Dept. of Treasury, 210 F3d 384 [9th Cir

2000] [FOIA exemption applied where legal action was

"'contemplated' or 'in prospect'"], cert denied 530 US 1215

[2000]; Manna v U.S. Dept. of Justice, 51 F3d 1158, 1164 [3d Cir

1995] [under FOIA, the agency must show that an enforcement

proceeding is "pending or prospective"], cert denied 516 US 975

[1995]; Miller v U.S. Dept. of Agric., 13 F3d 260, 263 [8th Cir

1993] [same]).

Here, considering the municipalities' submissions of

audit plans in the context of the statutory and regulatory

amendments aiming to uncover and curtail fraudulent and criminal

reporting, the existence of reasonably anticipated investigations

at the time of petitioner's FOIL request is clear. The

municipalities in question, by virtue of having submitted plans

pursuant to which audits could be conducted, were plainly

contemplating impending audits of preschool program providers for

which they bore financial responsibility. Thus, the redactions

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at issue fit squarely within the exemption permitting an agency

to deny access to records compiled for law enforcement purposes

where their disclosure would interfere with an investigation.

V.

As a final matter, we agree with petitioner that, even

accepting the Department's redactions as proper, she

"substantially prevailed" in this litigation (Public Officers Law

§ 89 [4] [c]). The Public Officers Law authorizes an award of

attorneys' fees where the petitioner "has substantially

prevailed" in the FOIL proceeding and the agency either lacked a

reasonable basis for denying access to the requested records or

"failed to respond to a request or appeal within the statutory

time" (Public Officers Law § 89 [4] [c] [i], [ii]). "Where . . .

a court determines that one of the requirements has not been met,

we review whether the court erred as a matter of law in reaching

that conclusion" (Matter of Beechwood Restorative Care Ctr. v

Signor, 5 NY3d 435, 441 [2005]; see Matter of Niagara Envtl.

Action v City of Niagara Falls, 63 NY2d 651, 652 [1984]). If the

statutory requirements have been satisfied, the determination of

whether to award fees rests within the court's discretion,

subject to review only for an abuse of that discretion (see

Matter of Capital Newspapers Div. of the Hearst Corp. v City of

Albany, 15 NY3d 759, 761 [2010]; Matter of Beechwood Restorative

Care Ctr., 5 NY3d at 441; Governor's Approval Mem, Bill Jacket, L

1982, ch 73 at 8).

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Here, the Appellate Division concluded that the

statutory requirement that petitioner "substantially prevail" was

not met because the "majority of the [Department's] challenged

redactions were appropriate" (133 AD3d at 965). However, this

analysis fails to take into account that the Department made no

disclosures, redacted or otherwise, prior to petitioner's

commencement of this CPLR article 78 proceeding. Although the

Department's redactions in the eventually-released records have

been upheld, petitioner's legal action ultimately succeeded in

obtaining substantial unredacted post-commencement disclosure

responsive to her FOIL request -- including both disclosure that

was volunteered by the agency and disclosure that was compelled

by Supreme Court's order.

Under these circumstances, petitioner substantially

prevailed within the meaning of Public Officers Law § 89 (4) (c)

and the Appellate Division erred in determining that petitioner

failed to meet the statutory prerequisites for an award of

attorneys' fees. Indeed, to conclude otherwise would be to

permit agencies to circumvent section 89 (4) (c) because "only a

petitioner who fully litigated a matter to a successful

conclusion could ever expect an award of counsel fees and a

respondent whose position was meritless need never be concerned

about the possible imposition of such an award so long as they

ultimately settled a matter -- however dilatorily" (Matter of New

York Civ. Liberties Union v City of Saratoga Springs, 87 AD3d

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336, 339-340 [3d Dept 2011]; see Matter of Kohler-Hausmann v New

York City Police Dept., 133 AD3d 437, 438 [1st Dept 2015]; Matter

of Jaronczyk v Mangano, 121 AD3d 995, 997 [2d Dept 2014]; Matter

of Purcell v Jefferson County Dist. Attorney, 77 AD3d 1328, 1329

[4th Dept 2010]; Matter of Powhida v City of Albany, 147 AD2d

236, 239 [3d Dept 1989]). We, therefore, must remit for Supreme

Court to exercise its discretion in relation to petitioner's fee

request.

Accordingly, the order of the Appellate Division should

be modified, without costs, by remitting the matter to Supreme

Court for further proceedings in accordance with this opinion

and, as so modified, affirmed.

* * * * * * * * * * * * * * * * *

Order modified, without costs, by remitting to Supreme Court,

Albany County, for further proceedings in accordance with the

opinion herein and, as so modified, affirmed. Opinion by Judge

Stein. Chief Judge DiFiore and Judges Rivera, Fahey, Garcia,

Wilson and Feinman concur.

Decided October 17, 2017

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Reversed