Buffalo News, Inc. v. Buffalo Enterprise Development Corp., 84 N.Y.2d 488 (1994)

A not-for-profit local development corporation that channels public funds into the community and possesses many attributes of public entities can be considered an “agency” subject to the disclosure requirements of New York’s Freedom of Information Law (FOIL).

Summary

Buffalo News sought access to financial records from Buffalo Enterprise Development Corporation (BEDC) regarding discharged or forgiven loans, arguing BEDC was an “agency” under FOIL. BEDC refused, claiming it was not an agency. The New York Court of Appeals held that BEDC, a not-for-profit local development corporation using public funds for economic development, qualified as an “agency” under FOIL, requiring disclosure of the requested records (subject to any exemptions). The Court emphasized FOIL’s broad scope and the need for liberal construction to ensure public access to governmental information.

Facts

BEDC, a not-for-profit corporation, was created to stimulate economic growth in Buffalo. It administered loan programs funded by federal and state governmental entities, assisting local businesses. Membership in BEDC was limited to those residing or doing business in Buffalo. The Mayor of Buffalo and other city officials served on BEDC’s Board of Directors. Buffalo News requested financial records concerning BEDC’s nonperforming loans that had been discharged or forgiven. BEDC provided limited data but refused access to the requested records.

Procedural History

Buffalo News filed a CPLR article 78 proceeding to compel disclosure. The Supreme Court denied the petition, finding BEDC was not an “agency” under FOIL. The Appellate Division reversed, concluding BEDC acted as a governmental agency and was subject to FOIL. The case was remanded for an in camera inspection to determine if exemptions applied and whether attorney’s fees should be awarded. The Supreme Court then ordered disclosure of certain documents but denied attorneys’ fees. BEDC appealed to the Court of Appeals based on a two-Justice dissent in the Appellate Division.

Issue(s)

Whether Buffalo Enterprise Development Corporation (BEDC), a local development corporation, constitutes an “agency” as defined by Public Officers Law § 86(3) and is therefore subject to the Freedom of Information Law (FOIL).

Holding

Yes, because BEDC performs a governmental function by channeling public funds into the community to stimulate economic growth and possesses many attributes of public entities, thus falling within the definition of an “agency” under FOIL.

Court’s Reasoning

The Court emphasized the broad purpose of FOIL: “that government is the public’s business and that the public, individually and collectively and represented by a free press, should have access to the records of government.” FOIL is to be liberally construed, and its exemptions narrowly interpreted, to grant maximum access to government records. The Court stated that the term “agency” under FOIL must be given its “natural and most obvious meaning” and must be “liberally construed” to further FOIL’s general purpose. Public Officers Law § 86(3) defines an “agency” as “any state or municipal department, board, bureau, division, commission, committee, public authority, public corporation, council, office or other governmental entity performing a governmental or proprietary function for the state or any one or more municipalities thereof.”

BEDC was created by and for the City of Buffalo to attract investment and stimulate growth. As a city development agency, it is required to publicly disclose its annual budget. BEDC also describes itself as an “agent” of the City of Buffalo. The Court rejected BEDC’s reliance on federal precedents requiring substantial governmental control over daily operations, finding it too narrow. The Court found BEDC’s purpose undeniably governmental and that a constricted construction of “agency” would contradict the expansive public policy dictates underpinning FOIL. Ultimately, the Court concluded that BEDC should be deemed an “agency” within FOIL’s reach in this case, based on its function and connection to the City of Buffalo. The Court affirmed the Appellate Division’s order and the Supreme Court’s judgment to disclose the requested records, subject to FOIL exemptions.