By Dan Trevas |
The foundation formed to distribute settlement funds that local and state governments are receiving from opioid makers and distributors is the functional equivalent of a public office and must makes its records publicly available, the Supreme Court of Ohio ruled today.
In a unanimous per curiam opinion, the Supreme Court directed the OneOhio Recovery Foundation to provide the public records that were requested by Harm Reduction Ohio, a nonprofit organization that works to prevent overdose deaths.
Local governments suing “pharmaceutical supply chain participants” signed a memorandum of understanding (MOU) with the governor and attorney general to plan the allocation and use of Ohio’s share of any settlement proceeds from the lawsuits. As part of the MOU, the OneOhio Recovery Foundation was formed in December 2021. It was agreed that the foundation would receive 55% of settlement funds won in opioid lawsuits and distribute the proceeds throughout the state to address the opioid epidemic.
The foundation claimed it was a private nonprofit corporation not subject to R.C. 149.43, the Ohio Public Records Act.
Citing its 2006 State ex rel. Oriana House, Inc. v. Montgomery decision, the Court found the foundation met the definition of a functional equivalent of a public office and must respond to Harm Reduction’s public records request.
The per curiam opinion stated that when the functional equivalency test developed in Oriana House is used, the Court considers whether providing public access to records serves the policy of governmental openness.
“In this case, allowing public access to the Foundation’s records serves that policy,” the Court concluded.
Access to Meeting Denied; Records Requested
The MOU established the foundation’s governing board, which consists of 29 members. The governor appoints five of the members and the attorney general appoints one. General Assembly leaders select four members. The governor appoints an executive director to oversee the foundation’s day-to-day operations.
The foundation divides the state into 11 non-metropolitan regions and 8 metropolitan regions. Each of the 19 regions appoints a member to the board of directors.
In May 2022, Dennis Cauchon, Harm Reduction’s president, attempted to attend the first meeting of the foundation’s board of directors. The meeting was conducted at the Ohio Department of Public Safety and organized by the director of the governor’s RecoveryOhio office. RecoveryOhio is a state-funded council developed by Gov. Mike DeWine to coordinate the work of state offices that address mental health and addiction issues.
Cauchon was told the public was not permitted to attend the meeting. The next month he filed a public records request asking for all documents prepared for the June 23 meeting along with documents related to prior “unnoticed” board meetings. The board did not respond to the request.
Harm Reduction sought a writ of mandamus in August 2022 from the Supreme Court, asking the Court to direct the foundation to provide the requested records. It also sought statutory damages for failure to provide records along with attorney fees and court costs. The foundation responded by denying it was subject to the Public Records Act.
Court Applies Functional Equivalency Test
In general, private entities are not subject to the Public Records Act, the Court explained. However, in Oriana House, the Court held that a private entity must provide records if clear and convincing evidence demonstrates it is the functional equivalent of a public office.
To determine if a private entity should be treated as a public office, the Court considers four factors: whether the entity performs a governmental function; the level of government funding; the extent of governmental involvement; and whether the entity was created by the government or created to avoid being subject to the Public Records Act. The Court found three of the four factors support Harm Reduction’s argument that the foundation is the equivalent of a public office and one factor, the level of government funding, may meet the test.
The foundation argued it is not performing a government function. It maintained the money it receives is directly from private companies that are being sued as part of the opioid lawsuits and the foundation will distribute the money to organizations that can be use it to address the effects of the opioid crisis. The settlement is “unique and unprecedented,” and cannot be seen to be similar to any historic governmental function.
The foundation noted the Supreme Court has ruled the use of public money by private entities does not classify the private organizations as functional equivalents. The settlement funds are for providing substance abuse treatment, education, and prevention services, which are performed by private entities, the foundation maintained.
The Court wrote that the foundation “misstates its function.”
The Court stated that the foundation is not responsible for “providing” treatment, education, or prevention services, but rather disbursing settlement funds to those who do provide services.
Further, once the settlement funds are sent from the private companies to the state and local governments who sued them, that money becomes public money, the Court ruled. The governments, through the MOU, agreed to provide a share of the public money to the foundation, the opinion noted. The foundation’s “true function” is to distribute public money, which is a historic government function, the Court concluded.
The Court found the foundation clearly met two other parts of the equivalency test — that the government is extensively involved in its operation and that it was created by the government.
The Court could not clearly indicate the level of government funding received by the foundation. The MOU stated the foundation will partner with the state “to increase revenue streams,” and that in addition to settlement funds it may receive “stocks, bonds, real property and cash.”
The opinion noted the board’s director is appointed by the governor and it appears it operates in tandem with RecoveryOhio. And as the foundation is awaiting settlement funds, the attorney general’s office provided $1 million in startup funds to operate the organization.
Despite the level of government funding not being clearly established, the balancing of all the factors led the Court to conclude that the foundation is the functional equivalent of a public office.
The Court also concluded that the foundation must pay Harm Reduction’s court costs. However, the Court ruled the foundation reasonably believed it was not subject to the records act and does not have to pay damages or Harm Reduction’s attorney fees.
2022-0966. State ex rel. Harm Reduction Ohio v. OneOhio Recovery Found., Slip Opinion No. 2023-Ohio-1547.
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