Despite receiving nearly $2 billion in taxpayer funding annually, the Public Employees’ Retirement System of Nevada (PERS) has spent years — and hundreds of thousands of taxpayer dollars — arguing that the public does not have a right to access records documenting how these taxpayer-funded benefits are calculated or distributed.
PERS preference for secrecy stands in stark contrast to the transparency found in the vast majority of states nationwide, where similar pension data is made public either via explicit legislation or court rulings.
In states like New Jersey and Rhode Island, for example, there are specific statutes that make pension data public. The fact that such laws were passed in states where government unions are most powerful is worth considering when PERS asserts that similar disclosure here would pose grave harm to its members. Said differently, if disclosing this information actually did pose a harm to public employees, then states like New Jersey and Rhode Island would be the last place such laws would have been implemented.
In the other states that make this information public, like California and New York, the courts have ruled that pension data is a public record under their state’s respective public records law, despite no legislation explicitly addressing pension data.
California’s case law is of particular relevance as it addresses an almost identical set of arguments and facts at play here.
Specifically, the California public pension systems argued that the statutorily undefined term “individual member files” — which are declared to be confidential — should encompass all records a retirement system creates for purposes of conducting the governmental function of calculating and paying out monthly pension benefits.
This claim was roundly rejected by multiple California courts, who found such a definition was far too broad, not supported in the legislative history and in violation of the mandate that the state’s public records law be construed liberally. In a definitive ruling on the matter, California’s 4th District Court of Appeal held that:
Public employees lack a reasonable expectation of privacy in an expense the public largely bears after their retirement…The names of pension recipients combined with their pension amounts is not information of a personal nature…Rather, the pension amounts reflect specific governmental decisions regarding retirees’ continuing compensation for public service. Therefore, the pension amounts are more comparable to public salaries than to private assets. Retirees’ publicly funded pensions — like their previous salaries — are of interest to the public, and only through the disclosure can the public expect to prevent abuse.
Unfortunately, PERS has spent nearly a decade trying to convince the Nevada judiciary of precisely the opposite.
2011: When the first of 3 separate Nevada courts would rule in favor of disclosure
In 2011, the Reno Gazette-Journal (RGJ) was forced to file a lawsuit after PERS denied their request for records documenting the names and benefit amounts of public pension recipients.
In his ruling ordering PERS to disclose the requested information, Carson City District Court Judge James Russell cited the fact that since state law makes active government employees’ compensation public, “it thus follows” that the benefits they later receive “as a result of the compensation amounts paid to them while they were active public employees are likewise public information.”
After a lengthy appeal, the state Supreme Court ruled that the requested information was public, but in doing so gave PERS an out that would ultimately force the Court to revisit this issue.
While the Court unanimously affirmed Judge Russell’s finding that the requested pension data was public, their ruling stated PERS had no obligation to extract this information from their computer database, but instead only had to turn over an existing, already published report that happened to contain the information requested by the RGJ, as well as several additional data points.
Thus, after being remanded back to Judge Russell — who reportedly chastised PERS after learning that some of their previous testimony was false — PERS finally turned over a copy of the report that contained all of the requested information for the 2013 fiscal year.
That would be the first and only time PERS produced a copy of a report with the information the state Supreme Court expressly ruled was public.
2015: PERS changes record-keeping practices to hide the very information the Nevada Supreme Court ordered to be disclosed, forcing yet another lawsuit
When NPRI submitted a records request the following year for the updated, FY2014 version of that same report, PERS responded by providing a version of that report that no longer contained the pension recipients’ names — rendering it mostly useless.
PERS stated that sometime after the state Supreme Court ruling ordering disclosure, they chose to no longer create a report with names alongside the pension payout data, using Social Security numbers instead, which are confidential and thus were properly redacted.
PERS asserted that the 2013 Reno Newspapers ruling meant they had no obligation to re-attach names or extract the requested information from their database.
Consequently, NPRI was forced to file a lawsuit seeking the exact pieces of data the state Supreme Court ruled public just two years prior.
This time, it was Carson City District Court Judge James Wilson presiding. Unfortunately, PERS would present the same type of misleading testimony that had frustrated Judge Russell in the previous case.
In the 2015 Nevada Supreme Court case Blackjack Bonding, the Court ruled that if “an agency has a computer program that can readily compile the requested information, the agency is not excused from its duty to produce and disclose that information.”
Because of this ruling, PERS has gone to great lengths to assert that there are no existing reports in their possession that would allow for the matching of benefit recipients’ names to their corresponding social security numbers — as NPRI requested when first presented with the names-less FY2014 pension data report from PERS.
In an evidentiary hearing before Judge Wilson, PERS Chief Operations Officer Cheryl Price stated that PERS possessed no records that contained benefit recipients’ names alongside their social security number, apart from the confidential individual members’ files. This potentially perjurious statement was immediately revealed to be false when, in response to questioning by NPRI Chief Legal Counsel Joseph Becker, Ms. Price admitted PERS does create a separate, public record — known as the monthly payment register — that contains both the Social Security number and full name of all pension recipients.
Ms. Price would later attempt to explain her misrepresentation by claiming that the monthly payment register is “not something we contain at all times,” but this too is false. As the name implies, the monthly payment register is created every month, and must be retained for a minimum of 3 years, according to the state guidelines which dictate PERS records retention schedule.
Of course, the existence of these two reports means reattaching names could be accomplished in roughly 5-10 minutes by using the automated, standard feature of Microsoft Excel known as “V-Lookup.”
But PERS would later tell the Court that producing this information would require them to engage in “extreme technological contortions,” which is a bit of an overstatement, to say the least!
Finally, in a tense exchange between PERS counsel and Judge Wilson, PERS falsely claimed that information regarding how much retirees are being paid “is confidential by statute.” Perplexed, Judge Wilson asked PERS to reconcile such a claim with the unanimous state Supreme Court ruling in Reno Newspapers that held that the requested pension data was public.
“Well, we have our own issues with that decision,” PERS declared, prompting Judge Wilson to reply, “But that is the decision. I mean, that’s the law.”
The exchange would conclude with Judge Wilson asking PERS if they felt anyone — even the Governor or Legislature — had the right to access records to see “who’s getting [paid] what.”
PERS responded that “by statute,” no one outside of PERS itself has a right to access that information.
Ultimately, Judge Wilson found PERS arguments to be without merit and ordered that they create a report with the requested information, a decision which PERS appealed and is now being heard before the state Supreme Court.
In their final written brief filed before the Court, PERS would again continue the pattern of misrepresentation evidenced at the trial court, claiming that complying with NPRI’s request would mean releasing information “despite being instructed by this Court that such information was confidential.”
That is false.
NPRI’s request was for the exact fields of data the Court declared were public records in Reno Newspapers — which was the primary reason Judge Wilson ordered PERS to disclose the information at the trial court.
It would appear PERS has shifted from expressing their disagreement with the Reno Newspapers ruling, to misrepresenting it to mean precisely the opposite of what it actually said!
While PERS has seemingly employed a “throw everything against the wall and see what sticks” strategy in this 2nd appeal — like arguing that they should not have to comply with Judge Wilson’s order because their data routinely changes or contains errors — there are two arguments worth addressing.
PERS: If a statutory term is undefined, we should be able to define it in terms most favorable to us and in a manner that directly violates the legislative purpose of Nevada’s Public Records Act.
As they did in the Reno Newspapers case, PERS again argues that the undefined term “individual members’ files” should include the entirety of their computer database — despite no such database existing when the statue was passed in 1977, in addition to the undeniable fact that today’s computer database contains vastly more data than the narrow category of physical paper files referenced at the time the statute was enacted.
The legislative minutes from 1977 further reinforce this notion, perhaps most clearly when then-PERS Executive Officer Vernon Bennett raised concerns that the bill did not provide enough secrecy. In response, the minutes reflect Senator Wilson stating that “If they [PERS] were going to provide for confidentiality they should do it with more specificity than presently in the bill.”
In other words, one of the key lawmakers who passed the 1977 “individual member files” exemption explicitly stated that the bill was limited in its scope of confidentiality.
And, of course, all of this analysis must be conducted under a framework wherein public access is construed broadly and restrictions narrowly, per the legislative mandate of Nevada’s Public Records Act.
Although the term is undefined in statute, the discussion in the legislative minutes from 1977 suggest it was used in a manner comparable to an active employee’s personnel file, in that it contained sensitive information — such as an employee’s medical records, disability claims, home address, etc. — which are rightfully confidential due to their highly sensitive nature and the fact that they reveal little to nothing about government operations.
By contrast, the pension data sought by NPRI, and the RGJ previously, is strictly limited to those records necessary for understanding the governmental function of calculating taxpayer-funded pension benefits.
A confidentiality clause designed to protect sensitive personnel records unrelated to governmental functions should not be broadly construed to include non-sensitive records directly relating to governmental functions in which the public has a legitimate interest.
An unduly narrow interpretation of Nevada’s definition of a public record
PERS has been able to re-litigate this issue because of a loophole in the state Supreme Court’s 2013 Reno Newspapers ruling, which found that while the pension data requested was public, PERS was only required to provide copies of existing reports that contained that information.
Specifically, the Court held that an agency has no obligation to “create new documents or customized reports…” in response to a public records request.
Thus, by simply no longer creating any reports with pension information alongside names, PERS can respond to requests for that information by stating no such document exists.
But this ruling is unduly narrow, given Nevada state law defines a public record to include, without limitation:
(a) Papers, unpublished books, maps and photographs;
(b) Information stored on magnetic tape or computer, laser or optical disc;
(c) Materials that are capable of being read by a machine…
While the first subsection lists very precise materials that qualify as a public record, the second subsection uses the much broader term “information” stored on a computer, not merely existing reports or documents.
The Legislature’s deliberate use of the inherently broad “information,” immediately following the use of much more specific terms like maps and photographs, makes clear that public records encompass all information stored on a computer, regardless of whether or not it has already been extracted into an existing document.
This is something the State of Nevada, of which PERS is a political subdivision, recognizes in their official guidebook Nevada Public Records Act: A Manual for State Agencies.
As a subdivision of the State, PERS is legally required to follow the instructions set forth in their manual, and even admitted as much in their brief when arguing that the Manual has “the force of law.”
So what does the Manual have to say on this matter?
First, under the section titled “What is a public record?” the manual offers that:
“Computer software developed by the government is not a public record, but the computer software may generate public records.”
Here is a clear recognition that the extraction of existing public records (defined in statute as “information” stored on a computer) might require computer software to “generate” the records being requested. If PERS was correct in their narrow interpretation of defining public records to include only existing, already-created documents, there would be no need for an agency to rely on computer software to “generate” a public record in the first place.
Then, under a section entitled, “Extraordinary use fees,” the Manual offers the following as one example of when an agency is permitted to charge an extraordinary use fee:
“Extracting information that the requester is entitled to inspect requires computer programming.”
This fits the description of Judge Wilson’s order to a tee. NPRI requested the exact pieces of information ruled public by the Nevada Supreme Court in Reno Newspapers. That information already exists within PERS computer database, albeit no longer in an already-created report or document.
But because state law defines public records in the broad terms of information stored on a computer, the state Manual correctly recognizes that the agency must extract that information into a readable format, although they may charge a production fee if doing so would require computer programming.
This is also just common-sense. For state law to define a public record to include “without limitation…information stored on a computer,” necessitates that the agency must make that information available in a readable format — even if that means creating a new document.
Any other interpretation is inherently illogical. It is of little use to declare information stored on a computer to be public and open to all, but then allow agencies to freely deny a request to access that information on the grounds that doing so would require them to create a new document!
To the extent public agencies are not required to create a new record, it is imperative that we recognize the plain statutory language of what a record entails. A public agency is not required to create new information in response to a request, but they must be required to create a new document if that is the only mechanism by which the public can access the existing information (public record) stored on a computer database.
Revisiting the Ohio case law cited in Reno Newspapers
In finding that PERS did not have to “create new documents or customized reports…” the Nevada Supreme Court in Reno Newspapers cited Ohio case law that appeared to support such a finding.
Since then, however, Ohio’s foremost authority on their state’s public records law — the Ohio Attorney General — expanded on that precise issue in the official 2017 Ohio Sunshine Laws Manual, writing that:
A database is an organized collection of related data. The Public Records Act does not require a public office to search a database for information and compile or summarize it to create new records.
However, if the public office already uses a computer program that can perform the search and produce the compilation or summary described by the requester, the Ohio Supreme Court has determined that the output already “exists” as a record for the purposes of the Public Records Act.
PERS has testified that their CARSON database is specifically designed to store and extract the fields of data requested. Indeed, they have done so previously. Thus, the very Ohio law cited in Reno Newspapers clearly recognizes that information stored in a computer database is a public record, and must be extracted in response to a public records request.
Accepting PERS arguments would gut the Nevada Public Records Act in its entirety. In the modern age, the vast majority of government records are now stored as information in a computer database. Permitting an agency to deny a request, merely because that information has not already been extracted into an existing document, would give governments the ability to shield records from public inspection at their discretion — which is precisely what the Nevada Public Records Act is supposed to prevent!
As the instant case proves, this isn’t merely hypothetical. In fact, this is precisely what PERS did when they “disagreed” with the binding case law in Reno Newspapers that ordered disclosure of records relating to the governmental function of calculating and distributing taxpayer-funded pension benefits.
NPRI will appear before the Nevada Supreme Court on March 7, 2018 at 10:00 am for oral arguments.
Update: On October 18, 2018 the Nevada Supreme Court ruled in our favor and held that government agencies are required “to query and search its database to identify, retrieve, and produce responsive records for inspection if the agency maintains public records in an electronic database.”