by Erica Horn
In Pike County Fiscal Court v. Utility Management Group, LLC,1 the Kentucky Court of Appeals considered whether a change to Kentucky’s Open Records Act (“ORA”) was merely a clarification—and thus would apply retroactively—or a substantive change to the law. At issue in this case was whether Utility Management Group, LLC (“UMG”) qualified as a public agency subject to the disclosure requirements of the ORA. Notably, UMG provided water, sewer, garbage, and other services to the City of Pikeville and a Pike County Water District through publicly bid contracts. Pike County sent an open records request to UMG seeking copies of UMG’s “checks and expenses.”
At the time of the request, KRS 61.970(1)(h) treated as public agencies subject to the ORA – “any body which derives at least twenty-five percent (25%) of its funds … from state or local authority funds.” UMG denied the request, claiming UMG constituted a “wholly private entity” not subject to the ORA. Pike County requested the Office of the Attorney General (“OAG”) to review UMG’s refusal to comply with the ORA request, and the OAG determined that UMG fell within KRS 61.970(1)(h) and should comply with Pike County’s request. UMG then challenged the OAG’s decision in Pike Circuit Court. Before the circuit court could rule, the Kentucky General Assembly amended the ORA to exempt from the 25% calculation public funds received as compensation for goods and services provided by a publicly bid contract. The circuit court treated the amendment as a “remedial clarification” that applied to all pending suits and thus held that UMG fell within the exception and was not a public agency subject to the ORA.
However, the Kentucky Court of Appeals disagreed and held that the amendment to KRS 61.970 represents a substantive instead of remedial change in the law, and therefore did not apply retroactively. In reaching this decision, the court first noted that Kentucky statutes do not apply retroactively unless the statute explicitly provides for retroactivity. Finding no express statement of retroactivity, the court next stated, “statutory amendments that seek only to clarify, not substantively change, existing law are remedial in nature.” These remedial amendments apply retroactively even absent an express statement of retroactivity.
Kentucky has not adopted a specific test to determine whether an amendment clarifies or substantively changes a statute. Therefore, the court examined law from other jurisdictions and “identified three criteria courts generally consider: (1) the plain language used by the General Assembly in the amendment itself; (2) any case law or agency decision indicating the prior statute was susceptible to differing interpretations; and (3) legislative history surrounding the amendment.”
In determining that the amendment to KRS 61.970(1)(h) did not merely clarify the law, the court analyzed these three criteria. First, the court noted that none of the plain language of the amendment suggested that the General Assembly intended the changes as only a clarification. Second, the court analyzed the history of the ORA and noted that the Act remained virtually unchanged for over thirty-five years. The court found this to be convincing evidence that the General Assembly intended the amendment as a substantive change and not a mere clarification. 3rd, the court noted: “There appears to be no prior case law by our courts deeming this portion of the ORA ambiguous.” The court thus concluded that the amendment to KRS 61.970 was a substantive change to the law and should not apply retroactively.
1 Kentucky Court of Appeals, No. 2013-CA-000929-MR (June 12, 2015, To Be Published)