Justices side with Legal Aid in state records case

The Arkansas Supreme Court upheld a circuit court order requiring the state’s Division of Workforce Services to produce unredacted documents after it was determined the state agency couldn’t apply for a law enforcement exemption to a Freedom of Information Act request.

The state’s highest court affirmed Thursday a Pulaski County Circuit Court decision that requires the Division of Workforce Services to produce the unredacted information requested by Legal Aid, a nonprofit, public interest law firm.

On Oct. 13, 2020, Legal Aid submitted a request to the state’s Division of Workforce Services seeking information about how the agency and its third party vendors determined eligibility for applicants of the Unemployment Insurance and/or Pandemic Unemployment Assistance Programs.

Legal Aid stated in its petition that it had made its FOIA request after hearing from many claimants that they were having trouble accessing their unemployment benefits, and had experienced monthlong delays in processing claims, wrongful denials, unsubstantiated allegations of fraud or overpaid benefits and lack of information about applicant procedures.

The Division of Workforce Services argued that the circuit court erred by finding that certain information was not exempt from disclosure. The agency attempted to use the law enforcement exception or the competitive-advantage exception to combat the Freedom of Information Act request.

The Division of Workforce Services stated in court documents that the exemption applied to the information being sought by Legal Aid because the state agency was participating in an ongoing nationwide effort to

combat fraudulent claims related to pandemic-inspired unemployment insurance programs.

Legal Aid argued that the law enforcement exemption does not protect the information because the Division of Workforce Services is not a law enforcement agency, there is no open investigation into suspected criminal activity, and the withheld records are not sufficiently investigative to fall within the exemption.

“We agree with Legal Aid that DWS is not a law-enforcement agency, and, on that basis alone, this exemption does not apply,” Courtney Rae Hudson, associate justice of the Supreme Court, wrote in the court’s opinion.

The Division of Workforce Services also stated the redacted records were exempt due to the state law that protects “files that if disclosed would give advantage to competitors or bidders.” The state agency stated this exemption applies to the fraud factors that it sought to protect from disclosure because bad actors are competing with valid claimants to unlawfully obtain economic benefits from it and other state agencies.

Legal Aid argued unemployment claimants are not competing for the same type of work or furnishing materials to the state and that the unambiguous language in the state law does not protect the information being withheld by the Division of Workforce Services.

“[W]e agree with the circuit court’s refusal to apply this exemption to the information that the Division of Workforce Services is seeking to protect,” Hudson wrote. “Applicants for unemployment benefits are not ‘competitors’ or ‘bidders’ within the plain language of [the law].

“While DWS argues that we should employ a common-sense approach to determine that this exception also applies to its fraud factors and algorithms, it is the job of the General Assembly to establish exemptions to the FOIA, and this court can only interpret the exemption as it is written.”

The circuit court decision was affirmed by the Supreme Court but by a narrow margin, as Supreme Court justices Shawn Womack and Barbara Webb dissented from the opinion.

In her dissent, Webb wrote that recently the state’s highest court set a precedent that expanded what had been its narrow interpretation of an exception to the Freedom of Information Act as it relates to law enforcement. She said in the case titled Arkansas State Police v. Racop, they specifically found that using publicly available information to determine features about law enforcement operations and investigations fell within an exemption to FOIA disclosure.

“However, we now abandon that precedent, ignore stare decisis, and leave the public to gamble that disclosure and exemption will be at the whim of the judiciary on any given day,” Webb wrote.

Webb said the effect of the majority’s holding will result in more fraudulent claims being paid.

“Ultimately, its effect is to reallocate wealth from hard working taxpayers to unqualified criminals,” she said. “This unconsciously affronts the principles of our republic and our State.”

The case escalated Dec. 8, 2020, when Legal Aid submitted a second request specifically for 10 separate items. However, the only one at issue in this appeal is Item 10, which sought “[a]ll public records, including communications, created by, sent by, sent to, or otherwise provided to DWS employees between March 1, 2020, and present that contain the words ‘algo’ or ‘algorithm’ in singular or plural form.”

The Division of Workforce Services notified Legal Aid on Dec. 18, 2020, that it had located files pertaining to Item 10 but that it would take some time to review the 5.8 gigabytes of data and redact any confidential information. Legal Aid filed suit on Feb. 18, 2021 after the state agency failed to provide a timeline for the production of documents.

Division of Workforce Services’ representative, Don Denton, testified at a circuit court hearing on March 2, 2021, that the records for Item 10 were expected to comprise more than 42,000 pages of emails that had to be printed, reviewed and redacted where necessary. The circuit court entered an order on March 12, 2021, finding that the state agency was substantially justified in its delay responding to Legal Aid’s request; however, the court ordered the agency to submit an estimated timeline for production of the records and to provide these records to Legal Aid on a weekly basis.

The Division of Workforce Services stated in a letter sent to the circuit court on March 19, 2021, that it anticipated the process would be complete within 25 weeks.

On April 8, 2021, Legal Aid filed a motion for a conference, asserting that in 6,000 pages produced so far, the Division of Workforce Services had redacted information about algorithms, or factors, that the agency uses in processes to determine benefit eligibility.

According to court documents, the state agency told Legal Aid that disclosing the redacted information would allow “bad actors” to gain financially to the detriment of the Division of Workforce Services and valid claimants, and that it objected to disclosure under the law. The agency also claimed that the bad actors were under investigation by federal and state law enforcement that is assisting in these investigations, and that the information was also protected under the law.

Legal Aid argued in its motion that these exceptions to the FOIA were inapplicable and requested that the Division of Workforce Services be ordered to produce this information.

The circuit court entered a May 3, 2021, order finding that the state agency’s redactions were justified.

Legal Aid on June 9, 2021, filed another motion alleging that the Division of Workforce Services had produced 2,103 files and that the state agency had indicated that its response to the FOIA request was complete. Legal Aid argued that hundreds of pages had been redacted and that Division of Workforce Services’ redactions were improper.

The case was reassigned to a different circuit court judge after the original judge recused herself due to a conflict. On July 28, 2021, the circuit court entered an order granting Legal Aid’s motion to compel. The court ordered that the unredacted documents be produced, that access to the documents be limited to counsel of records and their immediate support staff, that no electronic copies of the unredacted documents be created or stored, and that no publication of documents be allowed.

That was when the Division of Workforce appealed.