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Conflict Of Interest Alleged By FOIL Litigant Seeking Details Of BusPatrol’s Contract With Rockland County
A law firm fighting Rockland County to reveal the terms of its contract with BusPatrol now alleges that the surveillance company’s attorneys who are representing Rockland County have a conflict of interest.
Aron Law, a Brooklyn-based law firm denied those records filed a lawsuit in March against the county to secure the records, alleging violations of New York’s Freedom of Information Law (FOIL). On Friday, the firm filed a motion in Rockland County Supreme Court to disqualify Nixon, Peabody from representing the County.
Aron Law says that BusPatrol’s lawyers from Nixon Peabody have a conflict of interest that can’t be resolved and is asking the court to disqualify the firm from the case. It says the County and BusPatrol have different and divergent interests and obligations that cannot be reconciled.
BusPatrol is a private company that shares in the revenue from the issuance of citations for drivers alleged to have passed stopped school buses.
Last year, Aron Law filed a FOIL request for the contract terms between Rockland County and BusPatrol, and documents detailing how BusPatrol and the county share revenue from the issuance of citations, how much BusPatrol charges the County for technology and administration, how much the County pays monthly per bus to maintain the cameras and data, and other details about how public funds and county personnel are being utilized.
The County is being defended by BusPatrol’s lawyers at Nixon Peabody who are seeking to keep the records from public disclosure.
Rockland County has confirmed to RCBJ that the legal fees for the county’s representation by Nixon Peabody, a national law firm with 16 offices and more than 700 lawyers, are being paid by BusPatrol, whose primary interest is keeping the specific terms of its contract with Rockland County secret from public disclosure.
Nixon Peabody is also representing Dutchess County in a similar suit, also brought by Aron Law under New York’s Freedom of Information Law where the law firm is seeking similar records from Dutchess County.
Aron Law has also asked the Dutchess County Supreme Court to disqualify Nixon, Peabody in that litigation.
BusPatrol is not a party in either the Rockland or the Dutchess County litigation.
In denying Aron Law access to the contract terms, Rockland County cited a FOIL exemption that allows the County to withhold or redact information that amounts to a “trade secret” or information that if disclosed would cause “substantial injury to the competitive position of the subject enterprise.”
In its FOIL denial, the County acknowledged that “BusPatrol informed the County that it keeps the redacted information confidential, limiting access to such information to select individuals in its organization.”
Rockland County, in affirming the trade-secret redactions, said, “in discussions with BusPatrol, the RAO has learned” that the information in the redacted portions constituted “trade secrets,” and further recited BusPatrol’s position that the information was kept confidential, had commercial value, and would cause competitive harm if disclosed.
The County is required to make an independent assessment and determination as to whether a statutory exemption applies.
And, although the details of BusPatrol’s contracts with many other municipal entities are publicly available, the County asserts that revealing the terms of Rockland County’s arrangement would adversely prejudice BusPatrol.
Dutchess County has made similar assertions and is also attempting to keep the details of its contract secret, also through BusPatrol’s attorneys.
BusPatrol’s bid and contract with Rockland County contains several clauses stating that the contract terms are proprietary and exempt from public disclosure. Whether that is enforceable or not will largely be up to a court.
Herein lies the conflict, or the potential conflict.
Aron Law has filed motions in both Rockland County and Dutchess County to have Nixxon Peabody disqualified from representation, based primarily on the divergence of interests between the counties’ obligations to open disclosure of records under state law versus Buspatrol’s well-financed efforts to keep the information secret.
Under the New York Freedom of Information Law, a municipality’s primary obligation is to presume all records are public and disclose them unless they fall under a specific, statutorily mandated exemption.
Generally, trade secrets and records containing commercial enterprise secrets that would cause substantial competitive injury if released are exempt from disclosure.
The County though has a duty to the public disclosure of bids, contracts, and how it spends and accounts for public funds.
Courts have held that revealing the terms of public contracts fosters the purpose of the Freedom of Information Law “to shed light on government decision-making, which in turn both permits the electorate to make informed choices regarding governmental activities and facilitates exposure of waste, negligence and abuse.”
Courts have also held that vendors who choose to bid on contracts to provide services to public agencies have no reasonable expectation of privacy, and that a successful bidder on a public contract “has no reasonable expectation of not having its bid open to the public.”
New York law also provides a mechanism for BusPatrol (or any other contract vendor) to protect its own interests and apply to a court to stop disclosure of its trade secrets or competitive information.
A local attorney advises that in a commercial setting, it is not unusual to see defense and indemnification provisions requiring one party to defend or reimburse another. There are also joint defense or common-interest arrangements where parties’ interests are aligned. Those types of arrangements are generally permissible, but a conflict can arise where the interests of the County and BusPatrol diverge.
“For example, a municipality has independent obligations under FOIL and broader public responsibilities regarding transparency and disclosure of public records. A contractor, on the other hand, may have commercial interests in protecting proprietary business information, pricing structures, or contractual terms from disclosure. If those interests become materially adverse, conflict questions can arise.”
“From a public policy perspective, courts are often mindful that government entities owe duties of accountability and transparency to taxpayers, particularly where public funds and governmental contracts are involved.”
Aron Law asks the Court to disqualify Nixon Peabody from representing the County and direct the County to retain independent counsel. In the alternative, if the Court doesn’t see an inherent conflict, it asks the Court to review the retention contract, fee-payment, indemnity, informed-consent, conflict-waiver, joint-defense, common-interest, and related documents to enable the Court to determine if a conflict exists that would preclude Nixon Peabody from continuing to represent the County.
A similar request is pending in Dutchess County Supreme Court.
