Chancellor's TNInvestco records decision against Coleman

By Milt Capps Last updated 7:54 a.m. March 4, 2010

Published March 2, 2010

Comment

Coleman

Nashville Chancery Court Chancellor Russell Perkins' decision released today gives a win to two state commissioners who sought to keep confidential TNInvestco records demanded by venture capitalist Larry Coleman, who had sued for access under the Public Records Act.

In a memo filed just after 2 p.m. today, Perkins said that while attempting to "balance the public's right to know," he had determined that while some of the information might not be protected by state officials using exemptions within the Public Records Act, itself, the commissioners nonetheless have authority provided by statutory exception to "designate certain public records as sensitive and confidential."

An Associated Press story published March 4 in the Knoxville News Sentinel said Coleman told the AP he would appeal the Chancellor's decision.

Chancellor Perkins' memorandum is available here (pdf).

At one point in his tautly reasoned memo, Chancellor Perkins said he had determined that the records in question "could reasonably be characterized as sensitive documents," the diclosure or release of which "would seriously harm the ability of our State to compete or conclude agreements on [sic] contracts for economic or community development."

Chancellor Perkins cited existing law that supports treating the TNInvestco documents as confidential until Feb. 5, 2015.

Coleman sued under the Public Records Act as an individual, though he is a principal in VC Coleman Swenson Booth and a co-founder of Coleman Swenson Crist LLC, a certified, but unfunded TNInvestco competitor.

At issue, finally, were 25 scored TNInvestco evaluation matrices, tax credit purchase documents, side letters and a letter of understanding. Coleman argued, in part, that it was impossible for him or others to determine the rationale by which six competitors were chosen from a field of 25 applicants, while the rest of the field, including his own fund, did not win TNInvestco allocations.

In responding to Coleman's petition, Revenue Commissioner Reagan Farr and Economic and Community Development Commissioner Matt Kisber argued that laws shielding tax information, tax administration and economic-development data and deliberations out-weighed Coleman's complaint.

Updated 4:10 p.m.: Kisber (at left) issued a statement after the ruling: "I'm pleased by the court's ruling that our department clearly followed the law and was within its right to protect confidential information provided by companies investing in the state of Tennessee. We fully understand the need for open government, and we are committed to upholding that principle while balancing the need of our state to maintain a competitive posture as we sseek to attract new investment and create jobs for the people of Tennessee."

Farr (at right) also issued a statement this afternoon: "We’re pleased and gratified Chancellor Perkins agreed

with the intent of the Tennessee General Assembly in passing the Tennessee Small Business Company Investment Credit Act of 2009. The legislature understood that for the TNINVESTCO program to be successful, it would be necessary to give the commissioners of Revenue and ECD appropriate discretion in choosing the applicants, while putting in place strong reporting and oversight procedures and protecting the proprietary strategies of the individual TNINVESTCOs and the confidential taxpayer information of the insurance companies. This ruling recognizes the Act protects the interest of the taxpayers and the stakeholders.”

Chancellor Perkins said that the "deliberative process privilege" invoked with support of the State's Attorney General is adequate to prevent disclosure of the records Coleman had sought.

The Chancellor directed State attorneys to prepare for his approval or amendment a final order that conveys his decision as a ruling, denies Coleman's request that he be reimbursed his attorneys fees by the State, and assesses against Coleman all court costs.

The Chancellor's decision memo indicated that in seeking reimbursement for fees, Coleman had failed to prove that the commissioners had acted "willfully" in withholding information Coleman sought.

A VNC query to Coleman's office has not yet produced a response. ♦