Kentucky Central v. Park Broadcasting

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Kentucky Central Life Insurance Company vs. Park Broadcasting of Kentucky, Inc. Number: 913 S.W.2d 330 Year: 1996 State: Kentucky Court: Kentucky Court of Appeals Other lawsuits in Kentucky Other lawsuits in 1996 Precedents include: This case established that, in addition to the appointment of board members from a public agency, additional factors were required to be considered before naming a private corporation a public agency, including funding, day to day control, function and the use of employees.

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Kentucky Central Life Insurance Company v. Park Broadcasting of Kentucky, Inc. was a case before the Kentucky Court of Appeals in 1996 concerning the application of open records laws to private corporations.

Important precedents

This case established that, in addition to the appointment of board members from a public agency, additional factors were required to be considered before naming a private corporation a public agency, including funding, day to day control, function and the use of employees.

Background

• On February 12, 1993, a Kentucky District Court ordered the rehabilitation of Kentucky Central Life Insurance Company under the Commissioner of the Kentucky Department of Insurance. The commissioner was named rehabilitator and he quickly took control of the assets of the company pursuant to court order.
• On July 29, 1993, Bob Hensley, of Park Broadcasting, issued an open records request to Kentucky Central Life Insurance and the Kentucky Department of Insurance for records relating to bids submitted for portions of Kentucky Central's assets.
• The Department of Insurance denied the request, claiming:
  

1.) that the records were not public records because they did not relate to "functions, activities, programs, or operations funded by state or local authority."
2.) That the appointed rehabilitator was not included in the definition of public bodies.
3.) The bidding process is in a preliminary phase and exempt from disclosure.
4.) The release of the information would jeopardize the goal of revitalizing the insurer.

• The newspapers appealed the denial to the Attorney General, who ruled in favor of the newspapers.
• The case went to court and the trial court agreed with the Attorney General.
• The Commissioner and Insurance Corporation appealed the decision.

Ruling of the court

The Attorney General and the trial court both ruled in favor of the newspapers determining that the Commissioners role as a head of the commission and his role as rehabilitator were inseparable and were both functions of the same public body. Thus, the records requested were public records and subject to release.

The Court of Appeals overturned the decision of the lower court and instead ruled in favor of the insurance commission. The court first determined that the legislatures decision to make the position of rehabilitator a court appointed position indicated that it was a separate post. The court furthers this argument with the statutory language which clearly separated the roles of commissioner and rehabilitator. Based on this decision, the court rejected the trial courts contention that the rehabilitator was a public body due to its relation with the commissioner. The court also rejected the contention that the rehabilitator was a public body because it was appointed by a public body. Focusing on the legislature's intention behind Kentucky Statute 61.870.2.i, the court determined that the law only applied to private agencies whose members were appointed and which serve a public function. Adopting a 4 pronged test established by a New York case (Consolidated Edison Company v. Insurance Department of the State of New York), the court determined that:

1. The rehabilitator performed a non-governmental function.
2. The government department had little to do with the day to day control over the company's assets.
3. The funding for the rehabilitation process came entirely from the insurance corporation.
4. The employees from the Insurance Corporation, remained employees of the insurance corporation.

Based on these four factors, the court determined that the records of the rehabilitator and the insurance company are private records not subject to the act, thereby overturning the decision of the trial court.

Associated cases

• Consolidated Edison Company v. Insurance Department of the State of New York

External links

• Ruling of the Court