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  "id": 4171476,
  "name": "STATE EMPLOYEES ASSOCIATION OF NORTH CAROLINA, INC., Plaintiff v. NORTH CAROLINA DEPARTMENT OF STATE TREASURER, and RICHARD H. MOORE, in his capacity As Treasurer of the State of North Carolina, Defendantsp",
  "name_abbreviation": "State Employees Ass'n of North Carolina, Inc. v. North Carolina Department of State Treasurer",
  "decision_date": "2009-11-03",
  "docket_number": "No. COA08-1326",
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  "provenance": {
    "date_added": "2019-08-29",
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    "judges": [
      "Judge BRYANT concurs.",
      "Judge ELMORE dissents by separate opinion."
    ],
    "parties": [
      "STATE EMPLOYEES ASSOCIATION OF NORTH CAROLINA, INC., Plaintiff v. NORTH CAROLINA DEPARTMENT OF STATE TREASURER, and RICHARD H. MOORE, in his capacity As Treasurer of the State of North Carolina, Defendantsp"
    ],
    "opinions": [
      {
        "text": "BEASLEY, Judge.\nPlaintiff appeals from an order dismissing Plaintiff\u2019s complaint for failure to state a claim pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. For the reasons stated below, we affirm.\nPlaintiff is a nonprofit corporation incorporated in North Carolina, whose purposes include promoting the best interests and welfare of current, retired, and future employees of the State of North Carolina. On 1 February 2008, Plaintiff filed a complaint against North Carolina Department of State Treasurer (Defendant Department) and Richard H. Moore (Defendant Moore), Treasurer of the State of North Carolina (collectively Defendants). Under N.C. Gen. Stat. \u00a7 132-1 through 132-10, Plaintiff made a request for documents under public records law.\nThe complaint alleged that the 12 March 2007 issue of Forbes magazine published an article entitled \u201cPensions, Pols and Payola.\u201d The article:\ninsinuat[ed] that the Defendant Moore had instituted a \u201cpay for play\u201d system over investment decisions as sole fiduciary for the $73 billion in the state retirement system, had initially failed to provide public record information about the identity and payments to individual investment fund managers hired or retained by his office, had hired a private law firm to handle Forbes\u2019 inquiries, and only handed over those records after Forbes threatened him with a lawsuit.\nBased on the information provided in the Forbes article, Plaintiffs Executive Director, on behalf of Plaintiff, wrote a letter to Defendant Moore on 1 March 2007. The letter requested the following information:\n1. All documents from the Office of State Treasurer and the law firm retained regarding the dispute with Forbes over the magazine\u2019s request for information and the documents provided to Forbes.\n2. A complete accounting of how the law firm was paid and the total cost to taxpayers.\n3. All investment reports that your office has been required during your tenure to file with the legislature under GS 147-69.3(h)-(i), any other investment reports that have been required to be publicly filed under state law and identification of such reports that have not been filed.\n4. A list of all current investment managers, their performance by year (or total time if shorter than a year) and the total fee amounts being paid by your office.\nIn response to the March 2007 letter, Defendant Moore met with Plaintiffs Board of Governors, delivered to them 700 pages of public documents, and gave a presentation on those documents and the status of the pension fund. Plaintiff believed that the documents provided by Defendant Moore were incomplete and did not fully satisfy the March 2007 letter\u2019s request. On 16 October 2007, Plaintiff wrote a second letter to Defendant Moore. Plaintiff requested the following records, in addition to the records requested in the first letter:\n1. All private equity, hedge fund or real estate investments made or maintained by the Treasurer\u2019s Office on behalf of the state\u2019s pension funds since January 1, 2001. Please provide records that show the following information for each year that the investment was maintained by the Treasurer\u2019s Office:\na. Name of the fund or partnership\nb. Name of the principals, fund managers and general partners\nc. Date of the initial commitment, initial investment and any follow-[up] communications\nd. Amount of capital committed and the actual amount of funds paid\ne. Cash paid out\nf. Remaining or estimated value\ng. Internal rate of return\nh. Investment multiple or return on capital\n2. Records that show the fees paid to each external investment manager for the state\u2019s pension funds, including brokers, private equity managers, hedge fund, managers and real estate investment managers since January 6, 2001. Please provide records that show the fees paid on an annual or monthly basis.\n3. Records that show the fees paid to each broker, bank or other financial institution that manages or holds the investments, cash and/or deposits in the Cash Management Program from January 6, 2001, to the present. Please provide records that show the fees paid on an annual or monthly basis.\n4. Records that show all stocks held each year by the state retirement system (including externally managed funds) administered by the State Treasurer from January 6, 2001, to the present.\n5. Records that show the identity of each person who has served on the State Treasurer\u2019s investment committee since January 6, 2001. Please provide records that show the dates of service for each advisor, including any SEC investment advisor, registration forms or form ADV\u2019s provided to or retrieved by the State Treasurer\u2019s Office.\nPlaintiff wrote a third letter to Defendant Moore on 6 December 2007, warning that if Defendant Moore did not supply the requested documents by 31 December 2007, Plaintiff would take \u201cappropriate legal action to require your compliance with the Public Records Act.\u201d After the 6 December 2007 letter, Plaintiff and Defendants exchanged six additional letters between 21 December 2007 and 24 January 2008. In a 21 December 2007 letter, Defendants communicated to Plaintiff that they believed their production of the more than 700 documents had fully satisfied Plaintiff\u2019s 1 March 2007 request, and that if Plaintiff believed that there were \u201cstill outstanding documents from [their] requests\u201d, it should provide Defendants with a list of specific information it desired.\nIn February 2008, Plaintiff filed a complaint alleging that Defendants had violated the North Carolina Public Records Act, set out in N.C. Gen. Stat. \u00a7 132-1 et seq. Plaintiff sought a declaratory judgment that the requested records be deemed public records under N.C. Gen. Stat. \u00a7 132-1 and an order requiring Defendants to produce the requested records to Plaintiff under N.C. Gen. Stat. \u00a7 132-9(a). In March 2008, Defendants filed an answer seeking dismissal of Plaintiff\u2019s claims pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure for failure to state a claim upon which relief can be granted. In July 2008, the trial court entered an order granting Defendants\u2019 motion to dismiss and dismissing Plaintiff\u2019s complaint. From this order, Plaintiff appeals.\nPlaintiff argues that the trial court erred in granting Defendants\u2019 Rule 12(b)(6) motion to dismiss because Plaintiff\u2019s complaint alleged all necessary elements to state a claim for production of records under the Public Records Act. For the reasons stated below, we disagree.\nOn appellate review, we must determine whether:\nas a matter of law, the allegations of the complaint, treated as true, state a claim upon which relief can be granted. Dismissal under Rule 12(b)(6) is proper when one of the following three conditions is satisfied: (1) the complaint on its face reveals that no law supports the plaintiff\u2019s claim; (2) the complaint on its face reveals the absence of facts sufficient to make a good claim; or (3) the complaint discloses some fact that necessarily defeats the plaintiff\u2019s claim.\nWood v. Guilford Cty., 355 N.C. 161, 166, 558 S.E.2d 490, 494 (2002) (citations omitted). \u201cIn analyzing the complaint under Rule 12(b)(6), the complaint must be liberally construed.\u201d George v. Administrative Office of the Courts, 142 N.C. App. 479, 481-82, 542 S.E.2d 699, 701 (2001). We review the trial court\u2019s decision de novo. Id.\nPlaintiff alleged in their complaint, that Defendants had \u201cfailed to provide copies of a significant portion of the public records requested in [the 1 March 2007 letter] and practically all of the public records requested in [the 16 October 2007] letter.\u201d The Public Records Act:\ncodified in sections 132-1 et seq. of the North Carolina General Statutes \u201caffords the public a broad right of access to records in the possession of public agencies and their officials.\u201d . . . [It] permits public access to all public records in an agency\u2019s possession \u201cunless either the agency or the record is sp\u00e9cifically exempted from the statute\u2019s mandate.\u201d\nGannett Pacific Corp. v. N.C. State Bureau of Investigation, 164 N.C. App. 154, 156, 595 S.E.2d 162, 163-64 (2004) (quoting TimesNews Publishing Co. v. State of N.C., 124 N.C. App. 175, 177, 476 S.E.2d 450, 451-52 (1996)). In a claim under the Public Records Act,:\n[t]he burden is on the [Defendants] to comply with Plaintiff\u2019s request by reviewing its records and releasing all information relating to [Plaintiff\u2019s request] defined as public records. If, after reviewing its records, [Defendants] determinef] it does not have custody of any information classified as public records, denial of Plaintiff\u2019s request may be appropriate. Before this determination is made, however, dismissal of Plaintiffs\u2019 complaint is premature.\nId. at 159, 595 S.E.2d at 165.\nIn the present case, Defendants alleged in their answer that they had reviewed their records and produced all responsive public records, amounting to over 2,000 pages. Defendants also alleged that other documents were \u201cexcepted from Plaintiff\u2019s public records request as \u2018trade secrets\u2019 within the meaning of N.C. Gen. Stat. \u00a7 \u00a7 132-1.2(1)a and 66-152(3)[.]\u201d Defendants delivered numerous documents to Plaintiff, met with Plaintiff to offer an explanation of the records that were produced, and requested that Plaintiff provide a list of specific items that they believed were missing. After Defendants reviewed their records to determine which records were public, it was reasonable for Defendants to deny Plaintiffs requests regarding the public records that were not in their possession and records which contained trade secrets and therefore were within the public records exception.\nWe hold that the face of Plaintiffs complaint failed to state sufficient facts to make a valid claim under the Public Records Act. The complaint did not allege that Defendants were in possession of any particular public records that were being wrongfully withheld from Plaintiff, but merely alleged that Defendants had failed to provide portions of the requested public records. Because Defendants reviewed their records and requested that Plaintiff provide a list of specific information they believed to be missing, Defendants met their burden. The granting of Defendants\u2019 Rule 12(b)(6) motion was not premature.\nThe dissent contends that \u201cthe majority\u2019s interpretation of the elements of a legitimate claim under the Public Records Act is inconsistent with our holding in Gannett Pacific Corp. v. N.C. State Bureau of Investigation, 164 N.C. App. 154, 595 S.E.2d 162 (2004).\u201d We hold that the procedures followed by Defendants were consistent with the procedures contemplated by Gannett. Defendants fully complied by reviewing and releasing all public records that were in their custody, pursuant to Plaintiff\u2019s requests. The dissent also believes that the definition of \u201cpublic records\u201d does not include a \u201cpossession\u201d requirement. N.C. Gen. Stat. \u00a7 132-6(a) (2007) states that \u201c[e]very custodian of public records shall permit any record in the custodian\u2019s custody to be inspected and examined. . . .\u201d (emphasis added). Accordingly, the plain language of the statute suggests that a custodian of public records is required to only produce public records in their custody. We hold that although Plaintiff did not have the burden of showing Defendants\u2019 possession of the requested public records, Defendants correctly reviewed their records, determined which public records were in their possession, and produced the responsive public records.\nFor the foregoing reasons, we affirm the trial court\u2019s order and hold that the trial court did not err in granting Defendants\u2019 motion to dismiss pursuant to Rule 12(b)(6).\nAffirmed.\nJudge BRYANT concurs.\nJudge ELMORE dissents by separate opinion.",
        "type": "majority",
        "author": "BEASLEY, Judge."
      },
      {
        "text": "ELMORE, Judge,\ndissenting.\nFor the reasons stated below, I respectfully dissent from the majority opinion affirming the dismissal of plaintiffs complaint for failure to state a claim pursuant to Rule 12(b)(6) of our Rules of Civil Procedure.\nThe Public Records Act requires state government agencies to grant reasonable access to public records when requested. \u201c[I]t is the policy of this State that the people may obtain copies of their public records and public information free or at minimal cost unless otherwise specifically provided by law.\u201d N.C. Gen. Stat. \u00a7 132-l(b) (2007). N.C. Gen. Stat. \u00a7 132-9 provides a cause of action when a government agency denies access to public records:\nAny person who is denied access to public records for purposes of inspection and examination, or who is denied copies of public records, may apply to the appropriate division of the General Court of Justice for an order compelling disclosure or copying, and the court shall have jurisdiction to issue such orders.\nN.C. Gen. Stat. \u00a7 132-9(a) (2007).\nThe majority holds that, to make a valid claim under the Public Records Act, a plaintiff must plead that defendants \u201cwere in possession of. . . particular public records that were being wrongfully withheld\u201d and that alleging that defendants \u201chad failed to provide portions of.. . requested public records\u201d was insufficient. Our courts have not yet specified the elements needed to make such a claim, but, based upon the plain language of \u00a7 132-9(a), it appears clear that a plaintiff must allege that (1) it sought access to public records (2) for purposes of inspection and examination and (3) was denied access to those public records. I see no statutory requirement that a plaintiff plead that the government has possession of the requested public documents. Whether the government agency has possession of the requested documents is perhaps a valid defense to a claim under \u00a7 132-9, but does not appear in the statute creating the cause of action. Moreover, the definition of \u201cpublic records\u201d does not include a \u201cpossession\u201d requirement. Instead, whether a particular record is \u201cpublic\u201d is based in the purpose of the record\u2019s creation. See N.C. Gen. Stat. \u00a7 132-1 (2007) (\u201c \u2018Public record\u2019 or \u2018public records\u2019 shall mean all documents, papers, letters, maps, books, photographs, films, sound recordings, magnetic or other tapes, electronic data-processing records, artifacts, or other documentary material, regardless of physical form or characteristics, made or received pursuant to law or ordinance in connection with the transaction of public business by any agency of North Carolina government or its subdivisions.\u201d) (emphasis added). Accordingly, I believe that plaintiff adequately pled that it sought access to public records for purposes of inspection and examination and that defendants did not provide access to those public records; plaintiff\u2019s use of the phrase \u201cdid not provide\u201d rather than \u201cdenied access\u201d in the complaint is inconsequential.\nI also believe that the majority\u2019s interpretation of the elements of a legitimate claim under the Public Records Act is inconsistent with our holding in Gannett Pacific Corp. v. N.C. State Bureau of Investigation, 164 N.C. App. 154, 595 S.E.2d 162 (2004). In Gannett, the plaintiff news corporation sought records of a criminal investigation conducted by the SBI by filing a request under the Public Records Act. Id. at 155, 595 S.E.2d at 163. The SBI completely denied Gannett\u2019s request and Gannett brought suit under the Public Records Act. Id. at 159, 595 S.E.2d at 165. The SBI moved to dismiss for failure to state a claim, pursuant to Rule 12(b)(6). Id. at 145, 595 S.E.2d at 163. The trial court granted the motion and dismissed; Gannett appealed to this Court, which reversed and remanded. Id. We explained that, although Gannett was not entitled to disclosure of \u201cthe SBI\u2019s records of its criminal investigation or criminal intelligence information,\u201d it was \u201centitled to release of any other information classified as public records under the North Carolina General Statutes.\u201d Id. at 155-56, 595 S.E.2d at 163. Because Gannett requested \u201call public records relating to the investigation of the May 3, 2002 fire at the Mitchell County, North Carolina jail,\u201d the SBI\u2019s categorical denial was improper because its records likely extended beyond the exempted material and included public records. Id. at 159, 595 S.E.2d at 165. We explained:\nThe burden is on the SBI to comply with Plaintiffs\u2019 request by reviewing its records and releasing all information relating to the Mitchell County fire defined as public records. If, after reviewing its records, the SBI determines it does not have cus tody of any information classified as public records, denial of Plaintiffs\u2019 request may be appropriate. Before this determination is made, however, dismissal of Plaintiffs\u2019 complaint is premature.\nId. (emphases added). Certainly, dismissal of a Public Records Act complaint may be appropriate if the government determines that it does not have custody of certain requested public records. However, dismissal is not required, especially when it appears that the requested documents are public records and exist, but have not been provided because the government deems a request to be \u201coverly broad and complex, requiring documents from numerous sources and time periods\u201d as defendants stated in an 18 January 2008 letter to plaintiff.\nHere, plaintiff has a believable claim that defendants have improperly denied access to certain requested public records. Plaintiff appended, as an exhibit to its complaint, a 24 January 2008 letter to Sara Y. Lang, Director of Communications for the North Carolina Department of State Treasurer. In this letter, plaintiff described with specificity documents that it believed were public and had not been released by defendants:\nWith Ms. Lang\u2019s January 18 letter you appear to have provided most of the e-mail correspondence from representatives of Forbes to Sara Lang. However, it is clear that not all documents containing correspondence from Forbes has been provided. The January 19, 2007, 3:43 p.m. e-mail from Kai Falkenberg to Ms. Lang refers to an attached letter \u201ca copy of which \u2014 with enclosures \u2014 has also been sent to you by fax.\u201d You have provided neither that letter nor the enclosures. Moreover, Neil Weinberg\u2019s message on the same date refers to a letter faxed to Ms. Lang from Forbes\u2019 attorney. If this is not the same letter referred to by Ms. Falkenberg, then you have not provided a copy of it.\nIn addition, except for some responses that are attach\u00e9d to the Forbes e-mails, you have not provided all responses from Ms. Lang to Forbes. For example, attached to the February 14, 2007, e-mail message from Jason Storbakken is an e-mail from Ms. Lang stating: \u201cPlease see answers inserted in your original e-mail below.\u201d However, you have not produced the e-mail that contains Ms. Lang\u2019s answers. Moreover, attached to Jason Storbaklcen\u2019s message of February 14, 2007, 6:16 p.m., is a message stating: \u201cOn 2/14/07 PM, \u2018Sara Lang\u2019.. . wrote:\u201d but the text of Ms. Lang\u2019s message is omitted. It is difficult for me to draw any conclusion except that Ms. Lang\u2019s message has been intentionally deleted from the document.\nFinally, based on the size of the fee paid to the retained law firm and, thus, the number of hours that firm must have worked on this issue, it would appear that there must have been electronic or written correspondence between your office and that law firm regarding the Forbes public information request. However, no copies of any such correspondence have been produced.\nThe letter also reiterated that defendants had still not provided copies of the investment reports that the State Treasurer must file pursuant to N.C. Gen. Stat. \u00a7 147-69.3(h)-(i) even though those reports \u201care apparently from a set of reports routinely compiled and readily accessible for copying.\u201d\nAccordingly, I would reverse the trial court\u2019s order dismissing plaintiff\u2019s complaint.",
        "type": "dissent",
        "author": "ELMORE, Judge,"
      }
    ],
    "attorneys": [
      "Blanchard, Miller, Lewis and Styers, P.A. by E. Hardy Lewis and Karen M. Kemerait, for Plaintiff-Appellants.",
      "Shanahan Law Group, PLLC, by Kieran J. Shanahan and Steven K. McCallister; and Department of State Treasurer, by Jay J. Chaudhuri."
    ],
    "corrections": "",
    "head_matter": "STATE EMPLOYEES ASSOCIATION OF NORTH CAROLINA, INC., Plaintiff v. NORTH CAROLINA DEPARTMENT OF STATE TREASURER, and RICHARD H. MOORE, in his capacity As Treasurer of the State of North Carolina, Defendantsp\nNo. COA08-1326\n(Filed 3 November 2009)\nDeclaratory Judgments\u2014 motion to dismiss \u2014 sufficiency of evidence\nThe trial court did not err by granting defendants\u2019 Rule 12(b)(6) motion to dismiss plaintiff\u2019s declaratory judgment action requesting the production of certain records under N.C.G.S. \u00a7 132-9(a) where defendants reviewed their records, produced all responsive public records, and requested that plaintiff provide a list of specific information they believed to be missing.\nJudge ELMORE dissenting.\nAppeal by Plaintiff from judgment entered 21 July 2008 by Judge James E. Hardin in Wake County Superior Court. Heard in the Court of Appeals 21 May 2009. '\nBlanchard, Miller, Lewis and Styers, P.A. by E. Hardy Lewis and Karen M. Kemerait, for Plaintiff-Appellants.\nShanahan Law Group, PLLC, by Kieran J. Shanahan and Steven K. McCallister; and Department of State Treasurer, by Jay J. Chaudhuri."
  },
  "file_name": "0722-01",
  "first_page_order": 748,
  "last_page_order": 757
}
