David D. WIGAND
Sherby WILKES and WHRO.
Sept. 1, 2004.
Mr. David D. Wigand, Pulaski, Virginia.
Brett A. Spain, Esquire, Willcox & Savage, P.C., Norfolk,
JOSEPH A. LEAFE, Chief Judge.
This case comes before the Court on an appeal from a decision of
the General District Court based on a petition under the Virginia
Freedom of Information Act, §§ 2.2-3700 through 2.2-3714
of the Code of Virginia (the FOIA), requesting that the Court order
Hampton Roads Educational Television Associations, Inc. (HRETA),
otherwise known as WHRO, to release salary information of employees
who earn more than $10,000 per year.
Circuit Courts in Virginia have appellate jurisdiction from
judgments entered in courts not of record for cases involving the
Freedom of Information Act (§ 2.2-3700 et seq.). Va.Code Ann.
§ 16 .1-106 (Michie 2003). Plaintiff properly appealed to this
Plaintiff's first argument is that WHRO is a public body under
the FOIA, and as such, Plaintiff argues that he is entitled to the
public records, including employees' salary information, from WHRO.
The FOIA defines "public body" as "any legislative body,
authority, board, bureau, commission, district or agency of the
Commonwealth or of any political subdivision of the Commonwealth,
including cities, towns and counties, municipal councils, governing
bodies of counties, school boards and planning commissions; boards
of visitors of public institutions of higher education; and
other organizations, corporations or agencies in the
Commonwealth supported wholly or principally by public funds."
Va.Code Ann. § 2.2-3701 (Michie 2001) (emphasis added).
Specifically, Plaintiff believes WHRO should be covered under the
FOIA as a corporation that is supported wholly or principally by
Provisions of the FOIA are to be construed liberally to
promote an increased awareness by all persons of governmental
activities and to afford citizens an opportunity to witness the
operations of government. Va.Code Ann. § 2.2- 3701 (Michie
2001) (emphasis added). Exemptions from public access to records or
meetings under the FOIA are to be construed narrowly. Va.Code Ann.
§ 2.2- 3701 (Michie 2001).
WHRO is a non-profit, non-stock corporation in the Commonwealth
that was initially created by several school systems to operate as
a non-commercial, educational television station. Consequently, the
membership of WHRO consists of school boards of the school
divisions in the Commonwealth of Virginia. Since the time of its
creation, WHRO has expanded its television coverage for educational
services, and in addition to operating a television station, also
operates two radio stations. While WHRO may have initially been
supported wholly or principally by public funds provided by the
participating school divisions, that is no longer the case.
Defendant's undisputed evidence shows that for the years 2002 and
2003, less than 50% of WHRO funding came from government support.
In 2003, 24% of WHRO's funding came from government support, and in
2002, 26% of WHRO's funding came from government support.
In Advisory Opinions by the Virginia Freedom of Information
Advisory Council issued as early as July 2001 and as recently as
April 2004, the general rule used to determine whether an entity is
a public body is that if an entity receives two-thirds or 66.6% of
its operating budget from a government source, it may be deemed
principally supported by public funds. Virginia Freedom of Information Advisory Opinion 36
(2001). Even with the 66.6% guideline, the question of whether
an entity is supported principally by public funds is a question of
fact. An entity receiving less than 66.6% of its funding from
government sources may still be deemed a public body, especially if
the entity performs a delegated governmental function. Id.
In light of the facts presented, the Court finds that WHRO is
not a public body under the FOIA because it receives 25% of its
funding from the government and does not perform a delegated
Plaintiff's second argument is that because WHRO was
incorporated by school divisions that were public bodies, and
initially received its funding from those public bodies, it remains
a public body due to the nature of its incorporators. Essentially,
Plaintiff's argument is that WHRO is a sham corporation which
represents its incorporating school divisions. To consider WHRO as
a public body based on the character of its initial incorporators
would be to disregard WHRO as a corporate entity. RF & P Corporation v. Little, 247 Va.
309, 316, 440 S.E.2d 908, 913 (1994).
The Supreme Court of Virginia has stated that it is reluctant to
permit piercing of the corporate veil. Dana v. 313 Freemason, A
Condo. Ass'n, 266 Va. 491, 502, 587 S.E.2d 548, 554-55 (2003).
Only an extraordinary exception justifies disregarding the
corporate entity. Id. A corporation may not be disregarded unless
it is shown to be an "alter ego, alias, stooge, or dummy of the
individuals sought to be held personally accountable and that the
corporation was a device or sham used to disguise wrongs, obscure
fraud, or conceal crime." RF & P Corporation v. Little,
247 Va. 309, 316, 440 S.E.2d 908, 913(1994) (citing Cheatle v.
Rudd's Swimming Pool Supply Co., Inc., 234 Va. 207, 212, 360
S.E.2d 828, 831 (1987)). Only when the facts justify piercing of
the corporate veil will the courts look past the corporate entity
to the officers that compose the corporation. Lewis Trucking
Corp. v. Commonwealth of Virginia, 207 Va. 23, 31-32, 147
S.E.2d 747, 753 (1966).
Every attempt to pierce the corporate veil "requires examination
of the particular factual circumstances surrounding the corporation
and the acts in question." O'Hazza v. Executive Credit
Union, 246 Va. 111, 115, 431 S.E.2d 318, 321(1993). The
evidence indicates that WHRO has a Board of Directors that holds
regular meetings and keeps minutes at those meetings. WHRO also
maintains separate bank accounts and does not commingle corporate
funds. Representatives of the participating school divisions
represent only a small minority of the members of the Board of
Directors. See 1982-83 Va. AG 719 (noting
that the mere presence of three members of a Board of Supervisors
on an entirely different and otherwise private Board does not
transform the second Board into a public body under the FOIA).
Though elected by a nominating committee consisting of the school
board members of the corporation and members of the current Board,
the Board of Directors functions independently in managing the
affairs of the corporation. WHRO does not perform delegated
governmental functions of the incorporating school divisions. See
generally, 2001 Va. AG 5 (finding IRBs that
were wholly supported by public funds did not perform delegated
functions of institutions of higher learning and were not
considered public bodies under FOIA). In addition, WHRO sets no
policies for the school divisions.
Based on the principles of law set forth above, this Court
concludes that WHRO is not a public body covered under the FOIA,
and thus, does not have to release salary information of its
employees as a public record.
Mr. Spain should prepare an order consistent with this
Joseph A. Leafe