ADMINISTRATION OF GOVERNMENT GENERALLY: VIRGINIA FREEDOM OF INFORMATION ACT.

"Legal matters" exception in Act construed narrowly to permit discussion in executive session of specific matters or disputes. Written contract establishes legal relationship and creates legal obligations. Substantive terms of contracts being negotiated between Virginia Beach and City of Norfolk for purchase of water from Norfolk and negotiating strategies of those contracting jurisdictions are "legal matters" appropriate for discussion by Virginia Beach City Council in executive session, provided governing bodies follow appropriate procedural requirements. Conclusion does not automatically extend to every item included in public contracts or agreements.

December 18, 1992

The Honorable Clarence A. Holland
Member, Senate of Virginia

1992 1

You ask whether §2.1-344(A)(7) of the Code of Virginia, a part of The Virginia Freedom of Information Act, permits the Virginia Beach City Council to meet in executive session to discuss two contracts Virginia Beach is negotiating for the purchase of water from the City of Norfolk. Your letter indicates that the discussion in executive session would involve negotiating strategy, the price of the water and other proposed terms and conditions, all of which you characterize as nonlegal matters.

I. Applicable Statutes

The Virginia Freedom of Information Act, §§ 2.1-340 through 2.1-346.1 (the Act), establishes a general rule that all meetings of public bodies, including city councils, shall be public meetings, "[e]xcept as otherwise specifically provided by law." Section 2.1-343. Section 2.1-344(A) lists 21 categories of subjects that a public body may discuss in an executive or a closed meeting. The permitted category relevant to your question is detailed in §2.1-344(A)(7):¹

Consultation with legal counsel and briefings by sta al counsel and other staff members on actual or probable litigation, or other specific legal matters.

You do not indicate that any litigation over the proposed water contracts between Virginia Beach and Norfolk is either pending or threatened. Your question thus depends on whether the negotiation strategy and substantive terms of the contracts constitute other specific legal matters within the meaning of §2.1-344(A)(7) of the Act.

The Supreme Court of Virginia has applied this provision of t hat the board would convene in executive session for legal counsel. Nageotte v. King George County, 223 Va. 259, 288 S.E.2d 423 (1982). The opinion in Nageotte indicates that the county board had discussed various contemplated actions both about pending litigation that had been filed by the plaintiffs and about revocation of the plaintiffs' building permit. The Supreme Court upheld the lower court's finding that the subject matter of the executive sessions was proper under the exception in §2.1-344(A)(7), but also ruled that the board's motions to convene executive sessions were not sufficiently specific to comply with the procedural requirements of §2.1-344(B). Id. at 267-69, 288 S.E.2d at 426-28.

In the third case, however, the Supreme Court addressed directly what constitutes a legal matter appropriate for executive session under §2.1-344(A)(7). Marsh v. Rich. Newspapers, Inc., 223 Va. 245, 288 S.E.2d 415 (1982). In Marsh, the Richmond City Council had convened in executive session with representatives of the Henrico and Chesterfield County boards of supervisors to discuss issues pertaining to the construction of the I-295 Circumferential Highway and other matters relating to regional cooperation. Id. at 250, 288 S.E.2d at 417. The council member making the motion for the executive session stated as part of his motion that consideration of those subjects necessarily involved legal matters within the city's jurisdiction, and thus was appropriate for discussion in a closed meeting under §2.1-344(A)(7). Id. Following the executive session, the mayor issued a press release listing six subjects that had been discussed.²

The trial court in Marsh found that the city council's executive session discussions had included the six subjects in the mayor's press release, as well as a proposal for improving tax inequities in the Richmond region. Interpreting the term legal matters for which the Act permits executive sessions, the trial court found that term to encompass `only those legal matters as to which the public disclosure of facts or opinions would likely damage the City's interests and as to which confidentiality is reasonably essential to protect those interests.' Id. at 252, 288 S.E.2d at 418-19. The trial court held that the subjects discussed did not meet this standard and enjoined further violations. Id. at 252, 288 S.E.2d at 418.

In reviewing the trial court's decision in Marsh, the Supreme Court acknowledged that 2.1-340.1 required it to construe exceptions to the Act's open meetings narrowly. It noted, however, that

this requirement does not preclude a commonsense application of the Act. A governing body is entitled to make the initial determination that an executive or closed meeting is necessary under a specified exemption to consider a subject or subjects on the agenda. The decision whether to convene in executive session must be made by members of the responsible entity who often possess information as to the subject matter that is not necessarily possessed by others.

Id. at 255, 288 S.E.2d at 420.

The Richmond City Council had defended its executive session discussions on the grounds that all the subjects discussed were related to potential litigation over the state anti-annexation legislation that had triggered Mayor Marsh's call for the meeting. The Supreme Court rejected this argument as a justification for the executive session, noting that there was little or no need to keep the discussions secret from the public when representatives of the parties who would be the city's adversaries in the potential litigation were present and participating in those discussions. Accordingly, the Court affirmed the trial court's ruling that the discussions were outside the scope of the legal matters exception from the Act. Id. at 256, 288 S.E.2d at 421.

III. Prior Attorney General Opinions Limit Legal Matters Exception to Discussions of Specific Matters or Disputes

Prior Opinions of the Attorney General also apply the legal matters exception in what is now §2.1-344(A)(7). One of these Opinions concludes that a housing authority could not meet in executive session to discuss an increase in the amount to be paid to a consultant under contract with the authority. 1981-1982 ATT'Y GEN. ANN. REP. 432, 433. Two other Opinions, however, indicate that an executive session under §2.1-344(A)(7) would be appropriate for a governing body to discuss the terms of proposed contractual arrangements with specific auto repair firms. ATT'Y GEN. ANN. REP.: 1982-1983 at 716; 1980-1981 at 387, 388. These and other prior Opinions generally have held that the legal matters exception applies only to discussions of specific legal transactions or disputes and may not be used to justify closed meetings involving more general issues, even though those issues eventually may have legal consequences. See, e.g., ATT'Y GEN. ANN. REP.: 1985-1986 at 103 (board of zoning appeals may not hold executive session to discuss its functions, powers and duties in absence of specific legal problem requiring consideration); 1980-1981 at 389 (discussion of constitutionality of particular provision of zoning ordinance is other legal matter proper for executive session).

IV. Discussion in Facts Presented Involves Legal Matters Appropriate for Executive Session; Conclusion Does Not Necessarily Extend to All Items Included in Public Contracts

It is beyond question that a written contract establishes a legal relationship and creates legal obligations. In the case of the water contracts to be negotiated between Virginia Beach and Norfolk, the relationship and obligations to be established are of extreme public importance for the citizens of both jurisdictions. Under the analysis used by the trial court and affirmed by the Supreme Court in Marsh, it is clear that public disclosure by the governing body of either jurisdiction of its negotiating position would likely damage that jurisdiction's interests, and that confidentiality is reasonably essential to each governing body in formulating the terms to which it is willing to agree and the strategy it will use to obtain that agreement.

I do not conclude that every item of public business automatically is eligible for executive session discussion under §2.1-344(A)(7) simply because it will be included in a written contract or agreement. In the facts you present, however, I am of the opinion that the substantive terms of the contracts and the negotiating strategies of the contracting jurisdictions manifestly are legal matters. Although it is clear that the terms of the proposed contracts ultimately must be discussed and voted upon in public, it is my opinion that closed discussions of those substan- tive terms and strategies before and during the contract negotia- tions are appropriate under §2.1-344(A)(7), provided the governing bodies follow the appropriate procedural requirements.

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Footnotes:

1. The 1988 amendments to §2.1-344 renumbered the subdivisions of that section, and former subdivision a 6 became present A 7. Ch. 891, 1988 Va. Acts 1874, 1884.

2. The six subjects mentioned in the press release were:

1. The location and construction of the proposed circumferential highway.

2. The probable effect of the highway on the location of future industrial and commercial development within the region.

3. The effect that the recent `annexation legislation package' [would] have upon the three jurisdictions.

4. The relative tax burdens of the City and the adjacent counties.

5. The cost of regional services and facilities that [were] provided by the City.

6. Potential procedures for the counties to participate in the cost of regional services and facilities.

223 Va. at 251, 288 S.E.2d at 418.