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Asbury Park Press Inc. v. State

Decided As Amended August 8 1989.: June 1, 1989.


On appeal from Superior Court, Law Division, Mercer County.

Petrella, Shebell and Landau. The opinion of the court was delivered by Petrella, P.J.A.D.


The Asbury Park Press, Inc. (Press) appeals from the dismissal of its complaint which sought access to a summary analysis, in the form of a spread sheet, of more extensive primary data utilized by the Commissioner of the State Department of Health (Department) in a September 26, 1988 address before the New Jersey Hospital Rate Setting Commission (HRSC).

In her written report, distributed at a meeting with the HRSC, the Commissioner commented that despite claims by hospitals in the State for "across the board" rate relief, the Department had concluded that it could not find evidence of such a decline for the period 1985-1987 and that in general the "financial status of New Jersey hospitals remains generally healthy." The Commissioner had further noted that although it had been represented that a vast majority of hospitals were in distress, only a few hospitals had submitted specific requests for rate relief.

As part of an investigative review, the Department had examined the State hospitals' audited financial statements. In addition, a retained consultant, operating under a contract with the Department and in conjunction with Department staff, had prepared a computer spread sheet as part of his work in analyzing the data derived from the audited financial statements; official statements issued by the New Jersey Health Care Facilities Financing Authority accompanying bonds issued by it; certificate of need applications filed by various hospitals; and transcripts of meetings of the HRSC on December 23, 1987 and January 20, 1988.

The claim by the Press in this case centers on the Commissioner's statement that the Department discerned from the consultant's computer analysis that some hospitals claiming to be in dire financial straits either had significant cash reserves or had transferred out of their institutions considerable amounts of money to affiliated bodies in each of the past three years, or both. However, the Commissioner also stated that

because the Department did not have full and detailed information about transfers out of the hospital system through "related party transactions" the cases alluded to could not be confirmed. Hence, the Commissioner cautioned that before recommendations could be made for rate relief beyond what had already been provided, it was necessary to obtain complete and accurate financial information from each hospital claiming financial need. The Commissioner recommended that the HRSC "entertain only hospital-specific appeals for any additional increases for 1988." Under the law, the HRSC is the final authority in hospital rate setting matters. See N.J.S.A. 26:2H-4.1.

After the Commissioner's presentation a Press reporter requested the names of the hospitals alleged to have been involved in asset transfers, as well as a listing of cash reserves for each such hospital. Subsequently, the reporter also requested that the Department provide it with copies of the audited financial statements submitted to the Department by individual hospitals. The Press was supplied with financial statements for nine of the eighty-nine hospitals requested.*fn1 However, it was unable to determine the magnitude of the hospitals' transfers to related parties from the information received. Accordingly, the Press asked to be provided with the computerized analysis of the audited financial statements prepared by the Department's consultant. The Department denied the Press access to that document, taking the position that the basic sources of information examined by the consultant in preparing the spread sheet were readily available for inspection. It refused to make available its spread sheet summary

analysis of that data. The Press then instituted this suit to obtain the requested information.

In denying the Press access to the spread sheet, Judge Levy agreed with the Department that the factual data utilized by the consultant and the Department staff to prepare the computerized spread sheet were public records which were available for inspection. However, he determined that the internal analysis or work product of the analysis (the spread sheet itself) was not a public record. In granting the Department's motion for summary judgment, Judge Levy stated:

I see no requirement in the statute nor the Common Law dealing with public records to guide any member of the public, including newspaper reporters through the facts which a fact finder reviewed in order to make a decision. The decision can be reported. The facts can be reviewed by Mr. Brown, or if he's not capable of doing it, someone that he can hire that has more expertise than he does, and then he can ...

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