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Boston Globe Media Partners, LLC v. Retirement Board of The Massachusetts Bay Transportation Authority Retirement Fund

Superior Court of Massachusetts, Suffolk

March 9, 2016

Boston Globe Media Partners, LLC
Retirement Board of the Massachusetts Bay Transportation Authority Retirement Fund No. 132984


          Kenneth W. Salinger, Justice of the Superior Court.

         The publisher of The Boston Globe seeks a declaration that the Massachusetts public records law now applies to the Retirement Board of the Massachusetts Bay Transportation Authority Retirement Fund. The Globe also seeks an injunction ordering the Retirement Board to produce minutes of meetings concerning the Fund's $25 million investment in a hedge fund that lost all its value and sought bankruptcy protection amid allegations of fraud. The Board says it is not subject to the public records law and refuses to give these records to the Globe.

         The central issue is whether the Fund " receives public funds" and thus is subject to the public records law as amended in 2013. Both sides have moved for summary judgment. The parties agreed to reserve any claims by the Board that the relief sought would be unconstitutional. But the Board argues that its constitutional claims help show that the amended statute does not apply to it or the Fund.

         The Court will ALLOW the Globe's motion for summary judgment and DENY the Retirement Board's cross motion. The Retirement Board's preliminary assertions that the Supreme Judicial Court has already resolved the central question of statutory interpretation in the Board's favor, and that in any case the Globe may not press its claims because it failed to join other necessary parties, are both incorrect. On the merits, the Court concludes that the Board does indeed receive public funds from the MBTA, and thus that the Board's records are now subject to mandatory disclosure under the public records law unless they fall within one of the statutory exemptions. The Board's assertion that the 2013 statutory amendment only applies to records created after its effective date is also incorrect.

         The Court will schedule a status conference to learn whether any further constitutional issues, or any claim by the Board that documents requested by the Globe are exempt from disclosure, must be decided to resolve this case. If so, it will set a schedule for addressing the remaining issues.

         1. Background

         The parties have stipulated to various facts for the purposes of the pending motions for summary judgment. Those stipulations, reasonable inferences that can be drawn from those facts, and other relevant legal background can be summarized as follows.

         1.1. Legal and Procedural Background

          By law, " [e]very person having custody of any public record" must, " without unreasonable delay, " allow the record " to be inspected and examined by any person and provide " one copy thereof upon payment of a reasonable fee." G.L.c. 66, § 10(a). Up until 2013, the public records law applied only to state and local government agencies, authorities, and political subdivisions of the Commonwealth. That is because the Legislature had defined " public records" to mean any documents or data " made or received by any officer or employee of any agency, executive office, department, board, commission, bureau, division or authority of the commonwealth, or of any political subdivision thereof, or of any authority established by the general court to serve a public purpose, " unless the materials or data fall within a specific statutory exemption. G.L.c. 4, § 7, clause twenty-sixth. An entity that falls within this definition are referred in the public records law as a " custodian" of the public records in its custody. G.L.c. 66, § 10(b) & (c). By law there is a presumption that any record held by such a custodian " is public, and the burden shall be upon the custodian to prove with specificity the exemption which applies." Id. § 10(c). The MBTA is subject to the public records law because it is a " political subdivision of the commonwealth." See G.L.c. 161A, § 2.

         The Supreme Judicial Court held in 1993 that the public records law did not apply to the MBTA Retirement Board, because the Board did not fall within any of the categories of public entities described in the statutory definition of " public records." See Globe Newspaper Co. v. Massachusetts Transp. Auth. Ret. Bd., 416 Mass. 1007, 622 N.E.2d 265 (1993) (rescript) (" Board II "). The SJC issued a short " rescript" decision in that case, incorporating by reference the reasoning of its prior ruling that the Board was not a " State agency" within the meaning of, and thus its employees were not subject to, the conflict of interest law. See Massachusetts Bay Transp. Auth. Ret. Bd. v. State Ethics Comm'n, 414 Mass. 582, 608 N.E.2d 1052 (1993) (" Board I ").

          In July 2013, the Legislature amended the statutory definition that determines the scope of the public records law, through an outside section of the state's FY 2014 operating budget. It left intact the language quoted above. But it added language stating that " public records" shall also mean any documents or data made or received by " any person, corporation. association, partnership or other legal entity which receives or expends public funds for the payment or administration of pensions for any current or former employees of the commonwealth or any political subdivision thereof as defined by section 1 of chapter 32 of the general laws " (emphasis added). See St. 2013, c. 38, § 4 (amending G.L.c. 4, § 7, clause twenty-sixth). " Political subdivision" is defined in G.L.c. 32, § 1, to include the MBTA. When the Legislature broadened the scope of the public records law in this way, it did not revise the statutory exemptions from the obligation to produce public records. A year later, the Legislature repealed this amendment through an outside section of the FY 2015 general appropriations act. See St. 2014, c. 165, § 198. Governor Patrick vetoed that section, however. As a result the 2013 amendment to the statutory definition of " public records" remains in effect.

         In December 2013, reporter Beth Healy of the Globe asked the Retirement Board to provide copies of meeting minutes concerning an investment by the Fund in the Fletcher Fixed Income Alpha Fund.[1] In response, the Board told Healy that " there is considerable doubt as to the applicability and validity of the recent amendment to G.L.c. 4, § 7, cl. 26." It sent Healy a copy of a prior letter to the Boston Herald that explained the Board's legal position in more detail. The Board has not provided any of the records requested by Healy.

         The Globe then asked Supervisor of Public Records Shawn Williams, at the Secretary of the Commonwealth's Public Records Division, to order the Retirement Board to provide the records requested by Ms. Healy. The Supervisor denied that request. Mr. Williams concluded that the Supreme Judicial Court had decided in Board I that the Retirement Board does not receive or expend public funds, and that as a result the broadened definition of " public records" adopted in 2013 does not apply to the Board or to the Fund.

         The Board represents that, because the Supervisor ruled that the public records law does not apply to the Board or the Fund, the Board has made no attempt to collect any of the meeting minutes sought by the Globe or to determine whether any part of those records may be exempt from disclosure.

         The Globe brought this action against the Retirement Board in April 2014. It filed the action with the Supreme Judicial Court for Suffolk County. Cf. G.L.c. 66, § 10(b) (an action seeking public records may be filed with the SJC or in the Superior Court). A single Justice of the SJC (Botsford, J.) transferred the case to Suffolk Superior Court. Cf. G.L.c. 211, § 4A (authorizing any SJC justice to transfer to " any appropriate lower court any cause or matter which might otherwise be disposed of by a single justice"). The Globe filed an amended complaint in August 2014. The amended complaint defines the scope of relief now sought by the Globe. The parties filed their cross-motions for summary judgment in December 2015.

         1.2. Additional Factual Background

         The MBTA was created in 1964. It is a " political subdivision of the commonwealth" and is charged with the " duty to develop, finance and operate mass transportation facilities and equipment in the public interest." G.L.c. 161A, § § 2 & 5(a). The MBTA was the successor to the Metropolitan Transit Authority (" MTA"), which operated the public transportation system in the Boston area from 1947 to 1964. The MTA was created to take over that system from the Boston Elevated Railway Company (" Boston Elevated"). Workers employed by Boston Elevated were represented by a bargaining unit known as the Amalgamated Association of Street, Electric Railway and Motor Coach Employees of America, Division 589. Today this same bargaining unit is known as Local Union 589, Amalgamated Transit Union, AFL-CIO, CLC.

         Members of Local 589 who are or were employed by the Boston transit system have long been the beneficiaries of private pensions established by contract. Boston Elevated employees participated in a non-contributory pension plan starting in 1920, and in a contributory retirement plan beginning July 1, 1941. The statute establishing the MTA provided that the MTA's employees would not be subject to the general public employee retirement law, and instead authorized the MTA to continue to pay pensions and retirement allows pursuant to the plans that had been created by Boston Elevated. See St. 1947, c. 544, § 18. Shortly after it came into existence, the MTA negotiated a contract with Local 589 establishing a new contributory retirement plan, which replaced the prior plans established by Boston Elevated. This new plan took effect January 1, 1948. The more recent statute establishing the MBTA similarly provided that the MBTA's employees would not be subject to the general public employee retirement law, and instead required the MBTA to continue to employment the pension plan established by the MTA. St. 1964, c. 563, § § 19 & 22. The MBTA and Local 589 negotiated a new pension agreement in 1970. That contract has been amended from time to time.

         From 1948 to 1980, the assets of the Fund were held and managed first by the Old Colony Trust Company and then by its successor, the First National Bank of Boston. In 1980, with the agreement of the MBTA and Local 589, the Retirement Board became responsible for administering the retirement plan established by contract between the MBTA and Local 589 and for managing the Fund's assets that pay the plan's costs.

         All costs of Local 589's retirement plan and of the Retirement Board are paid by the Fund. The Board and the Fund are private, non-public, legal entities. All assets of the Fund are beneficially owned by its members, retired members, and their beneficiaries. Neither the MBTA nor the Commonwealth guaranties the Fund's pension obligations or has any legal interest in the Fund or its assets.

         The Fund has three sources of revenue: payments or " contributions" made by the MBTA, contributions made by MBTA employees who are members of Local 589, and investment returns that the Fund earns from its accumulated assets. The MBTA's payments are the largest of these three revenue streams. In 2013, for example, the MBTA paid the Fund $58.0 million, MBTA employees paid $21.0 million, and the Fund had investment returns of $32.3 million. From 2009 to 2013 the MBTA contributed a total of $252.9 million to the Fund, employees' contributions totaled $93.4 million, and the Fund's investment returns totaled $164.6 million.

         The amount of the contributions or payments made to the Fund are set by contract after negotiation by the MBTA and Local 589. The MBTA currently pays the Fund an amount equal to 15.1511% of annual pre-tax compensation for Local 589 members who participate in the pension plan, and the members pay an additional 5.4989% of their annual pre-tax compensation. Each month, the MBTA calculates each employee's contribution to the Fund, which is deducted from the employee's gross pay, as well as the MBTA's own contribution. The MBTA then instructs its bank to transfer those amounts electronically from the MBTA's account to the Fund's bank account. The parties have stipulated that the MBTA's contributions are irrevocable upon transfer to the Fund's bank.

         The MBTA's pays these contributions from general revenues. For FY 2015, the MBTA anticipated receiving almost $2.0 billion in operating revenues, mostly from tax revenues paid to the MBTA by the Commonwealth of Massachusetts, fares collected from riders, and assessments on cities and towns served by the MBTA. Roughly 57 percent of the MBTA's total revenues that year were expected to come from State funding, in large part from a dedicated portion of the state sales tax.

         2. Preliminary Issues

         The Retirement Board argues that the Court should not consider the merits of the Globe's claims. It asserts that the SJC determined in 1993 that the Retirement Board is not subject to the public records law because it does not receive public funds and that, since the Globe was a party to that prior case, the Globe is barred from relitigating the issue under the doctrine of issue preclusion or collateral estoppel. The Board also asserts that the Globe failed to join necessary parties whose interests may be affected by any declaratory judgment entered in this case. Neither of these claims has merit.

         2.1. ...

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