TX Supreme Ct. refuses to hear GHP case; preserves “Kneeland” Open Government test

By refusing to hear an appeal this month by the Greater Houston Partnership, the Texas Supreme Court has preserved the long-standing “Kneeland test” for determining whether a private group receiving public funds is subject to the disclosure requirements of the state public information act. 

“This case had enormous potential impact as it could have foreclosed media and public scrutiny of many   businesses and nonprofits receiving government funding,” said Paul Watler, an attorney with TAB’s Texas counsel Jackson Walker LLP, who worked on the original 1980’s case Kneeland v. National Collegiate Athletic Association.

Carole Kneeland, Capitol bureau chief for WFAA-TV Dallas-Ft. Worth, sued the NCAA to get access to records involving the troubled, and ultimately, disgraced SMU football program which had been paying players among other things.

In the Kneeland case, a federal appeals court adopted a three-prong test developed by the Texas attorney general to determine whether a nominally private entity receiving public funds is subject to the Texas Public Information Act:

• The agreement between the not-for-profit entity and the governmental entity does not have a specific and definite obligation to provide a measurable amount of service in exchange for an identifiable amount of money; or
• The entity has a relationship with the government that indicates a common purpose or objective or creates an agency-type relationship between the two; or
• The private entity's relationship with the government requires the private entity to provide services traditionally provided by governmental bodies.

“Without the Kneeland test, government functions outsourced to private nonprofit corporations could be exempt from public scrutiny,” Watler said.

The Greater Houston Partnership case involved a Montgomery County resident who seven years ago sought information from the GHP on how the taxpayer funds it receives are spent. 

GHP fought Jim Jenkins all the way to the state’s highest court, which refused to hear the case and let stand the original attorney general’s office opinion which said the non-profit GHP was subject to the Texas Public Information Act because it received public funds and was acting on the city’s behalf by carrying out the city’s economic development interests.

"Outsourcing the advocacy of city interests should invoke the highest level of public scrutiny," the state’s brief in the case said.

As a result of this decision, Open Government advocates are bracing for a fight in the Texas Legislature on this issue. 

GHP attempted to pass SB 1829 in the 2011 Texas Legislature which would have excluded from the TPIA a chamber of commerce or a nonprofit corporation that provides economic development services to a governmental body.  

The bill made it out of the Senate’s Committee on Open Government only after TAB newsroom legislative committee member Watler worked with other stakeholders and committee Chairman Jeff Wentworth, R-San Antonio, on bill language that was more acceptable.  

It would have guaranteed some transparency of publicly funded expenditures by such entities.  

The bill was referred to House State Affairs Committee in the middle of May where it did not receive a hearing.

Open Government advocates expect GHP and other similar entities to make another run at the Kneeland decision as a result of the Texas Supreme Court’s decision in this case.