In a recent circuit court decision, the DuPage County Circuit Court rendered a potentially precedent-setting decision that could have ramifications for municipal and park district foundations. Chicago Tribune v. College of DuPage.
In April, 2015, the Chicago Tribune sued the College of DuPage and the College of DuPage Foundation to obtain documents that were withheld in response to a federal grand jury subpoena the Tribune sent to both entities. The College of DuPage later provided most, but not all of the requested documents. The Foundation did not respond, arguing that it was not subject to FOIA as a nonprofit entity that is not a subsidiary of the College.
In the lawsuit, the Chicago Tribune argued that the College and the Foundation violated FOIA by refusing to respond to the subpoena. Further, the Tribune argued that that Foundation is a subsidiary of the College, and should be similarly subject to FOIA.
The court first addressed whether the Foundation is a public body or a subsidiary of a public body. The court acknowledged that the Foundation is a private, nonprofit corporation, with 501(c)(3) tax exempt status. The court also noted that the Foundation was not created pursuant to any statute. Based on the formal legal nature of the Foundation the independence of the Foundation’s Board of Directors, and the lack of any case law finding a private, nonprofit foundation to be a subsidiary of a public school, the Court found that the Foundation is not a public body, nor a subsidiary of the College.
The court next addressed whether the Foundation possessed a public record pertaining to the transaction of public business. Section 7(2) of FOIA provides as follows:
A public record that is not in the possession of a public body but is in the possession of a party with whom the agency has contracted to perform a governmental function on behalf of the public body, and that directly relates to the governmental function and is not otherwise exempt under this Act, shall be considered a public record of the public body, for purposes of this Act. (emphasis added) 5 ILCS 140/7(2).
The court found that the Foundation had indeed contracted to perform a governmental function on behalf of the College. Although no specific contract was cited, a June 22, 2009 Memorandum of Understanding of the Foundations’ Board of Trustees, stated that all donations to the College would be routed through the Foundation. The Foundation holds all private donations to the College, even those that were not solicited by the Foundation. Further, the College has no separate endowment and its sole fundraising source is the Foundation. The court found this proved that the Foundation performs duties that directly relate to the governmental function of the College.
The court then addressed whether the Tribune’s subpoena is a public record, subject to FOIA. The Court answered this question in the affirmative, finding that the subpoena is a public record of the Foundation, as the Foundation is under contract with the College, to “perform a governmental function on behalf of the public body.”
The court acknowledged that this decision could impact other private, non-profit foundations as it could cause donors who wish to remain anonymous to withhold donations for fear of disclosure of information under FOIA. However, it reasoned that this potential impact would be remedied by the FOIA privacy exemptions.
The Foundation now has until April 19, 2016 to comply with the FOIA request or appeal. We will continue to monitor the case to see whether an appeal is filed.
Post Authored by Erin Baker, Ancel Glink