MAINE SUPREME JUDICIAL COURT                                          Reporter of Decisions
Decision: 2014 ME 6
Docket:   Cum-13-165
Argued:   October 7, 2013
Decided:  January 16, 2014

Panel:          SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, and GORMAN, JJ.



                    PRETI FLAHERTY BELIVEAU & PACHIOS LLP

                                             v.

                                STATE TAX ASSESSOR


ALEXANDER, J.

         [¶1]    Preti Flaherty Beliveau & Pachios LLP (Preti) appeals from the

judgment of the Superior Court (Cumberland County, Warren, J.) affirming Maine

Revenue Services’ denial of Preti’s Freedom of Access Act request, pursuant to 1

M.R.S. §§ 402(3) and 408-A (2013), for documents containing methodologies,

formulas, or calculations relating to apportionment of Maine income tax liability

for nonresident partners of a professional services partnership entity based in or

with a significant business presence in Maine.          Maine Revenue Services had

denied Preti’s request, citing the privacy protections in 36 M.R.S. § 191(1) (2013),

which excepts certain tax information and records from the definition of public

records pursuant to 1 M.R.S. § 402(3)(A).

         [¶2] On appeal, Preti argues that the court erred in its interpretation of

36 M.R.S. § 191(1) and that any confidential information can be redacted from the
2


documents it seeks. Because the documents that are covered by Preti’s request for

information consist entirely of information deemed confidential pursuant to

36 M.R.S. § 191(1), we affirm.

                                 I. CASE HISTORY

      [¶3]   Preti is a Maine-based law firm, organized as a limited liability

partnership. It was originally organized in Maine, and its largest presence is in

Maine. However, Preti also has affiliated law offices in other states, including an

office with resident partners in Concord, New Hampshire.

      [¶4] The Maine income tax liability of Preti’s New Hampshire partners was

subject to previous litigation leading to our opinion in Luker v. State Tax Assessor,

2011 ME 52, 17 A.3d 1198. In Luker, the Preti partners in the New Hampshire

office had each established separate professional corporations to receive

partnership distributions from Preti.    Id. ¶ 3.   We held that “the partnership

distributions should be attributed to the individual Attorneys for Maine income tax

purposes,” and “that each Attorney individually, and not his respective

[professional corporation], earned the income from the partnership distributions in

2004 and 2005.” Id. ¶ 16.

      [¶5]   Continuing its efforts to determine the proper Maine income tax

treatment for distributions to its New Hampshire partners, Preti filed a Freedom of

Access Act request pursuant to 1 M.R.S. §§ 401-521 (2013) with Maine Revenue
                                                                                                      3


Services and the State Tax Assessor. That request sought access to State Tax

Assessor records regarding the apportionment applied to other firms with

nonresident partner income pursuant to 36 M.R.S. §§ 5192(5)1 and § 5211(17)2

(2013). Maine Revenue Services denied Preti’s request to the extent that it sought

taxpayer-specific information and also requested clarification. Preti responded by

limiting the scope of its request and by filing an appeal of the partial denial with

the Superior Court pursuant to 1 M.R.S. § 409(1) (2013). While Preti’s appeal to

the Superior Court was pending, Preti further limited its document access request.

        [¶6]     Ultimately, Preti’s request, as modified, sought all allocation and

apportionment formulas, methodologies, or calculations applicable to the

determination of Maine income tax for nonresident partners in a partnership

pursuant to 36 M.R.S. §§ 5192(5) and 5211(17). Preti expressly did not seek

(1) records over ten years old; (2) records involving entities other than

  1
      Title 36 M.R.S. § 5192(5) (2013) provides:

        Alternate methods. The assessor may, on application, authorize or may require the use
        of such other methods of determining a nonresident partner’s portion of partnership items
        derived from or connected with sources in this State, and the modifications related
        thereto, as may be appropriate and equitable, on such terms and conditions as he may
        require.
  2
      Title 36 M.R.S. § 5211(17) (2013) provides:

        Variations. If the apportionment provisions of this section do not fairly represent the
        extent of the taxpayer’s business activity in this State, the taxpayer may petition for, or
        the tax assessor may require, in respect to all or any part of the taxpayer’s business
        activity, if reasonable: . . .
                 D. The employment of any other method to effectuate an equitable
        apportionment of the taxpayer’s income.
4


partnerships; (3) any emails, correspondence, or other records unless they

expressly set forth actual apportionment formulas, methodologies, and/or

calculations used to apportion or otherwise determine Maine income taxes owed by

nonresident partners in a Maine partnership; or (4) the identity of any taxpayer or

the details of taxpayer-specific financial information.

      [¶7] In October 2012, Maine Revenue Services completed its search in

response to Preti’s request and produced two documents that contained no

taxpayer-specific information of any kind. Maine Revenue Services also filed with

the court for in camera review seven documents, which are the subject of this

appeal.

      [¶8] After conducting a de novo trial pursuant to 1 M.R.S. § 409 and after

reviewing the documents in camera, the Superior Court determined that the

documents it had reviewed were confidential pursuant to 1 M.R.S. § 402(3)(A) and

36 M.R.S. § 191(1), and thus not subject to redaction or disclosure. Preti timely

appealed from that judgment.

                              II. LEGAL ANALYSIS

      [¶9] Preti argues that the privacy protection of section 191(1) is limited to

information provided to Maine Revenue Services by the taxpayers and does not

extend to Maine Revenue Services’ own methodologies, formulas or decisions. It

further contends that any information exempted from disclosure by section 191(1)
                                                                                  5


can be redacted to allow access to Maine Revenue Services’ formulas and

methodologies.

A.    Standard of Review and Rules of Statutory Construction

      [¶10] We review the statutory construction of the Freedom of Access Act

(FOAA) de novo as a question of law.         See Anastos v. Town of Brunswick,

2011 ME 41, ¶ 5, 15 A.3d 1279. Statutory exceptions to the FOAA are to be

strictly construed to carry out the legislative mandate that the FOAA be “liberally

construed and applied to promote its underlying purposes and policies.” 1 M.R.S.

§ 401 (2013); Cyr v. Madawaska Sch. Dep’t, 2007 ME 28, ¶ 8, 916 A.2d 967.

When an agency denies a FOAA request, the agency bears the burden of

establishing that there is just and proper cause for the denial. Anastos, 2011 ME

41, ¶ 5, 15 A.3d 1279; Dow v. Caribou Chamber of Commerce & Indus., 2005 ME

113, ¶ 9, 884 A.2d 667.

      [¶11] When interpreting a statute, we accord its words their plain meaning

and will look beyond those words only if the result of a plain meaning reading is

illogical or absurd. Cyr, 2007 ME 28, ¶ 9, 916 A.2d 967. We will consider the

whole statutory scheme for the section at issue in seeking to obtain a harmonious

result. Stromberg-Carlson Corp. v. State Tax Assessor, 2001 ME 11, ¶ 9, 765 A.2d

566. If the words of the statute are ambiguous, we will then look to the legislative
6


history to determine the intent of the legislature. Cyr, 2007 ME 28, ¶ 9, 916 A.2d

967.

B.     Plain Meaning of Section 191(1)

       [¶12] The FOAA provides the public the right to inspect and copy any

“public record.” 1 M.R.S. § 408-A (2013). A “public record” is defined as “any

written, printed or graphic matter or any mechanical or electronic data compilation

from which information can be obtained . . . that is in the possession or custody of

an agency or public official of this State . . . except: (A) [r]ecords that have been

designated confidential by statute. . . .” 1 M.R.S. § 402(3)(A). Thus, all records in

the possession of a state agency are public records subject to disclosure unless

explicitly designated confidential by statute.

       [¶13]   Title 36 M.R.S. § 191(1) designates certain tax information as

confidential, excepting that information from the definition of public record

contained in 1 M.R.S. § 402(3). Section 191(1) provides, in pertinent part:

       [I]t is unlawful for any person who, pursuant to this Title, has been
       permitted to receive or view any portion of the original or a copy of
       any report, return or other information provided pursuant to this Title
       to divulge or make known in any manner any information set forth in
       any of those documents or obtained from examination or inspection
       under this Title of the premises or property of any taxpayer. This
       prohibition applies to both state tax information and federal tax
       information filed as part of a state tax return.

       [¶14] Preti argues that section 191(1) protects only information provided by

taxpayers to Maine Revenue Services. However, nowhere in the text of section
                                                                                 7


191(1) does the phrase “provided by the taxpayers” exist, nor can it be implied

from a plain reading of section 191(1) that its privacy protections apply solely to

tax returns, reports, or other information “provided pursuant to this Title” by the

taxpayer.   36 M.R.S. § 191(1).      Section 191(1) prohibits disclosure of any

information appearing in “any report, return or other information provided

pursuant to [Title 36].”   Thus, even when strictly construed, the language of

section 191(1) creates a broad sweep that protects all information, from whatever

source, provided pursuant to Title 36, including information generated by Maine

Revenue Services.

      [¶15] Section 191(1) also prohibits the disclosure of “any information set

forth in any of those documents or obtained from examination or inspection under

this Title of the premises or property of any taxpayer.”            This language

affirmatively indicates that any information Maine Revenue Services generates

from review of taxpayer specific returns and information is protected.

C.    Statutory Context

      [¶16] This interpretation is confirmed by the statutory context in which

section 191(1) appears. See Stromberg-Carlson Corp., 2001 ME 11, ¶ 9, 765 A.2d

566 (“In determining plain meaning, we consider the whole statutory scheme for

which the section at issue forms a part so that a harmonious result, presumably the
8


intent of the Legislature, may be achieved.”).                    Section 191(2) contains many

detailed exemptions from the section 191(1) privacy protections.

        [¶17]      Preti’s interpretation of section 191(1) would render multiple

exemptions in section 191(2) unnecessary surplusage, contrary to our rules of

construction.3 See Allied Resources, Inc. v. Dep’t of Public Safety, 2010 ME 64,

¶ 15, 999 A.2d 940 (“All words in a statute are to be given meaning, and none are

to be treated as surplusage if they can be reasonably construed.”). For example,

section 191(2)(H) authorizes Maine Revenue Services to disclose the reasons for

revocation of a taxpayer’s Title 36 registration. The reasons for revocation of a

taxpayer’s registration is information generated by Maine Revenue Services, not

information submitted to Maine Revenue Services by the taxpayer. Under Preti’s

interpretation, this information would not be confidential and there would be no

need for an exemption allowing for the release of this information.

        [¶18]      At oral argument, there was some discussion regarding the

applicability of 36 M.R.S. § 191(2)(UU) (2012). Because the Legislature amended

section 191(2)(UU) differently in two Public Laws, the Maine Revised Statutes for

2012 contained two exemptions labeled UU.                         See id.       One exempted from

protection the production of any reconsideration decision or other document setting


    3
      Title 36 M.R.S. § 191(2)(H), (L), (P), (Q), (Y), (EE), (JJ) (2012) all contain exemptions allowing for
the release of information obtained, maintained, issued, and/or generated by Maine Revenue Services.
                                                                                   9


forth or discussing the assessor’s practice, interpretation of law, or application of

the law to particular facts in a redacted format, pursuant to a discovery or a FOAA

request. P.L. 2011, ch. 644, § 5. The other UU exemption struck the language

regarding the production of other documents, allowing only the production of

reconsideration decisions and advisory rulings issued on or after July 1, 2012.

P.L. 2011, ch. 694, § 8. Review of the legislative history of the UU exemption

demonstrates that neither version is applicable in this case because ultimately they

only exempt redacted reconsideration decisions and advisory rulings issued on or

after July 1, 2012 from section 191(1) confidentiality, and none of the documents

at issue in this case fall into those categories.

       [¶19]   Based on the plain language of section 191(1) and the statutory

context in which section 191(1) appears, section 191(1) unambiguously mandates

that all taxpayer-specific information received or generated by Maine Revenue

Services pursuant to Title 36 is confidential, including federal tax return

information, and is not subject to disclosure under the FOAA.

       [¶20] Because all of the information contained in the documents at issue

here is protected by section 191(1), Preti is not entitled to disclosure of the

documents pursuant to the FOAA. See Springfield Terminal Ry. Co. v. Dep’t of

Transp., 2000 ME 126, ¶ 11 n.4, 754 A.2d 353 (noting that when a document
10


contains only protected information an agency need not disclose any portion of the

document).

        The entry is:

                           Judgment affirmed.



On the briefs and at oral argument:

        Sigmund D. Schutz, Esq., Preti, Flaherty, Beliveau & Pachios, LLP,
        Portland, for appellant Preti, Flaherty, Beliveau & Pachios, LLP

        Scott W. Boak, Asst. Atty. Gen., Office of the Attorney General, for
        appellee State Tax Assessor



Cumberland County Superior Court docket number AP-2012-46
FOR CLERK REFERENCE ONLY
