Necessity or nonsense? Should Trios bankruptcy prevent the release of public records?

Documents related to the firing of a public employee who breached more than 1,600 private health records.

A contract between a publicly owned hospital and the consulting firm hired to help it navigate difficult financial waters.

Both are types of documents typically open to the public under Washington law. They’re public records.

That means if a citizen, employee or reporter requests them of a public agency, that agency has to turn them over.

But what if the agency is in the midst of bankruptcy? Does that change the equation?

Trios Health in Kennewick says it does.

The public hospital district, which filed for bankruptcy last summer, has stopped fulfilling public records requests while it works through the process.

An automatic stay granted as part of the bankruptcy means it doesn’t have to, said the hospital’s bankruptcy attorney.

“We’re not saying we won’t (provide the records), but we’re saying if you have a request, it has to go to the bankruptcy judge” for a determination, said Jack Cullen of Foster Pepper, who’s representing Trios.

The stance is about protecting the district and its limited resources as it works to regain solid financial footing, he said.

It’s raising concerns among open government advocates.

Toby Nixon, president of the Washington Coalition for Open Government, said it seems to be “nonsense.”

There’s nothing in state records law or bankruptcy law — as far as his organization can tell — that relieves public agencies of being accountable, he said.

“The fact is, (public) records belong to the public,” he said. “They can’t claim that being in bankruptcy throws a cloak over everything they’re doing and they’re no longer accountable to the public.”

In Washington, government meetings and records generally are open.

There are exceptions, certainly. But the state’s Open Public Meetings and Public Records acts aim to ensure transparency.

Trios can’t turn over private patient health records to anyone who asks, for example.

But many other documents, from budgets to emails among board members discussing district business, generally are public.

Trios Health is the only public hospital district in the Tri-Cities. Kadlec Regional Medical Center in Richland and Lourdes Health in Pasco are private and aren’t subject to the same rules.

Trios Health filed for Chapter 9 bankruptcy on June 30.

Just before that, the Herald requested records related to a large-scale privacy breach at the hospital that was disclosed earlier in the year.

An employee looked at 1,603 electronic patient records outside of his or her job duties, violating federal law. The unnamed employee was fired after the breach was discovered.

“We believe the public has a right to know more about who was responsible and how it happened,” said Tri-City Herald editor Laurie Williams. “Trios is an important part of this community, but we also believe that the public’s trust is best repaired by openness.”

Earlier this month, the Herald also separately requested contracts between the district and Quorum Health Resources, the consulting firm that’s providing management services.

In both cases, the district said the automatic stay relieves it of any obligation it may have to turn over the documents.

“The automatic stay constitutes a fundamental debtor protection in bankruptcy,” Cullen wrote in a Jan. 19 letter to the Herald. “The automatic stay gives the debtor a ‘breathing spell,’ shielding the debtor from financial pressures and undue distraction, essential to preserving the debtor’s property and ability to administer its bankruptcy case.”

In bankruptcy, the automatic stay protects against actions such as liens, judgments and collections.

Public records requests aren’t specifically mentioned in the law, although Cullen said the shield is broad and asserted that records requests are included.

Chapter 9 is a type of bankruptcy that gives municipalities a chance to reorganize their debt. It’s fairly unusual in Washington, but several municipalities outside the state have gone through it in recent years, including the California cities of San Bernardino and Stockton.

Jackie Shook, San Bernardino’s records management specialist, said her city handled public records requests as usual while working its way through bankruptcy.

Connie Cochran, a Stockton spokeswoman, said requests that were tied to the bankruptcy were handled differently. But other requests were processed as usual.

“I wouldn’t judge them,” she said of Trios. “I know how much work it is. I know how weary we were. Almost everything could be some kind of financial document. The whole process is grueling.”

Cullen said it doesn’t work to draw comparisons to the California cities.

Records laws are different between states, he said, noting the cities may have had more flexible timelines for responding, more staff to help with the process and other advantages.

“Washington has extraordinarily tight time frames (in fulfilling public records requests) and is incredibly intrusive on a minimal staff that’s doing its best to keep everybody employed, to keep providing care and to answer all the requirements of the bankruptcy court,” he said.

It’s best to leave it up to the bankruptcy judge to decide if the resources should be expended, he said. In some cases, requested documents also could hurt negotiations.

“We need that forum, rather than just throwing resources at these things, (which) takes them away from the more important work of keeping the hospital running,” Cullen said. “We’ll do whatever the judge says, we just want the forum” to explain the circumstances.

The district is treating all records requests the same way. It’s received several in recent months, from the Herald and others.

Lisa Teske, Trios spokeswoman, said the district is committed to transparency.

For example, officials regularly meet with local news agencies to give updates, she noted. “We will be very transparent, but we must do it with the court and the legalities in mind. We’re certainly not going to do things that will put us in further legal jeopardy or add to the challenges,” she said.

When there’s news to share, “you can count on us to bring those things forward in a timely manner, because we know that you and our community want to know what’s happening at Trios Health,” she told the Herald.

Nixon, from the open government coalition, said the records request stance should be challenged. Public access to government records is critically important, he said.

“We, the people, created the government to help us protect our rights and provide services to us. The people are sovereign,” he said. “We have the right to know what the government is doing.”

This story was originally published January 27, 2018 at 4:25 PM with the headline "Necessity or nonsense? Should Trios bankruptcy prevent the release of public records?."