STRAINING STATUTORY INTERPRETATION IN ARGUS LEADER V. HOGSTAD: WHY POORLY DRAFTED STATUTES SHOULD BE FIXED BY THE LEGISLATURE.

• Author: Doubledee, Jennifer

1. INTRODUCTION

   The intent of a statute is determined from what the legislature said, rather than what the courts think it should have said (1) ... we must give legislation its plain meaning... [w]e cannot amend to produce or avoid a particular result. (2) The South Dakota Supreme Court used this quote to hold that a wrongful death statute applied to only the decedent's spouse and children." (3) However, in Argus Leader Media v. Hogstad, (4) the court's majority opinion determined that the overriding presumption of the legislature's 2009 Public Records Act should prevail. (5) In doing so, as Justice Zinter's dissent discussed, the majority opinion in Hogstad ignored its own precedent and overstepped its role by interpreting a statutory provision best left for the legislature to resolve. (6)

   In 2015, six years after the legislature's public records overhaul, the Center for Public Integrity still gave South Dakota's public access to information a failing grade. (7) Several recent, well-publicized state scandals have added fuel to the taxpayer fire that more government accountability and transparency is needed for citizens to trust in their elected and politically appointed officials. (8) But, was it proper for the South Dakota Supreme Court to provide a strained statutory interpretation to achieve this goal?

   This case note first reviews the facts surrounding the Hogstad opinion, including the circuit court decision and the Supreme Court's majority and dissenting opinions. (9) Next, this note provides background on the separation of powers doctrine, statutory interpretation, South Dakota's open records laws, case history, and other states' statutory approaches to confidential settlements. (10) Last, this note will discuss why the South Dakota Supreme Court should defer to the South Dakota Legislature to fix poorly worded statutes. (11)

2. FACTS AND PROCEDURE

   1. THE UNDERLYING CASE

      In June 2014, the Sioux Falls Mayor, City Council, and community realized the newly constructed Premier Center had a building defect: the flat horizontal panels on the curved design of the building were bulging. (12) The City of Sioux Falls ("City") hired a technical design group to determine the problem, (13) and attempted to negotiate a settlement through mediation with the general contractor and four subcontractors. (14) However, one subcontractor did not agree to the terms of the agreement. (15) The City threatened suit against the contractors in September 2015, but eventually reached a $1 million global settlement agreement ("settlement") with all five contractors, announced to the public on September 18, 2015. (16) The terms of the settlement included a clause stating that other than the settlement amount, the details of the agreement would remain confidential. (17) The settlement's confidentiality drew skepticism from open records advocates who argued the taxpayers, as parties to the settlement agreement, had a right to know its terms. (18) The City Attorney denied a local newspaper reporter's request for a copy of the settlement, stating South Dakota Codified Law ("S.D.C.L.") section 1-27-1.5(20) allowed the City to keep the settlement agreement confidential. (19) S.D.C.L. section 1-27-1.5(20) provides an exception to open records laws for "[a]ny document declared closed or confidential by court order, contract, or stipulation of the parties to any civil or criminal action or proceeding." (20) When the City declined to reconsider its position, Sioux Falls' newspaper, the Argus Leader ("Argus"), filed a complaint against the City for violating open record laws and requested the release of the settlement, civil penalties of fifty dollars a day for the City's unreasonable delay in producing the settlement, and an award for costs and disbursements. (21) The Argus alleged the settlement did not fit the exception in S.D.C.L. section 1-27-1.5(20) because it was not drafted by parties to a civil action, as the controversy was not in litigation when the settlement occurred. (22)

   2. THE LOWER COURT'S DECISION

      Both the City and the Argus filed summary judgment motions. (23) The Argus argued that S.D.C.L. section 1-27-1.5(20) should be interpreted as: any document declared:

      (1) closed, or

      (2) confidential by:

      (a) court order,

      (b) contract of the parties to any civil or criminal action or proceeding, or

      (c) stipulation of the parties to any civil or criminal action or proceeding ....

      which would place the settlement outside of the exception, thereby requiring the settlement's disclosure because no civil action had commenced. (24) Conversely, the City argued that the word "contract" stands alone and is not modified by "of the parties to any civil or criminal action or proceeding." (25) Therefore, the City argued the settlement was a contract that fit into the exception found in S.D.C.L. section 1 -27-1.5(20), allowing the settlement to remain confidential. (26)

      Judge Pekas weighed both parties' statutory interpretations and acknowledged that the doctrine of last antecedent, adopted by the South Dakota Supreme Court, instructs that a modifying clause only modifies the last antecedent. (27) Judge Pekas noted that the doctrine of last antecedent is: (1) subject to a determination of other "indicia found in the meaning of the statute," (2) should only apply when other rules of statutory construction or legislative intent do not clear up "uncertainties or ambiguities," and (3) should be used as an aid that "leads to more persuasive contextual evidence of legislative intent and common sense." (28) The circuit court opinion focused on whether it made sense to apply the modifier ("of the parties to any civil or criminal action or proceeding") to each antecedent ("court order, contract, stipulation") and determined that applying the modifier to the first antecedent would result in the phrase "[a]ny document declared closed or confidential by court order ... of the parties to any civil or criminal action or proceeding." (29) Judge Pekas concluded the phrase "a court order of the parties" would not make sense, as only courts can create court orders. (30) Therefore, Judge Pekas determined the doctrine of last antecedent applied to S.D.C.L. section 1 -27-1.5(20), and the City's argument that the word "contract" is not modified by "of the parties to any civil or criminal action or proceeding" was correct. (31) Judge Pekas granted the City's motion for summary judgment and held that the Legislature intended to include the settlement in S.D.C.L. section 1-27.1.5(20), which meant the settlement could be kept confidential. (32)

   3. THE SOUTH DAKOTA SUPREME COURT'S DECISION

      1. The Majority Opinion: "Guided by the Presumption of Openness " (33)

         The Argus appealed, arguing that the trial court erred when it held that the settlement was not an open record. (34) The Argus further argued that interpreting the word "contract" in S.D.C.L. section 1-27-1.5(20) as standing alone would undermine the intent of the entire Act, because a government entity could draft a confidentiality clause in any and all contracts, thereby making the documents unavailable to the public. (35) The South Dakota Supreme Court agreed with the Argus's argument, believing the legislature would not create such a broad exception in S.D.C.L. section 1-27-1.5(20) when the overall intent of the Act was to create the presumption of openness. (36)

         The South Dakota Supreme Court's majority opinion focused on the "ambiguous trailing modifier" found in S.D.C.L. section 1-27-1.5(20). (37) The court wrestled with whether the South Dakota Legislature intended "of the parties to any civil or criminal action or proceeding" to modify only "stipulation" or both "contract" and "stipulation" and agreed with the lower court that the modifier "clearly" could not modify "court order." (38) The majority considered the last antecedent canon and the series-qualifier canon, but found that neither should apply. (39) First, the last antecedent doctrine would require the modifier "of the parties" to modify only "stipulation." (40) Next, the series-qualifier canon would require all three--"court order," "contract," and "stipulation"--to be modified. (41) Instead, the majority held that the whole-text canon should prevail in its statutory interpretation of S.D.C.L. section 1-27-1.5(20). (42) The majority utilized the whole-text canon to assert that the purpose of the Act was to provide a presumption of openness, with the provisions of the Act "construe[d]... liberally in favor of open, public records." (43) Thus, the exceptions found in S.D.C.L. section 1-27-1.5 were to be "narrowly construe[d]." (44)

         In applying the whole-text canon, the majority agreed with the Argus's argument that the legislature did not intend to create a broad loophole that would allow public entities to contract around open records laws. (45) Such an exception would be contrary to the presumption of openness expressed by the Act as a whole. (46) The majority ultimately determined that the legislature did intend the word "contract" to be modified by "of the parties to any civil or criminal action or proceeding." (47) Therefore, because the settlement is considered a contract for statutory purposes, and the City and the contractors were not in litigation when the settlement was drafted, (48) the court held that the settlement did not fit the exception under S.D.C.L. section 1-27-1.5(20) and ordered the settlement released for public review. (49)

      2. Justice Zinter 's Dissent: "Using an Act's General Purpose to Change Text is a Breathtaking Proposition. " (50)

         Justice Zinter found the majority opinion's holding "breathtaking" for three reasons: (1) it defies standard English; (2) it renders the word "contract" meaningless; and (3) it requires the court to omit a comma and add a word to the statute, which is beyond the court's role. (51) First, Justice Zinter argued that this case should have been resolved by "the well accepted rule of last...