When it comes to public records, schools can’t hide behind the insurance company

Despite all its good intentions, the Family Education Rights and Privacy Act has often been misused by schools to deny any number of valid open records requests, leaving a string of court cases to interpret the law.

A recent decision out of Arizona ended with a judge ruling a school district couldn’t claim a FERPA exemption on a settlement agreement with a former student who was strip-searched by school officials.

The history on that case goes back many years and is well worth delving into, notably the Supreme Court ruling 8-1 that the girl’s Fourth Amendment rights were violated. But the most recent legal dispute was between the Safford Unified School District and Matthew Heller, the editor of the website On Point News. The case facts were pretty cut-and-dried, with a hint of irony: The school district wouldn’t release to Heller the settlement agreement with a student who was unlawfully strip-searched — because of FERPA, a law intended to protect the privacy of students. Heller’s lawyer noted in a letter to the court that the “assertion of student privacy to withhold its settlement agreement … is as ironic as it was misplaced.” A judge agreed and compelled the settlement’s release.

There was one point that didn’t make it into our story because the details were tangential to the ruling. But it’s a point worth discussing.

In that letter to the court, Heller’s counsel outlined various reasons why the district failed to prove FERPA protected the settlement. The school district had argued that it “did not expend any funds in the settlement,” because the money came from the district’s insurance company. Media attorney Christopher Moeser shot down that argument, saying that just because the settlement money came from an insurance payout doesn’t mean it’s exempt from an open records request.

With regards to open government, “you can’t delegate a public duty to a third party, whether it’s a nonprofit organization or private company,” Moeser said.

What’s important is where that money originated.

“The district pays into that risk retention trust or insurance trust or whatever it is, so technically those are public funds being used to facilitate that insurance policy,” he said.

This isn’t the first case to decide a settlement agreement doesn’t fall under FERPA, nor is it the only one to address the insurance defense. In The Herald Publishing Company, LLC v. Coopersville Area Public Schools, a judge ruled a settlement wasn’t an “education record” — a legal term at the core of FERPA disputes.

The judge in that case also addressed the claim by the defense that the dollar amount paid out by the insurance company isn’t subject to open records requests. He wrote the monetary settlement was “in essence” using public funds, and is a reflection of the school’s actions.

So the lesson for you open records hunters: Be skeptical if you are ever denied records because money was handled by a third party.