Article Concerning Recent Appellate Holding
FOR IMMEDIATE RELEASE
California Community Economic Development Association
July 12, 2022
CCEDA AMICUS CURIAE BRIEF HELPS OVERTURN COURT HOLDING ADVERSE TO CCEDA MEMBER INTERESTS
A California appellate court, the Third Appellate District in the Court of Appeals, recently issued a ruling that is beneficial to many/most CCEDA members that receive state or federal funding,including federal block grants to conduct their operations.
As background, in November 2020, a Superior Court ruled that a local Community Action Agency was classified as a “other local public agency” and thus, required to comply with the California Public Records Act (CPRA), the Freedom of Information Act (FOIA). The decision rested primarily on the fact that the nonprofit accepted government funding for its programs. The decision has potentially far-reaching implications for all nonprofit entities that receive because it infers those nonprofit entities are, for some purposes, government agencies, and because it potentially opens the door for private citizens to use CPRA and FOIA rules to intrude upon, burden and harass nonprofit organizations that receive even small amounts of state or federal funding.
“The ruling is vital to the network and our ability to conduct business without undue regulations that do not benefit our communities nor the families we serve,” said Jeremy Tobias, President of the CalCAPA Board of Directors and CEO of Community Action Partnership of Kern. “This process also highlights the important role for advocacy and representation from network associations like CCEDA and CalCAPA. The court’s response referencing our briefs shows that our collective work matters.”
The defendant in the Superior Court case, the Community Action Agency of Butte County, appealed the decision of the Superior Court. At that time, a coalition of nonprofit associations, including CCDEA, the California Association of Nonprofits and the California Association of Food Banks filed an Amicus Curiae brief arguing that the trial court’s decision should be overturned due to its potential adverse on numerous public benefit charities in California. An Amicus Curiae, in brief, is a written argument by an individual or entity that is not a party to a legal action but is affected or takes a position on the legal action.
CCDEA argued that (1) the trial court erred in summarily concluding that the local community action agency carried out public functions, (2) that Community Service Block Grant rules sufficiently address transparency regarding use of public funds, and (3) community action agencies are contractors, not government agencies.
On May 27, 2022, the Third District Court of Appeals ruled on the matter. The decision cited CCDEA arguments and concluded that “a nonprofit entity […] may be an ‘other local public agency’ only in exceptional circumstances,” meaning a nonprofit is subject to the CPRA in exceptional circumstances.
This decision provides a test for nonprofits to determine if it would be subject to CPRA disclosure requests. The test enumerated includes the following questions: “(1) whether the entity performs a government function, (2) the extent to which the government funds the entity’s activities, (3) the extent of government involvement in the entity’s activities, and (4) whether the entity was created by the government.” Further, the court determined that FOIA only applies to federal, not state or local, agencies. Of course, California nonprofits are not federal agencies, and, again, are not subject to FOIA.
The impact of this decision on nonprofit organizations that receive CSBG and other government funding is substantial. The ruling essentially prevents antagonists from using the Freedom of Information Act and California Public Records Act to intrude upon, burden and harass nonprofit organizations in all but the most extreme and unlikely situations.