09.15.2011 | Features | 7
6 | Features | 09.15.2011
Request Denied How BC universities are fighting to keep their billion-dollar corporations out of the public eye
UBC owns powerful corporations that manage its investments, commercialize its research and develop all of the real estate on campus. The university considers them off-limits to public access. A former Ubyssey journalist is engaged in a sprawling court battle to open them up.
UBC-owned corporations targeted by the freedom-of-information requests: Properties Trust
Self-described mission “to acquire, develop and manage real estate assets for the benefit of the University.”
a near-monopoly on all development that happens on campus, manages private rental housing for non-students, and is the landlord for most of the
UBC PT has
commercial space.
Investment and Management Trust
makes investment decisions with billions of dollars of UBC’s money.
By Neal Yonson If a public university owns a private corporation, is the corporation public—or not? Over the past six years, a legal battle has been taking place between BC universities and citizens who have requested information from corporations owned by the universities. The outcome of this ongoing legal saga will set an enormous precedent for the public’s right to know what is being done at private companies run by public institutions across Canada. In 2007, former Ubyssey journalist Stanley Tromp requested various records from seven UBC-affiliated corporations. Among the corporations was UBC Properties Trust (UBC PT), whose purpose is to “acquire, develop and manage real estate assets for the benefit of the University.” In other words, all of the construction you see happening around campus is ultimately managed by UBC PT. Another corporation was UBC Investment Management Trust (UBC IMANT), which manages the billions of dollars in UBC’s endowment fund and pension plan. Tromp wanted to see the latest annual report, meeting minutes and salary and expenses information about the highest-paid employees at these corporations. UBC refused to disclose the records, claiming they were private documents. Tromp appealed, and the legal battle was launched. Meanwhile, a similar situation developed at Simon Fraser University (SFU), where a professor tried to access records from an office which helped commercialize research developed at the university. In 2005, SFU refused, and the dispute made it all the way to the highest court in the province, before ending inconclusively when the professor died this past December. Now the UBC case is taking centre stage again, and both sides are preparing their arguments. The submission period ended this summer. Whatever decision is reached, the case will re-write privacy laws as they pertain to universities across all of Canada.
Challenging the university In BC, there is a law called the Freedom of Information and Protection of Privacy Act
UBC IMANT
(FIPPA), which says that records generated by a “public body” such as UBC must be disclosed to the public upon request. There are a number of exceptions which prevent disclosure, especially when it comes to protecting the privacy of individuals, but for the most part UBC’s records are publicly accessible to anyone who cares enough to request them. FIPPA applies to over 2000 public institutions and crown corporations in the province including government ministries, hospitals, universities and the Insurance Corporation of British Columbia (ICBC), but does not apply to private corporations. It was under FIPPA’s rules that Stanley Tromp made his request for the documents of the UBC-owned corporations. This wasn’t the first time Tromp had tangled with the university. Tromp originally gained fame around The Ubyssey in 2000, when he took the university to court over whether their exclusive supply contract with Coca-Cola was subject to FIPPA requests. The case took years to settle and racked up tens of thousands of dollars in legal fees, but Tromp and The Ubyssey emerged victorious. This was a hugely important legal precedent, opening up contracts between universities and corporations across Canada. As for this matter, it wasn’t unusual for UBC to deny requests for documents from the corporations it owned. The AMS, The Ubyssey and some of the CUPE unions on campus have also made FIPPA requests of UBC PT—all of which were rejected. Tromp was, however, the first to ask the BC Office of the Information and Privacy Commissioner (OIPC), an independent office which has adjudicators who can rule on issues arising as a result of FIPPA, to review UBC’s decision to withhold documents. In doing so, he was following in the footsteps of an eccentric professor who was causing SFU all kinds of headaches.
David Noble, gadfly extraordinaire In 2004, a York University professor named David Noble placed a request under FIPPA for documents held by SFU’s University-Industry
Self-described mission “to provide comprehensive investment management for the UBC Endowment Fund, Staff Pension Plan, Working Capital Fund and other UBC funds.”
Liaison Office (UILO), an office which helps commercialize SFU’s research discoveries. Noble was seeking information about two of SFU’s spin-off companies, Credo Interactive and Virtual Learning Environments. At first, SFU started producing some of the requested documents while holding others back, taking the position that they had possession of all the records and could provide them, but was required to first consult with other shareholders. After companies affected by the requests protested, SFU did an abrupt about-face in 2005, saying that it did not have any of the remaining documents. Instead, SF Univentures (SFUV), a private corporation wholly owned by SFU, was supposedly in possession of the records. SFU asserted that as a private corporation, SFUV was not required to fulfill requests made under FIPPA. It was made clear that Noble would not be receiving any more of the information he had requested. Noble was a well-known gadfly who frequently targeted Canadian universities. He fought against corporate influence at universities, which he felt was eroding academic freedom, and increasing use of technology, which he felt was being used to control, rather than empower, workers. He also had a decidedly unpleasant relationship with then-SFU President Michael Stevenson. Prior to becoming president, Stevenson had served as Vice President Academic Affairs and Provost at York University, where Noble was based. The two were bitter adversaries during a seven-week faculty strike in 1997. In 2001, Noble was nominated for a prestigious faculty position at SFU, the J.S. Woodsworth chair in the department of humanities. Despite unanimous faculty support, Stevenson blocked Noble from getting the position, telling another senior administrator in an email to “avoid this appointment like the plague.” Noble finished his career at York University. Although it may have been partly vindictive for him to pursue SFU, given his history with Stevenson, the documents he was after were not unrelated to his research interests. Once SFU stopped producing documents,
Noble requested a review of their decision by the OIPC. The OIPC adjudicator invited other groups to participate as intervenors, a status awarded to parties with a strong indirect interest in the outcome. UBC was one of those invitees and made a joint submission with the University of Victoria (UVic). During the inquiry, SFU asserted once again it did not have control of the documents, insisting that SFUV had never provided them to SFU. UBC and UVic’s submission argued that the records could not be under the control of both SFU and SFUV—and since the records were under SFUV’s control, they could not be under SFU’s. However, the situation was not as black and white as the universities had portrayed. SFUV exists only on paper. If it weren’t for SFU, SFUV would have no employees, location or any tangible existence at all. As summarized by the OIPC adjudicator: “SFU is the sole shareholder of SFUV. The President of SFUV is the Vice President of Research at SFU and the director of the UILO is an SFUV director. All of SFUV’s directors are SFU employees. All of SFUV’s activities and its day to day management are undertaken by staff of the UILO. SFUV’s office is located at SFU within office space that the UILO occupies.” SFU’s refusal to comply with FIPPA was treading within a grey area of the law. When FIPPA was created, it did not explicitly contemplate an arrangement where a public body owns and controls “private” subsidiary corporations. As a result, the OIPC was forced to consider what took precedence under FIPPA, the subsidiaries’ status as private corporations, or the university’s status as a public body. Due to SFU’s all-encompassing control over SFUV, and the fact that SFU employees were the ones creating and handing all of SFUV’s documents, the adjudicator ultimately concluded that SFU did in fact have control of the documents and that SFUV’s status as a private entity could be ignored. SFU was ordered to fulfill Noble’s information request. Unsurprisingly, SFU immediately appealed the OIPC’s decision to the BC Supreme Court.
Research Enterprises Inc.
Self-described mission “to encourage, promote and assemble resources for the commercialization of inventions and the new ventures they may inspire.” It works under the University-Industry Liason Office. UBC RE takes research innovations developed at UBC and
creates spin-off companies in
the hopes that the company’s profits will flow back to the university.
The judges take over While the OIPC is the primary adjudicator for disputes about FIPPA, its decisions can be subjected to judicial review if the BC Supreme Court agrees to hear the case. A party may then appeal the Supreme Court’s decision to the BC Court of Appeals, the highest court in the province. After that, the only place a case can go is the Supreme Court of Canada. As Noble’s case approached the BC Supreme Court, the OIPC was making its judgement on the dispute between Tromp and UBC. From the original seven corporations that Tromp targeted, the OIPC determined that three were set up in a similar manner to SFUV: technically private corporations but wholly-owned and wholly-controlled by UBC with many UBC employees on the payroll. These three were UBC PT, UBC IMANT, and UBC Research Enterprises (UBC RE), a corporation which helped to commercialize UBC research. In April 2009 the OIPC ordered, just as they had with SFU, that because UBC held such complete control over the three subsidiary companies, UBC controlled the documents and must produce them. Mirroring SFU, UBC immediately appealed to the BC Supreme Court. In August of 2009, the case between SFU and David Noble finally reached the BC Supreme Court. Once again, UBC obtained intervenor status in the case. In a convoluted ruling the judge sided with SFU, overturning the OIPC’s earlier decision. The judge’s ruling again pondered the
question “Is SFUV independent of SFU?” Based on precedent, for SFUV and SFU to be considered one and the same, SFUV must have “no independent functioning of its own.” However, the judge made no effort to actually perform the cited test on SFUV to determine its degree of independence. Instead, the simple fact that SFUV has been incorporated as a business was used to assert its independence from SFU. It was a purely tautological justification: SFUV is a private corporation because SFUV is a private corporation. As a result of the ruling in favour of SFU, the OIPC offered to hold a second inquiry into Tromp’s request and UBC withdrew its BC Supreme Court appeal. The precedent set by the SFU decision meant that a second Tromp inquiry would have almost certainly gone in UBC’s favour. However, David Noble, along with the Canadian Association of University Teachers (CAUT), subsequently appealed the SFU case to the BC Court of Appeals. The Tromp/UBC dispute was put on hold pending the outcome of the SFU case.
ahead as planned. However, rather than debating the substance of the case, the lawyers had a morning-long discussion about how to proceed in the wake of Noble’s death. Counsel for SFU argued the case was moot since there was no resolution to be had—even if the documents were produced there was no one to receive them. Legal counsel for Noble and CAUT sought to have another individual inserted into the case as a replacement plaintiff. They were given three months to come up with a suitable candidate. They found two. The first was Sarah Dopp, Noble’s widow. The second was Arthur Schafer, a philosophy professor at the University of Manitoba whose research interests overlapped with those of Noble. But in May 2011, the three-judge panel ruled that neither Dopp nor Schafer could be inserted into the case in Noble’s place. Since the only party in the case seeking records was deceased, the case was closed. After seven years, Noble’s request fizzled away quietly, without resolution. The case died with him.
Starting over
An inconvenient death Finally, over five years after Noble’s initial requests had been denied in October 2005, the BC Court of Appeals agreed to hear the case on January 19, 2011. As with the previous hearings, UBC obtained intervenor status. Unexpectedly on December 27, 2010, David Noble passed away from complications related to pneumonia. Nevertheless, the January court date went
On May 10, 2011, the OIPC reopened the second inquiry into Tromp’s document requests. The submission period ran until June 21. The OIPC adjudicator will now consider all of the submissions and eventually issue a ruling. With the leading precedent being the BC Supreme Court ruling in favour of SFU, it appears likely that the original ruling will be reversed and UBC will be allowed to keep the corporate veil intact.
No matter who ends up winning this inquiry, an appeal to the BC Supreme Court is certain. After that it may go to the BC Court of Appeals. It could easily be a few years before any sort of definitive resolution is reached, assuming the Supreme Court of Canada doesn’t also feel the need to weigh in. Should the courts rule that UBC’s subsidiaries are subject to the same FIPPA requirements as their parent universities, they’ll have to start fulfilling a backlog of freedomof-information requests, many of which are already a number of years old. Most likely, a lot of new requests would be made. It will be an important saga to watch. The UBC subsidiaries perform functions which are crucial for the university to operate. These corporations manage literally billions of dollars of UBC’s money and have a nearmonopoly over on-campus land development. A decision in favour of UBC would seal the records of UBC’s corporate subsidiaries forever, or until a theoretical future revision of BC’s privacy laws. It would also prop open a significant loophole in universities’ disclosure requirements, potentially allowing the university to hide any business it likes by creating a corporation to manage that business, thus keeping it private. There may still be years of court battles to come, but after a few false starts, we may now be getting close to a resolution of this long-running battle. -Neal Yonson is an editor at UBC Insiders. With files from Brian Platt.
Timeline of the legal battles against UBC and SFU January 4, 2007 December 2006 Tromp requests documents UBC denies the request, saying the documents are not under the university’s from various UBC-run control. Tromp appeals to the OIPC. companies
Tromp vs UBC
Noble vs SFU
March 1, 2004 David Noble requests documents held by SFU’s University-Industry Liaison Office
October 21, 2004 SFU grants Noble’s request, agreeing that the documents are under the control of SFU
October 17, 2005 After companies affected by the request protest, SFU reconsiders its decision and says the documents are not under SFU’s control. Noble appeals to the OIPC.
January 4, 2008 OIPC rules in favour of Noble, orders SFU to comply with the request
April 21, 2009 OIPC finds in favour of Tromp.
May 20, 2009 UBC appeals OIPC decision to the BC Supreme Court
November 25, 2009 Because of SFU’s Supreme Court win, the OIPC agrees to hold a second inquiry into the UBC case. UBC withdraws its appeal.
October 30, 2009 The BC Supreme Court rules in favour of SFU, overturns the OIPC’s ruling
November 27, 2009 Noble appeals to the BC Court of Appeal
May 10, 2011 Second inquiry resumes after SFU case ends inconclusively.
December 27, 2010 David Noble dies
Date to be determined: Second OIPC inquiry makes its ruling. No matter which way this goes, it will almost certainly be appealed.
May 2, 2011 The BC Court of Appeals rules that nobody can take Noble’s place, and the SFU case is closed without a final resolution.