The Vermont Attorney General’s Office has argued for years that it cannot release certain documents related to the Jay Peak EB-5 scandal because doing so could imperil the state in ongoing litigation.
A new filing by VTDigger, which has sued the state to obtain those documents, asserts that accepting the attorney general’s reasoning would make Vermont’s public records rules an “outlier” among its peers.
The nonprofit news outlet has sought to explain why state officials failed to prevent Jay Peak developers from allegedly defrauding more than 800 immigrant investors over a decade. The state, meanwhile, has since 2015 claimed a “relevant to litigation” exemption to the Vermont Public Records Act to keep the documents under wraps.
The news organization brought suit late last year challenging the use of that exemption as it sought documents and communications from a former commerce agency chief in a bid to shed light on what the state knew about the massive fraud case and when.
In March, the Attorney General’s Office filed a motion with a Washington County Superior Court judge seeking summary judgment in the case, reiterating the state’s claims that the records are shielded from release due to a pending civil lawsuit against the state brought by a group of EB-5 investors.
VTDigger, in its own motion for summary judgment filed late April, contends that the state is taking an overly broad interpretation of the litigation exemption.
According to its motion, only 10 states have a comparable exemption, and they apply it more narrowly than the Attorney General’s Office is proposing.
“If adopted, the State’s broad interpretation of the litigation exemption would make Vermont an outlier among the approximately 10 states that have pending litigation exemptions in addition to attorney-client privilege exemptions,” according to the filing.
Some of those states have language in their provisions that explicitly limit the scope of the exemptions, according to the VTDigger filing.
Other states have broader language than Vermont’s public records act, but “nonetheless have chosen to interpret their provisions narrowly precisely because their public records acts require that exemptions be narrowly construed,” the filing said. Connecticut’s litigation exemption, for example, applies to records related to strategy and negotiations regarding pending claims or lawsuits.
Lia Ernst, senior staff attorney for the American Civil Liberties Union of Vermont — which has joined VTDigger in its lawsuit — said Monday that courts look at how other states have interpreted similar provisions of the law even if they are not identical.
“If the court adopts the broad interpretation of this exemption, it would make Vermont a minority among a minority, sort of two levels of outlier status,” Ernst said.
Cornell Law School’s First Amendment Clinic also joined VTDigger and its legal counsel, Timothy Cornell of Cornell Dolan, P.C., in representing the news organization.
Charity Clark, chief of staff for Attorney General TJ Donovan, said in an email Monday that the summary judgment motion process remains ongoing.
“The Attorney General’s Office will let the briefs speak for themselves, but I note that not all briefs have yet been filed,” Clark said.
The lawsuit was brought by the Vermont Journalism Trust, the nonprofit parent organization of VTDigger. It was filed after Lindsay Kurrle, secretary of the Agency of Commerce and Community Development, denied a public records request by the news organization in September 2020.
The lawsuit seeks a court order calling on the state to make public records tied to Lawrence Miller, who previously held Kurrle’s job as commerce chief, and the operations of the state-run Vermont EB-5 Regional Center the agency was charged with overseeing.
Miller served as commerce secretary from 2011 to 2014. During that time, Miami businessman Ariel Quiros, who owned Jay Peak at the time, and his partner, Bill Stenger, the ski resort’s past CEO and president, solicited hundreds of immigrants to invest in the Jay Peak projects through the federal EB-5 visa program. The fraud scandal has led to civil enforcement actions and criminal charges against Quiros and Stenger.
In denying VTDigger’s request, the state has cited the “relevant to litigation” exemption stemming from a civil lawsuit brought by Russell Barr, a Stowe attorney, on behalf of a group of EB-5 investors.
Those EB-5 investors each plowed at least $500,000 into projects led by Stenger and Quiros, which under the federal visa program would make them eligible for permanent U.S residency if a development met job-creating requirements.
Barr alleged in his lawsuit that the state and several of its employees and officials were either negligent in the oversight of the regional center or active participants in the alleged fraud.
That case, after a stop in the Vermont Supreme Court and a ruling allowing Barr to proceed with parts of his claims, remains pending in Lamoille County Superior civil court.
Both VTDigger and the Attorney General’s Office are expected to file additional briefs by mid-June. The judge could hold a hearing at that point or make a ruling on those written briefs.
