Mackinac Gets FOIA Fees Lowered in Liquor Commission Lawsuit

On Jan. 22 the Mackinac Center Legal Foundation filed a lawsuit at my behest against the Michigan Liquor Control Commission. The commission attempted to charge $1,550 to copy a spreadsheet from an office computer onto a thumb drive. Or just email it. This spreadsheet, which contains a price list for beer and wine sold in the state, is the same one that a staffer had earlier offered to copy free of charge.

Six weeks after the foundation filed the lawsuit (March 6), the commission lowered its price from $1,550 to $50. The Mackinac Center issued a news release announcing its victory on March 16, the Monday of Sunshine Week, which celebrates open government and the public’s right to public information.

Even though we have prevailed, valuable research has been delayed by four months (versus the 10 days specified in Michigan’s Freedom of Information Act). And if this is what an established and well-known institution like the Mackinac Center has to endure to obtain supposedly open records from a state agency, the prospects are not bright for regular citizens seeking information from their state government.

The commission’s actions stem from a November 2014 visit I made to its Lansing office. I was seeking a review of papers from the agency’s files. A staffer offered instead to simply download newer data onto a thumb drive, since it had already been assembled on a spreadsheet. I did not have one of those compact information-storage devices on me at the time, so we agreed that I would submit a Freedom of Information Act request.

After I did so, the commission’s response included this sentence: “The FOIA request you submitted will require an estimate and a deposit before we can continue to process it.”

Incredulous, I responded, “[You] must do an estimate to ascertain the cost of sticking a thumb drive in your computer?”

The process apparently involved determining the most awkward and costly method possible for providing the information. That turned out to be estimating the actual cost of physically collecting and copying some 6,000 paper pages of price information submitted by wholesaler cartel members, rather than simply providing the spreadsheet from which they came. At 25 cents per page,
the cost came to $1,500.

In contrast, the amount of staff time and expense to copy that spreadsheet onto a thumb drive or email it would probably be less than $1. At that point the response from me and my Mackinac Center colleagues was, “See you in court.”

For years the Mackinac Center for Public Policy has undertaken empirical research into the real impact of alcohol control regulations on consumers, and their supposed public health consequences. Recently, we have zeroed in on archaic and inexplicable “post and hold” rules. No public policy rationale has been offered for these rules. Their effect and possibly their intent is to enrich a handful of fortunate families in the beer and wine wholesaler cartel at the expense of consumers who must pay higher prices.

These rules mandate that beer and wine manufacturers and wholesalers post product price changes at the Liquor Control Commission, an act that lets other manufacturers and wholesalers see the prices. Under the rules, the posted prices must then be left unchanged for a period of time that varies depending on the product. The practical effect is to alert potential competitors to price changes and suffocate the impulse for rapid moves.

This is tantamount to not only legal price collusion, but officially required collision. Its harmful impact on consumers is not hypothetical but is demonstrated with empirical research. One nationwide study suggests that such rules artificially raise the price of beer and wine products by 6.2 percent to as much as 30 percent.

Lawmakers cannot craft good public policy when government agencies act to keep secret the information needed to determine what those policies should be. This is why Michigan has a Freedom of Information Act, and why courts should be diligent and firm in enforcing it on administrative agencies.