Judge's Nike decision could cost city thousands

Mayor hints at appeal; attorney worries about impact on jurisdictions

Washington County Circuit Judge Gayle Nachtigal declared Nike Inc. the winner Monday afternoon in its long legal tussle with the city of Beaverton.

The decision could cost the city more than $600,000 in legal fees and computer search expenses.

Nachtigal also ruled that the city was in contempt after it failed to produce a 2001 draft annexation issue paper it knew to be responsive to Nike's public records request.

'The city did not want to turn over the document because it would fly in the face of what they were saying,' Nachtigal said from the bench following a hearing in Hillsboro. 'Instead, the city chose to bury it and hide it, and that is contemptuous behavior.

'Many people in the city knew about that document, knew it was responsive to the pubic records request and did not turn it over until forced to do so.'

Beaverton officials are considering an appeal of the ruling.

'The city doesn't believe this is the appropriate outcome given the facts of the case,' said Mayor Rob Drake. 'Therefore, consideration will be given for appealing this decision to a higher court.'

City Councilor Betty Bode, who attended the hearing, was stunned by what she witnessed in court.

'I was very disappointed in the judge's ruling,' Bode said. 'The city's annexation policy, which was directed by the Washington County 2000 plan is certainly something that has not been embraced or understood by the entire community.

'We'll wait until we read the judge's written ruling, then make a determination on what the City Council will direct the mayor to do. I think it's really time to bring some final closure to all of this - the city has better things to do.'

Linda Adlard, the mayor's chief of staff, agreed.

'It's unfortunate when things get misstated and it's unfortunate when the truth has been withheld from the other side,' Adlard said. 'We really need to focus on what the citizens need. And sometimes you take some hits.'

Adlard stood by previous arguments she made defending the city's actions in carrying out the judge's order to produce documents responsive to Nike's massive public records request.

'We attempted to give Nike that document on three occasions,' Adlard said as she left the courtroom. 'Nike had that document in their possession and they refused to take it.'

City 'stonewalled'

Attorneys representing the city in the litigation said the annexation issue paper - a document Nike called the 'smoking gun' that proved the city had its headquarters targeted for forced annexation - appeared at least seven times on two external computer disk drives that the city offered in open court Oct. 31, 2005.

Had Nike attorneys accepted the drives at the time, they would've had the document and color-coded maps nearly eight months earlier, city officials said.

Nachtigal rejected that argument and city officials' claim that the document was exempt because it was an internal staff discussion about annexation options that was never shared with the City Council.

'The city's failure to disclose it upfront and easily locate it is the fault of the city,' she said. 'If the city had been forthcoming in forwarding that annexation issue paper, the allocation of costs would be very different.'

Nachtigal ruled that the city would be forced to bear the bulk of the costs to process the public records search because 'the city stonewalled, hid and engaged in behavior' that caused the case to drag on.

While the judge will rule later on which party will pay attorneys' fees in the legal feud, Nike will foot the bill for the production of a stack of documents it identified as responsive to its request and the forensics search of city officials' private home computers as nothing of value was found on them.

Although the company has not yet presented an itemized bill to the court for its legal expenses, Nike estimates that they could total more than $475,000.

The city estimates that its outside legal fees could total about $400,000. The city also paid about $270,000 for the computer forensic search with the court-appointed expert.

City Attorney Alan Rappleyea worried that the ruling could open the floodgates to costly public records requests for cities and counties.

'Under this ruling any individual can come into a local government, demand an outside computer expert search through every electronic record and then require the local government to pay the bill,' Rappleyea said. 'We produced all the documents - including this one that they wanted - using existing city technology, but Nike demanded that we use an outside computer expert.

'Now they are demanding that we pay for it. If this is the rule for every jurisdiction, it's going to be very difficult.'

Nike representatives said the court's ruling sent a strong message that preserved the integrity of Oregon public records law.

'We're delighted with the court's ruling,' said Vada Manager, Nike's director of global issues management. 'It further demonstrates that this case could have been resolved some time ago with a walk down the hall, peek into a filing cabinet and a quick trip to Kinko's.'

Annexing 'islands'

The Fortune 500 sports apparel giant and the city have wrangled since December 2004 over a request for all the documents related to Beaverton's annexation policy and any plans to target Nike's World Campus on Southwest Murray Boulevard.

The legal feud was prompted by the Beaverton City Council's adoption in November 2004 of an aggressive 'island' annexation policy, forcing unincorporated properties surrounded by the city to annex.

'We pursued these public records so that Nike, businesses, homeowners and other neighboring property owners would have a better understanding of what motivated the city to begin this unusual series of forced annexations in the fall of 2004,' Manager said.