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Office of the Attorney General - State of Texas John Cornyn |
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March 27, 2002 Ms. Kathryn V. Garner
OR2002-1520 Dear Ms. Garner: You ask whether certain information is subject to required public disclosure under chapter 552 of the Government Code. Your request was assigned ID# 160361. The Texas State Affordable Housing Corporation ( "TSAHC"), which you represent, received a request for all documents and other information concerning the Willowick, the Wharf, and the Rafters apartment complexes and a proposed bond issue pertaining to those complexes. The requestor specifically seeks the appraised value of the complexes, the proposed sale price of the complexes, and the sources and uses fund statement for the bond issue.(1) You state that TSAHC has no objection to release of the requested information, but, pursuant to section 552.305, you notified representatives of WDOP Sub I LP, a wholly owned subsidiary of Oly Hightop Parent, L.P. ("WDOP"), and South Texas Affordable Properties Corporation, ("STAPC"), of the request for their information and invited these entities to submit arguments to this office as to why the information at issue should not be released.(2) Both WDOP and STAPC made arguments to this office and contend that the requested information is confidential as a trade secret and/or commercial or financial information under section 552.110 of the Government Code. We have considered the arguments raised by all the parties and have reviewed the submitted information. We note at the outset that the request for information submitted to TSAHC is not from a member of the public but from another governmental entity. We ruled in Open Records Decision No. 661 (1999) that whether a governmental entity may release information to another governmental entity is not a question under the Public Information Act (the "Act") as the Act is concerned with the required release of information to the public. Gov't Code §§ 552.001, .002, .021; see Attorney General Opinions, H-683 (1975), H-242 (1974), M-713 (1970); Open Records Decision No. 655 (1997). For many years, this office has recognized that it is the public policy of this state that governmental bodies should cooperate with each other in the interest of the efficient and economical administration of statutory duties. See, e. g., Attorney General Opinion H-836 (1976); Open Records Decision No. 655 (1997). But see Attorney General Opinions DM-353 at 4 n. 6 (1995) (interagency transfer prohibited where confidentiality statute enumerates specific entities to which release of confidential information is authorized and where receiving agency is not among statute's enumerated entities), JM-590 (1986) (same); Open Records Decision No. 655 (1997) (same), 650 (1996) (transfer of confidential information to federal agency impermissible unless federal law requires its disclosure). In adherence to this policy, this office has acknowledged that information may be transferred between governmental bodies without violating its confidential character on the basis of a recognized need to maintain an unrestricted flow of information between governmental bodies. See Attorney General Opinions H-836 (1976), H-242 (1974), M-713 (1970); Open Records Decision Nos. 655 (1997), 414 (1984). Moreover, the release of information by one agency to another agency is not a release to the public for the purposes of section 552.007 of the Government Code, which prohibits the selective disclosure of information, or for those of section 552.352, which provides criminal penalties for the release of information that is considered to be confidential. Open Records Decision No. 516 (1989). Accordingly, TSAHC has the discretion to release the requested information to the City of Corpus Christi. However, should you decline to exercise that discretion, you must nonetheless adhere to the following decision regarding the applicability of the claimed exception to the requested information. Next, we note that the information you have submitted in Exhibit C, consisting of three separate appraisal reports for the three apartment complexes in question, is subject to section 552.022 of the Government Code. Section 552.022 states in relevant part: (a) Without limiting the amount or kind of information that is public information under this chapter, the following categories of information are public information and are not excepted from required disclosure under this chapter unless they are expressly confidential under other law. Gov't Code § 552.022. One such category of expressly public information under section 552.022 is "a completed report, audit, evaluation, or investigation made of, for, or by a governmental body, except as provided by [s]ection 552.108 . . . ." Gov't Code § 552.022(a)(1). We find that the information in Exhibit C is subject to section 552.022(a)(1). WDOP and STAPC argue that this information is excepted from disclosure under section 552.110, which is considered "other law" for purposes of section 552.022(a)(1). Therefore, we will address the parties' arguments under section 552.110. Section 552.110 protects: (1) trade secrets, and (2) commercial or financial information the disclosure of which would cause substantial competitive harm to the person from whom the information was obtained. See Gov't Code § 552.110(a), (b). The Texas Supreme Court has adopted the definition of trade secret from section 757 of the Restatement of Torts. Hyde Corp. v. Huffines, 314 S.W.2d 763 (Tex.), cert. denied, 358 U.S. 898 (1958); see also Open Records Decision No. 552 at 2 (1990). Section 757 provides that a trade secret is any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers. It differs from other secret information in a business . . . in that it is not simply information as to single or ephemeral events in the conduct of the business . . . . A trade secret is a process or device for continuous use in the operation of the business. . . . [It may] relate to the sale of goods or to other operations in the business, such as a code for determining discounts, rebates or other concessions in a price list or catalogue, or a list of specialized customers, or a method of bookkeeping or other office management. Restatement of Torts § 757 cmt. b (1939). In determining whether particular information constitutes a trade secret, this office considers the Restatement's definition of trade secret as well as the Restatement's list of six trade secret factors. Restatement of Torts § 757 cmt. b (1939).(3) This office has held that if a governmental body takes no position with regard to the application of the trade secret branch of section 552.110 to requested information, we must accept a private person's claim for exception as valid under that branch if that person establishes a prima facie case for exception and no argument is submitted that rebuts the claim as a matter of law. Open Records Decision No. 552 at 5-6 (1990). The commercial or financial branch of section 552.110 requires the business enterprise whose information is at issue to make a specific factual or evidentiary showing, not conclusory or generalized allegations, that substantial competitive injury would result from disclosure. See Open Records Decision No. 661 (1999). Upon review of the arguments submitted by WDOP and STAPC, we find that the parties have established that release of a portion of the requested information contained in the appraisal reports in Exhibit C would result in substantial competitive harm to WDOP, and therefore, this information, which we have marked, is excepted from disclosure under section 552.110(b). WDOP also seeks to withhold the sales prices of the three properties, and STAPC seeks to withhold the purchase prices of the properties, as well as the terms and conditions of the purchases as contained in the purchase contracts,(4) under section 552.110. Upon review of the arguments of the parties, we conclude that WDOP and STAPC have established that release of the purchase price of the properties would result in substantial competitive harm to WDOP and STAPC, and therefore, the information we have marked relating to purchase price contained in the document submitted as Exhibit D must be withheld under section 552.110(b). Further, STAPC argues that release of information relating to proposed sources and use of funds would damage it competitively. TSAHC has submitted one document as Exhibit E entitled "Draft Sources and Use Schedule" for which the arguments of STAPC appear to apply. Because this document is in draft form, and states on its face that "[t]his analysis is preliminary and for discussion purposes only," we are unpersuaded that release of this document would result in the competitive harm STAPC complains of. Therefore, we find that Exhibit E may not be withheld under section 552.110 and must be released to the requestor. Finally, we note that WDOP makes arguments to withhold its "rent rolls" and "operating statements" for each of the three properties at issue. Although the appraisal reports submitted to this office for review as Exhibit C contain sections so entitled, these sections do not contain any information pertaining to rent rolls or operating statements. Therefore, this ruling does not address any such information, and is limited to the information submitted as responsive by TSAHC. See Gov't Code § 552.301(e)(1)(D) (governmental body requesting a decision from Attorney General must submit a copy of the specific information requested, or representative sample if voluminous amount of information was requested). To summarize, the information we have marked in Exhibits C and D is excepted from disclosure under section 552.110(b), and must therefore be withheld from the requestor. The remainder of the submitted information, including all of the information in Exhibit E, must be released to the requestor. This letter ruling is limited to the particular records at issue in this request and limited to the facts as presented to us; therefore, this ruling must not be relied upon as a previous determination regarding any other records or any other circumstances. This ruling triggers important deadlines regarding the rights and responsibilities of the governmental body and of the requestor. For example, governmental bodies are prohibited from asking the attorney general to reconsider this ruling. Gov't Code § 552.301(f). If the governmental body wants to challenge this ruling, the governmental body must appeal by filing suit in Travis County within 30 calendar days. Id. § 552.324(b). In order to get the full benefit of such an appeal, the governmental body must file suit within 10 calendar days. Id. § 552.353(b)(3), (c). If the governmental body does not appeal this ruling and the governmental body does not comply with it, then both the requestor and the attorney general have the right to file suit against the governmental body to enforce this ruling. Id. § 552.321(a). If this ruling requires the governmental body to release all or part of the requested information, the governmental body is responsible for taking the next step. Based on the statute, the attorney general expects that, within 10 calendar days of this ruling, the governmental body will do one of the following three things: 1) release the public records; 2) notify the requestor of the exact day, time, and place that copies of the records will be provided or that the records can be inspected; or 3) notify the requestor of the governmental body's intent to challenge this letter ruling in court. If the governmental body fails to do one of these three things within 10 calendar days of this ruling, then the requestor should report that failure to the attorney general's Open Government Hotline, toll free, at 877/673-6839. The requestor may also file a complaint with the district or county attorney. Id. § 552.3215(e). If this ruling requires or permits the governmental body to withhold all or some of the requested information, the requestor can appeal that decision by suing the governmental body. Id. § 552.321(a); Texas Department of Public Safety v. Gilbreath, 842 S.W.2d 408,411 (Tex. App.--Austin 1992, no writ). Please remember that under the Act the release of information triggers certain procedures for costs and charges to the requestor. If records are released in compliance with this ruling, be sure that all charges for the information are at or below the legal amounts. Questions or complaints about over-charging must be directed to Hadassah Schloss at the Texas Building and Procurement Commission at 512/475-2497. If the governmental body, the requestor, or any other person has questions or comments about this ruling, they may contact our office. We note that a third party may challenge this ruling by filing suit seeking to withhold information from a requestor. Gov't Code § 552.325. Although there is no statutory deadline for contacting us, the attorney general prefers to receive any comments within 10 calendar days of the date of this ruling. Sincerely, Michael A. Pearle
c: Mr. W. Thomas Utter
Ms. Tamea A. Dula
Mr. Michael R. Boulden
Footnotes 1. You note that the requestor also generally asks for other information relating to the properties and the bond issue, and that TSAHC has sought clarification from the requestor as to whether he seeks information other than that specifically enumerated above. See Gov't Code § 552.222(b) (authorizing governmental body's request for clarification of records request). As you have not provided us with any clarification concerning the scope of the information requested, our ruling is limited to the information you have submitted to this office as responsive. 2. See Gov't Code § 552.305 (permitting interested third party to submit to attorney general reasons why requested information should not be released); Open Records Decision No. 542 (1990) (determining that statutory predecessor to Gov't Code § 552.305 permits governmental body to rely on interested third party to raise and explain applicability of exception in Public Information Act in certain circumstances). 3. The six factors that the Restatement gives as indicia of whether information constitutes a trade secret are: (1) the extent to which the information is known outside of [the company]; (2) the extent to which it is known by employees and others involved in [the company's] business; (3) the extent of measures taken by [the company] to guard the secrecy of the information; (4) the value of the information to [the company] and [its] competitors; (5) the amount of effort or money expended by [the company] in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. Restatement of Torts § 757 cmt. b (1939); see also Open Records Decision Nos. 319 at 2 (1982), 306 at 2 (1982), 255 at 2 (1980). 4. In this regard, we note that TSAHC has submitted only a "Draft Purchase Contract" as Exhibit D, which is in the form of a First Amendment to Purchase and Sale Agreement, and no other purchase agreements. Therefore, our ruling with regard to the purchase agreements is limited to this particular document submitted by TSAHC as Exhibit D. POST OFFICE BOX 12548, AUSTIN, TEXAS 78711-2548 TEL: (512) 463-2100 WEB: WWW.OAG.STATE.TX.US |