April 10, 2002

Mr. Jesus Toscano, Jr.
Administrative Assistant City Attorney
City of Dallas
1500 Marilla, Room 7BN
Dallas, Texas 75201

OR2002-1789

Dear Mr. Toscano:

You ask whether certain information is subject to required public disclosure under chapter 552 of the Government Code. Your request was assigned ID# 161110.

The City of Dallas (the "city") received a request for information relating to the winning proposal to bid no. S3Z0106. The city takes no position as to whether the requested information is excepted from public disclosure. The city believes, however, that this request for information may implicate the proprietary interests of the private party that submitted the winning proposal. The city notified the private party of this request for information and of its right to submit arguments to this office as to why the information should not be released.⁽¹⁾ You also submitted the requested proposal to this office. We have reviewed the submitted information and considered the arguments that we received from Accurate Software, Inc. ("Accurate"). We initially note that these arguments encompass not only the submitted proposal but also Accurate's contract with the city and information relating to the contract negotiations. This ruling addresses only the information that the city submitted to this office. See Gov't Code § 552.301(e)(1)(D) (governmental body must submit specific information requested or representative sample if information is voluminous).

Next, we address Accurate's statement that its contract with the city contains a confidentiality clause, the purpose of which is to limit disclosure of the company's information. A governmental body may not withhold information that is subject to chapter 552 of the Government Code on the basis of a contractual provision that prohibits disclosure of the information, unless the governmental body has specific statutory authority to make such a contract. See Open Records Decision Nos. 514 at 1 (1988), 479 at 1-2 (1987), 444 at 6 (1986). Neither Accurate nor the city informs us that the city has such statutory authority. Furthermore, information may not be withheld from the public under chapter 552 merely because the person that submitted the information to the governmental body anticipated or requested confidentiality in doing so. See Industrial Found. v. Texas Industrial Accident Bd., 540 S.W.2d 668, 676-78 (Tex. 1976), cert. denied, 430 U.S. 931 (1977); see also Open Records Decision No. 203 at 1 (1978) (mere expectation of confidentiality by person supplying information does not satisfy requirements of statutory predecessor to section 552.110). Thus, the requested information may not be withheld from disclosure on the basis of an agreement to do so or because Accurate expected or requested confidentiality in submitting its proposal to the city.

Accurate also claims that part of its proposal is protected from disclosure under section 552.101 of the Government Code. Section 552.101 excepts from disclosure "information considered to be confidential by law, either constitutional, statutory, or by judicial decision." This exception encompasses the common-law right to privacy. Common-law privacy protects information that is (1) highly intimate or embarrassing, such that its release would be highly objectionable to a person of ordinary sensibilities, and (2) of no legitimate public interest. See Industrial Found. v. Texas Indus. Accident Bd., 540 S.W.2d at 685. Accurate asserts that certain financial information contained in its proposal is not a matter of legitimate public interest. We note, however, that common-law privacy protects the rights of individuals, not those of corporate entities. See Open Records Decision No. 620 at 3-4 (1993). A corporation has no right to privacy. See United States v. Morton Salt Co., 338 U.S. 632, 652 (1950) (cited in Rosen v. Matthews Constr. Co., Inc., 777 S.W.2d 434, 436 (Tex. App.--Houston [14th Dist.] 1989), rev'd on other grounds, 796 S.W.2d 692 (Tex. 1990)); see also Open Records Decision No. 192 at 4 (1978). Therefore, the financial information in question may not be withheld from disclosure under section 552.101 of the Government Code in conjunction with common-law privacy.

Accurate also raises section 552.110 of the Government Code. Section 552.110 protects the proprietary interests of private parties by excepting from disclosure two types of information: (1) "[a] trade secret obtained from a person and privileged or confidential by statute or judicial decision," and (2) commercial or financial information for which it is demonstrated based on specific factual evidence that disclosure 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 a "trade secret" from section 757 of the Restatement of Torts, which holds a "trade secret" to be

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 a single or ephemeral event 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) (emphasis added); see also Hyde Corp. v. Huffines, 314 S.W.2d 763, 776 (Tex. 1958), cert. denied, 358 U.S. 898 (1958). If the governmental body takes no position on the application of the "trade secrets" component of section 552.110 to the information at issue, this office will accept a private person's claim for exception as valid under that component if that person establishes a prima facie case for the exception and no one submits an argument that rebuts the claim as a matter of law.⁽²⁾ See Open Records Decision No. 552 at 5 (1990).

Section 552.110(b) of the Government Code excepts from disclosure "[c]ommercial or financial information for which it is demonstrated based on specific factual evidence that disclosure would cause substantial competitive harm to the person from whom the information was obtained[.]" Gov't Code § 552.110(b). Section 552.110(b) requires a specific factual or evidentiary showing, not conclusory or generalized allegations, that substantial competitive injury would likely result from release of the information at issue. See also Open Records Decision No. 661 at 5-6 (1999) (business enterprise must show by specific factual evidence that the release of information would cause it substantial competitive harm); National Parks & Conservation Ass'n v. Morton, 498 F.2d 765 (D.C. Cir. 1974).

Accurate argues that specified portions of its proposal are excepted from disclosure under both aspects of section 552.110. We also understand Accurate to contend that its entire proposal is protected by section 552.110. Having considered these arguments, we conclude that Accurate has shown that the city must withhold some of the submitted information under section 552.110(b) of the Government Code. We have marked that information accordingly. Accurate has not demonstrated that any of the remaining information is excepted from disclosure under section 552.110. See also Open Records Decision No. 319 at 3 (1982) (information relating to organization and personnel, market studies, professional references, qualifications and experience, and pricing not ordinarily excepted from disclosure under statutory predecessor).

We note, however, that the remaining information includes the e-mail addresses of private individuals. The city may be required to withhold these e-mail addresses under section 552.137 of the Government Code. Section 552.137 provides as follows:

(a) An e-mail address of a member of the public that is provided for the purpose of communicating electronically with a governmental body is confidential and not subject to disclosure under this chapter.

(b) Confidential information described by this section that relates to a member of the public may be disclosed if the member of the public affirmatively consents to its release.

Gov't Code § 552.137. We have marked the e-mail addresses that the city must withhold under section 552.137, unless the individuals to whom these e-mail addresses belong have affirmatively consented to their disclosure.

In summary, the city must withhold some of the submitted information under section 552.110 of the Government Code. The city must also withhold the e-mail addresses of private individuals under section 552.137, unless the individuals to whom the e-mail addresses belong have affirmatively consented to their disclosure. The remaining information must be released.

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,

James W. Morris, III
Assistant Attorney General
Open Records Division
JWM/sdk
Ref: ID# 161110
Enc: Marked documents

c: Mr. Prem Suhalka
BITS Systems
800 W. Airport, Suite 320
Irving, Texas 75062
(w/o enclosures)

Mr. Gary L. Gibbs
Accurate Software Inc.
17304 Preston Road, Suite 800
Dallas, Texas 75252
(w/o enclosures)

Footnotes

1. See Gov't Code § 552.305(d); Open Records Decision No. 542 (1990) (statutory predecessor to Gov't Code § 552.305 permits governmental body to rely on interested third party to raise and explain applicability of exception to disclosure under chapter 552 of Government Code in certain circumstances).

2. The Restatement of Torts lists the following six factors as indicia of whether information constitutes a trade secret:

(1) the extent to which the information is known outside of [the company];

(2) the extent to which it is known by employees and other 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).
 

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