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Office of the Attorney General - State of Texas John Cornyn |
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May 7, 2002 Ms. Jeanine A. Cadena
OR2002-2414 Dear Ms. Cadena: You ask whether certain information is subject to required public disclosure under chapter 552 of the Government Code. Your request was assigned ID# 162498. The City of McKinney (the "city"), which you represent, received a request for information relating to negotiations involving the city, the McKinney Community Development Corporation, Major League Soccer, the Hunt Sports Group, Craig International, and Collin County. The city claims that the requested information is excepted from disclosure under sections 552.110 and 552.131 of the Government Code. We have considered the exceptions you raise and have reviewed the information you submitted.(1) We first note that the city has failed to comply with section 552.301 of the Government Code in requesting this decision. Section 552.301 prescribes procedures that a governmental body must follow in asking this office to decide whether requested information is excepted from public disclosure. Section 552.301 provides in part: (e) A governmental body that requests an attorney general decision . . . must . . . not later than the 15th business day after the date of receiving the written request [for information]: (1) submit to the attorney general: (B) a copy of the written request for information[.] Gov't Code § 552.301(e)(1)(B). Section 552.302 provides that "[i]f a governmental body does not request an attorney general decision as provided by Section 552.301 . . . the information requested in writing is presumed to be subject to required public disclosure and must be released unless there is a compelling reason to withhold the information." In this instance, the city has not submitted a copy of the written request for information to this office. Thus, the city has not complied with section 552.301 of the Government Code in requesting this decision. The requested information is therefore presumed to be public and must be released under section 552.302, unless there is a compelling reason to withhold any of this information from public disclosure. See also Hancock v. State Bd. of Ins., 797 S.W.2d 379, 381 (Tex. App.--Austin 1990, no writ). The presumption that information is public under section 552.302 can generally be overcome by demonstrating that the information is confidential by law or that third-party interests are at stake. See Open Records Decision Nos. 630 at 3 (1994), 325 at 2 (1982). Sections 552.110 and 552.131 of the Government Code, which the city raises, can provide a compelling reason for non-disclosure under section 552.302. Accordingly, we will consider the city's arguments. Section 552.131 of the Government Code provides as follows: (a) Information is excepted from [required public disclosure] if the information relates to economic development negotiations involving a governmental body and a business prospect that the governmental body seeks to have locate, stay, or expand in or near the territory of the governmental body and the information relates to: (1) a trade secret of the business prospect; or (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. (b) Unless and until an agreement is made with the business prospect, information about a financial or other incentive being offered to the business prospect by the governmental body or by another person is excepted from [required public disclosure]. (c) After an agreement is made with the business prospect, this section does not except from [required public disclosure] information about a financial or other incentive being offered to the business prospect: (1) by the governmental body; or (2) by another person, if the financial or other incentive may directly or indirectly result in the expenditure of public funds by a governmental body or a reduction in revenue received by a governmental body from any source. Gov't Code § 552.131. Section 552.131(a) protects only "trade secrets" and "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." Section 552.131(b) protects information about a financial or other incentive that is being offered to a business prospect by a governmental body or another person. You state that the submitted information relates to economic development negotiations in which the city was engaged with regard to the prospective construction of a stadium for a major league soccer team. You also state that the city offered financial incentives in an effort to entice the team, the Dallas Burn, to relocate. You explain, however, that the negotiations were discontinued and that no economic development agreement involving the city was reached. We understand the city to argue that the submitted information is therefore excepted from disclosure under section 552.131 because the negotiations did not result in an agreement. See Gov't Code § 552.131(b). However, the city has not directed our attention to any information that relates specifically to any financial or other incentive that the city or another person actually offered to a business prospect. Id. We therefore conclude that none of the submitted information is excepted from disclosure under section 552.131 of the Government Code. The city 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). The city asserts that public disclosure of the submitted information might adversely affect the business interests of private parties that were involved in the negotiations with the city. However, having considered the city's arguments, we conclude that the city has not shown that any of the submitted information is excepted from disclosure under section 552.110 of the Government Code. See also Open Records Decision No. 509 at 5 (1988) (statutory predecessor requires more than general allegations of unspecified competitive injury). Moreover, this office has received no correspondence from any of the private parties to which the submitted information pertains. See Gov't Code § 552.305(d); Open Records Decision No. 542 (1990) (Gov't Code § 552.305 permits governmental body to rely on interested third party to raise and explain applicability of exception to disclosure in certain circumstances). Thus, none of the private parties has demonstrated to this office that any of the submitted information constitutes a trade secret of a private party or that the release of any of this information would cause a private party substantial competitive harm. We therefore conclude that none of the submitted information is excepted from disclosure under section 552.110 of the Government Code. We note, however, that this information contains the e-mail addresses of private individuals. Section 552.137, which the Seventy-seventh Legislature added to chapter 552 of the Government Code, 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 individual to whom a particular e-mail address belongs has affirmatively consented to its public disclosure. In summary, the city must withhold the e-mail addresses of private individuals under section 552.137, unless the individual to whom the e-mail address belongs has affirmatively consented to its disclosure. The city must release the rest of the submitted information. 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
c: Mr. Tobias X. Lopez
Footnotes 1. This letter ruling assumes that the submitted representative samples of responsive information are truly representative of the responsive information as a whole. This ruling neither reaches nor authorizes the city to withhold any responsive information that is substantially different from the submitted information. See Gov't Code § 552.301(e)(1)(D): Open Records Decision Nos. 499 at 6 (1988), 497 at 4 (1988). 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). POST OFFICE BOX 12548, AUSTIN, TEXAS 78711-2548 TEL: (512) 463-2100 WEB: WWW.OAG.STATE.TX.US |