 Office of the ATTORNEY GENERAL GREG ABBOTT | |
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April 17, 2003 Ms. Cynthia Villareal-Reyna
OR2003-2590 Dear Ms. Villareal-Reyna: You ask whether certain information is subject to required public disclosure under chapter 552 of the Government Code. Your request was assigned ID# 179566. The Texas Department of Insurance (the "department") received a request for "three [particular] confidential rate filings." You raise no exception on behalf of the department and make no arguments against disclosure. You indicate, however, that the release of the requested information may implicate a third party's proprietary rights. Pursuant to section 552.305 of the Government Code, you have notified the interested third party--Home State Insurance Group, Inc ("Home State")--of the request and of its opportunity to submit comments to this office. 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 section 552.305 permits governmental body to rely on interested third party to raise and explain applicability of exception to disclosure in certain circumstances). Home State claims that the requested information is excepted from disclosure under sections 552.101 and 552.110 of the Government Code. We have considered the exceptions claimed and reviewed the submitted information. Initially, we note that the requested information has been designated as confidential or proprietary. However, information is not confidential under the Public Information Act (the "Act") simply because the party submitting the information anticipates or requests that it be kept confidential. Industrial Found. v. Texas Indus. Accident Bd., 540 S.W.2d 668, 677 (Tex. 1976). In other words, a governmental body cannot, through an agreement or contract, overrule or repeal provisions of the Act. Attorney General Opinion JM-672 (1987); Open Records Decision No. 541 at 3 (1990) ("[T]he obligations of a governmental body under [the predecessor to the Act] cannot be compromised simply by its decision to enter into a contract."). Consequently, unless the information at issue falls within an exception to disclosure, it must be released, notwithstanding any agreement specifying otherwise. We now address Home State's arguments regarding section 552.110 of the Government Code. This section 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 ne's business, and which gives him an opportunity to obtain an advantage ver competitors who do not know or use it. It may be a formula for a hemical compound, a process of manufacturing, treating or preserving aterials, a pattern for a machine or other device, or a list of customers. t differs from other secret information in a business . . . in that it is not imply information as to a single or ephemeral event in the conduct of the usiness . . . . A trade secret is a process or device for continuous use in he operation of the business . . . . [It may] relate to the sale of goods or o other operations in the business, such as a code for determining discounts, ebates or other concessions in a price list or catalogue, or a list of specialized ustomers, or a method of bookkeeping or other office management. Restatement of Torts § 757 cmt. b (1939); see also Hyde Corp. v. Huffines, 314 S.W.2d 763, 776 (Tex. 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.(1) 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 Open Records Decision No. 661 at 5-6 (1999) (stating that business enterprise must show by specific factual evidence that release of information would cause it substantial competitive harm); see also National Parks & Conservation Ass'n v. Morton, 498 F.2d 765 (D.C. Cir. 1974). After reviewing Home State's brief, we conclude that it has demonstrated the applicability of section 552.110(a) to much of the information at issue. We find that Home State has demonstrated that its underwriting guidelines and rules pertaining to insurance programs are trade secrets. Thus, we conclude that Home State has made a prima facie case under section 552.110(a) for that information, and we have received no arguments to rebut this claim. However, we find that Home State has not adequately demonstrated that the remaining submitted information consists of either a trade secret or commercial or financial information the release of which would result in substantial competitive harm to Home State. Therefore, we determine that Home State has not shown that the remainder of the submitted information is excepted under section 552.110, and it may not be withheld on that basis. Id. Home State also argues that its information is excepted from disclosure pursuant to section 552.101 of the Government Code in conjunction with section 31.05 of the Penal Code.(2) Section 31.05 provides in pertinent part: (b) A person commits an offense if, without the owner's effective consent, he nowingly: (1) steals a trade secret; (2) makes a copy of an article representing a trade secret; or (3) communicates or transmits a trade secret. (c) An offense under this section is a felony of the third degree. Penal Code § 31.05(b), (c). We note that we have already determined that none of the remaining submitted information constitutes trade secret information or commercial or financial information the release of which would result in substantial competitive harm to Home State. We also note that section 31.05 does not expressly make information confidential. In order for section 552.101 to apply to information that is requested of a governmental body, a statute must contain language that expressly makes information confidential. See Open Records Decision Nos. 658 at 4 (1998), 478 at 2 (1987), 465 at 4-5 (1987). Confidentiality cannot be implied from the structure of a statute or rule. See Open Records Decision No. 465 at 4-5 (1987). Accordingly, we conclude that none of the remaining submitted information is made confidential under section 31.05, and it may not be withheld under section 552.101 on that basis. In summary, the department must withhold Home State's underwriting guidelines and rules under section 552.110(a). The remainder of the submitted information 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 Dep't of Pub. 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, Denis C. McElroy
c: Ms. Kelly Stone
Mr. Christopher A. McClellan
Footnotes 1. 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] usiness; (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 thers. 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). 2. Section 552.101 of the Government Code excepts from disclosure "information considered to be confidential by law, either constitutional, statutory, or by judicial decision." Gov't Code § 552.101. This section encompasses information made confidential by other statutes. POST OFFICE BOX 12548, AUSTIN, TEXAS 78711-2548 TEL: (512) 463-2100 WEB: WWW.OAG.STATE.TX.US |