 Office of the ATTORNEY GENERAL GREG ABBOTT | |
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January 21, 2004 Mr. Juan J. Cruz
OR2004-0461 Dear Mr. Cruz: You ask whether certain information is subject to required public disclosure under chapter 552 of the Government Code. Your request was assigned ID# 194573. The South Texas Workforce Development Board (the "board"), which you represent, received two requests from the Texas Migrant Council for responses to and information relied upon by the board in awarding bids for certain Requests For Proposals. You claim that the submitted information is excepted from disclosure under section 552.103 of the Government Code. You also claim that release of the requested information may implicate the proprietary interests of third parties under sections 552.101, 552.110, and 552.131 of the Government Code, although you take no position as to whether the information is so excepted. You state, and provide documentation showing, that you notified SERCO of Texas, Inc. ("SERCO"); Training, Resources & Consulting, Inc. ("TRAC"); ACS State & Local Solutions, Inc. ("ACS"); Community Action Council of South Texas ("CACST"); United Migrant Opportunity Services, Inc. ("UMOS"); and RCI Holding Corporation ("RCI") of the request and of their right to submit arguments to this office as to why the information should not be released. See Gov't Code § 552.305(d); see also 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 under Public Information Act (the "Act") in certain circumstances). We have considered the exception you claim and reviewed the submitted information. We have also reviewed arguments submitted to this office by SER Jobs for Progess, Inc. ("SER") and ACS.(1) As the board's claim under section 552.103 of the Government Code is broadest, we will address it first. Section 552.103 provides as follows: (a) Information is excepted from [required public disclosure] if it is information relating to litigation of a civil or criminal nature to which the state or a political subdivision is or may be a party or to which an officer or employee of the state or a political subdivision, as a consequence of the person's office or employment, is or may be a party. . . . . (c) Information relating to litigation involving a governmental body or an officer or employee of a governmental body is excepted from disclosure under Subsection (a) only if the litigation is pending or reasonably anticipated on the date that the requestor applies to the officer for public information for access to or duplication of the information. Gov't Code § 552.103(a), (c). A governmental body has the burden of providing relevant facts and documents to show that the section 552.103(a) exception is applicable in a particular situation. The test for meeting this burden is a showing that (1) litigation was pending or reasonably anticipated on the date the governmental body received the request for information, and (2) the information at issue is related to that litigation. University of Tex. Law Sch. v. Texas Legal Found., 958 S.W.2d 479, 481 (Tex. App.--Austin 1997, no pet.); Heard v. Houston Post Co., 684 S.W.2d 210, 212 (Tex. App.--Houston [1st Dist.] 1984, writ ref'd n.r.e.); Open Records Decision No. 551 at 4 (1990). A governmental body must meet both prongs of this test for information to be excepted under 552.103(a). To establish that litigation is reasonably anticipated, a governmental body must provide this office "concrete evidence showing that the claim that litigation may ensue is more than mere conjecture." Open Records Decision No. 452 at 4 (1986). Concrete evidence to support a claim that litigation is reasonably anticipated may include, for example, the governmental body's receipt of a letter containing a specific threat to sue the governmental body from an attorney for a potential opposing party. Open Records Decision No. 555 (1990); see Open Records Decision No. 518 at 5 (1989) (litigation must be "realistically contemplated"). On the other hand, this office has determined that if an individual publicly threatens to bring suit against a governmental body, but does not actually take objective steps toward filing suit, litigation is not reasonably anticipated. See Open Records Decision No. 331 (1982). Further, the fact that a potential opposing party has hired an attorney who makes a request for information does not establish that litigation is reasonably anticipated. Open Records Decision No. 361 (1983). You have submitted a copy of the Plaintiff's Original Petition in Texas Migrant Council, Inc. v. South Texas Workforce Development Board, Inc. et al, No. 2003CUQ001768 D2 (111th Dist. Ct., Webb County, Tex., Nov. 6, 2003), which indicates that a lawsuit related to the Requests for Proposals at issue in the present requests was filed on November 6, 2003. We note, however, that the present requests were received by the board on October 24, 2003, and October 30, 2003, respectively. Furthermore, you make no argument regarding whether litigation was anticipated on these dates. Therefore, we find that you have failed to show that litigation was pending or reasonably anticipated on the dates that the board received the requests. Thus, the submitted information may not be withheld under section 552.103. We now turn to the arguments submitted by interested third parties pursuant to section 552.305. We note that an interested third party is allowed ten business days after the date of its receipt of the governmental body's notice under section 552.305(d) to submit its reasons, if any, as to why requested information relating to that party should be withheld from disclosure. See Gov't Code § 552.305(d)(2)(B). As of the date of this letter, SERCO, TRAC, CACST, UMOS, and RCI have not submitted any comments to this office explaining how release of the requested information would affect their proprietary interests. Therefore, SERCO, TRAC, CACST, UMOS, and RCI have provided us with no basis to conclude that they have protected proprietary interests in any of the submitted information. See Gov't Code § 551.110(b) (to prevent disclosure of commercial or financial information, party must show by specific factual or evidentiary material, not conclusory or generalized allegations, that it actually faces competition and that substantial competitive injury would likely result from disclosure); Open Records Decision Nos. 639 at 4 (1996), 552 at 5 (1990) (party must establish prima facie case that information is trade secret), 542 at 3 (1990). Thus, the submitted information relating to SERCO, TRAC, CACST, UMOS, and RCI must be released. SER and ACS seek to withhold information under section 552.104 of the Government Code. Section 552.104 is a discretionary exception that protects only the interests of a governmental body, as distinguished from exceptions which are intended to protect the interests of third parties. See Open Records Decision Nos. 592 (1991) (statutory predecessor to section 552.104 designed to protect interests of a governmental body in a competitive situation, and not interests of private parties submitting information to the government), 522 (1989) (discretionary exceptions in general). As the board does not raise section 552.104, this section does not apply to the submitted information. See Open Records Decision No. 592 (1991) (governmental body may waive section 552.104). Therefore, the submitted information may not be withheld under section 552.104. SER and ACS also seek to withhold information under section 552.110 of the Government Code. 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). Section 552.110(a) protects the property interests of private parties by excepting from disclosure trade secrets obtained from a person and privileged or confidential by statute or judicial decision. See Gov't Code § 552.110(a). A "trade secret" may consist of any formula, pattern, device or compilation of information which is used in one's business, and which gives [one] 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, as for example the amount or other terms of a secret bid for a contract or the salary of certain employees. . . . A trade secret is a process or device for continuous use in the operation of the business. Generally it relates to the production of goods, as for example, a machine or formula for the production of an article. It may, however, 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); see also Hyde Corp. v. Huffines, 314 S.W.2d 763, 776 (Tex. 1958); Open Records Decision Nos. 255 (1980), 232 (1979), 217 (1978). There are six factors to be assessed in determining whether information qualifies as a trade secret: (1) the extent to which the information is known outside of [the company's] business; (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 to [its] competitors; (5) the amount of effort or money expended by [the company] in developing this information; and (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 No. 232 (1979). This office must accept a claim that information subject to the Act is excepted as a trade secret if a prima facie case for exemption is made and no argument is submitted that rebuts the claim as a matter of law. Open Records Decision No. 552 (1990). However, we cannot conclude that section 552.110(a) is applicable unless it has been shown that the information meets the definition of a trade secret and the necessary factors have been demonstrated to establish a trade secret claim. Open Records Decision No. 402 (1983). Section 552.110(b) protects "[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). This exception to disclosure 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. Gov't Code § 552.110(b); see also National Parks & Conservation Ass'n v. Morton, 498 F.2d 765 (D.C. Cir. 1974); Open Records Decision No. 661 (1999). Upon review of ACS's arguments and its submitted proposal, we find that ACS has made a prima facie case that portions of its proposal are protected as trade secrets. Moreover, we have received no arguments that would rebut this case as a matter of law. We therefore conclude that the board must withhold the information we have marked in the ACS proposal pursuant to section 552.110(a) of the Government Code. With respect to the remaining information ACS seeks to withhold, however, we determine that ACS has not demonstrated that this information meets the definition of a trade secret, nor has ACS demonstrated the necessary factors to establish a trade secret claim for this information. We further find that ACS has only provided conclusory statements that release of the remaining portions of its proposal that it seeks to withhold under section 552.110 would harm its competitive interests, and has not provided specific factual evidence to substantiate the claim that release of this information would result in competitive harm to the company. Accordingly, we determine that none of this information is excepted from disclosure under section 552.110(b) of the Government Code. See Open Records Decision Nos. 661 (1999) (for information to be withheld under commercial or financial information prong of section 552.110, business must show by specific factual evidence that substantial competitive injury would result from release of particular information at issue), 509 at 5 (1988) (because costs, bid specifications, and circumstances would change for future contracts, assertion that release of bid proposal might give competitor unfair advantage on future contracts is too speculative), 319 at 3 (1982) (information relating to organization, personnel, and qualifications not ordinarily excepted from disclosure under statutory predecessor to section 552.110). Upon review of SER's arguments and its submitted proposal, we find that the company has made a specific factual or evidentiary showing that the release of certain portions of its proposal would cause the company substantial competitive harm. This information, which we have marked, must be withheld pursuant to section 552.110(b). We find, however, that SER has not shown that any of the remaining information in its proposal meets the definition of a trade secret or that release of the remaining information would cause the company substantial competitive harm. Therefore, the remaining information may not be withheld pursuant to section 552.110. We note that the submitted information contains social security numbers that may be confidential under federal law. A social security number may be withheld in some circumstances under section 552.101 of the Government Code in conjunction with the 1990 amendments to the federal Social Security Act, 42 U.S.C. § 405(c)(2)(C)(viii)(I).(2) See Open Records Decision No. 622 (1994). These amendments make confidential social security numbers and related records that are obtained or maintained by a state agency or political subdivision of the state pursuant to any provision of law enacted on or after October 1, 1990. See id. We have no basis for concluding that the submitted social security numbers are confidential under section 405(c)(2)(C)(viii)(I), and therefore excepted from public disclosure under section 552.101 on the basis of that federal provision. We caution, however, that section 552.352 of the Government Code imposes criminal penalties for the release of confidential information. Prior to releasing any social security number information, you should ensure that no such information was obtained or is maintained by the board pursuant to any provision of law enacted on or after October 1, 1990. We note that some of the information in the ACS proposal is protected by copyright. A custodian of public records must comply with the copyright law and is not required to furnish copies of records that are protected by copyright. Attorney General Opinion JM-672 (1987). A governmental body must allow inspection of copyrighted materials unless an exception applies to the information. Id. If a member of the public wishes to make copies of materials protected by copyright, the person must do so unassisted by the governmental body. In making copies, the member of the public assumes the duty of compliance with the copyright law and the risk of a copyright infringement suit. See Open Records Decision No. 550 (1990). In summary, the board must withhold the information we have marked under section 552.110. The board may be required to withhold social security numbers under section 552.101 in conjunction with federal law. The copyrighted information in the ACS proposal must be released in accordance with copyright law. Any 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 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, Amy D. Peterson
c: Ms. Mary Capello
Mr. Sigifredo Perez
Mr. Kevin Moran
Ms. Daphne Turpin Forbes
Mr. Ignacio Salazar
Ms. Christine E. Reinhard
Mr. Francisco G. Zarate
Mr. Lupe Martinez
Mr. George Troendle
Footnotes 1. In its brief submitted to this office, SER states that it received notification of the present request. 2. Section 552.101 excepts from disclosure "information considered to be confidential by law, either constitutional, statutory, or by judicial decision" and 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 |