September 13, 2004

Mr. Steve Aragón
General Counsel
Texas Health and Human Services Commission
P.O. Box 13247
Austin, Texas 78711

OR2004-7802

Dear Mr. Aragón:

You ask whether certain information is subject to required public disclosure under chapter 552 of the Government Code. Your request was assigned ID# 209107.

The Texas Health and Human Services Commission (the "commission") received a request for the financial statistical reports ("FSRs") of several specified health plans in specified service areas. You state that the commission has released the FSRs from Evercare. With respect to the FSRs of the remaining companies at issue, while you state that the commission takes no position on the public availability of the information, you indicate that release of the requested information may implicate the proprietary interests of the companies. Accordingly you state, and provide documentation showing, that you notified third parties Community First Health Plans, Inc. ("Community First"), Community Health Choice, Inc. ("Community Health"), Cook Children's Health Plan ("Cook"), Driscoll Children's Health Plan ("Driscoll"), FirstCare, Parkland Community Health Plan, Inc. ("Parkland"), Seton Health Plan ("Seton"), Superior Health Plan, Inc./Centene ("Superior")⁽¹⁾, Texas Children's Health Plan ("TCHP"), and UTMB Health Care Systems ("UTMB") 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 in certain circumstances). We have reviewed the submitted information.⁽²⁾

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, Community Health, Driscoll, FirstCare, Parkland, TCHP, and UTMB have not submitted any comments to this office explaining how release of the information at issue would affect their proprietary interests. Therefore, we have no basis to conclude that these companies have protected proprietary interests in the submitted FSRs. See Gov't Code § 552.110(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). We therefore determine the commission must release the FSRs of Community Health, Driscoll, FirstCare, Parkland, TCHP, and UTMB to the requestor.

Community First, Cook, Seton, and Superior have submitted comments to this office contending that their respective FSRs are excepted from disclosure under section 552.110 of the Government Code. Section 552.110 of the Government Code 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 Public Information 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).

Upon review, we find that Community First, Cook, Seton, and Superior have each made a prima facie case that the FSRs at issue are protected as trade secrets, and we have received no arguments that rebut the companies' claims. We therefore determine that the submitted FSRs pertaining to Community First, Cook, Seton, and Superior are excepted from disclosure under section 552.110(a) of the Government Code and must be withheld. As we are able to make this determination, we need not reach these companies' claims under section 552.110(b) of the Government Code.

In summary, the commission must withhold the submitted FSRs pertaining to Community First, Cook, Seton, and Superior under section 552.110(a) of the Government Code. The submitted FSRs pertaining to Community Health, Driscoll, FirstCare, Parkland, TCHP, and UTMB 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 thirty calendar days. Id. § 552.324(b). In order to get the full benefit of such an appeal, the governmental body must file suit within ten 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 ten 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 ten 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); Tex. 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 ten calendar days of the date of this ruling.

Sincerely,

David R. Saldivar
Assistant Attorney General
Open Records Division
DRS/seg
Ref: ID# 209107
Enc: Submitted documents

c: Ms. Bobbie Jo Jonas
Amerigroup Corporation
4425 Corporation Lane
Virginia Beach, Virginia 23462
(w/o enclosures)

Mr. Christopher W. Buley
Community First Health Plans, Inc.
4801 NW Loop 410, Suite 1000
San Antonio, Texas 78229
(w/o enclosures)

Mr. John W. McNey
Cook Children's Health Care System
801 Seventh Avenue
Fort Worth, Texas 76104-2796
(w/o enclosures)

Mr. Charles Carroll
Driscoll Children's Health Plan
P.O. Box 6609
Corpus Christi, Texas 78411
(w/o enclosures)

Mr. Bill Thames
FirstCare
12940 Research Boulevard
Austin, Texas 78750
(w/o enclosures)

Mr. John H. Evler, III
Seton Health Plan
205 East Huntland Drive, Suite 200
Austin, Texas 78752
(w/o enclosures)

Mr. Christopher D. Bowers
Superior Health Plan, Inc.
2100 South IH-35, Suite 202
Austin, Texas 78704
(w/o enclosures)

Mr. Chris Born
Texas Children's Health Plan
1919 Braeswood
Houston, Texas 77230
(w/o enclosures)

Ms. Aurora Mitchell
UTMB Health Care Systems
2621 Featherwood Drive, Suite 100
Houston, Texas 77034
(w/o enclosures)

Mr. Tim Bahe
Parkland Community Health Plan, Inc.
2777 North Stemmons Freeway, Suite 1750
Dallas, Texas 75207
(w/o enclosures)

Dr. Glen Johnson
2636 South Loop, Suite 700
Houston, Texas 77054
(w/o enclosures)

Mr. David Rodriguez
El Paso First Health Plans
2501 North Mesa
El Paso, Texas 79902
(w/o enclosures)

Footnotes

1. Superior informs us that Centene, as specified in the request, is the parent company of Superior.

2. We note that the submitted information pertaining to Amerigroup Texas, Inc., HMO-Blue Texas, and MetroWest Health Plan, Inc. is not responsive to the present request and need not be released.