April 3, 2009

Ms. Zandra L. Pulis

Senior Counsel

Legal Services Division

P.O. Box 1771

San Antonio, Texas 78296

OR2009-04379

Dear Ms. Pulis:

You ask whether certain information is subject to required public disclosure under the Public Information Act (the "Act"), chapter 552 of the Government Code. Your request was assigned ID# 338923.

The City Public Service Board ("CPS") of San Antonio received a request for the submitted bid prices for a specified request for proposal. Although you take no position as to whether the submitted information must be released to the requestor, you state that the submitted documents may contain proprietary information subject to exception under the Act. Accordingly, you provide documentation showing that CPS notified the L.E. Myers Company ("Myers") and Pike Electric, Inc. ("Pike") of the request for information and of their rights to submit arguments to this office as to why the submitted information should not be released. See Gov't Code § 552.305(d); see also Open Records Decision No. 542 (1990) (statutory predecessor to section 552.305 permits governmental body to rely on interested third party to raise and explain applicability of exception in the Act in certain circumstances). Both Myers and Pike have responded to this notice and both argue that the submitted information is excepted from disclosure under section 552.110 of the Government Code. ⁽¹⁾ We have considered the submitted arguments and reviewed the submitted information.

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. Gov't Code § 552.110(a), (b). Section 552.110(a) protects trade secrets obtained from a person and privileged or confidential by statute or judicial decision. Id. § 552.110(a). The Texas Supreme Court has adopted the definition of trade secret from section 757 of the Restatement of Torts. Hyde Corp. v. Huffines, 314 S.W.2d 763 (Tex. 1957); see also Open Records Decision No. 552 at 2 (1990). Section 757 provides that a trade secret is:

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 single or ephemeral events 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); see also Huffines, 314 S.W.2d at 776. In determining whether particular information constitutes a trade secret, this office considers the Restatement's definition of trade secret as well as the Restatement's list of six trade secret factors. Restatement of Torts § 757 cmt. b (1939).

The following are the six factors that the Restatement gives 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 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 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.

Id.; see also Open Records Decision Nos. 319 at 2 (1982), 306 at 2 (1982), 255 at 2 (1980). This office must accept a claim that information subject to the Act is excepted as a trade secret if a prima facie case for the exception is made and no argument is submitted that rebuts the claim as a matter of law. See ORD 552 at 5. 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. Id. § 552.110(b); see also Nat'l Parks & Conservation Ass'n v. Morton, 498 F.2d 765 (D.C. Cir. 1974); Open Records Decision No. 661 (1999).

Both Myers and Pike assert that their respective bid prices in the submitted information are trade secrets subject to section 552.110(a). Both Myers and Pike further claim that their respective bid prices are trade secrets because the bid prices reveal the companies' respective pricing methods. We note that pricing information pertaining to a particular proposal or contract is generally not a trade secret because it is "simply information as to single or ephemeral events in the conduct of the business," rather than "a process or device for continuous use in the operation of the business." See Restatement of Torts § 757 cmt. b (1939); Huffines, 314 S.W.2d at 776; Open Records Decision Nos. 319 at 3 (1982), 306 at 3 (1982). Furthermore, after review of the arguments and submitted information, we find that neither Myers nor Pike has adequately explained, nor is it apparent from our review of the submitted information, how the submitted bid prices could be used to obtain the companies' respective pricing methods or formulas, and thus obtain information that is continually used in their respective businesses. Therefore, we find that both Myers and Pike have failed to demonstrate that their respective bid prices meet the definition of a trade secret. Accordingly, CPS may not withhold any of the submitted information pursuant to section 552.110(a) of the Government Code.

Next, both Myers and Pike argue that release of their respective pricing information would cause them substantial competitive harm. Upon review, we find Pike has demonstrated release of its pricing information would cause it specific competitive harm. Therefore, CPS must withhold the pricing information pertaining to Pike, which we have marked, under section 552.110(b) of the Government Code. However, you inform this office that Myers submitted the winning bid for the contract at issue. We note that pricing information of a winning bidder is generally not excepted under section 552.110(b). Furthermore, this office considers pricing information in government contracts to be a matter of strong public interest. See Open Records Decision No. 514 (1988) (public has interest in knowing prices charged by government contractors); see generally Freedom of Information Act Guide & Privacy Act Overview, 219 (2000) (federal cases applying analogous Freedom of Information Act reasoning that disclosure of prices charged government is a cost of doing business with government). Further, the terms of a contract with a governmental body are generally not excepted from public disclosure. See Gov't Code § 552.022(a)(3) (contract involving receipt or expenditure of public funds expressly made public); Open Records Decision No. 541 at 8 (1990) (public has interest in knowing terms of contract with state agency). Accordingly, we conclude CPS may not withhold the pricing information pertaining to Myers under section 552.110(b) of the Government Code.

In summary, CPS must withhold Pike's pricing information, which we have marked, under section 552.110(b) of the Government Code. The remaining information must be released to the requestor.

This letter ruling is limited to the particular information 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 information or any other circumstances.

This ruling triggers important deadlines regarding the rights and responsibilities of the governmental body and of the requestor. For more information concerning those rights and responsibilities, please visit our website at http://www.oag.state.tx.us/open/index_orl.php, or call the Office of the Attorney General's Open Government Hotline, toll free, at (877) 673-6839. Questions concerning the allowable charges for providing public information under the Act must be directed to the Cost Rules Administrator of the Office of the Attorney General at (512) 475-2497.

Sincerely,

Christopher D. Sterner

Assistant Attorney General

Open Records Division

CDSA/eeg

Ref: ID# 338923

Enc. Submitted documents

c: Requestor

(w/o enclosures)

Mr. Jim Meuth

Pike Energy Soultions

P.O. Box 868

Mount Airy, North Carolina 27030

(w/o enclosures)

Mr. James R. Fox

Vice President and General Counsel

Pike Energy Solutions

P.O. Box 868

Mount Airy, North Carolina 27030

(w/o enclosures)

Mr. J. Doehring

The L. E. Myers Co.

4315 Allen Genoa Road

Pasadena, Texas 77504

(w/o enclosures)

Mr. Keith Coulter

Andrews Myers Coulter & Cohen P.C.

3900 Essex Lane, Suite 800

Houston, Texas 77027-5198

(w/o enclosures)

Footnotes

1. Although Pike also raises section 552.101 of the Government Code, Pike does not present any arguments against disclosure under that section. We note this office has concluded section 552.101 does not encompass other exceptions found in the Act. See Open Records Decision Nos. 676 at 1-2 (2000), 575 at 2 (1990).

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