March 18, 2010

Ms. Cary Grace

Assistant City Attorney

City of Austin

P.O. Box 1088

Austin, Texas 78767-8828

OR2010-03863

Dear Ms. Grace:

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# 374199.

The City of Austin (the "city") received a request for sixteen categories of information related to taxi cab operations in Austin, including a copy of the report of revenues and expenses for each taxi franchise for the last three years. You state you are releasing most of the information to the requestor. While you take no position with respect to the public availability of the submitted information, you state that the request may implicate the proprietary interests of Lone Star Cab Co. ("Lone Star"), Austin Cab, and Greater Austin Transportation Co. ("GATC"). Accordingly, you notified these entities of this request for information 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) (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). Austin Cab and GATC responded to the notice and argue that their information is excepted from disclosure. We have considered the submitted arguments and reviewed the submitted information.

Initially, we note, and you acknowledge, that the city has not complied with the requirements of section 552.301 of the Government Code. See Gov't Code § 552.301(b), (e). A governmental body's failure to comply with the procedural requirements of section 552.301 results in the legal presumption that the requested information is public and must be released unless the governmental body demonstrates a compelling reason to withhold the information from disclosure. See id. § 552.302; Simmons v. Kuzmich, 166 S.W.3d 342, 350 (Tex. App.--Fort Worth 2005, no pet.); Hancock v. State Bd. of Ins., 797 S.W.2d 379, 381 (Tex. App.--Austin 1990, no writ); see also Open Records Decision No. 630 (1994). A compelling reason exists when third-party interests are at stake, or when information is confidential by law. Open Records Decision No. 150 (1977). Because the third-party interests at issue here can provide a compelling reason to overcome the presumption of openness, we will consider whether the submitted information is excepted under the Act.

Next, 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 information relating to that party should be withheld from public disclosure. See Gov't Code § 552.305(d)(2)(B). As of the date of this letter, this office has not received comments from Lone Star explaining why its submitted information should not be released. Therefore, we have no basis to conclude that Lone Star has a protected proprietary interest in the submitted information. See id. § 552.110; Open Records Decision Nos. 661 at 5-6 (1999) (to prevent disclosure of commercial or financial information, party must show by specific factual evidence, not conclusory or generalized allegations, that release of requested information would cause that party substantial competitive harm), 552 at 5 (1990) (party must establish prima facie case that information is trade secret), 542 at 3. Accordingly, the city may not withhold any portion of the submitted revenue and expense reports based on the proprietary interests of Lone Star. As the city raises no exceptions to disclosure for this information, it must be released to the requestor.

Austin Cab and GATC both raise section 552.110 for their revenue and expense reports. 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 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, 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 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 Hyde Corp. v. Huffines, 314 S.W.2d 776 (Tex. 1958). 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. ⁽¹⁾ Restatement of Torts § 757 cmt. b (1939). 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). We note that pricing information pertaining to a particular 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." Restatement of Torts § 757 cmt. b (1939).

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.; see also Open Records Decision No. 661 at 5 (1999).

Both parties assert that their reports are confidential under section 552.110(b). Austin Cab argues that release of its reports would allow competitors to analyze its infrastructure, fare, and fee set up, and reveal information relating to operating agreements, driver information, and additional revenue streams. GATC argues that release of its reports would reveal highly negotiated contracted prices and rates with vendors, investment priorities, how it apportions value, profit margins, and cost saving measures. Both parties argue that release of their information would place them at a disadvantage to their competitors. Upon review of Austin Cab and GATC's arguments and the submitted revenue and expense reports, we conclude both parties have established the release of their revenue and expense reports would cause them substantial competitive injury. Therefore, the city must withhold Austin Cab and GATC's revenue and expense reports under section 552.110(b) of the Government Code.

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, toll free at (888) 672-6787.

Sincerely,

Kate Hartfield

Assistant Attorney General

Open Records Division

KH/dls

Ref: ID# 374199

Enc. Submitted documents

c: Requestor

(w/o enclosures)

Mr. Arthur L. Walker

Mr. Joel A. Levine

Walker Bright, P.C.

For Austin Cab Company

6850 Austin Center Boulevard, Suite A 100

Austin, Texas 78731

(w/o enclosures)

Mr. Brian O'Toole

Moltz Morton O'Toole, L.L.P.

For Greater Austin Transportation Company

106 East 6^th Street, Suite 700

Austin, Texas 78701

(w/o enclosures)

Mr. Solomon Kassa

Lone Star Cab Co.

208 West Powell Lane

Austin, Texas 78753

(w/o enclosures)

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] 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).

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