May 25, 2010

Mr. Carey E. Smith

General Counsel

Texas Health and Human Services Commission

P.O. Box 13247

Austin, Texas 78711

OR2010-07546

Dear Mr. Smith:

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# 380616.

The Texas Health and Human Services Commission (the "commission") received a request for (1) the proposals submitted by specified companies in response to RFP number 529-08-0001 and (2) the scoring sheets regarding the proposals. You state that the commission will release some of the requested information. Although you take no position with respect to the public availability of the submitted information, you state that the submitted documents may contain proprietary information of third parties subject to exception under the Act. Accordingly, you state, and provide documentation showing, that the commission notified Amerigroup Texas, Inc. ("Amerigroup") and Blue Cross and Blue Shield of Texas ("BCBS") (collectively, the "third parties") of the request for information and of the third parties' right 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). Amerigroup and BCBS have responded to this notice. We have considered the third parties' arguments and reviewed the submitted information.

Initially, you inform us that a portion of the requested information was the subject of a previous request for information, as a result of which this office issued Open Records Letter No. 2010-05344 (2010). However, we note that the information at issue in Open Records Letter No. 2010-05344 is currently at issue in a lawsuit pending against the Office of the Attorney General: Superior Healthplan Network v. Greg Abbott, Attorney Gen. for the State of Tex., No. D-1-GN-10-001369 (53rd Dist. Ct., Travis County, Tex.). We will not address whether the information at issue in the lawsuit is excepted under the Act, but will instead allow the trial court to determine whether this information must be released to the public.

We now address the third parties' arguments against disclosure of the submitted information. Section 552.110(a) of the Government Code protects trade secrets obtained from a person and privileged or confidential by statute or judicial decision. Gov't Code § 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).

Upon review of the arguments submitted by Amerigroup and BCBS, we find the information we have marked must be withheld as trade secrets under section 552.110(a) of the Government Code. ⁽¹⁾ The remaining submitted 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, toll free, at (888) 672-6787.

Sincerely,

Christopher D. Sterner

Assistant Attorney General

Open Records Division

CDSA/eeg

Ref: ID# 380616

Enc. Submitted documents

c: Requestor

(w/o enclosures)

Ms. Rachael K. Padgett

McGinnis, Lochridge & Kilgore, L.L.P.

Counsel for Amerigroup

600 Congress Avenue, Suite 2100

Austin, Texas 78701

(w/o enclosures)

Mr. Keith George

Assistant General Counsel

BlueCross BlueShield of Texas

P.O. Box 655730

Dallas, Texas 75265

(w/o enclosures)

Footnotes

1. As our ruling is dispositive of this information, we need not address the third parties' arguments under section 552.110(b) of the Government Code.

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