February 25, 2011

Ms. Jessica C. Eales

Assistant City Attorney

City of Houston

P.O. Box 368

Houston, Texas 77001-0368

OR2011-02860

Dear Ms. Eales:

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# 410360 (GC No. 18049).

The City of Houston (the "city") received a request for the NRG Energy Services, LLC ("NRG") bid proposal submitted for project number PWE-MMB-69000-JR regarding back-up power generation for drinking water operations. Although you state the city takes no position with respect to the public availability of the submitted proposal, you state its release may implicate NRG's proprietary interests. Accordingly, you state, and provide documentation showing, the city notified NRG of the request and of the company's 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) (determining statutory predecessor to section 552.305 permits governmental body to rely on interested third party to raise and explain the applicability of exception to disclose under Act in certain circumstances). We have received comments from NRG. We have considered the submitted arguments and reviewed the submitted information.

NRG claims its submitted bid proposal is excepted from disclosure under section 552.110 of the Government Code. This section protects the proprietary interests of private parties by excepting from disclosure two types of information: (1) "[a] trade secret obtained from a person and privileged or confidential by statute or judicial decision," and (2) "commercial 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(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 a "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 a single or ephemeral event 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 763, 776 (Tex. 1958). This office will accept a private person's claim for exception as valid under section 552.110(a) if that person establishes a prima facie case for the exception, and no one submits an argument that rebuts the claim as a matter of law. See Open Records Decision No. 552 at 5 (1990). However, we cannot conclude section 552.110(a) is applicable unless it has been shown the information meets the definition of a trade secret and the necessary factors have been demonstrated to establish a trade secret claim. ⁽¹⁾ Open Records Decision No. 402 (1983).

Section 552.110(b) requires a specific factual or evidentiary showing, not conclusory or generalized allegations, substantial competitive injury would likely result from release of the information at issue. Gov't Code § 552.110(b); Open Records Decision No. 661 at 5-6 (1999).

NRG claims its entire submitted bid proposal is excepted from disclosure because the methodology and structure of its proposal constitutes a trade secret under section 552.110(a). NRG argues disclosure of the proposal would divulge the manner in which NRG leverages its strengths to compete in the marketplace and competitors could use NRG's proposal as a template to create their own proposals and improve their competitive positions. NRG, however, also states the proposal was specifically designed to show NRG can serve the city's needs with respect to the project at issue. Thus, we understand NRG to represent the proposal is specific to the project at issue. Based on this representation and our review, we find NRG has failed to demonstrate its entire proposal meets the definition of a trade secret. See Restatement of Torts § 757 cmt. b (1939) (trade secret "is not simply information as to a single or ephemeral event in the conduct of the business"); Open Records Decision Nos. 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 and personnel, professional references, market studies, qualifications, and pricing are not ordinarily excepted from disclosure under statutory predecessor to section 552.110). Consequently, the city may not withhold NRG's entire proposal under section 552.110(a) of the Government Code.

NRG also claims the content within its proposal, including its customer information, pricing information, project design details, and third party vendors' product specifications, constitute trade secrets under section 552.110(a). We note, however, NRG, on its website, has identified one of the companies listed in its customer information as an NRG subsidiary. Additionally, NRG has made the remainder of the customer information it seeks to withhold publicly available on its website. Consequently, NRG has failed to demonstrate it considers its customer information at issue to be trade secret information. Furthermore, we find NRG has not demonstrated how the remaining information in the proposal either meets the definition of a trade secret or constitutes NRG's trade secret information. See Restatement of Torts § 757 cmt. b; ORD 319 at 3. Thus, the city may not withhold any of the information at issue under section 552.110(a) of the Government Code.

NRG also claims its information constitutes commercial information that, if released, would cause the company substantial competitive harm. Upon review, however, we find NRG has made only general conclusory assertions that release of the information, including its pricing information, would cause it substantial competitive injury, and has provided no specific factual or evidentiary showing to support such assertions. See generally Open Records Decision Nos. 661, 509 at 5, 319 at 3. Furthermore, we note NRG was the winning bidder in this instance and the pricing information of a winning bidder is generally not excepted under section 552.110(b). This office considers the prices charged in government contract awards 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 Dep't of Justice Guide to the Freedom of Information Act 344-345 (2009) (federal cases applying analogous Freedom of Information Act reasoning that disclosure of prices charged government is a cost of doing business with government). Therefore, the city may not withhold any of NRG's information under section 552.110(b) of the Government Code.

NRG claims portions of its information are confidential under section 552.101 of the Government Code in conjunction with section 418.181 of the Government Code. Section 552.101 excepts from public disclosure "information considered to be confidential by law, either constitutional, statutory, or by judicial decision." Gov't Code § 552.101. This exception encompasses information other statutes make confidential. Sections 418.176 through 418.182 were added to chapter 418 of the Government Code as part of the Texas Homeland Security Act (the "HSA"). These provisions make certain information related to terrorism confidential. Section 418.181 provides:

Those documents or portions of documents in the possession of a governmental entity are confidential if they identify the technical details or particular vulnerabilities of critical infrastructure to an act of terrorism.

Id. § 418.181; see generally id. § 421.001 (defining critical infrastructure to include "all public or private assets, systems, and functions vital to the security, governance, public health and safety, economy, or morale of the state or the nation"). The fact that information may relate to a governmental body's security measures does not make the information per se confidential under the HSA. See Open Records Decision No. 649 at 3 (1996) (language of confidentiality provision controls scope of its protection). Furthermore, the mere recitation of a statute's key terms is not sufficient to demonstrate the applicability of the claimed provision. As with any exception to disclosure, a claim under section 418.181 must be accompanied by an adequate explanation of how the responsive records fall within the scope of the claimed provision. See Gov't Code § 552.301(e)(1)(A) (governmental body must explain how claimed exception to disclosure applies).

NRG contends the aerial photographs, schematics, and descriptions of the city's water treatment facilities contained in the submitted information are confidential pursuant to section 418.181. NRG generally argues this information could be used by a terrorist to determine how to inflict the most damage to the city's water system. Pursuant to section 552.303 of the Government Code, we notified the city by letter that we needed an explanation of whether or not the city asserts any of this information is excepted from disclosure under section 552.101 in conjunction with section 418.181. See id.§ 552.303(c) (attorney general may give written notice to governmental body that additional information is necessary to render a decision). We have received comments from the city stating it does not assert any of the information at issue is excepted from disclosure pursuant to section 552.101 in conjunction with section 418.181. Based on the city's representation and our review of the submitted arguments, we find the information at issue does not identify the technical details or particular vulnerabilities of critical infrastructure to an act of terrorism. Therefore, the city may not withhold any of the information at issue under section 552.101 of the Government Code in conjunction with section 418.181 of the Government Code.

We note some of the submitted information may be 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 copyrighted. Open Records Decision No. 180 at 3 (1977). A governmental body must allow inspection of copyrighted materials unless an exception applies to the information. Id.; see Open Records Decision No. 109 (1975). If a member of the public wishes to make copies of copyrighted materials, 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. Accordingly, as no other exceptions to disclosure have been claimed, the submitted information must be released, but any information protected by copyright must be released in accordance with copyright law.

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,

Leah B. Wingerson

Assistant Attorney General

Open Records Division

LBW/dls

Ref: ID# 410360

Enc. Submitted documents

c: Requestor

(w/o enclosures)

Ms. Andrea M. Stover

Graves, Dougherty, Hearon & Moody, P.C.

For NRG Energy Services, L.L.C.

P.O. Box 98

Austin, Texas 78767

(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 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.

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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