March 22, 2011

Ms. Neera Chatterjee

Public Information Coordinator

Office of General Counsel

The University of Texas System

201 West Seventh Street

Austin, Texas 78701-2902

OR2011-03904

Dear Ms. Chatterjee:

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# 411880. (OGC# 134622)

The University of Texas System (the "system") received a request for information pertaining to the RFP for Administration of the UT Flex Health Care Flexible Spending Account and Dependent Care Flexible Spending Account and Dependent Day Care Flexible Spending Account Plans, including any internal correspondence pertaining to the decision making process regarding Ameriflex. Although the system takes no position on whether the requested information is excepted from disclosure, you state release of this information may implicate the propriety interests of PayFlex Systems USA, Inc. ("PayFlex") and OptumHealth Financial Services ("OptumHealth"). Accordingly, you notified these third parties of the request and of their right to submit arguments to this office as to why their information should not be released. See Gov't Code § 552.305(d) (permitting interested third party to submit to attorney general reasons why requested information should not be released); Open Records Decision No. 542 (1990) (statutory predecessor to section 552.305 permitted governmental body to rely on interested third party to raise and explain applicability of exception to disclosure under certain circumstances). We have received comments from both interested parties. We have considered the claimed exceptions and reviewed the submitted information.

Initially, we note OptumHealth seeks to withhold information the system has not submitted for our review. By statute, this office may only rule on the public availability of information submitted by the governmental body requesting the ruling. See Gov't Code § 552.301(e)(1)(D) (governmental body requesting decision from Attorney General must submit copy of specific information requested). Therefore, this ruling does not address OptumHealth's arguments against the disclosure of information that was not submitted by the system.

PayFlex raises section 552.101 of the Government Code, which governs information considered to be confidential by law, but PayFlex has not directed our attention to any law under which the information it seeks to withhold is considered to be confidential for the purposes of section 552.101. See Open Records Decision Nos. 611 at 1 (1992) (common-law privacy), 600 at 4 (1992) (constitutional privacy), 478 at 2 (1987) (statutory confidentiality). We, therefore, conclude that the system may not withhold any of PayFlex's information under section 552.101 of the Government Code.

PayFlex also claims that its information is excepted under section 552.104 of the Government Code, which excepts from disclosure "information that, if released, would give advantage to a competitor or bidder." Gov't Code § 552.104. Section 552.104, however, is a discretionary exception that protects only the interests of a governmental body, as distinguished from exceptions that are intended to protect the interests of third parties. See Open Records Decision Nos. 592 (1991) (statutory predecessor to section 552.104 designed to protect interests of a governmental body in a competitive situation, and not interests of private parties submitting information to the government), 522 (1989) (discretionary exceptions in general). As the system does not claim any of the submitted information is excepted from disclosure under section 552.104, we find this section is not applicable to the information at issue, and it may not be withheld on that basis. See ORD 592 (governmental body may waive section 552.104).

Next, both PayFlex and OptumHealth claim portions of their respective information are excepted from disclosure under section 552.110 of the Government Code. Section 552.110(a) 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 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. 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.; see also Open Records Decision No. 661 (1999) (business enterprise must show by specific factual evidence that release of information would cause it substantial competitive harm).

Both PayFlex and OptumHealth claim their information contains trade secrets protected by section 552.110(a) of the Government Code. We note 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; ORD 319 at 3, 306 at 3. Upon review of the submitted arguments under section 552.110(a) and the information at issue, we find OptumHealth has demonstrated that portions of its information pertaining to its customers and operating procedures are protected trade secrets under section 552.110(a). Accordingly, the system must withhold this information, which we have marked, under section 552.110(a). However, we find OptumHealth has failed to demonstrate that any of its remaining information, and PayFlex has failed to demonstrate how any of its information, meets the definition of a trade secret. See ORD 402 (section 552.110(a) does not apply unless information meets definition of trade secret and necessary factors have been demonstrated to establish trade secret claim), 319 at 3 (information relating to organization and personnel, market studies, qualifications and experience, and pricing are not ordinarily excepted from disclosure under statutory predecessor to section 552.110). Consequently, the system may not withhold any of the remaining information at issue under section 552.110(a) of the Government Code.

PayFlex and OptumHealth also claim section 552.110(b) for portions of their information. We note pricing information of a winning bidder is generally not excepted under section 552.110(b), because 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). In addition, 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). Therefore, as PayFlex was the winning bidder in this instance, the system may not withhold any of PayFlex's pricing information under section 552.110. We conclude the system must withhold OptumHealth's pricing information, which we have marked, under section 552.110(b) of the Government Code. We find PayFlex and OptumHealth have made only conclusory allegations that release of the remaining information at issue would result in substantial damage to either company's competitive position. Thus, PayFlex and OptumHealth have not made the specific factual or evidentiary showing required by section 552.110(b) that substantial competitive injury would result from the release of any of the remaining information. See Open Records Decision Nos. 661 at 5-6, 509 at 5 (1988). Accordingly, the system may not withhold any of PayFlex's information or Optumhealth's remaining information under section 552.110(b) of the Government Code.

Finally, we note some of the information at issue appears to 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.

In summary, the system must withhold the information we have marked under section 552.110 of the Government Code. The system must release the remaining information, 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,

Jonathan Miles

Assistant Attorney General

Open Records Division

JM/em

Ref: ID# 411880

Enc. Submitted documents

c: Requestor

(w/o enclosures)

Ms. Christine A. Longe

Senior Associate General Counsel

Optum Health

12501 Whitewater Drive, MN004-0200

Minnetonka, Minnesota 55343

(w/o enclosures)

Mr. Robert J. Camenzind

Executive Vice President and General Manager of Operations

PayFlex

P.O. Box 3039

Omaha, Nebraska 68103-3039

(w/o enclosures)

POST OFFICE BOX 12548, AUSTIN, TEXAS 78711-2548 TEL: (512) 463-2100 WEB: WWW.OAG.STATE.TX.US
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