April 8, 2011

Mr. Kipling D. Giles

Senior Counsel

Legal Services Division

CPS Energy

P.O. Box 1771

San Antonio, Texas 78296

OR2011-04886

Dear Mr. Giles:

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# 414076.

The City Public Service Board of the City of San Antonio d/b/a CPS Energy ("CPS") received a request for the contract between CPS and Landis+Gyr, Inc. ("Landis"). You claim that portions of the submitted information are excepted from disclosure under sections 552.101 and 552.139 of the Government Code. Additionally, you state that release of some of the submitted information may implicate the proprietary interests of Landis. Accordingly, you inform us, and provide documentation showing, that you notified Landis of the request and of its right to submit arguments to this office as to why the submitted 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 a representative of Landis. We have considered the submitted arguments and reviewed the submitted information.

Section 552.101 of the Government Code excepts from disclosure "information considered to be confidential by law, either constitutional, statutory, or by judicial decision." Gov't Code § 552.101. This section encompasses information protected by other statutes. As part of the Texas Homeland Security Act ("HSA"), sections 418.176 through 418.182 were added to chapter 418 of the Government Code. These provisions make certain information related to terrorism confidential. You assert that Exhibit A and the same information in Exhibit B is confidential under section 418.181 of the Government Code, which provides "[t]hose documents or portions of documents in the possession of a governmental entity are confidential if they identify the technical details of particular vulnerabilities of critical infrastructure to an act of terrorism." Id. § 418.181. The fact that information may relate to a governmental body's security concerns 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 by a governmental body of a statute's key terms is not sufficient to demonstrate the applicability of the claimed provision. As with any exception to disclosure, a governmental body asserting one of the confidentiality provisions of the HSA must adequately explain 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).

You explain that Exhibit A involves the details of CPS's Advanced Metering Infrastructure ("AMI") pilot program and identifies technical details of CPS's electric distribution operations. We agree that the electric distribution system is critical infrastructure. 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"). You state that an individual could analyze the information at issue and determine the entry points to the AMI pilot program, allowing the disruption of electricity distribution. You explain that such an event would compromise public security and health. Based on your arguments and our review, we conclude Exhibit A and the same information found in Exhibit C-2 of Exhibit B is confidential under section 418.181 of the Government Code and must be withheld from disclosure on that basis under section 552.101 of the Government Code. ⁽¹⁾

Landis asserts that portions of its information may not be disclosed because section D.14.1 of its contract with CPS provides for the confidentiality of its trade secret information during the term of the contract and for two years thereafter. However, information is not confidential under the Act simply because the party submitting the information anticipates or requests that it be kept confidential. Indus. Found. v. Tex. Indus. Accident Bd., 540 S.W.2d 668, 677 (Tex. 1976). In other words, a governmental body cannot, through an agreement or contract, overrule or repeal provisions of the Act. Attorney General Opinion JM-672 (1987); Open Records Decision Nos. 541 at 3 (1990) ("[T]he obligations of a governmental body under [the predecessor to the Act] cannot be compromised simply by its decision to enter into a contract."); 203 at 1 (1978) (mere expectation of confidentiality by person supplying information does not satisfy requirements of statutory predecessor to Gov't Code § 552.110). Consequently, unless the submitted information falls within an exception to disclosure, it must be released, notwithstanding any expectations or agreement specifying otherwise.

Landis raises section 552.110 of the Government Code for a portion of the submitted information. Section 552.110 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. See Hyde Corp. v. Huffines, 314 S.W.2d 763 (Tex. 1957); see also Open Records Decision No. 552 (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. ⁽²⁾ 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. See 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) at 5-6 (business enterprise must show by specific factual evidence that release of information would cause it substantial competitive harm).

Having considered their submitted arguments, we find that Landis has established a prima facie case that some of its testing methodology information, which we have marked, constitutes trade secrets. Therefore, CPS must withhold the information we have marked pursuant to section 552.110(a) of the Government Code. However, Landis has failed to demonstrate that any of the remaining information at issue meets the definition of a trade secret, nor has Landis demonstrated the necessary factors to establish a trade secret claim for this information. See ORD 319 at 3 (information relating to organization and personnel, market studies, and qualifications and experience are not ordinarily excepted from disclosure under statutory predecessor to section 552.110). We also note that information, including 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. Thus, none of the remaining information at issue may be withheld under section 552.110(a) of the Government Code.

Upon review of the arguments and the information at issue, we find that Landis has made only conclusory allegations that the release of the remaining information at issue would result in substantial damage to its competitive position. Thus, Landis has not demonstrated that substantial competitive injury would result from the release of any of the remaining information. See Open Records Decision Nos. 661 (for information to be withheld under commercial or financial information prong of section 552.110, business must show by specific factual evidence that substantial competitive injury would result from release of particular information at issue), 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). We note that the pricing information of a company contracting with a governmental body 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 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). Moreover, 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); ORD 541 at 8 (public has interest in knowing terms of contract with state agency). Accordingly, no portion of the remaining information may be withheld under section 552.110(b).

In summary, CPS must withhold Exhibit A and the same information found in Exhibit C-2 of Exhibit B under section 552.101 of the Government Code in conjunction with section 418.181 of the Government Code. CPS must also withhold the information we have marked under section 552.110(a) of the Government Code. As no further exceptions to disclosure are raised, the remaining information must be released.

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,

Laura Ream Lemus

Assistant Attorney General

Open Records Division

LRL/tf

Ref: ID# 414076

Enc. Submitted documents

c: Requestor

(w/o enclosures)

Mr. Gavin S. Martinson

Gibson, Dunn & Crutcher L.L.P.

2100 McKinney Avenue, Suite 110

Dallas, Texas 75201

(w/o enclosures)

Footnotes

1. As our ruling is dispositive, we need not address your remaining argument against the disclosure of Exhibit A and the same information found in Exhibit C-2 of Exhibit B.

2. 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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