May 6, 2011

Ms. Mary Ann Slavin

Assistant General Counsel

Texas Department of State Health Services

P.O. Box 149347

Austin, Texas 78714-9347

OR2011-06266

Dear Ms. Slavin:

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# 416854.

The Department of State Health Services (the "department") received a request for procurement information pertaining to Deliverable Based IT Services for the years 2009, 2010, and 2011. You state the department has released some of the requested information to the requestor. Although you take no position on whether the submitted information is excepted from disclosure, you state release of this information may implicate the proprietary interests of KForce Technology Staffing ("KForce"); Loblolly Consulting, LLC ("Loblolly"); Idea Integration ("Idea"); Sierra Systems Inc. ("Sierra"); The Greentree Group ("Greentree"); and MTG Management Consultants, L.L.C. ("MTG"). Accordingly, you have 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 Loblolly. We have considered the submitted arguments and reviewed the submitted information.

Initially, 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 of the Government Code to submit its reasons, if any, as to why information relating to that party should not be released. See Gov't Code § 552.305(d)(2)(B). As of the date of this decision, we have not received correspondence from KForce, Idea, Sierra, Greentree, or MTG. Thus, these third parties have not demonstrated that they have a protected proprietary interest in any of the submitted information. See id. § 552.110(a)-(b); 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 department may not withhold any of the submitted information on the basis of any proprietary interests KForce, Idea, Sierra, Greentree, or MTG may have in the information.

Loblolly raises section 552.110 of the Government Code. Section 552.110 protects the proprietary interests of private parties with respect to 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).

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 [one] 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, as, for example, the amount or other terms of a secret bid for a contract or the salary of certain employees . . . . A trade secret is a process or device for continuous use in the operation of the business. Generally it relates to the production of goods, as, for example, a machine or formula for the production of an article. It may, however, 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); Open Records Decision Nos. 255 (1980), 232 (1979), 217 (1978). 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); see also ORD 232. This office will accept a private person's claim for exception as valid under section 552.110(a) if the person establishes a prima facie case for the exception and no one submits an argument that rebuts the claim as a matter of law. ORD 552. 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) of the Government Code excepts from disclosure "[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. See ORD 661 at 5-6 (business enterprise must show by specific factual evidence that release of information would cause it substantial competitive harm).

Loblolly contends portions of its proposal constitute trade secrets under section 552.110(a). Having considered Loblolly's arguments and reviewed the information at issue, we find Loblolly has established a prima facie case that some of its customer information, which we have marked, constitutes trade secret information and must be withheld under section 552.110(a). We also 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; Open Records Decision Nos. 319 at 3 (1982), 306 at 3 (1982). Thus, we conclude Loblolly has failed to demonstrate any portion of its remaining information constitutes a trade secret, and none of Loblolly's remaining information may be withheld under section 552.110(a).

Loblolly also contends that release of some of its remaining information would result in substantial competitive harm. However, upon review, we find Loblolly has failed to demonstrate that release of any of the remaining information would cause it substantial competitive harm. See ORD 661; see also ORD 319 (information relating to organization and personnel, professional references, market studies, and qualifications are not ordinarily excepted from disclosure under statutory predecessor to section 552.110). Furthermore, we note pricing information of a winning bidder, as Loblolly is in this case, 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; thus, the pricing information of a company contracting with a governmental body is generally not excepted under section 552.110(b). 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). Consequently, none of the remaining information may be withheld under section 552.110(b).

Finally, we note that some of the remaining 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.

In summary, the department must withhold the information we have marked under section 552.110 of the Government Code. The department must release the remaining information, but any information that is protected by copyright may only 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,

Sarah Casterline

Assistant Attorney General

Open Records Division

SEC/tf

Ref: ID# 416854

Enc. Submitted documents

c: Requestor

(w/o enclosures)

Mr. Roger Noble

Kforce Technology Staffing

11044 Research Boulevard B520

Austin, Texas 78759

(w/o enclosures)

Ms. Adarsh Karia

Ideaintegration

3200 Southwest Parkway, Suite 2900

Houston, Texas 77027

(w/o enclosures)

Mr. John Galloway

Sierra Systems

4801 Southwest Parkway, Suite 115

Austin, Texas 78735

(w/o enclosures)

Mr. Paul Cox

The Greentree Group

4011 Joseph Hardin Drive, Suite B

Dallas, Texas 75236

(w/o enclosures)

Mr. William S. Rippi

MTG Consulting

111 Congress Avenue, Suite 2750

Austin, Texas 78701

(w/o enclosures)

Mr Pat Wyman

President

Loblolly Consulting, LLC

506 Carolyn Avenue

Austin, Texas 78705

(w/o enclosures)

Footnotes

1. 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. Restatement of Torts § 757 cmt. b (1939); see also Open Records Decision Nos. 319 at 2 (1982), 306 at 2 (1982), 255 at 2.

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