May 20, 2011

Mr. Brett Norbraten

Open Records Attorney

Texas Department of Aging and Disability Services

P.O. Box 149030

Austin, Texas 78714

OR2011-07142

Dear Mr. Norbraten:

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# 418123 (DADS ORR #2011SOLEG0047).

The Texas Department of Aging and Disability Services (the "department") received a request for proposals for Statement of Work #53900-1-0000054507, the resulting contract, and any purchase orders in relation to the contract. We understand the department has released some information to the requestor. Although you take no position as to the public availability of the remaining responsive information, you state its release may implicate the proprietary interests of Austin Ribbon & Computer ("ARC") and Northrop Grumman Corporation ("Northrop"). Thus, pursuant to section 552.305 of the Government Code, you notified ARC and Northrop of the request and of the companies' rights to submit arguments to this office as to why their information should not be released. Gov't Code § 552.305(d); see also Open Records Decision No. 542 (1990) (determining that statutory predecessor to section 552.305 permits governmental body to rely on interested third party to raise and explain applicability of exception to disclosure under in certain circumstances). We have received comments from Northrop. We have considered the submitted arguments and reviewed submitted information.

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(d) to submit its reasons, if any, as to why information relating to that party should be withheld from public disclosure. See Gov't Code § 552.305(d)(2)(B). As of the date of this letter, we have not received comments from ARC explaining why any portion of the company's information should not be released. Therefore, we have no basis to conclude ARC has a protected proprietary interest in the submitted information. See id. § 552.110; Open Records Decision Nos. 661 at 5-6 (1999) (to prevent disclosure of commercial or financial information, third 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 (1990). Consequently, the department may not withhold any of the submitted information on the basis of any proprietary interest ARC may have in the information.

Northrop seeks to withhold portions of its information under section 552.110 of the Government Code. Section 552.110 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 ORD 552 at 5-6. 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) of the Government Code 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 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. Id.; see also ORD 661 at 5-6 (business enterprise must show by specific factual evidence that release of information would cause it substantial competitive harm).

Northrop argues its technical and project management information as well as its pricing information constitute trade secrets and are confidential under section 552.110(a) of the Government Code. Upon review, we find Northrop has failed to demonstrate any of the information at issue meets the definition of a trade secret, nor has it demonstrated the necessary factors to establish a trade secret claim for this information. Further, some of Northrop's information reflects it was tailored for this particular bid proposal. We note information pertaining to a particular contract, including pricing information from a particular proposal, 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." Restatement of Torts § 757 cmt. b (1939); see Huffines, 314 S.W.2d at 776; Open Records Decision Nos. 319 at 3, 306 at 3. Thus, the department may not withhold any of Northrop's information at issue under section 552.110(a).

Northrop claims its pricing information, personnel information, and technical information of sale are excepted from disclosure under section 552.110(b) of the Government Code. Upon review, we find Northrop has established the pricing information we marked constitutes commercial or financial information, the release of which would cause the company substantial competitive harm. Therefore, the department must withhold the information we marked under section 552.110(b). However, we find Northrop has made only conclusory allegations the release of the remaining information it seeks to withhold would result in substantial damage to its competitive position. Thus, Northrop failed to demonstrate substantial competitive injury would result from the release of any of its remaining information at issue. See Open Records Decision Nos. 661, 509 at 5 (1988) (because 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 (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). Consequently, the department may not withhold any of the remaining information under section 552.110(b).

In summary, the department must withhold the information we marked under section 552.110(b) of the Government Code. 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,

Ana Carolina Vieira

Assistant Attorney General

Open Records Division

ACV/eeg

Ref: ID# 418123

Enc. Submitted documents

c: Requestor

(w/o enclosures)

Mr. Ryan Grant

Austin Ribbon & Computer

9211 Waterford Centre Boulevard, Suite 202

Austin, Texas 78758

(w/o enclosures)

Mr. Taray Delemore

Northrop Grummans Systems Corporation

7745 Chevy Chase Drive, Building V, Suite 100

Austin, Texas 78752

(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 (1980).

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