February 7, 2012

Mr. Michael R. Crowe

For Healthcare Access San Antonio

Brown McCarroll, LLP

111 Congress Avenue, Suite 1400

Austin, Texas 78701-4093

OR2012-01897

Dear Mr. Crowe:

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# 444637.

Healthcare Access San Antonio ("HASA"), which you represent, received a request for the contract and all proposals submitted in response to a Health Information Exchange ("HIE") contract. You claim HASA is not a governmental body and, thus, the requested information is not public information under the Act. Alternatively, you inform us release of this information may implicate the proprietary interests of third parties. Accordingly, you state, and provide documentation demonstrating, HASA notified the third parties of the request for information and of their right to submit arguments stating why their information should not be released. ⁽¹⁾ See Gov't Code § 552.305 (permitting interested third party to submit to attorney general reasons why requested information should not be released); 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 applicability of exception in certain circumstances). We have received arguments from Cerner, iCA, Medicity, and Sandlot. We have considered the submitted arguments and reviewed the submitted information.

We must first address the threshold issue of whether HASA is subject to the Act. The Act requires a governmental body to make information that is within its possession or control available to the public, with certain statutory exceptions. See Gov't Code §§ 552.002(a), .006, .021. Under the Act, the term "governmental body" includes several enumerated kinds of entities and "the part, section, or portion of an organization, corporation, commission, committee, institution, or agency that spends or that is supported in whole or in part by public funds[.]" Id. § 552.003(1)(A)(xii). "Public funds" means funds of the state or of a governmental subdivision of the state. Id. § 552.003(5).

Both the courts and this office previously have considered the scope of the definition of "governmental body" under the Act and its statutory predecessor. In Kneeland v. Nat'l Collegiate Athletic Ass'n, 850 F.2d 224 (5th Cir. 1988), cert. denied, 488 U.S. 1042 (1989), the United States Court of Appeals for the Fifth Circuit recognized that opinions of this office do not declare private persons or businesses to be "governmental bodies" that are subject to the Act "'simply because [the persons or businesses] provide specific goods or services under a contract with a government body.'" Kneeland, 850 F.2d at 228 (quoting Open Records Decision No. 1 (1973)). Rather, the Kneeland court noted that in interpreting the predecessor to section 552.003 of the Government Code, this office's opinions generally examine the facts of the relationship between the private entity and the governmental body and apply three distinct patterns of analysis:

The opinions advise that an entity receiving public funds becomes a governmental body under the Act, unless its relationship with the government imposes "a specific and definite obligation . . . to provide a measurable amount of service in exchange for a certain amount of money as would be expected in a typical arms-length contract for services between a vendor and purchaser." Tex. Att'y Gen. No. JM-821 (1987), quoting ORD-228 (1979). That same opinion informs that "a contract or relationship that involves public funds and that indicates a common purpose or objective or that creates an agency-type relationship between a private entity and a public entity will bring the private entity within the . . . definition of a 'governmental body.'"  Finally, that opinion, citing others, advises that some entities, such as volunteer fire departments, will be considered governmental bodies if they provide "services traditionally provided by governmental bodies."

Id. The Kneeland court ultimately concluded that the National Collegiate Athletic Association (the "NCAA") and the Southwest Conference (the "SWC"), both of which received public funds, were not "governmental bodies" for purposes of the Act, because both provided specific, measurable services in return for those funds. See Kneeland, 850 F.2d at 230-31.

Both the NCAA and the SWC were associations made up of both private and public universities. The NCAA and the SWC both received dues and other revenues from their member institutions. Id. at 226-28. In return for those funds, the NCAA and the SWC provided specific services to their members, such as supporting various NCAA and SWC committees; producing publications, television messages, and statistics; and investigating complaints of violations of NCAA and SWC rules and regulations. Id. at 229-31. The Kneeland court concluded that although the NCAA and the SWC received public funds from some of their members, neither entity was a "governmental body" for purposes of the Act, because the NCAA and SWC did not receive the funds for their general support. Rather, the NCAA and the SWC provided "specific and gaugeable services" in return for the funds that they received from their member public institutions. See id. at 231; see also A.H. Belo Corp. v. S. Methodist Univ., 734 S.W.2d 720 (Tex. App.--Dallas 1987, writ denied) (athletic departments of private-school members of Southwest Conference did not receive or spend public funds and thus were not governmental bodies for purposes of Act).

In exploring the scope of the definition of "governmental body" under the Act, this office has distinguished between private entities that receive public funds in return for specific, measurable services and those entities that receive public funds as general support. In Open Records Decision No. 228 (1979), we considered whether the North Texas Commission (the "commission"), a private, nonprofit corporation chartered for the purpose of promoting the interests of the Dallas-Fort Worth metropolitan area, was a governmental body. Id. at 1. The commission's contract with the City of Fort Worth obligated the city to pay the commission $80,000 per year for three years. Id. The contract obligated the commission, among other things, to "[c]ontinue its current successful programs and implement such new and innovative programs as will further its corporate objectives and common City's interests and activities." Id. at 2. Noting this provision, this office stated that "[e]ven if all other parts of the contract were found to represent a strictly arms-length transaction, we believe that this provision places the various governmental bodies which have entered into the contract in the position of 'supporting' the operation of the Commission with public funds within the meaning of section 2(1)(F)." Id. Accordingly, the commission was determined to be a governmental body for purposes of the Act. Id.

In Open Records Decision No. 602 (1992), we addressed the status under the Act of the Dallas Museum of Art (the "DMA"). The DMA was a private, nonprofit corporation that had contracted with the City of Dallas to care for and preserve an art collection owned by the city and to maintain, operate, and manage an art museum. Id. at 1-2. The contract required the city to support the DMA by maintaining the museum building, paying for utility service, and providing funds for other costs of operating the museum. Id. at 2. We noted that an entity that receives public funds is a governmental body under the Act, unless the entity's relationship with the governmental body from which it receives funds imposes "a specific and definite obligation . . . to provide a measurable amount of service in exchange for a certain amount of money as would be expected in a typical arms-length contract for services between a vendor and purchaser." Id. at 4. We found that "the [City of Dallas] is receiving valuable services in exchange for its obligations, but, in our opinion, the very nature of the services the DMA provides to the [City of Dallas] cannot be known, specific, or measurable." Id. at 5. Thus, we concluded that the City of Dallas provided general support to the DMA facilities and operation, making the DMA a governmental body to the extent that it received the city's financial support. Id. Therefore, the DMA's records that related to programs supported by public funds were subject to the Act. Id.

We note that the precise manner of public funding is not the sole dispositive issue in determining whether a particular entity is subject to the Act. See Attorney General Opinion JM-821 at 3 (1987). Other aspects of a contract or relationship that involves the transfer of public funds between a private and a public entity must be considered in determining whether the private entity is a "governmental body" under the Act. Id. at 4. For example, a contract or relationship that involves public funds, and that indicates a common purpose or objective or that creates an agency-type relationship between a private entity and a public entity, will bring the private entity within the definition of a "governmental body" under section 552.003(1)(A)(xii) of the Government Code. Structuring a contract that involves public funds to provide a formula to compute a fixed amount of money for a fixed period of time will not automatically prevent a private entity from constituting a "governmental body" under section 552.003(1)(A)(xii). The overall nature of the relationship created by the contract is relevant in determining whether the private entity is so closely associated with the governmental body that the private entity falls within the Act. Id.

You state HASA is a Texas non-profit corporation that was formed "by a consortium of San Antonio hospitals and other healthcare providers in order to help hospitals and community health centers provide better care for people without medical coverage." You explain HASA has helped create "a system under which data can be sent to HASA for aggregation and reported to a medical provider." You further explain the contract at issue was financed entirely with funds received under a contract with the Texas Health and Human Services Commission ("HHSC") to develop local HIE systems. You state that under the contract with HHSC, HASA is contractually required to abide by all terms of the business plan, including adherence to measurable objectives. Accordingly, you argue HASA has contracted with HHSC to provide specific, measurable services in an arms-length transaction. Upon review, we disagree with your contention that the contract is a typical arms-length contract for services. HASA's Business and Operational Plan, which was approved by HHSC, shows that HASA may use the funds it receives from HHSC for "all reasonable expenditures" related to personnel, travel, direct costs, and capital equipment. Further, the submitted contract states that HHSC may suspend or terminate the grant if HASA fails to comply with the terms of the contract. Accordingly, based on our review, we find the contract establishes a "common purpose or objective or...creates an agency-type relationship" between the company and the board by requiring the company to perform services that would otherwise be provided by a governmental body. See Attorney General Opinion JM-821 at 3. We therefore conclude that HASA is a "governmental body" for purposes of section 552.003(1)(A)(xii) of the Government Code to the extent it is supported by public funds.

We note, however, that an organization is not necessarily a "governmental body" in its entirety. "The part, section, or portion of an organization, corporation, commission, committee, institution, or agency that spends or that is supported in whole or in part by public funds" is a governmental body. Gov't Code § 552.003(1)(A)(xii); see also ORD 602 (only the records of those portions of the Dallas Museum of Art that were directly supported by public funds are subject to the Act). The contract at issue is fully funded by state funds, which may be used for the general support of the HIE program. Thus, we find the information at issue is subject to the Act. Accordingly, this information must be released unless HASA demonstrates this information falls within an exception to public disclosure under the Act. Therefore, we will address the submitted arguments against disclosure of the requested 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 requested information relating to it should be withheld from disclosure. See Gov't Code § 552.305(d)(2)(B). As of the date of this letter, this office has not received comments from Axolotl, Browsersoft, Mirth, or NextGen, explaining why their information should not be released to the requestor. Thus, we have no basis to conclude that the release of any of the information at issue would implicate Axolotl's, Browsersoft's, Mirth's, or NextGen's interests. See id. § 552.110; 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, we conclude that HASA may not withhold any of the information on the basis of any interest Axolotl, Browsersoft, Mirth, or NextGen may have in the information. We will consider the arguments submitted by Cerner, iCA, Medicity, and Sandlot for their respective information.

We note portions of the information Sandlot and iCA seek to withhold were not submitted by HASA 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). Because this information was not submitted by HASA, this ruling does not address Sandlot's or iCA's arguments against its disclosure.

Cerner, Medicity, and Sandlot each claim that some of their information is excepted from disclosure under section 552.110 of the Government Code. 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. Gov't Code § 552.110(a), (b). Section 552.110(a) protects the proprietary interests of private parties by excepting from disclosure trade secrets obtained from a person and privileged or confidential by statute or judicial decision. Id. § 552.110(a). A "trade secret" has been defined as the following:

A trade secret may consist of 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) (citation omitted); 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. ⁽²⁾ See 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 exemption is made and no argument is submitted that rebuts the claim as a matter of law. ORD 552 at 2. 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. Open Records Decision No. 402 (1983).

Section 552.110(b), which 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.; ORD 661 at 5-6 (business enterprise must show by specific factual evidence that release of information would cause it substantial competitive harm).

Cerner, Medicity, and Sandlot each claim portions of their information constitute trade secrets. Upon review, we find HASA must withhold Medicity's customer information we have marked pursuant to section 552.110(a) of the Government Code. We note that Medicity has made the remaining customer information it seeks to withhold publicly available on its website. Because Medicity has published this information, it has failed to demonstrate this information is a trade secret. We also note pricing information pertaining to a particular contract with a governmental body is generally not a trade secret under section 552.110(a) 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. Furthermore, we conclude Medicity has failed to demonstrate any of its remaining information meets the definition of a trade secret. Cerner and Sandlot have failed to demonstrate that any of their information meets the definition of a trade secret. Additionally, none of these parties demonstrated the necessary factors to establish a trade secret claim for this information. Accordingly, HASA may not withhold any of Cerner's, Medicity's, or Sandlot's remaining information on this basis.

Cerner, Medicity, and Sandlot each contend some of their information is commercial or financial information, release of which would cause competitive harm. Upon review, we conclude Cerner and Sandlot have established that release of some of their information would cause them substantial competitive injury. Accordingly, HASA must withhold the information we have marked under section 552.110(b). However, we find that Cerner, Medicity, and Sandlot have not made the specific factual or evidentiary showings required by section 552.110(b) that release of any of their remaining information would cause the companies substantial competitive harm. See Open Records Decision Nos. 319 at 3 (1982) (statutory predecessor to section 552.110 generally not applicable to information relating to organization and personnel, market studies, professional references, qualifications and experience, and pricing), 175 at 4 (1977) (resumes cannot be said to fall within any exception to the Act). Additionally, we note the pricing information of a winning bidder of a government contract, such as Medicity, is generally not excepted under section 552.110(b). Open Records Decision No. 514 (1988) (public has interest in knowing prices charged by government contractors); see also ORD 319 at 3. 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). Moreover, we believe the public has a strong interest in the release of prices in government contract awards. See ORD 514. We therefore conclude HASA may not withhold any of Cerner's, Medicity's, or Sandlot's remaining information under section 552.110(b) of the Government Code.

We note portions of the submitted information are 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, HASA must withhold the information we have marked under section 552.110 of the Government Code. HASA must release the remaining information; however, any information 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,

Cynthia G. Tynan

Assistant Attorney General

Open Records Division

CGT/em

Ref: ID# 444637

Enc. Submitted documents

c: Requestor

(w/o enclosures)