February 29, 2012

Ms. Neera Chatterjee

University of Texas System

Office of General Counsel

201 West Seventh Street

Austin, Texas 78701-2902

OR2012-03106

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# 447700 (OGC# 141198).

The University of Texas System (the "system") received a request for the system's 2006 contract for pharmacy benefit management services and any subsequent amendments. Although you take no position as to whether the submitted information is excepted under the Act, you state release of the submitted information may implicate the proprietary interests of Medco Health Solutions, Inc. ("Medco"). Accordingly, you state, and provide documentation showing, you notified Medco of the request for information 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); see also Open Records Decision No. 542 (1990) (statutory predecessor to section 552.305 permits governmental body to rely on interested third party to raise and explain applicability of exception in the Act in certain circumstances). We have received comments from Medco. We have reviewed the submitted information and the submitted arguments.

Initially, you state most of the submitted information was the subject of a previous request for information, as a result of which this office issued Open Records Letter No. 2010-01413 (2010). In that ruling, we determined the system must withhold portions of the information at issue under section 552.110 of the Government Code, and must release the remaining information at issue in accordance with copyright law. In response to our ruling, Medco filed a lawsuit styled Medco Health Solutions, Inc. v. Greg Abbott, Cause No. D-1-GN-10-000536 98th Dist. Ct., Travis County, Tex., challenging the ruling with respect to specific portions of the information ordered released. Accordingly, we will allow the trial court to determine whether those specific portions of the information at issue in the pending lawsuit must be withheld from the public. The remaining information the subject of Open Records Letter No. 2010-01413 includes information that was previously ordered withheld, as well as information the release of which Medco did not and does not challenge. With respect to this remaining information not at issue in the pending litigation, we have no indication there has been any change in the law, facts, or circumstances on which the previous ruling was based. Accordingly, for the submitted information that is the subject of Open Records Letter No. 2010-01413 and is not at issue in the pending lawsuit, we conclude the system must rely on Open Records Letter No. 2010-01413 as a previous determination and withhold or release the identical information in accordance with that ruling. See Open Records Decision No. 673 (2001) (so long as law, facts, and circumstances on which prior ruling was based have not changed, first type of previous determination exists where requested information is precisely same information as was addressed in prior attorney general ruling, ruling is addressed to same governmental body, and ruling concludes that information is or is not excepted from disclosure).

We now turn to Medco's arguments against release of the submitted information not at issue in Open Records Letter No. 2010-01413. Medco argues its information was submitted with the expectation that the information would be treated as confidential and would not be divulged to competitors or to the public. 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 information falls within an exception to disclosure, it must be released, notwithstanding any expectations or agreement specifying otherwise.

Next, Medco states portions of the information at issue are 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. 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, 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 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 Hyde Corp. v. Huffines, 314 S.W.2d 776 (Tex. 1958). 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). 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 Open Records Decision No. 552 at 5 (1990). 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). We note pricing information pertaining to a particular 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." Restatement of Torts § 757 cmt. b (1939); see also Huffines, 314 S.W.2d at 776; Open Records Decision Nos. 255 (1980), 232 (1979), 217 (1978).

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 at 5 (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).

Medco asserts portions of the information at issue constitute trade secrets under section 552.110(a) of the Government Code. Upon review, we conclude Medco has failed to establish a prima facie case that any portion of the information at issue meets the definition of a trade secret. We further find Medco has not demonstrated the necessary factors to establish a trade secret claim for its remaining information. See ORD 402. Therefore, none of Medco's remaining information may be withheld under section 552.110(a).

Medco further argues portions of the information at issue consist of commercial information the release of which would cause substantial competitive harm under section 552.110(b) of the Government Code. Upon review, we find Medco has made only conclusory allegations that the release of any of the information at issue would result in substantial harm to its competitive position. 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), 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). Furthermore, we note the contract at issue was awarded to Medco. This office considers the prices charged in government contract awards to be a matter of strong public interest; thus, the pricing information of a winning bidder 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). Further, 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). Accordingly, none of the information at issue may be withheld under section 552.110(b).

In summary, we decline to render a decision regarding the specific portions of the information at issue in the pending lawsuit, and will allow the trial court to determine the public availability of that information. With respect to the remaining information the subject of Open Records Letter No. 2010-01413, including both the information that was previously ordered withheld and the information the release of which Medco did not and does not challenge, the system must rely on Open Records Letter No. 2010-01413 as a previous determination and withhold or release the identical information in accordance with that ruling. The remaining submitted 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,

Claire V. Morris Sloan

Assistant Attorney General

Open Records Division

CVMS/eb

Ref: ID# 447700

Enc. Submitted documents

c: Requestor

(w/o enclosures)

Mr. Richard L. Josephson

Baker Botts LLP

One Shell Plaza

910 Louisiana

Houston, Texas 77002-4995

(w/o enclosures)

Ms. Jill Stearns

National Account Executive

Medco Health Solutions

Northpoint Center, Building 1

6836 Austin Center Boulevard, Suite 165

Austin, Texas 78731

(w/o enclosures)

Footnotes

1. 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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