March 28, 2012

Ms. Sarah W. Langlois

Ogden, Gibson, Broocks, Longoria & Hall, L.L.P.

1900 Pennzoil South Tower

711 Louisiana

Houston, Texas 77002

OR2012-04558

Dear Ms. Langlois:

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# 449143.

The Harris County Department of Education (the "department"), which you represent, received a request for the RFP response of Insource Technology Corporation ("Insource") for RFP 11-030DG. Although you raise no exceptions to disclosure of the submitted information, you believe release of the submitted information may implicate the proprietary interests of Insource. Accordingly, you provide documentation showing you have notified Insource of the request and of its right to submit arguments to this office. 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 an attorney for Insource. We have considered the submitted arguments and reviewed the submitted information.

Insource raises section 552.101 of the Government Code for some of its information. Section 552.101 excepts from disclosure "information considered to be confidential by law, either constitutional, statutory, or by judicial decision." Gov't Code § 552.101. However, Insource has not pointed us to any statutory confidentiality provision, nor are we aware of any, that would make any of the submitted information confidential for purposes of section 552.101. See, e.g., Open Records Decision Nos. 611 at 1 (1992) (common-law privacy), 600 at 4 (1992) (constitutional privacy), 478 at 2 (1987) (statutory confidentiality). In addition, we note this office has concluded section 552.101 does not encompass other exceptions found in the Act, such as section 552.110 of the Government Code. Therefore, the department may not withhold any of the submitted information under section 552.101 of the Government Code.

Insource asserts portions of the submitted information is protected by 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. See 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 at 5 (1990). 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); see also Huffines, 314 S.W.2d at 776; Open Records Decision Nos. 255 (1980), 232 (1979), 217 (1978). There are six factors to be assessed in determining whether information qualifies as a trade secret:

(1) the extent to which the information is known outside of [the company's] business;

(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 to [its] competitors;

(5) the amount of effort or money expended by [the company] in developing the information; and

(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 ORD 232. 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. See ORD 552 at 5. However, we cannot conclude 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) 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. § 552.110(b); see also ORD 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).

Upon review, we find Insource has made a prima facie case that some of its customer information constitutes trade secret information for purposes of section 552.110(a). Accordingly, the department must withhold the information we have marked in Insource's proposal under section 552.110(a). However, because the remaining customer information is publicly available on Insource's website, we find Insource has not demonstrated the remaining information it seeks to withhold constitutes trade secrets for purposes of section 552.110(a). See ORD 402 (section 552.110(a) does not apply unless information meets definition of trade secret and necessary factors have been demonstrated to establish trade secret claim). 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 business" rather than "a process or device for continuous use in the operation of the business. See Restatement of Torts § 757 cmt. b; Huffines, 314 S.W.2d at 776, ORD 319 at 3 (information relating to organization and personnel, professional references, market studies, qualifications, and pricing are ordinarily not excepted from disclosure under statutory predecessor to section 552.110). Thus, the department may not withhold any of the remaining information under section 552.110(a) of the Government Code.

Insource also claims portions of the remaining information constitutes commercial information that, if release, would cause the company substantial competitive harm. Upon review, we find Insource has established that the information we have marked constitutes commercial or financial information, the release of which would cause the company substantial competitive harm. Thus, the department must withhold the information we have marked under section 552.110(b). However, we find Insource has made only conclusory allegations that release of its remaining information would result in substantial damage to the company's competitive position. We note the pricing information of a winning bidder, such as Insource, is generally not excepted from disclosure 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 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). Thus, Insource has not made the specific factual or evidentiary showing required by section 552.110(b) that substantial competitive injury would result from the release of any of the remaining information. See ORD 661 at 5-6, 509 at 5. Accordingly, the department may not withhold any of the remaining information under section 552.110(b) of the Government Code.

In summary, the department must withhold the information we have marked under section 552.110 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,

Jonathan Miles

Assistant Attorney General

Open Records Division

JM/som

Ref: ID# 449143

Enc. Submitted documents

c: Requestor

(w/o enclosures)

c: Mr. Steve Miller

Vice President

InSource

450 Gears Road, Suite 600

Houston, Texas 77067

(w/o enclosures)

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