September 14, 2012

Ms. Cynthia Villarreal-Reyna

Director - Office of Agency Counsel

Legal Section MC 110-1A

Texas Department of Insurance

P.O. Box 149104

Austin, Texas 78714-9104

OR2012-14661

Dear Ms. Villarreal-Reyna:

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# 463580 (TDI# 128489).

The Texas Department of Insurance (the "department") received a request for information related to two specified complaints filed with the department. ⁽¹⁾ You state you will release some of the requested information. You state some of the requested information will be withheld pursuant to the previous determination issued to the department in Open Records Letter No. 1999-1264 (1999) (information is confidential that the department represents to be work papers related to examination reports concerning a carrier that is not in liquidation or receivership). See Open Records Decision No. 640 at 4 (1996) (department must withhold any information obtained from audit "work papers" that are "pertinent to the accountant's examination of the financial statements of an insurer" under previous version of section 401.058 of the Insurance Code). You claim that some of the submitted information is excepted from disclosure under section 552.111 of the Government Code and privileged under rule 192.5 of the Texas Rules of Civil Procedure and rule 503 of the Texas Rules of Evidence. Additionally, you state release of this information may implicate the proprietary interests of Cypress Texas Lloyds Insurance ("CTL"). Accordingly, you have notified CTL of the request and of its right to submit arguments to this office as to why its 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 an attorney for CTL. We have considered the submitted arguments and reviewed the submitted information.

Initially, we understand CTL to assert a portion of the submitted information is not responsive to the request because it relates to an individual who was not insured by CTL. We note, however, the information at issue is related to one of the investigations specified in the request for information. Accordingly, we find this information to be responsive to the request for information. Thus, we will consider whether this information is excepted under the Act.

Next, we note, and you acknowledge, the submitted information consists of completed investigations that are subject to section 552.022(a)(1) of the Government Code. Section 552.022(a)(1) provides that a completed report, audit, evaluation, or investigation made of, for, or by a governmental body is public information and not excepted from required disclosure unless made confidential under the Act or other law. Gov't Code § 552.022(a)(1). Although you raise the deliberative process privilege and work product privilege in section 552.111 of the Government Code for a portion of the submitted information, this is a discretionary exception and does not make information confidential under the Act. See id. § 552.007; Open Records Decision Nos. 677 at 10 (2002) (attorney work product privilege under section 552.111 may be waived), 665 at 2 n.5 (2000) (discretionary exceptions generally); 663 at 5 (1999) (governmental body may waive section 552.111), 470 at 7 (1987) (governmental body may waive statutory predecessor to section 552.111 deliberative process). Therefore, the department may not withhold the information you have marked under section 552.111 and the deliberative process privilege. As no further exceptions are raised for this information, it must be released. However, the Texas Supreme Court has held the Texas Rules of Evidence and the Texas Rules of Civil Procedure are "other law" that make information confidential for purposes of section 552.022. See In re City of Georgetown, 53 S.W.3d 328, 336 (Tex. 2001). Therefore,  we will consider your assertion of the attorney-client privilege under Texas Rule of Evidence 503. We will also consider your work product arguments and CTL's arguments under Texas Rule of Civil Procedure 192.5 for the remaining information at issue.  Additionally, we will consider CTL's arguments under sections 552.101 and 552.110 of the Government Code as these sections make information confidential under the Act.

Texas Rule of Evidence 503(b)(1) provides:

A client has a privilege to refuse to disclose and to prevent any other person from disclosing confidential communications made for the purpose of facilitating the rendition of professional legal services to the client:

(A) between the client or a representative of the client and the client's lawyer or a representative of the lawyer;

(B) between the lawyer and the lawyer's representative;

(C) by the client or a representative of the client, or the client's lawyer or a representative of the lawyer, to a lawyer or a representative of a lawyer representing another party in a pending action and concerning a matter of common interest therein;

(D) between representatives of the client or between the client and a representative of the client; or

(E) among lawyers and their representatives representing the same client.

Tex. R. Evid. 503(b)(1). A communication is "confidential" if it is not intended to be disclosed to third persons other than those to whom disclosure is made in furtherance of the rendition of professional legal services to the client or those reasonably necessary for the transmission of the communication. Id. 503(a)(5).

Thus, in order to withhold attorney-client privileged information from disclosure under rule 503, a governmental body must: (1) show the document is a communication transmitted between privileged parties or reveals a confidential communication; (2) identify the parties involved in the communication; and (3) show the communication is confidential by explaining it was not intended to be disclosed to third persons and it was made in furtherance of the rendition of professional legal services to the client. Upon a demonstration of all three factors, the information is privileged and confidential under rule 503, provided the client has not waived the privilege or the document does not fall within the purview of the exceptions to the privilege enumerated in rule 503(d). See Pittsburgh Corning Corp. v. Caldwell, 861 S.W.2d 423, 426-27 (Tex. App.--Houston [14th Dist.] 1993, no writ).

You state the information at issue constitutes confidential communications between department staff and its attorneys. You also state the communications at issue were intended to be confidential, have remained confidential, and are related to the rendition of legal services. Accordingly, we conclude the department may withhold the information we have marked on the basis of the attorney-client privilege under Texas Rule of Evidence 503. ⁽²⁾ However, the remaining information at issue consists of a communication with a non-privileged party. Therefore, this non-privileged communication may not be withheld under Texas Rule of Evidence 503.

Section 552.101 of the Government Code excepts from disclosure "information considered to be confidential by law, either constitutional, statutory, or by judicial decision." Gov't Code § 552.101. This section encompasses information protected by other statutes. CTL asserts a portion of the submitted information is confidential under section 38.001 of the Insurance Code, which provides in part the following:

(b) The department may address a reasonable inquiry to an insurance company, including a Lloyd's plan or reciprocal or interinsurance exchange, or an agent or other holder of an authorization relating to:

(1) the person's business condition; or

(2) any matter connected with the person's transactions that the department considers necessary for the public good or for the proper discharge of the department's duties.

. . .

(d) A response made under this section that is otherwise privileged or confidential by law remains privileged or confidential until introduced into evidence at an administrative hearing or in a court.

Ins. Code § 38.001(b), (d). Section 38.001(d) does not itself make any information privileged or confidential. Rather, section 38.001(d) merely provides that information furnished to the department that is otherwise privileged or confidential remains privileged or confidential until introduced into evidence at an administrative hearing or in a court. In order for section 552.101 of the Government Code to apply to information requested under the Act, a statute must contain language expressly making certain information confidential. See Open Records Decision Nos. 658 at 4 (1998), 478 at 2 (1987), 465 at 4-5 (1987). Confidentiality cannot be implied from the structure of a statute or rule. See ORD 465 at 4-5. Thus, the department may not withhold any of the submitted information under section 552.101 of the Government Code on the basis of section 38.001 of the Insurance Code.

CTL argues some of its information is privileged under the attorney work product privilege found in Texas Rule of Civil Procedure 192.5. See City of Garland v. Dallas Morning News, 22 S.W.3d 351, 360 (Tex. 2000). Section 38.001(d) of the Insurance Code provides information furnished to the department pursuant to section 38.001 that is otherwise privileged or confidential remains privileged or confidential until introduced into evidence at an administrative hearing or in a court. Ins. Code § 38.001(d); see also id. § 38.001(b)(2) (department may address reasonable inquiry to any insurance company relating to any matter connected with person's transactions that department considers necessary for public good or for proper discharge of department's duties). CTL states it provided the submitted information to the department as a result of an inquiry made by the department to CTL under section 38.001. Pursuant to section 552.303 of the Government Code, we asked the department whether the information CTL submitted to the department as a result of the department inquiry, for which CTL claims the attorney work product privilege, was introduced into evidence at an administrative hearing or in a court. ⁽³⁾ See id. § 38.001(d). In response, you inform our office the information at issue was not introduced into evidence at an administrative hearing or in a court. Thus, we will address CTL's arguments that the information at issue is privileged under rule 192.5.

Rule 192.5 encompasses the attorney work product privilege. For purposes of section 552.022 of the Government Code, information is confidential under rule 192.5 only to the extent the information implicates the core work product aspect of the work product privilege. See Open Records Decision No. 677 at 9-10 (2002). Rule 192.5 defines core work product as the work product of an attorney or an attorney's representative, developed in anticipation of litigation or for trial, that contains the mental impressions, opinions, conclusions, or legal theories of the attorney or the attorney's representative. See Tex. R. Civ. P. 192.5(a), (b)(1). Accordingly, in order to withhold attorney core work product from disclosure under rule 192.5, a governmental body must demonstrate the material was (1) created for trial or in anticipation of litigation and (2) consists of the mental impressions, opinions, conclusions, or legal theories of an attorney or an attorney's representative. Id.

The first prong of the work product test, which requires a governmental body to show the information at issue was created in anticipation of litigation, has two parts. A governmental body must demonstrate (1) a reasonable person would have concluded from the totality of the circumstances surrounding the investigation that there was a substantial chance that litigation would ensue, and (2) the party resisting discovery believed in good faith that there was a substantial chance that litigation would ensue and conducted the investigation for the purpose of preparing for such litigation. See Nat'l Tank v. Brotherton, 851 S.W.2d 193, 207 (Tex. 1993). A "substantial chance" of litigation does not mean a statistical probability, but rather "that litigation is more than merely an abstract possibility or unwarranted fear." Id. at 204. The second part of the work product test requires the governmental body to show the materials at issue contain the mental impressions, opinions, conclusions, or legal theories of an attorney or an attorney's representative. See Tex. R. Civ. P. 192.5(b)(1). A document containing core work product information that meets both parts of the work product test is confidential under rule 192.5, provided the information does not fall within the scope of the exceptions to the privilege enumerated in rule 192.5(c). See Pittsburgh Corning Corp., 861 S.W.2d at 427.

CTL states portions of the submitted "Adjuster Activity Diary Notes" for claims 109856 and 116796 were created in expectation of litigation and should be withheld as attorney core work product under rule 192.5. Upon review, we find CTL has demonstrated that the information at issue, which we have marked, consists of mental impressions, opinions, conclusions, or legal theories of an attorney or an attorney's representative that were created for trial or in anticipation of litigation. Consequently, the information we have marked in claims 109856 and 116796 may be withheld pursuant to rule 192.5.

The department also claims portions of the remaining information are privileged under Texas Rule of Civil Procedure 192.5. You state the submitted handwritten notes are from a closed investigative enforcement case file. You also state the notes were prepared by a department enforcement attorney and reveal the attorney's mental processes, conclusions, and legal theories regarding the litigation file and possible resolution. Additionally, you claim the non-privileged communication you have marked constitutes core work product. Based on your representations and our review, we agree the information we have marked is protected core work product. Accordingly, the department may withhold the information we have marked under Texas Rule of Civil Procedure 192.5. However, we find you have failed to demonstrate the non-privileged communication at issue constitutes core work product. Consequently, the department may not withhold the non-privileged communication at issue under Texas Rule of Civil Procedure 192.5.

Next, CTL asserts some of its remaining submitted information is protected under common-law privacy. Section 552.101 of the Government Code also encompasses the common-law right of privacy, which protects information that is (1) highly intimate or embarrassing, such that its release would be highly objectionable to a reasonable person, and (2) not of legitimate concern to the public. See Indus. Found. v. Tex. Indus. Accident Bd., 540 S.W.2d 668 (Tex. 1976). To demonstrate the applicability of common-law privacy, both prongs of this test must be established. Id. at 681-82. The types of information considered intimate or embarrassing by the Texas Supreme Court in Industrial Foundation included information relating to sexual assault, pregnancy, mental or physical abuse in the workplace, illegitimate children, psychiatric treatment of mental disorders, attempted suicide, and injuries to sexual organs. See id. at 683. This office has found personal financial information not relating to a financial transaction between an individual and a governmental body is generally protected by common-law privacy. See Open Records Decision Nos. 600 (1992) (finding personal financial information to include choice of particular insurance carrier), 545 (1990) (deferred compensation information, participation in voluntary investment program, election of optional insurance coverage, mortgage payments, assets, bills, and credit history). Upon review, we find the information that identifies the insureds in the submitted information, including their names, addresses, and telephone numbers, is highly intimate or embarrassing and is not of legitimate public concern. Therefore, the department must withhold the submitted information revealing the identities of insureds, a representative sample of which we have marked, under section 552.101 in conjunction with common-law privacy. However, we find no portion of the remaining information to be highly intimate or embarrassing and of no legitimate public concern. Accordingly, none of the remaining information at issue may be withheld under section 552.101 in conjunction with common-law privacy.

Section 552.101 of the Government Code also encompasses constitutional privacy, which consists of two interrelated types of privacy: (1) the right to make certain kinds of decisions independently and (2) an individual's interest in avoiding disclosure of personal matters. See ORD 455 at 4. The first type of constitutional privacy protects an individual's autonomy within "zones of privacy," which include matters related to marriage, procreation, contraception, family relationships, and child rearing and education. Id. The second type of constitutional privacy balances an individual's privacy interests against the public's need to know information of public concern. Id. The scope of information protected by constitutional privacy is narrower than under common-law privacy; the information must concern the "most intimate aspects of human affairs." Id. at 5 (citing Ramie v. City of Hedwig Village, Texas, 765 F.2d 490 (5th Cir. 1985)). We find CTL has not demonstrated how any portion of the remaining information at issue falls within the constitutional zones of privacy or implicates an individual's privacy interests for purposes of constitutional privacy. We therefore conclude the department may not withhold any of the remaining information at issue under section 552.101 of the Government Code in conjunction with constitutional privacy.

CTL claims section 552.110 of the Government Code for some of its submitted information. Section 552.110 protects the proprietary interests of private parties by excepting from disclosure two types of information: trade secrets and commercial or financial information, the release of which would cause a third party substantial competitive harm. See Gov't Code § 552.110(a)-(b). Section 552.110(a) excepts from disclosure "[a] trade secret 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. Hyde Corp. v. Huffines, 314 S.W.2d 763 (Tex. 1958); see also Open Records Decision No. 552 at 2 (1990). Section 757 provides that a trade secret is

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; see also Huffines, 314 S.W.2d at 776. 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. ⁽⁴⁾ Restatement of Torts § 757 cmt. b (1939). This office must accept a private person's claim for exception as valid under section 552.110(a) if that person establishes a prima facie case for exception, and no argument is submitted that rebuts the claim as a matter of law. ORD 552 at 5-6. However, we cannot conclude that section 552.110(a) applies 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. See Open Records Decision No. 402 (1983).

After reviewing the submitted arguments and the information at issue, we conclude CTL has demonstrated release of some of the remaining information at issue would cause the company substantial competitive injury. Accordingly, the department must withhold the information we have marked under section 552.110(b). ⁽⁵⁾

Section 552.136(b) of the Government Code states that "[n]otwithstanding any other provision of [the Act], a credit card, debit card, charge card, or access device number that is collected, assembled, or maintained by or for a governmental body is confidential." ⁽⁶⁾ Gov't Code § 552.136(b); see id. § 552.136(a) (defining "access device"). Therefore, the department must withhold the credit card numbers, bank account numbers, and insurance policy numbers, a representative sample of which we have marked, pursuant to section 552.136 of the Government Code.

The remaining information includes e-mail addresses subject to section 552.137 of the Government Code, which excepts from disclosure "an e-mail address of a member of the public that is provided for the purpose of communicating electronically with a governmental body," unless the member of the public consents to its release or the e-mail address is of a type specifically excluded by subsection (c). See id. § 552.137(a)-(c). The e-mail addresses at issue are not specifically excluded by section 552.137(c). As such, these e-mail addresses, a representative sample of which we have marked, must be withheld under section 552.137 of the Government Code, unless the owners of the addresses have affirmatively consented to their release. ⁽⁷⁾

Next, we note the requestor may be the authorized representative for some of the insureds whose information is at issue. We further note common-law privacy and section 552.136 protect personal privacy. If the requestor is the authorized representative of the individuals at issue, the requestor would have a right of access under section 552.023 of the Government Code to their private information. See id. § 552.023(a) (person or a person's authorized representative has special right of access, beyond the right of general public, to information held by a governmental body that relates to person and is protected from public disclosure by laws intended to protect person's privacy interests); ORD 481 at 4. Accordingly, if the requestor is acting as the individuals' authorized representative, the department may not withhold from this requestor information that would otherwise be withheld under common-law privacy or section 552.136 to protect these individuals' privacy. However, if the requestor is not acting as the individuals' authorized representative, the department must withhold the information pertaining to these individuals we have marked under common-law privacy and section 552.136. In either event, the department must withhold the information pertaining to the other individuals we marked under common-law privacy and section 552.136.

We note 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 may withhold the information we have marked under rule 503 of the Texas Rules of Evidence, as well as the information we have marked under rule 192.5 of the Texas Rules of Civil Procedure. The department must withhold the identifying information of the insureds, a representative sample of which we have marked, under section 552.101 of the Government Code in conjunction with common-law privacy. The department must withhold the information we have marked under section 552.110(b) of the Government Code. The department must withhold the credit card numbers, bank account numbers, and insurance policy numbers, a representative sample of which we have marked, pursuant to section 552.136 of the Government Code. The department must withhold the submitted personal e-mail addresses, a representative sample of which we have marked, under section 552.137 of the Government Code, unless the owners of these addresses have affirmatively consented to their release. However, to the extent the requestor is the authorized representative of the individuals whose information we have marked under section 552.101 of the Government Code in conjunction with common-law privacy and section 552.136 of the Government Code, the department must release this information pursuant to section 552.023 of the Government Code. The remaining information must be released; however, any information that is subject to copyright law 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,

Vanessa Burgess

Assistant Attorney General

Open Records Division

VB/dls

Ref: ID# 463580

Enc. Submitted documents

c: Requestor

(w/o enclosures)

Cypress Texas Lloyds Insurance

c/o Mr. Bruce McCandless III

Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C.

106 East Sixth Street, Suite 300

Austin, Texas 78701

(Third party w/o enclosures)

Footnotes

1. We note that the department sought and received clarification of the information requested. See Gov't Code § 552.222 (providing that if request for information is unclear, governmental body may ask requestor to clarify request); see also City of Dallas v. Abbott, 304 S.W.3d 380, 387 (Tex. 2010) (holding that when a governmental entity, acting in good faith, requests clarification or narrowing of an unclear or over-broad request for public information, the ten-day period to request an attorney general ruling is measured from the date the request is clarified or narrowed).

2. As our ruling is dispositive for this information, we need not address your arguments under rule 192.5 of the Texas Rules of Civil Procedure for this information.

3. See Gov't Code § 552.303(c)-(d) (if attorney general determines information in addition to that required by section 552.301 is necessary to render decision, written notice of that fact shall be given to governmental body and requestor, and governmental body shall submit necessary additional information to attorney general not later than seventh calendar day after date of receipt of notice).

4. The following are the six factors 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; see also Open Records Decision Nos. 319 at 2 (1982), 306 at 2 (1982), 255 at 2 (1980).

5. As our ruling is dispositive, we need not address CLT's remaining arguments against disclosure of this information.

6. The Office of the Attorney General will raise mandatory exceptions on behalf of a governmental body, but ordinarily will not raise other exceptions. See Open Records Decision Nos. 481 (1987), 480 (1987), 470 (1987).

7. We note this office issued Open Records Decision No. 684 (2009), a previous determination to all governmental bodies authorizing them to withhold certain categories of information, including an e-mail address of a member of the public under section 552.137 of the Government Code, without the necessity of requesting an attorney general decision.

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