December 19, 2012

Ms. Judith N. Benton

Assistant City Attorney

City of Waco

P.O. Box 2570

Waco, Texas 76702-2570

OR2012-20472

Dear Ms. Benton:

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# 474349 (Waco Reference #LGL-12-1662).

The City of Waco (the "city") received a request for the following information pertaining to a specified request for proposals for health care services: (1) winning proposals; (2) current utilization data; (3) Administrative Services Only Agreements and amendments; and (4) a list of names and dosages of the one hundred most used drugs. You state the city has released some of the requested information. Although you take no position as to whether the submitted information is excepted under the Act, you state release of this information may implicate the proprietary interests of third parties. Accordingly, you state, and provide documentation showing, you notified Blue Cross Blue Shield ("BCBS"), Prudential Insurance Company of America ("Prudential"), QCD of America ("QCD"), and Superior Vision Services, Inc. ("Superior") the request for information and of their 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 BCBS. We have considered the submitted arguments and reviewed the submitted information.

Initially, we note the portions of BCBS's proposal pertaining to pharmacy benefit management services were the subject of a previous request, as a result of which this office issued Open Records Letter No. 2010-13609 (2010). In that ruling, we determined the city must withhold certain portions of Humana's and Caremark's information under section 552.110 of the Government Code and withhold certain information under section 552.136 of the Government Code but must release the remaining information, including BCBS's information in accordance with copyright law. We note in subsequent litigation involving Open Records Letter No. 2010-13609, Health Care Service Corporation v. Abbott, No. D-1-GN-10-003364 (53rd Dist. Ct., Travis County, Tex.), the court issued an Agreed Final Judgment pertaining to BCBS's pharmacy benefit manage services information. Thus, the city must continue to rely on the Agreed Final Judgment to release or withhold the information pertaining to the pharmacy benefit management services portion of BCBS's proposal. However, we will consider BCBS's remaining information and Prudential's, QCD's, and Superior's information, as it was not previously ruled upon.

Next, we note 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 Prudential, QCD, or Superior explaining why their information should not be released. Therefore, we have no basis to conclude Prudential, QCD, or Superior have a protected proprietary interest in their submitted information. 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, the city may not withhold any of the information at issue on the basis of any proprietary interest Prudential, QCD, or Superior may have in it.

BCBS claims some of its remaining information is excepted under section 552.110 of the Government Code, which 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. See Hyde Corp. v. Huffines, 314 S.W.2d 763 (Tex. 1957); see also ORD 552. 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 (1939); 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. ⁽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 ORD 552 at 5. 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. See 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.; see also ORD 661 at 5-6 (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).

Having considered BCBS's arguments under section 552.110(a), we determine BCBS has failed to demonstrate that any portion of its remaining information meets the definition of a trade secret, nor has it demonstrated the necessary factors to establish a trade secret claim for this information. 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 (1939); Huffines, 314 S.W.2d at 776; Open Records Decision Nos. 319 at 3 (1982), 306 at 3 (1982). Accordingly, the city may not withhold any of BSBC's remaining information on the basis of section 552.110(a) of the Government Code.

We also find BCBS has failed to provide specific factual evidence demonstrating that release of any of its remaining information would result in substantial competitive harm to BCBS's 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, qualifications, and pricing are not ordinarily excepted from disclosure under statutory predecessor to section 552.110). Furthermore, we note the pricing information of a winning bidder, such as BCBS, 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 Freedom of Information Act Guide & Privacy Act Overview, 219 (2000) (federal cases applying analogous Freedom of Information Act reasoning that disclosure of prices charged government is a cost of doing business with government). Accordingly, the city may not withhold any of BCBS's remaining information pursuant to section 552.110(b) of the Government Code.

We note some of the materials at issue 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. As no further arguments are raised, the submitted information must be released, but any information protected by copyright only may be released in accordance with copyright law.

In summary, with regard to the information in BCBS's proposal that was at issue in Open Records Letter No. 2010-13609, the city must continue to rely on the Agreed Final Judgement to release or withhold this information. The remaining information must be released, but any information subject to 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,

Jennifer Luttrall

Assistant Attorney General

Open Records Division

JL/som

Ref: ID# 474349

Enc. Submitted documents

c: Requestor

(w/o enclosures)

Ms. Catherine Y. Livingston

Counsel for Blue Cross Blue Shield of Texas

GreenbergTraurig

300 West 6^th Street, Suite 2050

Austin, Texas 78701

(w/o enclosures)

Ms. Joanna Freeman

Vice President, Finance

Superior Vision Services, Inc.

1111 White Rock Road, Suite 150

Rancho Cordova, California 95670

(w/o enclosures)

Mr. Collin Brown

Business Development Executive

QCD of America

12001 North Central Expressway

Dallas, Texas 75243

(w/o enclosures)

Mr. Stan Eiger

Vice President

Prudential Insurance Company of America

751 Broad Street

Newark, New Jersey 07102

(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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