|Office of the Attorney General - State of Texas
January 19, 2000
Mr. W. Kent McIlyar
Dear Mr. McIlyar:
You ask whether certain information is subject to required public disclosure under chapter 552 of the Government Code. Your request was assigned ID#130765.
The City of Plano (the "city") received a request on October 4, 1999 for all written proposals submitted to the city in conjunction with its JD Edwards OneWorld Project. You state that as of October 4, 1999, the city had received proposals from eleven private vendors in response to the proposed project. You request our decision whether the requested proposals are excepted from disclosure under sections 552.104 and 552.110 of the Government Code. You have provided the requested proposals for our review.
Section 552.301 of the Government Code provides that a governmental body must ask the attorney general for a decision as to whether requested documents must be disclosed not later than the tenth business day after the date of receiving the written request. The city received the requestor's written request for information on October 12, 1999. This office received your request for a decision on October 27, 1999, more than ten business days after the requestor's written request. Therefore, we conclude that the city failed to meet its ten-day deadline for requesting a decision from this office.
When a governmental body fails to request a decision within ten business days of receiving a request for information, the information at issue is presumed public. Gov't Code § 552.302; Hancock v. State Bd. of Ins., 797 S.W.2d 379 (Tex. App.--Austin 1990, no writ); City of Houston v. Houston Chronicle Publ'g Co., 673 S.W.2d 316, 323 (Tex. App.--Houston [1st Dist.] 1984, no writ); Open Records Decision No. 319 (1982). The governmental body must show a compelling interest to withhold the information to overcome this presumption. See id. Normally, a compelling interest is that some other source of law makes the information confidential or that third party interests are at stake. Open Records Decision No. 150 at 2 (1977). Because section 552.104 protects only the interests of governmental bodies, its applicability is not a compelling interest that overcomes the presumption of openness. See Open Records Decision No. 592 at 8 (1991). Therefore, we do not address your claim under section 552.104 of the Government Code. However, the applicability of section 552.110 presents a compelling reason to overcome the presumption of openness. Therefore, we will address your argument under section 552.110 of the Government Code.
In compliance with section 552.305(d) of the Government Code, you have made a good faith effort to notify in writing each of the companies that submitted a proposal. Sirius Computer Solutions, Inc. ("Sirius") responded to your notice by asserting that its proposal contains confidential and proprietary information which should be excepted from disclosure under section 552.110. However, the remaining companies have not submitted arguments for withholding or releasing the information as required under 552.305(d). Therefore, we have no basis to conclude that the remaining companies' proposals are excepted from disclosure by section 552.110. See Open Records Decision Nos. 639 at 4 (1996) (to prevent disclosure of commercial or financial information, party must show by specific factual or evidentiary material, not conclusory or generalized allegations, that it actually faces competition and that substantial competitive injury would likely result from disclosure), 552 at 5 (1990) (party must establish prima facie case that information is trade secret), 542 at 3 (1990).
Sirius argues that the "Methodology Information" and "Employee Information" in its September 15, 1999 proposal are excepted from disclosure under section 552.110 of the Government Code. Section 552.110 protects the property interests of private persons by excepting from disclosure two types of information: (1) trade secrets obtained from a person and privileged or confidential by statute or judicial decision, and (2) commercial 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. Sirius has made arguments against disclosure under both branches of section 552.110.
First, we address whether the Employee Information is excepted from disclosure under the commercial or financial branch of section 552.110. The commercial or financial branch of section 552.110 requires the business enterprise whose information is at issue to make a specific factual or evidentiary showing, not conclusory or generalized allegations, that substantial competitive injury would result from disclosure. See Open Records Decision No. 661 (1999). We have reviewed Sirius' arguments and the Employee Information at issue. In our opinion, Sirius has not shown, based on specific factual evidence, that disclosure of the Employee Information would cause "substantial competitive harm" to Sirius. Accordingly, the Employee Information at issue may not be withheld under section 552.110.
Next, we address whether the Methodology Information is excepted from disclosure under the trade secret branch of section 552.110. 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.), cert. denied, 358 U.S. 898 (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 (1939). 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) Id. This office has held that if a governmental body takes no position with regard to the application of the trade secret branch of section 552.110 to requested information, we must accept a private person's claim for exception as valid under that branch if that person establishes a prima facie case for exception and no argument is submitted that rebuts the claim as a matter of law. Open Records Decision No. 552 at 5-6 (1990).
We have reviewed Sirius' arguments and conclude that Sirius has made a prima facie showing that the Methodology Information is a trade secret for purposes of section 552.110. We have marked the information that is excepted as a trade secret under section 552.110, and therefore, must be withheld from disclosure. The city must release the remaining information to the requestor.
This letter ruling is limited to the particular records 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 records or any other circumstances.
This ruling triggers important deadlines regarding the rights and responsibilities of the governmental body and of the requestor. For example, governmental bodies are prohibited from asking the attorney general to reconsider this ruling. Gov't Code § 552.301(f). If the governmental body wants to challenge this ruling, the governmental body must appeal by filing suit in Travis County within 30 calendar days. Id. § 552.324(b). In order to get the full benefit of such an appeal, the governmental body must file suit within 10 calendar days. Id. § 552.353(b)(3), (c). If the governmental body does not appeal this ruling and the governmental body does not comply with it, then both the requestor and the attorney general have the right to file suit against the governmental body to enforce this ruling. Id. § 552.321(a).
If this ruling requires the governmental body to release all or part of the requested information, the governmental body is responsible for taking the next step. Based on the statute, the attorney general expects that, within 10 calendar days of this ruling, the governmental body will do one of the following three things: 1) release the public records; 2) notify the requestor of the exact day, time, and place that copies of the records will be provided or that the records can be inspected; or 3) notify the requestor of the governmental body's intent to challenge this letter ruling in court. If the governmental body fails to do one of these three things within 10 calendar days of this ruling, then the requestor should report that failure to the attorney general's Open Government Hotline, toll free, at 877/673-6839. The requestor may also file a complaint with the district or county attorney. Id. § 552.3215(e).
If this ruling requires or permits the governmental body to withhold all or some of the requested information, the requestor can appeal that decision by suing the governmental body. Id. § 552.321(a); Texas Dep't of Public Safety v. Gilbreath, 842 S.W.2d 408, 411 (Tex. App.-Austin 1992, no writ).
If the governmental body, the requestor, or any other person has questions or comments about this ruling, they may contact our office. Although there is no statutory deadline for contacting us, the attorney general prefers to receive any comments within 10 calendar days of the date of this ruling.
Kay H. Hastings
Encl. Submitted documents
cc: Mr. Nick Galuzevxki
Steven A Elder
William H White
Larrry G Nenstiel
Jeff W Benton
George M Kunkel
Jae H Kim
BrightStar Information Technology Group Inc
1. The six factors that the Restatement gives as indicia of whether information constitutes a trade secret are: "(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 (1939); see also Open Records Decision Nos. 319 at 2 (1982), 306 at 2 (1982), 255 at 2 (1980).
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