Cornyn Open Records Letter Ruling OR99-2154
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John Cornyn
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July 30, 1999

Mr. John Steiner
Division Chief
City of Austin
P.O. Box 1546
Austin, Texas 78767-1546

OR99-2154


Dear Mr. Steiner:

You ask whether certain information is subject to required public disclosure under chapter 552 of the Government Code. Your request was assigned ID# 126137.

The Austin Bergstrom International Airport (the "airport") received a request for a copy of the winning proposal in response to the airport's request for proposal on its Automated Teller Machine Concession. You have released some of the requested information. You contend that section 552.110 of the Government Code excepts the remaining requested information from public disclosure because NationsBank has indicated that it constitutes a trade secret or proprietary information.

Since the property rights of a third party may be implicated by the release of the requested information, this office notified NationsBank of the request for information. See Gov't Code 552.305 (permitting interested third party to submit to attorney general reasons why requested information should not be released); Open Records Decision No. 542 (1990) (determining that statutory predecessor to Gov't Code 552.305 permits governmental body to rely on interested third party to raise and explain applicability of exception in the Public Information Act in certain circumstances).

NationsBank argues that portions of its proposal are excepted by section 552.110. Section 552.110 protects the property interests of third parties by excepting from disclosure two types of information: (1) trade secrets, and (2) commercial or financial information obtained from a person and privileged or confidential by statute or judicial decision. In Open Records Decision No. 639 (1996), this office announced that it would follow the federal courts' interpretation of exemption 4 to the federal Freedom of Information Act when applying the second prong of section 552.110 for commercial and financial information. Thus, this office relied on National Parks & Conservation Association v. Morton, 498 F.2d 765 (D.C. Cir. 1974), as a judicial decision and applied the standard set out in National Parks to determine whether information is excepted from public disclosure under the commercial and financial prong of section 552.110. However, the Third Court of Appeals recently held that National Parks is not a judicial decision within the meaning of section 552.110. Birnbaum v. Alliance of Am. Insurers, 1999 WL 314976 (Tex. App.--Austin May 20, 1999, no pet. h.). Because NationsBank has not cited to a statute or judicial decision that makes the commercial or financial information privileged or confidential, you may not withhold the requested information under the commercial or financial information prong of section 552.110.

The Texas Supreme Court has adopted the definition of "trade secret" from the Restatement of Torts, section 757, 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 a single or ephemeral event 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 Hyde Corp. v. Huffines, 314 S.W.2d 763, 776 (Tex.), cert. denied, 358 U.S. 898 (1958). If a governmental body takes no position with regard to the application of the "trade secrets" branch of section 552.110 to requested information, we 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 one submits an argument that rebuts the claim as a matter of law. Open Records Decision No. 552 at 5 (1990). Six factors determine whether information will be accorded trade secret status: "(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. 541 at 6 (1990), 319 at 2 (1982), 306 at 2 (1982), 255 at 2 (1980).

After reviewing NationsBank's arguments, we conclude that only a small portion of the information that NationsBank has marked is a trade secret. We have marked the information you must withhold under section 552.110.

NationsBank also asserts that section 552.104 excepts the requested information from public disclosure. Section 552.104, which excepts from public disclosure "information which, if released, would give advantage to competitors or bidders," protects the interests of governmental bodies, not third parties. Open Records Decision No. 592 (1991). Because the airport does not raise section 552.104, this section is not applicable tot he requested information. Id. (section 552.104 may be waived by governmental body). Except for the information we have marked, you must release the requested information.

We are resolving this matter with an informal letter ruling rather than with a published open records decision. This ruling is limited to the particular records at issue under the facts presented to us in this request and should not be relied upon as a previous determination regarding any other records. If you have questions about this ruling, please contact our office.

Sincerely,

Yen-Ha Le
Assistant Attorney General
Open Records Division

YHL/nc

Ref: ID# 126137

Encl.: Marked documents

cc: Mr. C. Marvin Rickabaugh
President, Downtown Region
Frost National Bank
P.O. Box 1727
Austin, Texas 78767-1727
(w/o enclosures)

Mr. Michael F. Hord
Associate General Counsel
Bank of America
Legal Department
901 Main Street 68th Floor
Dallas, Texas 75202-3714
(w/o enclosures)


 

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