|Office of the Attorney General - State of Texas
May 16, 2000
Ms. Ann Dillon
Dear Ms. Dillon:
You ask whether certain information is subject to required public disclosure under chapter 552 of the Government Code. Your request was assigned ID# 135223.
The General Services Commission ("GSC") received a request for copies of offers submitted in response to Request for Offer #303-0-0254 for services relating to the State of Texas Electronic Commerce Store. You state that without taking a position, GSC requests a ruling from this office regarding the disclosure of the requested information.
Specifically, the requestor asks for the offers submitted by Bank of America, Deloitte Consulting, KPMG/Ariba, KPMG/Intellisys, Phoenix Maximus and SAP Public Sector and Education, Inc. You have provided us the offers responsive to the request and you state that the offers submitted by Bank of America, Deloitte Consulting, KPMG/Ariba, and KPMG/Intellisys are marked "Confidential" or "Proprietary" by the vendors. Additionally the offer submitted by SAP Public Sector and Education, Inc. has several sections marked "Copyright." Further, you state that the rest of the information had no restrictions and has been released to the requestor. As you have not provided us the offer submitted by Phoenix Maximus for review, we assume that it has been released to the requestor.
Since the property and privacy rights of third parties may be implicated by the release of the requested information, you inform us that you notified those parties whose information is responsive to the request. 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 Public Information Act in certain circumstances). Section 552.305(d)(1) requires that a governmental body that requests an attorney general decision under section 552.301 must make a good faith attempt to notify third parties of the request for information in writing not later than the 10th business day after the date the governmental body receives the request for the information. Bank of America, Deloitte Consulting and SAP Public Sector and Education, Inc. responded to the notification by submitting their arguments against disclosure of their respective information to this office. Gov't Code §552.305(b).
The remaining companies, KPMG/Ariba, and KPMG/Intellisys, whose information is also responsive to this request did not submit objections to the release of their respective information; therefore, we have no basis to conclude that these companies' information is excepted from disclosure. See Gov't Code § 552.110(b) (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); Open Records Decision Nos. 552 at 5 (1990) (party must establish prima facie case that information is trade secret), 542 at 3 (1990). The offer information submitted by KPMG/Ariba, and KPMG/Intellisys must, therefore, be released to the requestor.
Section 552.110 of the Government Code protects the property interests of private parties by excepting from disclosure two types of information: (1) trade secrets, 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.
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. [Emphasis added.]
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).(1)
Section 552.110(b) excepts from required public disclosure "[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." An entity will not meet its burden under section 552.110(b) by a mere conclusory assertion of a possibility of commercial harm. See generally National Parks & Conservation Ass'n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974). The governmental body or interested third party raising section 552.110(b) must provide a specific factual or evidentiary showing that substantial competitive injury would likely result from disclosure of the requested information.
Bank of America, N. A. ("BOA") identifies certain portions of information contained in its offer which it argues are protected from disclosure under sections 552.104, 552.110 and 552.131 of the Government Code. See Open Records Decision No. 542 (1990)(governmental body may rely upon another party to raise applicable exceptions). BOA further asserts that all of its information is also protected by general confidentiality concerns under section 552.101. We first address BOA's section 552.101 assertion. Section 552.101 excepts "information considered to be confidential by law, either constitutional, statutory, or by judicial decision." This exception applies to information made confidential by the common law right to privacy. Industrial Foundation v. Texas Industrial Accident Board, 540 S.W.2d 668 (Tex. 1976), cert. denied, 430 U.S. 931 (1977). Information may be withheld under section 552.101 in conjunction with the common law right to privacy if the information contains highly intimate or embarrassing facts about a person's private affairs such that release of the information would be highly objectionable to a reasonable person and if the information is of no legitimate concern to the public. Id. Financial information concerning an individual is in some cases protected by a common law right of privacy. See Open Records Decision Nos. 545 (1990), 523 (1989). A previous opinion of this office states that "all financial information relating to an individual . . . ordinarily satisfies the first requirement of common law privacy, in that it constitutes highly intimate or embarrassing facts about the individual, such that its public disclosure would be highly objectionable to a person of ordinary sensibilities." See Open Records Decision No. 373 at 3 (1983). However, BOA is a corporation and not an individual. See Open Records Decision No. 523 (1989). Corporations do not have a right to privacy. United States v. Morton Salt Co., 338 U.S. 632, 652 (1950), cited in Rosen v. Matthews Const. Co., 777 S.W.2d 434, 436 (Tex. App.--Houston [14th Dist.] 1989), rev'd on other grounds, 796 S.W.2d 692 (Tex. 1990); see Open Records Decision Nos. 620 (1993), 192 (1978) (stating that right of privacy protects feelings and sensibilities of human beings, and does not protect evaluation report on private college). The right of privacy is intended to protect the feelings and sensibilities of human beings; it does not protect information about private corporations. Id. Therefore, BOA's information may not be withheld pursuant to section 552.101 of the Government Code.
Under section 552.104, BOA asserts that, "in addition to the protections afforded to trade secrets, commercial information and financial information, the release of any or all of the above information would cause substantial harm to BOA's current and future competitive position, and should be protected from disclosure." The purpose of section 552.104 is to protect the interests of a governmental body in competitive bidding situations. See Open Records Decision No. 592 (1991). Section 552.104 is not designed to protect the interests of private parties that submit information to a governmental body. Id. at 8-9. This exception protects information from public disclosure only if the governmental body demonstrates potential specific harm to its interests in a particular competitive situation. See Open Records Decision Nos. 593 at 2 (1991), 463 (1987), 453 at 3 (1986). Consequently, as BOA cannot avail itself of the protection of section 552.104 for its offer information, GSC may not withhold any of BOA's offer information under section 552.104 of the Government Code.
BOA also argues that its trade secret and commercial or financial information is protected from disclosure under sections 552.110 and 552.131. Section 552.131, like section 552.110, applies to trade secrets or 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. However, unlike section 552.110, section 552.131 only applies to information that relates to economic development negotiations between a governmental body and a business prospect. BOA has not established that the information relates to economic development negotiations involving a governmental body and a business prospect that the governmental body seeks to have locate, stay, or expand in or near the territory of the governmental body. We do not believe that section 552.131 is intended to protect from disclosure third party information submitted in response to a governmental body's solicitation for goods or services. Accordingly, we find that section 552.131 is not applicable to BOA's information in its offer to provide goods or services.
After a review of BOA's arguments, we conclude that the company has made only unsubstantiated, conclusory statements regarding the confidentiality of its information. See also National Parks & Conservation Ass'n v. Morton, 498 F.2d 765 (D.C. Cir. 1974). Consequently, it has not established that its information is either trade secret information or commercial or financial information excepted from disclosure under section 552.110. See Open Records Decision No. 552 at 5 (1990) (party must establish prima facie case that information is trade secret), Open Records Decision No. 542 at 3 (1990); (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) Open Records Decision No. 552 at 5 (1990). Therefore, GSC must release BOA's offer information in its entirety to the requestor.
Deloitte Consulting ("Deloitte") claims that certain pages in Sections 2, 3, 4, 5, and 6 of its offer contain trade secret information protected from disclosure under section 552.110. It also asserts that "Section 3 can be properly classified as either trade secret and/or commercial or financial information." We have reviewed Deloitte's arguments and conclude that Deloitte has made a prima facie showing that certain portions in Sections 2, 3, 4, 5, and 6 of its offer contain trade secret information. Also, in our opinion, Deloitte has shown, based on specific factual evidence, that disclosure of those portions of information would cause "substantial competitive harm" to Deloitte. See Open Records Decision No. 661 (1999). We have marked the information that is excepted as trade secret information under section 552.110(a), and therefore, must be withheld from disclosure. We note, however, that the resumes listing the education and experience of employees in Section 5 cannot reasonably be said to fall within the "trade secret" or any other exception to the Public Information Act. Open Records Decision No. 175 (1977) Accordingly, the resume information and the remaining offer information at issue may not be withheld and must be released. See Open Records Decision No. 309 (1982).
SAP Public Sector and Education, Inc. submitted a letter arguing against disclosure of resumes of its consultants and its customer reference list as trade secrets under section 552.110(a), but it did not provide the information for our review.(2) However, even if SAP Public Sector and Education, Inc had provided the documentation, after review of SAP Public Sector and Education, Inc.'s arguments, we conclude that the company has not established a prima facie case for protection from disclosure of the information at issue under the "trade secrets" branch of section 552.110. GSC must, therefore, release SAP Public Sector and Education, Inc's offer information in its entirety 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 Department 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.
Ref: ID# 135223
Encl. Submitted documents
cc: Mr. Nygil Murrell
Ms. Hadassah Schloss
Mr. Alden Schiller
Mr. Jack Radzikowski - Senior Vice President
Mr. Robert Salvucci - President
Mr. Gary J. Miglicco - Partner
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 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).
2. GSC provided portions of SAP Public Sector and Education, Inc.'s offer, however, the documents do not contain resumes or a customer reference list.
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