|Office of the Attorney General - State of Texas
September 7, 1999
Ms. Linda Cloud
Dear Ms. Cloud:
You ask whether certain information is subject to required public disclosure under the Public Information Act, chapter 552 of the Government Code. Your request was assigned ID# 127457.
The Texas Lottery Commission (the "commission") received a request for information relating to the Request for Proposals for the Minority Market Advertising Services. You state that the responsive documents may be protected from disclosure under sections 552.101 and 552.110 of the Government Code. Gov't Code §§ 552.007, .305. You raise no exception to disclosure on behalf of the commission, and make no arguments regarding the proprietary nature of the submitted information.
Since the property and privacy rights of a third party may be implicated by the release of the requested information, this office notified Mithoff Advertising, Inc. ("Mithoff") of 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 Open Records Act in certain circumstances). Mithoff responded to our notice by arguing that all or portions of the submitted documents are protected from disclosure by sections 552.104, 552.110, and 552.111 of the Government Code.
Section 552.101 excepts from disclosure "information considered to be confidential by law, either constitutional, statutory, or by judicial decision." Section 552.101 also encompasses the doctrine of common-law privacy. After reviewing the submitted materials and arguments, we do not believe that the requested information must be withheld based on a right of privacy. See Industrial Found. v. Texas Indus. Accident Bd., 540 S.W.2d 668 (Tex. 1976), cert. denied, 430 U.S. 931 (1977) (common-law privacy); Open Records Decision No. 600 at 4 (1992) (citing Ramie v. City of Hedwig Village, 765 F.2d 490 (5th Cir. 1985), cert. denied, 474 U.S. 1062 (1986)) (corporation or business entity may not claim common-law privacy). Moreover, we are not aware of, nor has the commission referred us to, any law that would make the requested information confidential. Therefore, we conclude that the requested information is not excepted from disclosure under section 552.101.
Section 552.104 excepts from required public disclosure "information that, if released, would give advantage to a competitor or bidder." The purpose of section 552.104 is to protect the interests of a governmental body by preventing one competitor or bidder from gaining an unfair advantage over others in the context of a pending competitive bidding process. Open Records Decision No. 541 (1990). Section 552.104 does not, however, protect the interests of private parties that submit information to a governmental body. Id. at 8-9. As the commission does not raise section 552.104, this section is not applicable to the requested information. Id. (Gov't Code § 552.104 may be waived by governmental body).
Section 552.111 excepts "an interagency or intraagency memorandum or letter that would not be available by law to a party in litigation with the agency." Section 552.111 excepts only those internal communications consisting of advice, recommendations, opinions, and other material reflecting the policymaking processes of the governmental body. Since the commission did not raise section 552.111, this section is not applicable to the requested information.
Section 552.110 protects the property interests of private persons 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.
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).(1)
After reviewing the submitted materials, we conclude that Mithoff has not established that its Cost Proposal falls within the protection of section 552.110. See Gov't Code § 552.022(3). Pricing information is generally not a trade secret because it relates exclusively to a particular circumstance, that is, "single or ephemeral events in the conduct of the business" rather than "a process or device for continuous use in the operation of the business." 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); Open Records Decision Nos. 319 at 3 (1982), 306 at 3 (1982). Accordingly, the commission must release the submitted documents.
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 on as a previous determination regarding any other records. If you have any questions regarding this ruling, please contact our office.
June B. Harden
Ref: ID# 127457
Encl. Submitted documents
cc: Mr. Arturo Villar
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).
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