|Office of the Attorney General - State of Texas
April 17, 2000
Mr. Habib H. Erkan, Jr.
Dear Mr. Erkan:
You ask whether certain information is subject to required public disclosure under chapter 552 of the Government Code. Your request was assigned ID# 134111.
The City of San Antonio (the "city") received a request for information regarding construction of a hotel at 736 S. St. Mary's Street, including the construction plans. You have provided information to the requestor regarding the construction of the hotel but assert that the construction plans contain proprietary information. You have submitted a copy of a letter notifying the contractor, Mencotex, Inc. ("Mencotex"), about the request as required by section 552.305(d). 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). Mencotex asserts that the construction plans are excepted from disclosure under section 552.110 of the Government Code. We have considered the exception you claim and reviewed the submitted information
Pursuant to section 552.301(e), a governmental body is required to submit to this office within fifteen business days of receiving an open records request (1) general written comments stating the reasons why the stated exceptions apply that would allow the information to be withheld, (2) a copy of the written request for information, (3) a signed statement or sufficient evidence showing the date the governmental body received the written request, and (4) a copy of the specific information requested or representative samples, labeled to indicate which exceptions apply to which parts of the documents. Gov't Code § 552.301(e)(1). You failed to submit a copy of the specific information requested within fifteen business days of receiving the request.(1)
Pursuant to section 552.302 of the Government Code, a governmental body's failure to submit to this office the information required in section 552.301(e) results in the legal presumption that the information is public and must be released. Gov't Code § 552.302. Information that is presumed public must be released unless a governmental body demonstrates a compelling reason to withhold the information to overcome this presumption. See Hancock v. State Bd. of Ins., 797 S.W.2d 379, 381-82 (Tex. App.-Austin 1990, no writ) (governmental body must make compelling demonstration to overcome presumption of openness pursuant to statutory predecessor to Gov't Code § 552.302); Open Records Decision No. 319 (1982). Because you assert that the construction plans are proprietary and Mencotex asserts that the construction plans are excepted under section 552.110, we find compelling reasons to overcome the presumption of openness. Therefore, we will address Mencotex's arguments against disclosure. 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 552.110 protects the property interests of private parties 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.
A "trade secret" may consist of any formula, pattern, device or compilation of information which is used in one's business, and which gives [one] 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, as for example the amount or other terms of a secret bid for a contract or the salary of certain employees. . . . A trade secret is a process or device for continuous use in the operation of the business. Generally it relates to the production of goods, as for example, a machine or formula for the production of an article. It may, however, 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) (emphasis added). See also Hyde Corp. v. Huffines, 314 S.W.2d 763, 776 (Tex. 1958); Open Records Decision Nos. 255 (1980), 232 (1979), 217 (1978).
There are six factors to be assessed in determining whether information qualifies as a trade secret:
1) the extent to which the information is known outside of [the company's] business;
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 to [its] competitors;
5) the amount of effort or money expended by [the company] in developing this information; and
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 No. 232 (1979). This office must accept a claim that information is excepted as a trade secret if a prima facie case for exemption is made and no argument is submitted that rebuts the claim as a matter of law. Open Records Decision No. 552 (1990). However, where no evidence of the factors necessary to establish a trade secret claim is made we cannot conclude that section 552.110 applies. Open Records Decision No. 402 (1983).
Mencotex asserts that the construction plans contain a number of unique design features that Mencotex has developed over time in designing and building successful hotel projects. Mencotex further contends that the design features are the results of years of experience in hotel design and gives it advantage over competitors. It appears, based on the submitted arguments, that these unique design elements have been utilized in other hotel projects. According to Mencotex, only the designer, contractor, engineers, and consultants know the details of the unique designs. After examining all of the arguments and the submitted documents, we conclude that Mencotex has presented a prima facie case that the construction plans constitute trade secrets which are confidential under section 552.110 of the Government Code. Therefore, the city must withhold the construction plans.
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# 134111
cc: Ms. Christine Viña
Mr. Lawrence E. Letchford
1. We note that Mencotex submitted a copy of the plans, but not within fifteen days of the request. However, section 552.301(e)(1)(D) requires the governmental body to submit the requested information within the fifteen days.
POST OFFICE BOX 12548, AUSTIN, TEXAS 78711-2548 TEL: (512) 463-2100 WEB: WWW.OAG.STATE.TX.US