[No. 44520-4-II. Division Two. March 4, 2014.]
October 15, 2013, Oral Argument
Michele Lynn Earl-Hubbard (of Allied Law Group LLC), for appellant.
Douglas C. McDermott (of McDermott Newman PLLC); and Robert W. Ferguson, Attorney General, and Dawn C. Cortez, Assistant (Daniel Morrissey, of counsel), for respondent.
James W. Beck on behalf of McClatchy Company, Washington Newspaper Publishers Association, and Pioneer News Group, amici curiae.AUTHOR: Lisa Worswick, C.J. We concur: Joel Penoyar, J.P.T., James Richard Verellen Richard Verellen, J.Lisa Worswick
FACTS The Protected Information qualifies as valuable formulae, designs and research data, the disclosure of which would result in private gain and public loss, and is exempt from disclosure under RCW 42.56.270(1). The Protected Information qualifies as trade secrets under RCW 19.108.010(4), and are exempt from disclosure under RCW 42.56.270(11)(a)-(b) as proprietary data and trade secrets essential to Robbins Geller's method of conducting business and the services the Firm offers its clients. CP at 1343. The AGO then successfully moved for summary judgment of Gresham's PRA claim against it. Gresham appealed directly to our Supreme Court which transferred the case to this court. ANALYSIS I. PUBLIC RECORDS ACT [1-5] II. STANDARD OF REVIEW [6, 7] III. STATUTORY INTERPRETATION PRINCIPLES [8, 9] IV. APPLICATION OF STATUTORY EXEMPTIONS A. "Other Statute" Exemption--Uniform Trade Secrets Act [10-13] information, including a formula, pattern, compilation, program, device, method, technique, or process that: (a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. RCW 19.108.010(4). "To be a trade secret, information must be 'novel' in the sense that the information must not be readily ascertainable from another source." Spokane Research & Def. Fund v. City of Spokane, 96 Wn. App. 568, 578, 983 P.2d 676 (1999). "A key factor in determining whether information has 'independent economic value' under the statute is the effort and expense that was expended in developing the information." McCallum v. Allstate Prop. & Cas. Ins. Co., 149 Wn. App. 412, 424, 204 P.3d 944 (2009). The alleged unique, innovative, or novel information must be described with specificity and, therefore, "conclusory" declarations that fail to "provide concrete examples" are insufficient to support the existence of a trade secret. McCallum, 149 Wn. App. at 425-26. Compilations of customer information may be a trade secret. See, e.g., Ed Nowogroski Ins., Inc. v. Rucker, 137 Wn.2d 427, 436, 442, 449, 971 P.2d 936 (1999) (trial court finding that customer list was trade secret was not at issue on appeal--only issue was whether memorized information could be a trade secret). 1. Fee Proposal & Insurance Information [14, 15] 2. Portfolio Monitoring Program Client List [16] 3. Client Reference List [17] 4. Injunction Standard B. PRA Exemptions 1. RCW 42.56.270(1) [18-20] The following financial, commercial, and proprietary information is exempt from disclosure under this chapter: (1) Valuable formulae, designs, drawings, computer source code or object code, and research data obtained by any agency within five years of the request for disclosure when disclosure would produce private gain and public loss. We agree. a. Private Party May Assert RCW 42.56.270(1) Exemption b. Private Party May Assert Public Loss Regardless of Agency Position The AGO believes, among other things, that disclosure could, as the law firms have asserted, inhibit firms' desire to compete for the State's legal work. This is because the firms may be reluctant to provide proprietary information as part of the procurement process if they believe that information will be made available to their competitors. If that is indeed the case, there would be a public loss attributable to the inability to procure the best outside legal services. CP at 922-23.» c. Robbins Geller Does Not Prove Public Loss 2. RCW 42.56.270(11) [21] The following financial, commercial, and proprietary information is exempt from disclosure under this chapter: . . . . (11) Proprietary data, trade secrets, or other information that relates to: (a) A vendor's unique methods of conducting business; (b) data unique to the product or services of the vendor; or (c) determining prices or rates to be charged for services, submitted by any vendor to the department of social and health services for . . . state purchased heath care. The trial court concluded that the records here were exempt under subsections (a) and (b) as "proprietary data and trade secrets essential to Robbins Geller's method of conducting business and the services the Firm offers its clients." CP at 1343. a. Subsection (a): Unique Methods of Conducting Business b. Subsection (b): Data Unique to the Product or Services [22, 23] 3. RCW 42.56.270(6) [24] V. SUMMARY JUDGMENT DISMISSAL OF GRESHAM'S CROSS CLAIM AGAINST THE AGO [25, 26] ATTORNEY FEES VERELLEN, J., and PENOYAR, J. PRO TEM., concur. Reconsideration denied May 22, 2014.