The Commonwealth Court’s recent decision in Mission Pennsylvania, LLC v. McKelvey provides a road map to private entities seeking to prevent government agencies from disclosing sensitive business information. The case involved a public records request for applications that private entities submitted to the Department of Health for permits to grow, process, and distribute medical marijuana. The court found that one applicant justified redactions of trade secrets, confidential proprietary information, and facility security information. Four other applicants failed to support their redactions.
Legal Protections for Sensitive Business Information
Private entities must take precautions to ensure that non-public information is not publicly disclosed in response to public records requests. Most information submitted to public agencies becomes a public record. Members of the general public may request to inspect or make copies of public records under the Pennsylvania Right-to-Know Law (RTKL). The RTKL establishes a presumption of openness that requires government agencies to release requested records unless they are privileged or subject to another lawful exemption from public disclosure.
The RTKL contains several exemptions to prevent public disclosure of sensitive business information. Most important for private entities are the RTKL’s exemptions for trade secrets and confidential proprietary information. These exemptions prevent disclosure of information that is maintained confidentially and where disclosure would cause competitive harm.
Notice to Agency at Time of Submission
Private entities must notify the agency at the time that sensitive business information is submitted to the agency. Section 707(b) of the RTKL requires the private entity to provide the agency with a signed, written statement identifying trade secrets or confidential proprietary information. Most agencies provide standardized forms to identify protected information. Often the private entity must provide two copies, the first unredacted for agency review, and the second redacted for public disclosure. The redacted copy should be accompanied by an exemption log to identify the basis for each redaction.
Response to Notice of Request for Public Access
If notice is timely provided to the government agency, the RTKL requires the agency to notify the private entity within five business days of receipt of any public records request. The private entity then has five business days to object to disclosure. Within ten business days of notice to the private entity, the agency must determine whether to deny the request or release the record. The agency must notify the private entity of its decision.
Participation in Administrative and Judicial Appeals
If a government agency denies a public records request, the requester may file an administrative appeal with the Pennsylvania Office of Open Records (OOR). The OOR requires the agency to provide notice of the appeal to persons who have a direct interest in the requested records. The OOR typically establishes a schedule allowing participants seven business days to submit argument and evidence.
The agency bears the burden to establish the basis for non-disclosure. Where, however, a private entity asserts an independent property interest, such as trade secrets, the private entity bears the burden to prove the requested information is exempt. This requires submission of actual evidence, in the form of sworn affidavits, to establish the exemption.
Within 30 calendar days of the appeal, the OOR issues a final determination granting or denying access to the requested records. If the OOR denies public disclosure, the requester may file a judicial appeal and the private entity may participate in that appeal. If the OOR orders public disclosure of sensitive business information, the private entity may file a judicial appeal.
Lessons from Mission Pennsylvania v. McKelvey
- Be judicious with redactions.
One of the overall themes of Mission Pennsylvania is that the applicants overly redacted their applications. Where a public record contains both public and non-public information, the RTKL requires disclosure of the record with non-public information redacted. The court found wide variations in redactions from application to application. Entire sections of some applications were fully redacted, while the same sections in other applications contained minimal redactions. The court explained that redaction of entire sections of applications did not comport with the RTKL’s minimal redaction mandate.
- Take advantage of initial opportunities to protect sensitive business information.
Several applicants asked the Commonwealth Court to consider new evidence that they had not submitted to the OOR. The Commonwealth Court denied this request because the applicants failed to take advantage of “extraordinary due process” afforded by the OOR. After determining several applicant’s evidentiary submissions were deficient, the OOR took an unprecedented step of issuing a stay and allowing the applicants to supplement their positions. Despite this extraordinary opportunity, only two of the five applicants submitted sworn affidavits.
- Produce evidence to address each element of claimed exemptions.
The Commonwealth Court described one of the applicants’ evidentiary submissions as “a model for establishing the trade secrets exemption.” The applicant submitted affidavits from experts with experience in marijuana cultivation, extraction processes, and manufacturing of cannabis products. These experts established the first element of trade secret protection, which is economic value in remaining secret, by discussing the development of nutrient regimen and fertilization and specialized extraction and manufacturing techniques. They also established the second element of trade secret protection by outlining the steps taken to maintain the secrecy of this information.
The other applicants did not establish trade secrets because they failed to explain what steps they took to maintain secrecy. The court rejected an argument that the entire application was a trade secret. Several applicants failed to submit any competent evidence (i.e. sworn affidavits). The court also rejected an argument that an applicant’s financial information was confidential and proprietary because the applicant presented no evidence of steps taken to maintain the confidentiality of this information.
Although the OOR permits corporate entities to participate without legal counsel, this is a critical stage for an experienced public records attorney to make complete evidentiary submissions to ensure that sensitive business information is not publicly disseminated.