Justia.com Opinion Summary: The freedom of information commission ordered the University of Connecticut to disclose databases identifying persons who had paid to attend, donated to, inquired about or participated in certain educational, cultural or athletic activities of institutions within the university. The trial court sustained the university's appeal, concluding that the university could, as a matter of law, create a trade secret entitled to exemption from disclosure under the Freedom of Information Act. The commission appealed, contending that, in light of the public policy favoring disclosure of public records, the trial court improperly rejected the commission's determination that none of the databases at issue could be trade secrets because the university was not principally involved in a trade. The Supreme Court affirmed, holding that a public agency can create and maintain trade secrets that are exempt from disclosure under the Act, as long as the information meets the statutory criteria for a trade secret.
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UNIVERSITY OF CONNECTICUT v. FREEDOM OF
INFORMATION COMMISSION ET AL.
(SC 18772)
Rogers, C. J., and Norcott, Palmer, Zarella, McLachlan, Eveleigh and
Harper, Js.
Argued December 5, 2011—officially released February 21, 2012
Clifton A. Leonhardt, with whom, on the brief, were
Gregory F. Daniels, commission counsel, and Colleen
M. Murphy, general counsel, for the appellant
(named defendant).
Michael Sullivan, assistant attorney general, with
whom, on the brief, were George Jepsen, attorney general, and Henry Salton, assistant attorney general, for
the appellee (plaintiff).
Opinion
HARPER, J. This appeal concerns the issue of
whether a public agency can create and maintain trade
secrets that are exempt from disclosure under General
Statutes § 1-210 (b) (5) (A)1 of the Freedom of Information Act (act), General Statutes § 1-200 et seq. The
named defendant, the freedom of information commission (commission), appeals2 from the trial court’s judgment sustaining the administrative appeal of the
plaintiff, the University of Connecticut (university),
from the commission’s decision ordering the university
to disclose databases identifying persons who had paid
to attend, donated to, inquired about or participated
in certain educational, cultural or athletic activities of
institutions within the university. The commission contends that, in light of the public policy favoring disclosure of public records, the trial court improperly
rejected the commission’s determination that none of
the databases at issue could be trade secrets because
the university is not principally engaged in a trade.3 We
affirm the trial court’s judgment.
The record reflects the following undisputed facts.
In April, 2008, the defendant Jonathan Pelto submitted
a freedom of information request to the university seeking disclosure of eleven databases that Pelto believed
institutions within the university were maintaining. The
information sought by Pelto included the names, street
addresses, telephone numbers and e-mail addresses of
individuals from the following four university databases
that are the subject of this appeal: the athletics department’s database of season ticket purchasers;4 Jorgensen
Auditorium’s database of subscribers, individual event
ticket buyers and prospects; the Center for Continuing
Studies’ (center) database of persons having an interest
in its programs and course offerings; and the library’s
database of donors and friends. Pelto purported to seek
this information on behalf of a group of university
alumni and friends for the purpose of creating an advocacy organization to help persuade legislators, public
officials and the university’s board of trustees to provide
the university with proper support. The university
declined to provide Pelto with the four databases,
asserting that all of them are exempt from disclosure
under § 1-210 (b) (5) (A) as trade secrets in the form
of customer lists and that the center’s database also is
exempt under § 1-210 (b) (11) and (17) ‘‘as contact and/
or other information related to students . . . .’’
Thereafter, Pelto filed a complaint with the commission, contending that the university’s failure to disclose
the information violated the act. At a hearing on the
matter, Pelto acknowledged that he owns a public relations company that, inter alia, develops mailing databases for its clients, which include an Indian casino,
nonprofit organizations and political leaders, but denied
seeking the university’s databases to further the inter-
ests of his clients.5
In its final decision, the commission concluded that,
with a limited exception, the university had violated
the act by failing to disclose the databases. In rejecting
the university’s claim that the databases are customer
lists protected by the act’s trade secret exemption, the
commission first noted that it previously had not determined whether that exemption applies to a public
agency’s own trade secrets, rather than only to a private
entity’s trade secrets submitted or filed with such an
agency. Turning to that question as applied specifically
to the university, the commission found that the databases contained information consistent with the definition of trade secrets in that they could be of economic
value to others and that the university maintained them
in such a way as to avoid disclosure. Nonetheless, it
concluded that the university could not assert the act’s
trade secret exemption because none of the databases
were maintained by an entity engaged in a trade. Specifically, the commission reasoned that public agencies are
generally engaged in governance, not trade. It noted that
the principal function of the university was education, a
traditional government function. With respect to the
databases of the athletics department and Jorgensen
Auditorium relating to the marketing and selling of tickets for events, the commission found that, ‘‘unlike a
private business entity engaged in ‘trade’ where profits
are closely linked to such entities’ existence and economic advantage, the cultural and athletic activities of
the [university] are incidental to its primary governmental function of education. . . . [The university] is
largely subsidized by public funding, unlike a private
business engaged in a trade that depends on earned
income for its continued existence.’’ With respect to
the library’s database, the commission found that,
‘‘[w]hile the patronage of . . . donors often provides
financial assistance to the programs and projects of
the library, the [c]ommission is not persuaded that the
library is engaged in trade with such donors . . . .’’
The commission nevertheless concluded that it would
exercise its discretion and not compel the library to
disclose the names of those persons who had requested
anonymity in exchange for their donations. With respect
to the center’s database, the commission similarly
found that the center’s mission of providing education
was not a trade, and, therefore, this database also did
not contain trade secrets. The commission did, however, agree with the university insofar as whatever information in the center’s database that would personally
identify students was protected under the education
records exemption under § 1-210 (b) (17). In accordance with the foregoing reasoning, the commission
ordered the university to disclose to Pelto all of the
information he had sought, with the limited exceptions
identified for anonymous library donors and education records.
The university appealed from the commission’s decision to the Superior Court pursuant to General Statutes
§§ 1-206 (d) and 4-183 (i), and the court sustained the
appeal. The court first answered in the affirmative the
question of whether the university could, as a matter
of law, create a trade secret entitled to the exemption
under the act. The court rejected the commission’s
determination that the exemption’s application turns
on whether the public agency is engaged in a trade
and instead concluded that the exemption’s application
turns on whether the government has engaged in activities that create qualifying intellectual property. With
respect to customer lists as a type of trade secret under
§ 1-210 (b) (5) (A), the court reasoned that a governmental entity that sells things would have customers, as
that term commonly is understood.
In light of its conclusion that the university could
create a trade secret customer list, the court considered
evidence presented to the commission regarding each
database to determine whether it met the statutory definition of a trade secret under the act. The court examined the nature of the information in the databases, the
purposes for which such information was used, whether
there were potential competitors with respect to such
purposes, and the economic benefit that such information might confer on competitors. Ultimately, the court
concluded that the evidence established that the databases for the athletics department, Jorgensen Auditorium and the center met the criteria for customer list
trade secrets. With respect to the library database, the
court rejected the reason stated in the commission’s
decision for concluding that the trade secret exemption
was inapplicable—that the library was not engaged in
a trade—but nonetheless agreed with the commission’s
ultimate conclusion under the reasoning that this database is not a customer list because the library’s donors
and friends are not customers. Although the court determined that this database might fall into the broader
class of trade secret ‘‘information,’’ it questioned
whether this database satisfied one requirement of
trade secrets generally—that the information was ‘‘not
being generally known to, and not being readily ascertainable by proper means by, other persons . . . .’’
General Statutes § 1-210 (b) (5) (A). In the absence of
any findings by the commission as to this issue, the
court concluded that it should remand the matter back
to the commission for further determinations as to this
issue and ‘‘any other related points that might be raised
on remand.’’ This appeal followed.
At the outset, it is necessary to make clear what
claims properly are before us in light of changes in the
commission’s position since it filed its appellate brief.
At oral argument before this court, the commission
disavowed the sweeping position that it had advanced
both before the trial court and in its appellate brief,
namely, that public agencies cannot create trade secrets
protected from disclosure under the act. Instead, it
advanced the slightly narrower position that it had
stated in its decision—that, in light of the policies
favoring disclosure underlying the act, the trade secrets
exemption must be construed to apply to public agencies only when they are engaged in a trade. The commission conceded that the athletics department’s database
of season ticket holders satisfied this requirement, but
argued that the other databases did not. The commission also contended that the trial court’s judgment
should be reversed on the ground that the university
had failed to produce evidence to the commission to
establish an essential element of a trade secret—that
the information was ‘‘not being readily ascertainable
by proper means by . . . other persons . . . .’’ General Statutes § 1-210 (b) (5) (A).
Upon questioning from this court, however, the commission conceded that there was nothing in the record
to indicate that it had asserted its evidentiary claim
before the trial court. The commission’s appellate brief
also does not advance this claim; the only statements
remotely bearing on this issue are generalized assertions that a plaintiff bears the burden of proving entitlement to an exemption. Accordingly, the commission is
not entitled to review of its evidentiary claim in light
of the settled principle of waiver, as well as this court’s
policy not to consider arguments inadequately briefed
and raised substantively for the first time at oral argument. See Alexandre v. Commissioner of Revenue Services, 300 Conn. 566, 585, 586 n.17, 22 A.3d 518 (2011).
We therefore turn to the sole issue in the commission’s appeal properly before us. Specifically, we consider whether a public agency that creates and
maintains information that would constitute a trade
secret if created by a private entity must engage in a
‘‘trade’’ in order to shield such information from disclosure under the act. We answer that question in the
negative.6
The present appeal turns on the scope and meaning
of the definition of a trade secret under the act. ‘‘It is
well established that an administrative agency’s decision under the Uniform Administrative Procedure Act,
General Statutes § 4-166 et seq., with respect to the
construction of a statute is not entitled to special deference when [as in the present case] that determination
has not previously been subjected to judicial scrutiny
[or to] . . . a governmental agency’s time-tested interpretation . . . . Instead, [w]ell settled principles of
statutory interpretation govern our review.’’ (Citation
omitted; internal quotation marks omitted.) Commissioner of Public Safety v. Freedom of Information Commission, 301 Conn. 323, 336–38, 21 A.3d 737 (2011).
Under those principles, ‘‘we seek to determine, in a
reasoned manner, the meaning of the statutory language
as applied to the facts of [the] case, including the question of whether the language actually does apply.’’
(Internal quotation marks omitted.) Id., 338. The
sources to which we may look to make this determination are limited by the legislature’s plain meaning rule.
See General Statutes § 1-2z (‘‘The meaning of a statute
shall, in the first instance, be ascertained from the text
of the statute itself and its relationship to other statutes.
If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results,
extratextual evidence of the meaning of the statute shall
not be considered.’’).
The university is a public agency within the meaning
of § 1-200 (1) and is, therefore, required under the act
to disclose public records unless disclosure is otherwise
limited or prohibited by law. The disclosure exception
at issue provides in relevant part: ‘‘Nothing in the Freedom of Information Act shall be construed to require
disclosure of . . . (5) (A) Trade secrets, which for purposes of the Freedom of Information Act, are defined
as information, including formulas, patterns, compilations, programs, devices, methods, techniques, processes, drawings, cost data, customer lists, film or
television scripts or detailed production budgets that (i)
derive 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 their disclosure or
use, and (ii) are the subject of efforts that are reasonable
under the circumstances to maintain secrecy . . . .’’
General Statutes § 1-210 (b).
This definition, on its face, focuses exclusively on
the nature and accessibility of the information, not on
the status or characteristics of the entity creating and
maintaining that information. More particularly, there
is no requirement, express or implied, that the entity
generally must be engaged in a ‘‘trade,’’ however one
might define that term. In the absence of any such
limitation, it is self-evident that there cannot be any
basis to apply that limitation to public, but not private,
entities. If the information meets the statutory criteria, it
is a trade secret and the entity creating that information
would be engaged in a trade for purposes of the act even
if it was not so engaged for all purposes. Accordingly,
nothing in the act indicates an intention to exclude
public agencies from the exemption to disclosure for
trade secrets they have created if the agencies generally
do not engage in a ‘‘trade.’’
Related statutes further confirm this interpretation.
The definition of a trade secret under § 1-210 (b) (5)
(A) mirrors the definition under Connecticut’s Uniform
Trade Secrets Act (trade secrets act), General Statutes
§§ 35-50 through 35-58, which penalizes the misappropriation of trade secrets. See General Statutes § 35-51.7
Significantly, that act expressly applies to both public
and private entities and clearly does not impose any
requirement that either type of entity principally be
engaged in a trade. See General Statutes § 35-51 (c)
(defining ‘‘ ‘[p]erson’ ’’ under trade secret act expansively as ‘‘a natural person, corporation, limited liability
company, business trust, estate, trust, partnership,
association, joint venture, government, governmental
subdivision or agency, or any other legal or commercial entity’’ [emphasis added]). Although the trade
secret act provides that its definition applies ‘‘[n]otwithstanding the provisions of sections 1-210 [and certain
other statutes]’’; General Statutes § 35-51 (d); we can
infer two reasonable interpretations of this proviso,
neither of which indicate an intention to provide more
limited protections to public agencies that are not principally engaged in a trade. First, this proviso may be
intended to make clear that the commission is not
divested of jurisdiction to decide whether information
is subject to disclosure, or an exemption to disclosure,
under the act. Second, this proviso simply may be an
outdated reflection of a time when the act used a different definition of trade secrets; see General Statutes
(Rev. to 1999) § 1-210 (b) (5); as the trade secrets act
has not been amended since the definition of trade
secret under § 1-210 (b) was changed to conform with
the definition under § 35-51 (d).8 See Public Acts 2000,
No. 00-136, § 2. Perhaps most fundamentally, it makes
no sense to construe the scope of the two acts differently. Once information is ordered disclosed under the
Freedom of Information Act, it no longer meets the
secrecy requirements of a trade secret and no subsequent use can be a proper basis for a claim of misappropriation. See General Statutes § 35-51 (d). In effect, the
protection to government trade secrets would be rendered a nullity.
Such a result could not have been intended. The university exemplifies a prime example of why that is so.
It cannot reasonably be questioned that the university
expends considerable resources of the state, on its own
or in partnership with others, for the research and development of intellectual property. The state’s ability to
recoup costs or reap the financial benefits for such
efforts would be seriously undermined if any member
of the public could obtain such information simply by
filing a request under the act. Indeed, the legislature
has created a statutory scheme to recognize and facilitate the university’s ownership of, and control over,
information relating to research and development of
various products, formulas and technologies. See General Statutes §§ 10a-110 through 10a-110g; see also General Statutes § 4-61a (ownership rights of state with
respect to inventions and discoveries by state
employees).
In sum, all of the textual evidence unambiguously
demonstrates the legislature’s intention to afford trade
secret protection to the university under the act, as
long as the information meets the statutory criteria for
a trade secret. Although the act embodies a public policy in favor of disclosure, that presumption is subject
to clear limits within which the university may claim
an exemption.
The judgment is affirmed.
In this opinion the other justices concurred.
1
The full text of this provision is set forth later in this opinion.
The commission appealed from the trial court’s judgment to the Appellate
Court, and we thereafter transferred the appeal to this court. See General
Statutes § 51-199 (c); Practice Book § 65-1.
3
As we explain later; see footnote 6 of this opinion; the commission
asserted an additional claim before this court that we do not reach in
this appeal.
4
Pelto also sought a list of individual game ticket purchasers, but the
commission found that the university does not maintain records of such purchases.
5
As the trial court properly noted, disclosure under the act does not turn
on the motive for the request. Nonetheless, we agree with the university
that the question of whether Pelto, or other persons similarly situated, could
obtain economic value from the disclosure would be relevant in assessing
whether the information constitutes a trade secret.
6
We note that the commission’s appellate brief also asserts a claim that
the trial court improperly expanded the issues in the case by considering
whether the library database is trade secret information after agreeing with
the commission that the database is not a trade secret customer list. It is
unclear from representations that the commission made at oral argument
before this court regarding the claims that it intends to advance whether it
has abandoned this claim. Nevertheless, we note that the only case that the
commission cited in support of this position is an Appellate Court case
wherein the trial court had addressed a distinct exemption from the one
considered by the commission. See Hartford v. Freedom of Information
Commission, 41 Conn. App. 67, 73, 674 A.2d 462 (1996) (‘‘The trial court
needlessly enlarged the issue on appeal by analyzing the question of whether
the relevant records are engineering documents, an argument not found in
the record. In doing so, the court seemingly ignored the city’s argument
that the records were exempt because they were feasibility estimates.’’). In
the exemption at issue in the present case, a customer list is not a distinct
category, but a description of a type of ‘‘information’’ that can be a trade
secret. See General Statutes § 1-210 (b) (5) (A) (exempting ‘‘[t]rade secrets,
which for purposes of the Freedom of Information Act, are defined as
information, including formulas, patterns, compilations, programs,
devices, methods, techniques, processes, drawings, cost data, customer lists,
film or television scripts or detailed production budgets that [meet specified
criteria]’’ [emphasis added]). Thus, the Appellate Court case is distinguishable. More fundamentally, it is ironic that the commission asserts this argument, given that the trial court reached this issue only after rejecting the
sole ground stated in the commission’s decision for concluding that the
library database was not a trade secret customer list and then sua sponte
raising the issue of whether the database lacked the requisite customers.
We also note that, in light of our conclusion affirming the trial court’s
judgment, we need not address an argument asserted in the university’s
brief that the commission’s decision was arbitrary and capricious. We further
note, however, that the university did not file a preliminary statement of
alternate grounds for affirmance; see Practice Book § 84-11; nor did it file
a cross appeal from the trial court’s decision insofar as it remanded the
matter to the commission for further proceedings regarding the library
database.
7
General Statutes § 35-51 provides in relevant part: ‘‘As used in this chapter, unless the context requires otherwise . . . .
‘‘(b) ‘Misappropriation’ means: (1) Acquisition of a trade secret of another
by a person who knows or has reason to know that the trade secret was
acquired by improper means; or (2) disclosure or use of a trade secret of
another without express or implied consent by a person who (A) used
improper means to acquire knowledge of the trade secret; or (B) at the time
of disclosure or use, knew or had reason to know that his knowledge of
2
the trade secret was (i) derived from or through a person who had utilized
improper means to acquire it; (ii) acquired under circumstances giving rise
to a duty to maintain its secrecy or limit its use, including but not limited
to disclosures made under section 1-210, sections 31-40j to 31-40p, inclusive,
or subsection (c) of section 12-62; or (iii) derived from or through a person
who owed a duty to the person seeking relief to maintain its secrecy or
limit its use; or (C) before a material change of his position, knew or had
reason to know that it was a trade secret and that knowledge of it had been
acquired by accident or mistake. . . .
‘‘(d) Notwithstanding the provisions of sections 1-210, 31-40j to 31-40p,
inclusive, and subsection (c) of section 12-62, ‘trade secret’ means information, including a formula, pattern, compilation, program, device, method,
technique, process, drawing, cost data or customer list that: (1) 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
(2) is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy.’’ (Emphasis added.)
8
Prior to the 2000 amendment; Public Acts 2000, No. 00-136, § 2; trade
secrets were defined under the act as ‘‘unpatented, secret, commercially
valuable plans, appliances, formulas or processes, which are used for the
making, preparing, compounding, treating or processing of articles or materials which are trade commodities obtained from a person and which are
recognized by law as confidential, and commercial or financial information
given in confidence, not required by statute . . . .’’ General Statutes (Rev.
to 1999) § 1-210 (b) (5).
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