O.M.J.C. SIGNAL, INC., Plaintiff-Appellee, vs. IOWA DEPARTMENT OF TRANSPORTATION, Defendant, and HORIZON SIGNAL TECHNOLOGIES, Defendant-Appellant.
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IN THE COURT OF APPEALS OF IOWA
No. 9-945 / 09-0771
Filed December 17, 2009
O.M.J.C. SIGNAL, INC.,
Plaintiff-Appellee,
vs.
IOWA DEPARTMENT OF TRANSPORTATION,
Defendant,
and
HORIZON SIGNAL TECHNOLOGIES,
Defendant-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Story County, William J. Pattinson,
Judge.
On interlocutory appeal, Horizon Signal Technologies contends the district
court erred in denying its motion for an injunction. AFFIRMED.
Lisa R. Perdue of Grefe & Sideny, P.L.C., Des Moines, for appellant
Horizon Signal Technologies.
Robert W. Goodwin of Goodwin Law Office, P.C., Ames, for appellee
O.M.J.C. Signal, Inc.
Thomas J. Miller, Attorney General, and Richard E. Mull, Assistant
Attorney General, for Iowa Department of Transportation.
Considered by Eisenhauer, P.J., Potterfield, J., and Mahan, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2009).
2
MAHAN, S.J.
On interlocutory appeal, Horizon Signal Technologies (Horizon) contends
the district court erred in denying their request to enjoin the Iowa Department of
Transportation (IDOT) from releasing to O.M.J.C. Signal, Inc. (O.M.J.C.)
redacted test results regarding an electronic traffic signal it manufactures. It
claims the report is a confidential public record under Iowa Code chapter 22
(2007). We review this claim de novo. Iowa R. App. P. 6.907 (2009).
O.M.J.C. and Horizon are competing manufacturers of temporary traffic
signals. O.M.J.C. filed a petition for declaratory judgment asking the court to
determine whether the IDOT was requiring Horizon to comply with federal
regulations regarding the temporary traffic signals it provides the IDOT. As part
of its discovery, O.M.J.C. sought copies of all reports of tests conducted on
Horizon’s products by MET Laboratories.1 Horizon filed a motion to enjoin the
production of the documents. In its ruling, the district court determined the test
report generated by MET Laboratories is not a confidential record pursuant to
section 22.7 and ordered Horizon to provide a copy of the redacted report to
O.M.J.C. It is from this ruling Horizon appeals.
Generally, every person has the right to examine and copy the records of,
or belonging to, the State.2 Iowa Code §§ 22.1(3), .2(1). However, certain of
these public records are required to be kept confidential. Id. § 22.7. Horizon
asserts the district court’s ruling was in error because the report is confidential as
1
This report was commissioned by the IDOT and the IDOT possesses a full copy of the
report.
2
There is no dispute as to whether the report is a “public record” as defined in section
22.1(3).
3
a trade secret recognized and protected as such by law, id. § 22.7(3), and as a
report to a governmental agency that, if released, would give its competitor an
advantage and serve no public purpose. Id. § 22.7(6). Horizon bears the burden
of demonstrating the report falls within one of these exemptions. See Clymer v.
City of Cedar Rapids, 601 N.W.2d 42, 45 (Iowa 1999).
We first address Horizon’s claim that the report would reveal a trade
secret recognized and protected as such by law. Iowa Code section 550.2(4)
provides the legal definition of a “trade secret.”
“Trade secret” means information, including but not limited to a
formula, pattern, compilation, program, device, method, technique,
or process that is both of the following:
a. Derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable
by proper means by a person able to obtain economic value from
its disclosure or use.
b. Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
Iowa Code § 550.2(4).
In support of its motion for an injunction, Horizon provided the affidavit of
David Krahoulec, its vice president/chief operating officer. In contrast, O.M.J.C.
provided the affidavit of Keith Niehaus, its vice president, which indicates the
federal requirements placed on the temporary traffic control industry require
standardized equipment be used. The district court found and ruled in part as
follows:
First, the affidavit Horizon provided to supplement its motion
for injunctive relief, that of David Krahoulec, did little more than
parrot the language of Iowa Code section 550.2(4). Horizon
provided nothing to support the notion that its temporary traffic
signal was made NEMA TS1 compliant through the use of some
4
program, device, method, technique, etc., that was not generally
known or readily ascertainable.
Instead, copies of the pertinent NEMA TS1 standards and an
affidavit provided by O.M.J.C. appear to indicate that a temporary
traffic signal, at least insofar as a conflict monitor system is
concerned, requires the incorporation of a specific type of
connector and a specific piece of electronic gear that have been
standardized throughout the industry. Because of such I do not
believe that a trade secret, in the legal sense of the term, is
involved here.
Additionally, my personal in camera inspection of the
questioned document convinced me that there was little, if any,
technical information in the report relating to the machine’s
composition, as opposed to the machine’s basic test results
obtained by MET Laboratories. As such, I fail to see how
disclosure of this public record will economically benefit O.M.J.C. or
any other industry competitor.
The bottom line here is that the report in question is not a
public record whose confidentiality must be maintained pursuant to
Iowa Code section 22.7(3).
I reached the same conclusion after analyzing whether Iowa
Code section 22.7(6) shielded the subject report from disclosure.
“Reports to governmental agencies which, if released, would
give advantage to competitors and serve no public purpose” must
remain confidential as per Iowa Code Section 22.7(6). Id. Once
again, Horizon had the burden of proof on this issue. See
Northeast Council on Substance Abuse v. Iowa Dep’t of Public
Health, 513 N.W.2d at 760.
Much of the discussion pertaining to the trade secret
exclusion is applicable to this issue as well. Specifically, a
temporary traffic signal of the type involved here can only be NEMA
TS1 compliant if it has specific parts and components. Nothing has
been advanced to show that a temporary traffic signal can meet the
Iowa Department of Transportation’s development specifications
concerning conflict monitors in some alternative fashion, or by
using some other device or protocol. Either Horizon’s device has
the compliance-necessary and industry-standardized components,
or it does not. The answer to that proposition will not provide
O.M.J.C. or other competitor any economic advantage.
Further, Horizon failed to support in any fashion the second
requirement for confidentiality under Iowa Code section 22.7(6);
i.e., that the disclosure would serve no public purpose.
Indeed, it would be very difficult to convince me that there is
no public interest in ascertaining whether the temporary traffic
signals manufactured by Horizon, O.M.J.C., or any other similar
manufacturer comply with established safety standards. As noted
5
above, the absence of a functioning conflict monitor of the type
specified by NEMA (National Electrical Manufacturers Association)
could cause vehicles to collide head-on with resulting property
damage at the very least and the vehicle’s occupants’ death, at the
very worst.
In light of the evidence before us, we agree with the district court and conclude
Horizon has failed in its burden of proving it has a trade secret that is not readily
ascertainable to the rest of the temporary traffic light industry.
For the reasons already stated, we likewise conclude Horizon has failed to
establish the report would give O.M.J.C. an advantage, a requirement to meet
the exemption provided in section 22.7(6). Because Horizon has failed to
demonstrate it meets an exception to the open records rule, O.M.J.C. is entitled
to discovery of the MET Laboratories redacted report.
AFFIRMED.
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