Belo Management Services, Inc., Et Al. V. Click! Network, Et Al. (Majority)
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r; < IN THE COURT OF APPEALS OF THE STATE OF WASHINGT` ON'' 2014 NOV 25 DIVISION II STAT BELO MANAGEMENT SERVICES, INC., Delaware TV, KIRO - corporation; Delaware BY a LLC, SEATTLE; a Delaware limited liability company; and CBS CORPORATION; Respondents, v. PUBLISHED OPINION CLICK! NETWORK, a Department of Tacoma Public Utilities Division of the CITY OF TACOMA; and TACOMA NEWS, INC.; Appellants. MELNICK, J. — Tacoma News, Inc. appeals the trial court' s order enjoining the disclosure of unredacted retransmission consent agreements ( by the City of Tacoma ( the City), and RCAs) between Click!, five broadcasters. a cable system owned The court ruled that the pricing information portions of the RCAs were trade secrets exempt from disclosure under the Public Records Act1 ( court should prove the entitled PRA). have Tacoma News conducted requirements to attorney fees because the for in an that camera review of injunction and costs. RCA pricing argues under the RCAs the do unredacted the PRA, Ch. 42. 56 RCW. trade secrets, the RCAs, the broadcasters did not the injunction is overbroad, and it is The broadcasters argue that we should uphold the injunction information qualifies as trade secrets regulations exempt the pricing information from PRA disclosure. 1 not contain or, alternatively, r I: 20 SHr:$ t, No. 45577- 3- 11 a TRIBUNE corporation; BROADCASTING INC., t n: federal 45577 -3 - II We hold that the RCA pricing information is not a trade secret and that the broadcasters failed to meet their burden of proving that the non -cash compensation information in the agreements qualifies broadcasters do not as trade a as qualify secret. an " other Additionally, the federal regulations cited by the under the PRA which exempts the pricing statute" information from disclosure. Moreover, the broadcasters failed to establish the requirements for an the injunction under the PRA. Tacoma News is not entitled to attorney fees under the PRA because the unredacted records. private broadcasters, Accordingly, the trial court erred when it enjoined disclosure of rather City, than the opposed the disclosure. We reverse and vacate the injunction. FACTS This case involves whether pricing information in contracts between the City -owned cable system, Click!, and several broadcasters should be disclosed under the PRA. Cable systems must obtain express consent from broadcasters and pay license fees to retransmit the broadcasters' The fees shows. Cable systems and broadcasters enter into RCAs that include license fees. between the individual broadcasters are negotiated cable systems and the broadcasters consider the licensing fees and the cable confidential. systems. Both the The amount paid in fees is not shared with third parties. These figures are only known, on a need to know basis, by a few employees information within each confidential. party' s organization. Clerk' s Papers ( CP) at These employees are required to keep the 36. T between Click! and the broadcasters, however, specifically put the broadcasters on notice that the RCA' s terms are subject to potential disclosure under chapter 42. 56 RCW. Click! had difficulty negotiating the 2013 RCAs with one of the broadcasters, Fisher Communications. As a result, Click! customers were unable to view the channels broadcast by 45577 -3 - II Fisher. In response to this situation, Tacoma News filed a public records request with Click! seeking copies of the current RCAs between Click! and " all broadcast entities." CP at 43. The City determined that there were no applicable PRA exemptions and it notified the broadcasters that it intended to release the RCAs to Tacoma News.2 The broadcasters sought an injunction prohibiting the City and Click! from releasing the RCAs. The broadcasters claimed that the RCAs contained pricing information that qualified as a trade secret. The broadcasters the considered would fees rebroadcast be harmed fees Click! and paid by to Click! fee infoiination disclosure. negotiate are a significant and submitted affidavits and declarations stating that they The broadcasters alleged that they confidential. They claimed that other cable systems would use the disclosed lower fees for themselves. The broadcasters stated that rebroadcast growing portion of their revenue. The broadcasters claimed that they would not have a similar opportunity to discover the fees other cable systems paid because most cable systems are privately -owned and not subject to the PRA, which would put them at a disadvantage in negotiating RCAs. disclosure would contracting with harm Click! and Additionally, both the broadcasters and Click! stated that the public Click! because Click! because it would discourage broadcasters from could not promise confidentiality, it would likely raise Click!' s fees because the broadcasters would use the highest disclosed fee as a baseline, and the preceding issues would result in fewer available channels and increased rates for Click! customers. 2 At the initial these hearing, contracts, sensitive the City stated, "[ F] rom a business standpoint [ C] lick! finds the release of , specifically the pricing, to information; however, be we are a public highly agency, objectionable. and under This is commercially the [ PRA], our evaluation is that we are unlikely to successfully assert Uniform Trade Secret Act exemption or any other exemption under the [ PRA]." Report of Proceedings ( RP) at 14. The City and Click! did not file briefs in this appeal. 3 45577 -3 - II The trial court ruled that the RCAs contained trade secrets and enjoined Click! from releasing the RCAs and any related records. Tacoma News moved for reconsideration. It argued that the court should review the unredacted RCAs in camera and, if it still found that the agreements contained trade secrets, redact the exempt information and release the redacted RCAs. process the The court granted the motion for reconsideration and set a hearing to establish the by parties which to it submit would receive and review briefing The court further ordered the unredacted RCAs. regarding the sealing of the unredacted RCAs. The court clarified that the injunction was still in effect and that the City must submit RCA related records to the broadcasters for approval before releasing the records to any requesters.3 After a hearing, the trial court determined that in camera review was unnecessary in light of the broadcasters' affidavits and declarations which described the redacted information. Based on the affidavits and declarations, the court concluded that the redactions contained trade secrets that were exempt from disclosure under the PRA. The court never reviewed unredacted copies. Instead, the court ordered Click! to release the records with the redacted information. Tacoma News appealed to our Supreme Court. That court denied direct review and transferred the case to us. ANALYSIS I. STANDARD OF REVIEW The PRA requires each agency to make public records available for public inspection unless the record 42. 56. 070( 1). falls The PRA within the should be "` specific exemptions of the PRA or other statute. RCW liberally construed to promote full access to public records, 3 After the broadcasters sought an injunction, unrelated third parties began requesting RCA information from the City. 45577 -3 -II and v. its exemptions are Parmelee, 162 Wn. to be narrowly App. construed.' 337, 350, 254 P. 3d 927 ( 2011) ( 131 Wn.2d 25, 31, 929 P. 2d 389 ( 1997)). record pertains may move King County Dep' t the trial court of Adult & Juvenile Det. quoting Amren v. City of Kalama, Persons who are named in the record or to whom the to enjoin the release of the records. RCW 42. 56. 540; Parmelee, 162 Wn. App. at 350. The court may enjoin production of requested records if it finds that production would not be in the public' s interest and would substantially and irreparably damage any person or vital government function. RCW 42. 56. 540. We review injunctions issued under the PRA de novo.4 Parmelee, 162 Wn. App. at 351. Where, as here, the record consists only of documentary evidence, we stand in the same position as the trial court. Progressive Animal Welfare Soc' y v. Univ. of Wash., 125 Wn.2d 243, 252, 884 P. 2d 592 ( 1994). II. TRADE SECRET EXEMPTION The broadcasters do not argue that the RCAs are not public records subject to the PRA. Rather, they argue that the records are exempt from disclosure. The trial court concluded that the pricing information in the RCAs was exempt as a trade secret. Tacoma News disagrees. We hold that the broadcasters failed to prove that the fees are a trade secret. A public record is exempt from disclosure under the PRA if the record falls within an other statute" that exempts or prohibits disclosure of specific information. RCW 42. 56. 070( 1). 4 The broadcasters argue that we should use the abuse of discretion standard to review the court' s decision to grant an injunction. They cite Resident Action Council v. Seattle Housing Authority, 177 Wn. 2d 417, 428, 300 P. 3d 376 ( 2013). injunction under RCW 42. 56. 540. actions under chapter Wn.2d at But the trial court in that case did not grant an Resident Action Council, 177 Wn. 2d 42. 56 RCW de novo. RCW 42. 56. 550( 3); 445 -46. We review Dowd, LLP v. State, 179 Wn. App. 711, 719, 328 Parmelee, 162 Wn. App. at 351. 432; Robbins, Geller, Rudman & P. 3d 905 ( 2014); at Resident Action Council, 177 5 45577 -3 - II The Uniform Trade Secret Acts ( UTSA) qualifies as an " other statute" Progressive Animal Welfare Soc 'y, 125 Wn.2d to protect trade secrets. at 262. exempting disclosure. This statute allows courts to take action . Progressive Animal Welfare Soc' y, 125 Wn.2d at 262 ( citing RCW 19. 108. 020( 3), . 050). The UTSA defines a trade secret as 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. The information RCW 19. 108. 010( 4). ascertainable from must be " novel," Spokane Research & another source. meaning that it must not be readily Def. Fund v. City of Spokane, 96 Wn. App. 568, 578, 983 P. 2d 676 ( 1999). The broadcasters have the burden Fund, 96 Wn. App. at 577. of proving a trade secret. Spokane Research & Def. Their declarations and affidavits must provide specific, concrete examples illustrating that the pricing information meets the requirements for a trade secret. McCallum A. v. Allstate Prop. & Cas. Ins. Co., 149 Wn. App. 412, 426, 204 P. 3d 944 ( 2009). RCA Pricing Information Tacoma News contends that the RCA pricing information not trade secrets because they are not the type of information protected as a trade secret and they are not subject to reasonable efforts to maintain secrecy. Tacoma News further contends, and the .broadcasters' conclusory statements are insufficient to establish, that the pricing information is novel. We agree. 5 Ch. 19. 108 RCW. 45577 -3 -II We recently dealt State, 179 Wn. App. in Robbins, Geller, Rudman & Dowd, LLP v. with a similar situation There, a law firm attempted to enjoin the 711, 328 P. 3d 905 ( 2014). Attorney General' s Office from disclosing the firm' s fee proposal and insurance information under Robbins, 179 Wn. the PRA. App. at 717 -18. The firm argued that the information constituted a trade secret that was exempt from PRA disclosure. Robbins, 179 Wn. App. at 72324. It stated that its approach to fee setting was unique, specific to each client and case, and required significant time and effort to formulate. Robbins, 179 Wn. App. at 723. And it contended that the release of this information would give its competitors an unfair advantage by allowing them to outbid the firm for future work. Robbins, 179 Wn. App. at 723 -24. We disagreed. Robbins, 179 Wn. App. at 724. We determined that the firm failed to show that its fee schedule and insurance information differed significantly from its competitors'. Robbins, 179 Wn. App. at 724. Additionally, the firm had previously publicly released similar fee information. Robbins, 179 Wn. App. at 724. Thus, the firm' s assertions of uniqueness and competitive disadvantage were conclusory and the information was not a trade secret. Robbins, 179 Wn. App. at 724. Similarly, here, the broadcasters' allegations of harm are too conclusory and speculative. They make the same argument as the firm in Robbins: Release of this information would give competitors an unfair advantage. is a trade secret. This reason alone is insufficient to prove that the information The broadcasters have not proven that their prices have independent economic value to their competitors or other cable systems. As the broadcasters concede, every negotiation is different. Markets and cable systems Prices fluctuate vary. over time. Thus, it does not follow that the other cable systems could viably argue that they are entitled to the same price as a cable system in a different market during a different time period. Moreover, it is not clear from 7 45577 -3 - II the record that Click!' s fees would set a ceiling on fees because the record does not state that Click! 's fees are consistently lower than the fees paid by other cable systems. And, the court did not see the unredacted records to make an independent assessment. Additionally, the broadcasters failed to show that their RCA fees are unique. Like the firm in Robbins, the broadcasters merely presented conclusory and speculative statements arguing that their approaches are unique and specific to each negotiation. There is no support for this statement because the broadcasters stated that their fees are unique, but they admit that they have not seen the other broadcasters' RCAs. And the unredacted RCAs are not in the record. The City, the only party to view all of the unredacted RCAs, determined that no PRA exemption applied to bar disclosure of the The broadcasters' RCAs. assertions are conclusory and speculative and we hold that the RCA prices are not trade secrets. The broadcasters provide no authority compelling us to hold that contract prices are trade secrets. Both sides cite to federal cases discussing the Freedom of Information Act (FOIA),6 but this case does not involve federal agencies and Washington courts have recognized that FOIA differs in many ways" from the PRA. 712, 731, 748 P. 2d 597 ( 1988); B. The Cowles Publ' g Co. v. Wash: State Patrol, 109 Wn.2d Robbins, 17.9 Wn. App. at 730 -31. Non cash compensation trial court also allowed the broadcasters to redact non cash compensation information from the disclosed RCAs. We hold that this is error because the broadcasters failed to meet their burden of establishing that these provisions are a trade secret. As stated above, the broadcasters have the burden of proving that information is a trade secret. 6 Spokane Research & Def. Fund, 96 Wn. 5 U. S. C. § 552. 8 App. at 578. Although the trial court has 45577 -3 - II discretion to review documents in in camera some instances, ' the only way that a court can accurately determine what portions, if any, of the file are exempt from disclosure is by an in camera review. "' Newman see also v. Limstrom King County, Overlake Fund v. v. Landenburg, 136 Wn.2d 595, 615, 963 P. 2d 869 ( 1998) ( quoting 133 Wn.2d 565, 583, 947 P. 2d 712 ( 1997) ( Alexander, City of Bellevue, 60 Wn. App. J., dissenting)); 787, 797, 810 P. 2d 507 ( 1991) ( stating that in camera review may be necessary " when the court cannot evaluate the asserted exemption without more information than th at contained in the ... affidavits. "). Here, one of the broadcasters, Fisher, redacted portions of its RCA that related to " noncash compensation." CP at 447. It is unclear from the affidavits what non cash compensation The broadcasters resisted in camera review of the unredacted RCAs, despite the trial entails. assurances court' s that the records could be sealed. Without more information than what is contained in the affidavits, we are unable to say that the broadcasters met their burden of proving that the non -cash compensation information is a trade secret. III. FEDERAL REGULATION EXEMPTION The broadcasters alternatively argue that federal regulations qualify as an " other statute" which exempt cite and disclosure 47 U. S. C. § 325( b), 47 C. F.R. § under RCW 42. 56. 070( 1). Resp' t Belo' s Br. at 23. The broadcasters which involves consent to retransmission of broadcasting station signals, 0. 459( a)( 1), which allows parties submitting materials to the Federal Communications Commission ( FCC) to request that the information " not be made routinely available for public inspection." In Ameriquest Mortgage Co. v. Washington State Office ofAttorney General, 170 Wn.2d 418, 440, 241 P. 3d 1245 ( 2010), our Supreme Court determined that the federal Gramm- Leach- 9 45577 -3 -II Bliley Act ( GLBA) other statute" the FTC 7 and exempting rule provided 170 Wn.2d at the Federal Trade Commission ( FTC) 424 -25. records privacy from disclosure protections to under customers rule8 the PRA. of enforcing it qualified as an In that case, the GLBA and financial institutions. Ameriquest, These federal regulations fit within the PRA exemption because they precluded disclosure of specific information or records, namely, customers' nonpublic personal information. Ameriquest, 170 Wn.2d at 425, 440. Contrary to the broadcasters' assertions, the federal regulations the broadcasters cited do state not specifically do not preclude disclosure of confidential and protected specific any information that information submitted to the FCC " request 47 C. F. R. § 0. 459( a)( 1). inspection." other that RCAs are statute " 42. 56. 070( 1). exempts or prohibits Thus, the federal The PRA " disclosure regulations from disclosure. The regulations or records. Rather, they allow a party to not be made routinely available for public other statute" of specific exemption only applies if the information the broadcasters cited do not or records." qualify RCW as an " other statute." Even if the broadcasters had proven that RCA prices are trade secrets or that the federal regulations are an " other statute," the broadcasters still failed to prove the requirements for an injunction under RCW 42. 56. 540. IV. INJUNCTION If a PRA exemption applies, a court can enjoin the release of a public record if disclosure would clearly not be in the public interest and would substantially and irreparably damage any 7 15 U. S. C. §§ 6801 - 6809. 8 16 C. F.R. § 313. 10 45577 -3 -II person, or ... vital governmental functions. "' 9 Morgan v. City ofFederal Way, 166 Wn.2d 747, 756 -57, 213 P. 3d 596 ( 2009) ( quoting RCW 42. 56. 540). The broadcasters cannot show either requirement in this instance. A. Public Interest Tacoma News asserts that the broadcasters failed to demonstrate that disclosure would clearly not be in the public' s interest. We agree. Tacoma News persuasively argues that the public has a right to know how Click!, a city - owned enterprise, is spending public funds. The PRA broadly mandates in favor of disclosure: The people of this state do not yield their sovereignty to the agencies that serve. them. The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know. The people insist on remaining informed so that they may maintain control over the instruments that they have created. This chapter shall be liberally construed and its exemptions narrowly construed to promote this public policy and to assure that the public interest will be fully protected. RCW 42. 56. 030. The broadcasters' contrary arguments confuse the public with Click! and its customers. The affidavit from Click!' s general manager alleges public harm in the form of increased cable rates to its subscribers, but not all people who subscribe to cable. Disclosure in this instance is in the public' s interest because the information involves expenditure of public funds. B. Irreparable Damage Tacoma News next argues that the broadcasters are not a " person" under RCW 42. 56. 540. They also argue that the broadcasters will not be irreparably damaged by disclosure 9 Tacoma News argues that the trial court may have applied a different injunction .standard than the one set out in RCW 42. 56. 540. But the court' s oral ruling shows that it considered whether a PRA exemption applied, the public' s interest in disclosing the records, and damage to Click! and the broadcasters. The record does not show that the court used a different standard. 11 45577 -3 -II of the RCA prices. We hold that the broadcasters qualify as " persons" but that they failed to show that they would suffer irreparable harm. Our legislature has limited liability or corporation construed " person" other commercial determined that the UTSA RCW entity. an exemption provides Animal Welfare Soc' y, 125 Wn.2d person" 1. 16. 080( 1). " RCW company." to include " any public or private corporation or at 262. Person" within the UTSA includes 19. 108. 010( 3). for disclosure a Washington courts have under the PRA. Progressive For this exemption to have meaning, it follows that within the context of the PRA must also include commercial entities such as the broadcasters. But the broadcasters have not shown that they would suffer substantial and irreparable damage. They stated that disclosure of the RCA prices would place them at a disadvantage in negotiating RCAs with other cable systems. disclosed license fees above, these granted an as a maximum, which would cost the broadcasters revenue. As discussed are speculative. The broadcasters failed to show that they should be under the PRA. 10 We hold that this injunction should be vacated. The assertions injunction They claim the other cable systems would use the broadcasters have not shown that the disclosure is not in the public' s interest and that it would substantially and irreparably damage any person. We reverse the court and vacate the injunction. VI. ATTORNEY FEES Tacoma News contends that it is entitled to attorney fees and costs. RCW 42. 56. 550( 4) states, Any person who prevails against an agency in any action in the courts seeking the right to inspect or copy any public record or the right to receive a response to a 1° Because we vacate the injunction, we need not address Tacoma News argument that the injunction was overbroad. We do note, however, that RCW 42. 56. 540 enjoins the release of any specific public record and the court must make the determination. 12 45577 -3 - II public record request within a reasonable amount of time shall be awarded all costs, including reasonable attorney fees, incurred in connection with such legal action. This provision is inapplicable when a third party brings an action to prevent disclosure of records the agency has agreed to release but is prevented from releasing because of a court order. Confederated Tribes of Chehalis Reservation v. Johnson, 135 Wn.2d 734, 757, 958 P. 2d 260 1998). release Here, the City determined that no exemptions applied and stated that it intended to the records. releasing the records. Thus, the broadcasters sought an injunction to prevent the City from Tacoma News has prevailed against deny the request for attorney fees. We reverse and vacate the injunction. We concur: 13 the broadcasters, not the City. We
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