Idaho judge orders records disclosed in trade secrets case

From The Spokesman-Review

By Betsy Z. Russell

BOISE – An Idaho 4th District judge has ordered a Florida dental services contractor to disclose nearly 100 pages from its successful bid for an Idaho Medicaid contract that the company had claimed was exempt from public disclosure as trade secrets.

The order came in a lawsuit filed by Blue Cross, which had the state contract but lost out to Florida-based MCNA Dental, which has been winning similar contracts around the country.

Blue Cross contended that the Florida firm claimed much of its bid consisted of trade secrets – preventing Blue Cross from reviewing it to decide whether to challenge the bid award.

Judge Samuel Hoagland wrote, “The court finds that much of MCNA’s redacted information was previously disclosed publicly and was freely available on its own website, on various other state websites, and by simple Google searches.” Information that has been publicly disclosed, he wrote, “cannot now be claimed as a trade secret. If the information has been made public, then by definition it cannot and is not a trade secret.”

Hoagland wrote that for a public record to be exempt from disclosure under the trade secrets exemption, the party claiming the exemption must demonstrate two things: That the information has independent economic value from being kept secret; and that reasonable means have been taken to keep that information secret.

“MCNA asserts that the balancing act in this case is between the importance of keeping the proprietary information protected and Blue Cross’ need for information,” the judge wrote. But the Idaho Public Record Act, he wrote, “stands for the proposition that the balancing act is between governmental transparency and individual protection of trade secrets.” The reason why someone wants the records is irrelevant, he wrote, citing a 2014 Idaho Supreme Court decision, Wade vs. Taylor.

Under Idaho law, “All public records are open unless expressly provided otherwise by statute,” the judge wrote. “Therefore, we narrowly construe exemptions to the disclosure exemption.”

In his 33-page decision, the judge meticulously went through individual page numbers from the bid and determined whether the information redacted was appropriate or not. He found that roughly 250 pages, plus eight attachments, were appropriately redacted from the MCNA bid. But nearly 100 other pages weren’t, he ruled.

MCNA argued in court that Blue Cross was just after its trade secrets for competitive reasons, and as the third-place finisher in the bid process, likely couldn’t successfully challenge the bid. The contract award, which was supposed to take effect Sept. 2, was put on hold by the lawsuit; Blue Cross and the state agreed to extend their existing contract until it was resolved.

Blue Cross also challenged redactions by the second-place bidder, Liberty Dental Plan of Nevada, but the judge ruled that those were appropriate under the Idaho Public Records Act.

MCNA’s original submission redacted all or part of 507 of the 709 pages in its bid proposal and attachments. Blue Cross redacted only a few pages. After Blue Cross protested to the state, state officials asked the bidders to rethink their redactions, and MCNA reduced them, but they remained substantial.

“The major argument that MCNA advances is that if a competitor was to see the bid in its entirety, then the competitor would have an advantage in future bids,” Hoagland wrote in his ruling. But he said MCNA enjoyed that advantage itself in the Idaho bid process. “MCNA further argues that businesses will be disinclined to come to do business in Idaho if such trade secrets were not protected. The court is not persuaded. First, it didn’t stop MCNA. Second, these are policy arguments for the Legislature. … Third, as seen here, true trade secrets are protected, but information that is not a trade secret is not protected.”

“If a company wants to engage in public contracting,” the judge wrote, “it must follow our Public Records Act, be transparent in its dealings, and recognize the public’s right to know, even if the public includes a competitor.”

There’s little case law testing the limits of Idaho’s trade secrets exemption from the Idaho Public Records Act, but there is for the Idaho Trade Secrets Act, which has nearly identical wording.

From The Spokesman-Review

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