May 13, 1999; Minnesota Department of Revenue
5/13/1999 10:14:43 AM
This is an opinion of the Commissioner of Administration issued pursuant to section 13.072 of Minnesota Statutes, Chapter 13 - the Minnesota Government Data Practices Act. It is based on the facts and information available to the Commissioner as described below.
Facts and Procedural History:For purposes of simplification, the information presented by the person who requested this opinion and the response from the government entity with which the person disagrees are presented in summary form. Copies of the complete submissions are on file at the offices of IPA and, except for any data classified as not public, are available for public access. On March 3, 1999, IPA received a letter from Matthew G. Smith, Commissioner of the Minnesota Department of Revenue. In his letter, Commissioner Smith asked the Commissioner of Administration to issue an opinion regarding the classification of certain data maintained by Revenue. Commissioner Smith enclosed copies of related correspondence. IPA received a letter on March 8, 1999, from Thomas L. Fabel, attorney for SUPERVALU (the company whose data are at issue), stating that he wished to submit additional comments in support of SUPERVALU's position that the data are protected. On March 26, IPA received those comments from Mr. Fabel and his associate, Thomas F. Pursell. A summary of the detailed facts of this matter follows. The Minnesota Department of Revenue is responsible for enforcing the Minnesota Unfair Cigarette Sales Act, Minnesota Statutes, sections 325D.30-325D.42. SUPERVALU, a company, submitted cost of doing business data to Revenue to comply with the requirements of section 325D.32, subdivision 10(c). A Revenue inspector obtained additional information during an on-site review. According to Commissioner Smith, a competitor of SUPERVALU has requested access to all of the data associated with the SUPERVALU filing, including supporting financial details, formulas, methodology, and calculations. In their comments to the Commissioner of Administration, Mr. Fabel and Mr. Pursell wrote that SUPERVALU believes . . . the highly sensitive internal cost data, which it permitted a Department of Revenue inspector to review under conditions of strict confidentiality are classified as not public trade secret data pursuant to Minnesota Statutes, section 13.37, subdivision 1 (b). According to Mr. Fabel and Mr. Pursell: The data in question consist of four pages of typewritten tables and accounting information. The data appear to have been copied directly and verbatim from tables and notes provided to the Department of Revenue Inspector. These tables and notes were, in turn, taken from internal audit documents, themselves the compiled work product or other SUPERVALU employees and contractors. The actual information consists of: bull; A table of individual named employees' salaries, with cost allocations to cigarette sales; bull; shipping costs and trucking income attributable to stated volumes of cigarettes shipped; bull; inventory and product turnover information; bull; warehouse, building, stamping and payroll expenses; bull; sales volumes; and bull; other financial summary information. These data were obtained by a Revenue inspector, who was told by SUPERVALU that the information was confidential. The inspector was permitted to take notes, but was not permitted to take any SUPERVALU documents. The information reflected in the inspector's notes was apparently copied verbatim out of SUPERVALU documents without the company's knowledge or consent. Issues:In his request for an opinion, Commissioner Smith asked the Commissioner to address the following issues:
Discussion:Pursuant to Minnesota Statutes, section 13.03, subdivision 1, government data are presumed public unless otherwise classified by statute, federal law, or temporary classification at Section 13.06. Minnesota Statutes, section 13.37, subdivision 1 (b), provides: Trade secret information' means government data, including a formula, pattern, compilation, program, device, method, technique or process (1) that was supplied by the affected individual or organization, (2) that is the subject of efforts by the individual or organization that are reasonable under the circumstances to maintain its secrecy, and (3) that 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. Under section 13.37, subdivision 2, trade secret data are classified as nonpublic (data not on individuals) and as private (data on individuals.) The data in question were collected from SUPERVALU because an official of the Department of Revenue decided that acquiring the data was necessary for the Department of Revenue to determine if SUPERVALU was complying with the statutes regulating cigarette sales. The correspondence from the attorneys for SUPERVALU states that the Company did not willingly supply the data in question but that the data were acquired from documents provided for review by a Department of Revenue inspector. The comments from SUPERVALU indicate that the data in question were taken from certain tables and accounting information to which the inspector was given access by a representative of the Company. It is not clear from the information provided to the Commissioner if the data in question were just copied verbatim by hand from the SUPERVALU files or if the Department of Revenue employee actually prepared a compilation of data based on a review of files at SUPERVALU. The Company did state that the Department of Revenue employee did not take any of the actual documents prepared by the Company. The Commissioner has not been provided with a copy of the actual data at issue in this opinion so as to be able to accurately assess just exactly what data was compiled and who compiled it. However, the Company did state clearly that the Department of Revenue employee was not given copies of actual Company documents. If that is the case, then the data in question appear to be data that were compiled, not by the affected company, but by an official of the Department of Revenue. If that is a correct understanding of the status of this data, it is difficult for the Commissioner to conclude that a compilation of data by a government employee would qualify for trade secret protection under Section 13.37. Part of what makes a compilation of data a trade secret is the effort that goes into the compilation. If it were clear to the Commissioner that the data in question were verbatim copies of data compiled by the Company, then the question of whether that compiled data would qualify as trade secret information would have to be considered. However, the Company's statements on that issue are equivocal so the Commissioner will not, at this point, consider that question. Given the information provided, the Commissioner must reasonably conclude that these data were not compiled by the Company and therefore cannot qualify as trade secret information. The Commissioner is concerned that specific salary information on SUPERVALU employees may have been acquired by the Department of Revenue that would not be protected from public disclosure. If that is the case, the Department of Revenue should determine if an application for temporary classification may be appropriate to protect the data. The second question Commissioner Smith asked was whether the SUPERVALU data ought to be destroyed or returned to SUPERVALU. The Commissioner addressed a similar situation in Advisory Opinion 96-057: As noted by [former Minnesota Department of Labor and Industry (DOLI)] Commissioner Bastian, Minnesota Statutes Section 15.17, subdivision 1, provides: [a]ll officers and agencies of the state . . . shall make and preserve all records necessary to a full and accurate knowledge of their official activities. In its comments on Mr. Claypatch's opinion request, DOLI made no mention of the requirements of the State's Records Management Statute, Minnesota Statutes Section 138.163 and the following Sections. Pursuant to Minnesota Statutes Chapter 138, government entities may dispose of government records only as provided by that Chapter. (See Section 138.163.) Pursuant to Section 138.17, government entities must seek the approval of the Records Disposition Panel before they may dispose of government records. Pursuant to Section 138.17, subdivision 1, government records are defined to include all . . . data, information, or documentary material . . . made or received by an officer or agency of the state . . . pursuant to state law or in connection with the transaction of public business by an officer or agency . . . . (Emphasis added.) . . . . The Legislature has established a process whereby government records may be properly disposed. Mr. Claypatch makes a valid argument that if DOLI were not required to retain copies of the certified payroll records for at least some period of time, it would not be possible for the public to hold DOLI accountable for its determinations. The public has an interest in reviewing determinations of government entities, regardless of whether or not a violation of law has been found. The public access provisions of Chapter 13, which strongly favor public access to government data, would be frustrated if government entities did not follows Chapters 15 and 138. From the information provided to the Commissioner, it appears that Revenue relied upon the data in question to make its determination regarding whether a cigarette distributor is in compliance with the Minnesota Unfair Cigarette Sales Act. Pursuant to the requirements of sections 15.17 and 138.17, if the data in question are necessary to a full and accurate knowledge of its official activities, Revenue should be retaining copies of the data, unless it receives permission from the Records Disposition Panel to do otherwise. If the data supplied by SUPERVALU and other cigarette distributors are not records which fall under the provisions of Sections 15.17 and 138.17, then they need not be retained. Given the specific nature of the data in question, Revenue may want to attempt to resolve this classification question through the temporary classification process, rather than section 13.37. (See section 13.06.) Opinion:Based on the facts and information provided, my opinion on the issues raised by Commissioner Smith is as follows:
Signed: David F. Fisher
Dated: May 13, 1999 |
Records management/retention
Data destruction
Temporary classification (13.06)
