Note: In 2014, the Legislature amended Minnesota Statutes, section 13.05, subd. 11(a), related to government contracts.

Facts and Procedural History:

On April 11, 2003, the Commissioner received a letter dated April 9, 2003, from Dick Stehr, Director of the Engineering Services Division of the Minnesota Department of Transportation. After consultation with IPAD staff, two issues were agreed upon and on May 2, 2003, IPAD received Mr. Stehr's revised opinion request. IPAD invited Zumbro River Constructors (ZRC) and the Star Tribune to provide comments. On May 16, 2003, IPAD received a letter dated same from John Borger, an attorney representing the Star Tribune. On May 21, 2003, IPAD received a letter dated May 20, 2003, from Herbert Morgan, ZRC Project Manager.

A summary of the facts is as follows. In his April 9, 2003, letter, Mr. Stehr wrote:

In 2002, Mn/DOT and Zumbro River Constructors (ZRC), a private consortium, entered into a contract for the Trunk Highway 52 Design-Build Reconstruction Project....In turn, ZRC has entered into subcontracts for some of the work on this project.

As part of its contract with ZRC, Mn/DOT has retained the rights to receive a copy of each ZRC subcontract. [Specification 1801] also states that subcontract prices may be omitted on the (State's) copy of the agreements. ...The contract between Mn/DOT and ZRC... and Minn. Stat. section 13.05 subd. 11 (2002), also expressly provide [sic] that the Act is applicable to ZRC. However, MnDOT does not routinely request copies of subcontracts. In addition, Mn/DOT has honored specification 1801 in the past and has not asked for or received subcontract price information from its contractors.

A reporter for a Twin Cities' newspaper...requested that Mn/DOT provide it access to copies of all ZRC's subcontracts related to this project....The newspaper also requested copies of the prime contract and all related contract documents that Mn/DOT maintains for this project....The requested documents have been provided to Mn/DOT, including copies of Request to Sublet forms which identify the subcontractors and provide information about them.

ZRC sent Mn/DOT copies of three subcontracts. However, certain information was redacted by ZRC from these copies....Mn/DOT, in turn, provided the redacted copies to the newspaper. Mn/DOT does not have possession of the redacted material nor has Mn/DOT personnel seen such information.

Issue:

In his request for an opinion, Mr. Stehre asked the Commissioner to address the following issues:

Discussion:

Issue 1:

Pursuant to Minnesota Statutes, Chapter 13, what is the classification of the following data that Zumbro River Constructors (ZRC) maintains: pricing information contained in ZRC's contracts with subcontractors?

Pursuant to Minnesota Statutes, section 13.03, subdivision 1, government data are public unless otherwise classified. Government data are defined as all data collected, created, received, maintained or disseminated by any [government entity] regardless of its physical form, storage media or conditions of use. (See section 13.02, subdivision 7.) Government entity is defined as a state agency, political subdivision, or statewide system. (See section 13.02, subdivision 7a.)

ZRC is not a government entity. However, because of its contractual relationship with Mn/DOT, certain data it collects and/or maintains are subject to the requirements of Chapter 13. Section 13.05, subdivision 11, states:

(a) If a government entity enters into a contract with a private person to perform any of its functions, the government entity shall include in the contract terms that make it clear that all of the data created, collected, received, stored, used, maintained, or disseminated by the private person in performing those functions is subject to the requirements of this chapter and that the private person must comply with those requirements as if it were a government entity. The remedies in section 13.08 apply to the private person under this subdivision.

(b) This subdivision does not create a duty on the part of the private person to provide access to public data if the public data are available from the government entity, except as required by the terms of the contract.

The provisions relating to Chapter 13 in the contract between Mn/DOT and ZRC are in Section 6 of Part II - Instructions to Proposers. Section 6.4.1., Government Data Practices, states:

The Design-Builder and State must comply with the Minnesota Government Data Practices Act, Minnesota Statutes, Chapter 13, as it applies to all data provided by the Department under this Contract, and as it applies to all data created, collected, received, stored, used, maintained, or disseminated by the Design-Builder under this Contract. The civil remedies of Minnesota Statutes Section 13.08 apply to release of the data referred to in this clause by either the Design-Builder or the Department.

If the Design-Builder receives a request to release the data referred to in this clause, the Contractor must immediately notify the Department. The Department will give the Design-Builder instructions concerning the release of the data to the requesting party before the data are released.

Further, Section 6.4.3., Relinquishment of Originals, states:

The originals of reports, drawings, work sheets, plans, field notes, computations, and other project data must be relinquished to the Department:

Upon written notice of completion or termination of the Contract, or

Upon written notification by the Department, or

Upon final payment for the Contract by the Department to the Design-Builder.

As the contract between ZRC and Mn/DOT provides, all data ZRC creates under the contract are subject to the requirements of Chapter 13. Thus, any contracts between ZRC and its subcontractors are subject to Chapter 13.

In his comments to the Commissioner, Mr. Morgan argues that the pricing information is not public pursuant to section 13.37, subdivision 1(b), trade secret. He wrote:

...[the data] would be exempt from disclosure under Section 13.37 subsection 1(b), as trade secret information. This exemption extends to data that the private sector participant attempts to keep confidential to avoid competitive disadvantage. Virtually every state and the U.S. Freedom of Information Act have similar provisions. Such exceptions are universally construed to protect pricing data. As stated by the United States Court of Appeals for the D.C. Circuit The deleted information, if released, would likely cause substantial harm to [the contractor's] competitive position in that it would allow competitors to estimate, and undercut, its bids. Gulf Western Industries v. U.S., 615 F.2d 527 (D.C. Cir 1979). That is precisely the situation here, and is why the trade secret exception to the Data Practices Act exists....

...[the data] would be exempt from disclosure under the Act because such trade secret information would cause competitive disadvantage to ZRC if released to the public.

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.

Pursuant to subdivision 2 of section 13.37, trade secret data are classified as nonpublic (data not on individuals) and as private (data on individuals).

The Commissioner has issued a number of advisory opinions that discuss the appropriateness of government entities using the trade secret provision as a basis upon which to deny access to data. In each case, s/he consistently has interpreted the trade secret definition narrowly. In the most recent of these, Advisory Opinion 03-009, the Commissioner noted that the Ramsey County District Court overturned two advisory opinions in which the Commissioner opined that the involved entities inappropriately denied access to data on the basis of the trade secret provision. Also in 03-009, the Commissioner noted that one of those cases was appealed to the Minnesota Court of Appeals:

The Prairie Island Indian Community case was appealed to the Minnesota Court of Appeals, which affirmed, in part, and reversed, in part, the District Court's decision. (Prairie Island Indian Community v. Minnesota Department of Public Safety, C9-02-1012, C0-02-1013, C7-02-1025, C2-02-1028 (Minn.Ct.App. April 1, 2003).) While the Court of Appeals decision is somewhat instructive to general matters of government trade secret claims, the bulk of its analysis is geared to the specific issues raised in that particular case. The data in question were financial audit data, whereas the issue currently before the Commissioner relates to data that, in essence, are terms of a contract between two parties. In addition, the Court of Appeals' ability to make a clear determination on the trade secret issue was hindered by the lack of record; thus, one of the actions the Court took was to remand for consideration of what, if any, specific data constitute trade secrets and for the redaction of that data. In writing future opinions, the Commissioner will continue to monitor the courts' handling of issues relating to trade secrets.

The Commissioner still seeks guidance from the courts in interpreting the trade secret provision.

Also in 03-009, the Commissioner made it very clear that a government entity claiming trade secret protection bears the burden of establishing that the data in question satisfy the requirements set forth in section 13.37, subdivision 1(b). The Commissioner previously has described the required elements as follows: (1) a collection of information; (2) that was supplied by the affected individual or organization; (3) that is the subject of reasonable efforts to maintain its secrecy; and (4) that, a) derives independent, i.e., on its own, economic value, b) from not being generally known to or readily ascertainable by, c) other persons who can obtain economic value from its disclosure or use.

In the case of this opinion, Mr. Morgan did not clearly demonstrate how the data satisfy the requirements set forth in section 13.37, subdivision 1(b). Mr. Morgan's only argument is that the data are proprietary. This, in and of itself, does not mean ZRC can protect the data based on a claim of trade secret. State law does not protect proprietary information in the same manner as does the federal Freedom of Information Act. Thus, because Mr. Morgan did not provide sufficient information to support his assertion that the data in question are trade secret, the Commissioner concludes that the pricing data are public and available to the public upon request.

Issue 2:

If the data described in Issue 1 are public, and Zumbro River Constructors won't release the data to the Minnesota Department of Transportation (Mn/DOT), what is Mn/DOT's responsibility under Minnesota Statutes, Chapter 13?

The Commissioner addressed a similar issue in Advisory Opinion 94-035. In that opinion, Anoka County refused to provide a copy of a report prepared by a paid consultant, claiming the County no longer retained the data. The Commissioner wrote:

In making his request for an opinion, Mr. Biernat cited the case of Pathmanathan v. St. Cloud State University, 461 N.W. 2d 726 (Minn. App. 1990) and argued that his dispute with the County was controlled by the result in that case. In the Pathmanathan case, an individual who was applying for a position at St. Cloud State sought access to a report done by a private investigator that was not in the possession of St. Cloud State but was retained by the private investigator. In reaching its result in the Pathmanathan case, the Court of Appeals relied heavily on the fact that the St. Cloud State's contract with the investigator included a term in which St. Cloud State retained ownership rights to reports and information generated by the investigator in doing the background checks on prospective employees. The contract between the County and the consultant does not contain a comparable contract term. However, Term XVI of the contract does state the following:

In collecting, storing, using and disseminating data on individuals in the course of providing services hereunder, the Consultant agrees to abide by all pertinent state and federal statutes, rules and regulations covering data privacy, including but not limited to the Minnesota Data Practices Act and all rules promulgated pursuant thereto by the Commissioner of the Department of Administration. (Emphasis added.)

This contractual provision can certainly be read to mean that the consultant has obligated itself to comply with the entire Minnesota Data Practices Act (sic). Abiding by all of the provisions of the Minnesota Government Data Practices Act, means that the consultant obligated itself to make copies of data that are public under the Act available to a member of the public, such as Mr. Biernat, free of charge for purposes of inspection and for a reasonable cost of providing copies if copies are requested. (See Minnesota Statutes Section 13.03, subdivision 3.)...

Another route presents itself for access to a copy of the consultant's report. Part of the concern raised by Mr. Biernat in his request for an opinion goes to what he sees in this situation of the County's ability to evade certain obligations under the Data Practices Act. In Mr. Biernat's view, the County contracted with this consultant, the consultant was paid public funds to do a study, the study was presented in the form of a written report to the governing body of the County and County representatives acknowledge that the report was used by the County to make decisions concerning the County's system of compensating employees. After the County's obvious reliance on the report in making decisions, it did not retain a copy of the report. When Mr. Biernat sought access to the report, the County told him it did not have the report.

Chapter 13 does not contain any specific language imposing obligations on government agencies to retain government data. After broadly defining government data, the Act states that all government data are public unless classified otherwise. (See Minnesota Statutes Sections 13.02, subdivision 7 and 13.03, subdivision 1.) The definition of government data and the presumption that government data are public are clear statements of intent by the legislature, in this age of information, to give the public access to data the public wants to examine to determine what its government is doing and why. Although not specifically providing for retention of government data for purposes of accountability in Chapter 13, the legislature has long required public officers of this state acting for any governmental entity to . . . make and preserve all records necessary to a full and accurate knowledge of their official activities. (Minnesota Statutes Section 15.17, subdivision 1.) When the legislature amended the predecessor language to what now appears in Chapter 13, establishing the presumption of public data and providing for maximum access to public data, the legislature also amended Minnesota Statutes Section 15.17. This amendment provided that access to records required to be kept under Section 15.17 is governed by Chapter 13. (See Session Laws of Minnesota 1979, Chapter 328.)

When read together, Section 15.17 and Section 13.03, impose an obligation on the County to preserve records that it uses to conduct public business so that those records will be available for public inspection. In this situation, it is quite clear that the County used and relied on the consultant's report to make decisions about its compensation system. It is also clear that the County failed in its obligation to preserve the report that it used and on which it relied in making decisions concerning the public's business. To fulfill its obligations under Minnesota Statutes, the County should re-acquire a copy of the report and make it available to the public under the conditions provided in Chapter 13.

The Commissioner has the following comments regarding the case at hand. Mr. Stehr noted that Standard Specification 1801 provides, The subcontract prices may be omitted on the Engineer's copy of the agreement. The fact that the contract contains this particular specification does not vitiate the language in Chapter 13 and section 15.17 requiring the Department to maintain complete records. Thus, to comply with its obligations under Chapter 13 and section 15.17, the Department should request that ZRC provide to the Department the data in question. If ZRC refuses to release the pricing information, an option available to the Department is for it to bring an action against ZRC for a violation of the contract.

The Commissioner notes that options available to the Star Tribune in seeking access to the pricing information include requesting the data from the Department and requesting the data directly from ZRC.

Opinion:

Based on the facts and information provided, my opinion on the issues that Mr. Strehr raised is as follows:

Signed:

Brian J. Lamb
Commissioner

Dated: June 18, 2003