Discussion:

Pursuant to Minnesota Statutes, section 13.03, subdivision 1, government data are presumptively 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 approximately 12 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. Given the presumption of openness in Chapter 13, the Commissioner is of the opinion that the Legislature intended that government entities employ section 13.37, subdivision 1(b), in a limited manner. However, the Ramsey County District Court overturned two recent advisory opinions in which the Commissioner opined that the involved entities inappropriately denied access to data on the basis of the trade secret provision. (See Supervalue, Inc. v. Matthew F. Smith, as Commissioner of the Minnesota Department of Revenue, File No. C9-99-10390 (Second Judicial District Ramsey County State of Minnesota) and Prairie Island Indian Community v. Minnesota Department of Public Safety, File No. C5-01-8766 (Second Judicial District Ramsey County State of Minnesota).)

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 points out that some trade secret disputes are particularly difficult for him to resolve because his authority under section 13.072 is limited. He cannot conduct investigations, take depositions, or subpoena data. Often times, this lack of being a fact finder is not critical to the outcome of an advisory opinion. However, in cases such as this, it is very difficult for the Commissioner to make a determination without being able to obtain more information or become an expert in matters involving trade secrets.

In addition, the government entity maintaining the data often has more knowledge about the topics to which the data relate than does the Commissioner. This is because of the nature of the entity's work and because of its involvement in various business and professional activities. In such cases, the Commissioner greatly benefits from knowing how the entity reached its determination that the data are trade secret. Here, the Department provided no analysis as to why it concluded the data in question are trade secret. In his December 4, 2002, letter to Mr. McGreevy, Mr. Giese wrote that MOHPA had made a claim of trade secret regarding some of the data. Mr. Giese then cited section 13.37, subdivision 1(b), and stated the Department had determined that the filing made by MOHPA meets the criteria. In his letter he provided no supporting detail. The Department's comments to the Commissioner regarding Mr. Freeman's opinion request provide nothing further.

Given all of the above, the Commissioner is inclined, in this case, to agree with the Department that MOHPA has made a compelling argument that the data satisfy the elements 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.

As to the first and second requirement of section 13.37, the data in the agreement clearly are a collection of information that MOHPA supplied to the Department. It also appears to the Commissioner that MOHPA has made reasonable efforts to maintain the secrecy of the data. To this point, Mr. Sandberg provided copies of affidavits from Thomas Flynn (MOHPA President), Robert Baumgartner (Chief Executive Officer of the Center for Diagnostic Imaging, Inc.), and Scott Aitken (attorney for U.S. Oncology). Each of the affidavits indicates that a limited number of people in the involved organizations have seen the agreement and that efforts have been made to keep copies of the document in secure locations.

Regarding the final requirement, Mr. Sandberg argued that MOHPA derives economic value by virtue of the data not being generally known because the data reveal the key elements of the structure of the parties' relationship. Mr. Sandberg stated:

Mr. Freeman suggests that the Agreements are readily ascertainable by others , and again refers to statements made by USO regarding other transactions it has been involved in elsewhere in the country. While those statements may prevent USO from claiming trade secret status on those particular transactions, they do not in any way limit the trade secret qualification of the portions of the particular Agreement set out in the Data. The Data fundamentally comprise the method of MOHPA and [Minneapolis PET Center, LLC] for the development and operation of a PET facility in Minnesota. The parties believe that their proposed arrangement, intertwining an oncology and medical imaging practice and a practice management group in a specific manner, is innovative and not generally known in the medical community....

The Commissioner finds Mr. Sandberg's argument persuasive.

Although the Commissioner acknowledges he is not entirely comfortable with the result in this opinion, he is hopeful that further review by the courts will pave a clearer path on issues of trade secret. He also urges government entities to reach their own conclusions regarding trade secret classifications - especially in situations where the entities have expertise regarding the involved data. Finally, to deal more directly with the issue, the Department may wish to go to the Legislature and request a specific classification for data it collects pursuant to Minnesota Statutes, Chapter 62J.

Opinion:

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

Signed:

Brian J. Lamb
Commissioner

Dated: April 15, 2003