47 Cal.App.5th 716
Cal. Ct. App.2020Background
- Senate Bill 17 (Health & Safety Code §127677) requires pharmaceutical manufacturers to give 60 days’ advance notice of certain wholesale acquisition cost increases to statutorily defined "registered purchasers," including state purchasers, insurers, and pharmacy benefit managers (PBMs); the statute does not impose confidentiality or use restrictions on recipients.
- Amgen emailed an SB 17 price‑increase notice (listing 13 drugs and ranges of possible increases) to ~170 registered purchasers, including California Correctional Health Care Services (CCHCS).
- Reuters made a Public Records Act (CPRA) request to CCHCS for notices Amgen had sent; Amgen filed a reverse‑CPRA mandamus petition seeking to enjoin disclosure, invoking the trade secret privilege (Evidence Code §1060) and the CPRA exemption (Gov. Code §6254(k)).
- The trial court granted Amgen a preliminary injunction, finding a reasonable probability Amgen’s notice remained a trade secret and that the balance of harms favored Amgen; CCHCS appealed.
- The Court of Appeal exercised its discretion despite mootness concerns, and reversed: it held Amgen failed to show the notice retained trade‑secret status after widespread statutorily compelled disclosure and that the balance of harms favored CCHCS.
Issues
| Issue | Amgen's Argument | CCHCS's Argument | Held |
|---|---|---|---|
| Whether the appeal is moot | Dismissal of underlying action moots injunction appeal | Court may decide because issue is capable of repetition and likely to evade review | Court exercised discretion to decide (not moot) |
| Whether Amgen’s SB 17 notice remained a trade secret after disclosure to registered purchasers (and PBM customers) | Disclosure was "compelled" by statute and limited to noncompetitors; limited disclosure does not necessarily destroy trade secret | Widespread, unprotected disclosure to many recipients (and required PBM onward notice) destroyed secrecy and value | Amgen failed to show secrecy; disclosure to unbound purchasers defeated trade secret claim; trial court erred |
| Whether Evid. Code §1060 / Gov. Code §6254(k) provide a proper basis for reverse‑CPRA relief | Trade secret privilege incorporated into CPRA exempts the notice from disclosure | Even if privilege exists, Amgen did not prove entitlement once notice was disclosed | Court did not decide scope of privilege as a reverse‑CPRA basis because Amgen failed on secrecy; ruled Amgen unlikely to prevail |
| Whether balance of harms and irreparable injury supported a preliminary injunction | Public disclosure would irreparably harm Amgen competitively; preliminary injunction necessary | Harm was illusory because purchasers already held notices and could use them; competitors face same regime; public interest favors disclosure | Balance of harms did not favor Amgen; preliminary injunction was an abuse of discretion |
Key Cases Cited
- Ruckelshaus v. Monsanto Co., 467 U.S. 986 (U.S. 1984) (public dissemination can extinguish trade‑secret protection)
- Providian Credit Card Cases, 96 Cal.App.4th 292 (Cal. Ct. App. 2002) (disclosure to customers negates trade‑secret status)
- Masonite Corp. v. County of Mendocino Air Quality Mgmt. Dist., 42 Cal.App.4th 436 (Cal. Ct. App. 1996) (limited/inadvertent disclosure by statutorily bound agency to noncompetitors may not destroy secrecy)
- DVD Copy Control Assn. v. Bunner, 116 Cal.App.4th 241 (Cal. Ct. App. 2004) (scope of dissemination determines whether online publication destroys secrecy)
- White v. Davis, 30 Cal.4th 528 (Cal. 2003) (standards and factors for preliminary injunction)