In 1996, David “Birny” Birnbaum filed an open-records request seeking disclosure of Quarterly Market Reports that Texas automobile insurers had filed with the Texas Department of Insurance.
1
A group of insurers sought and obtained a temporary injunction prohibiting release of the reports of all Texas insurers. On appeal this Court upheld that injunction on the basis that the reports were subject to trade-secret protection pending a trial on the merits as to the named insurance companies.
Birnbaum v. Alliance of Am. Insurers,
DISCUSSION
Although Birnbaum asks this Court to consider the same issue decided in Bim-baum I, he contends that subsequent amendments to the Public Information Act (the Aсt) force us to reach a different result. Birnbaum asserts that the amended Act deprived the trial court of jurisdiction to order the Department of Insurance to withhold the Quarterly Market Reports. Birnbaum argues that even if the trial court had jurisdiction, granting the injunction was an abuse of discretion because the insurance companies failed to prove the reports were entitled to trade-secret protection. Birnbaum contends that, in any event, the amended Act now mandates that the reports be disclosed. Finally, he claims that the trial court erred as a matter of law in overruling his Robinson challenge to the testimony of the insurance companiеs’ expert witness, and that the trial court abused its discretion by excluding evidence. We first consider whether the amended Act applies to the requests at issue here.
I. Applicability of the 1999 Public Information Act Amendments
The legislature amended the Public Information Act during the 76th Legislative Session. E.g., Act of June 18, 1999, 76th Leg., R.S., ch. 1319, §§ 5, 7,1999 Tex. Gen. Laws 4500, 4501-03 (codified at Tex. Gov’t Code Ann. §§ 552.022, .110 (West Supp.2001)). The amendments at issue here became effective September 1, 1999. See id. The insurance companies maintain that the amended Act does not affect this dispute because Birnbaum’s open-records requests were made prior to the effective date of the amendments.
We note initially that thе open-records requests are not in the appellate record. Only a brief excerpt from a request dated July 18, 1999, appears in the record. Based on the pleadings, we can discern that tfiere was more than one request. Several plaintiffs’ petitions refer to requests made on July 19 and 20, 1999. The evidentiary hearing was held July 27, 1999.
The insurance companies rely on
City of Garland v. Dallas Morning News,
in which the supreme court considered the version of the Act that existed when the open-records request was filed.
See City of Garland v. Dallas Morning News,
Unlike a one-time request for information, an open-ended, continuing request for data as it becomes available necessarily involves looking to the applicable statute each time the data is available for release. The language of the request here can be construed as asking for data that becomes available after September 1, 1999, continuing until the trial on the merits.
See Independent Am. Real Estate, Inc. v. Davis,
This open-ended request seeks release of the Quarterly Market Reports filed after the effective date of the amended Act and the injunction prohibits release of the reports after that date. We hold that the amended Act governs the release of reports as they become available after September 1, 1999, even if the request predated this effective date. We therefore consider the amended Act’s impact on the temporary injunction, which protects the records from release pending trial on the merits.
Birnbaum I
controls the ability of the trial court to protect the release of data filed before September 1, 1999.
Birnbaum I,
II. Purpose of the Temporary Injunction
The trial court, in a temporary injunction hearing, assesses whether the applicant has shown a probable right to recover at trial and a probable injury in the interim.
Universal Health Servs., Inc. v. Thompson,
At this preliminary stage, the trial court does not determine that the information subject to an open-records request is a trade secret. Rather, the trial court ascertains whether the applicant has established that the information is entitled to trade-secret protection until the trial on the merits.
See T-N-T Motorsports, Inc. v. Hennessey Motorsports, Inc.,
The applicant seeking a temporary injunction does not have to prove that it will ultimately prevail in the litigation.
Transport Co.,
III. Effect of Section 552.022(b) on the Trial Court’s Jurisdiction
Birnbaum contends that section 552.022(b) of the amended Act deprived the trial court of jurisdiction to order that the Department of Insurance withhold the Quarterly Market Reports from public inspection. See Tex. Gov’t Code Ann. § 552.022(b). Section 552.022(b) provides:
A court in this state may not order a governmental body or an officer for public information to withhold from public inspection any category of public information described by Subsection (a) or to not produce the category of public information for inspection or duplication, unless the category of information is expressly made confidential under other law.
Id. (emphasis added). Birnbaum argues that this section prohibits the trial court from granting the injunction below because (1) thе Quarterly Market Reports are public information that the Act requires be released upon request, and (2) the reports are not “expressly made confidential under other law.” See id.
Section 552.022(b) gives the trial court discretion to order information be withheld if it is in a category that is expressly made confidential under other law. Id. Because section 552.022(b) does not affect the trial court’s ability to order that information be withheld in certain situations, it is not a jurisdictional statute.
The trial court may order a temporary injunction to preserve the status quo pending a trial on the merits. If the injunction order were a decision that the reports are trade secrets, then there would be no need for a trial. Conversely, if the trial court were prevented from ordering a temporary injunction, then a potential trade secret would be released and a trial to determine whether the information is confidential would be pointless. In the instant case, the amended Act may compel a different conclusion on the merits, but in the interim, the nature of trade secrets requires that the trial court err on the side of preserving secrecy. The trial court had the ability under the amended Act to exercise its equitable jurisdiction in ordering the temporary injunction to preserve the status quo.
See GXG, Inc.,
IV. Elements of Trade-Secret Protection
Birnbaum complains that even if the triаl court had jurisdiction, it abused its discretion in ordering the injunction because the insurance companies failed to prove that the Quarterly Market Reports are entitled to trade-secret protection. We have already held in
Birnbaum I
that the reports are subject to trade-secret protection until a trial on the merits.
Birnbaum I,
The insurance companies must satisfy six factors to entitle them to trade-secret protection: (1) the extent to which the information is known outside of the holder’s business; (2) the еxtent to which it is known by employees and others involved in the holder’s business; (3) the extent of the measures taken by the holder to guard the secrecy of the information; (4) the value of the information to the
A. Value to Competitors
Birnbaum argues that the insurance companies failed to prove that the Quarterly Market Reports are valuable to their competitors.
5
He notes that the insurance companies attempted to satisfy their burden of proving value by claiming that the reports are customer lists, which have been held to be trade secrets.
See id.
(citing
T-N-T Motorsports,
In describing the Quarterly Market Reports, Dr. Berry stated that they are lists of “customers by number who reside within a zip code,” as opposed to a customer “list of people by name, address, and zip code.” He testified that competitors could learn from the reports, if released, whether a particular insurancе company is growing or declining in business in a particular geographic area. He said that for “head-to-head competitor[s],” the reports will tell you “where to go get their business,” informing a competitor “what geographic area to flood with direct mail, with billboards ... and how to attack them in terms of where the business is.”
Birnbaum asserts that Dr. Berry’s testimony failed to prove that the reports have value to the insurers’ competitors because it was not supported by logic and only reflected Dr. Berry’s “subjective musing.” This was a determination for the trial court to make. Even if Birnbaum correctly characterizes Dr. Berry’s testimony, the insurance companies introduced four additional witnesses who testified about the value of the data to an insurer’s competitors. These witnesses had worked in the insurance industry, specifically in marketing. While admitting that precise data could not be derived from the Quarterly Market Reports, they testified that competitors can estimate a company’s retention rates in a zip code or strengths and weaknesses in a given zip code and use this information in their marketing strategies. One witness described how a competitor could ascertain from the reports a company’s increased cancellations in a particular zip code and how this could lead the cоmpetitor to make inferences about profitability that would inform the competitor’s decision to do business in that area.
Injunctive relief is proper to prevent a party from gaining an unfair market advantage.
See T-N-T Motorsports,
B. Measures Taken to Guard Secrecy
Birnbaum next contends that the insurance companies failed to prove they took sufficient measures to guard the secrecy of the data in the Quarterly Market Reports. He states that the insurance companies never claimed the data as trade secrets when they filed the reports with the Department of Insurance, never commented on or objected to that department’s proposed rule for releasing the vehicle count data, failed to challenge the rule after it was promulgated in February 1995, and did not sue to stop the release of the reports after Birnbaum’s first open-records request in 1996. 6 Birnbaum refers us to the department’s rule 5.206(h), which states:
Upon request, the Department shall publish a listing of the number of average vehicles on policies in force by eom-pany by ZIP Code in this state. This information will enable the Texas Automobile Insurance Plan Association, insurers and the public to make the necessary credit calculations and allow all interested parties to monitor which ZIP Codes may be underserved in the future.
28 Tex. Admin. Code § 5.206(h) (1999).
The insurance companies respond that there was no threat of disclosure until 1996 when Birnbaum made his first open-records request for the Quarterly Market Reports. First, they explain that prior to the proposed rule, the department did not threaten to release any confidential information. Next, they contend that Rule 5.206(h) does not put the insurance companies on notice that the detailed information in the reports would be subject to release. They state that the first threat of public disclosure occurred on July 24, 1997, when the Department of Insurance decided to release the reports to Birnbaum. The insurance companies in the present case relied on the named parties in Bimbaum I to protect their interests, but when this Court modified the injunction to protect only the named insurance companies, these companies filed Bimbaum II seeking the same protection. Finally, the insurance companies point to evidence in the record of their efforts to keep the data in their possession secret from their сompetitors.
Birnbaum has not demonstrated that the trial court abused its discretion in finding that the insurance companies took sufficient measures to guard the secrecy of the data. Rule 5.206(h), by its own language, does not require disclosure of the detailed information in the Quarterly Market Reports. Instead, it directs the department to publish the “number of
average
vehicles on policies in force by company by ZIP Code.”
Id.
(emphasis added). The Quarterly Market Reports do not contain any
C. Use of Reports in Business
In his fourth point of error, Birnbaum claims that the insurance companies failed to prove they use the information contained in the Quarterly Market Reports in their business. He states that without showing use of the information in one’s business, the data cannot constitute a trade secret as a matter of law, and as a result, the trial court abused its discretion in granting the temporary injunction.
Usе of the alleged trade secret in one’s business is not among the six factors required to establish trade-secret protection in the preliminary stage of a temporary injunction.
John Paul Mitchell,
To the extent the trial court’s order does more than enforce trade-secret protection, however, it is in error. It is within our discretion to modify an injunction that is overbroad.
Birnbaum I,
V. Mandatory Disclosure Under the Amended Act
Birnbaum maintains that the Quarterly Market Reports, even if they are trade secrets, are subject to mandatory disclosure under section 552.022(a)(1), which lists categories of public information.
See
Tex. Gov’t Code Ann. § 552.022(a)(1). He also asserts that the exception to disclosure in section 552.110(a) does not apply to these facts.
See id.
§ 552.110(a). Whether information is subject to disclosure under the Act and whether an exception to disclosure applies are legal questions of statutory construction.
City of Garland,
(a) Without limiting the amount or kind of information that is public information under this chapter, the following categories of information are public information and not excepted from required disclosure under this chapter unless they are expressly confidential under other law:
(1) a completed report, audit, evaluation, or investigation made of, for, or by a governmental body, except as provided by Section 552.108 [Exception: Certain Law Enforcement and Pros-ecutorial Information]
Tex. Gov’t Code Ann. § 552.022(a)(1). “Public information is available to the public at a minimum during the normal business hours of the governmental body.” Id. § 552.021 (West Supp.2001).
Birnbaum asserts that the Quarterly Market Reports are completed reports made for a governmental body; 8 therefore, the reports are public information that must be made available to the public. He argues that the reports are not excepted from disclosure because they are not “expressly confidential under other law.” 9 He first maintains that the word “expressly” requires that the Quarterly Market Reports be mentionеd by name in a statute or judicial decision making them confidential. Second, he contends that “other law” refers to law outside of the Public Information Act; consequently, a judicial decision or statute other than the Act must identify the reports as confidential to protect them from disclosure.
Birnbaum specifically complains that no statute or judicial decision expressly identifies Quarterly Market Reports by automobile insurers as confidential. 10 Birnbaum mistakenly reads the phrase “expressly confidential under other law” in isolation from the remaining language in the statute. The pertinent part of the statute reads: “the following categories of information are public information ... unless they are expressly confidential under other law.” Id. § 552.022(a) (emphasis added). This provisiоn does not require that every conceivable trade secret, or every potential trade secret, be specifically identified in another statute in order to receive trade-secret protection under the Act. This section requires that the information be in a category that is expressly confidential under other law.
Common law protects information that meets the traditional six-factor test for trade-secret protection.
T-N-T Motorsports,
Birnbaum also argues that the insurance companies may not rely on section 552.110(a) as an exception to mandatory disclosure under section 552.002(a). Section 552.110(a) provides: “A trade secret obtained from a person and privileged or
VI. Evidentiary Points of Error
A. Robinson Challenge
Birnbaum challenges the admissibility of Dr. Berry’s testimony for failure to meet criteria required of expert testimony.
See E.I. du Pont de Nemours & Co. v. Robinson,
B. Exclusion of Evidence
Birnbaum finally asserts as error the trial court’s exclusion of allegedly relevant evidence that financial institutions have not been harmed by the public release of similar data under the Home Mortgage Disclosure Act. He also claims the trial court erred in ruling that this evidence is not analogous to the present situation, while admitting testimony about the release of similar information from soft drink manufacturers and television sales stores.
The admission and exclusion of evidence is committed to the trial court’s sound discretion.
City of Brownsville v. Alvarado,
CONCLUSION
The ability of the trial court to grant interim protection of data filed before September 1, 1999, is controlled by
Birnbaum I.
We hold that the amended Act applies to the release of data made available after the effective date of the amendments. The amended Act did not deprive the trial court of jurisdiction to determine if public information should be withheld under the terms of the statute and did not foreclose the trial court’s ability to grant temporary injunctive relief to maintain the status quo pending a trial on the merits. The trial court did not abuse its discretion in finding sufficient evidence that the insurance companies were entitled to trade-secret protection in the interim and did not err in admitting or excluding certain evidence. The trial court erred, however, in reaching the merits of the dispute by declaring that these reports are trade secrets. We modify the order to delete any holding that these reports are trade secrets and to reflect that the insurance companies are only entitled to trade-secret protection pending final hearing on the merits. We
Notes
. Quarterly Market Reports, compiled by zip code, contain information concerning writtеn premiums, policy and membership fees, number of vehicles on policies at the end of the previous quarter, number of vehicles on policies at the end of the current quarter, vehicles added during the quarter, vehicles canceled or not renewed by the insurer, vehicles canceled for nonpayment, and vehicles canceled by the insured.
. The appellees include American Insurance Association; Camden Fire Insurance Association; Pennsylvania General Insurance Company; General Accident Insurance Company of America; Potomac Insurance Company of Illinois; Automobile Insurance Company of Hartford, Connecticut; Standard Fire Insurance Company; Charter Oak Fire Insurance Company; Phoenix Insurance Company; Travelers Indemnity Company; Travelers Indemnity Company of America; Travelers Indemnity Company of Illinois; Travelers Indemnity Company of Connecticut; Travelers Home and Marine Insurance Company; Travelers Personal Security Insurance Company; Travelers Property Casualty Insurance Company; Hartford Fire Insurance Company; Hartford Accident and Indemnity Company; Hartford Casualty Insurance Company; Twin City Fire Insurance Company; Hartford Underwriters Insurance Company; Hartford Insurance Company of the Midwest; United States Fidelity and Guaranty Comрany; Fidelity and Guaranty Insurance Underwriters, Inc.; Fidelity and Guaranty Insurance Co.; American Employer’s Insurance Company; Commercial Union Insurance Company; Employers' Fire Insurance Company; Northern Assurance Company of America; American Protection Insurance Company; American Motorists Insurance Company; Lumbermen’s Mutual Casualty Company; American Manufacturers Mutual Insurance Company; American Casualty Company of Reading, Pennsylvania; National Fire Insurance Company of Hartford; Transportation Insurance Company; Valley Forge Insurance Company; Commercial Insurance Company of Newark, New Jersey; Firemen's Insurance Company of Newark, New Jersey; Boston Old Colony Insurance Company; Kansas City Fire and Marine Insurance Company; Continental Lloyd’s Insurance Company; Glen Falls Insurance Company; Niagara Fire Insurance Company; Fidelity and Casualty Company of New York; Continental Insurance Company; American Fire and Indemnity Company; American Indemnity Company; Texas General Indemnity Company; Trinity Universal Insurance Company of Kansas, Inc.; Security National Insurance Company; Trinity Lloyds Insurance Company; Charter County Mutual Insurance Company; Charter Indemnity Company; Assurance Company of America; Maryland Insurance Company; Maryland Casualty Company; National Standard Insurance Company; Northern Insurance Company of New York; Valiant Insurance Company; Consumers County Mutual; Germania Insurance Company; Germania Fire and Casualty Company; Sentry Insurance, a mutual insurance company; Dairyland County Mutual; and State and County Mutual Insurance Company.
. Birnbaum and the Center for Economic Justice intervened in the suit. The Department of Insurance and the Attorney General are not participating in this appeal.
. The insurance companies do not challenge the ongoing nature of the request.
. Because, according to Birnbaum, the reports are not valuable to competitors, the insurance companies failed to show that a competitor could use the reports to irreparably harm the reporting insurers. Birnbaum concludes, then, that the trial court abused its discretion in finding that release of the reports would irreparably harm the insurance companies.
. This is the request that led to Bimbaum I, in which we held that the insurance companies who were not named parties lacked standing and therefore, were not subject to the temporary injunction.
. We note that the mere fact that a company is not utilizing information at the present time does not prevent that information from being subject to trade-secret protection.
Bertotti v. C.E. Shepherd Co.,
. The insurance companies do not dispute that the Quarterly Market Reports are completed reports for the purposes of section 552 .022(a)(1).
. Birnbaum bases this argument on the language in section 552.022(b) when he asserts that the trial court lacks jurisdiction to order the temporary injunction. Even though we have overruled that point of error on other grounds, we must decide this question. In order for section 552.022(a)(1) to apply to the Quarterly Market Reports as Birnbaum suggests, we must deal with similar language in section 552.022(a).
.This Court, in
Birnbaum I,
did not hold that the Quarterly Market Reports are trade secrets. Instead, this Court held that the trial court did not abuse its discretion in holding that the reports are temporarily entitled to trade-secret protection.
Birnbaum I,