56 N.Y.2d 213 | NY | 1982
OPINION OF THE COURT
The Public Service Commission (Commission) has authority to issue orders protecting the confidentiality of trade secrets received in evidence in rate-fixing proceedings notwithstanding the statutory prescription that all proceedings and records of the Commission shall be public.
In the course of hearings being conducted by the Public Service Commission on tariff revisions filed by petitioner New York Telephone Company, certain user parties (intervenors in the present proceeding) proposed to introduce in evidence material gained from a “Migration Study” which had been prepared by the telephone company and had been made available by it to the user parties under a protective agreement. The “Migration Study” contained detailed, year-by-year projections of transfer of the company’s customers from older to newer, more sophisticated types of telephone systems, as well as specifics of the company’s future price plans, schedules of new product introduction, and particular sales tactics, representing confidential commercial information which would be valuable to the utility’s competitors and which petitioner characterizes as trade secrets. When the telephone company requested that a protective order be granted precluding disclosure of the “Migration Study” data to the public (as contrasted with disclosure to the Commission, its hearing officers and the parties to the proceeding), the Administrative Law Judges before whom the hearing was being held denied receipt in evidence of the confidential information pending determination by the Public Service Commission whether it would grant such protective relief. The Commission on August 14,1980 denied the protection sought and directed that the proof, insofar as the hearing officers determined it to be relevant and material, be placed in evidence without measures to preserve confidentiality. When the Administrative Law Judges thereafter concluded that much of the alleged confidential information was relevant and material, peti
On September 5, 1980 the telephone company commenced the present proceeding under CPLR article 78 to annul the determinations of the Commission on August 14 and August 27 to the extent that the Commission directed that the relevant portions of the “Migration Study” should be admitted into evidence without any protective measures to preserve their confidentiality.
Although acknowledging in its August 14 order that there might be “circumstances where we would need to protect those rare items of proprietary material whose disclosure would cause injury more significant than secrecy’s effects on the openness of our decisional process”, but noting too that “it would be extraordinary if information in a regulated company’s possession were relevant and material to a Commission proceeding yet also deserving of secrecy”, the Public Service Commission now joins the intervenor Attorney-General in arguing in support of the
We hold a different view and give no such limiting effect to the statutory provision, failing to find in it any proscription against protection from general public disclosure by appropriate order of the Commission of information put in evidence at hearings held by it which falls within the category of trade secrets.
For the same reason that section 4 of the Judiciary Law (providing that court sessions shall be public) does not preclude a court’s exclusion of the public when such exclu
Whether or not a permanent protective order in some form should be granted in the present case cannot now be resolved because there has as yet been no determination whether in fact the “Migration Study” data received in evidence subject to the temporary protective order of August 27, 1980 constitutes trade secrets. The case must therefore be remitted to Supreme Court with directions to remand to the Commission for such determination and, if trade secrets be found to be involved, for formulation by it of an appropriate permanent protective order, the terms of which, if unsatisfactory, would of course be subject to judicial review in another article 78 proceeding.
Pending such action by the Commission on the utility’s application, the temporary protective order (which peti
For the reasons stated, the order of the Appellate Division should be reversed, without costs, the petition granted to the extent of vacating the Commission’s denials of a permanent protective order on August 14, 1980 and August 27, 1980, and the matter remitted to Supreme Court with direction to remand to the Public Service Commission for further proceedings by it in accordance with this opinion, pending which the temporary protective order of August 27, 1980 should be continued in effect.
Chief Judge Cooke and Judges Jasen, Wachtler and Meyer concur; Judges Gabrielli and Fuchsberg taking no part.
Order reversed, without costs, petition granted to the extent of vacating the Commission’s denials of a permanent protective order on August 14, 1980 and August 27, 1980, and matter remitted to Supreme Court, Albany County, with directions to remand to the Public Service Commission for further proceedings in accordance with the opinion herein.
. The temporary protective order issued by the Commission on August 27,1980 has been continued through this litigation by orders of Supreme Court and of the Appellate Division.
. Public Service Law (§ 16, subd 1), provides: “All proceedings of the commission and all documents and records in its possession shall be public records.”
. A useful and widely adopted definition of a trade secret is that which was set out in Restatement of Torts (§757, Comment b): “A trade secret may consist of any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.”