The Montana Supreme Court went on to proscribe a specific method by which companies are to seek trade secret designation from state agencies. The Montana Supreme Court felt that agencies presumably had the requisite expertise to examine documents and determine if they contain constitutionally protected property rights in the form of trade secrets or confidential proprietary information.[8] A district court can then on an administrative appeal review the record to determine if the agency finding regarding trade secret is correct.[9]
The Montana Supreme Court specifically banned as creating an unconstitutional presumption of confidentiality, agency practices of issuing a generic protective order covering all documents alleged to be trade secrets.[10] (something akin to marking documents confidential and filing in SERFF as confidential). The court instead held "there is a constitutional presumption that all documents of every kind in the hands of public officials are amenable to inspection, regardless of legislation, special exceptions made to accommodate the exercise of constitutional police power, and other competing constitutional interests, such as due process."[11]
The Montana Supreme Court did fashion a method by which companies could claim trade secret protection when filing documents with Montana agencies.
- A company must file an affidavit that makes a prima facie showing that the materials constitute property rights which are protected under constitutional due process requirements, such as trade secrets.
- The showing must be more than conclusory.
- The showing must be specific enough for the agency, any objecting parties, and reviewing authorities to clearly understand the nature and basis of the claim to the right of confidentiality.
- The agency has an affirmative duty to review the trade secret documents and the affidavit and make an independent determination of trade secret status.[12]
The Montana Commissioner of Securities and Insurance (CSI) has its own ideocracies regarding the Great Falls Tribune process. It is the author’s experence that CSI will want to view the underlying data. CSI will scrutinize the affidavit carefully and will object to any conclusory statements such as “the data is proprietary”, “the data is subject to protection within the company”, “company has taken substantial steps to ensure trade secrets remain proprietary and confidential”, and “company derives significant independent economic value from trade secret information”.
Rather CSI requires extensive and detailed explanation of why the data submitted meets the definition of trade secret in Montana’s Uniform Trade Secret Act. CSI wants the affidavit to address, in detail, how the company derives independent economic value from keeping the data secret and what reasonable efforts are made to maintain the confidential nature of the data. The affidavit should also refer specifically by name the documents or file containing the documents uploaded to SERFF for which the Company wants trade secret protection.
Montana’s trade secret filing process:
- Mark materials confidential.
- File confidential materials in SERFF as confidential.
- Submit a supporting affidavit as a public SERFF document and await a trade secret determination.
CSI has now outlined the trade secret affidavit process in an advisory memorandum. [13] This guidance is welcome. The Advisory Memorandum requires:
- All trade secret requests must be accompanied by CSl's GENERAL AFFIDAVIT IN SUPPORT OF REQUEST FOR TRADE SECRET PROTECTION PURSUANT TO Mont. Code Ann. § 30-14-402(4) and separate TRADE SECRET CERTIFICATION AFFIDAVIT for each exhibit that confidentiality is sought. CSI provides the forms for each in its Advisory Memorandum.
- The GENERAL AFFIDAVIT IN SUPPORT OF REQUEST FOR TRADE SECRET PROTECTION PURSUANT TO Mont. Code Ann. § 30-14-402(4) and TRADE SECRET CERTIFICATION AFFIDAVIT(s) will not be held confidential by CSI and should not be submitted as confidential in SERFF.
- The information on which confidentiality is being sought must be submitted with the red SERFF goggles and separately from non-confidential documents.
- If CSI ultimately denies confidentiality on information submitted as confidential, the submitting entity may chose among the following options:
o Submit a revised General Affidavit and/ or Trade Secret Certification Affidavit addressing the CSI's concerns;
o Withdraw the request for confidentiality on the submitted information;
o Withdraw the filing.
(CSI omitted the possibility of filing a lawsuit challenging CSI’s denial but of course that is a valid option as well.)
My experience shows that several iterations of the affidavit may need to be submitted to satisfy CSI. However, CSI staff are gracious in giving their time to assist in this process. A company’s preference to be vague will not be tolerated by CSI regarding trade secret designations.
Trade Secret Designation in Idaho
The Idaho Public Records Act grants a general right to the public to examine and copy public records of the state.[14] Under the Act, public records are presumed "open unless provided otherwise by statute."[15]. The Idaho Supreme Court “narrowly construes exemptions to the disclosure presumption."[16]. The agency withholding records "bears the burden of persuasion and must ‘show cause,’ or prove, that the documents fit within one of the narrowly-construed exemptions."[17]
Idaho has an exemption for trade secrets in its public records statute. I.C. § 74-107 specifically exempts trade secrets filed with public agencies from disclosure.[18] This exemption is specifically mentioned by the Idaho Department of Insurance in the Idaho P&C Rate Checklist & Certification.[19]
The Idaho Insurance Code Idaho Code[20] expressly prohibits the Department from disclosing Individual and Small Group premium rate information submitted by each carrier for review by the Department, unless the carrier agrees or a court issues an order.[21]
Idaho is the only department in the Mountain West that has issued an advisory memorandum on applying for trade secret designation.[22]
The Department will abide by the following policy in dealing with requests that information submitted to the Department be classified “confidential” and exempt from disclosure under the Public Records Act, Title 74, Chapter 1, Idaho Code. Requests that any “writing,” as defined in Idaho Code § 74-101(16), be exempt from disclosure under the Public Records Act must be made in writing and specifically state the exemption(s) relied upon under Idaho Code §§ 74-104 through 74-111. Generic requests and requests with insufficient information will be returned asking for specific authority and/or information necessary to make a determination upon the request.
Idaho added further clarification in an advisory memorandum on rate filings in the individual health insurance market.[23]
DOI generally considers as proprietary or “trade secret” any rating information that is flagged as confidential within a filing. While flagging a document within a filing as confidential does not conclusively resolve the question, it assists DOI in its identification of confidential, proprietary information or trade secrets. Consistent with Idaho Code and historical practices, DOI will not treat form filings as confidential.
The process for obtaining trade secret designation in Idaho is much the same as in other states.
- A company marks the information as confidential and then files it in SERFF as confidential.
- The Idaho DOI will review the filing and if they have concerns, DOI will propound interrogatories through SERFF regarding the request for trade secret status.
Idaho DOI has cautioned that not all documents should be marked as confidential. That designation should be reserved for actual trade secrets.
Trade Secret Designation in Wyoming
Wyoming trade secret designation is governed by the Wyoming Public Records Act.[24] In order to maintain an open and accountable government, the Wyoming legislature enacted the WPRA in 1969. The Act provides a public right of access to records of the state, its agencies, and local government entities.[25] (all public records “shall be open for inspection by any person at reasonable times”).[26]
WPRA defines public records as documents received by public agencies in connection with the transaction of public business.[27]
The WPRA requires the Department to deny public requests for inspection of records they deem to be trade secrets.[28] “If the custodian denies access to any public record, the applicant may request a written statement of the grounds for the denial,” which “shall cite the law or regulation under which access is denied and shall be furnished to the applicant.”[29]
The WPRA provides:
The custodian shall deny the right of inspection of the following records, unless otherwise provided by law: (v) Trade secrets, privileged information and confidential commercial, financial, geological or geophysical data furnished by or obtained from any person.[30]
Interestingly despite having adopted the Uniform Trade Secrets Act in 2006[31], Wyoming does not use the Uniform Trade Secrets Act definition of trade secret in the context of an exemption to public records disclosure. Rather the Wyoming Supreme Court adopted the federal definition of trade secret used under the Freedom of Information Act.[32] A trade secret in Wyoming in the public records context is:
a secret, commercially valuable plan, formula, process, or device that is used for the making, preparing, compounding, or processing of trade commodities and that can be said to be the end product of either innovation or substantial effort, with a direct relationship between the trade secret and the productive process.[33]
The Wyoming Insurance Code does provide specific trade secret protection for Own Risk Solvency Documents,[34] Corporate Governance Annual Disclosure[35], and Small Group Rate Filings.[36]
Wyoming’s process for trade secret designation mirrors Idaho’s.
- Mark trade secret documents as confidential.
- File the marked documents in SERFF as confidential documents.
- Await approval of the filing or interrogatories through SERFF.
Wyoming does not have any advisory memos on trade secret filings. However, Wyoming DOI staff have cautioned that not all documents should be marked as confidential. Only those documents that deserve trade secret designation should be so marked.
Conclusion
It is fairly simple to obtain trade secret designation in Wyoming and Idaho. A company simply designates what it wishes to be a trade secret and then files those documents as confidential in a SERFF filing. Montana is another story. Documents need to be identified as confidential, filed in SERFF as confidential and then a detailed affidavit needs to be filed as a public document on SERFF supporting the trade secret request.