Appellate, Constitutional and
Governmental Litigation Alert
March 2008
Authors:
John P. Krill
717.231.4505
john.krill@klgates.com
David R. Overstreet
717.231.4517
david.overstreet@klgates.com
Abram D. Burnett III
717.231.5838
abram.burnett@klgates.com
K&L Gates comprises approximately 1,500
lawyers in 24 offices located in North
America, Europe and Asia, and represents
capital markets participants, entrepreneurs,
growth and middle market companies,
leading FORTUNE 100 and FTSE 100
global corporations and public sector
entities. For more information, please visit
www.klgates.com.
www.klgates.com
In a Lockbox or a Goldfish Bowl? Confidential
Proprietary Information and Trade Secrets in
Government Records under Pennsylvania’s New
“Right-To-Know” Law.
Anyone doing business in Pennsylvania should take note of its recently enacted “Right-ToKnow Law,” which presents a risk that confidential business information in the possession of
state and local government agencies will be disclosed as a result of requests from the public.
The Right-To-Know Law, which has a strong bias in favor of the release of information held
by government agencies, places the burden squarely upon companies submitting information
to government agencies to take steps to protect their confidential data. This Alert highlights
issues that may arise in the course of trying to protect proprietary material in government
files.
The Law Favors Disclosure and Puts the Burden on Anyone Trying to
Limit the Release of Data.
Under the new law, state and local government agencies must allow the public prompt access
to “public records.” A request for access must be honored, without regard to the motive or
intended use of the information. Information on a business can be obtained from government
records by business competitors, advocacy groups and others. Information submitted in
support of permit and license applications and in mandatory reports and filings is fair game
for disclosure.
The new law broadly defines “public records” to include just about everything in government
files. However, some things, even though they are public records, are exempt from disclosure.
“Confidential proprietary information” and “trade secrets” are exempt from disclosure, but
the burden is on the private party that submitted the material to take steps to protect it.
Protecting “Confidential Proprietary Information” and “Trade Secrets”
An agency has to give notice to a company that provided a requested record, if the company
“included a written statement . . . that the record contains a trade secret or confidential
proprietary information.”
The first issue this presents is that the “written statement” requirement is new, but “public
records” include documents already in government files. If propriety information was
submitted without the “written statement” required by the new law, the agency may not be
obligated to give notice of a request to the company that originally provided it. Businesses
that are concerned about the confidentiality of prior submissions should consider conducting
an inventory of agency records that may contain such data and attempting to supplement those
records with nunc pro tunc written statements claiming confidentiality.
Another issue is whether notice will be sent to the right address and received in time to do
anything about it. A business that has not corrected its “written statements” to reflect a new
address may not get notice.
Appellate, Constitutional and Governmental Litigation Alert
If a business gets notice of a request, a prompt
response is required in order to oppose the release of
the data. A company will have only five business days
to respond. Potentially affected companies should
establish a process for expediting responses to such
notices. The written statements covering confidential
data submitted to agencies should direct that notices be
sent to a company representative who will be certain
to receive and promptly respond to the notice. Care
should be taken when selecting the addressee to avoid
having notices lost or delayed.
How Will Claims of Confidentiality Be
Decided?
When a company objects to a request for access to
its confidential information, it needs to prepare to
defend its position immediately. The agency has little
time to ponder it, as the new law provides that the
“agency shall deny the request for the record or release
the record within ten business days of the provision
of notice to the third party and shall notify the third
party of the decision.” There are as yet unanswered
questions about the process that follows a decision to
deny or to release.
The law creates an administrative hearing process
for appealing an agency decision to deny access to
information. The statute, though, is silent about
appealing a decision to release information. It is
possible that the state’s long-standing Administrative
Agency and Local Agency Laws will be found to
provide an avenue of appeal for the company opposing
release of information. Would the appeal be filed with
the new Office of Open Records, as is the case with
appeals from denials? Or would the appeal have to be
filed with the head of the very agency that decided to
release the information, as is typical under generally
applicable administrative law? It should be noted
that any appeal may be barred unless it is filed within
fifteen days of the agency’s decision.
The statute also does not set a time period between
the decision to release and the actual release. It is
conceivable that proprietary information could be
immediately released by an agency. To prevent this, a
company may have to seek relief outside of the RightTo-Know Law, perhaps going to court to obtain an
injunction, while pursuing a parallel appeal from the
agency decision.
Although persons submitting confidential data are
entitled to receive notice of the agency’s determination,
there is no corresponding statutory right to receive
notice of a requester’s appeal. Accordingly, a company
opposed to release of data should develop a process for
securing prompt notice of any appeal.
If a company learns of an appeal, it may seek, but
might not have a right, to intervene in the proceeding.
The appeals officer may allow the submitting party to
participate by submitting information in connection
with the appeal if “the appeals office believes the
information will be probative.” Submitting parties who
are not permitted to participate in an administrative
appeal may find it prudent to take additional steps
to ensure that relevant information is included in the
record created by the hearing officer.
What Happens After The Appeals
Officer Rules?
If the appeals officer orders an agency to release
confidential information, the agency has a right under
the new law to seek judicial review. Similarly, a
requester has a right to seek judicial review of a decision
not to release confidential information. However, the
statute does not give the same right to the company
whose proprietary data will be released. Nor does the
statute provide for notice to the submitting company of
any appeal. And, if the agency seeks judicial review,
the law provides that the records will not be released
until the court issues a decision, but does not provide
that an appeal by a submitter will stay the release
of the information. The bottom line is that, if the
agency is not on your side, your company may need
to act independently to get protection for proprietary
data. Such independent action by a private party is
not unprecedented. K&L Gates’ lawyers have used
similar methods to protect the rights of a business that
was not a party to an agency adjudication but that was
adversely affected by it. See Delaware Valley Concrete
Company v. Schneiderwind (Pa. Cmwlth. 2005)
(Obtained reversal of administrative hearing board
order that mandated action by state environmental
agency against non-party permittee. The appeals court
held that the order “offends basic principles of equity
and due process.”)
March 2008 | 2
Appellate, Constitutional and Governmental Litigation Alert
Looking Ahead
This Alert has highlighted a few of the challenges
created by Pennsylvania’s new Right-To-Know
Law for businesses that need to protect confidential
proprietary information and trade secrets that are in
government records.
Some of the issues may be resolved when agencies
promulgate regulations under the statute or by means
of policies and advisory opinions issued by the new
Office of Open Records. Inevitably, some issues will
have to be litigated. K&L Gates will be following
developments in this field through its Appellate,
Constitutional & Governmental Litigation Practice
Group and its Public Policy Practice Group.
While the issues are being sorted out and decided,
a company concerned about potential damaging
disclosures of proprietary data should develop a plan
to protect data already in government records, as well
as data submitted in the future.
K&L Gates comprises multiple affiliated partnerships: a limited liability partnership with the full name Kirkpatrick & Lockhart Preston Gates Ellis LLP
qualified in Delaware and maintaining offices throughout the U.S., in Berlin, and in Beijing (Kirkpatrick & Lockhart Preston Gates Ellis LLP Beijing
Representative Office); a limited liability partnership (also named Kirkpatrick & Lockhart Preston Gates Ellis LLP) incorporated in England and
maintaining our London office; a Taiwan general partnership (Kirkpatrick & Lockhart Preston Gates Ellis - Taiwan Commercial Law Offices) which
practices from our Taipei office; and a Hong Kong general partnership (Kirkpatrick & Lockhart Preston Gates Ellis, Solicitors) which practices from
our Hong Kong office. K&L Gates maintains appropriate registrations in the jurisdictions in which its offices are located. A list of the partners in
each entity is available for inspection at any K&L Gates office.
This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein should not be used
or relied upon in regard to any particular facts or circumstances without first consulting a lawyer.
Data Protection Act 1998—We may contact you from time to time with information on Kirkpatrick & Lockhart Preston Gates Ellis LLP seminars and
with our regular newsletters, which may be of interest to you. We will not provide your details to any third parties. Please e-mail london@klgates.
com if you would prefer not to receive this information.
©1996-2008 Kirkpatrick & Lockhart Preston Gates Ellis LLP. All Rights Reserved.
March 2008 | 3