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September23,1971 L--J

7.L

Hon. Charles R. Barden, P.E. Opinion No. M-957 Executive Secretary ‘+-Az-~~

Texas Air Control Board Re: Whether the Texas Air 1100West 49th Street Control Board or its Austin, Texas 78756 Executive Secretary have discretion to determine what matters are "confidential information"' and "public records" as those terms are used in Sections 1.07 and 2.13 of the Texas Clean Air Dear Mr. Barden: Act.

You have asked: "Does the Texas Air Control Board or the Executive Secretary have di.scretionoverwhich items and matters are tobe deemed 'confidential information' and 'public records' as those terms are used'in Sections 1.07 and 2.13 of the Texas Clean AirAct?" We will deal firstwith "confidential information".

The term "confidential information" is found in the Texas Clean Air Act, Article 4477-5, V.A.C.S., as the caption of Section 1.07. Its meaning appears clear from the language of the section itself:

"Information submitted to theboard relating to secret processes ormethods ofmanufacture
orproduction which is identified as confidentialwhen submitted shall not be disclosed by any member, employee, or agent of the board."
Thus, "confidential information" as used in this section is only thatwhich relates "to secret processes or methods ofmanufacture or production". This is similiar to
a "trade secret". A "trade secret" may consist of any formula,pattern, device or compilation of information used in

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Hcum,Charles R.Barden, page 2 (M-957)

one's business andwhich gives him an opportunity to obtain
an advantage over competitors who do not know of or use it and aenerallv relates to the oroduction of aoods throuah it. Hyde-Corp. v:Huffines, 158TAX. 566, 314 S:c.2d 763, 576, 777 (1958). Itmay be adevice or process which ispatentable, but itneed not be, and itmay be adevice orprocess which is clearly anticipated in theprior art or onewhich ismerely amechanical improvement that a goodmechanic can make, andnovelty and innovation arenot requisite. K&G Tool &Service Co. v. G. &G. Fishing Tool Service, 158 Tex. 594, 314 S.b7.2d782, 789 (1958).

Section 1.07 requires thatthe information~be identified
as confidential when submitted, but it does not indicate who is to classify it as such. Because the one submitting the information will necessarily be in thebest position toknow whether or not it is "confidential", Section 1.07 should be read tomean thathe is the one tomake the initial classification. And if classified "confidential", the information will be screened frompublic inspection under Section 2.13, and frompublic disclosure by theboard.

But the further question remains whether it canbe referred to in aboard order, or at aboard hearing or in a court proceeding. Surely, theLegislature inwriting Section 1.07did not intend toprevent the Texas Air Control Board from using the contents of the "confidential information", where material and relevant, to form thebasis of informed administrative decisions or action. Certainly, then, aboard order canbe based on "confidential information" in the board's file and can refer to the existence of such information, so long as the order does not disclose its substance.

It is clear that no absolute privilege for trade secrets is recognized. VIII Wigmore, Evidence, page 156, Sec. 2212 (McNaughton Revision 1961). And a statute generally declaring records tobe confidential should be liberally construed to contain an implied exception for disclosure when needed in a judicial or quasi-judicial proceeding. Attorney General Opinion No. M-213 (1968). On the other hand, courts are not apt to require disclosure except in such cases and to such extent asmay appear tobe indispensable for the ascertainment of truth. VIII Prigmore,Evidence, page 157, Sec. 2212, supra.

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.,Hon. Charles R.Barden, page 3 (M-957)

In Sections 2212 and 2377 ofVIII Wigmore, Evidence, supra, it is indicated that the general privilege for trade secrets isbroader when applied to disclosure by an official of secrets contained in a report reauired by law tobe made to him.
Therefore, if it isnecessary toput portions of the "confidential information" into evidence at aboard meeting in order tomake a complete record, theboard, acting in its quasi-judicial capacity should follow theprocedure approved inCrane v. Tunks, 160 Tex. 182, 328 s.w.2d 434 (1959). The board should submit the confidential information proposed to be used to the parties whom the confidential information directly concerns, inprivate. The affected party or parties could then privately make to theAir Control Board all their objections to the use of such evidence or to themaking public of the evidence. The evidence would then be sealed and made apart of the recordwithout being made public. This would afford theparties involved and theboard the opportunity to consider the propriety of the introduction of the evidence, asbetween the needs of the board to rely on the evidence and the rights of theparties tohave the information remain secret. The "confidential information" remains confidential, but is in thisway available to a court in the event of an appeal of theboard decision.

In response toyour question about "confidential information", you are advised that the Texas Air Control Board or its Executive Secretary do not have the discretion to determine what is "confidential information" as defined above. But they may refer to and rely upon such information as the basis forboard orders and decisions so long as the substance of the information is not disclosed. The existence of this confidential information may be referred to atpublic board hearings, but the substance of the information canbe put into evidence onlywhen it ismaterial and relevant to an issue at thehearing, and only by using the procedure outlined above.

The next part ofyour question deals with "public recor& II.The key phrase is, "public records open to inspectionby any person". Section 2.13 of theTexas Clean Air Act is captioned, "Documents, etc., public property",,,and reads:

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"All information documents and data collected by the board in the performance of itsduties
are the property of theState. Subject to the limitation of Section 1.07 of theAct; all

. records of the board arepublic records open to inspection by any person during regular officehours."

The TexasAir Control Board keeps many records and com- 'pilesmuch data in carrying out itsduties as theprincipal authority in the state onmatters relating to air quality, criteria, standards, and emission levels forpollution con-' trol. Section 1.05,Article 4477-5, V.A.C.S. While most of these records anddata arepublic records, andmany would be admissible as such in a courtproceeding, some of the data and information compiled and kept by the board is compiled pursuant to theboard's enforcement duties and is not "open to inspection by any person".

In addition to the usual administrative records, such
as rules, regulations, standards, minutes ofmeetings, orders, and the like,which are clearly open to inspection, theTexas Air Control Board maintains files on 'mattersunder investigation for violation of the Texas CleanAir Act. This data is evidence orpotential evidence for an enforcement action pursuant to Section 4.02 of the Act, andwe hold that it isnot open to inspection by thepublic.

If evidence or potential evidence orpreliminary data compiled andheld by theboard were open to inspection by thepublic, the enforcement activities of that agency would be subject toburdensome interference. The right of inspection of public records may notbe exercised so as to unreasonably interfere with thebusiness of government. Mac Ewan v. @, 226 Ore. 27, 359 P.2d 413, 85A.L.R.2d 1086 (1961); Annotation 85A.L.R.2d 1105.

While the Texas courts have not dealt with this question directly, other jurisdictions have. InMathews v. Pyle, 75 Ariz. 76, 251 P.2d 893 (19521, the courtheld that documents gathered in an attorney general's investigation report to the governor ofArizona were not "public records open to inspection of any person". The governor had the initial right to determine what documents should be made public, but the ultimate

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determination rested with the courts. N.Y.S.Zd 215 (N.Y.Sup. 19611, Sorley v. Listar! 218 is the best case found~which clearly classifies which records are open to inspection. This was an action wherein certain persons whose property was under condemnation demanded the appraisal reports and records
as toprices paid and tobe paid for real estate. The Court set up three classes of records as follows:
(1) Records which are ,publicbecause the statutes specifically make them so orbecause the Court thinks they
arepublic. These records may be inspected under reasonable rules and regulations set upby the custodian of the records.
(2) Those types of records which the Court considers. tobe public records, butwhich it is unwilling to open to. public inspection by calling them public records. Examples of this type of record are motor vehicle accident reports, reports to a state tax commission, certain financial statistics, certain healthyrecords, and court and trust fund records. In this case the right of inspection exists only if theperson shows aprivate interest different from thatwhich the rest of the public has.

(3) Papers or documents which are not in any sense open to thepublic. Here the right of inspection does not exist. Examples of this type arepolice reports, confidential communications; evidence, parole board records, and certain lists and records not required tobe kept but which are kept to facilitate administrative procedures.
Thus, while most of the records of theTexas Air Control Board arepublic records, evidence gathered and datamaintained in an investigation isnot, and such isnot open to inspection. V7hilecertain types of evidence might be discoverable in a court proceeding with aproper motion under Texas Rules of Civil Procedure Rules 167 and 186a, this evidence would not bepublicly "open to inspection by any person", pursuant to Section 2.13 of theAct. The Texas Air Control Board would be-entitled to theprotections of theprovisos of those discovery rules,~limiting the scope of discovery, just as any other litigant i&. Shirley v. Dalby, 384S.W.2d 362, 368, 369, (Tex.Civ.App. 1964 error ref. n.r.e.).

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The Texas Air Control Board or its Executive Secretary
are theproper ones to decide which of their records, information, documents and data they have compiled will ormay be used in enforcement proceedings. And they are therefore in the best position to determine which of their records are "public records", andwhich are not.

SUMMARY

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"Confidential information" as used in Sections 1.07 and 2.13 of the Texas Clean Air Act is similar to "trade secret" and applies only to "processes or methods ofmanufacture orproduction". "Public records open to inspection" as used in Section 2.13 includes most of the administrative records of the Texas Air Control Board, but does not include evidence, potential evidence, andpreliminary data compiled pursuant to theboard's enforcement duties. The board or itsExecutive Secretary have discretion to determine what matters are "public records open to inspection" andwhich arenot, but donot have discretion to determine what is "confidential information". Theboard may rely upon "confidential information" as thebasis forboard orders and administrative decisions, but may notmake public such information over the objection of the interested parties.
trulyyours, I

Prepared by Richard W. Chote Assistant Attorney General

APPROVED OPINION COMMITTEE:

Kerns Taylor, Chairman W. E.Allen, Co-Chairman

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Malcolm Quick Milton Richardson Malcom Smith Fisher Tyler

SAM MCDANIEL Acting Staff Legal Assistant

ALFREDWGKER Executive Assistant

NOLA WHITE First Assistant (M-957)

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