Opinion ID: 877457
Heading Depth: 1
Heading Rank: 2

Heading: compelled disclosure and due process

Text: It is conceded that there is constitutional and statutory authority for compelled disclosure of trade secret information to the PSC and the Consumer Counsel. Indeed, Mountain Bell offers to disclose such information to those agencies, subject to the issuance of a protective order. The Consumer Counsel is a constitutional agency having the duty of representing consumer interests in hearings before the PSC. 1972 Mont.Const., Art. XIII, § 2. By statute, the Consumer Counsel has all the investigatory powers necessary to perform its duties and it may examine under oath in any PSC proceedings any employee of a regulated company and the business and corporate records of such a company in accordance with the law and in the exercise of its duties. Section 69-2-203, MCA. Since it is conceded by Mountain Bell that its application before the PSC for increased revenues is based in part upon its trade secret process, it is obvious that the Consumer Counsel, in the exercise of its duties, has a full statutory right to the disclosure by Mountain Bell of its trade secret information. The PSC is vested with full power of supervision, regulation, and control of ... public utilities. Section 69-3-102, MCA. It has authority to inquire into the management of the business of all public utilities, keeping itself informed as to the method in which the same is conducted. It has the right to obtain from any public utility all necessary information to enable the PSC to perform its duties. Section 69-3-106, MCA. The PSC has jurisdiction to set rates to be charged by public utilities for their regulated services. Sections 69-3-301 and 69-3-302, MCA. The compelled disclosure, therefore, of a trade secret owned by a public utility, where such information is necessary to the proper exercise of the duties of the PSC or the Consumer Counsel is not a taking or a deprivation under either the state or federal due process clauses. U.S.Const., Amend. V; 1972 Mont.Const., Art. II, § 17. ( See, Great Northern Utilities Co. v. Public Service Comm'n. (1930), 88 Mont. 180, 293 P. 294, for a discussion of the constitutionality of the power of the PSC to regulate utility rates.) The constitutional rub lies, as Mountain Bell contends, in the compelled disclosure of the information to all of the public  including Mountain Bell's nonregulated competitors  beyond the state agencies. The District Court and the PSC concluded that such compelled disclosure was required under the right to know and right to inspect constitutional and statutory provisions of Montana. As we have noted, section 69-3-105, MCA, provides that records of every nature in the possession of the PSC are open to the public at reasonable times, except for a minor provision that the PSC might withhold the information for not more than 90 days. Section 2-6-102, MCA, gives every citizen a right to inspect and get copies of any public writings. The term public writings would include all documents filed with the PSC. Section 2-6-101(2), MCA. Most importantly, the District Court and the PSC applied the 1972 Mont.Const., Art. II, § 9  the constitutional right to know provision  so as to compel disclosure to any citizen of all information in regulatory proceedings. This is a classic case for the application of the means end test wherein the power of the state to interpose its authority on behalf of the public is balanced against the constitutional requirement of due process in the protection, in this case, of private property. Lawton v. Steele (1894), 152 U.S. 133, 14 S.Ct. 499, 38 L.Ed. 385. Courts are not required to follow one extreme or the other of colliding constitutional rights; judicial protection of the confidentiality of the trade secret information is proper where both the needs of the public and the protection of private property can equally be served. See, F.C.C. v. Schreiber (1965), 381 U.S. 279, 85 S.Ct. 1459, 14 L.Ed.2d 383. We find it possible to protect fully the ownership of the trade secret information and at the same time, supply fully the need of the state agencies for the information required in the exercise of their duties. We find that an order can be fashioned in such manner that the state public agencies can perform their duties with the fullest available information and at the same time disclose to the public all information required to enable citizens to determine the propriety of governmental actions affecting them. As the court stated in Pennzoil Co. v. Federal Power Commission (5th Cir.1976), 534 F.2d 627: Implicit in Schreiber is the proposition that the balancing of the public and private interests might compel secrecy, 381 U.S. at 296, 85 S.Ct. 1459. Therefore, in reviewing this case we must likewise determine whether the Commission abused its discretion in balancing the public and private interests. 534 F.2d at 631. Here, neither the District Court nor the PSC balanced the competing public and private interests presented in this case. Rather, they determined that if the data was necessary for the determination by the PSC, that fact alone made it necessary to disclose all of the information to all of the parties, including persons not necessarily interested in the ratemaking process. Such a construction may lead in this case to the destruction of a property right based on materiality rather than on a consideration of whether full public disclosure is based upon a reasonable and rational means to achieve the purpose inherent in the right to know provision. Moore v. City of East Cleveland, Ohio (1977), 431 U.S. 494, 97 S.Ct. 1932, 52 L.Ed.2d 531; Nectow v. City of Cambridge (1928), 277 U.S. 183, 48 S.Ct. 447, 72 L.Ed. 842; Tyson & Bro.  United Theatre Ticket Offices v. Baton (1927), 273 U.S. 418, 47 S.Ct. 426, 71 L.Ed. 718; Norfolk & W. Ry. Co. v. Public Service Commission (1924), 265 U.S. 70, 44 S.Ct. 439, 68 L.Ed. 904; Jay Burns Baking Co. v. Bryan (1924), 264 U.S. 504, 44 S.Ct. 412, 68 L.Ed. 813; Adams v. Tanner (1917), 244 U.S. 590, 37 S.Ct. 662, 61 L.Ed. 1336. We have therefore issued a directive for a protective order in this case. In it is the result of the balancing process that we have described above. The order gives the PSC full access to all information needed by it in its regulatory duties with the right in the commission to preserve that information in its offices. Likewise, we have provided that the Consumer Counsel may receive such information and preserve the same in its office. We have made the same information available to any party, corporate or private, participating in the rate hearings before the PSC, subject to provisions which protect the confidentiality of the trade secret information. We are confident that such provisions provide consumers with adequate knowledge to participate fully in the commission's proceedings while at the same time protecting the interests of the utility. See Pennzoil Co., 534 F.2d at 632.