Court Opinion

ID: 4524187
Source: CourtListenerOpinion
Date Created: 2020-04-09 22:02:22.559976+00
Date Added: 2024-06-11T08:43:03.372274
License: Public Domain

Filed 4/9/20
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                 SECOND APPELLATE DISTRICT

                          DIVISION ONE

 AMGEN INC.,                             B296563

         Plaintiff and Respondent,       (Los Angeles County
                                         Super. Ct. No. 18STCP03147)
         v.

 HEALTH CARE SERVICES,

         Defendant and Appellant.

      APPEAL from an order of the Superior Court of
Los Angeles, Mitchell L. Beckloff, Judge. Reversed.
      Xavier Becerra, Attorney General, Thomas S. Patterson,
Assistant Attorney General, Paul Stein and Sharon L. O’Grady,
Deputy Attorneys General, for Defendant and Appellant.
      Hueston Hennigan, Moez M. Kaba and Lauren McGrory
Johnson for Plaintiff and Respondent.
      U.S. Chamber Litigation Center, Janet Galeria; Gibson,
Dunn & Crutcher, Blaine H. Evanson and Shaun A. Mathur for
Chamber of Commerce of the United States of America and
National Association of Manufacturers as Amici Curiae on behalf
of Plaintiff and Respondent.
      Downey Brand, Annie S. Amaral; Arnold & Porter Kaye
Scholer, Robert N. Weiner, Jeffrey L. Handwerker, and
R. Stanton Jones for Pharmaceutical Research and
Manufacturers of America as Amicus Curiae on behalf of Plaintiff
and Respondent.
      Shook, Hardy & Bacon, Amir M. Nassihi, Joan R.
Camagong; GlaxoSmithKline and Marc Leonard Moore for GSK
as Amicus Curiae on behalf of Plaintiff and Respondent.
      Shook, Hardy & Bacon, Amir M. Nassihi, Joan R.
Camagong for ViiV Healthcare as Amicus Curiae on behalf of
Plaintiff and Respondent.
                   ____________________________

       Health and Safety Code section 127677, enacted as part of
Senate Bill No. 17 (Stats. 2017, ch. 603, § 4), requires
pharmaceutical manufacturers to provide 60-days’ notice to
public and private registered purchasers, including state entities
and health insurers, before increasing the wholesale acquisition
cost of a drug (we will refer to the notice as a “price increase
notice”). That statutory section further mandates that registered
purchasers who are pharmacy benefit managers give notice to
certain of their customers irrespective of whether those
customers are registered purchasers. Senate Bill No. 17 does not
impose any confidentiality obligations on the recipients of the
price increase notices or restrict their use of the information
provided in the notices.

                                   2
       Plaintiff and respondent Amgen Inc. (Amgen) submitted a
price increase notice by e-mail to defendant and appellant
California Correctional Health Care Services (CCHCS) and the
other approximately 170 registered purchasers. When Reuters
News made a request under the California Public Records Act
(CPRA) (Gov. Code, § 6250 et seq.) seeking the price increase
notices CCHCS had received, Amgen filed a petition for a writ of
mandamus blocking disclosure, commonly called a “reverse-
CPRA” action. Amgen invoked the trade secret privilege under
Evidence Code section 1060, incorporated into the CPRA through
Government Code section 6254, subdivision (k).
       Amgen also moved for a preliminary injunction, which the
trial court granted. CCHCS appeals from that order.
       While this appeal was pending, the trial court sustained
CCHCS’s demurrer to the mandamus cause of action with leave
to amend. Amgen chose to dismiss its action instead.
       On appeal, CCHCS argues the trial court abused its
discretion when it found, among other things, that Amgen had
made a sufficient showing that its price increase notice met the
definition of a trade secret despite its disclosure to more than
170 registered purchasers and an unknown number of customers
of pharmacy benefit managers. CCHCS further contends the
trial court erred in finding that the balance of hardships favored
Amgen. Amgen argues the appeal is moot following its dismissal
of the underlying mandamus action, and that the trial court
correctly ruled that limited disclosure of the price increase notice
to noncompetitors did not deprive the information included in the
price increase notice of its trade secret status.
       We exercise our discretion to decide this otherwise moot
appeal. The issues this appeal raises are capable of repetition

                                    3
because there will be future price increase notices. In addition,
the issues are likely to evade review because a pharmaceutical
manufacturer has little reason to continue to prosecute a
mandamus action after obtaining a preliminary injunction for the
60-day period before a price increase becomes public.
       On the merits, we agree with CCHCS. Amgen has failed to
demonstrate that once it disclosed its price increase information
pursuant to Senate Bill No. 17, that information retained
whatever status it may previously have had as a trade secret.
First, Amgen has failed to show that its disclosure was limited.
Senate Bill No. 17 and Health and Safety Code section 127677
place no limitation on the registered purchasers’ further
dissemination of Amgen’s price increases during the 60-day
period, including to Amgen’s competitors. Amgen provides no
evidence that the registered purchasers have, or would, maintain
the confidentiality of the price increase notice.
       Second, Amgen has failed to explain why, even if the price
increase information were not disseminated to competitors, the
registered purchasers, who sit opposite Amgen at the bargaining
table, are not themselves capable of taking economic advantage of
that information, thus inflicting the very harm Amgen claims a
preliminary injunction would prevent. Indeed, as detailed below,
the purpose of Health and Safety Code section 127677 was to
allow the registered purchasers actively to prepare for upcoming
price increases by, inter alia, finding cheaper alternatives to the
drugs subject to the notices.
       Given Amgen’s failure to show its price increase
information was still a trade secret after disclosure to the
registered purchasers, we further conclude that the trial court

                                   4
abused its discretion in finding that the balance of harms favored
Amgen.
      Accordingly, we reverse the trial court’s order granting the
preliminary injunction.

      FACTUAL AND PROCEDURAL BACKGROUND

A.    Health and Safety Code section 127677
       The Legislature passed Senate Bill No. 17 in 2017 to
increase transparency into pharmaceutical pricing. The bill’s
author stated, “Expensive drugs and steady price increases are
becoming commonplace with little transparency for astounding
prices,” and explained that Senate Bill No. 17 would “shin[e] a
light on drugs that are having the greatest impact on our health
care dollar.” (Sen. Rules Com., Off. of Sen. Floor Analyses,
Unfinished Business of Sen. Bill No. 17 (2017–2018 Reg. Sess.) as
amended Sept. 5, 2017, p. 8.)
       Among other things, Senate Bill No. 17 requires
pharmaceutical manufacturers to provide advance notice of price
increases to statutorily defined purchasers, including state
purchasers and health insurers. (Health & Saf. Code, §§ 127675,
127677; Stats. 2017, ch. 603, § 4.) Supporters of the bill
contended that providing them advance notice of price increases
would allow them to “make changes to formularies; find
alternatives to costly drugs; hold third-party purchasers
accountable for prices and rebates; negotiate larger rebates and
discounts; . . . prevent unnecessarily high payment for drugs,
such as those with short-term price hikes where an alternative
formulation can achieve the same result; and budget for price
increases.” (Assem. Com. on Appropriations, Analysis of Sen. Bill
No. 17 (2017–2018 Reg. Sess.) as amended July 20, 2017, p. 4

                                   5
[statement of San Francisco Culinary, Bartenders, and Service
Employees Welfare Fund]; see also Sen. Health Com., Analysis of
Sen. Bill No. 17 (2017–2018 Reg. Sess.) Mar. 14, 2017, p. 8 [bill
cosponsor Health Access California stated that the advance
notice provisions of bill would give purchasers “time to adjust
formularies, to negotiate price concessions, and to seek other
alternatives, including obtaining alternative formulations of
drugs for which there are therapeutic equivalents”].)
      Health and Safety Code section 127677 sets forth the
advance notice provision of Senate Bill No. 17. It requires a
prescription drug manufacturer to provide a minimum of 60 days’
notice to specified recipients of an “increase in the wholesale
acquisition cost of a prescription drug,” subject to certain
limitations not at issue in this appeal.1 (Health & Saf. Code,
§ 127677, subds. (a), (b).) The notice “shall include” the date and
amount of the increase, the current wholesale acquisition cost of
the drug, “a statement regarding whether a change or
improvement in the drug necessitates the price increase,” and, if
applicable, a description of that change or improvement. (Id.,
subd. (c).)
      The manufacturer must provide the notice to “each
purchaser described in [Health and Safety Code] Section 127675”
who “registers with the [Office of Statewide Health Planning and
Development] for the purpose of this notification.” (Health & Saf.

      1 Notice is required only if the current wholesale
acquisition cost of the drug is more than $40 for a course of
therapy, and if the proposed increase “is more than 16 percent,
including the proposed increase and the cumulative increases
that occurred within the previous two calendar years prior to the
current year.” (Health & Saf. Code, § 127677, subd. (a).)

                                    6
Code, § 127677, subds. (a), (d).) The entities listed in Health and
Safety Code section 127675 are considered “purchasers” for
purposes of Health and Safety Code section 127677 because they
either purchase drugs directly or because they provide
reimbursement for prescription drug purchases by others. (See
Health & Saf. Code, § 127675, subd. (a) [applying chapter to
manufacturers of prescription drugs that are “purchased or
reimbursed” by the listed entities].)
       Purchasers described in Health and Safety Code
section 127675 include state purchasers like CCHCS, as well as
“licensed health care service plan[s],” “health insurer[s] holding
a valid outstanding certificate of authority from the Insurance
Commissioner,” and “pharmacy benefit manager[s]” as
defined under Business and Professions Code section 4430,
subdivision (j).2 (Health & Saf. Code, § 127675, subd. (a).)
Pharmacy benefit managers in turn “shall notify [their] large
contracting public and private purchasers of the increase”; a
“ ‘large purchaser’ ” is defined as “a purchaser that provides
coverage to more than 500 covered lives.” (Id., § 127677,
subd. (e).)
       Neither Health and Safety Code section 127677 nor any
other provision enacted under Senate Bill No. 17 requires the
purchasers to keep the price increase notices confidential or
otherwise restricts the purchasers’ use of the information in the
notices.

      2 A pharmacy benefit manager “manages the prescription
drug coverage” provided by entities such as health insurers and
health care service plans. (Bus. & Prof. Code, § 4430, subds. (a),
(j).)

                                    7
      CCHCS provided the trial court with a list of
approximately 170 individuals registered to receive the price
increase notices. The registered recipients represented over 70
public and private entities, such as the California Department of
Public Health, the County of Los Angeles, CalPERS, Blue Shield,
Kaiser Permanente, and CVS Health.3

B.    Amgen’s disclosure
       On November 15, 2018, Amgen provided notice pursuant to
Health and Safety Code section 127677 to all registered
purchasers, including CCHCS. The notice consisted of an e-mail
and an attachment. The e-mail, marked “Confidential” both in
the subject line and at the beginning of the message text (some
capitalization omitted), stated, “Amgen is providing the enclosed
60 day notification of potential list price actions for select drugs
as required by California SB 17 to all registered purchasers. In
addition to the potential list price increases included in the
attached notification, Amgen also intends to decrease list prices
for select products in 2019.”
       The attachment consisted of a chart of 13 drugs, listing for
each the earliest date of a price increase, the current wholesale
acquisition cost, and a range of possible increases in both dollar
amounts and percentages, with zero as the bottom of each range.4

      3  It appears from the list provided by CCHCS that
multiple employees of a single entity have registered for receipt
of the price increase notices.
      4 Amgen did not provide “a statement regarding whether a
change or improvement in the drug necessitates the price
increase.” (Health & Saf. Code, § 127677, subd. (c)(2).) That
omission is not at issue in this appeal.

                                    8
       On December 3, 2018, CCHCS informed Amgen by letter
that it had received a CPRA request from Reuters News seeking
all price increase notices received by CCHCS from November 1 to
November 16, 2018. CCHCS stated, “Due to the confidentiality
disclaimer set forth in [Amgen’s] notification documents, CCHCS
is providing this notice of its intent to disclose such records, in
their entirety, in response to the PRA request.” CCHCS stated it
would disclose the notice unless it received a court order to the
contrary by December 17, 2018. CCHCS stated that it “does not
identify a legal basis for nondisclosure of the price increase
notifications, as the records and its contents were provided
pursuant to a statutory obligation . . . .”
       On December 11, 2018, Amgen filed a complaint and
petition for writ of mandate “seek[ing] declaratory and injunctive
relief ” to prevent CCHCS from disclosing its price increase
notice. Amgen claimed its potential price increases constituted
trade secrets privileged under Evidence Code section 1060, which
exempted them from CPRA disclosure under Government Code
section 6254, subdivision (k). Amgen did not challenge the
validity of Senate Bill No. 17 or Health and Safety Code
section 127677.
       Amgen’s writ petition was directed solely at protecting the
confidentiality of the proposed price increases disclosed in the
price increase notice; Amgen acknowledged in later filings that
“[i]f Amgen in fact implements an increase in the [wholesale
acquisition cost] for any particular product, that increase can be
disclosed.”
       The trial court granted Amgen’s unopposed ex parte
application for a temporary restraining order. Amgen then
moved for a preliminary injunction, which CCHCS opposed.

                                    9
       In support of its motion, Amgen submitted a declaration
from an employee, Rachelle Wan (Wan). Wan declared that
“Amgen invests substantial resources in developing its pricing
strategy” and “spend[s] considerable time, effort, and money
determining and properly calibrating Amgen’s prices for its
products, as well as making decisions about which products may
see price changes and what possible changes may be
implemented.” According to Wan, “Amgen diligently protects the
confidentiality” of its drug pricing strategy, including through
employee training and limiting which employees have “access to
information regarding drug prices and potential price changes.”
Wan attested that Amgen released the information to the
registered purchasers “solely for the purpose of complying with”
Health and Safety Code section 127677, and “would not otherwise
disclose this information publicly.”
       Wan contended that public disclosure of Amgen’s potential
price changes would put it at a “significant competitive
disadvantage by providing Amgen’s competitors valuable non-
public information and insights about Amgen’s pricing strategy,
internal decision-making, internal forecasts, and a roadmap for
Amgen’s potential actions with respect to certain of its products.”
Wan opined that a competitor armed with information about
Amgen’s potential future price increases could “(i) undercut
Amgen’s prices, (ii) ‘dump’ competing drugs onto the market in
advance to decrease Amgen’s sales, (iii) start a publicity
campaign against Amgen’s products, or (iv) negotiate sales
contracts with potential clients and strengthen their existing
client base,” all to Amgen’s detriment.
       The trial court issued a written ruling in Amgen’s favor on
February 1, 2019. The trial court found that Amgen had

                                   10
demonstrated a reasonable probability of prevailing on the merits
of its writ petition. Citing Wan’s declaration, the trial court
found that Amgen had sufficiently demonstrated that the
information in its price increase notice contained trade secrets.
Specifically, the trial court found that Amgen had made
reasonable efforts to maintain the secrecy of its potential price
changes, and the pricing information had “independent economic
value” in that Amgen “expended time, effort, and money” in
setting the prices and its “pricing strategy provides [Amgen] with
a competitive advantage over competitors.”
       The trial court rejected CCHCS’s argument that disclosure
of the pricing information to the registered purchasers vitiated
any trade secret protection, because “the law compelled [Amgen]
to make the disclosure,” and “there is no evidence the pricing
information in the Notice is ‘generally known to the public’ or
[Amgen’s] competitors.” The trial court also rejected CCHCS’s
argument that the CPRA trade secret exemption under
Government Code section 6254, subdivision (k) was permissive,
not mandatory, finding that “without the ability to bring a
reverse-CPRA action, [Amgen’s] trade secret protection would be
left to the discretion of [CCHCS].”
       The trial court acknowledged that one of the goals of
Senate Bill No. 17 was to “ ‘improve data transparency’ ”
regarding drug pricing, but found this goal “is not thwarted
through recognizing a manufacturer’s trade secret information
for up to 60 days before the price increase is effectuated.”
       Finally, the trial court found that “the balance of relative
harms [in granting the injunction] tips in [Amgen’s] favor.”
Despite Amgen’s disclosure of the pricing information to the
registered purchasers, “there is no evidence those purchasers

                                   11
have not voluntarily complied with [Amgen’s] request to maintain
the confidentiality of the information,” and “the audience to
whom [Amgen] actually disclosed the pricing information was not
[Amgen’s] competitors. Therefore, public dissemination of the
pricing information could be harmful to [Amgen] notwithstanding
[Amgen’s] compliance with SB 17.”
      The trial court signed an order granting the preliminary
injunction on March 11, 2019, stating that “Amgen’s Notice or
information contained in Amgen’s Notice shall not be disclosed by
CCHCS to any third parties pursuant to a Public Records Act
request or otherwise.”5 (Footnote omitted.) The order further
stated that “[n]othing in this Order shall prevent CCHCS from
disclosing a price increase to the Wholesale Acquisition Cost
(WAC) implemented by Amgen for the medications in the Notice.”
      CCHCS timely appealed from the grant of the preliminary
injunction. Amgen applied ex parte to stay the trial court
proceedings pending resolution of the appeal, which CCHCS
opposed. The trial court denied the ex parte application.
      The trial court subsequently sustained CCHCS’s demurrer
to the mandamus cause of action with leave to amend.6 Amgen

      5  CCHCS objected in the trial court to the “or otherwise”
language in the preliminary injunction order, which arguably
bars any public disclosure, and not just disclosure pursuant to a
CPRA request. CCHCS does not renew this challenge on appeal;
we therefore do not address the validity or effect on this appeal of
the “or otherwise” language.
      6  The trial court also stayed Amgen’s cause of action for
declaratory relief and sustained the demurrer without leave
to amend to the cause of action for injunctive relief. The
trial court’s rulings on the demurrer are not at issue in this
appeal.

                                    12
did not amend, instead voluntarily dismissing its action, thereby
abandoning its attempt to prevent CCHCS from providing the
price increase notification to Reuters News. Amgen represents
on appeal that the dismissal did not “jeopardize[e] its trade
secrets because it had already implemented the proposed price
changes for the drugs listed in the SB 17 notice.”

                          DISCUSSION

I.    This Appeal Is Not Barred by the Mootness Doctrine
       As an initial matter, Amgen argues that its voluntary
dismissal of the underlying action dissolved the preliminary
injunction CCHCS seeks to challenge, and thus the appeal should
be dismissed as moot. As CCHCS notes, however, we “retain[ ]
discretion to decide a moot issue if the case presents an issue of
‘ “substantial and continuing public interest” ’ and is capable of
repetition yet evades review.” (Citizens Oversight, Inc. v. Vu
(2019) 35 Cal. App. 5th 612, 615; Conservatorship of Wendland
(2001) 26 Cal. 4th 519, 524, fn. 1.)
       This is such a case. The issues involved are capable of
repetition. We reasonably can expect that Amgen will provide
price increase notices in the future, and will again attempt to
enjoin disclosure of those notices under the CPRA. Indeed, at the
hearing on CCHCS’s demurrer, Amgen’s counsel admitted,
“[W]e’re going to have the same issue the next time a disclosure
is made and if a C.P.R.A. request is made for that information.”
Counsel continued, “So it becomes a repeated issue.”
       The issues raised by this case are not limited to the parties
before us. Amici curiae GlaxoSmithKline LLC and ViiV
Healthcare US state that they “have each been notified by state
agencies on three separate occasions that third parties were

                                   13
seeking disclosure of the advance price increase submissions,”
and both have taken legal action to prevent the public agencies
from disclosing the submissions.
      Amgen suggests the dispute at issue in this case is unlikely
to recur because the contents of Amgen’s future price increase
notices may change—for example, Amgen may no longer include
a range of possible price increases, instead listing only a specific
increase—which in turn may affect the trade secret analysis.
Because our resolution of this appeal does not turn on the
contents of Amgen’s notice, we reject this argument.
      The issues in this case also are likely to evade review. As
Amgen has made clear, its goal in this litigation was to prevent
disclosure of its proposed price increases for the 60-day period
before Amgen implemented the new prices. Once Amgen
implemented the price increases, it could (and did) dismiss its
reverse-CPRA action without jeopardizing its purported trade
secrets. Nothing prevents Amgen from taking a similar approach
to future price increase notices, in which case the trial and
appellate courts would never reach the merits of the case.7
      We further conclude that the interrelation of trade secret
protections and Health and Safety Code section 127677 is an
issue of substantial and continuing public interest, given the

      7  Amgen represents that it dismissed the underlying case
not to avoid a ruling on the merits, but out of concern that
changes in the content of its future notices might render any
declaratory relief based on its current notice of limited use. We
do not question Amgen’s motives. We merely note that a
pharmaceutical manufacturer has little incentive to continue
prosecuting an action to protect its price increase notice once it
has implemented the price increases publicly.

                                    14
multiple legal actions taken by drug manufacturers to prevent
disclosure of their price increase notices, the filing of three briefs
by amici curiae in this case, and the fact that the disclosure in
the case was sought by a prominent news organization.
       Amgen argues that CCHCS “cannot invoke the
discretionary exception to mootness because it voluntarily chose
not to preserve the status quo pending this appeal” when
it opposed Amgen’s request to stay the trial court proceedings.
Amgen cites Fair v. United States E.P.A. (9th Cir. 1986) 795 F.2d
851 (Fair), which declined to consider a moot appeal when it was
“unlikely that this controversy will arise again between these
parties,” and “[t]he sole reason this case ‘evaded review’ is the
appellants’ failure to take requisite action,” such as posting a
bond along with their request for a preliminary injunction or
seeking a stay of the trial court’s judgment pending appeal.
(Id. at p. 855.)
       Fair is inapposite. As set forth above, the controversy at
issue in this case is likely to arise again between these parties,
and the appeal was rendered moot not through CCHCS’s
inaction, but by Amgen’s decision to dismiss the underlying case,
something CCHCS could not have prevented even had it agreed
to stay the proceedings in the trial court.
       Amgen’s other cited cases do not support the proposition
that application of the mootness exception depends on the
appellant taking action to preserve the status quo. Instead, the
courts in those cases declined to apply the exception because they
were not persuaded the issues in the cases were likely to recur.
(See Building a Better Redondo, Inc. v. City of Redondo Beach
(2012) 203 Cal. App. 4th 852, 867 [no exception to mootness
applied because “the appeal of the judgment in this case presents

                                     15
fact-specific issues that are unlikely to recur”]; Santa Monica
Baykeeper v. City of Malibu (2011) 193 Cal. App. 4th 1538, 1551
[declining to apply an “exception for recurring controversies” to
an otherwise moot appeal because the recurrence of issues
concerning a particular construction project in future undefined
projects was speculative].) Amgen also cites Wilson & Wilson v.
City Council of Redwood City (2011) 191 Cal. App. 4th 1559, but
that case did not address any exceptions to the mootness
doctrine.
      We proceed to the merits of CCHCS’s appeal.

II.   The Trial Court Abused Its Discretion by Granting
      the Preliminary Injunction
      CCHCS raises several contentions on appeal. Two are
dispositive. We agree that the trial court abused its discretion
when it concluded that (1) Amgen had sufficiently shown its price
increase notice is a trade secret despite its disclosure to the
registered purchasers, and (2) Amgen sufficiently demonstrated
it would be harmed if CCHCS disclosed Amgen’s price increase
notice to Reuters News and other members of the public during
the 60-day notice period under Health and Safety Code
section 127677. We assume without deciding that the price
increase information was a trade secret before Amgen disclosed it
to the purchasers.

      A.    Standard of review
      “[A] preliminary injunction is an order that is sought by a
plaintiff prior to a full adjudication of the merits of its claim.”
(White v. Davis (2003) 30 Cal. 4th 528, 554, italics omitted.) “To
obtain a preliminary injunction, a plaintiff ordinarily is required
to present evidence of the irreparable injury or interim harm that

                                   16
it will suffer if an injunction is not issued pending an
adjudication of the merits.” (Ibid.)
        Trial courts “ ‘evaluate two interrelated factors when
deciding whether or not to issue a preliminary injunction. The
first is the likelihood that the plaintiff will prevail on the merits
at trial. The second is the interim harm that the plaintiff is
likely to sustain if the injunction were denied as compared to the
harm that the defendant is likely to suffer if the preliminary
injunction were issued.’ ” (ITV Gurney Holding Inc. v. Gurney
(2017) 18 Cal. App. 5th 22, 28–29 (ITV Gurney).)
        “We review a trial court’s application of these factors
for abuse of discretion.” (ITV Gurney, supra, 18 Cal.App.5th
at p. 29.) “However, if the ‘likelihood of prevailing on the merits’
factor depends upon the construction of a statute or another
question of law, rather than evidence to be introduced at trial,
our review of that issue is independent or de novo.” (Marken v.
Santa Monica-Malibu School Dist. (2012) 202 Cal. App. 4th 1250,
1261 (Marken).)

      B.    The California Public Records Act
       Under the CPRA, “every person has a right to inspect any
public record” except records that are “exempt from disclosure by
express provisions of law.” (Gov. Code, § 6253, subds. (a), (b).)
“ ‘In other words, all public records are subject to disclosure
unless the Legislature has expressly provided to the contrary.’ ”
(American Civil Liberties Union Foundation v. Superior Court
(2017) 3 Cal. 5th 1032, 1038–1039.) “ ‘Public records’ includes any
writing containing information relating to the conduct of the
public’s business prepared, owned, used, or retained by any state
or local agency . . . .” (Gov. Code, § 6252, subd. (e).) The parties

                                     17
do not dispute that the price increase notice that Amgen sent to
CCHCS is a public record.8
      Although the CPRA provides a mechanism to challenge an
agency’s refusal to disclose a requested public record (see Gov.
Code, § 6258), it provides no mechanism for a third party to
prevent a public agency from disclosing public records. (Marken,
supra, 202 Cal.App.4th at p. 1267.) “Therefore, third parties
must bring an independent action for declaratory relief or
traditional mandamus if they believe they will be adversely
affected by disclosure.” (Pasadena Police Officers Assn. v. City of
Pasadena (2018) 22 Cal. App. 5th 147, 160, fn. 16.) This type of
mandamus action is commonly called a “reverse-CPRA action.”
(National Conference of Black Mayors v. Chico Community
Publishing, Inc. (2018) 25 Cal. App. 5th 570, 575, fn. 2.)
      Here, Amgen bases its reverse-CPRA action on
Government Code section 6254, which lists over two dozen
categories of documents exempt from disclosure under the CPRA.
Amgen claims its price increase notice is exempt from disclosure
under subdivision (k) of that section, which exempts “[r]ecords,
the disclosure of which is exempted or prohibited pursuant to
federal or state law, including, but not limited to, provisions of
the Evidence Code relating to privilege.” Amgen contends that
subdivision (k) incorporates the trade secret privilege under

      8 Amici curiae GlaxoSmithKline LLC and ViiV Healthcare
US argue that Amgen’s notice is not a public record. Because the
parties have not raised this argument, we decline to address it.
(Bullock v. Philip Morris USA, Inc. (2011) 198 Cal. App. 4th 543,
572 [“An amicus curiae ordinarily must limit its argument to the
issues raised by the parties on appeal, and a reviewing court need
not address additional arguments raised by an amicus curiae”].)

                                   18
Evidence Code section 1060, which provides that “the owner of a
trade secret has a privilege to refuse to disclose the secret, and to
prevent another from disclosing it, if the allowance of the
privilege will not tend to conceal fraud or otherwise work
injustice.”
       The exemptions in Government Code section 6254
“are permissive, not mandatory: They allow nondisclosure but
do not prohibit disclosure.” (Marken, supra, 202 Cal.App.4th
at p. 1262; see Gov. Code, § 6254, 2d to last para. [“This section
does not prevent any agency from opening its records concerning
the administration of the agency to public inspection, unless
disclosure is otherwise prohibited by law”].) In other words, a
government agency has the discretion to invoke an exemption
under Government Code section 6254, but is not required to do
so. Because mandamus cannot be used “ ‘to control an exercise of
discretion’ ”(Marken, at p. 1266), a party bringing a reverse-
CPRA action must show disclosure is “ ‘otherwise prohibited by
law,’ ” that is, that the government agency lacks discretion to
disclose. (Id. at p. 1270, quoting Gov. Code, § 6254, 2d to last
par.) Parties have brought reverse-CPRA actions, for example,
based on the state constitutional right to privacy (Marken, at
p. 1271) and the requirement under Penal Code section 832.7,
subdivision (a) that peace officer personnel records remain
confidential. (Pasadena Police Officers Assn. v. Superior Court
(2015) 240 Cal. App. 4th 268, 285 (Pasadena Police).)
       It is not clear to us that the trade secret evidentiary
privilege is a broad prohibition on disclosure akin to the
constitutional right to privacy or the statutory protection for
peace officer personnel records. Evidentiary privileges as a
general matter apply in a “ ‘[p]roceeding,’ ” defined in the

                                    19
Evidence Code as “any action, hearing, investigation, inquest, or
inquiry (whether conducted by a court, administrative agency,
hearing officer, arbitrator, legislative body, or any other person
authorized by law) in which, pursuant to law, testimony can be
compelled to be given.” (Evid. Code, § 901; see also id., § 910
[Evidence Code privileges “apply in all proceedings”].) We are not
aware of any authority holding that the trade secret evidentiary
privilege bars the government from disclosing information
outside of the context of a “proceeding,” nor has Amgen directed
us to any such authority.
       Although the Legislature expanded the reach of the
evidentiary privileges by incorporating them into the CPRA as
exemptions, those exemptions, like all exemptions under
Government Code section 6254, are not mandatory. Thus, while
incorporation of the evidentiary privileges into the CPRA grants
the government additional discretionary bases to refuse
disclosure, it does not necessarily follow that the Legislature
intended to allow third parties to assert those privileges outside
the context of a “proceeding” to prohibit the government from
disclosing information subject to those privileges.
       In light of the above, it is not a foregone conclusion that the
trade secret privilege under Evidence Code section 1060 is a
proper basis for a reverse-CPRA mandamus action. Given our
holding in Part C of our Discussion, post, that Amgen has failed
to show its price increase notice was a trade secret after it had
been disclosed pursuant to Senate Bill No. 17, however, we need
not decide the question.

                                    20
      C.    Amgen has failed to show a probability of
            success on the merits
       CCHCS contends the trial court abused its discretion by
concluding that Amgen had sufficiently shown that its price
increase notice was a trade secret despite its disclosure to the
registered purchasers. We agree.
       “ ‘[W]hether information constitutes a trade secret is a
question of fact.’ ” (Global Protein Products, Inc. v. Le (2019)
42 Cal. App. 5th 352, 367.) The party claiming the trade secret
privilege under Evidence Code section 1060 bears the burden of
proving its entitlement to that privilege. (Bridgestone/Firestone,
Inc. v. Superior Court (1992) 7 Cal. App. 4th 1384, 1393.)
Similarly, a party resisting disclosure under the CPRA bears the
burden of proving an exemption applies. (Pasadena Police, supra,
240 Cal.App.4th at p. 290.) In this case, the record does not
support the trial court’s finding that Amgen had met its burden.
       In applying Evidence Code section 1060 and Government
Code section 6254, subdivision (k), the trial court used the trade
secret definition from Civil Code section 3426.1, subdivision (d),
which is part of the Uniform Trade Secrets Act (UTSA) (Civ.
Code, § 3426 et seq.). This was appropriate; the Evidence Code
and case law apply the UTSA definition to the trade secret
privilege under Evidence Code section 1060. (Evid. Code, § 1061,
subd. (a)(1); Stadish v. Superior Court (1999) 71 Cal. App. 4th
1130, 1141 & fn. 10.)
       Civil Code section 3426.1, subdivision (d) defines a trade
secret as “information . . . that: [¶] (1) Derives independent
economic value, actual or potential, from not being generally
known to the public or to other persons who can obtain economic
value from its disclosure or use; and [¶] (2) Is the subject of

                                  21
efforts that are reasonable under the circumstances to maintain
its secrecy.” “In short, the test for a trade secret is whether the
matter sought to be protected is information (1) that is valuable
because it is unknown to others and (2) that the owner has
attempted to keep secret.” (DVD Copy Control Assn., Inc. v.
Bunner (2004) 116 Cal. App. 4th 241, 251 (DVD Copy).)
       Our focus here is on the first prong,9 which recognizes the
self-evident principle that a trade secret must, in fact, be secret.
(See 1 Milgrim on Trade Secrets (2009) § 1.03 [“Indispensable to
an effective allegation of a trade secret is proof that the matter is,
more or less, secret. In the absence of secrecy the property
disappears”].) This is because the “intrinsic value” of a trade
secret “is based upon, or at least preserved by, being safeguarded
from disclosure.” (Pillsbury, Madison & Sutro v. Schectman
(1997) 55 Cal. App. 4th 1279, 1287; see also DVD Copy Control
Assn., Inc. v. Bunner (2003) 31 Cal. 4th 864, 881 [“ ‘Trade secrets

      9  Had Amgen voluntarily disclosed its purported trade
secrets to the registered purchasers, Amgen likely would fail to
satisfy the second prong of the trade secret definition because it
would not have made reasonable efforts to maintain secrecy.
(See, e.g., Whyte v. Schlage Lock Co. (2002) 101 Cal. App. 4th 1443,
1454–1455 [manufacturer did not make reasonable efforts to
maintain secrecy of information disclosed to customer without a
secrecy agreement in place].) The trial court ruled, however, that
Amgen’s disclosure in this case was “compelled” by the
requirements of Health and Safety Code section 127677, the
implication being that Amgen did everything it reasonably could
to maintain secrecy short of violating the law. Because we
conclude that Amgen has failed to make a sufficient showing to
satisfy the first prong, we do not decide whether Amgen’s
disclosure was “compelled” or what impact, if any, such a finding
might have on the second prong of the trade secret definition.

                                     22
are a peculiar kind of property. Their only value consists in their
being kept private’ ”].)
       Thus, “[p]ublic disclosure, that is the absence of secrecy, is
fatal to the existence of a trade secret. ‘If an individual discloses
his trade secret to others who are under no obligation to protect
the confidentiality of the information, or otherwise publicly
discloses the secret, his property right is extinguished.’ ” (In re
Providian Credit Card Cases (2002) 96 Cal. App. 4th 292, 304
(Providian Credit Card), quoting Ruckelshaus v. Monsanto Co.
(1984) 467 U.S. 986, 1002.) In Providian Credit Card, for
example, the court held that telemarketing scripts are not trade
secrets once they are read to customers. (Providian Credit Card,
at p. 305.)
       Amgen does not dispute that it disclosed its price increase
notice to over 170 registered purchasers. The disclosure did not
stop there, because those registered purchasers who were
pharmacy benefit managers were required by statute also to
inform their “large contracting public and private purchasers,”
whether or not those contracting purchasers themselves were
registered.10 (Health & Saf. Code, § 127677, subd. (e).)
       Amgen provided no evidence that the recipients of the price
increase information, whether registered purchasers or
purchasers contracting with pharmacy benefit managers, were

      10 Senate Bill No. 17 itself contains no limitation on the
number of purchasers entitled to receive the price increase notice,
so long as they either meet the statutory definition and register,
or are “large” purchasers that are contracting with a pharmacy
benefit manager that is registered. As noted earlier, “large”
purchasers are those that “provide[ ] coverage to more than 500
covered lives.” (Health & Saf. Code, § 127677, subd. (e).)

                                    23
under any contractual obligation to maintain its confidentiality,
nor does Senate Bill No. 17 impose any confidentiality
obligations.11 In contrast, other provisions of Senate Bill No. 17
expressly impose confidentially requirements for certain
information disclosed to the government. For example, Health
and Safety Code section 1367.243 (Stats. 2017, ch. 603, § 1),
which requires health care service plans annually to report
information regarding pharmaceuticals dispensed under the
plans (id., subd. (a)(2)), states that “the department shall keep
confidential all of the information provided to the department
pursuant to this section, and the information shall be protected
from public disclosure.” (Id., subd. (f).) No such language
pertaining to the price increase notices appears in Senate Bill
No. 17.
      Given the price increase notice’s disclosure to an unknown
number of recipients, none of whom was bound to keep it in
confidence, it would not appear that Amgen’s price increase
notice could be called “secret.”
      The trial court found to the contrary, relying on the
proposition that disclosed information nonetheless may retain
trade secret status so long as it is not “generally known to the
public or to other persons who can obtain economic value from its
disclosure or use.” (Civ. Code, § 3426.1, subd. (d)(1); see Masonite
Corp. v. County of Mendocino Air Quality Management Dist.
(1996) 42 Cal. App. 4th 436, 451, fn. 11 (Masonite) [“limited

      11 At the hearing on Amgen’s preliminary injunction
motion, Amgen’s counsel suggested Amgen has “confidentiality
expectations and obligations” with its purchasers, but Amgen
has not identified any evidence in the record supporting this
contention.

                                   24
disclosure to noncompetitors does not result in loss of the trade
secret privilege where . . . the holder of the privilege made
reasonable efforts to maintain secrecy”].)
       The trial court found “no evidence the pricing information
in the Notice is ‘generally known to the public’ or [Amgen’s]
competitors.” The trial court further noted “there is no evidence
those purchasers have not voluntarily complied with [Amgen’s]
request to maintain the confidentiality of the information,”
presumably referring to Amgen’s placing the term “Confidential”
in both the subject line and text of the e-mail transmitting the
price increase notification.
       In so concluding, the trial court misapplied the burden of
proof and abused its discretion. As the authorities cited above
indicate, disclosure to others, who have no obligation to maintain
confidentiality, will destroy a trade secret. As the party asserting
the trade secret privilege, it was Amgen’s burden to establish
that its price increase notice remained confidential despite
disclosure to the registered purchasers and “large” customers of
pharmacy benefit managers. At a minimum, this would have
required some evidence that the purchasers did not, and would
not, disclose the information to the general public or to those
“who can obtain economic value from its disclosure or use.” (Civ.
Code, § 3426.1, subd. (d)(1).) Amgen presented no evidence on
this issue. The trial court instead relied on a purported lack of
evidence of further disclosure, thus improperly shifting the
burden of proof to CCHCS.
       Amgen argues that at the preliminary injunction stage, it
need only show “ ‘a reasonable probability’ that it would prevail
on the merits.” This is so, but in the absence of any evidence
whatsoever that Amgen’s price increase notice maintained its

                                   25
confidentiality after disclosure to the registered purchasers and
others, the trial court had no basis to find Amgen had a
probability of prevailing on that critical issue, much less a
reasonable one.
      The trial court’s finding that Amgen’s disclosure was
“compelled” does not affect our conclusion. The question here is
not why Amgen disclosed its price increase notice, but whether
that disclosure rendered the notice no longer confidential.
      Even assuming arguendo that the registered purchasers
did not disseminate the price increase notice further, we would
conclude that Amgen has failed to show that the notice
maintained its purported trade secret status. Amgen has not
explained why the registered purchasers, who directly or
indirectly sit on the opposite side of the negotiating table from
Amgen, are not themselves “persons who can obtain economic
value” from advance knowledge of Amgen’s prospective pricing
information. (Civ. Code, § 3426.1, subd. (d)(1).) To paraphrase
Amgen’s declarant Wan, a large purchaser negotiating deals for
Amgen’s and its competitors’ products presumably would greatly
value insight into Amgen’s “pricing strategy, internal decision-
making, internal forecasts,” and “roadmap[s] for Amgen’s
potential actions.” Thus, whatever benefit Amgen may have
derived from keeping secret its future price increases would have
been lost once those increases were disclosed to the purchasers,
even if the purchasers used the information solely for their own
purposes without disclosing it further.
      Among other things, purchasers aware of upcoming price
increases can seek less expensive alternatives from Amgen’s
competitors, to the purchasers’ economic benefit and Amgen’s
detriment. Indeed, the legislative history of Senate Bill No. 17

                                  26
indicates that this was precisely what the Legislature intended
to happen. (See Sen. Health Com., Analysis of Sen. Bill No. 17
(2017–2018 Reg. Sess.) Mar. 14, 2017, p. 8 [advance notice
provision “gives purchasers . . . time . . . to seek other
alternatives, including obtaining alternative formulations of
drugs for which there are therapeutic equivalents”]; Assem. Com.
on Appropriations, Analysis of Sen. Bill No. 17 (2017–2018 Reg.
Sess.) as amended July 20, 2017, p. 4 [“the advance price
notification will help [the purchaser] . . . find alternatives to
costly drugs . . . and prevent unnecessarily high payment for
drugs, such as those with short-term price hikes where an
alternative formulation can achieve the same result”].)
       In short, Amgen has failed to explain how its purported
trade secret maintained its confidentiality and concomitant value
to Amgen when it was disclosed to over 170 purchasers who had
the incentive to use the information to their benefit and Amgen’s
detriment, and were not subject to any restrictions on using or
further disseminating the information.
       Amgen’s cited cases, some of which the trial court relied
upon as well, are unavailing. We discuss each in turn.
       Masonite, supra, 42 Cal. App. 4th 436 held that air
emissions information submitted to government regulators
did not lose trade secret protection when those regulators, who
were statutorily bound to maintain the confidentiality of the
information, inadvertently disclosed the information to two
environmental organizations.12 (Id. at pp. 450–451.) Thus,

      12  Masonite claimed trade secret status under statutes
specific to air emissions information submitted to regulators,
none of which is applicable to this case. (See Gov. Code, § 6254.7;

                                   27
despite the disclosure, the trade secret holder could prevent
another environmental organization from obtaining the
information through a public records request. (Id. at pp. 451,
456.)
        The Masonite court reasoned, “We do not equate limited,
unsanctioned acquisition of confidential information by a third
party, such as occurred here, with more general, authorized
dissemination to the public or competitors which results in loss of
trade secret privileges. The public agencies which received
the . . . information were not entitled to distribute it further, so
Masonite maintained the protection afforded by law to prevent
disclosure of designated trade secrets to the general public
and competitors.” (Masonite, supra, 42 Cal.App.4th at p. 451,
fn. omitted.) Although not applicable in that case, the Masonite
court found the trade secret definition in Civil Code
section 3426.1, subdivision (d), the definition at issue in the
instant case, supports the proposition that “limited disclosure to
noncompetitors does not result in loss of the trade secret privilege
where . . . the holder of the privilege made reasonable efforts to
maintain secrecy.” (Masonite, at p. 451, fn. 11.) It is for this
proposition that Amgen cites Masonite.
        The government’s inadvertent disclosure in Masonite is not
analogous to Amgen’s disclosure under Senate Bill No. 17.
Masonite stands for the proposition that the government’s
erroneous disclosure of information that it is statutorily bound to
keep confidential does not convert the information into a public

Health & Saf. Code, § 44346; Masonite, supra, 42 Cal.App.4th at
pp. 450–451.)

                                   28
record, at least when the inadvertent disclosure is “limited” and
made to “noncompetitors.”
        Here, Amgen, not the government, disclosed the price
increase notice to the registered purchasers. Amgen did so in
compliance with a statutory regime that, far from protecting
Amgen’s price information, required that it be disclosed to a long
list of potentially adverse recipients with no limitations on those
recipients’ use or further dissemination of the information.
Amgen cannot claim to have been unaware of the possible
consequences of its disclosure, including the loss of trade secret
protections; trade groups opposed Senate Bill No. 17 precisely
because it “requires the disclosure of commercially sensitive
pricing information” “without confidentiality protections.”
(Assem. Com. on Appropriations, Analysis of Sen. Bill No. 17
(2017–2018 Reg. Sess.) as amended July 20, 2017, p. 4
[summarizing joint letter of Pharmaceutical Research and
Manufacturers of America, Biotechnology Innovation
Organization, California Life Sciences Association, and Biocom].)
        Also, as we have explained, Amgen has failed to make any
showing that the registered purchasers were not akin to
competitors who could derive economic value from Amgen’s
pricing information, or that the purchasers would not further
disseminate Amgen’s price increase notice. Indeed, the pharmacy
benefit managers were required to disseminate it further to their
“large” contracting purchasers. Thus, to the extent information
may remain a trade secret despite “limited disclosure to
noncompetitors,” such as the small number of environmental
organizations in Masonite, Amgen has not shown that principle
applies here.

                                   29
       Amgen also quotes DVD Copy, supra, 116 Cal. App. 4th 241,
which stated, “Publication on the Internet does not necessarily
destroy the secret if the publication is sufficiently obscure or
transient or otherwise limited so that it does not become
generally known to the relevant people, i.e., potential competitors
or other persons to whom the information would have some
economic value.” (Id. at p. 251.) DVD Copy does not in fact apply
this principle, concluding instead that the evidence indicated the
Internet disclosure in that case likely reached millions of people.
(Id. at p. 252.) Thus, DVD Copy gives no guidance as to what it
means for a publication to be “sufficiently obscure or transient or
otherwise limited” that it does not destroy trade secret
protections. Also, as we have explained, Amgen has failed to
show that the registered purchasers were not “other persons to
whom the information would have some economic value.” (Id. at
p. 251.) DVD Copy therefore does not undercut our conclusion
that Amgen has failed to show that its price increase notice
remained a trade secret after disclosure to the registered
purchasers.
       Amgen cites American Defense Systems, Inc. v. Southern
California Gold Products, Inc. (C.D. Cal. May 14, 2009,
No. CV 07-7134) 2009 WL 10671854, at page *3 for the
proposition that “limited disclosure for [a] specified purpose
‘cannot be considered tantamount to placing plaintiff ’s trade
secrets in the public domain.’ ” In that case, however, the trade
secret holder had a contract with the federal government “which
explicitly prevent[ed] general or public disclosure of trade
secrets.” (Ibid.) Thus, the trade secret holder providing its
products to the government under the terms of that contract did

                                   30
not vitiate its trade secret protections. (Ibid.) Amgen has
demonstrated no such obligation of confidentiality here.
        Amgen cites Morlife, Inc. v. Perry (1997) 56 Cal. App. 4th
1514, 1522 (Morlife) for the proposition that information that is
“ ‘not readily ascertainable, but only discoverable with great
effort’ ” can be a trade secret. Morlife did not concern the legal
effect of the disclosure of trade secrets; instead, it addressed
whether the information in a roofing company’s customer list was
“ ‘readily ascertainable’ through public sources” such that it
could not constitute a trade secret in the first place. (Id. at
pp. 1521–1522.) Assuming arguendo that principle applies here,
it is of no help to Amgen. Even if Amgen’s price increase notice
were not readily ascertainable by the general public (although
Amgen provided no evidence of this), it was certainly
ascertainable by the purchasers who received the notice without
any limitation on using that information to their economic
advantage.
        Amgen contends in its supplemental briefing and
emphasized at oral argument that recipients of the price increase
notice did in fact have “a duty to maintain the secrecy and limit
use of Amgen’s trade secrets” under the trade secret
misappropriation statutes. (See Civ. Code, § 3426.1,
subd. (b)(2)(A)(ii) [misappropriation includes “[d]isclosure or use
of a trade secret” when the trade secret was “[a]cquired under
circumstances giving rise to a duty to maintain its secrecy or
limit its use”].) Amgen argues that CCHCS “recognized this
duty” when it sent Amgen the letter informing Amgen of Reuters
News’s CPRA request. Amgen further argues that Senate Bill
No. 17 “contemplates that CCHCS will use price increase
notifications for only a specific, limited purpose,” namely to

                                   31
“ ‘understand and plan for specific price increases.’ ” (Quoting
Assem. Com. on Appropriations, Analysis of Sen. Bill No. 17
(2017–2018 Reg. Sess.) as amended July 20, 2017, p. 3.)
       As we have discussed, nothing in Senate Bill No. 17
requires purchasers to maintain the confidentiality of price
increase notices. The fact that CCHCS, in light of Amgen’s
unilaterally marking its price increase notice confidential,
notified Amgen before responding to the CPRA request, does not
establish that CCHCS was obligated to do so. It is telling that in
that same letter, CCHCS stated that it had “not identif[ied] a
legal basis for nondisclosure,” and intended to disclose the price
increase notice absent a court order. CCHCS’s letter cannot be
read to concede any confidentiality obligation. Even if it could,
we would not be bound by any such concession given the absence
of any supporting language in Senate Bill No. 17.
       Furthermore, there is no language in Senate Bill No. 17
limiting the purposes for which recipients may use the price
increase notice. Indeed, reading limitations into the statutory
scheme would be inimical to its purpose, given that one of the
intended goals of Senate Bill No. 17 was to allow the purchasers
to find less expensive alternatives for the drugs listed in the price
increase notices. This would include use of the information in the
price increase notice in negotiations to accomplish that goal,
including negotiations between purchasers and Amgen’s
competitors.
       Amgen cites federal cases in support of its
misappropriation argument. All these cases are inapposite,
because they involve confidentiality obligations arising from
agreements or express statutory mandates. (See Jerome Stevens
Pharmaceut. v. Food & Drug. Admin. (D.C. Cir. 2005) 402 F.3d
32
1249, 1252 [federal law prohibited disclosure of trade secrets at
issue]; Kramer v. Secretary, United States Dept. of Army (2d. Cir.
1980) 653 F.2d 726, 730 [plaintiff alleged “government employees
agreed to honor her demand that the information, once disclosed
[in an effort to obtain a government contract], be treated in
confidence”]; Inteliclear, LLC v. ETC Global Holdings (C.D. Cal.
Apr. 5, 2019, No. 2:18-cv-10342) 2019 WL 3000648, at p. *3
[under license agreement, “Defendant had a duty to maintain in
confidence Plaintiff ’s intellectual property”]; BladeRoom Group
Ltd. v. Emerson Elec. Co. (N.D. Cal. 2018) 331 F. Supp. 3d 977,
984 [defendant’s written agreement to use plaintiff ’s information
“ ‘only for the purpose of internal evaluation of whether to enter
into a business relationship’ ” gave “ ‘rise to a duty to maintain
secrecy’ ”].)
       Amgen argues that a holding that it lost trade secret
protection by complying with Health and Safety Code
section 127677 “raises significant due process and other
constitutional questions that this Court should avoid,” such as
whether disclosure constitutes an unconstitutional taking of
property. (See People v. Garcia (2017) 2 Cal. 5th 792, 804
(Garcia) [under the doctrine of constitutional avoidance, “a
statute should not be construed to violate the Constitution ‘ “ ‘if
any other possible construction remains available’ ” ’ ”].)
       We note again that Amgen has not challenged the
constitutional validity of Senate Bill No. 17, either on appeal or
below, but instead relies solely on Evidence Code 1060 and
Government Code section 6254, subdivision (k) as a basis to bar
disclosure under the CPRA. Even assuming arguendo that our
interpretation of Senate Bill No. 17 implicates constitutional
questions, Amgen has failed to persuade us of another

                                   33
“ ‘ “ ‘possible construction’ ” ’ ” (Garcia, supra, 2 Cal.5th at p. 804)
of the relevant statutes. Amgen urges us to read into Senate Bill
No. 17 confidentiality obligations and limitations on recipients’
use of the price increase notice that the language and intent of
the bill do not support. Absent those obligations and limitations,
we must conclude, based on the plain language of Civil Code
section 3426.1, subdivision (d) and case law interpreting it, that
Amgen has failed to show a likelihood of prevailing on its claim
that its price increase notice satisfied the statutory definition of a
trade secret once it was disclosed to the registered purchasers
and others. We will not, for the sake of avoiding potential
constitutional questions, import confidentiality obligations and
limitations into a statute that is not susceptible to such an
interpretation.
        Amgen also argues that interpreting Senate Bill No. 17 as
we have would “create perverse incentives encouraging
non-compliance.” To the extent Amgen claims that the advance
notice requirement is bad policy, that is for the Legislature to
decide. We note again that the Legislature enacted Senate Bill
No. 17 over the pharmaceutical manufacturers’ express objection
that the bill “requires the disclosure of commercially sensitive
pricing information” “without confidentiality protections.”
(Assem. Com. on Appropriations, Analysis of Sen. Bill No. 17
(2017–2018 Reg. Sess.) as amended July 20, 2017, p. 4.) One
could view Amgen’s preliminary injunction motion as an attempt
to obtain from the courts an outcome that the Legislature
apparently rejected.
        The parties debate at length whether the Legislature
intended the price increase notices to be publicly available
beyond those statutorily entitled to receive it. Whatever the

                                      34
Legislature’s intent, the effect of disclosure to the registered
purchasers and customers of pharmacy benefit managers was the
loss of secrecy essential to meeting the first prong of the UTSA
trade secret definition. If the Legislature did not intend that
effect, the Legislature may of course address the issue. Again, to
the extent Amgen urges that we impose limitations on
disseminating the price increase information once received by the
registered purchasers and “large” pharmacy benefit manager
customers, that is the Legislature’s prerogative and not a matter
for judicial fiat.

      D.    The trial court abused its discretion by
            concluding that the balance of harms favored
            Amgen
       The trial court’s balancing of harms relied on the same
reasoning as did its analysis of the trade secret claim: Because
Amgen had disclosed its pricing information only to the limited
number of registered purchasers, and not to the general public or
its competitors, further dissemination of the information would
be harmful to Amgen during the 60-day period defined in
Senate Bill No. 17, tipping the balance of harms in its favor.
       As set forth above, Amgen has failed to show that
disclosure to the registered purchasers and pharmacy benefit
manager customers had not already placed Amgen’s price
increase notice in the hands of those who would use it to their
advantage and Amgen’s detriment, thus causing the very harm
Amgen sought to prevent with its preliminary injunction. The
trial court’s finding that “the audience to whom [Amgen] actually
disclosed the pricing information was not [Amgen’s] competitors”
did not factor in this patent consequence of Amgen’s disclosure or
that this consequence was what the Legislature intended in

                                   35
enacting Health and Safety Code section 127677 in the first
place.
       Amgen’s claim of harm is undercut further by the fact that
it ultimately discloses its purported trade secret publicly when it
implements its price increases 60 days after notifying the
registered purchasers. To the extent a competitor can divine
“pricing strategy, internal decision-making, internal forecasts,”
and “roadmap[s] for Amgen’s potential actions” from price
listings, as Wan asserted, the competitor can do so once the
prices are public. Similarly, at that time the competitor can
engage in the conduct predicted by Wan, including undercutting
Amgen’s prices, dumping competing drugs on the market,
starting a publicity campaign against Amgen, or negotiating
deals with Amgen’s customers. Amgen has failed to explain the
benefit of delaying these purported consequences for 60 days,
particularly when during that period, the registered purchasers
can use the price increase notice without limitation to Amgen’s
detriment.
       We also observe that Amgen’s rival drug manufacturers are
subject to the same advance notice requirements. Thus,
whatever competitive disadvantage Amgen might suffer by
disclosing its prices early is shared by its rivals. Amgen argues
that some of its competitors may not comply with the notice
requirements, but this is pure speculation.
       Amgen contends that some of the information in its price
increase notice may not become public after 60 days and
therefore should be entitled to protection. Wan stated in her
declaration, “Pursuant to SB 17, Amgen may implement the price
increases at any point after notice or Amgen may decide not to
implement the price increases at all. Furthermore, Amgen may

                                   36
increase prices by any amount within the specified range
contained in Amgen’s notices.”
      Assuming arguendo Wan correctly characterized the
requirements of Senate Bill No. 17, she provided no evidence
suggesting that Amgen actually has, or would, avail itself of
these options. Her assertions appear to us to be mere argument.
They also appear to be internally inconsistent. Given Amgen’s
concern for the harm public dissemination of its pricing may
cause, it seems unlikely Amgen would announce any prices it was
not going to implement within 60 days. Indeed, were Amgen to
disclose a proposed price increase and later retreat from
implementing that increase, that conduct could call into question
Amgen’s claim that it had made “efforts that are reasonable
under the circumstances to maintain . . . secrecy.” (Civ. Code,
§ 3426.1, subd. (d)(2).)
      Amgen argues that “public disclosure of trade secret
information constitutes irreparable harm as a matter of law.”
This argument presupposes that Amgen’s price increase notice
remained a trade secret after its disclosure to the registered
purchasers and customers of pharmacy benefit managers. As we
have already explained, we disagree with that assertion.

                                  37
                        DISPOSITION
      The order granting the preliminary injunction is reversed.
California Correctional Health Care Services is awarded its costs
on appeal.
      CERTIFIED FOR PUBLICATION.

                                         BENDIX, J.
We concur:

             ROTHSCHILD, P. J.

             WEINGART, J.*

     *  Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

                                  38