Court Opinion

ID: 2692474
Source: CourtListenerOpinion
Date Created: 2014-08-01 21:24:33.226664+00
Date Added: 2024-06-11T12:56:14.665595
License: Public Domain

[Cite as Brookville Equip. Corp. v. Cincinnati, 2012-Ohio-3648.]

                          IN THE COURT OF APPEALS
                 FIRST APPELLATE DISTRICT OF OHIO
                            HAMILTON COUNTY, OHIO

BROOKVILLE EQUIPMENT CORP.,                           :            APPEAL NO. C-120434
                                                                   TRIAL NO. A-1204469
          Plaintiff-Appellant,                        :

  and                                                 :

THE CINCINNATI ENQUIRER,                              :               O P I N I O N.

          Intervenor-Appellee,                        :

  and                                                 :

CAF USA, INC.,                                        :

         Intervenor,                                  :

  vs.                                                 :

CITY OF CINCINNATI,                                   :

          Defendant.                                  :

Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Affirmed

Date of Judgment Entry on Appeal: August 15, 2012

Dinsmore & Shohl LLP, Bryan E. Pacheco and Alan H. Abes, for Plaintiff-Appellant,

Graydon Head & Ritchey LLP and John C. Greiner, for Intervenor-Appellee.

Please note: This case has been removed from the accelerated calendar.
                    OHIO FIRST DISTRICT COURT OF APPEALS

SYLVIA S. HENDON, Presiding Judge.

       {¶1}   Plaintiff-appellant Brookville Equipment Corporation (“Brookville”)

appeals the judgment of the Hamilton County Court of Common Pleas denying in

part its request for a temporary restraining order and preliminary injunction

prohibiting defendant city of Cincinnati (the “City”) from releasing Brookville’s

unredacted proposals for the construction of the City’s streetcar system to

intervenor-appellee The Cincinnati Enquirer, or to anyone else, pursuant to a public-

records request, during the pendency of Brookville’s lawsuit against the City for

declaratory judgment and permanent injunction. Because we determine that the

trial court did not abuse its discretion in denying Brookville’s request, we affirm that

portion of the trial court’s judgment.

                        Factual and Procedural Background

       {¶2}   In September 2011, the City issued a request for proposals for the

construction of a streetcar system (the “RFP”). The RFP provided that documents

submitted to the City as part of a proposal or best and final offer would be subject to

disclosure under Ohio’s Public Records Act. The RFP also provided that information

a proposer believed to be exempt from disclosure, such as trade-secret information,

be set apart on separate pages.

       {¶3}   Brookville, a manufacturer of various transportation vehicles,

including streetcars, submitted two proposals in response to the RFP (the

“Proposals”). At the request of the City, Brookville then submitted its best and final

offer for the streetcar (the “BAFO”). Brookville redacted information it believed to

be trade secrets from the BAFO.

                                           2
                    OHIO FIRST DISTRICT COURT OF APPEALS

       {¶4}   The Cincinnati Enquirer (the “Enquirer”) made a public-records

request to the City for proposals submitted in response to the RFP. The City gave

Brookville and the other streetcar proposers an opportunity to remove trade-secret

information from their proposals. Brookville redacted its purported trade secrets

from the Proposals and BAFO, including information related to price, design,

performance, manufacturing, and personnel, and those redacted documents were

given to the Enquirer.

       {¶5}   Unsatisfied with the redacted documents, the Enquirer made a request

to the City for “unredacted versions of the bid records.” The City then informed

Brookville of the City’s intent to release the unredacted Proposals and BAFO, absent

a court order. Subsequently, Brookville filed a verified complaint in the Hamilton

County Court of Common Pleas requesting a declaratory judgment (1) that its

unredacted Proposals and BAFO contain trade-secret information and (2) that the

City cannot disclose this trade-secret information.      Brookville also requested a

temporary restraining order (“TRO”), preliminary injunction, and permanent

injunction prohibiting the City from disclosing its unredacted Proposals and BAFO.

       {¶6}   Another streetcar proposer, United Streetcar, LLC, also filed suit

against the City to protect its purported trade secrets, which was later consolidated

with Brookville’s action. A third streetcar proposer, CAF USA, Inc., filed a motion to

intervene and also requested injunctive relief prohibiting disclosure of its trade

secrets until such time as the City awarded a final contract. The Enquirer also moved

to intervene in the action and filed a complaint requesting a declaratory judgment

against the City that the streetcar proposals be made available for public inspection.

                                           3
                    OHIO FIRST DISTRICT COURT OF APPEALS

       {¶7}   The trial court held hearings on the motions for temporary and

injunctive relief. Meanwhile, United Streetcar, LLC, reached a settlement with the

Enquirer, and so the Enquirer voluntarily dismissed with prejudice its intervening

complaint against the City as to that company’s proposal. CAF USA, Inc., also

reached an agreement with the Enquirer; Brookville, however, did not.              After

conducting an in camera review of the information in Brookville’s Proposals and

BAFO, the trial court denied Brookville’s request for a TRO and preliminary

injunction as to its baseline-pricing information, most of its technical and

manufacturing information, and its staffing information. The trial court granted

Brookville’s motion for a TRO as to the component-pricing information and the

remaining technical and manufacturing information until a preliminary-injunction

hearing could be held.

       {¶8}   The trial court refused to stay that portion of its order denying

Brookville relief, which would have allowed for immediate disclosure of information.

Brookville then filed this appeal from that portion of the trial court’s order denying

its request for TRO and preliminary injunctive relief.        We granted Brookville’s

motion to stay the order of the trial court pending Brookville’s appeal to this court.

                   Temporary and Preliminary Injunctive Relief

       {¶9}   In its sole assignment of error, Brookville contends that the trial court

erred in denying in part its request for a TRO and preliminary injunction.

       {¶10} The purpose of a TRO or preliminary injunctive relief is to preserve the

status quo. Acordia of Ohio, LLC v. Fishel, 1st Dist. No. C-100071, 2010-Ohio-6235,

¶ 9. This court reviews a trial court’s decision granting or denying temporary or

preliminary injunctive relief for an abuse of discretion. See Garono v. State, 37 Ohio

                                           4
                    OHIO FIRST DISTRICT COURT OF APPEALS

St.3d 171, 173, 524 N.E.2d 496 (1988) (“The grant or denial of an injunction is solely

within the trial court’s discretion and, therefore, a reviewing court should not disturb

the judgment of the trial court absent a showing of a clear abuse of discretion.”). A

trial court abuses its discretion when its decision is unreasonable, arbitrary, or

unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140

(1983).

       {¶11} A party seeking a TRO or preliminary injunctive relief must show, by

clear and convincing evidence, (1) a substantial likelihood that the party will prevail

on the merits, (2) the party will suffer irreparable injury or harm if the requested

injunctive relief is denied, (3) no unjustifiable harm to third parties will occur if the

injunctive relief is granted, and (4) the injunctive relief requested will serve the

public interest. Cincinnati v. Harrison, 1st Dist. No. C-090702, 2010-Ohio-3430, ¶

8, citing The Proctor & Gamble Co. v. Stoneham, 140 Ohio App.3d 260, 267, 747

N.E.2d 268 (1st Dist.2000). A court must balance all four factors in determining

whether to grant or deny injunctive relief, and no one factor is determinative. Toledo

Police Patrolman’s Assn., Local 10, IUPA, AFL-CIO-CLC, v. Toledo, 127 Ohio App.3d

450, 469, 713 N.E.2d 78 (6th Dist.1998).

                          Likelihood of Success on the Merits

       {¶12} As to the first element of preliminary injunctive relief—likelihood of

success on the merits—Brookville asserts that it is likely to prevail on the merits of its

suit seeking a declaratory judgment and permanent injunction because the redacted

portions of its Proposals and BAFO are trade secrets exempt from disclosure by

Ohio’s Public Records Act, R.C. 149.43. “Trade secrets are exempt from disclosure

under the ‘state or federal law’ exemption of R.C. 149.43.” State ex rel. Besser v.

                                            5
                   OHIO FIRST DISTRICT COURT OF APPEALS

Ohio State Univ., 89 Ohio St.3d 396, 399, 732 N.E.2d 373 (2000), quoting R.C.

149.43(A)(1)(v). Trade secret, as defined in Ohio’s Uniform Trade Secrets Act, R.C.

1333.61(D),

              means information, including the whole or any portion

              or phase of any scientific or technical information,

              design,    process,    procedure,     formula,     pattern,

              compilation, program, device, method, technique, or

              improvement, or any business information or plans,

              financial information, or listing of names, addresses, or

              telephone numbers, that satisfies both of the following:

              (1) It derives independent economic value, actual or

              potential, from not being generally known to, and not

              being readily ascertainable by proper means by, other

              persons who can obtain economic value from its

              disclosure or use. (2) It is the subject of efforts that are

              reasonable under the circumstances to maintain its

              secrecy.

       {¶13} The Ohio Supreme Court established a two-part test for determining

whether information submitted to a public agency is exempt from disclosure as a

trade secret in State ex rel. Allright Parking of Cleveland, Inc. v. Cleveland, 63 Ohio

St.3d 772, 776, 591 N.E.2d 708 (1992): (1) A court must review the documents in

camera to determine whether they contain trade-secret information.              If the

documents do not contain trade-secret information, then they must be disclosed. (2)

If the documents contain trade-secret information, however, then the court must

                                           6
                   OHIO FIRST DISTRICT COURT OF APPEALS

determine whether the statutory submission requirements of the public agency place

the information in the public record. State ex rel. The Plain Dealer v. Ohio Dept. of

Ins., 80 Ohio St.3d 513, 523-24, 687 N.E.2d 661 (1997).

       {¶14} In Allright Parking, the court of appeals in a mandamus action had

determined that certain documents submitted to the city of Cleveland as part of a

tax-abatement application under R.C. 1728.06 were not exempt from disclosure as

trade secrets under R.C. 149.43 because R.C. 1728.06, which governs such

applications, provides that the applications are a matter of public record. 63 Ohio

St.3d at 774. On direct appeal to the Ohio Supreme Court, the Court held that the

court of appeals had erred in reaching its conclusion with regard to waiver of trade

secrets without first conducting an in camera review of the documents to determine

whether they had become public record or were merely “ancillary to” the application.

Id. at 775.

       {¶15} Specifically, the Court determined that

              [t]he court of appeals erred in its assumption that once

              an application is ‘a matter of public record,’ materials

              that are ancillary to, but submitted with, the application

              are automatically subject to disclosure. Although the

              court of appeals was correct that the application itself

              was a public record because the statute directly provides

              for its inspection by the public, it incorrectly ruled that

              all of the documents relating to or submitted with the

              application were public records and subject to release

              under R.C. 149.43.

                                          7
                   OHIO FIRST DISTRICT COURT OF APPEALS

Id., quoting R.C. 1728.06.

       {¶16} In determining whether Brookville’s Proposals and BAFO were exempt

from disclosure, the trial court examined the City’s requirements for submitting

competitive proposals in the Cincinnati Municipal Code. Cincinnati Municipal Code

321-61 provides that “[a]ll proposals shall be opened at the time, date and place

specified in the request for proposal and the proposals shall be available for public

inspection.” Cincinnati Municipal Code 321-1-P1 provides that “ ‘[p]roposal’ shall

mean an offer in response to a ‘Request for Proposal.’ ” The trial court determined

that the phrase “public inspection” in Cincinnati Municipal Code 321-61 means that

the public has the right to review, at a minimum, essential terms of any proposal to

the City. The trial court then relied on Allright Parking to determine that Brookville

waived any trade-secret protection as to the baseline-pricing information and most

of the technical and manufacturing information, because those categories were

essential to public inspection of the Proposals and BAFO.

       {¶17} Brookville argues that the trial court erred in holding that it waived

trade-secret protection. Brookville contends that Allright Parking is distinguishable

because in that case a state statute, as opposed to a municipal ordinance, operated to

waive trade-secret protection. Brookville is correct insofar as the City’s competitive-

proposal process is governed by Cincinnati Municipal Code 321-51 et seq. and not by

statute.   As the trial court correctly noted, however, under the Home Rule

Amendment of the Ohio Constitution, a municipality has the authority to exercise all

powers of local self-government, meaning that a municipal ordinance relating solely

to matters of local self-government is valid even in the face of a conflicting a state

statute. Am. Fin. Serv. Assn. v. Cleveland, 112 Ohio St.3d 170, 2006-Ohio-6043, 858

                                          8
                   OHIO FIRST DISTRICT COURT OF APPEALS

N.E.2d 776, ¶ 22-23. Because the result of the City’s competitive-proposal process

affects the City itself more than the state as a whole, it is a matter of local self-

government, and thus Cincinnati Municipal Code 321-61 sits on equal footing with

the tax-abatement statute in an analysis under Allright Parking. See Cleveland Elec.

Illuminating Co. v. Painesville, 15 Ohio St.2d 125, 129, 239 N.E.2d 75 (1968).

       {¶18} Brookville also argues that the trial court erred in determining that

Brookville waived its trade secrets because it complied with the City’s RFP, which

protected trade secrets from disclosure.      The language contained in the RFP

represented to potential proposers that any disclosure would conform to Ohio’s

Public Records Act. The procedures contained in the RFP were promulgated by a

city purchasing agent to whom authority to promulgate procedures for the

competitive-proposal process had been delegated. See Cincinnati Municipal Code

321-51(f). As the trial court correctly noted, however, an administrative rule that

conflicts with a legislative enactment is invalid. See, e.g., Nestle R&D Ctr., Inc. v.

Levin, 122 Ohio St.3d 22, 2009-Ohio-1929, 907 N.E.2d 714, ¶ 40. Therefore, the

language contained in the RFP could not trump the plain language of Cincinnati

Municipal Code 321-61, which provides for public inspection of competitive

proposals.

       {¶19} Moreover, the Ohio Supreme Court in Allright Parking determined

that the party who had submitted the tax-abatement application waived its trade

secrets despite the fact that the party had been given assurance from the city of

Cleveland that such information would be kept confidential. State ex rel. Allright

Parking of Cleveland, Inc. v. Cleveland, 8th Dist. No. 57881, 1991 Ohio App. LEXIS

890, *3 (Mar. 1, 1991), rev’d by Allright Parking, 63 Ohio St.3d 772, 591 N.E.2d 708.

                                          9
                   OHIO FIRST DISTRICT COURT OF APPEALS

Thus, the indication from the RFP language that the City would protect Brookville’s

trade secrets from disclosure does not change the waiver analysis.

       {¶20} Brookville argues that the use of “public inspection” in Cincinnati

Municipal Code 321-61 invokes the trade-secret exemption under R.C. 149.43

because R.C. 149.43 also contains the phrase “public inspection.” This argument is

not well-taken. If city council had intended proposals to be available for public

inspection, subject to the exemptions listed in R.C. 149.43(A)(1), then it could have

provided for that expressly within Cincinnati Municipal Code 321-61.        Because

council chose not to include language in the ordinance, a court will not add that

language when undertaking an interpretation of such ordinance. See, e.g., State ex

rel. Lorain v. Stewart, 119 Ohio St.3d 222, 2008-Ohio-4062, 893 N.E.2d 184, ¶ 36

(refusing to add language to a statute when engaging in statutory interpretation).

City council also could have chosen to leave out Cincinnati Municipal Code 321-61

altogether, which would have made R.C. 149.43 the default governing provision.

       {¶21} Although we do not agree with Brookville’s purported definition of the

phrase “public inspection” in Cincinnati Municipal Code 321-61, we do not agree

with the trial court’s interpretation either. The trial court determined that “public

inspection” in that ordinance means that the public has the right to review, at a

minimum, the essential terms of a proposal. In this case, the trial court reasoned

that the public must be able to review the essential price terms and significant

performance measures in the streetcar proposals. The trial court’s interpretation

conflicts with the plain meaning of the ordinance: The public has the right to review

proposals—not just essential terms.

                                         10
                   OHIO FIRST DISTRICT COURT OF APPEALS

       {¶22} Applying Cincinnati Municipal Code 321-61 and Allright Parking to

Brookville’s request for relief, we determine that Brookville has waived any trade-

secret protection as to its Proposals and BAFO. Nothing in the record indicates that

the information Brookville seeks to protect as trade secrets is merely related to or

ancillary to its Proposals or BAFO as was the case in Allright Parking. See Allright

Parking, 8th Dist. No. 57881, 1991 Ohio App. LEXIS 890 at *1 (where the relator had

requested “all documents relating to any tax abatement request(s)”), rev’d by

Allright Parking, 63 Ohio St.3d 772, 591 N.E.2d 708. Brookville stated affirmatively

in its verified complaint that its trade-secret information was contained within its

Proposals and BAFO. Therefore, Brookville has not shown that it is likely to succeed

on the merits of its complaint for declaratory judgment and permanent injunction.

                                The Remaining Factors

       {¶23} Along with likelihood of success on the merits, a party seeking a TRO

or preliminary injunctive relief must also show that irreparable injury would result in

the absence of injunctive relief. Stoneham, 140 Ohio App.3d at 267, 747 N.E.2d 268.

Irreparable injury means a harm for which no plain, adequate, or complete remedy

at law exists. Cleveland v. Cleveland Elec. Illum. Co., 115 Ohio App.3d 1, 14, 684

N.E.2d 343 (8th Dist.1996). A party does not have to demonstrate actual harm—

threatened harm is sufficient. Convergys Corp. v. Tackman, 169 Ohio App.3d 665,

2006-Ohio-6616, 864 N.E.2d 145, ¶ 9 (1st Dist.).

       {¶24} As a general matter, no adequate remedy at law exists for the

disclosure of trade secrets.    Empower Aviation, LLC v. Butler County Bd. of

Commrs., 185 Ohio App.3d 477, 2009-Ohio-6331, 924 N.E.2d 862, ¶ 18 (1st Dist.).

Brookville’s allegation of irreparable harm is greatly weakened, however, given our

                                          11
                    OHIO FIRST DISTRICT COURT OF APPEALS

determination that Brookville has waived trade-secret protection as to its Proposals

and BAFO. Therefore, this factor does not weigh in favor of injunctive relief.

       {¶25} As to the remaining factors, the trial court merged the inquiries

regarding unjustifiable harm to third parties and the public interest and found that

these factors weighed in favor of denying an injunction with respect to the baseline-

pricing information, most of the technical and manufacturing information, and the

staffing information because the public has a strong interest in access to public

records. Brookville argues that the trial court ignored the private and public interest

in protecting trade secrets, but Brookville’s argument is undercut in this instance by

its decision to participate in a public, competitive-proposal process, which waived

trade secrets. Thus, the public interest weighs in favor of denying an injunction, and

no unjustifiable harm to third parties exists.

                                         Conclusion

       {¶26} In conclusion, because we determine that Brookville waived any trade

secrets contained within its Proposals and BAFO, Brookville failed to show a

likelihood of success on the merits of its complaint for a declaratory judgment and

permanent injunction against the City prohibiting the release of its unredacted

Proposals and BAFO. Nor did Brookville establish that the other factors for a TRO or

preliminary injunction weighed in favor of granting such relief. Therefore, that

portion of the trial court’s decision from which Brookville has appealed denying

Brookville a TRO and preliminary injunction was not abuse of discretion.

       {¶27} Consequently, we overrule Brookville’s sole assignment of error, and

we affirm that part of the trial court’s decision denying Brookville’s requested relief.

                                                                     Judgment affirmed.

                                           12
                    OHIO FIRST DISTRICT COURT OF APPEALS

DINKELACKER, J., concurs.
FISCHER, J., dissents.

FISCHER, J., dissenting.

       {¶28} Because I believe that the trial court abused its discretion in denying in

part Brookville’s request for a TRO and preliminary injunction by applying an

incorrect legal standard, I respectfully would sustain Brookville’s assignment of error

and remand the cause to the trial court to apply in the first instance the test in

Allright Parking, 63 Ohio St.3d 772, 591 N.E.2d 708.

       {¶29} Although the majority implicitly determines that the trial court did not

correctly apply Allright Parking and Cincinnati Municipal Code 321-61, the majority

nonetheless concludes that the trial court’s judgment in denying Brookville’s request

for a TRO and preliminary injunction was not an abuse of discretion. In reaching

this conclusion, the majority determines that Brookville has no likelihood of

succeeding on the merits of its complaint for permanent injunction and declaratory

judgment because it has waived any trade-secret protection with regard to the

Proposals and BAFO—a determination not reached by the trial court. Because the

majority determines that Brookville has no likelihood of success on the merits, the

majority then necessarily determines that the other factors for granting preliminary

injunctive relief do not weigh in favor of Brookville’s requested relief.

       {¶30} I believe that the majority goes somewhat too far in deciding the

merits of Brookville’s complaint at this early stage in the proceedings. I would

remand the cause to the trial court with instructions to properly apply the test

required by the Supreme Court of Ohio in Allright Parking. Specifically, I would

instruct the trial court to conduct an evidentiary hearing to determine whether

Brookville’s redacted information is part of its proposal, as defined in Cincinnati

                                           13
                    OHIO FIRST DISTRICT COURT OF APPEALS

Municipal Code 321-61, or merely related or ancillary to such a proposal.             See

Allright Parking, 63 Ohio St.3d at 776, 591 N.E.2d 708. Until the trial court in the

first instance applies the correct legal standard on the likelihood-of-success factor,

this court cannot appropriately review any decision by the trial court as to whether

the other preliminary-injunction factors might weigh in favor of Brookville’s request

for temporary relief.

       {¶31} Therefore, I must respectfully dissent.

Please note:
       The court has recorded its own entry on the date of the release of this opinion.

                                           14