Court Opinion

ID: 2755320
Source: CourtListenerOpinion
Date Created: 2014-11-25 22:10:02.703323+00
Date Added: 2024-06-11T10:48:07.245614
License: Public Domain

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      IN THE COURT OF APPEALS OF THE STATE OF WASHINGT`ON''
                                                                                                                                  n:   r

                                                                                                              2014 NOV 25                  I: 20
                                                        DIVISION II
                                                                                                              STAT
                                                                                                                         t        SHr:$
                                                                                                                                   t,
BELO MANAGEMENT SERVICES, INC.,                                 a                         No. 45577- 3- 11
Delaware          corporation;     KIRO -TV,           INC.,    a                                             BY
Delaware                  corporation;             TRIBUNE
BROADCASTING                     SEATTLE;             LLC,      a

Delaware limited liability company; and CBS
CORPORATION;

                                         Respondents,

           v.

CLICK! NETWORK, a Department of Tacoma                                              PUBLISHED OPINION
Public Utilities           Division of the            CITY     OF
TACOMA; and TACOMA NEWS, INC.;

                                         Appellants.

           MELNICK, J. —         Tacoma News, Inc. appeals the trial court' s order enjoining the disclosure

of unredacted retransmission consent agreements (                      RCAs) between Click!,            a cable system owned

by   the   City     of    Tacoma ( the       City),   and    five broadcasters.         The court ruled that the pricing

information portions of the RCAs were trade secrets exempt from disclosure under the Public

                Act1 (
Records                  PRA).   Tacoma News           argues   that     the RCAs       do   not contain   trade   secrets,     the

court should        have   conducted     in   camera review of       the   unredacted     RCAs, the broadcasters did not

prove   the      requirements     for   an    injunction    under   the PRA,       the injunction is overbroad, and it is

entitled    to attorney fees      and costs.      The broadcasters argue that we should uphold the injunction

because the          RCA pricing         information         qualifies     as   trade   secrets   or,   alternatively,       federal

regulations exempt the pricing information from PRA disclosure.

1
    Ch. 42. 56 RCW.
45577 -3 - II

          We hold that the RCA pricing information is not a trade secret and that the broadcasters

failed to meet their burden of proving that the non -cash compensation information in the

agreements      qualifies     as    a   trade     secret.      Additionally, the federal regulations cited by the

broadcasters do      not    qualify      as    an " other      statute"    under the PRA which exempts the pricing

information from disclosure. Moreover, the broadcasters failed to establish the requirements for

an    injunction   under   the PRA.           Accordingly, the trial court erred when it enjoined disclosure of

the   unredacted records.       Tacoma News is not entitled to attorney fees under the PRA because the

private   broadcasters,     rather      than the       City,   opposed      the disclosure.      We reverse and vacate the

injunction.

                                                                FACTS

          This case involves whether pricing information in contracts between the City -owned

cable    system,    Click!,   and       several    broadcasters        should     be disclosed        under    the PRA.     Cable

systems must obtain express consent from broadcasters and pay license fees to retransmit the

broadcasters'      shows.     Cable systems and broadcasters enter into RCAs that include license fees.

The fees    are negotiated         between the individual broadcasters                   and   the   cable    systems.   Both the

cable systems and      the broadcasters           consider      the   licensing   fees   confidential.       The amount paid in

fees is not shared with third parties. These figures are only known, on a need to know basis, by a

few    employees     within    each      party'   s   organization.         These employees are required to keep the

information     confidential.        Clerk' s Papers ( CP)            at   36.   T between Click! and the broadcasters,

however, specifically put the broadcasters on notice that the RCA' s terms are subject to potential

disclosure under chapter 42. 56 RCW.

          Click! had difficulty negotiating the 2013 RCAs with one of the broadcasters, Fisher

Communications.         As    a result,       Click!    customers were unable            to   view   the   channels   broadcast   by
45577 -3 - II

Fisher.     In response to this situation, Tacoma News filed a public records request with Click!

seeking    copies of     the   current   RCAs between Click!               and " all   broadcast   entities."   CP   at   43.   The

City determined that there were no applicable PRA exemptions and it notified the broadcasters

that it intended to release the RCAs to Tacoma News.2 The broadcasters sought an injunction

prohibiting the        City    and   Click! from releasing the RCAs.                    The broadcasters claimed that the

RCAs contained pricing information that qualified as a trade secret.

          The broadcasters             and    Click!    submitted affidavits and declarations stating that they

considered      the    rebroadcast      fee infoiination         confidential.         The broadcasters alleged that they

would     be harmed      by    disclosure.      They claimed that other cable systems would use the disclosed

fees Click!     paid   to   negotiate    lower fees for themselves. The broadcasters stated that rebroadcast

fees   are a significant and         growing        portion of   their    revenue.     The broadcasters claimed that they

would not have a similar opportunity to discover the fees other cable systems paid because most

cable systems are privately -owned and not subject to the PRA, which would put them at a

disadvantage in negotiating RCAs.                      Additionally, both the broadcasters and Click! stated that

disclosure      would    harm Click!          and   the   public   because        it would discourage broadcasters from

contracting     with    Click! because Click!              could not promise        confidentiality,    it would likely raise

Click!' s fees because the broadcasters would use the highest disclosed fee as a baseline, and the

preceding issues would result in fewer available channels and increased rates for Click!

customers.

2
    At the initial    hearing,   the   City   stated, "[   F] rom a business standpoint [ C] lick! finds the release of ,
these     contracts,    specifically the pricing, to               be    highly   objectionable.       This is commercially
sensitive    information; however,             we are a public          agency,   and under   the [ PRA], our evaluation is

that we are unlikely to successfully assert Uniform Trade Secret Act exemption or any other
exemption under the [ PRA]." Report of Proceedings ( RP) at 14. The City and Click! did not file
briefs in this appeal.

                                                                    3
45577 -3 - II

          The trial court ruled that the RCAs contained trade secrets and enjoined Click! from

releasing the RCAs and any related records. Tacoma News moved for reconsideration. It argued

that the court should review the unredacted RCAs in camera and, if it still found that the

agreements contained trade secrets, redact the exempt information and release the redacted

RCAs.      The court granted the motion for reconsideration and set a hearing to establish the

process   by    which     it   would receive and review         the unredacted RCAs.          The court further ordered

the   parties   to   submit    briefing   regarding the sealing     of   the   unredacted   RCAs. The court clarified

that the injunction was still in effect and that the City must submit RCA -related records to the

broadcasters for approval before releasing the records to any requesters.3

          After a hearing, the trial court determined that in camera review was unnecessary in light

of the broadcasters' affidavits and declarations which described the redacted information. Based

on the affidavits and declarations, the court concluded that the redactions contained trade secrets

that   were exempt        from disclosure     under     the PRA.    The court never reviewed unredacted copies.

Instead, the court ordered Click! to release the records with the redacted information.

          Tacoma News            appealed    to   our   Supreme Court.         That court denied direct review and

transferred the case to us.

                                                         ANALYSIS

I.        STANDARD OF REVIEW

          The PRA requires each agency to make public records available for public inspection

unless    the    record    falls   within   the     specific   exemptions      of   the PRA    or   other   statute.   RCW

42. 56. 070( 1).      The PRA      should   be "`   liberally construed to promote full access to public records,

3 After the broadcasters sought an injunction, unrelated third parties began requesting RCA
information from the City.
45577 -3 -II

and    its   exemptions are     to be narrowly     construed.'         King County Dep' t       of Adult & Juvenile Det.

v.    Parmelee, 162 Wn.         App.   337, 350, 254 P.3d 927 ( 2011) (            quoting Amren v. City of Kalama,

131 Wash. 2d 25, 31, 929 P.2d 389 ( 1997)).                 Persons who are named in the record or to whom the

record pertains        may    move   the trial   court   to   enjoin   the release of the     records.    RCW 42. 56. 540;

Parmelee, 162 Wash. App. at 350. The court may enjoin production of requested records if it finds

that production would not be in the public' s interest and would substantially and irreparably

damage any person or vital government function. RCW 42. 56. 540.

             We review injunctions issued under the PRA de novo.4 Parmelee, 162 Wash. App. at 351.

Where, as here, the record consists only of documentary evidence, we stand in the same position

as    the trial   court.   Progressive Animal Welfare Soc' y            v.   Univ. of Wash., 125 Wash. 2d 243, 252, 884
P.2d 592 ( 1994).

II.          TRADE SECRET EXEMPTION

             The broadcasters do not argue that the RCAs are not public records subject to the PRA.

Rather, they argue that the records are exempt from disclosure. The trial court concluded that the

pricing information in the RCAs              was exempt as a           trade    secret.    Tacoma News disagrees.      We

hold that the broadcasters failed to prove that the fees are a trade secret.

             A public record is exempt from disclosure under the PRA if the record falls within an

 other statute"       that   exempts or prohibits        disclosure    of    specific   information. RCW 42. 56. 070( 1).

4 The broadcasters argue that we should use the abuse of discretion standard to review the court' s
decision to grant an injunction. They cite Resident Action Council v. Seattle Housing Authority,
177 Wash. 2d 417, 428, 300 P.3d 376 ( 2013).                     But the trial court in that case did not grant an
injunction        under    RCW 42. 56. 540.      Resident Action Council, 177 Wash. 2d               at   445 -46. We review
actions under chapter           42. 56 RCW de       novo.      RCW 42. 56. 550( 3);        Resident Action Council, 177
Wash. 2d        at   432; Robbins, Geller, Rudman &     Dowd, LLP v. State, 179 Wash. App. 711, 719, 328
P.3d 905 ( 2014);         Parmelee, 162 Wash. App. at 351.

                                                                 5
45577 -3 - II

                                         Acts (
The Uniform Trade Secret                          UTSA)   qualifies as an " other statute"         exempting disclosure.

Progressive Animal Welfare Soc 'y, 125 Wash. 2d                     at    262.   This statute allows courts to take action .

to   protect    trade secrets.         Progressive Animal Welfare Soc' y, 125 Wash. 2d at 262 ( citing RCW

19. 108. 020( 3), . 050).

          The UTSA defines a trade secret as

          information, including a formula, pattern, compilation, program, device, method,
          technique, or process that:

          a) 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; and

          b) Is the subject of efforts that are reasonable under the circumstances to
          maintain its secrecy.

RCW 19. 108. 010( 4).                The information   must     be "   novel,"   meaning that it must not be readily

ascertainable        from   another source.        Spokane Research &          Def. Fund v. City of Spokane, 96 Wn.

App. 568, 578, 983 P.2d 676 ( 1999).

          The broadcasters have the burden                of   proving    a   trade   secret.   Spokane Research &   Def.

Fund, 96 Wn.           App.     at   577.   Their declarations and affidavits must provide specific, concrete

examples illustrating that the pricing information meets the requirements for a trade secret.

McCallum        v.   Allstate   Prop. & Cas.      Ins. Co.,   149 Wash. App. 412, 426, 204 P.3d 944 ( 2009).

          A.          RCA Pricing Information

          Tacoma News contends that the RCA pricing information not trade secrets because they

are not the type of information protected as a trade secret and they are not subject to reasonable

efforts   to    maintain    secrecy.        Tacoma News further contends, and the .broadcasters' conclusory

statements are insufficient to establish, that the pricing information is novel. We agree.

5
     Ch. 19. 108 RCW.
45577 -3 -II

            We recently dealt      with a similar situation             in Robbins, Geller, Rudman & Dowd, LLP v.

State, 179 Wn.           App.   711, 328 P.3d 905 ( 2014).                 There, a law firm attempted to enjoin the

Attorney General' s Office from disclosing the firm' s fee proposal and insurance information

under      the PRA.       Robbins, 179 Wn.            App.     at   717 -18.      The firm argued that the information

constituted a trade secret that was exempt from PRA disclosure. Robbins, 179 Wash. App. at 723-

24.      It stated that its approach to fee setting was unique, specific to each client and case, and

required      significant   time       and   effort   to formulate.          Robbins, 179 Wn.      App.   at   723.   And it

contended that the release of this information would give its competitors an unfair advantage by

allowing them to outbid the firm for future work. Robbins, 179 Wash. App. at 723 -24.

            We disagreed.       Robbins, 179 Wn.           App.       at   724.   We determined that the firm failed to

show that its fee schedule and insurance information differed significantly from its competitors'.

Robbins, 179 Wn.           App.   at   724.    Additionally, the firm had previously publicly released similar

fee information. Robbins, 179 Wn.                 App.    at   724.        Thus, the firm' s assertions of uniqueness and

competitive disadvantage were conclusory and the information was not a trade secret. Robbins,
179 Wash. App. at 724.

            Similarly, here, the broadcasters' allegations of harm are too conclusory and speculative.

They make the same argument as the firm in Robbins: Release of this information would give

competitors an unfair advantage.                This reason alone is insufficient to prove that the information

is   a   trade secret.    The broadcasters have not proven that their prices have independent economic

value to their competitors or other cable systems. As the broadcasters concede, every negotiation

is different.      Markets      and cable       systems   vary.         Prices fluctuate   over   time.   Thus, it does not

follow that the other cable systems could viably argue that they are entitled to the same price as a

cable system in a different market during a different time period. Moreover, it is not clear from

                                                                    7
45577 -3 - II

the record that Click!' s fees would set a ceiling on fees because the record does not state that

Click! 's fees    are   consistently lower than the fees      paid   by   other cable systems.      And, the court did

not see the unredacted records to make an independent assessment.

           Additionally,     the broadcasters failed to      show    that their RCA       fees   are unique.   Like the

firm in Robbins, the broadcasters merely presented conclusory and speculative statements

arguing that their approaches are unique and specific to each negotiation. There is no support for

this statement because the broadcasters stated that their fees are unique, but they admit that they

have    not seen    the other      broadcasters' RCAs.      And the unredacted RCAs are not in the record.

The City, the only party to view all of the unredacted RCAs, determined that no PRA exemption

applied     to   bar disclosure       of   the   RCAs.     The broadcasters'         assertions are conclusory and

speculative and we hold that the RCA prices are not trade secrets.

           The broadcasters provide no authority compelling us to hold that contract prices are trade

secrets.    Both sides cite to federal cases discussing the Freedom of Information Act (FOIA),6 but
this case does not involve federal agencies and Washington courts have recognized that FOIA

    differs in many       ways"    from the PRA.     Cowles Publ' g Co. v. Wash: State Patrol, 109 Wash. 2d
712, 731, 748 P.2d 597 ( 1988);           Robbins, 17.9 Wn. App. at 730 -31.

           B.       Non -cash compensation

           The    trial    court    also   allowed   the   broadcasters         to   redact   non -cash   compensation

information from the disclosed RCAs. We hold that this is error because the broadcasters failed

to meet their burden of establishing that these provisions are a trade secret.

           As stated above, the broadcasters have the burden of proving that information is a trade

secret.     Spokane Research &             Def. Fund,    96 Wn.   App.     at   578.    Although the trial court has

6
    5 U.S. C. § 552.

                                                             8
45577 -3 - II

discretion to       review   documents in             camera   in    some    instances, '      the only way that a court can

accurately determine what portions, if any, of the file are exempt from disclosure is by an in

camera review. "'         Limstrom          v.   Landenburg,    136 Wash. 2d 595, 615, 963 P.2d 869 ( 1998) ( quoting

Newman        v.   King County,        133 Wash. 2d 565, 583, 947 P.2d 712 ( 1997) ( Alexander,                            J., dissenting));

see also     Overlake Fund        v.   City      of Bellevue, 60 Wn.        App.     787, 797, 810 P.2d 507 ( 1991) ( stating

that in camera review may be necessary " when the court cannot evaluate the asserted exemption

without more         information than th at          contained      in the ...    affidavits. ").

           Here, one of the broadcasters, Fisher, redacted portions of its RCA that related to " non-

cash    compensation."         CP      at   447.    It is unclear from the affidavits what non -cash compensation

entails.      The broadcasters resisted in camera review of the unredacted RCAs, despite the trial

court' s     assurances    that the         records   could    be    sealed.       Without more information than what is

contained in the affidavits, we are unable to say that the broadcasters met their burden of proving

that the non -cash compensation information is a trade secret.

III.       FEDERAL REGULATION EXEMPTION

           The broadcasters alternatively argue that federal regulations qualify as an " other statute"

which exempt          disclosure       under      RCW 42. 56. 070( 1).           Resp' t   Belo'   s   Br.   at   23.   The broadcasters

cite   47 U.S. C. § 325( b),     which involves consent to retransmission of broadcasting station signals,

and     47    C. F.R. §      0. 459( a)( 1),       which allows parties submitting materials to the Federal

Communications Commission ( FCC) to                           request      that the information "             not be made routinely

available for public inspection."

             In Ameriquest Mortgage Co. v. Washington State Office ofAttorney General, 170 Wash. 2d
418, 440, 241 P.3d 1245 ( 2010), our Supreme Court determined that the federal Gramm- Leach-

                                                                       9
45577 -3 -II

                            7
          Act ( GLBA)                  the Federal Trade Commission ( FTC)                             enforcing it qualified as an
                                                                                               rule8

Bliley                           and

    other statute"      exempting       records         from disclosure      under    the PRA.         In that case, the GLBA and

the FTC      rule provided         privacy        protections      to   customers      of    financial institutions.        Ameriquest,
170 Wash. 2d          at   424 -25.       These federal regulations fit within the PRA exemption because they

precluded disclosure of specific information or records, namely, customers' nonpublic personal

information. Ameriquest, 170 Wash. 2d at 425, 440.

          Contrary to the broadcasters' assertions, the federal regulations the broadcasters cited do

not    specifically      state   that RCAs are           confidential and protected            from disclosure. The regulations

do    not preclude       disclosure         of   any   specific   information      or records.     Rather, they allow a party to

request     that information submitted to the FCC "                           not be made routinely available for public

inspection."        47 C. F. R. § 0. 459( a)( 1).            The PRA "        other statute"      exemption only applies if the

other     statute "     exempts        or    prohibits      disclosure       of   specific    information         or   records."   RCW

42. 56. 070( 1).        Thus, the federal              regulations   the broadcasters cited            do   not   qualify   as an " other

statute."

           Even if the broadcasters had proven that RCA prices are trade secrets or that the federal

regulations     are an " other statute,"                the broadcasters still failed to prove the requirements for an

injunction under RCW 42. 56. 540.

IV.        INJUNCTION

           If a PRA exemption applies, a court can enjoin the release of a public record if disclosure

     would clearly not be in the public interest and would substantially and irreparably damage any

7
     15 U.S. C. §§ 6801 - 6809.

8
     16 C. F.R. § 313.

                                                                        10
45577 -3 -II

person, or ...   vital governmental   functions. "' 9    Morgan v. City ofFederal Way, 166 Wash. 2d 747,

756 -57, 213 P.3d 596 ( 2009) ( quoting RCW 42. 56. 540).              The broadcasters cannot show either

requirement in this instance.

        A.       Public Interest

        Tacoma News asserts that the broadcasters failed to demonstrate that disclosure would

clearly not be in the public' s interest. We agree.

        Tacoma News persuasively        argues     that the   public   has   a right   to know how Click!, a city -

owned enterprise, is spending public funds. The PRA broadly mandates in favor of disclosure:

        The people of this state do not yield their sovereignty to the agencies that serve.
        them. The people, in delegating authority, do not give their public servants the
        right to decide what is good for the people to know and what is not good for them
        to know. The people insist on remaining informed so that they may maintain
        control over the instruments that they have created. This chapter shall be liberally
        construed and its exemptions narrowly construed to promote this public policy
        and to assure that the public interest will be fully protected.

RCW 42. 56. 030.

        The broadcasters' contrary arguments confuse the public with Click! and its customers.

The affidavit from Click!' s general manager alleges public harm in the form of increased cable

rates to its subscribers, but not all people who subscribe to cable. Disclosure in this instance is in

the public' s interest because the information involves expenditure of public funds.

        B.       Irreparable Damage

        Tacoma News       next     argues   that   the   broadcasters        are   not   a "   person"   under RCW

42. 56. 540. They also argue that the broadcasters will not be irreparably damaged by disclosure

9 Tacoma News argues that the trial court may have applied a different injunction .standard than
the one set out in RCW 42. 56. 540. But the court' s oral ruling shows that it considered whether a
PRA exemption applied, the public' s interest in disclosing the records, and damage to Click! and
the broadcasters. The record does not show that the court used a different standard.

                                                         11
45577 -3 -II

of   the RCA      prices.   We hold that the broadcasters qualify                 as " persons"      but that they failed to

show that they would suffer irreparable harm.

          Our legislature has      construed " person"          to include " any public or private corporation or

limited    liability    company."         RCW       1. 16. 080( 1). "      Person"     within the UTSA includes            a

corporation       or   other   commercial        entity.      RCW        19. 108. 010( 3).      Washington courts have

determined that the UTSA              provides     an exemption         for disclosure       under   the PRA.   Progressive

Animal Welfare Soc' y, 125 Wash. 2d              at   262.     For this exemption to have meaning, it follows that

 person"    within the context of the PRA must also include commercial entities such as the

broadcasters.

          But the broadcasters have not shown that they would suffer substantial and irreparable

damage.     They stated that disclosure of the RCA prices would place them at a disadvantage in

negotiating RCAs         with other cable systems.            They claim the other cable systems would use the

disclosed license fees         as a maximum, which would cost                the broadcasters        revenue.   As discussed

above,    these    assertions   are    speculative.        The broadcasters failed to show that they should be

                                                    10
granted an     injunction      under   the PRA.            We hold that this injunction should be vacated. The

broadcasters have not shown that the disclosure is not in the public' s interest and that it would

substantially and irreparably damage any person. We reverse the court and vacate the injunction.

VI.       ATTORNEY FEES

          Tacoma News          contends   that   it is   entitled   to attorney    fees   and costs.    RCW 42. 56. 550( 4)

states,

          Any person who prevails against an agency in any action in the courts seeking the
          right to inspect or copy any public record or the right to receive a response to a

1°
   Because we vacate the injunction, we need not address Tacoma News argument that the
injunction was overbroad. We do note, however, that RCW 42. 56. 540 enjoins the release of any
specific public record and the court must make the determination.

                                                                12
45577 -3 - II

          public record request within a reasonable amount of time shall be awarded all
          costs, including reasonable attorney fees, incurred in connection with such legal
          action.

          This provision is inapplicable when a third party brings an action to prevent disclosure of

records the agency has agreed to release but is prevented from releasing because of a court order.

Confederated Tribes of Chehalis Reservation v. Johnson, 135 Wash. 2d 734, 757, 958 P.2d 260

 1998).     Here, the City determined that no exemptions applied and stated that it intended to

release   the   records.    Thus, the broadcasters sought an injunction to prevent the City from

                            Tacoma News has                       the broadcasters,         the   City.   We
releasing the    records.                     prevailed against                       not

deny the request for attorney fees.

          We reverse and vacate the injunction.

We concur:

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