August 21, 2014
FROM: Robert J. Freeman, Executive Director
The staff of the Committee on Open Government is authorized to issue advisory opinions. The ensuing staff advisory opinion is based solely upon the facts presented in your correspondence.
We are in receipt of your inquiry concerning the application of the Freedom of Information Law (FOIL) based on the public statement made by Maya Wiley, the counsel to the Mayor of New York City, Bill de Blasio, that “the Mayor’s office routinely denies requests for FOIL logs from reporters”. Further, according to your letter, “Wiley [stated] that such requests can be denied since the competitive advantage of news outlets would be threatened, [if] other outlets can see what requests a given outlet has made,” and denied your request on the ground that the news outlets constitute “commercial enterprises”.
In this regard, we offer the following comments.
First, as a general matter, an agency need not create records or reports to satisfy a request, for FOIL pertains to existing records [see §89(3)].
However, we note that §86(4) of FOIL defines the term "record" expansively to include:
"any information kept, held, filed, produced, reproduced by, with or for an agency or the state legislature, in any physical form whatsoever including, but not limited to, reports, statements, examinations, memoranda, opinions, folders, files, books, manuals, pamphlets, forms, papers, designs, drawings, maps, photos, letters, microfilms, computer tapes or discs, rules, regulations or codes."
Based upon the language quoted above, if information is maintained in some physical form, it would constitute a "record" subject to rights of access conferred by FOIL.
Although an agency need not create new records to comply with FOIL, §89(3)(a) states that, “when an agency has the ability to retrieve or extract a record or data maintained in a computer storage system with reasonable effort, it shall be required to do so.” In that kind of situation, the agency would merely be retrieving data that it has the capacity to retrieve; it would not be creating a new record.
If logs or similar documents exist, but if they do not include, for example, “the sum and substance” of the requests, again, FOIL would not require the preparation of new records containing that information. However, insofar as the items sought can be generated and retrieved with reasonable effort, we believe that they must be disclosed to comply with FOIL and disagree with the response offered by Ms. Wiley. On the basis of that response, it appears that she alluded to §87(2)(d) of FOIL, which authorizes an agency to withhold records that:
"are trade secrets or are submitted to an agency by a commercial enterprise or derived from information obtained from a commercial enterprise and which if disclosed would cause substantial injury to the competitive position of the subject enterprise..."
It is emphasized that the courts have consistently interpreted the Freedom of Information Law in a manner that fosters maximum access. As stated by the Court of Appeals, the state’s highest court, nearly thirty years ago:
"To be sure, the balance is presumptively struck in favor of disclosure, but in eight specific, narrowly constructed instances where the governmental agency convincingly demonstrates its need, disclosure will not be ordered (Public Officers Law, section 87, subd 2). Thus, the agency does not have carte blanche to withhold any information it pleases. Rather, it is required to articulate particularized and specific justification and, if necessary, submit the requested materials to the courts for in camera inspection, to exempt its records from disclosure (see Church of Scientology of N.Y. v. State of New York, 46 NY 2d 906, 908). Only where the material requested falls squarely within the ambit of one of these statutory exemptions may disclosure be withheld" [Fink v. Lefkowitz, 47 NY 2d 567, 571 (1979)]."
In another decision rendered by the Court of Appeals, it was held that:
"Exemptions are to be narrowly construed to provide maximum access, and the agency seeking to prevent disclosure carries the burden of demonstrating that the requested material falls squarely within a FOIL exemption by articulating a particularized and specific justification for denying access" [Capital Newspapers v. Burns, 67 NY 2d 562, 566 (1986); see also, Farbman & Sons v. New York City, 62 NY 2d 75, 80 (1984); and Fink v. Lefkowitz, 47 NY 2d 567, 571 (1979)].
Moreover, in the same decision, in a statement regarding the intent and utility of the Freedom of Information Law, it was found that:
"The Freedom of Information Law expresses this State's strong commitment to open government and public accountability and imposes a broad standard of disclosure upon the State and its agencies (see, Matter of Farbman & Sons v New York City Health and Hosps. Corp., 62 NY 2d 75, 79). The statute, enacted in furtherance of the public's vested and inherent 'right to know', affords all citizens the means to obtain information concerning the day-to-day functioning of State and local government thus providing the electorate with sufficient information 'to make intelligent, informed choices with respect to both the direction and scope of governmental activities' and with an effective tool for exposing waste, negligence and abuse on the part of government officers" (id., 565-566).
The question under §87(2)(d) involves the extent, if any, to which disclosure would "cause substantial injury to the competitive position" of a commercial entity.
The concept and parameters of what might constitute a "trade secret" were discussed in Kewanee Oil Co. v. Bicron Corp., which was decided by the United States Supreme Court in 1973 (416 (U.S. 470). Central to the issue was a definition of "trade secret" upon which reliance is often based. Specifically, the Court cited the Restatement of Torts, section 757, comment b (1939), which states that:
"[a] trade secret may consist of any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers" (id. at 474, 475).
In its review of the definition, the court stated that "[T]he subject of a trade secret must be secret, and must not be of public knowledge or of a general knowledge in the trade or business" (id.). The phrase "trade secret" is more extensively defined in 104 NY Jur 2d 234 to mean:
"...a formula, process, device or compilation of information used in one's business which confers a competitive advantage over those in similar businesses who do not know it or use it. A trade secret, like any other secret, is something known to only one or a few and kept from the general public, and not susceptible to general knowledge. Six factors are to be considered in determining whether a trade secret exists: (1) the extent to which the information is known outside the business; (2) the extent to which it is known by a business' employees and others involved in the business; (3) the extent of measures taken by a business to guard the secrecy if the information; (4) the value of the information to a business and to its competitors; (5) the amount of effort or money expended by a business in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. If there has been a voluntary disclosure by the plaintiff, or if the facts pertaining to the matter are a subject of general knowledge in the trade, then any property right has evaporated."
From our perspective, the nature of record, the area of commerce in which a commercial
entity is involved and the presence of the conditions described above that must be found to
characterize records as trade secrets would be the factors used to determine the extent to which
disclosure would "cause substantial injury to the competitive position" of a commercial enterprise. Therefore, the proper assertion of §87(2)(d) would be dependent upon the facts and, again, the effect of disclosure upon the competitive position of the entity to which the records relate.
In our view, a FOIL request, even if it is unusual or creative, cannot be withheld pursuant to §87(2)(d). The Court of Appeals has found that the exception “turns on the commercial value of the information to competitors and the cost of acquiring it through other means…” [Encore College Bookstores v. Auxiliary Service Corporation of the State University, 87 NY2d 410, 420 (1995)]. In the same decision, the Court referred to the “economic windfall” that would accrue to the company requesting the records should the records be disclosed, and the resultant “substantial competitive injury” to the company that created the records (id.. 421). In consideration of the speed in which events become known and the ability of news media organizations to seek information regarding those events, it is rare that a request involves items or events that may be characterized as “secret” or which if disclosed would “cause substantial injury” to the competitive position of a news organization.
As noted earlier, to sustain a denial of access, it must be clear that an exception can be justified and that the harmful effect of disclosure be demonstrated to meet the burden of defending secrecy. In that regard, in its consideration of the assertion of §87(2)(d), the Court of Appeals has held that “To meet its burden, the party seeking exemption must present specific, persuasive evidence that disclosure will cause it to suffer a competitive injury; it cannot merely rest on a speculative conclusion that disclosure might potentially cause harm” [Markowitz v.Serio, 11 NY3d 43, 51 (2008)].
Even when §87(2)(d) is pertinent, the ability to deny access under that provision is not permanent. For instance, detailed, current financial information regarding a commercial enterprise could be devastating if disclosed today to a competitor. However, the impact of disclosure of the same information three years from now will be different and perhaps innocuous. In the context of your request, we do not believe that the records at issue may be withheld pursuant to §87(2)(d) or any other exception to rights of access.
Finally, the FOIL playing field is level; everyone, and every news organization, has the same rights of access and the same capacity to request and obtain records. No one has an advantage over anyone else with respect to the right or capacity to seek government records. Because that is so, again, the denial of your request is, in our view, inconsistent with law.
I hope that I have been of assistance
Robert J. Freeman