Must Government Contractors "submit" to Their Own Destruction?: Georgia's Trade Secret Disclosure Exemption and United Healthcare of Georgia, Inc. v. Georgia Department of Community Health - Ryan M. Ingram

• Jurisdiction: Georgia,United States
• Publication year: 2009
• Citation: Vol. 60 No. 2

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Must Government Contractors "Submit" to Their Own Destruction?: Georgia's Trade Secret Disclosure Exemption and United HealthCare of Georgia, Inc. v. Georgia Department of Community Health

I. Introduction

The notion that the records of government offices should be open and accessible to the public is rooted in the basic political structure of the State of Georgia.¹ The Georgia Constitution provides that "[p]ublic officers are the trustees and servants of the people and are at all times amenable to them."² Further, it is generally believed in this country that openness in government increases efficiency and responsiveness while decreasing incidents of corruption.³ Still, concerns about government decision-making and general privacy rights have led to the creation of various exclusions from disclosure under open records laws.⁴ In United HealthCare of Georgia, Inc. v. Georgia Department of Community Health,⁵ the Georgia Court of Appeals confronted one such disclosure exclusion contained in the Georgia open Records Act⁶ (the Act): the exclusion of trade secrets that have been submitted to the government by private owners.⁷

While it is settled law in Georgia that private trade secrets submitted to a state agency during the performance of a contract are excluded from disclosure under the Act,⁸ it remains unclear whether trade secrets submitted to a state agency as part of a voluntary bid on a government contract are excluded from disclosure. This uncertainty of the applicability of the trade secret protection mandated by the Act requires clarification from either the judiciary or the Georgia General Assembly because trade secret protection in government contracting is vital to the ability of the state to provide public services. If the law prevents contractors from protecting trade secrets from disclosure to the general public when bidding on government contracts, many contractors will forgo government contract work, resulting in diminished quality and availability of many government services.

II. Factual Background

Georgia requires its Department of Community Health (the Agency) to administer a health insurance plan for state employees known as the State Health Benefit Plan (the Plan).⁹ In 2005, through a public bidding process, the Agency selected United HealthCare and its subsidiary, United HealthCare of Georgia (United HealthCare), to be third-party administrators of the Plan.¹⁰ Accordingly, the Agency and united HealthCare entered into a contract (the Contract) authorizing United

HealthCare to administer the Plan by processing and paying "health insurance claims . . . out of a bank account funded by [the Agency]."¹¹

In March 2006, the South Georgia Physicians Association, LLC, and the Medical Association of Georgia (collectively, the Physicians' Association) filed a request pursuant to the Georgia Open Records Act¹² seeking disclosure of documents related to United HealthCare's administration of the Plan. Specifically, the Physicians' Association sought disclosure of United HealthCare's fee schedules, contracts executed with medical care providers, correspondence with the Agency, as well as any form contracts related to United HealthCare's administration of the Plan.¹³ Of these requested documents, the Agency was only in possession of records of its correspondence with United HealthCare and various form provider contracts United HealthCare had supplied to the Agency as part of the public bidding process (the Agency Documents). The fee schedules and provider contracts were never supplied to the Agency and remained in the sole possession of United HealthCare (the United Documents). While United HealthCare refused to disclose the United Documents, the Agency concluded that the Agency Documents were subject to the Act and therefore made the documents available to the Physicians' Association. United HealthCare then filed suit against the Agency, seeking to temporarily and permanently enjoin the disclosure of both the Agency and the United Documents.¹⁴

The Physicians' Association intervened in the suit and counterclaimed, seeking disclosure of both the Agency and the United Documents. After discovery concluded, United HealthCare moved for summary judgment, claiming that the United Documents were not "public records" within the meaning of the Act and that both the United and the Agency Documents were exempt from disclosure under the trade secret exclusion to the Act. Specifically, United HealthCare argued that the United Documents were not public records because they had never been submitted to the Agency. The Physicians' Association moved for summary judgment contending that, as a matter of law, all the documents in question were public records, subject to disclosure under the Act.¹⁵

The Fulton County Superior Court granted summary judgment to the Physicians' Association. The court first ruled as a matter of law that both sets of documents in question were public records under the Act.¹⁶ The court then ruled that neither the Agency Documents nor the United Documents qualified for exemption from disclosure under the Act because neither set of documents had been "'required by law to be submitted to a government agency.'"¹⁷ United HealthCare appealed.¹⁸ The Georgia Court of Appeals affirmed the trial court's ruling that the documents were public records under the Act;¹⁹ however, the court vacated the trial court's ruling that neither of the sets of documents were exempt from disclosure under the Act.²⁰ Rather, the court held that the trial court had misinterpreted the "required by law to be submitted" language of the Act and erred by not first considering whether the documents were trade secrets under Georgia law.²¹ Accordingly, the appellate court vacated the trial court's ruling and remanded the case for a determination of whether the documents constitute trade secrets under Georgia law.²²

Ill. Legal Background

In recent years, "[g]ood government has become increasingly synonymous with open government."²³ In this spirit, the Georgia Open Records Act²⁴ (the Act) was enacted on February 27, 1959²⁵ with the intent of encouraging public access to information related to the functioning of government and its expenditure of public funds.²⁶ By mandating that all citizens should have the opportunity to inspect the records of public offices, the legislature sought to ensure effective accountability in government and to help protect the public from "'closed door' politics."²⁷ Additionally, by allowing the public to observe the inner-workings of government, the legislature intended the Act to increase public confidence in the actions of elected officials.²⁸ The Act broadly provides that "public records" of all government agencies are to be "open for a personal inspection by any citizen of th[e] state."²⁹ The expansive language of the Act, along with its purpose of fostering public awareness ofthe activities ofpublic officials, suggest that the Act should be interpreted broadly to include all materials and information that are not statutorily exempt from disclosure.³⁰ As the Georgia Supreme Court has explained, all records of government are open for public inspection unless they are specifically exempted by the Act or another applicable code section.³¹

A. Definition of Public Records

Despite its broad scope, the original version of the Act failed to define "public records" subject to disclosure.³² Rather, the Georgia Supreme Court, interpreting the Act in Houston v. Rutledgef³³ first defined public records as "documents, papers, and records prepared and maintained in the course of the operation of a public office."³⁴ In Houston a county sheriffclaimed that records related to the deaths ofseveral inmates were not public records under the Act because they were prepared and maintained pursuant to his discretionary orders and not any statutory obligation.³⁵ The court disagreed, however, reasoning that because the documents were prepared and maintained in the ordinary course of the business ofthe government entity, they constituted public records under the Act regardless of why the sheriff prepared them.³⁶

The Georgia Supreme Court subsequently expanded on the definition of public records in Macon Telegraph Publishing Co. v. Board of Regents of the University System of Georgia³⁷ and Athens Observer, Inc. v. Anderson.³⁸ In both cases, the issue before the court was whether documents prepared by entities outside the government agency (by a private association in Macon Telegraph and by a third-party contractor in Athens Observer) were public records under the Act.³⁹ The court held the documents in question in each case were public records subject to disclosure regardless of who created them because, under the analysis of Houston, the records had been "prepared and maintained in the course of the operation of a public office."⁴⁰

In 1988 the Georgia General Assembly took the first major step toward codifying the common law developed in and after Houston by amending the Act to define a public record as "all documents, papers, letters, maps, books, tapes, photographs, [computer based or generated information], or similar material prepared and maintained or received in the course of the operation of a public office or agency."⁴¹ Amendments in 1992⁴² and 1999⁴³ completed the codification process by expanding the definition of public records to expressly include "items received or maintained by a private person or entity on behalfofa public office or agency . . . in the performance of a service or function for or on behalf of . . . a public agency, or a public office."⁴⁴ Thus, the legislative evolution of the Act has simply codified the jurisprudence of the Georgia Supreme Court regarding the scope of the Act.⁴⁵ Accordingly, the requirements of the Act apply to private entities that perform any activity or service for a government agency.⁴⁶

B. Exclusion from Disclosure

Despite the legislative purpose to provide broad...