Public Disclosure Requirements

In a recent decision, the Supreme Court of Vermont affirmed its commitment to protecting commercial secrets of private companies, even if they may have been disclosed to a public agency. Long v. City of Burlington, 199 A.3d 542 (Vt. 2018). The Burlington City Council was working with its consultant, ECONorthwest, and private property owners Devonwood Investors, LLC and BTC Mall Associates LLC (collectively BTC) to redevelop several downtown city blocks. The parties entered into a Predevelopment Agreement that required BTC to provide the City with market studies and feasibility analyses, but also acknowledged that this information, if disclosed to BTC’s competitors, could harm BTC’s business. Therefore, when BTC provided its studies to the City, it redacted any commercially competitive information. But because BTC and ECONorthwest had also entered into a nondisclosure agreement, BTC provided ECONorthwest with unredacted copies. Plaintiff filed suit alleging that the City violated the Vermont Public Records Act by failing to disclose the unredacted study its consultant had received. The trial court dismissed the case, holding that the study was not a public record, and even if the study was a public record, the redacted information was exempt from disclosure as a trade secret.

On appeal, the Court assumed without deciding that the unredacted study was a public record, and focused solely on the trade secret question. The Public Records Act exempts from disclosure “trade secrets” defined as “confidential business records or information, including any … plan, … production data, or compilation of information which is not patented, which a commercial concern makes efforts that are reasonable under the circumstances to keep secret, and which gives its user or owner an opportunity to obtain business advantage over competitors who do not know it or use it.” Vt. Stat. Ann. tit. 1, § 317(c)(9) (2018). Relying on an earlier Supreme Court of Vermont decision, the Court explained that the plain language of the exemption, specifically the inclusion of “compilation of information,” indicated that the Vermont Legislature did not intend to limit the definition of trade secrets to just information in the nature of intellectual property. See Springfield Terminal Railway Company v. Agency of Transportation, 816 A.2d 448 (Vt. 2002). Here, the private corporate information at issue would give its possessor a commercial advantage. Furthermore, BTC made a reasonable effort to keep such information secret by requiring ECONorthwest to sign a nondisclosure agreement. BTC’s information therefore met the definition of a trade secret and was exempt from disclosure.

Any other finding under the Public Records Act would have led to absurd results. The exemption “promotes not only the private company’s interest in protecting its commercial secrets, but also the government’s interest in its continuing ability to secure such data on a cooperative basis … to make intelligent, well-informed decisions.” 199 A.3d at 550. The Court’s decision should provide comfort to private companies that their commercial secrets are safe from disclosure when contracting with the government.