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2014-0120, CaremarkPCS Health, LLC v. New Hampshire Department of Administrative Services
PCS HEALTH, LLC
the trial court ruled that disclosure of Caremark’s trade secrets by the under the Right - to - Know Law, RSA ch. 91 - A (2013 & Supp. 2014). Spe cifically, Trade Secrets Acts (UTSA), RSA ch. 350 - B (2009), is exempt from disclosure information con stituting trade secrets under the New Hampshire Uniform CaremarkPCS Health, LLC (Caremark). The tr ial court ruled that certain (Smukler, J.) granting summary judgment in favor of the p etitioner, Administrative Services (Department), appeals an order of the Superior Court BASSETT, J. The respondent, the New Hampshire Department of
general, on the brief and orally), for the respondent. Joseph A. Foster, attorney general (Richard W. Head, associate attorney
and orally), for the petitioner. and Foley & Lardner LLP, of Chicago, Illinois (John F. Zabriskie on the brief Ransmeier & Spellman, P.C., of Concord (Daniel J. Mullen on the brief),
Opinion Issued: April 30, 2015 Argued: October 15, 2014
NEW HAMPSHIRE DEPART MENT OF ADMINISTRATI VE SERVICES
v.
C AREMARK
No. 2014 - 120 Merrimack
___________________________
THE SUPREME COURT OF NEW HAMPSHIRE
page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh. us. Opinions are available on the Internet by 9:00 to press. Errors may be reported by E - mail at the following address: editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concor d, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as 2
information “could have a chilling effect on the willingness of potential bidders (Supp. 2014). The parties also agreed that disclosure of the designated information” within the meaning of the Right - to - Know Law, RSA 91 - A:5, IV 350 - B:1, IV, and constitutes “confidential, commer cial, or financial designated information const itutes “trade secrets” as defined in the UTSA, RSA they continued to disagree (designated information), and stipulated that the parties filed a joint stipulation of fact s, identified the information as to which summary judgment. As part of the summary judgment proceedings, the parties filed pleadings that the trial court treated as cross - motions for enjoin the Department from disclosing certain information. Thereafter, the Caremark filed a petition for declaratory and injunctive relief seeking t o
disclosure. Law. The parties disputed whether certain information was subject to bid and final cont r act was exempt from disclosure under the Right - to - Know the requests, responded that certain confidential information contained in the Caremark’s competitors. Caremar k, after being informed by the Department of Caremark’s bid and the final contract. Two of the requests were made by In 2011, the Department received multiple requests to inspect and copy
those documents is proprietary and constitute s trade secrets of Caremark. contract included statements to the effect th at certain information set forth in Council approved the contract on November 17, 2010. Both the bid and final final negotiated contract with the Department. T he Gov ernor and Executive In response to the RFP, Caremark submitted a bid, which ultimately le d to a
State’s notice without any liability to Vendor. release the requested information on the date specified in the enjoining the release of the requested information, the State may unless the Vendor obtains a cour t order, at its sole expense, release the records. By submitting a proposal, V endor agrees that will notify Vendor of the request and of the date the State plans to the Vendor has properly and clearly marked confidential, the State If a request is made to the State to view portion s of a proposal that
that: State of New Hampshire’s health plan. T he RFP, in pertinent part, provided Request for Proposals (RFP) for pharmacy benefit management s ervices for the T he following facts are undisputed. In 2010, the Department issued a
prohibited by statute” exemption in RSA 91 - A:4, I. We affirm. Department from disclosing Caremark’s trade secrets under the “otherwise argues that the trial court erred in finding that the UTSA prohibits t he Right - to - Know Law. See RSA 91 - A:4, I ( 201 3). On appeal, th e Department therefore, that the subject information is exempt from disclosure under the Department would constitute a “misappropriation” under the UTSA and, 3
“Thus, we are the final arbiter of the legislature’s intent as expressed in the statutory construction apply to our review of the Right - to - Know Law.” Id. Belknap County Convention, 157 N.H. 375, 378 (2008). “The ordinary rules of provisions, including certain provisions of the Right - to - Know Law.” Lambert v. “Resolution of this case requires us to interpret several statutory
information the dis closure of which is “otherwise prohibited by statute.” designated information falls under the exempt ion in RSA 91 - A:4, I, for UTSA prohibits disclosure of trade secrets and, therefore, whether the N.H. 2 33, 234 (2001). T his case presents the legal question of whether the stipulated facts de novo.” Nash Family Inv. Properties v. T own of Hudson, 147 (2014). “On appeal, we review the trial court’s application of law to the matter of law.” Bovaird v. N.H. Dep’t of Admin. Servs., 166 N.H. 755, 758 exists, we determine whether the moving party is entitled to judgment as a its capacity as the nonmoving party and, if no genuine issue of material fact judgment, “we consider the evidence in the light most favorable to each party in In reviewing the trial court’s rulings on cross - motions for summary
disclosure under RSA 91 - A:5, IV. Alternatively, Caremark argues that the designa ted information is exempt from designated information is exempt from disclosure under RSA 91 - A:4, I. UTSA prohibits the di sclosure of trade secrets and that, therefore, the N.H. at 554. Caremark counters that the trial court correctly ruled that the comme rcial, or financial information” under RSA 91 - A:5, IV. See Goode, 148 court should have engaged in the balancing test applicable to “confidential, to fall under RSA 91 - A:4.” Rather, the Department contends that the trial the UTSA “does not contain sufficient explicit language prohibiting disclosure v. N.H. Legislative Budget Assistant, 148 N.H. 551, 554 (2002), it argues that to engage in the same balancing test required under RSA 91 - A:5, IV, see Goode Department acknowledges th at RSA 91 - A:4, I, does not requir e the trial court that the designated information w as exempt from disclosure. Although t he On appeal, the Department asserts that the trial court erred in ruling
appeal followed. designated information was exempt from disclosure under RSA 91 - A:4, I. This disclosure of the designated information” by the D epart ment and, therefore, the concluded that, pursuant to RSA 350 - B:1, II(b)(2), the UTSA “prohibits [D]epartment with the information under the duty of confidentiality.” The court balancing of interests. The court further found that Caremark “provided the information that is “other wise prohibited by statute,” did not require a The tr ial court ruled that RSA 91 - A:4, I, which exempts from disclosure judgment in favor of Caremark and granted its request for injunctive relief. Following a non - evidentiary hearing, the trial court entered summa ry
government entity....” to submit proposals for [pharmacy benefit management] servic es to a 4
implied consent by a person who: (b) Disclosure or use of a trade secret of another without express or
improper means; or or has reason to know that the trade secret was acquired by (a) Acquisition of a trade secret o f anoth er by a person who knows
misappropriation as: mis appropriation” of trade secrets. RSA 350 - B:2, I. The UTSA defines circumstances; r ather, it provides remedies for the “[a] ctual or threatened The UTSA does not prohibit the disclosure of trade secrets under all
information is exempt from disclosure under RSA 91 - A: 4, I. disclosure of the designated information under the circumstances here, that (Emphasis added.) Caremark argues that, because the UTSA precludes
91 - A:5. or agencies, . . . except as otherwise prohibited by statu te or RSA records in the possession, custody, or control of such public bodies public bodies or agencies, has the right to inspect all governmental bodie s or agencies, and on the regular business premises of such Every citizen during the regular or business hours of all public
RSA 91 - A: 4, I, in relevant part, states:
exempt from disclosure under the Right - to - Know Law. Caremark has the burden of demonstrating that the designated information is Liberties Union v. City of Manchester, 1 49 N.H. 437, 439 (2003). Therefore, (2011). “The party seeking nondisclosure has the burden of proof.” N.H. Civil restrictively.” Ettinger v. Town of Madison Planning Bd., 162 N.H. 785, 788 construe provisions favoring disclosure and i nterpret the exemptions objectives.” Id.; see also N.H. CONST. pt. I, art. 8. “As a result, we broadly information in order to best effectuate these statutory and constitutional regarding the Right - to - Know Law with a view to providing the utmost does not provide for unrestri ct ed access to public records, we resolve questions Marshal, 163 N.H. 656, 660 (2012) (quotation omitted). “Although the statute bodies, and their accountability to the people.” 38 Endicott St. N. v. State Fire possible public access to the actions, discussions and records of all public “The purpose of the Right - to - Know Law is to ensure both the greatest
context of the overall statutory scheme and not in isolation.” Id. legislature did n ot see fit to include.” Id. “We also interpret a statute in the not consider what the legislature might have said or add language that the used.” Id. “We interpret legislative intent from the statute as written and will language of a statute, we ascribe the plain and ordinary meaning to the words words of the statute considered as a whole.” Id. “When examining t he 5
circumstances giving rise to a duty to maintain its secrecy or limit its use.” Id. reason to know that [its] knowledge of the trade secret was . . . acquired under trade secrets. Acco rdingly, we conclude that the Department “knew or had provides that both parties are under a duty of confidentiality not to disclose designated information as confidential and proprietary. Moreover, the contract properly marked confidential.” Notably, Caremark specifically marked the maintain the confidentiality of portions of the proposal that [are] clearly a nd consistent with applicable state and federal law [,]. . . the State will endeavor to it is undisputed that the RFP specifically provided that, “to the extent to a duty to maintain its secrecy or limit its use.” RSA 3 50 - B:1, II(b)(2). Here, knowledge of the trade secret” was “acquired under circumstances giving rise owner’s consent when the person “knew or had reason to know that his misappropriation occurs if a person discloses a trade secret without the the disclosure of a trade secret to constitute a misappropriation. R ather, a direct commitment to maintain the secrecy of a trade secret is not required for Turning to the first prong of the Department’s argument, we note that a
designated information because, here, it “did neither of those things.” maintains that there has been no actual or threatened misappropriation of the a trade secret, and (2) the tr ade secret is d isclosed without consent,” it [UTSA] when (1) a direct commitment is ma de to maintain the confidentialit y of Department agrees with Caremark “that a misappropriation occurs under the [thei r] use” and Caremark does not consent to their disclosure. Although t he “under circumstances giving rise to a duty to maintain [their] secrecy or limit Department “knew or had reason to know” that it acquired the trade secrets secrets by the Department would constitute a “misappropriation” because the Caremark argues that, under RSA 3 50 - B:1, II(b)(2), disc losure of its trade
RSA 3 50 - B:1, II (emphases added).
had been acquired by accident or mistake. to know that it was a trade secret and that knowledge of it (3) Before a material change of his position, knew or had reason
relief to maintain its secrecy or limit its use; or or through a person who owed a duty to the person seeking duty to maintain its secrecy or limit its use; or derived from acquire it; or acquired under circumstances giving rise to a through a person who had utilized improper means to that his knowledge of the trade secret was derived from or (2) At the time of disclosure or use, knew or had reason to know
secret; or (1) Used improper means to acquire know ledge of the trade 6
a misappropriation, such information is exempt from discl osure under public which courts have held that, if the disclosure of trade secrets would constitute W e note that our holding is in accord with cases in other jurisdictions, in
argument that RSA 91 - A:5 exempts trade secrets from disclosure. disclosure under RSA 91 - A:4, I. Accordingly, we need not address Caremark’s I, and, therefore, we hold that the designated information is exempt from that disclosure of that in formation is “prohibited by statute” under RSA 91 - A:4, a misappropriation of Caremark’s trade secrets under the UTSA, we conclude because disclosure of the designated information by the Department would be “misappropriation” of a trade secret is “prohibited” by the UTSA. Accordingly, liability may arise from acts within the scope of the statute, we hold that a in the court s under the UTSA, as well as the express statement that criminal G iven the plain language of the UTSA, the broad remedial powers vested
available only to persons selected by him.” RSA 637:2, I (Supp. 2 014). Code includes “trade secrets, . . . which the owner thereof intends to be I I(c). Notably, the definition of “property” in the theft chapter of the Criminal whether or not based upon m isappropriation of a trade secret.” RSA 350 - B:7, expressly provides that it does not displace existing “[c]riminal remedies, amount of the actual damage award. RSA 350 - B:3, II. Moreover, the UTSA malicious” the trial court may award “exemplary damages” up to twice the recover damages. RSA 350 - B:3, I. If the misappropriation is “willf ul and misappropriation, the UTSA provides that the complainant may be entitled to secret may be compelled by court order.” RSA 350 - B:2, I, III. In the event of a threatened misappropriation,” and that “affirm ative acts to protect a trade trade secret s, specifically stating that a court may enjoin an “[a] ctual o r generally RSA ch. 350 - B. The UTSA grants court s broad authority to protect misappropriated and to provide redress in the event of a misappropriation. See The purpose of the UTSA is to protect trade secrets from being
disagree. with in the “otherwise prohibited by statute” exemp tion in RSA 91 - A:4, I. We the misappropria tion of trade secrets such that the misappropriation falls argues that the UTSA does not contain “sufficient explicit language prohibiting” misappropriation does not end the analysis because the Department next However, our conclusion that the disclosure would constitute a
“misappropriation” as defined by the UTSA. Caremark’s trade secrets under these circumstances would constitute a its disclosure, and sought an injunction to prevent disclosure. D isclosure of this assertion. Caremark marked the information as “confidential,” objected to disclosure of the designated information, the language of the RFP contrad icts Department contends that submitting a bid constituted “consent” to the impliedly consent to disclosure of the designated information. Although the The undisputed facts establish that Caremark did not express ly or 7
DALIANIS, C.J.
, and HICKS, CONBOY, and LYNN, JJ., concurred.
Affirmed.
Petition of Kilton, 156 N.H. at 645. therefore leave to it the task of addressing the [Department’ s] concerns.” observe that “[m] atters of public policy are reserv ed for the legislature, and we argues that the legislature improperly balanced policy considerations, we prohibited by statute.” RSA 91 - A:4, I. To the extent that the Department in the Right - to - Know Law for information the disclosure of which is “otherwise Accordingly, misappropriated trade secrets fall squarely within the exemption the policy det ermination to prohibit the misappropriation of trade secrets. N.H. 632, 645 (200 7). With the enactment of the UTSA, the legislature ma de Department makes “[its] argument in the wrong forum.” Petition of Kilton, 156 reasons that favor disclosure of the designated information. However, the Finally, the Department argues that there are overriding pu blic policy
public record laws). Trade Secrets Act protects trade secrets from disclosure under Missouri’s App. 2005) (affirming the trial court’s c onclusion that the Missouri Uniform American Family Mut. Ins. v. Missouri Dept., 169 S.W.3d 905, 913 - 14 (Mo. Ct. exempts trade secrets from disclosure under the Oregon Public Records Law); (Or. Ct. App. 2012) (concluding that the Oregon Uniform Trade Secrets Act Public Records Act].”); Pfizer Inc. v. Oregon Dept. of Justice, 294 P.3d 496, 510 ex empt from disclosure under the ‘state or federal law’ exemption of [Ohio’s Univ., 721 N.E.2d 1044, 1049 (Ohio 2000) (“[W]e hold that trade secrets [are] 592, 6 03 (Wash. 1994) (en banc); see also State ex rel. Besser v. Ohio State knowledge of a trade secret.” A nimal Welfare Soc. v. Univ. of Wash., 884 P.2d Washington’s public record law “is simply an improper means to acquire record laws. We agree with the Supreme Court o f Washington, which held that