UNITED HEALTHCARE OF GEORGIA, INC. v. DCH No. A08A0579.
666 S.E.2d 472 (2008)
UNITED HEALTHCARE OF GEORGIA, INC. et al. v. GEORGIA DEPARTMENT OF COMMUNITY HEALTH.
Court of Appeals of Georgia.
July 28, 2008.
Thurbert E. Baker, Attorney General, Shalen S. Nelson, Senior Assistant Attorney General, Michelle Townes, Kathryn A. Fox, Assistant Attorneys General, Phears & Moldovan, Victor L. Moldovan, Atlanta, Donald J. Palmisano Jr., for appellee.
United HealthCare of Georgia, Inc. and United HealthCare Insurance Company (collectively, "United HealthCare") sought to enjoin the disclosure of certain documents relating to United Health Care's contract with the Georgia Department of Community Health ("DCH") for the administration of the State Health Benefit Plan ("SHBP"). Some of the documents had been provided to the DCH by United HealthCare, while other documents had not and remained in United HealthCare's sole possession. Granting summary judgment to the parties seeking the documents, the trial court ruled that all of the documents were public records under the Georgia Open Records Act, OCGA § 50-18-70 et seq. and were not exempt from disclosure as trade secrets. We conclude that while all of the documents are public records as a matter of law, they nevertheless may be exempt from disclosure as trade secrets, if they satisfy the applicable two-part test. Therefore, we affirm in part, vacate in part, and remand the case for consideration of whether the documents constitute trade secrets.
(Citations and punctuation omitted.) Rubin v. Cello Corp.,
In 2005, following a public bidding process, the DCH chose United HealthCare to serve as third-party administrator of the SHBP, and a contract was executed by the parties reflecting the same (the "TPA Contract"). Under the TPA Contract, United HealthCare is required to process and pay health insurance claims for SHBP members out of a bank account funded by DCH. See TPA Contract, Section 3.15.2. United HealthCare also must maintain a network of health care providers (i.e., hospitals and physicians) for SHBP members and execute formal contracts with those providers that address, among other factors, levels of reimbursement. TPA Contract, Sections 5.1 and 5.1.1.
It is undisputed that prior to executing the TPA Contract, United HealthCare already had in place a network of health care providers for its public and private sector customers throughout Georgia. As such, many of the provider contracts relevant to services provided to SHBP members were executed and in place prior to the execution of the TPA Contract; United HealthCare then made this preexisting network of providers available to SHBP members after contracting with the DCH. But, an effort also was made to sign up additional providers after the execution of the TPA Contract to cover parts of Georgia that were not covered by United HealthCare's existing network.
The Open Records Act Requests. In March 2006, the South Georgia Physicians Association, LLC ("SGPA") submitted an Open Records Act request to the DCH for documents relating to the TPA Contract. The SGPA subsequently amended its request and, joined by the Medical Association of Georgia ("MAG"), made an Open Records Act request directly to United HealthCare. SGPA and MAG requested that either the DCH or United HealthCare produce copies of: (1) all fee schedules related to the SHPB to which United HealthCare is the third-party administrator; (2) all executed contracts between United HealthCare and the various physicians in Georgia regarding the SHBP; (3) all executed contracts between United HealthCare and various hospitals in Georgia regarding the SHBP; (4) all correspondence between the DCH and United HealthCare related to the physician and hospital contracts in Georgia for the SHBP; and (5) all template form contracts between United HealthCare and various physicians in Georgia regarding the SHBP.
Requests (1) — (3) were for provider contracts and fee schedules that were never provided to the DCH and that remained in United Healthcare's sole possession (the "UHC Provider Documents"). Requests (4) and (5) involved documents that United HealthCare had previously submitted to the DCH (the "DCH Documents"). United HealthCare objected to the production of both the UHC Provider Documents and the DCH Documents. However, the DCH determined that the DCH Documents were subject to inspection under the Open Records Act and informed United HealthCare that it planned to make the documents available to SGPA and MAG.
The Litigation. In May 2006, United HealthCare filed a verified complaint seeking to temporarily and permanently enjoin the DCH from making the DCH Documents available to SGPA and MAG. SGPA and MAG successfully moved to intervene in the suit and then counterclaimed for the disclosure of both the DCH Documents and the UHC Provider Documents. After discovery, United HealthCare moved for summary judgment, contending that as a matter of law, the UHC Provider Documents were not public records under the Open Records Act,
The trial court granted SGPA and MAG's motion for summary judgment, denied United HealthCare's motion for summary judgment, and closed the case. First, the trial court ruled as a matter of law that the UHC Provider Documents were public records under the Open Records Act, OCGA § 50-18-70(a). Second, the trial court determined that neither the DCH Documents nor the UHC Provider Documents were protected from disclosure by the trade secrets exemption to the Open Records Act, OCGA § 50-18-72(b)(1). United HealthCare now appeals.
(Footnotes omitted.) Central Atlanta Progress v. Baker,
The threshold question in an Open Records Act suit is whether the documents are public records as defined in OCGA § 50-18-70(a). Northwest Ga. Health System v. Times-Journal,
1. Public Records. United HealthCare asserts that the trial court erred in concluding that the UHC Provider Documents are public records under the Open Records Act.
The Open Records Act defines "public record" as material "prepared and maintained or received in the course of the operation of a public office or agency." OCGA § 50-18-70(a). Significantly, the Act further provides that
Id. As such, the Act requires the disclosure of documents possessed by a private entity performing a service or function for or on behalf of a public agency. OCGA § 50-18-70(a); Central Atlanta Progress, 278 Ga.App. at 735,
In Central Atlanta Progress, we held that bidding documents prepared by a private corporation were public records subject to disclosure because public funds had been used to prepare the bid, the bid called for the future expenditure of substantial public funds, and multiple public officials and employees had actively participated in the preparation and promotion of the bid. 278 Ga. App. at 735-737(1), 739-740(3),
The uncontroverted facts in the present case are indistinguishable from this case law. Like in Central Atlanta Progress, United HealthCare's administration of the SHBP involves the current and future expenditure of substantial public funds. Moreover, the record reflects that after the TPA Contract was executed, public officials from the executive branch were actively involved in signing up new health care providers for the SHBP, assisting providers in obtaining changes to their provider contracts with United HealthCare, and conducting town hall meetings to answer questions about provider issues. Hence, the instant case includes significant involvement of public officials as in Central Atlanta Progress. Additionally, like the private companies in Northwest Ga. Health System and Hackworth, United HealthCare is the "vehicle" or "management tool" through which the DCH has chosen to carry out its public function of administering the SHBP. Accordingly, United HealthCare was carrying out a service or function for or on behalf of the DCH and its records pertaining thereto are subject to disclosure under the Open Records Act. See OCGA § 50-18-70(a); Central Atlanta Progress, 278 Ga.App. at 735-737(1), 739-740(3),
United HealthCare argues that even if it is otherwise subject to the Open Records Act, the provider contracts and fee schedules at issue here — the UHC Provider Documents — should not be treated as public records subject to disclosure. Specifically, United HealthCare emphasizes that many of the health care provider contracts and fee schedules were already executed prior to the TPA Contract, and contends that the ones that were executed after the TPA Contract were executed by United HealthCare on its own behalf in order to increase its network and provide services to all of its private and public sector customers. As such, United HealthCare asserts that the UHC Provider Documents were not received or maintained in the performance of any service or function done for or on behalf of the DCH. We are unpersuaded.
While many of the provider contracts and fee schedules relevant to services provided to SHBP members were in place prior to the execution of the TPA Contract, the TPA Contract specifically provides that United HealthCare is required to "maintain formal contracts with all Network Providers that address the level of reimbursement, Provider access, quality requirements, and other key factors." TPA Contract, Section 5.1. Likewise, the TPA Contract requires United HealthCare to "ensure that its network of Providers is adequate to assure access to all Covered Services." TPA Contract, Section 5.1.1. As such, all of the provider contracts and fee schedules at issue here are maintained, at least in part, in order for United HealthCare to comply with its contractual obligations in administering the SHBP. And, the provider contracts and fee schedules entered into after the TPA Contract was formed were not executed simply on United HealthCare's own behalf to increase its provider network as a whole for all of its customers, but also to comply with Sections 5.1 and 5.1.1 of the TPA Contract. Indeed, in hundreds of cases, United HealthCare entered
2. Trade Secrets Exemption. United HealthCare next asserts that even if the trial court correctly held that the DCH Documents and the UHC Provider Documents constitute public records, the court nevertheless erred in holding that the documents were not exempt from disclosure as trade secrets. OCGA § 50-18-72(b)(1) exempts from disclosure "[a]ny trade secrets obtained from a person or business entity which are of a privileged or confidential nature and required by law to be submitted to a government agency." Information that is not commonly known by or available to the public constitutes a trade secret if it meets a two-part test. First, it must "[d]erive 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." OCGA § 10-1-761(4)(A); Douglas Asphalt Co. v. E.R. Snell Contractor, 282 Ga.App. 546, 549,
Here, the trial court did not resolve whether the materials at issue constituted trade secrets under the two-part test as a matter of law. Rather, the trial court concluded that even if the materials at issue could be considered trade secrets, neither the DCH Documents nor the UHC Provider Documents were protected from disclosure by the trade secrets exemption because the documents were not "required by law to be submitted to a government agency."
(a) We disagree with the trial court's analysis of the "required by law" component of the trade secrets exemption. As an initial matter, United HealthCare submitted the DCH Documents to the DCH pursuant to its contractual obligation to administer the SHBP. Therefore, the DCH Documents were "required by law to be submitted to a government agency." See Douglas Asphalt Co., 282 Ga.App. at 549, 551(3),
We likewise conclude that the "required by law" component of the exemption does not prevent UHC Provider Documents from being exempt from disclosure as trade secrets. On the one hand, statutory exemptions to the Open Records Act must be narrowly construed. City of Atlanta v. Corey Entertainment,
(b) Relying upon a contractual waiver theory, SGPA and MAG argue that the trial court ultimately was correct that the DCH Documents and UHC Provider Documents are not exempt from disclosure as trade secrets. See Gilbert v. City of Jackson, 287 Ga.App. 326, 327(1),
Section 13.6(1) provides: "Because DCH is a public agency of the State of Georgia, any information received by the DCH is subject to disclosure under the Georgia Open Records Act, O.C.G.A. § 50-18-70 et seq." Section 13.6(2) states:
The issue is whether these sections of the TPA Contract, when construed together, reflect that United HealthCare waived statutory trade secret protection for all materials other than "Proprietary Software." We conclude that they do not.
As an initial matter, we do not construe the phrase "subject to disclosure" in Section 13.6(1) of the TPA Contract as meaning that all documents will be disclosed pursuant to the Open Records Act. Section 13.6(1) cites to "O.C.G.A. § 50-18-70 et seq." and thus references the application of the entire Open Records Act, which includes rights of exemption from disclosure for trade secrets. As such, Section 13.6(1) simply means that because the DCH is a public agency, materials it receives from private companies will have to be disclosed to third parties if required under the Open Records Act. In turn, Section 13.6(2) sets out a special procedure for determining the trade secret status of "Proprietary Software" submitted by United HealthCare to the DCH, but is silent as to whether other types of materials are entitled to trade secret protection.
Under these circumstances, we cannot say that United HealthCare waived its statutory trade secret protection for all materials other than "Proprietary Software." "[W]here statutory rights are clearly granted, the waiver of such vested rights should not be found in an agreement absent a clear, unambiguous, and conscious intent to surrender such rights." In re Estate of Sims,
(c) SGPA and MAG further argue that the DCH Documents and the UHC Provider Documents are subject to disclosure because trade secret status is lost where a private corporation voluntarily enters into a contract to administer public funds, and because the public interest warrants disclosure of the documents.
We reject SGPA and MAG's broad assertion that the trade secret exemption should not apply because United HealthCare voluntarily entered into a public contract to administer public funds. A private entity's voluntary participation in a government contract does not, standing alone, strip the entity's documents of their trade secret status. See Douglas Asphalt Co., 282 Ga.App. at 551(3),
We likewise are unpersuaded by SGPA and MAG's contention that the public interest warrants disclosure of the documents. The public policy of this state against the disclosure of trade secret information, as evidenced by the plain language of OCGA § 50-18-72(b)(1), constitutes the General Assembly's determination that trade secret protection outweighs any greater public benefit in disclosure. See Richmond County Hosp. Auth. v. Southeastern Newspapers Corp.,
(d) The only remaining question is whether the DCH Documents and the UHC Provider Documents meet the two-part test for trade secrets as a matter of law. But, as previously indicated, the trial court did not resolve this issue, given the trial court's erroneous legal conclusion that the documents were not protected from disclosure by the trade secrets exemption because they were not "required by law to be submitted to a government agency." Under these circumstances, we vacate the trial court's grant of summary judgment in favor of SGPA and MAG, and its denial of summary judgment in favor of United HealthCare. We remand for the trial court to consider in the first instance whether the DCH Documents and the UHC Provider Documents meet the two-part test for trade secrets as a matter of law or whether a genuine issue of material fact exists as to that issue. See, e.g., City of Gainesville v. Dodd,
Judgment affirmed in part, vacated in part, and case remanded.
RUFFIN, P.J., and ANDREWS, J., concur.
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