XI. "Market Sensitive" Information Is Different From "Trade Secrets"
Several parties assert that we should interpret § 454.5(g) coextensively with Evidence Code § 1060's protection for trade secrets.58 We find no merit to this assertion. While there may be instances in which information meets both statutory bases for confidentiality protection, neither the language of § 454.5(g) nor its legislative history provides support for interpreting the two statutes coextensively. Trade secret law and § 454.5(g) provide independent bases for protecting confidential information, and SB 1488 does not give us leave to ignore these statutory provisions.
A. Parties' Positions - Market Sensitive Information vs. Trade Secrets
CAC/EPUC claims that "Caselaw on trade secret and market-sensitive information suggests that the ultimate treatment of these categories of information is the same."59 Similarly, "Other than the distinctions described above, SCE believes that most confidential data is both trade secret and market sensitive."60 While PG&E asserts that "[t]here is no formal distinction between `trade-secret' and `market sensitive,'" it goes on to identify a distinction:
As a rule of thumb however, PG&E considers "trade secret" to include information and data that it creates and used in the course of its business practices, such as its load forecasting methodologies and forecasts, projections of unit operations, new resource procurement, and resource need. Additional types of information that PG&E considers trade secret would include contract terms designed to meet specific PG&E requirements. Market sensitive information would include most if not all trade secret information, and would also include information that is not developed by the utility but may have commercial value.61
In perhaps the narrowest view, the CEC assets that the only protection for data identified in the Matrix is trade secret protection: "The CEC believes that `market sensitive information' will always meet the definition of trade secret."62
In contrast, "TURN submits that the trade secret concept is clearly narrower in scope [than `market sensitive' information], having been defined and limited by years of judicial interpretation. The definition of `market sensitive' does not enjoy the same history, and thus this Commission is free to interpret the term as appropriate to its proceedings."63
B. Discussion - Market Sensitive Information is Not the Same as Trade Secret Information
The OIR asked the parties to address trade secrets vis-à-vis market sensitive information because trade secret law is well developed and therefore provides a possible process for handling market sensitive information:
According to Evidence Code § 1060, the owner of a trade secret has a privilege against disclosure so long as allowance of the privilege "will not tend to conceal fraud or otherwise work an injustice." The party claiming the privilege must establish that the information is a trade secret and that the party is its owner. Thereafter, the party seeking discovery must show that the information is "relevant and necessary to proof of . . . a material element of a cause of action" and essential to resolution of the case. Then the party claiming privilege must demonstrate the disadvantages of alternatives to full disclosure, such as a protective order.64 We seek comment on whether we should apply the Evidence Code § 1060 framework here.65
We acknowledge that the request for comment on this point may have led the parties to believe we were seeking input on the substantive similarities between trade secrets and "market sensitive" information, when it was the process and relative burdens of proof on which we sought input.
We find no use in straining to read the two statutes as covering the same substantive information. There is no evidence from the statutory language that they are the same. While it might be neater to have one confidentiality statute rather than two, we cannot change the law.
Under Evidence Code § 1060, the Uniform Trade Secrets Act, trade secrets consist of
[I]nformation, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) [d]erives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Market sensitive information, by contrast, is not defined in § 454.5(g), and the legislative history contains no helpful information, but the statute gives us no reason to believe that by "market sensitive," the Legislature meant "trade secret." If the Legislature had so intended, it could have said so expressly.
Even if the statutes cover different substantive information, the process for analyzing trade secrets is helpful to determining how to protect "market sensitive" information. As we discuss more fully in the section entitled "Practical Application of SB 1488," above, the party seeking to assert that it possesses a trade secret or market sensitive information bears the initial burden of proving that its information meets the requirements for protecting such information.
Mere recitation of the conclusory statement that information is a trade secret, or is market sensitive procurement information, is not enough to meet this burden. Rather, for information listed in the Matrix (Appendices 1 and 2), the producing party always bears the initial burden of proof that the information is entitled to protection. For data not in the Matrix, the producing party also bears the burden of proof, without the benefit of the Matrix determinations.
58 The California Public Records Act creates an exception to the general requirement that government records be open by providing protection for trade secrets. Cal. Gov't Code §§ 6254(k), 6254.7(d).
59 CAC/EPUC Opening Brief at 22.
60 SCE Opening Brief at 26.
61 PG&E Opening Brief at 16.
62 CEC Opening Brief at 7.
63 TURN Opening Brief at 6.
64 Weil & Brown, Civil Procedure Before Trial, Scope of Discovery, Ch. 8C, at 8C-24 to 8C-24.1.
65 OIR, mimeo. at 8.
