May 5, 2006
The staff of the Committee on Open Government is authorized to issue advisory opinions. The ensuing staff advisory opinion is based solely upon the facts presented in your correspondence.
I have received your letter in which you sought an advisory opinion "as to whether the Freedom of Information Law permits an individual to obtain from the New York State Liquor Authority a copy of a completed liquor license application that was used to obtain a liquor license."
While I believe that substantial portions of the applications must be disclosed, others, in my opinion, may be withheld. In this regard, I offer the following comments.
As a general matter, the Freedom of Information Law is based upon a presumption of access. Stated differently, all records of an agency are available, except to the extent that records or portions thereof fall within one or more grounds for denial appearing in §87(2)(a) through (i) of the Law. It is emphasized that the introductory language of §87(2) refers to the authority to withhold "records or portions thereof" that fall within the scope of the exceptions that follow. In my view, the phrase quoted in the preceding sentence evidences a recognition on the part of the Legislature that a single record or report, for example, might include portions that are available under the statute, as well as portions that might justifiably be withheld. That being so, I believe that it also imposes an obligation on an agency to review records sought, in their entirety, to determine which portions, if any, might properly be withheld or deleted prior to disclosing the remainder.
From my perspective, one of the grounds for denial of access is clearly relevant with respect to portions of the applications. Another may be pertinent in some but perhaps not all instances.
Section 87(2)(b) authorizes an agency to withhold information contained in records insofar as disclosure would constitute "an unwarranted invasion of personal privacy." Historically, information pertaining to those persons or entities obtaining licenses, permits and similar certifications has been available to the public, for it is intended to enable the public to know that those persons or entities are qualified to engage in certain activities in which the government has a substantial interest. The fact that a license has been issued to engage in the practice of a variety of professions (i.e., medicine, law, architecture, social work, etc.) and other kinds of activities, (i.e., selling real estate, being a barber or cosmetologist, driving an automobile or possessing a firearm) involve matters all of which enable the public to know that the recipient has met the required conditions for licensure or engaging in certain activities.
Although the standard in the law relating to unwarranted invasions of personal privacy is not specific, the Court of Appeals has held that the "essence" of the exception involves an intent to enable an agency to withhold items "that would ordinarily and reasonably be regarded as intimate, private information" [Hanig v. State Department of Motor Vehicles, 79 NY2d 106, 112 (1992)]. As the foregoing relates to the information contained in liquor license, I believe that several items may properly be withheld. Having reviewed the application forms accessible on the Authority’s website, home addresses, dates of birth, fingerprints, personal financial and banking information, for instance, may be withheld, in my opinion, as an unwarranted invasion of personal privacy.
Also of possible significance in considering rights of access is §87(2)(d), which permits an agency to withhold records that:
"...are trade secrets or are submitted to an agency by a commercial enterprise or derived from information obtained from a commercial enterprise and which if disclosed would cause a substantial injury to the competitive position of the subject enterprise."
The question under §87(2)(d) involves the extent, if any, to which disclosure would "cause substantial injury to the competitive position" of a commercial entity. The concept and parameters of what might constitute a "trade secret" were discussed in Kewanee Oil Co. v. Bicron Corp., which was decided by the United States Supreme Court in 1973 (416 (U.S. 470). Central to the issue was a definition of "trade secret" upon which reliance is often based. Specifically, the Court cited the Restatement of Torts, section 757, comment b (1939), which states that:
"[a] trade secret may consist of any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers" (id. at 474, 475).
In its review of the definition, the court stated that "[T]he subject of a trade secret must be secret, and must not be of public knowledge or of a general knowledge in the trade or business" (id.). The phrase "trade secret" is more extensively defined in 104 NY Jur 2d 234 to mean:
"...a formula, process, device or compilation of information used in one's business which confers a competitive advantage over those in similar businesses who do not know it or use it. A trade secret, like any other secret, is something known to only one or a few and kept from the general public, and not susceptible to general knowledge. Six factors are to be considered in determining whether a trade secret exists: (1) the extent to which the information is known outside the business; (2) the extent to which it is known by a business' employees and others involved in the business; (3) the extent of measures taken by a business to guard the secrecy of the information; (4) the value of the information to a business and to its competitors; (5) the amount of effort or money expended by a business in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. If there has been a voluntary disclosure by the plaintiff, or if the facts pertaining to the matter are a subject of general knowledge in the trade, then any property right has evaporated."
In my view, the nature of record, the area of commerce in which a commercial entity is involved and the presence of the conditions described above that must be found to characterize records as trade secrets would be the factors used to determine the extent to which disclosure would "cause substantial injury to the competitive position" of a commercial enterprise. Therefore, the proper assertion of §87(2)(d) would be dependent upon the facts and, again, the effect of disclosure upon the competitive position of the entity to which the records relate.
The applications, especially those involving wholesale licenses, include a variety of financial information pertaining to commercial entities. In some instances, disclosure of information of that nature may be innocuous; in others, particularly if the information is current, disclosure to a competitor could be damaging. In short, as suggested earlier, the commercial conditions and degree of competition in the vicinity of the licensee would likely serve as the factors in determining the extent to which portions of the application might justifiably be withheld.
I hope that I have been of assistance.
Robert J. Freeman
cc: Michael Smith, Records Access Officer