City of Seattle Wins Key Battle in Lawsuit Filed by Uber and Lyft

Also in the win column with this ruling: the public's right to see what its government is doing.
Posted: Jun, 01 2018
 
 

This story originally ran on SCC Insight.

The State Supreme court handed down a ruling in a lawsuit that Uber and Lyft filed against the City of Seattle. While the case isn’t over, Seattle won a key battle — and so did the public’s right to see what its government is doing.

The case relates to the state’s Public Disclosure Act, which dictates that except in certain circumstances the government’s internal workings are open for the public to view.

In 2014, Uber and Lyft negotiated an agreement with the city to avoid an ordinance restricting the number of drivers the company can deploy in the city. Under the terms of the agreement, Uber and Lyft must deliver quarterly reports to the city with statistics on rides completed, detailed by ZIP code; city officials wanted to verify that all parts of the city were being offered service and that drivers weren’t avoiding certain areas. The companies consider that data to be a trade secret, and the agreement request requires the city to keep the information confidential “within the confines of state law.” Further, it says that if a public documents request is made for any confidential documents supplied by the companies, the city must notify them before turning over the documents.

Well that happened — a PDR was filed for the reports, the city notified the companies, and they in turn sued the city to prevent the release of the documents.

The basis of Uber and Lyft’s case is that the information they turned over to the city is not only confidential, it’s a “trade secret” subject to additional protection — and an exemption from the Public Records Act.

The Public Records Act holds that “Each agency, in accordance with published rules, shall make available for public inspection and copying all public records, unless the record falls within the specific exemptions of subsection (8) of this section, this chapter, or other statute which exempts or prohibits disclosure of specific information or records.”  (emphasis added) And there is indeed another statute — the Uniform Trade Secrets Act — that provides certain protections for trade secrets.

With that in mind, the case poses three questions:

  1. Is Uber and Lyft’s ZIP code-indexed ride data a “trade secret?”
  2. Could the PRA’s reference to “other statute” be construed to include the UTSA?
  3. Does the UTSA require trade secrets to be withheld from public records requests?

The trial court answered “yes” to all three questions, and granted the companies an injunction preventing release of the reports. The city appealed directly to the state Supreme Court, which agreed to take the case.

On the first question — is the ride data a “trade secret” — the Supreme Court agreed with the trial court, though it said that it could be argued either way. The UTSA defines trade secrets as:

"information, including a formula, pattern, compilation, program, device, method, technique, or process that:
(a) Derives independent 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; and
(b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy."

And the ride data is a “compilation” as referenced in the UTSA — though the UTSA never defines a compilation and the Court had to wrestle with what an appropriate definition would be. The city also argued that the ride data didn’t have economic value; again, the Court said that it was a close question, but gave the benefit of the doubt to Uber and Lyft.

The Court also agreed on the answer to question 2: the UTSA is an “other statute.”  But it disagreed on question #3.

Neither the PRA nor the UTSA explicitly require trade secrets to be exempted from public records requests. So that brings the question around to the standard for evaluating a court injunction. The UTSA follows a general rule, while the PRA has its own:

"The examination of any specific public record may be enjoined if, upon motion and affidavit by an agency or its representative or a person who is named in the record or to whom the record specifically pertains, the superior court for the county in which the movant resides or in which the record is maintained, finds that such examination would clearly not be in the public interest and would substantially and irreparably damage any person, or would substantially and irreparably damage vital governmental functions."

Uber and Lyft argued for the UTSA standard, and the trial court agreed; but the City argued that the PRA standard applied because the companies were trying to enjoin a public record disclosure, and the Supreme Court agreed with them. The Court emphasized that it isn’t enough to earn an injunction just because a PRA exemption applies; the full standard must be met, including showing that releasing the documents would clearly not be in the public interest and  substantially and irreparably damage any person or vital government function.

With that determination, the Supreme Court concluded that there were factual determinations that still needed to be made in order to determine whether the full standard is met, and remanded the case back to the trial court to do just that.

The Court’s ruling today doesn’t advance any of the legal issues swarming around the TNC industry, but it’s nonetheless a very important finding related to public disclosure law in Washington State, reinforcing the resilience of the Public Records Act against attempts to chip away at it.

The City Attorney’s Office said this today about the ruling: “While additional court proceedings are still necessary, we see this as a victory for transparency and the public’s right to access information.”

Read Kevin Schofield's April 2018 cover story on Uber and Lyft in Seattle. 

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