Four environmental groups sued the Wyoming Oil and Gas Conservation Commission (WOGCC) under Wyoming’s Administrative Procedure Act (APA), asserting that the WOGCC unlawfully withheld the identification of hydraulic fracturing chemicals used by various oil and gas operators under the trade secret exception to the state’s disclosure rules.
On March 21, 2013, the district court upheld the WOGCC’s decision, ruling that the Supervisor “acted reasonably” in establishing a policy for evaluating trade secret requests and that his decisions to grant trade secret protection were not arbitrary or capricious and were in accordance with the law.
On March 12, 2014, the Wyoming Supreme Court reversed and remanded the lawsuit for further proceedings, pointing to a “procedural flaw” and stating that “[b]ecause the district court reviewed the Commission Supervisor’s decision under the APA, we must reverse and remand.”
The Supreme Court found that, in their prayer for relief, the environmental groups “asked the district court to compel the Supervisor to show cause why its partial denial of their request for access to its records was lawful.
However, no order to show cause [under the Wyoming Public Records Act (WPRA)] was ever issued, and…the district court never held a show-cause evidentiary hearing.”
The Supreme Court directed the district court to determine whether it will allow the environmental groups “to amend their existing pleadings to request and issue an order to the Supervisor to show cause as to why the documents requested should not be produced, or dismiss the case, which will permit Appellants to file a new action.”
“[U]nwilling to cast the district court adrift without some guidance on the standard to be applied…” and adopting the Freedom of Information Act standard, the Supreme Court defined a trade secret under the WPRA as “a secret, commercially valuable plan, formula, process, or device that is used for the making, preparing, compounding, or processing of trade commodities and that can be said to be the end product of either innovation or substantial effort, with a direct relationship between the trade secret and the productive process.”
The district court is required to determine as a matter of fact based on evidence presented to it whether the information sought is a trade secret.
The district court will have to “review the disputed information on a case-by-case, record-by-record, or perhaps even on an operator-by-operator basis, applying the definition of trade secrets…and making the particularized findings which independently explain the basis of its ruling for each.”
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
