No. 80-448
IN THE SUPREME COURT OF THE STATE OF MONTANA
1981
THE MOUNTAIN STATES TELEPHONE AND TELEGRAPH
COMPANY, et al.,
Plaintiff and Appellant,
MOUNTAIN STATES LEGAL FOUNDATION, et al.,
Intervenors and Appellants,
VS.
THE DEPARTMENT OF PUBLIC SERVICE REGULATION,
THE PUBLIC SERVICE COMMISSION OF THE STATE OF MONTANA,
et al.,
Defendants and Respondents.
Appeal from: District Court of the First Judicial Distrct,
In and for the County of Lewis and Clark.
Honorable Gordon Bennett, Judge presiding.
Counsel of Record:
For Appellants:
J. Walter Hyer argued, Helena, Montana
Hughes, Bennett, Kellner and Sullivan, Helena, Montana
For Intervenors:
Maxwell Miller and R. Norman Cramer, argued, Denver,
Colorado
For Respondents:
Eileen E. Shore, argued, P.S.C., Helena, Montana
James Payne, Helena, Montana
John C. Allen argued, Montana Consumer Counsel, Helena,
Montana
Roger Tippy, Helena, Montana
Alan Joscelyn, Helena, Montana
John R. Kline, Helena, Montana
Submitted: June 9, 1981
Filed:
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
This appeal arises out of the denial by the District
Court, First Judicial District, Lewis and Clark County, of
a petition for declaratory judgment by Mountain States
Telephone and Telegraph Company (Mountain Bell) that the
Public Service Commission (PSC) issue a protective order
preserving the confidentiality of certain trade secrets
claimed by Mountain Bell to be a valuable property right.
Mountain Bell is a public utility incorporated in
Colorado, offering regulated telephone services, and other
services in the State of Montana. The Public Service Commission
is the arm of state government charged with the duty of
regulating public utilities. The Montana Consumer Counsel
(MCC), working with the Consumer Committee (both provided
for in Title 5, Ch. 15, MCA) is given the statutory authority
to appear at public hearings conducted by the PSC as the
representative of the consuming public in all matters which
in any way affect the consuming public. Section 69-2-201, MCA.
Mountain Bell filed an application for a rate increase
for its regulated services before the PSC. MCC and the
other defendants-respondents appeared before the PSC in
opposition to the application for increases. During the
course of discovery, MCC served upon Mountain Bell certain
data requests. Mountain Bell filed objections to the data
requests contending that the requested information consisted of
trade secretq\andproprietary and confidential business
information. Mountain Bell offered to make the information
available to the commission and the MCC subject to the com-
mission's entry of a proposed protective order.
The PSC denied Mountain Bell's motion for a protective
order on the grounds that a corporation is not entitled to
the protection of the individual privacy exception under
1972 Mont. Const., Art. 11, § 9, and that parties of record
should be able to examine any and all documents in a rate
increase proceeding before the PSC.
After final denial by the PSC of the motion for a
protective order, Mountain Bell filed an action for judicial
review and declaratory relief in the District Court. The
facts were stipulated to for the purpose of submitting pure
legal issues to the District Court for summary judgment.
Leave to intervene was granted the plaintiff-intervenors who
also join as appellants in this cause.
Mountain Bell and intervenors filed motions for summary
judgment. The District Court denied the motions for summary
judgment, and ordered that general judgment be entered in
the cause for all the defendants. From this summary disposition
of the cause appeal was duly perfected.
Mountain Bell states the issue presented to us for
review in this paragraph:
"Whether certain identified provisions of Montana
Constitutional and statutory law, which mandate
public disclosure and dissemination of regulated
utility trade secret property whenever such
information is necessary to a rate determination
of the Public Service Commission, are in fatal
contravention to other Montana Constitutional
guarantees and the protections and guarantees
of the Fifth and Fourteenth Amendments to and the
equal protection and interstate commerce clauses
of the United States Constitution."
On July 9, 1981, we issued an interlocutory order in
this cause, in effect requiring the issuance of a protective
order regarding Mountain Bell's trade secret property. A
copy of that interlocutory order is attached hereto. We
undertake in this opinion to explain the reasons for our
interlocutory order, and to issue a declaratory judgment in
favor of Mountain Bell.
There is no doubt raised by any party to these proceed-
ings that the trade secret information is essential to the
PSC to make a determination on Mountain Bell's application
for revenue increases, and that Mountain Bell relies on the
trade secret information in support of its application for
revenue increases. The dispute centers solely around Mountain
Bell's contention that in submitting the information requested
upon discovery, it is entitled to a protective order preserving
the confidentiality of the trade secret information from
Mountain Bell's unregulated competitors.
Mountain Bell contends that the trade secret information
is property which should be protected against compelled
public disclosure to competitors, and asserts five grounds
why certain Montana statutes and provisions of the 1972
Montana Constitution are unconstitutional., facially and as
applied. The intervenors assert unconstitutionality under
the Fourth and Fifth Amendments of the United States Constitution.
We refer first to the state constitutional section and
the statutes which Mountain Bell contends are unconstitutional
on their face and as applied here. The 1972 Mont. Const.,
Art. 11, 5 9 (the citizen's "right to know"), provides the
right in all persons to examine documents or to observe the
deliberations of all public bodies "except in cases in which
the demand of individual privacy clearly exceeds the merits
of public disclosure." Section 69-3-105, MCA (the citizen's
right to inspect), makes all records in the possession of
the PSC open to the public at reasonable times subject to
withholding only in the interest of the public for a period
not exceeding 90 days. Section 2-6-102, MCA (the citizen's
right to inspect and copy records), opens the records of all
public bodies in this state to inspection and copying, except
as otherwise provided by statute, and gives any citizen the
right to a certified copy of any such document upon payment
of legal fees.
Basically, the principal legal reason given by the PSC
for its denial of a protective order was that Mountain Bell
was not entitled to the individual privacy provided for in
the exception clause of the,1972Mont. Const., Art._II, § 9.
The PSC concluded that the constitutional section did not
guarantee individual privacy to corporations. The District
Court examined in detail the order of the PSC, and outlined
for itself the issues to be decided by it in this cause in
the following fashion:
"While we agree with the Commission's principle,
we cannot agree that the principle strips a
private corporation of all rights to protect its
trade secrets in Montana. The provisions of a
constitution, as well as a statute, must be read
together and effect must be given to all of them,
insofar as possible. While the privacy interest
of the corporation may not be placed in the balance
in considering the public's 'right to know' guaranteed
by Article 11, Section 9 of our constitution, the
right of the corporation to due process of law before
being deprived of its property (Article 11,
Section 17), the right of the corporation to
compensation in the event it is deprived of
its property for a public purpose (Article 11,
Section 29), possibly its right to remain secure
against unreasonable searches and seizures (Article
11, Section 11) and even the right to enforce its
unenumerated rights (Article 11, Section 34) are
not necessarily abrogated by its lack of entitlement
under the 'right to know' provision. Nor, of course,
are any rights guaranteed corporations by the
U.S. Constitution. To protect any or all of these
rights, the Public Service Commission might, in a
proper case, issue a protective order despite the
corporation's exclusion from protection under Art.
1 Section 9 s T " :
. h U f $ section is therefore not facially
defective, nor/& e held decisive in this case on the
question of whether the plaintiff is entitled to
a protective order.
"If the plaintiff is not necessarily excluded from
entitlement to a protective order by Article 11,
Section 9, the next question is whether it is entitled,
contrary to the specific statutes of Montana (inter
alia MCA Sections 69-2-203(2), 69-3-104, 69-3-105,
2-6-102 and 2-6-104), to a protective order in this
particular proceeding before the Public Service
Commission. In relation to that question, part
of the second legal reason given by the Public Service
Commission is most pertinent and compelling: 'Parties
of record in this proceeding should be able to examine
any and all documents upon which the Commission will
base its decision and upon which Applicant relies in
filing its request for increased revenues * * * I u
District Court Opinion and Order, dated October 2,
1980.
The first task facing the District Court, and now facing
us, is whether a trade secret of the kind involved here is
property subject to constitutional protections. The District
Court concluded it was. The District Court then further
concluded, in effect, that because Mountain Bell is a public
utility, subject to regulation, when it applied to the PSC
for an increase of its revenues for its regulated services,
Mountain Bell was required to divulge to the PSC and to the
public all pertinent information upon which its application
for rate increases was based and that such compelled disclosure
did not violate any state or federal constitutional rights
of Mountain Bell.
As we examine the constitutional problems brought up in
this appeal, it becomes obvious to us that if the denial of
a protective order has the effect of violating any one of
Mountain Bell's constitutional rights as contended in this
action, then such protective order ought to be granted if by
so granting, the unconstitutional effect is obviated.
We have concluded that we agree with the District Court
that trade secret information of the kind involved here is a
species of property that is entitled to constitutional
protection; but we have further concluded that the provisions
of our state constitution and statutes, when applied to deny
the protective order in this case, have the effeet of violating,
as applied, the equal protection clause of the Fourteenth
Amendment of the federal constitution, and the due process
clauses of the state and federal constitutions. We leave
for decision to some other case and time whether the remaining
constitutional arguments of Mountain Bell have validity.
TRADE SECRETS AS PROPERTY
We are given no record here as to what it is we have
categorized as "trade secret"; that is, whether it is an
idea, design, system or implement, or combination of these.
The respondents make no point of this, conceding, and we
accept their concession, that some process resulting from
Mountain Bell's research and development gives Mountain Bell
a competitive edge as to the communications services it
offers. This however, leads respondents to the argument
that disclosure of the trade secret does not necessarily
deprive Mountain Bell of the use of its trade secret.
Regardless of dislosure, say the respondents, Mountain Bell
still has the use of its trade secret available and that
disclosure therefore does not take away from Mountain Bell
any property of value. On that basis, respondents claim
that the trade secret as such is not entitled to constitutional
protection.
The intervenors point out that the respondents have not
appealed from the finding of the District Court that trade
secrets are protectable property. However, a determination
that a trade secret is protectable property is - - -
sine qua non
to our decision and in any event, is a matter which we must
consider under Rule 14, M.R.App.Civ.P.
To be short about it, we agree with the District Court,
which pointed out that the Ninth Circuit case of Tri-Tron
Intern. v. Velto (9th Cir. 1975), 525 F.2d 432, upheld the
decision of the Montana Federal ~istrictCourt recognizing
as a compensable tort the deprivation of a trade secret
through a breach of faith. Also, the Montana Rules of Civil
Procedure recognize trade secrets as protectable. Rule 26,
(C)(7), M.R.C~V.P. The District Court concluded:
"To insist in the face of all this that Montana,
or any other state, should eschew recognition
of a trade secret as property would be to insist
on a legal fabrication unsullied by reality."
District Court Opinion and Order, dated October
2, 1980.
It is obvious to us that a trade secret which is used
in one's business, and which gives one an opportunity to
obtain an advantage over competitors who do not know or use
it, is private property which could be rendered valueless or
of less value to its owner if disclosure of the information
to the public and to one's competitors were compelled.
Surely, if an individual owned a trade secret and sought
protection against compelled disclosure, we would hold such
private property protectable under the exception in 1972 Mont.
Const., Art. 11, § 9, ("cases in which the demand of individual
privacy clearly.exceeds the merits of public disclosure"),
to the extent necessary under the circumstances. Whether a
corporate owner of a trade secret is entitled to the same
exception we will discuss below.
COMPELLED DISCLOSURE AND DUE PROCESS
It is conceded that there is constitutional and statutory
authority for compelled disclosure of trade secret information
to the PSC and the Consumer Counsel. Indeed, Mountain Bell
offers to disclose such information to those agencies,
subject to the issuance of a protective order.
The Consumer Counsel is a constitutional agency having
the duty of representing consumer interests in hearings
before the PSC. 1372 Mont. Const., Art. XIII, § 2.
By statute, the Consumer Counsel has all the investigatory
powers necessary to perform its duties and it may examine
under oath in any PSC proceedings any employee of a regulated
company and the business and corporate records of such a
company in accordance with the law and in the exercise of
its duties. Section 69-2-203, MCA. Since it is conceded by
Mountain Bell that its application before the PSC for increased
revenues is based in part upon its trade secret process, it
is obvious that the Consumer Counsel, in the exercise of its
duties, has a full statutory right to the disclosure by
Mountain Bell of its trade secret information.
The PSC is vested with "full power of supervision,
regulation, and control of . . . public utilities." Section
69-3-102, MCA. It has authority to inquire into the manage-
ment of the business of all public utilities, keeping itself
informed as to the method in which the same is conducted.
It has the right to obtain from any public utility all
necessary information to enable the PSC to perform its
duties. Section 69-3-106, MCA. The PSC has jurisdiction to
set rates to be charged by public utilities for their regulated
services. Sections 69-3-301 and 69-3-302, MCA.
The compelled disclosure, therefore, of a trade secret
owned by a public utility, where such information is necessary
to the proper exercise of the duties of the PSC or the
Consumer Counsel is not a "taking" or a deprivation under
either the state or federal due process clauses. U.S. Const.,
Amend. V; 1372 Mont. Const., Art. 11, S 17. (See, Great
Northern Utilities Co. v. Public Service Comrn'n. (1930), 88
Mont. 180, 293 P. 294, for a discussion of the constitutionality
of the power of the PSC to regulate utility rates.)
The constitutional rub lies, as Mountain Bell contends,
in the compelled disclosure of the information to all of the
public--including Mountain Bell's nonregulated competitors--
beyond the state agencies. The District Court and the PSC
concluded that such compelled disclosure was required under
the right to know and right to inspect constitutional and
statutory provisions of Montana.
As we have noted, section 69-3-105, MCA,provides that
records of every nature in the possession of the PSC are
open to the public at reasonable times, except for a minor
provision that the PSC might withhold the information for
not more than 90 days. Section 2-6-102, MCA, gives every
citizen a right to inspect and get copies of any public
writings. The term "public writings" would include all
documents filed with the PSC. Section 2-6-101(2), MCA.
Most importantly, the District Court and the PSC applied the
1972 Mont. Const., Art. 11, 5 9--the constitutional "right
to know" provision--so as to compel disclosure to any citizen
of all information in regulatory proceedings.
This is a classic case for the application of the
"means end test" wherein the power of the state to interpose
its authority on behalf of the public is balanced against
the constitutional requirement of due process in the protection,
in this case, of private property. Lawton v Steele (1894),
.
152 U.S. 133, 14 S.Ct. 499, 38 L.Ed. 385. Courts are not
required to follow one extreme or the other of colliding
constitutional rights; judicial protection of the confidentiality
of the trade secret information is proper where both the
needs of the public and the protection of private property
can equally be served. -
See, F.C.C. v. Schreiber (1965), 381
U.S. 279, 85 S.Ct. 1459, 14 L.Ed.2d 383. We find it possible
to protect fully the ownership of the trade secret information
and at the same time, supply fully the need of the state
agencies for the information required in the exercise of
their duties. We find that an order can be fashioned in
such manner that the state public agencies can perform their
duties with the fullest available information and at the
same time disclose to the public all information required to
enable citizens to determine the propriety of governmental
actions affecting them. As the court stated in Pennzoil Co.
v. Federal Power Commission (5th Cir. 1976), 534 F.2d 627:
"Implicit in Schreiber is the proposition
that the balancinq of the public and private
interests might compel secrecy, 381 u,S. at
296, 85 S.Ct. 1459. Therefore, in reviewing
this case we must likewise determine whether
the Commission abused its discretion in
balancing the public and private interests."
534 F.2d at 631.
Here, neither the District Court nor the PSC balanced
the competing public and private interests presented in this
case. Rather, they determined that if the data was necessary
for the determination by the PSC, that fact alone made it
necessary to disclose all of the information to all of the
parties, including persons not necessarily interested in the
ratemaking process. Such a construction may lead in this
-
case to the destruction of a property right based on material-
- rather than on a consideration of whether full public
ity
disclosure is based upon a reasonable and rational means to
achieve the purpose inherent in the right to know provision.
Moore v. City of East Cleveland, Ohio (1977), 431 U.S. 494,
97 S.Ct. 1932, 52 L.Ed.2d 531; Nectow v. City of aambridge
(1928), 277 U.S. 183, 48 S.Ct. 417, 72 L.Ed. 842; Tyson &
Bro.--Unitied Theatre Ticket Offices v. Baton (1927), 273 U.S.
418, 47 S.Ct. 426, 71 L.Ed. 718; Norfolk & W. Ry. Co. v. Public
Service Commission (1924), 265 U.S. 70, 44 S.Ct. 439, 68 L.Ed.
904; Jay Burns Baking Co. v. Bryan (1924), 264 U.S. 504, 44
S.Ct. 412, 68 L.Ed. 813; Adams v. Tanner (1917), 244 U.S. 590,
We have therefore issued a directive for a protective
order in this case. In it is the result of the balancing
process that we have described above. The order gives the
PSC full access to all information needed by it in its
regulatory duties with the right in the commission to preserve
that information in its offices. Likewise, we have provided
that the Consumer Counsel may receive such information and
preserve the same in its office. We have made the same
information available to any party, corporate or private,
participating in the rate hearings before the PSC, subject
to provisions which protect the confidentiality of the trade
secret information. We are confident that such provisions
provide consumers with adequate knowledge to participate
fully in the commission's proceedings while at the same time
protecting the interests of the utility. See Pennzoil
Co.,
- 534 F.2d at 632.
DUE PROCESS-FOURTEENTH AMENDMENT-EOUAL PROTECTION
The PSC held in its order denying a protective order on
April 30, 1979 (and upheld its ruling on a motion for recon-
sideration) that "Mountain States Telephone and Telegraph
Company is not to be considered an individual under Article
11, Section 9, of the Montana Constitution."
The commission ruling took Mountain Bell out of the
exception, contained in Mont. Const., Art. 11, 5 9, which
states that the "right to know" does not apply "in cases in
which the demand of individual privacy clearly exceeds the
merits of public disclosure."
The District Court, sitting in review of the PSC order
declined to follow the PSC's rationale as to whether Mountain
Bell was entitled to the benefit of the exception. Instead
the District Court determined that the PSC would have applied
the "right to know" provision even-handedly, both to individuals
and to corporations, and that therefore, the PSC would not
have made any distinction between individuals and corporations
as classes. The District Court concluded therefore that no
equal protection question was presented to it by the ruling.
The District Court appears to base its denial of a
protective order upon the premise that it is constitutionally
permissible for the state in the exercise of a lawful govern-
mental function, to regulate utility rates, and for its
citizens to know how the state regulates such rates by full
access to the information before the regulators.
We incline to agree with the District Court that the
PSC would probably have applied equally the "right to know"
constitutional provision and required disclosure whether it
had before it an individual or a corporation. Nevertheless,
we put this possible corporate classification to rest, as an
unequal application of the right to know provision, by
stating that the demands of individual privacy of a corporation
as well as of a person might clearly exceed the merits of
public disclosure, and thus come within the exception of the
right to know provision.
We are reinforced in this conclusion by Mont. Const.,
Art. 11, 5 10, which states: "The right of individual
privacy is essential to the well-being of a free society and
shall not be infringed without the showing of a compelling
state interest."
Showing a compelling state interest is an equal protection
test, and it comes into play if the statute or state con-
stitution affects a fundamental right. Schilb v. Kuebel
(1971), 404 U.S. 357, 365, 92 S.Ct. 479, 484, 30 L.Ed.2d
502, 511, reh. den. 405 U.S. 948, 92 S.Ct. 930, 30 ~.Ed.2d 818.
Since we have determined that a trade secret is a
species of private property, the right to hold that property
is a fundamental right. If the PSC were to be upheld in its
ruling that the 197.2 Mont. Const., Art,. TI, S 9, covers individuals
but not corporations, it would be necessary that we find a
compelling state interest for such classification to avoid
the implications of the equal protection clause of the
Fourteenth Amendment. We find no such compelling state
interest. A corporation is a "person" within the due process
and equal protection clauses of the Fourteenth Amendment to
the U.S. Constitution. First Nat. Bank of Boston v. Bellotti
(1978), 435 U.S. 765, 780, 98 S.Ct.1407, 1418, 55 L.Ed.2d 707, 720,
reh. den. 438 U.S. 907, 98 S.Ct. 3126, 57 L.Ed.2d 1150.
Even, however, if we were to agree with the District
Court that no pernicious classification by the PSC is involved
in this case because of its even-handed application of the
right to know provision, we cannot escape the implications
of the Fourteenth Amendment under our finding that a due
process violation occurred in the refusal of the protective
order. The Fourteenth Amendment does far more than extend
equal protection in the application of state law. It also
provides that no state "shall . . . dgprive any person of
life, liberty, or property, without due process of law.. . ."
Our state constitution also guarantees due process, 1972
Mont. Const., Art. 11, 5 17, and equal protection of the
laws, Mont. Const., Art. 11, 5 4. The application by the
PSC of Montana's right to know provision in this instance
created a conflict of that provision with the due process
and equal protection clauses of the state constitution.
It is not difficult to resolve the conflict if we keep
in mind the federal constitutional provisions. The due
process clauses of the Fifth and Fourteenth Amendments of
the U.S. Constitution also conflict with Montana's right to
know provision as applied here by the PSC. It is appropriate
that state rules respecting due process principles be in
harmony with federal rules on the same subject, in the same
area. Matter of M.D.Y.R. (1978), 177 Mont. 521, 532, 582
P.2d 758, 765. By holding that the due process clause of
the Fourteenth Amendment and the due process clause of the
Fifth Amendment require us to provide protection to Mountain
Bell for its trade secrets to the extent not necessary for
regulation, we confirm the police power of the state to
regulate utilities, we resolve the seeming internal conflict
in our state constitution created by the PSC in the application
of the right to know provision, and we pay due accord to the
due process requirements of the U.S. Constitution.
INFORMATIONAL RIGHTS OF THE PSC AND THE CONSUMER COUNSEL
It should be noted that in our protective order, we
have placed no fetters upon the rights of the PSC and the
Consumer Counsel to obtain from Mountain Bell all information,
including trade secret data, upon which its application for
increased revenues is based. The police power of this state
in the regulation of public utilities is sufficient basis to
justify the unhampered rights of these state agencies to
receive such information. We have confirmed the rights of
these agencies to hold the information in their office
files. Any party to the ratemaking process shall have access
to the trade secret information to be used by their expert
witnesses in the ratemaking determination. Further dissemination
of the information we leave to the discretion of the PSC, to
be released, or not released, in the exercise by the PSC of
its ratemaking functions. We have thus balanced the rights
that all citizens acquired under the right to know provision
of the state constitution with the purpose and function for
which our laws compel disclosure by utilities of trade
secrets. The right to know provision was designed to prevent
the elevation of a state czar or oligarchy; it was not
designed for, nor will we substitute, the tyranny of a
proletariat.
By our holding here we have declared that the PSC and
utilities appearing before it are not presented a Hobson's
choice. The utility can hold and enjoy its private property
to the extent not necessary to be divulged in the ratemaking
process. The Consumer Counsel, representing the consuming
public, has full access to the necessary information. Any
other citizen, under our order, may also have access to the
trade secret, provided his or her interest relates to the
ratemaking function of the PSC.
The judgment of the District Court is reversed. This
opinion shall be a declaratory judgment on the rights of the
parties. We retain jurisdiction of this proceedings as
recited in the attached order. No costs to any party.
Justice
We Concur:
/ District Judge, Sitting
For the Hon. Daniel J.
Shea
IN THE SUPREME COURT OF THE STATE OF MONTANA
No. 80-448
THE MOUNTAIN STATES TELEPHONE AND TELEGRAPH
COMPANY, a Colorado Corporation,
Plaintiff and Appellant,
MOUNTAIN STATES LEGAL FOUNDATION,
NORTHWEST MINING ASSOCIATION, MONTANA
CHAMBER OF COMMERCE,
Intervenors and Appellants,
VS.
THE DEPARTMENT OF PUBLIC SERVICE REGULATION,
et al.,
Defendants and Respondents.
O R D E R
PER CURIAM:
This is an appeal from a judgment for the defendants-
respondents entered in the First Judicial ~ i s t r i c tCourt,
Lewis and Clark County, on December 3, 1980.
Briefs have been received and oral argument by all
parties had before this Court on June 9, 1981, and the
matter thereupon taken under advisement.
The Court has concluded that plaintiff-appellants
are entitled to protective relief; however, the constitutional
issues raised in the cause are complex, require extended
discussion, and the court's opinion will not be issued for
at least thirty days.
In the interest of expediting the proceedings before
the Public Service Commission which underlie the declaratory
action in the District Court, the Court deems it appropriate
to issue this interlocutory order pending issuance of its
final opinion;
NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED:
1. The judgment entered in favor of the defendants on
December 3, 1980, in cause no. 43992 in the District Court
of the First Judicial District, in and for the County of
Lewis and Clark be and the same is hereby reversed, vacated
and set aside.
2. The said District Court is hereby required and ordered
to enter judgment in favor of the plaintiffs-appellants in
said District Court. Said judgment shall include an order
directed to the Department of Public Service Regulation, the
Public Service Commission of the State of Montana, directing
that the said Public Service Commission shall make and enter
in the underlying proceedings before it the following order:
" O R D E R
"THE COMMISSION ORDERS THAT:
"1. All documents, data, information,
studies and other matters furnished pursuant
to any interrogatories or requests for information,
subpoenas, depositions, or other modes of
discovery that are claimed to be trade secret,
privileged or confidential nature shall be
furnished pursuant to the terms of this Order,
and shall be treated by all persons accorded
access thereto pursuant to this Order as
constituting trade secret, confidential or
privileged commercial and financial information
(hereinafter referred to as 'Confidential
Information'), and shall neither be used nor
disclosed except for the purpose of this
proceeding, and solely in accordance with this
Order.
"2. All Confidential Information made available
pursuant to this Order shall be given solely
to counsel for the parties, and shall not be
used or disclosed except for purposes of this
proceeding; provided, however, that access to
any specific Confidential Information may be
authorized by said counsel, solely for the
purpose of this proceeding, to those persons
indicated by the parties as being their
experts in this matter. Any such expert may
not be an officer, director or employee (except
legal counsel) of the parties, or an officer,
director, employee or stockholder or member of
an association or corporation of which any party
is a member, subsidiary or affiliate. Any member
of the Public Service Commission, and any member
of its staff, the Consumer Counsel, and any member of
his staff may have access to any Confidential
Information made available pursuant to this
Order.
"3. Prior to giving access to Confidential
Information as contemplated in paragraph 2
above to any expert, counsel for the party seeking
review of the Confidential Information shall deliver
a copy of this Order to such person, a i prior
rd
to disclosure such person shall agree in writing
to comply with and be bound by this Order; and
said counsel shall, at the time of the review
of such information and data, or as soon there-
after as practicable, deliver to counsel for
the party furnishing said information and data
a copy of such written agreement (which shall
show signatory's full name, permanent address,
and employer) .
"4. Where feasible, Confidential Information
will be marked as such and delivered to counsel.
In the alternative, the Confidential Information
may be made available for inspection and be
reviewed by counsel and experts as defined in
paragraph 2 herein in a place and a time mutually
agreed on by the parties, or as directed by
the Public Service Commission.
"5. In the event that the parties hereto are
unable to agree that certain documents, data,
information, studies or other matters constitute
trade secret, confidential or privileged commercial
and financial information, the party objecting
to the trade secret claim shall forthwith submit
the said matters to the Commission for its review
pursuant to this Order. When the Commission rules
on the question of whether any documents, data,
information, studies or other matters submitted to
them for review and determination are Confidential
Information, the Commission will enter an order
resolving the issue.
"6. All counsel for the Commission, the staff of the
Commission and the staff of the Consumer Counsel and
his attorneys shall be bound by the terms of this
Order.
"7. Those parts of any writing, depositions reduced
to writing, written examination, interrogatories
and answers thereto, or other written references
to Confidential Information in the course of
discovery, if filed with the Commission, will be
sealed by the Commission, segregated in the files
of the Commission, and withheld from inspection by
any person not bound by the terms of this Order,
unless such Confidential Information is released
from the restrictions of this Order either through
agreement of the parties or, after notice to the
parties and hearing, pursuant to the Order of the
Commission and/or final order of a Court having
jurisdiction.
"All written Confidential Information coming
into the possession of the Consumer Counsel
under this order may be retained by him in his
office files, but shall be withheld from inspection
by others, except for his staff and his counsel,
unless released by the Public Service commission
and/or a final order of a court under this paragraph
7, and subject always to the terms of paragraph
8 of this Order.
"8. All persons who may be entitled to receive, or
who are afforded access to any Confidential
Information by reason of this Order shall neither
use nor disclose the confidential Information for
purposes of business or competition, or any other
purpose other than the purposes of preparation
for and conduct of this proceeding, and then
solely as contemplated herein, and shall take
reasonable precautions to keep the confidential
Information secure and in accordance with the
purposes and intent of this Order.
"9. The parties hereto affected by the terms
of this Protective Order further retain the
right to question, challenge, and object to the
admissibility of any and all data, information,
studies and other matters furnished under the
terms of this Protective Order in response to
interrogatories, requests for information or
cross-examination on the grounds of relevancy
or materiality.
"10. This Order shall in no way constitute
any waiver of the rights of any party herein
to contest any assertion or finding of trade
secret, confidentiality or privilege, and to
appeal any such determination of the Commission
or such assertion by a party.
"11. Upon completion of this proceeding, including
any administrative or judicial review thereof,
all Confidential Information, whether the
original or any duplication or copy thereof,
furnished under the terms of this Protective
Order, and finally determined to be confidential
or trade secret, shall be returned to the party
furnishing such Confidential Information upon
request. Confidential Information made part of
the record in this proceeding shall remain in
the possession of the Commission, and may remain
in the possession of the Consumer Counsel as above
provided in paragraph 7.
"12. The provisions of this Order are specifically
intended to apply to data or information supplied by
or from any party to this proceeding, and any non-
party that supplies documents pursuant to process
issued by this Commission.
"13. This Order shall be effective forthwith."
3. If any provision of the foregoing order required to
be entered by the Public Service Commission shall impede or
make impossible the performance of the lawful duties of the
Public Service Commission, or the Montana Consumer Counsel
in a manner not heretofore argued in this cause, such parties
are hereby granted express permission to file directly in
this Court such motions as may be appropriate to amend or
vacate the offending provisions of said order, and this
Court retains jurisdiction of the cause for that purpose.
4. This Court further retains jurisdiction of the
cause for the purpose of issuing an opinion herein and for
such further and other relief or judgment as may be appropriate
in the premises.
-
DATED this &day of July, 1981.
C,hief Justice-
,
/' /
District Judge, Sitting for
Mr. Justice Daniel J. Shea