WENTWORTH, J.
This matter comes before the Court on Orbitz, LLC's request to have certain documents
Orbitz, a Delaware corporation with its principal place of business in Chicago, Illinois, is an online travel company. Through its website, www.orbitz.com, Orbitz "provides travel related services enabling [its customers] to search for and make reservations for a broad array of travel products, including airline tickets, lodging, rental cars, cruises and vacation packages[.]" (Jt. Stip. Facts, Aug. 28, 2013 ("Jt. Stip."), ¶ 1.) Between January 1, 2004 and December 31, 2006, Orbitz's customers booked hotel rooms in Indiana through Orbitz's website ("bookings at issue").
In 2007, the Indiana Department of State Revenue completed an audit of Orbitz. As a result of the audit, the Department determined that Orbitz had been deficient in remitting Indiana's gross retail (sales) and county innkeeper taxes on the bookings at issue.
On June 19, 2008, Orbitz protested the proposed assessments. After holding an administrative hearing, the Department, in two Letters of Findings dated November 24, 2008, denied Orbitz's protest. Orbitz initiated this original tax appeal on March 3, 2009.
On August 2, 2013, Orbitz filed a motion for summary judgment and designated evidence in support thereof. That same day, Orbitz also sought an order from the Court prohibiting public access to information in the Court's Record ("Request"). In the Request, Orbitz explained that its designated evidence included copies of contracts it had with three Indiana hotels. (See Pet'r V. Req. Order Prohibiting Pub. Access Info. Ct. R., Aug. 2, 2013 ("Pet'r Req."), ¶ 4 (referring to Pet'r Des'g Evid. Supp. Mot. Summ. J., Ex. 10, Attachs. D-F, Aug. 2, 2013).) See also supra, note 1. Asserting that these contracts were "proprietary, competitively sensitive, and contain [Orbitz] trade secrets and financial information," Orbitz's Request asked the Court
(Pet'r Req., ¶¶ 5, 8.)
The Court conducted a hearing on Orbitz's Request on September 17, 2013. During the hearing, the public was given the opportunity to comment on whether the contracts should be shielded from public access. Additional facts will be supplied when necessary.
The general rule in Indiana is that information submitted to state governmental entities, including the courts, is accessible by the public. Travelers Cas. & Sur. Co. v. U.S. Filter Corp., 895 N.E.2d 114, 115 (Ind.2008). To promote such accessibility, the Indiana General Assembly has enacted the Access to Public Records Act (APRA), Indiana Code § 5-14-3-1 et seq., which guarantees that "all persons are entitled to full and complete information regarding the affairs of [their] government." IND.CODE § 5-14-3-1 (2013). Likewise, the Indiana Supreme Court has adopted Indiana Administrative Rule 9 to secure the public's access to court records.
Nonetheless, there are "`public policy interests that are not always fully compatible with unrestricted access.'" Travelers, 895 N.E.2d at 115. Indeed, "unrestricted access to certain information ... could result in an unwarranted invasion of personal privacy or unduly increase the risk of injury to individuals and businesses." Admin. R. 9(A) (Commentary). Accordingly, both APRA and Administrative Rule 9 set forth certain exceptions to the general rule of public access, trade secrets being one of them. See IND.CODE § 5-14-3-4(a)(4) (2013 (version c, eff. 7-1-2013)); Admin. R. 9(G)(1)(b); Bobrow v. Bobrow, 810 N.E.2d 726, 732-33 (Ind.Ct.App.2004) (explaining that such exceptions are mandatory).
A trade secret is
IND.CODE § 24-2-3-2 (2013). See also IND. CODE § 5-14-3-2(q) (2013) (stating that for purposes of APRA, the term "`[t]rade secret' has the meaning set forth in IC 24-2-3-2"); Admin. R. 9(A)(1) (explaining that unless otherwise provided, access to court records under Administrative Rule 9 is governed by the provisions of APRA). Based on this statutory definition, Indiana courts have long held that a trade secret has four general characteristics: 1) it is information; 2) that derives independent economic value; 3) that is not generally known, or readily ascertainable by proper means by others who can obtain economic value from its disclosure or use; and 4) that is the subject of efforts, reasonable
There are certain procedures a court must follow before granting a request to shield information from public access under either Indiana Code § 5-14-3-5.5 or Administrative Rule 9. Most notable among these are the court's duty 1) to conduct a public hearing on the request and 2) to subsequently issue an order that specifically outlines why the need for privacy outweighs the strong public policy that would otherwise allow access to such records.
First, the contracts at issue contain, and therefore are, "information." As previously explained, the contracts specifically detail what Orbitz has negotiated with the hotels regarding room rates (i.e., the net rates). See supra, note 1.
Second, Orbitz derives independent economic value from this pricing information. Indeed, given the highly competitive nature of the online travel industry, if Orbitz's competitors had access to that pricing information, they could possibly gain a competitive advantage by negotiating better rates with hotels.
Third, the pricing information contained in the contracts is not readily ascertainable through proper means by others who can obtain economic value from the information's disclosure or use.
Finally, Orbitz has taken reasonable efforts to maintain the secrecy of the information contained within the contracts. Each contract contains its own confidentiality clause that precludes the hotels from disclosing to any third party any information relating to the contracts as well as any information provided by one party to the other in performing the contract. (See Pet'r Des'g Evid. Supp. Mot. Summ. J., Ex. 10, Attachs. D-F, Aug. 2, 2013.)
Because the Court has determined that Orbitz's contracts have the four characteristics of trade secrets, they fall within the mandatory exceptions to the general rule of public access set forth in APRA and Administrative Rule 9. Accordingly, the Court need not determine whether Orbitz's need for privacy outweighs the policy of providing public access.
Competition is the bedrock of our country's economic system. See WEBSTER'S THIRD NEW INT'L DICTIONARY 332 (2002 ed.) (defining capitalism). The protection afforded to trade secrets under APRA and Administrative Rule 9 helps to foster a healthy, competitive marketplace. See Bridgestone Americas Holding, Inc. v. Mayberry, 878 N.E.2d 189, 192 (Ind.2007) (stating that "[u]nlike other assets, the value of a trade secret hinges on its secrecy. As more people or organizations learn
SO ORDERED.
After the customer has occupied the room, Orbitz forwards to the hotel the portion of the payment it collected from the customer that constitutes the room's net rate and tax recovery charge. (Jt. Stip., ¶¶ 53, 56, 58, 62-63.) The hotel is then responsible for remitting to the taxing authorities the appropriate state and local taxes due on the room's rental. (Jt. Stip., ¶ 64.) Here, as a result of its audit, the Department determined that taxes should have been calculated and remitted based on the total amount Orbitz's customers paid for the hotel rooms, not merely on the rooms' net rates.
IND.CODE § 5-14-3-5.5(d) (2013). Administrative Rule 9 requires that a court's order prohibiting public access to information in its records must find that at least one of the following factors has been met:
See Admin. R. 9(H)(1)-(3).
While it may be true that the online travel industry uses the same business model in negotiating contracts with hotels, Orbitz points out that the business model "says nothing about ... how the pricing for Expedia differs from the pricing [for] Orbitz or Priceline" under that business model. (Hr'g Tr. at 37-39.) Those pricing differences, no matter how minute, may be the difference between players in a highly competitive industry. Furthermore, the contracts do not reveal how much tax, if any, Orbitz might owe.