ILLINOIS POLLUTION CONTROL BOARD
July 30, 1992
IN THE MATTER OF:.
)
)
TRADE SECRET
CLAIM
BY,
)
PCB 92-110
THE GRIGOLEIT COMPANY, an
)
(Trade Secret)
Illinois Corporation,
)
(also see PCB 90—135)
OPINION AND ORDER OF THE BOARD (by J. Anderson):
On July 20, 1992, The Grigoleit Company (Grigoleit) filed
before the Board a trade secret Statement of Justification
(Statement). The Statement was filed in response to the Board
Order of June 4, 1992, in PCB 90-135. The Board hereby
incorporates by reference the Board’s PCB 90—135 Opinion and
Order of June 4, 1992 and dismissal Order of today, July 30,
1992; also, pursuant to the June 4, 1992 dismissal Order, the
Board also directs the Clerk to physically transfer the Material
Safety Data Sheets (MSDSs), the documents being claimed as trade
secret, from the PCB 90-135 record into this record. Because of
the unusual history surrounding Grigoleit’s trade secret
documents, and because of the problems that have already arisen
over applying the trade secret regulations, the Board will
specifically repeat significant portions of those two Board
actions here to assist in clarifying the issues involved.
The Illinois Environmental Protection Agency (Agency) filed
a response on July 27, 1992 requesting that the Board deny trade
secret status to the MSDS5. The Board cannot consider the
response. Part 120 does not provide for filing of such
responses; we note the short tixneframe of 10 working days for
BoardThedecision.applicableWewillBoardretainregulationsthefilingregardingfor thetraderecord.secrets1
are
found at 35 Ill. Adm. Code 120.101 through 120.401. The time
limit for the Board’s determination is found at 35 Ill. Adm. Code
120.225, which states:
The agency shall determine whether the article
represents a trade secret within 10 working days from
the date of receipt of a complete statement of
justification as prescribed in Section 120.202 (whether
such justification is submitted as a result of a
We note that today Grigoleit filed a motion to strike the
Agency’s response after the Board meeting but before this Opinion
and Order was formalized for the Clerk’s signature. In that the
Board will not consider the Agency’s response, Grigoleit’s filing
is moot. We will retain the filing for the record.
0135-0191
2
request by the agency, a request by the public, or on
the owner’s initiative.) This time peeriod may be
extended for a second period of 10 working days, if
within the first 10 day period, the agency demonstrates
that the extension is necessary to make determination
pursuant to Section 120.230 and notifies the owner and
requester of the extension.
The Board’s determination today is within the ten working
days timeframe of Grigoleit’s July 20, 1992 filing.
BACKGROUND
The MSDSs which comprise Grigoleit’s trade secret claim were
a part of various documents that had been seized on January 26,
1990 from the premises of Grigoleit’s Decatur plant by the Agency
under an administrative search warrant. On that same day,
Grigoleit’s president hand-delivered to Agency personnel at the
Decatur plant site his personally signed trade secret claim
letter and initial statement of justification, dated January 25,
1990. Throughout the subsequent series of events, this letter
remained the sole claim letter provided by Grigoleit.
The Agency denied Grigoleit’s trade secret claim, and on
July 23, 1990, Grigoleit appealed to the Board. In response to a
Board order, Grigoleit clarified the scope of its claim as
encompassing only the some-200 MSDS5 submitted by the Agency,
filed and properly marked NSDSs in conformance with the Board’s
trade secret regulations.
In its June 4, 1992 Opinion and Order, the Board ruled that
the Agency failed to make a timely trade secret determination.
The Board also found that the Agency’s default did not cause the
MSDS5 to be accorded trade secret protection by operation of law.
The Board declined to make any further decision on Grigoleit’s
claim, concluding that “this record cannot be used as a basis for
determining whether Grigoleit justified trade secret status” for
the MSDS5 (Board Op. p. 13; also see p. 11, 12 re: post-hearing
briefs.) Instead, the Board concluded that the best remedy was
to afford Grigoleit the opportunity to initiate a new claim
directly before the Board, in that trade secret matters may be
initiated before the Board as~wel1as .the Agency (and the
Department of Energy and Natural Resources). (Board Op. pp.
13
,
14.)
The June 4, 1992 Order stated:
1. Because no timely determination by the Agency was made in
this matter:
2. The Material Safety Data Sheets (MSDS5) shall continue to
remain confidential. If, however, within 45 days, Grigoleit
0135-0192
3
fails to take action pursuant to paragraph 3, the documents
will be subject by Board Order to placement in the public
domain and this case will be dismissed.
3. If, within 45 days of the date of this order Grigoleit,
pursuant to Section 120.201 of the Act, and with particular
reference to Section 120.201(a) (3), either submits a
Statement of Justification for the claim or, alternatively,
a claim with a limited waiver, this case will be dismissed
and the matter will be dealt with as a new case in a newly
docketed proceeding before the Board. However, Grigoleit
need not resubmit the documents which are in the Board’s
possession which the Board has previously found are properly
marked.
4. The Board will retain jurisdiction in this matter.
(Emphasis added)
As earlier noted, the Board is today dismissing PCB 90—135
in accordance with paragraph #3 of the above order, and
proceeding with Grigoleit’s new filing under the instant Docket
PCB 90—135.
DISCUSSION
In this instant case, Grigoleit’s sole filing consists of
its 1 and 1/2 page July 20, 1992 Statement of Justification,
without attachments or incorporations; as noted in the June 4,
1992 Order, Grigoleit was not required to refile the MSDS5, filed
as Joint Exhibit #2 in PCB 90-135. The MSDS5 are now part, of the
record in this case (See p. 1 of this Opinion). Grigoleit’s
support of its claim was brief. Grigoleit states in essence that
it believes it “has previously submitted sufficient Statements
(sic) of Justification
..“
and:
“...
wishes to stand on the document previously
submitted to the Illinois Environmental Protection
Agency as and for its Statement of Justification, i.
e., the letter/memorandum directed to the Illinois
Environmental Protection Agency dated January 25,
1990”. (Statement, p. 1, 2; July 20, 1992.)
Grigoleit did not incorporate or attach any of the prior
record, including the January 25, 1992 “letter/memorandum” (id.)
•to which the Statement refers, or even identify the letter by
Exhibit number or other means. We assume that Grigoleit is
referring to the letter which is identified in, the Board’s PCB
90-137 Opinion, p. 5. The Opinion notes that the letter, which
was hand-signed and hand-delivered, cites 7 and 7.1 of the
Environmental Protection Act (Act), claims the documents as trade
secrets, and states that the letter constitutes Grigoleit’s
initial statement of justification. The PCB 90—135 Opinion then
0135-0193
4
quotes the following paragraph of Grigoleit’s January 25, 1992
letters:
1. The Company does not disclose information to any
persons outside the Company and provides only limited
access to certain management employees concerning its
products, processes, equipment, materials, components,
etc., on a “need to know” basis only. The Grigoleit
Company further certifies that it has no knowledge that
any such records have ever been published, disseminated
or otherwise become a matter of general public
knowledge. The above articles represent a combination
of years of experience, practical application,
innovation and in—house technology which have been
applied in such a manner as to make the Company’s
production processes unique and have enabled the
Company to maintain a competitive edge and provide the
highest quality product.
The procedures applicable to Grigoleit’s claim are found in
35 Ill. Adm. Code Subpart B, and specifically in Sections 120.201
and 120.202, which state:
Section 120.201
Claim That Article Represents A Trade
Secret
a) An agency shall consider any article submitted to or
otherwise obtained by the agency as claimed to present a
trade secret and shall protect such article from disclosure
pursuant to Subpart C of this Part,
‘
only if the agency is
provided with the following:
1) A claim letter which clearly states that the article is
claimed to represent a trade secret, as defined in
these rules and the Act, and names and briefly
describes the article; and
2) A copy of the article marked as provided in Section
120.305; and
3) Either a Statement of Justification for the claim
meeting the requirements of Section 120.202 or a
limited waiver of the statutory deadlines for any
agency decision as proived in Section 120.203.
b) The owner of an article in the possession of the agency may
Olaim that the article represents a trade secret by
providing the agency with the information listed in
subsection (a) at any time.
O135-O19~
5
Section 120.202
Contents of Statements of ~ustification
A statement of justification shall contain the following:
a) A detailed description of the procedures used by the owner
to safeguard the article from becoming available to persons
other than those selected by the owner to have access
thereto for.limited purposes; and
b) A detailed statement identifying the persons or class of
persons to whom the article has been disclosed; and
C)
A certificaion that the owner has no knowledge that the
article has ever been published, disseminated or otherwise
become a matter of general public knowledge; and
d) A detailed discussion of why the owner believes the article
to be of competitive value; and
e) Any other pertinent information which will support the
claim.
Next, 35 Ill. Adm. Code 120.230 articulates the standards
for the Board’s trade secret determination, as follows:
Section 120.230
Standards For Agency Determination
a) An article shall be determined to represent a trade secret
if and only if:
1) The owner has substantially complied with the
procedures for making a claim and justification as
prescribed by this Part; and
2) The statement of justification demonstrates that:
A) The article has not been published, disseminated
or otherwise become a matter of general public
knowledge; and
B) The article has competitive value.
b) There shall be a rebuttable presumption that an article has
not been published, disseminated or otherwise become a
matter of general public knowledge, if:
1) The owner has taken reasonable measures to prevent the
article from becoinming available to persons other than
those selected by the owner to have access thereto for
limited purposes; and
0135-0195
6
2) The statement of justification contains a certification
that the owner has no knowledge that the article has
ever been published, disseminated, or otherwise become
a matter of general public knowledge.
c) The agency may determine that any page, part or portion of
the articirepresents a trade secret which meets the
requirements of subsection (b).
BOARD DETERMINATION
In summary, the Board finds that Grigoleit has failed to
justify its trade secret claims. The Board has made every effort
to fairly respond to the procedural breakdown before the Agency
that left many unanswered questions, particularly those
concerning whether circumstances might have frustrated
Grigoleit’s earlier efforts to make a proper trade secret claim.
We remind Grigoleit that it had earlier never even speOifically
identified or properly marked what it was claiming as trade
secrets until the case was before the Board on appeal. This
omission was corrected only in response to a post—hearing Board
‘Order. Also, even if the January 25, 1990 letter had contained a
certification by the owner of no knowledge that the documents
were in the public domain pursuant to Section 120.202(c) (we had
found none), it turned out that the owner was laying claim to far
more documents than the NSDSs at that time. As recounted in the
PCB 90-135 Opinion, it was only later by stipulation at hearing
that it was agreed that the remaining claim referred only to the
MSDSs. We note that the Board, in “starting over” in PCB 90-135,
took special pains in paragraph #3 of the Order to draw
Grigoleit’s attention specifically to what must be submitted and
the justifications to be made under Sections 120.201 and Sections
120.202. We further remind Grigoleit that the Board has
procedural rules in 35 Ill.Adm. Code 101 which are applicable to
all Board proceedings, and which include rules concerning
incorporations and filing of exhibits for the record. (See e.g.
Sections 101.100, 101.103 and 101.106). The Board allowed only
the MSDSs to become part of this record without refiling.
Grigoleit, not the Board or the Agency, is responsible for
complying with the regulations in justifying its claim. We note
that Section 120.201(b) allows Grigoleit at any time to cure its
filing and informational problems. Grigoleit has not done ‘so.
Even if the Board were to at this juncture “waive”
Grigoleit’s failure to place the claim letter in the record of
this proceeding, the claim letter, standing alone, provides
insufficient justification. It neither clearly states what
articles are claimed nor names nor briefly describes them; it was
not made clear until the subsequent Board hearing and following
briefs, none of which is in this record, that, while the NSDSs
individually were admittedly of public record, what,was being
claimed as confidential and of competitive value was that public
0135-0196
7
access to them collectively would reveal the chemical “formulas”
used in Grigoleit’s processes. (See Section 120.201 (a)(1), and
Sections 120.202 (d) and (e).)
Again, even assuming that the letter was in the record, the
letter at best only by a list of general assertions, not by
“detailed description”, addresses the procedures used by the
owner to safeguard the article (Section 120.202(a).) Also, ‘as
noted above, there is no formal certification, of the owner’s
assertion that ~ (not the Company as Grigoleit states) has no
knowledge that the article is in the public domain as required by
Section 120.202 (c).
The Board finds that Grigoleit, in its July 20, 1992
Statement of Justification, has not placed its January 25, 1990
claim letter into the record of this proceeding. The Board
further finds that, even if it were to take notice of the
contents of the January 25, 1990 letter, the letter would be
insufficient to support a positive determination of trade secret
status. Additionally, Grigoleit, in its Statement of
Justification, has not identified or placed in the record of this
proceeding any other portions of the record from the PCB 90-135
proceeding that might serve to clarify the deficiencies noted
above.
Section 120.240 addresses the Board’s actions following a
negative determination.
In consideration of the Section 120.230 standards for its
determination, ,and in reference to Section 120.240, the Board
determines that neither the article, nor any page, part or
portion thereof meets the standards specified in Section
120.230(a) (1) or (2). Therefore, the Board denies the claim for
trade secret protection for the article and page, part or portion
thereof. The owner has not substantially complied with the
prescribed procedures for making a claim or justification
(Section 120.230(a) (1); the Statement of Justification does not
demonstrate that the article has not been in the public domain
(Section 120.230(a) (2) (A); and the Statement of Justification
does not demonstrate that the article has competitive value
(Section 120.230(a) (2) (B).
In accordance with Section 120.240(b) (1), this opinion
constitutes the Board’s reasons for denying the claim.
ORDER
1. For the reasons stated above, the Board den’ies in its
entirety the claim for trade secret protection by The,
Grigoleit Company for the Material Safety Data Sheets
(NSDS5) seized by the Agency on,January 26, 1990.
0135-0197
8
2. The Clerk is directed to give notification to Grigoleit by
certified mail return receipt requested, in accordance with
Section 120.240. In that the NSDSs are also in the
possession of the Agency, the Clerk is also directed to send
in the same manner a copy of this opinion and order to the
Agency.
3. In accordance with 35 Ill. .P~dm. Code 120.240(c) and (d) and
until further action of the Board, the Board directs the
Clerk and. the Agency to continue to protect as confidential
the MSDSs.
4. In accordance with 35 Ill. Mm. Code 120.240(b) (3) Grigoleit
is hereby notified that the agency will cease protecting the
article, or the page, part or portion thereof, as a trade
secret unless ‘the Board is served with notice of the filing
of a petition for review within 35 days from the date of
notice to the owner.
IT IS SO ORDERED.
Section 41 of the Environmental Protection Act, Ill. Rev.
Stat. 1989, ch. 111 1/2, par. 1041, provides for appeal of final
orders of the Board within 35 days. The Rules of the Supreme
Court of Illinois establish filing requirements.
(
But see also
35 Ill. Adm. Code 101.246, Motions for Reconsideration, and
Castenada v Illinois Human Rights Commission (1989), 132 Ill.2d
304, 547 N.E.2d 437).
B. Forcade concurred.
I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control
Board, hereby certify that the above inion and order was
adopted on the J~rtZ~ day of ______________________, 1992,
byavoteof
________
~
~.
Dorothy M. 9~3A1n, Clerk
~I1linoisPo3~IutionControl Board
0135-0198