Trade Secrets and Confidential Business Information

1. Trade Secrets and Confidential Business Information Marcellus Shale Safe Drilling Commission Advisory Commission February 10, 2014 Presented by Stephanie Cobb Williams and Brigid Kenney

2. Disclaimer • This presentation • Is for informational purposes only and not for the purpose of providing legal advice • Does not cover the topic comprehensively • Is not a complete description of the laws and regulations covered • The information provided and statements made do not reflect the opinions or positions of the State or any agency or employee of the State, or of the Attorney General.

3. Information Can Be Commercially Valuable • The identity of a chemical or the composition of a mixture • Drilling additives • Hydraulic fracturing additives • Geological or geophysical data • Seismic test results • Geological logs

4. Others May Want the Information • The government and citizens have an interest in knowing what chemicals are proposed for use • Persons who are exposed to chemicals, and health professionals who treat them or study the exposures, have an interest in knowing the identity of the chemicals • Emergency responders need information • The seismic and geological information may enhance the regulator's understanding of the subsurface

5. Maryland Uniform Trade Secrets Act • "Trade secret" means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) 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    (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

6. Maryland Uniform Trade Secrets Act • Maryland law protects trade secrets and provides a civil remedy for disclosure without express or implied consent • Injunction • Compensatory Damages • Punitive Damages • Other remedies under contract law or criminal law may also apply

7. Maryland Public Information Act (PIA) • Basic policy of PIA favors disclosure, but there are mandatory and discretionary denials of disclosure • A custodian shall deny inspection of the part of a public record that contains any of the following information provided by or obtained from any person or governmental unit: • A trade secret; • Confidential commercial information; • Confidential financial information; or • Confidential geological or geophysical information.

8. Interpretation of PIA by Attorney General • Objective inquiry; mere assertion that information is protected is not sufficient • Confidential commercial information and confidential financial information must be withheld if • Customarily regarded as confidential in the business; and • Withholding the data would serve a recognized governmental or private interest sufficiently compelling to override the general policy in favor of disclosure, e.g., • Insuring the flow of information to the government • Protecting the privacy of particular individuals • Protecting the competitive position of the person submitting the data

9. Maryland Regulations on Oil & Gas Wells • Information contained in the application to conduct seismic operations and accompanying documents and required reports shall be available to the public, except for confidential geological and geophysical information protected under the Public Information Act. • Within 30 days after the drilling, stimulating, and testing of a well are completed, a completion report of the well shall be submitted to the Department. Except for confidential geological and geophysical information protected under the Public Information Act, information contained in the completion report and accompanying documents shall be available to the public.

10. Federal Laws • OSHA Worker Right to Know • Emergency Planning and Community Right to Know Act (EPCRA), • Sections 301-303 • Section 304 • Sections 311 and 312 • Section 313 • Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund) • Section 103 release reporting

11. Applicability and Limitations Differ • Which industries are covered • Which chemicals are covered • The information that must be provided • To whom the information must be provided • Small spills may not have to be reported • Facilities that have amounts of chemicals below threshold planning quantities may not be covered • Most have some form of trade secret protection

12. OSHA Hazard Communication Standard • Chemical manufacturers, distributors, or importers must provide a Safety Data Sheet for each hazardous chemical to downstream users to communicate information on these hazards • Chemical includes an element, a chemical compound, or a mixture • A chemical is hazardous if it presents a physical or health hazard • Certain categories are excluded (drugs, consumer products, food or alcoholic beverages, etc.) • Certain chemicals are specifically designated as hazardous

13. EPCRA Sections 301 - 303 • Local governments are required to prepare chemical emergency response plans and review plans at least annually • State governments are required to oversee and coordinate local planning efforts • Facilities that maintain Extremely Hazardous Substances (EHS) on-site in quantities greater than threshold planning quantities (TPQ) must cooperate in emergency plan preparation • EHSs are chemicals that could cause serious irreversible health effects from accidental releases • A list of EHSs and TPQs can be found in 40 CFR Part 355, Appendices A and B

14. EPCRA Section 304 • Facilities must immediately report accidental releases of EHS chemicals and CERCLA “hazardous substances” in quantities greater than the corresponding Reportable Quantities (RQs) to state and local officials • CERCLA “hazardous substances” include substances designated by other statutes; EPA can designate additional substances. • No claim of trade secret is allowed • Information about accidental chemical releases must be available to the public

15. EPCRA Sections 311 and 312 • For any hazardous chemical used or stored in the workplace, facilities must maintain a material safety data sheet (MSDS). • MSDSs, or a list of chemicals, must be submitted to their State Emergency Response Commission (SERC), Local Emergency Planning Committee (LEPC) and local fire department. • Facilities must also report an annual inventory of these chemicals by March 1 of each year to their SERC, LEPC and local fire department. • The information must be made available to the public.

16. EPCRA Section 313 -- TRI • EPA designates toxic chemicals (more than 600 so far) that may present an unreasonable risk of injury to human health or the environment, determines thresholds for chemicals and maintains toxic release information in a database called the Toxics Release Inventory (TRI). • Facilities in certain industries that manufacture, process, or use significant amounts of toxic chemicals, must report annually on their releases of these chemicals. • Oil and Gas not among the industries covered

17. Trade Secret Protection under OSHA • The chemical manufacturer, importer or employer may withhold the specific chemical identity or the exact percentage (concentration) of the substance in a mixture from a Safety Data Sheet (SDS) if • The claim that the information withheld is a trade secret can be supported • The SDS discloses information about the properties and effects of the hazardous chemical • The SDS indicates that the specific information is being withheld as a trade secret • Disclosure must be made to health professionals, employees, and designated representatives under certain circumstances • Upon request of the Department of Labor, the trade secret must be disclosed to the Assistant Secretary, who will take steps to protect the information

18. Disclosure under OSHA (continued) • In emergency situations, • The specific chemical identity or percentage must be disclosed • To a treating physician or nurse in a medical emergency where the specific chemical identity or percentage composition is necessary for emergency or first-aid treatment • Regardless of a written statement of need and confidential agreement • A written statement of need and confidential agreement may be required as soon as circumstances permit

19. Disclosure under OSHA (continued) • In non-emergency situations, • The specific chemical identity or percentage must be disclosed • To a physician, industrial hygienist, toxicologist, epidemiologist, or occupational health nurse • Who is providing medical or other occupational health services to exposed employees or designated representatives if a written request • Identifies an occupational health need for the information • Explains why information other than the specific chemical identity or percentage is insufficient • And the recipient signs a written confidentiality agreement • If disclosure is refused, upon request, OSHA will consider the evidence supporting the denial

20. Trade Secret Protection under EPCRA • Facilities can protect the specific chemical identity as a trade secrets in reports required by EPCRA sections 303, 311, 312, and 313 but a generic class for the trade secret chemical must be provided • The specific chemical identity must be provided to EPA, but not to state or local officials • The criteria a facility must meet to claim a chemical identity as a trade secret are in 40 CFR part 350 • Assertions in support must be made with the claim • If EPA reviews the claim, the facility must present facts • Disclosure must be made to health professionals under certain circumstances

21. Disclosure under EPCRA • For specific purposes only • Diagnosis or treatment by health professionals in non-emergency situations • Preventive measures and treatment by local health professionals who are employees of the local government or under contract with the local government • Medical emergency • Except in a medical emergency, a written request, justification, and a confidentiality agreement can be required before disclosure • In a medical emergency, a written statement of need and confidentiality agreement can be requested at a later time

22. Proposal in Draft Best Practices Report • Patterned on OSHA regulations, except: • Chemical identity of trade secret chemicals must be disclosed to MDE • Claim of trade secret must be supported when the claim is made • Disclosure to health care professional can be made by MDE • Health care professional’s need for the information need not relate to occupational exposure or employees.

23. Comments Received • Make full disclosure mandatory, negating trade secret protection entirely • The burden should be on the claimant to prove the claim of trade secrecy. • There should be an administrative mechanism for citizens to challenge the validity of the claim • Confidentiality agreements should be illegal