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