Lyft, Inc., v. Pennsylvania Public Utility Commission v. Kim Lyons and PG Publishing, Inc.

No. 843 C.D. 2015 and No. 974 C.D. 2015
August 31, 2016
State Court
Pennsylvania
COMMONWEALTH COURT OF PENNSYLVANIA

The Commonwealth Court of Pennsylvania has ruled against Lyft, Inc.’s (Lyft) request to designate its aggregate trip data as a trade secret. This ruling comes out of two consolidated petitions for review filed by Lyft and Kim Lyons, a reporter for PG Publishing, Inc., d/b/a The Pittsburgh Post-Gazette (collectively, PG) from two orders of the Public Utility Commission (PUC).

In 2014, Lyft briefly attained experimental authority to operate as a transportation network company (TNC) in both Allegheny County and the entire Commonwealth. Shortly thereafter, the Bureau of Investigation and Enforcement (BIE) filed a complaint against the company, which prompted PUC to terminate Lyft’s authority to operate in the area. Administrative law judges for BIE have requested data from Lyft—including the number of rides utilized in certain areas before Lyft had full authority to operate—which Lyft objects to providing on the basis that this information constitutes a trade secret.

On review, PUC initially found and then reaffirmed that the data Lyft sought to protect merely constituted aggregate data, which rarely attains trade secret status from the Commission and did not here. Additionally, PUC found that the economic harm Lyft would face as a result of releasing such information did not outweigh the public’s interest. In fact, “the number of trips during the period before Lyft received authority to operate posed a risk to public safety.”

Speaking in the case at bar, Judge Simpson of the Commonwealth Court affirmed PUC’s determination. Judge Simpson notes that PUC properly analyzed what constitutes a trade secret pursuant to its own regulation, 52 Pa. Code §5.365, (Regulation), which differs from the definition of trade secret provided in Pennsylvania’s Uniform Trade Secrets Act. The differences between the Regulation and the Act had the effect of nullifying Lyft’s arguments in reliance on any state court precedent.

Specifically, PUC’s Regulation places the burden on the moving party (Lyft) to 1) prove that disclosure will result in substantial harm and 2) that the harm outweighs public interest in a transparent hearing. In balancing these two prongs, the PUC clearly supports an analysis of these factors: (1) The extent to which the disclosure would cause unfair economic or competitive damage. (2) The extent to which the information is known by others and used in similar activities. (3) The worth or value of the information to the party and to the party’s competitors. (4) The degree of difficulty and cost of developing the information. (5) Other statutes or regulations dealing specifically with disclosure of the information.

Judge Simpson ruled that the data requested by PUC is not detailed enough to trigger economic harm to Lyft as demanded by the factors above. He also denied Lyft’s argument that its competitors could extrapolate detailed information from the aggregate data to gain a competitive market edge. The Court called this argument “speculative and vague.” Therefore, Lyft had failed to prove the first prong of PUC’s Regulation, losing its opportunity to obtain a protective order for its ride data.

Finally, the Court denied PG’s request for an Interim Emergency Order to intervene in the case in the public interest, on the basis that PG’s aims have already been achieved. Judge McCullough, concurring in the majority’s ruling that Lyft’s aggregate data is not proprietary, dissents on this issue. Judge McCullough believes PG, as a conduit of information to the public, has the right to attain party status in this case, especially since Lyft is likely to repeat its attempts to keep certain vital information private as the case moves forward.

Read the full opinion here: http://www.pacourts.us/assets/opinions/Commonwealth/out/843cd15_8-31-16....

and Public Utility Commission (PUC), PG Publishing, Inc.
Lyft, Inc.
Other state statute