General Chemical Corp. v. Department of Environmental Quality Engineering

• Decision Date: 01 April 1985
• Citation: 474 N.E.2d 183,19 Mass.App.Ct. 287
• Parties: GENERAL CHEMICAL CORPORATION v. DEPARTMENT OF ENVIRONMENTAL QUALITY ENGINEERING et al. 1
• Court: Appeals Court of Massachusetts

Page 183

474 N.E.2d 183

19 Mass.App.Ct. 287

GENERAL CHEMICAL CORPORATION v. DEPARTMENT OF ENVIRONMENTAL QUALITY ENGINEERING et al.

¹

Appeals Court of Massachusetts Suffolk.

Argued May 21, 1984.

Decided Jan. 31, 1985.

Further Appellate Review Granted April 1, 1985.

Rowena H. Conkling, Boston (Joseph L. Cotter, Boston, with her), for plaintiff.

Donna E. Arzt, Asst. Atty. Gen., for defendants.

Before ARMSTRONG, KASS and WARNER, JJ.

ARMSTRONG, Justice.

General Chemical Corporation (General Chemical) appeals from a judgment in the Superior Court dismissing its complaint for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. In its complaint, General Chemical sought judicial review of a determination by the Commissioner of the Department of Environmental Quality Engineering (department) that records submitted by General Chemical to the department may be disclosed under the Massachusetts public records law, G.L. c. 66, § 10.

General Chemical is a hazardous waste facility, as defined in G.L. c. 21C, and therefore its operations are regulated by the department. The department's regulations require General Chemical to submit monthly and annual reports on its activities. In accordance with G.L. c. 21C, § 12, General Chemical requested that these reports be kept confidential and not be disclosed under the public records law. When a newspaper reporter filed a request under that law to inspect the General Chemical monthly reports, the department informed General Chemical of the request and asked that it submit written arguments in support of its position that its reports contained trade secrets and thus were entitled to confidentiality under G.L. c. 21C, § 12. General Chemical did submit such arguments, and it later met, informally, with representatives of the department to discuss the matter. The department subsequently issued an exhaustive written decision concluding that neither the monthly nor annual reports contained trade secrets and were thus subject to disclosure. General Chemical's effort to obtain judicial review of that decision met with the fate recounted above.

General Chemical bases its claim for confidentiality on G.L. c. 21C, § 12, inserted by St.1979, c. 704, § 2, which states:

"Notwithstanding the provisions of any law to the contrary, any information, record, or particular part thereof, obtained by the department pursuant to the provisions of this chapter, shall, upon request, be kept confidential and not considered to be public record when it is deemed by the commissioner that such information, record, or report relates to secret processes, methods of manufacture, or production or that such information, record, or report if made public would divulge a trade secret. This section shall not prevent disclosure of any information necessary for an enforcement action or to comply with [the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seq. (1982) ]."

General Laws c. 66, § 10(b ), provides for both administrative and judicial review when the Commissioner declines to disclose submitted reports, but it contains no corresponding provision for review of the department's determination that reports are not confidential and shall be disclosed.

General Chemical contends that review is available under G.L. c. 30A, § 14, as appearing in St.1973, c. 1114, § 3, which states that "any person ... aggrieved by a final decision of any agency in an adjudicatory proceeding ... shall be entitled to judicial review ..." The department is an "agency," as defined in G.L. c. 30A, § 1(2), and its determination that the monthly reports be disclosed is a "final decision," since no further agency review exists and disclosure follows as a matter of course under G.L. c. 66, § 10(b ). See generally Boston Edison Co. v. Brookline Realty & Inv. Corp., 10 Mass. App. 63, 65-67, 405 N.E.2d 995 (1980); Local 1111, Intl. Assn. of Firefighters, AFL-CIO v. Labor Relations Commn., 14 Mass.App. 236, 237-239, 437 N.E.2d 1079 (1982). General Chemical, as a submitter of information which has been ordered disclosed, is an "aggrieved" person. Chrysler Corp. v. Brown, 441 U.S. 281, 317-318, 99 S.Ct. 1705, 1725-1726, 60 L.Ed.2d 208 (1979). See also Dodge v. Prudential Ins. Co. of America, 343 Mass. 375, 381, 179 N.E.2d 234 (1961). The critical question, then, is whether the department's determination of nonconfidentiality was "in an adjudicatory proceeding." ²

General Laws c. 30A, § 1(1), inserted by St.1954, c. 681, § 1, defines an adjudicatory proceeding as "a proceeding before an agency in which the legal rights, duties or privileges of specifically named persons are required by constitutional right or by any provision of the General Laws to be determined after opportunity for an agency hearing." The department's decision clearly determined "the legal rights ... of [a] specifically named person[ ]," namely, General Chemical. Contrast Reid v. Acting Commr. of the Dept. of Community Affairs, 362 Mass. 136, 141-142, 284 N.E.2d 245 (1972); Borden, Inc. v. Commissioner of Pub. Health, 388 Mass. 707, 717, 448 N.E.2d 367, appeal dismissed, 464 U.S. 923, 104 S.Ct. 323, 78 L.Ed.2d 296, cert. denied, 464 U.S. 936, 104 S.Ct. 345, 78 L.Ed.2d 312 (1983). Because the General Laws do not require the department to hold a hearing with regard to its G.L. c. 21C, § 12, determination, "[t]he question thus becomes whether [General Chemical] had a property interest [in the submitted reports] which would invoke the protection of the due process clause of the Fourteenth Amendment to the United States Constitution, and of art. 10 of the Declaration of Rights of the Massachusetts Constitution" School Comm. of Hatfield v. Board of Educ., 372 Mass. 513, 514-515, 363 N.E.2d 237 (1977).

"Property interests 'are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state laws--rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.' " Haverhill Manor, Inc. v. Commissioner of Pub. Welfare, 368 Mass. 15, 23, 330 N.E.2d 180, cert. denied, 423 U.S. 929, 96 S.Ct. 277, 46 L.Ed.2d 257 (1975), quoting from Regents of State Colleges v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). Various laws of the Commonwealth protect a person's interest in trade secrets. For a summary of such statutes, see Jet Spray Cooler, Inc. v. Crampton, 377 Mass. 159, 166 n. 8, 385 N.E.2d 1349 (1979). The common law of contract and of tort also protects trade secrets. J.T. Healy & Son v. James A. Murphy & Son, Inc., 357 Mass. 728, 260 N.E.2d 723 (1970). Jet Spray Cooler, Inc. v. Crampton, 361 Mass. 835, 282 N.E.2d 921 (1972), after remand, 377 Mass. 159, 165, 385 N.E.2d 1349 (1979). Eastern Marble Products Corp. v. Roman Marble, Inc., 372 Mass. 835, 364 N.E.2d 799 (1977). The words "trade secret" are commonly thought to carry a connotation of a property interest. We may assume that the Legislature, in its regulation of hazardous waste industries, might prospectively deprive such industries of a property right in the confidentiality of certain classes of records, even though they contain matter previously regarded as trade secrets. Here, however, the Legislature has taken the contrary position by mandating, G.L. c. 21C, § 12, that the department not disclose submitted reports containing trade secrets. ³ Cf. G.L. c. 66, § 10(d ). Reading that mandate in light of the extensive statutory and common law protections accorded trade secrets, we think it is clear that firms such as General Chemical, which submit reports to the department in accordance with the department's hazardous waste regulations, have a property interest, recognized by State law, in whatever trade secrets may be contained in those monthly reports.

It follows that General Chemical was entitled under constitutional due process to "some form of hearing" prior to the Commissioner's determination under G.L. c. 21C, § 12. Regents of State Colleges v. Roth, 408 U.S. at 570-571 n. 8, 92 S.Ct. at 2705-2706 n. 8 (emphasis original). Konstanopoulos v. Whately, 384 Mass. 123, 132-133, 424 N.E.2d 210 (1981). Cf. Massachusetts Medical Serv. v. Commissioner of Ins., 344 Mass. 335, 339, 182 N.E.2d 298 (1962). Federal courts have arrived at the same conclusion with regard to disclosure of trade secrets under the Freedom of Information Act, 5 U.S.C. § 552 (1982). Chrysler Corp. v. Schlesinger, 412 F.Supp. 171, 178-179 (D.Del.1976), vacated on other grounds, 565 F.2d 1172, 1193 (3rd Cir.1977), vacated on other grounds sub. nom. Chrysler Corp. v. Brown, 441 U.S. 281, 99 S.Ct. 1705, 60 L.Ed.2d 208 (1979), on remand, 611 F.2d 439 (3rd Cir.1979). Metropolitan Life Ins. Co. v. Usery, 426 F.Supp. 150, 172 (D.D.C.1976). Westinghouse Elec. Corp. v. Brown, 443 F.Supp. 1225, 1234- 1235 (E.D.Va.1977). United Technologies Corp. v. Marshall, 464 F.Supp. 845, 855 (D.Conn.1979).

If due process requires any type of hearing, G.L. c. 30A, § 1(1), mandates that the department conduct an "adjudicatory proceeding" in accordance with G.L. c. 30A, §§ 10, 11. Milligan v. Board of Registration of Pharmacy, 348 Mass. 491, 494-495, 499-500, 204 N.E.2d 504 (1965). Commonwealth v. Gordon, 354 Mass. 722, 725, 242 N.E.2d 399 (1968). Reid v. Acting Commr. of the Dept. of Community Affairs, 362 Mass. at 144, 284 N.E.2d 245. Borden, Inc. v. Commissioner of Pub. Health, 388 Mass. at 717-720, 448 N.E.2d 367. Consequently, the nature of the proceeding before the department was adjudicatory and General Chemical is entitled to judicial review of the department's decision under G.L. c. 30A, § 14, which gives subject matter jurisdiction to the Superior Court. A complaint seeking such review, filed (as this complaint was) within the thirty-day period specified in § 14(1), states a claim upon which relief can be granted, and it was error to dismiss the complaint as against...