A Chicago appeals panel has affirmed a Cook County judge’s decision, allowing the city of Chicago to release subpoenaed records from a drug maker in accordance with any Freedom of Information Act requests, saying public disclosure of the material will not violate state laws protecting trade secrets.
The March 31 ruling was authored by Justice Jesse Reyes, of the Illinois First District Appellate Court, with concurrence from justices Robert Gordon and Bertina Lampkin. The decision favored City Hall over Janssen Pharmaceuticals, which is based in Raritan, N.J.
The city started investigating Janssen several years ago, purportedly to see if the drug manufacturer committed consumer fraud. The city suspected Janssen allegedly hid the addictive properties of narcotics the company was marketing to physicians and the public.
During the investigation, the city obtained 114,230 documents from Janssen through subpoena, with Janssen noting on the record the documents contained trade secrets and other confidential business information. The city agreed to notify Janssen if any party asked for the documents through the Freedom of Information Act, so Janssen could try to head off the request. The city eventually lodged a consumer fraud suit against Janssen and a number of other drug companies.
Newspaper USA Today then filed a FOIA request with the city for copies of three Janssen documents. The city told Janssen of the request and Janssen took court action to block USA Today.
Janssen argued the documents were exempt from disclosure, because the state FOIA prohibited release of trade secrets, and handing over the documents would make it more difficult in the future for public bodies to induce parties to furnish similar business documents. A "chilling effect" would set in, according to Janssen.
Cook County Judge Sanjay Taylor denied Janssen’s request and ordered the documents be released to USA Today. Janssen asked Taylor to hold off on the release, while Janssen took the matter to appellate court, but Taylor refused. Janssen went ahead with the appeal for the sake of the remaining documents, which were not tendered to USA Today, but would nevertheless be available for disclosure via any future FOIA requests.
Janssen contended on appeal the False Claims chapter of Chicago’s municipal code, which the city used in pursuing Janssen in court, should be considered “state law,” because FOIA prohibits disclosure, if such disclosure breaches state law. Specifically, Janssen pointed to the Illinois Administrative Procedure Act, as prohibiting release of trade secrets.
Janssen maintained the ordinance is an “exercise of home rule power" by the city and as a home rule unit, “Chicago has the same power as the State to legislate [FOIA] exemptions,” so the ordinance amounts to a state law.
The city responded the ordinance is not a state law and only the legislature promulgates laws, while a home rule municipality promulgates ordinances. Consequently, the ordinance does not bar disclosure, the city reasoned.
Justice Reyes agreed.
“Janssen has failed to demonstrate how we can bypass the plain and ordinary language" of the FOIA and "instead read into the statute that the legislature intended that the words ‘State law’ include an ordinance,” Reyes said.
Reyes also found Janssen's "chilling effect" argument failed, because the company did not show how disclosure would cause it "competitive harm" or "even that the remaining documents are confidential."
Janssen has been represented by the Chicago firm of Sidley Austin.