Supreme Court Expands Application of Exemption for Business Data Under Freedom of Information Act

Rejecting a standard that had governed lower courts for 45 years, the U.S. Supreme Court has made it easier for federal agencies to protect companies' commercial information from public disclosure under the Freedom of Information Act (FOIA). Previously, federal agencies could withhold confidential business information under FOIA only if releasing the information would cause "substantial competitive harm." See National Parks & Conservation Assoc. v. Morton, 498 F.2d 765 (D.C. Cir. 1974). In Food Marketing Institute v. Argus Leader Media, 139 S.Ct. 2356 (2019), the Supreme Court held that no showing of "competitive harm" is required.

In Argus Leader, a FOIA request sought detailed information from the United States Department of Agriculture (USDA) regarding names, addresses, and annual redemption data of retailers participating in the food stamp program, Supplemental Nutrition Assistance Program (SNAP). The USDA provided the names and addresses of participating retailers, but declined to provide detailed redemption information. Argus Media successfully sued the USDA in federal court in South Dakota over its withholding of the data.

When the USDA declined to appeal, the Food Marketing Institute (FMI) intervened on behalf of its retail members and appealed. The 8th Circuit affirmed the lower court decision, holding that confidential information under FOIA Exemption 4, pertaining to trade secrets and privileged or confidential commercial or financial information, includes a "'competitive harm' test, under which commercial information cannot be deemed 'confidential' unless disclosure is 'likely . . . to cause substantial harm to the competitive position of the person from whom the information was obtained.'" (quoting Argus Leader Media v. United States Dept. of Agriculture, 889 F.3d 914, 915 (8th Cir. 2018)).

By a 6-3 majority, the Supreme Court reversed the decision, finding that because the government had long given assurances that this information would be kept private, the ordinary meaning of the statute required only that the retailers not have otherwise disclosed store-level SNAP data or made it publicly available in any way. The Court left open for future resolution the question of whether it matters that the government provided such confidentiality assurances before the information was turned over. Therefore, in future cases, there will likely be additional disputes over the question of whether and under what circumstances the government promised the submitter that their information would be kept private.

Notably, however, in the wake of the Court's decision, legislation has been introduced in the form of the Open and Responsive Government Act (S.2220) to restore the substantial competitive harm standard.

Chip English is a partner and Ronald D. London is of counsel in Davis Wright Tremaine's Washington, D.C. office. Ashley L. (Watkins) Vulin and Allison B. Condra are both associates in the firm's Portland office. Eric M. Stahl is a partner in the firm's Seattle office.