Supreme Court Expands Application of Exemption for Business Data Under FOIA
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 from FOIA disclosure 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, No. 18-481 (Slip Op. June 24, 2019), the Supreme Court holds 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 participant retailers, but declined to provide the 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, FMI intervened on behalf of its retail members and appealed. The Court of Appeals for 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.’” Slip Op. 2 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 is turned over. Thus, we can expect in future cases additional disputes over the question of whether and under what circumstances the government promised the submitter of the information that it would be kept private.