Information just got a little less free under the federal Freedom of Information Act (FOIA).
The U.S. Supreme Court’s decision in Food Marketing Institute v. Argus LeaderMedia, issued on June 24, 2019, makes it easier for the government to keep commercial information out of the public’s reach when the business that provided the information considers it confidential. The Court held that those seeking to prevent disclosure of confidential commercial or financial information under FOIA’s Exemption 4 must demonstrate the following: (1) the information is “customarily kept private” or “closely held,” and (2) the government, in receiving the information, provided “some assurance that it will remain secret.” Essentially, when an owner of commercial or financial information treats the information as private and gives that information to the government with an expectation of continued privacy, the information is “confidential” within the meaning of FOIA Exemption 4.
The dispute underlying this case began when Argus Leader Media filed a FOIA request with the U.S. Department of Agriculture, seeking disclosure of the annual amounts taxpayers paid to the retail stores that participated in the Supplemental Nutrition Assistance Program (SNAP). After the district court ordered that the requested data must be provided to Argus Leader Media, the Food Marketing Institute intervened and appealed the court’s ruling. Food Marketing Institute sought to protect the confidentiality of store-level sales data of retailers who participate in SNAP. The case was taken up to the Supreme Court to decide whether the store-level SNAP data is confidential under Exemption 4 of FOIA. Exemption 4 protects private parties from mandatory disclosure of confidential commercial or financial information.
The Supreme Court reasoned that, “at least where commercial or financial information is both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy, the information is ‘confidential’ within the meaning of Exemption 4.” Therefore, the store-level SNAP data qualified as confidential under the Court’s standard.
The Court’s opinion reverses the “substantial competitive harm” test which has been used since 1974 by courts to determine whether private information given to the government should be deemed confidential.
It remains to be seen how far this Supreme Court decision will go in limiting the type of federal contractor information that can be released under FOIA. And the decision does not directly affect how Michigan courts will interpret the state-level FOIA, although courts in the state do often look to federal decisions for interpretive guidance. This new rule, however, will provide contractors with additional comfort that they will no longer be required to establish substantial competitive harm to prevent the release of their information, granted such information was provided with the expectation that it remained confidential.
Those who had concerns that their private information given to a government agency may be released to the public in response to a FOIA request, should consider this Supreme Court decision a win. But for those who rely on FOIA requests to gain access to such information, their best hopes now lie with Congress to amend the statute.
On Thursday, June 27, 2019, Iowa Senator Chuck Grassley took to the Senate floor, as “an advocate for the Freedom of Information Act and the public’s business being public.” Grassley said he is “working on legislation to address these developments and to promote access to government records. Americans deserve an accountable government, and transparency leads to accountability.” Time will tell if the legislature will choose to circumvent the Court’s ruling.
If you have any questions, please contact Brian Wassom, Kris Araya or any other member of the Warner Media Litigation Practice Group.