Supreme Court Clarifies When Commercial or Financial Information Is 'Confidential' Under the Freedom of Information Act

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FOOD MARKETING INSTITUTE V. ARGUS LEADER MEDIA.

Before the Supreme Court with J. Gorsuch delivering the majority opinion.

Summary: Commercial or financial information is confidential under the Freedom of Information Act (FOIA) when it is (1) both customarily and actually treated as private by its owner and (2) provided to the government under an assurance of privacy.

Argus Leader Media filed a FOIA request with the Department of Agriculture (USDA) seeking information submitted to the USDA from stores in national food-stamp program. The USDA declined under FOIA’s Exemption 4 that shields “trade secrets and commercial or financial information obtained from a person and privileged or confidential” from disclosure.  Argus Leader sued to compel the USDA information. The district court, employing Eighth Circuit precedent, found that the stores’ data was not “confidential” because disclosure would not cause substantial competitive harm.  When the USDA declined to appeal, the Food Marketing Institute intervened and appealed to the Eighth Circuit, which affirmed the district court’s decision. The Supreme Court granted the Institute a stay of the Eighth Circuit’s mandate and later granted certiorari.

In a 6-3 decision, the Court rejected the Eighth Circuit’s “competitive harm” test for confidential commercial or financial information. The Court observed that this test originated from a highly-criticized 1974 D.C. Circuit decision that relied on witness statements from a congressional hearing on a different, unpassed bill. The Court held that “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 Exemption 4’s meaning.”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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