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

Davis Wright Tremaine LLP

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.

[View source.]

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.

© Davis Wright Tremaine LLP | Attorney Advertising

Written by:

Davis Wright Tremaine LLP

Davis Wright Tremaine LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.