- Significant U.S. Supreme Court FOIA Decision Likely To Complicate Activist Agendas

As many lawyers representing animal-related businesses regulated by U.S. federal government agencies can attest to, Freedom of Information Act (FOIA) litigation by animal activist interests has become what amounts to a cottage industry.  Animal activist groups are prolific in their FOIA requests to various federal animal-related agencies — such as the U.S. Department of Agriculture (USDA), which regulates animal exhibitors and researchers under the Animal Welfare Act (AWA) — for information on the persons and entities subject to USDA regulation.  

This quest for business information typically unfolds as follows:  a business will mark its internal commercial and financial information “confidential” when submitting it to the agency in connection with an agency proceeding; the information is then requested through FOIA; the agency withholds it under FOIA Exemption 4; and then the fight becomes whether the release of the information will inflict “substantial competitive harm” on the submitter.  This all changed today with the U.S. Supreme Court’s decision in Food Marketing Institute v. Argus Leader Media, No. 18-481, Slip opinion (U.S. June 24, 2019).

The FOIA requester in this case, a newspaper, had sought records from USDA collecting data from retail grocery stores participating in the Supplemental Nutrition Assistance Program (SNAP).  USDA withheld store-level SNAP data on the basis of Exemption 4 which exempts from mandatory disclosure “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”  5 U.S.C. § 552(b)(4).  

In the ensuing litigation, both the trial and appellate courts followed the rule, developed in prior FOIA cases, that  “commercial information” under Exemption 4 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.  This test  originated in a 1974 D.C. Circuit case, well known to FOIA practitioners — National Parks & Conservation Ass’n v. Morton, 498 F.2d 765 (D.C. Cir. 1974).   After a bench trial in the instant case, the trial court determined that disclosure would not cause substantial competitive harm to the retailers, and the Eighth Circuit affirmed, declining to reconsider the validity of the National Parks test.

In a 6-3 decision authored by Justice Gorsuch, the Supreme Court rejected the “substantial competitive harm” test in its entirety.

Agreeing with the government’s characterization, the Court described National Parks as a “relic from a ‘bygone area of statutory construction.'”  Slip op. at 8 (citing government brief).  The Court instead focused on the plain language of the statute itself.  The information here was “confidential” because (1) the retailers did not share the SNAP data or make it public in any way; and (2) it did not lose confidentiality by being shared with USDA because the agency had promised to keep the information private. Id. at 6.  Thus, as the Court summarized the outcome here:

"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.  Because the store-level SNAP data at issue here is confidential under that construction, the judgment of the court of appeals is reversed and the case is remanded for further proceedings consistent with this opinion." Id. at 12. READ MORE FROM SOURCE.