Access to Public Information
Dotcom Trading 121 (PTY) Ltd v. King
Closed Contracts Expression
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The Supreme Court of the United States ruled that commercial or financial information is considered “confidential” under the Freedom of Information Act (FOIA) Exemption 4 when it is “customarily and actually” treated as private by its owner and is provided to the government under an “assurance of privacy.” The South Dakota newspaper Argus Leader filed a FOIA request to the United States Department of Agriculture (USDA) for information relating to the national food stamp program known as SNAP (Supplemental Nutrition Assistance Program). The data requested would have effectively documented how much individual grocery stores received annually in taxpayer money from the program. The Court rejected the established “substantial harm” test to justify non-disclosure, in favor of protecting information falling under the ordinary meaning of confidential. The minority concurred in part, but dissented in part arguing that the majority opinion undermined the basic principles of FOIA and that a “genuine harm” requirement would ensure the exemption was narrowly construed.
The plaintiff in the case, the South Dakota newspaper Argus Leader, filed a FOIA request to the United States Department of Agriculture (USDA) for information relating to the national food stamp program known as SNAP (Supplemental Nutrition Assistance Program). Specifically, they requested the names and addresses of all the retails stores participating in the SNAP program as well as each store’s annual redemption data from fiscal years 2005-10. The data requested would have effectively documented how much individual grocery stores received annually in taxpayer money from the program.
The USDA complied with the first part of the request and provided the name and addresses of participating stores. However, it refused to disclose the store level SNAP revenue data invoking FOIA Exemption 3, which prohibits disclosure based on another law, and Exemption 4 which protects “trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential.” The USDA claimed that the data had to remain confidential on the ground that releasing it publicly would reveal stores sales strategies and result in competitive injury.
Argus filed a lawsuit claiming that the exemptions did not apply. The federal district court found that Exemption 3 applied but the 8th Circuit on appeal found it did not apply and remanded the case back to the district court. On the second hearing, the District Court relied on the well-established National Parks test to determine whether the requested information qualified as “confidential.” According to National Parks & Conservation Assn. v. Morton, 498 F. 2d 765, 770 (D.C. Cir. 1974), commercial or financial information “obtained” by government on a mandatory basis is “confidential” if [its] disclosure would either (i) “impair the Government’s ability to obtain necessary information in the future;” or (ii) “cause substantial harm to the competitive position of the person from whom the information was obtained.”
The District court ordered disclosure finding that while disclosure could result in some competitive harm, it was unlikely to result in “substantial competitive harm.” The USDA declined to appeal. However, the Food Marketing Institute, a trade association for grocery stores, intervened and filed the appeal. Food Marketing claimed the ordinary meaning of confidential should be used to determine the scope of the exemption, rather than the “substantial harm” test, on the ground that retailers never released such data publicly.
On appeal, the Eighth Circuit affirmed the District Court ruling and rejected Food Marketing’s argument.
Justice Gorsuch delivered the majority opinion in a 6-3 ruling.
The primary issue before the court was to determine under what circumstances information provided to a federal agency qualified as confidential. The Court considered whether the statutory meaning of “confidential” under Exemption 4 should be understood based on its ordinary meaning or based on the “substantial harm” test outlined under National Parks.
The Court first rejected Argus Leaders claim that Food Market did not have standing, finding that “some financial injury” (emphasis in original) was sufficient to meet the threshold of concrete injury. [p.4 ] The Court also affirmed that the government’s longstanding policy to maintain confidentiality was sufficient to establish that the relief sought would offer redress.
The Court then undertook a textual analysis of the statute and addressed the meaning of the term “confidential.” Since the term was not defined under FOIA, the Court had to determine what the “ordinary, contemporary, common meaning” was at the time the statute was written. The court referred to the standard dictionary definition of confidential which meant “private “or “secret” and then specified this could apply for information customarily kept private by the owner of the information and/or by the receiver of the information. Under Exemption 4, only the first condition would be required, but in the present case, both conditions were met as the retailers as well as the government have standing policies that such information is not normally disclosed. The Court referred to GSA v. Benson, 415 F. 2d 878, 881 (1969), case law prior to National Parks, to establish that Exemption 4 protects “ ‘information that a private individual wishes to keep confidential for his own purposes, but reveals to the government under the express or implied promise’ of confidentiality.”
The Court was unpersuaded by Argus’ proposition that only “confidential commercial information” whose release would likely result in “substantial harm” was afforded protection. This argument was dismissed on the grounds that the term was not found in the original statute and there was no evidence of such a common law meaning prior to FOIA’s adoption. [p. 10] The Court further rejected the argument that Congress had “effectively ratified” Argus’ concept of confidentiality in subsequent legislation as irrelevant, since that approach would not shed any light on the actual meaning of the statute as enacted in 1966.
The Court took issue with the term “substantial competitive harm” established in National Parks noting that it is not in the language of the statute. The Court found that the 9th Circuit had “inappropriately” interpreted the statute based on witness statements, thereby constructing new meanings which were not included in the original meaning or structure of the law. [p. 8] Finally, the Court rejected Argus’ claim that the “substantial competitive harm” test should be adopted to guarantee that FOIA exemptions are narrowly construed, countering that the Courts responsibility was to give statutory exemptions a “fair reading” and not to “expand” or constrict” them beyond the plain language of the law.
The Majority Opinion concluded by critiquing the minority’s call for a “workable balance” of interests as insufficient to justify the inclusion of a harm requirement. The majority found the minority arguments more policy driven in support of broad disclosure rather than legally based.
The Court reversed the 8th Circuit ruling, finding “the competitive harm requirement inconsistent with the terms of the statute.”
Justice Breyer filed an opinion, concurring in part and dissenting in part, which was joined by Justices Ginsberg and Sotomayor. Justice Breyer affirmed the majority findings and concurred that the substantial harm test required in National Parks went too far. However, he wrote that there are other forms of harm which should be taken into consideration and cited a range of lower court case law since 1974 which “imposed some kind of harm requirement.” Breyer proposed a “genuine harm” test to provide a greater balancing of interests.
Building on the majority’s definition of confidential, Breyer referenced additional dictionary definitions to extend the understanding of the term to account for the “nature of the information” (i.e prejudicial to national interests), rather than just how it is kept by the owners.
Breyer concluded that the Majority Opinion undermined the basic principles of FOIA by providing a mechanism for businesses and government to hide information from public scrutiny unjustifiably. Exemptions, he wrote, must be narrowly construed in order to uphold the original purpose of FOIA, which is to “‘permit access to official information long shielded unnecessarily from public view” and “to create a judicially enforceable public right to secure such information from possibly unwilling official hands.’ EPA v. Mink, 410 U. S. 73, 80 (1973).” [p. 4]
Decision Direction indicates whether the decision expands or contracts expression based on an analysis of the case.
The decision contracts expression in a variety of ways. The Majority Opinion did not engage in any balancing exercise, as it did not acknowledge or discuss the right of the public to access information or the government’s duty to disclose government held information in the name of transparency and accountability, at the heart of The Freedom of Information Act, 5 U.S.C. § 552.
The Majority Opinion also accepts, without consideration, that the SNAP data is private information which was obtained by the government. However, it could be argued that SNAP data is more an accounting of government expenditures, rather than retailers’ proprietary commercial or financial information. Argus cited established case law to argue that the government cannot “obtain” information on its own expenditures from outside sources.
The decision, by dispensing with any harm requirement and broadening the scope of the Exemption to include information customarily held confidential, undermines established case law and sets a very low threshold for justifying non-disclosure.
Global Perspective demonstrates how the court’s decision was influenced by standards from one or many regions.
5 U. S. C. §552(b)(4)
Case significance refers to how influential the case is and how its significance changes over time.
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