By: Chuqiao Yu, Volume 104 Staff Member
Imagine you, as a taxpayer, wanted to know how your hard-earned money had been used and filed a request to a federal agency asking for some information about a commercial program it was administering. The agency declined your request and explained to you that the information you requested was a secret. But you have nowhere to complain because a recent Supreme Court case would tell you that the agency is right if that is just the way they are conducting their work. This may seem like nonsense, but government transparency will no longer satisfy people’s expectations under the Freedom of Information Act. On June 24, 2019, the Supreme Court ruled on Food Marketing Institute v. Argus Leader Media, a case drawing attention to the confidentiality of government records. This ruling “overturned over forty years of precedent” in favor of greater transparency set by National Parks and Conservation Ass’n v. Morton and imposed a higher standard for seeking disclosure for government records under FOIA Exemption 4.
I. FOIA EXEMPTION 4
Recognizing the need for transparency, Congress enacted the Freedom of Information Act (FOIA) in 1966 to “make the federal government more transparent by bringing light to its internal operations.” FOIA requires all federal agencies to disclose any requested information unless one of the exemptions provided in the statute applies. In particular, Exemption 4 protects “trade secrets and commercial or financial information obtained from a person and privileged or confidential” from the disclosure requirement. This exemption is designed to protect both the interests of the government and those who submit information to the government “by safeguarding them from the competitive disadvantages that could result from disclosure.”
Most Exemption 4 litigation turns on the scope of “confidential” because the statute itself does not provide a clear definition. Before the Supreme Court issued its opinion in Food Marketing, courts traditionally relied upon the two-prong test in National Parks which deemed requested information “confidential” under Exemption 4 if its disclosure is likely either “(1) to impair the Government’s ability to obtain necessary information in the future; or (2) to cause substantial harm to the competitive position of the person from whom the information was obtained.”If either the “impairment prong” or competitive harm” prong is satisfied, then the nondisclosure is warranted.
II. FOOD MARKETING INSTITUTE V. ARGUS LEADER MEDIA
The dispute started when Argus Leader Media filed a request under the FOIA with the U.S. Department of Agriculture (USDA) seeking disclosure of “the names and addresses of all retail stores” that participated in the Supplemental Nutrition Assistance Program (SNAP), which is under USDA’s administration, and “each store’s annual SNAP redemption data.” In declining to release the redemption data, the USDA invoked the Exemption 4 of the FOIA, claiming that the redemption data is “confidential” and could not be disclosed. Argus Leader Media then sued the USDA in the federal district court to compel the disclosure. Relying on the “substantial competitive harm” test to determine the meaning of the term “confidential” in the circuit court precedent, the district court ruled in favor of the Argus Leader. The USDA did not appeal, but the Food Marking Institute, a trade association representing affected retailers, intervened and appealed the case to the Eighth Circuit. Still finding the “substantial competitive harm” test unsatisfied, the Eighth Circuit court affirmed the district court’s decision and ordered the USDA to disclose the requested redemption data. Finally, the Institute petitioned for certiorari and the case came to the Supreme Court.
The Supreme Court primarily took four steps in addressing whether such redemption data should be deemed as “confidential information” and thus be exempted from disclosure under the FOIA Exemption 4. First, it began to interpret the meaning of the statutory term “confidential” with reference to its ordinary meaning. The Supreme Court summarized two conditions to be met for “confidential” after examining several dictionary meanings: 1) when the information is “customarily kept private,” and 2) when there is “some assurance that it will remain secret” from the party receiving the information. In determining whether the disputed information falls within the scope of “confidential,” the Supreme Court held that at least the first condition should be met. Because testimony established that retailers customarily do not disclose requested redemption data “or make it publicly available,” the Court found the requested information is within the meaning of “confidential” under Exemption 4. Second, since the Supreme Court has employed the ordinary meaning of “confidential” to interpret it, it therefore overruled the contradictory long-standing “substantial competitive harm” test established in National Parks. In criticizing its “casual disregard of the rules of statutory interpretation,” the Court stated that “[n]ot only did National Parks inappropriately resort to legislative history before consulting the statute’s text and structure, once it did so it went even further astray.” Third, the Court rejected Argus Leader’s argument regarding the legal term of art “confidential commercial information” because no evidence was provided to establish this usage. Finally, the court rejected Argus Leader’s proposed policy reason for narrowly construing the term “confidential” and replaced it with a “‘workable balance’ between disclosure and other governmental interests—interests that may include providing private parties with sufficient assurances about the treatment of their proprietary information so they will cooperate in federal programs and supply the government with information vital to its work.” Based on this analysis, the Supreme Court finally held the requested information was within Exemption 4 of the FOIA and cannot be disclosed.
FOIA disclosure remains in high demand. During fiscal year of 2018, federal government agencies received 863,729 FOIA requests. A fair reading of the FOIA language matters not only to the right of the public to access government information, but also to democratic processes of governance, including public participation in the formation of well-informed government decisions.
The Food Marketing Institute majority opinion’s complete rejection of the “competitive harm” test in National Parksis problematic both as a matter of law and as a matter of policy. First, it ignores other applicable dictionary meanings of the term “confidential” and this makes its interpretation one-sided. Referring to some dictionary meanings, the majority finally concluded that one condition is necessary for information to be “confidential”: the information is “customarily kept private.” Merely looking at how the information is kept to determine the confidentiality of it is incomplete and unreasonable because it is only an external approach to deal with the meaning. However, confidentiality is at least determined by the nature of the information itself and a fair reading of “confidential” should dig into the inside of the information. As Justice Breyer pointed out, there are other applicable dictionary meanings referring, “at least in the national security context, to information the disclosure of which would cause harm.” In this regard, confidentiality has nothing to do with how the information is kept. Therefore, without considering the nature of the information, the majority comes to an arbitrary interpretation.
Second, the majority misapplies the rules of statutory interpretation. Despite criticizing National Parks for only looking to legislative history, the majority makes a similar mistake when it only looks at dictionary meanings and does not examine them within the underlying legislative purpose. The Supreme Court has made clear in its prior decisions that other interpretive aids should not be forbidden “however clear the words may appear on ‘superficial examination.’” National Parks might exaggerate the “competitive harm” requirement, but its extensive references to Congressional hearings and Senate Reports strongly indicate that Congress intended Exemption 4 to have at least some relations to avoiding the potential harm or danger. Without further exploring the legislative purpose, the majority court unreasonably concluded that the dictionary meaning of “confidential” is its statutory meaning.
These two legal mistakes lead to a serious policy problem: the majority’s opinion opens up the possibility that more government records will be withheld from public, which defeats FOIA’s purpose. As Justice Breyer emphasized, the “‘mandate of the FOIA’ is ‘broad disclosure of Government records’” in order 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.’” Unlike the nature of the information, the way the information is customarily kept can be controlled by agencies and their contractors with the intention of avoiding FOIA disclosure. Government transparency will then be reduced to the extent that the public cannot effectively participate in democratic governance. This disturbing situation is exactly what the FOIA was intended to address, but the majority’s opinion is putting it back on the table again.
How this issue will shake out remains an open question. Congress could step in and clarify the meaning of “confidential” under FOIA Exemption 4. However, until then, the Food Marketing Institute will lead lower courts to decide Exemption 4 cases in a way that blocks the sunshine of government transparency provided in the FOIA.
139 S. Ct. 2356 (2019).
U.S. Dep’t of Justice, Exemption 4 After the Supreme Court’s Ruling in Food Marketing Institute v. Argus Leader Media (2019), https://www.justice.gov/oip/exemption-4-after-supreme-courts-ruling-food-marketing-institute-v-argus-leader-media.
Nathaniel E. Castellano, Where the Sunshine Meets the Shade: Using FOIA Exemption 4 to Protect Confidential Compliance Information After the 2016 FOIA Improvement Act, 46 Pub. Cont. L.J.589, 596 (2017).
Freedom of Information Act, 5 U.S.C. § 552(b)(4) (2016).
Castellano, supra note 3, at 602.
See id. at 604 (examining the tests for “confidential”).
Food Marketing Inst. v. Argus Leader Media, 139 S. Ct. 2356, 2362 (2019) (“But FOIA nowhere defines the term “confidential.”).
Nat’l Parks & Conservation Ass’n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974), abrogated byFood Marketing Inst. v. Argus Leader Media, 139 S. Ct. 2356 (2019). See alsoU.S. Dep’t of Justice, Guide to the Freedom of Information Act 13–14, https://www.justice.gov/oip/page/file/1207891/download (2019)[hereinafter DOJ FOIA Guide] (introducing the historical interpretation of Exemption 4).
Food Marketing Inst., 139 S. Ct. at 2361.
Id. (describing factual background of the case).
Id. (introducing the procedural posture of the case).
Id. (summarizing district court’s decision-making process).
Id. at 2362 (summarizing the appellate process).
Id. (summarizing the Eighth Circuit decision).
Id. (summarizing the case’s path to the Supreme Court).
Id. at 2363 (examining dictionary meanings of the term “confidential”).
Id. (concluding that at least the “customarily kept private” condition has to be met for information to be considered confidential under Exemption 4).
Id. at 2364.
Id. at 2365 (“[T]he parties have mustered no evidence that the terms of Exemption 4 did [carry the specialized common law meaning] at the time of their adoption.”).
Id.at 2366. (citing Milner v. Dep’t of Navy, 562 U.S. 562, 589 (1979) (Breyer, J., dissenting opinion)).
Id. (concluding its opinion).
U.S. Dep’t of Justice, Summary of Annual FOIA Reports for Fiscal Year 2018, at 2, https://www.justice.gov/oip/page/file/1170146/download#FY18(reporting the number of requests received).
Margaret B. Kwoka, FOIA, Inc., 65 Duke L.J.1361, 1371–72 (discussing the importance of effective requesting under the FOIA).
Food Marketing Inst., 139 S. Ct. at 2363.
Id. at 2368 (Breyer, J., concurring in part and dissenting in part) (providing examples of other applicable dictionary definitions).
Arthur W. Murphy, Old Maxims Never Die: The “Plain-Meaning Rule” and Statutory Interpretation in the “Modern” Federal Courts, 75 Colum. L. Rev. 1299, 1301 (1975)(quoting U.S. v. Am. Trucking Ass’ns, 310 U.S. 534, 544 (1940)).
Food Marketing Inst., 139 S. Ct. at 2368 (Breyer, J., concurring in part and dissenting in part) (internal citation omitted).