Justices Urged to Bolster Public-Records Limit on Business Data

WASHINGTON (CN) – Seeking to block the release of food stamps data under the Freedom of Information Act, an attorney for the federal government urged the Supreme Court on Monday to tighten an exemption that keeps secret some types of business and financial information.

“It is information that is private information, it’s obtained outside the government, it’s about private entities, that is, either commercial or financial,” Assistant to the Solicitor General Andrew Yang said Monday. “And in that narrow ambit of commercial or financial information, Congress made the policy judgment that when that is reasonably understood to be confidential, it should not be disclosed.”

The exemption the justices considered Monday protects from disclosure under the Freedom of Information Act, or FOIA, “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”

In this April 9, 2019, photo, Argus Leader investigative reporter Jonathan Ellis and news director Cory Myers in the newsroom in Sioux Falls, S.D. Argus Leader reporters came up with the idea of requesting data about the government’s food assistance program. (Briana Sanchez/The Argus Leader via AP)

For more than 40 years, federal appeals courts across the country have adopted a D.C. Circuit ruling in National Parks & Conservation Association v. Morton that held in order to qualify under this exemption, the information must be likely to cause serious competitive harm.

The renewed fight over that holding started in 2011 when Argus Leader Media, which runs several news outlets in South Dakota, filed a request for information the government collects from retailers that participate in the food stamps program.

The U.S. Department of Agriculture said it would not turn over information about sales at individual stores, citing the exemption for confidential commercial information. While the government releases some statistics about the food stamps program publicly, it keeps store-level information confidential.

A two-day trial in federal district court ended with a ruling in favor of Argus and the Eighth Circuit, applying the National Parks standard, upheld the decision.

Now before the U.S. Supreme Court, the Food Marketing Institute, which intervened in the case and carried the appeal to the Eighth Circuit, said the National Parks standard does too much to interpret the meaning of the word “confidential,” when there is a perfectly familiar definition that could apply instead.

Evan Young, an attorney with the firm Baker Botts who argued Monday for the Food Marketing Institute, said different courts have applied the National Parks standard differently and that a reduced threshold for the exemption would be closer to what Congress intended when it wrote the law.

“Congress solved that problem by saying objectively… if you have a pattern of keeping this information secret and not publicly disclosing it, that is the only thing the federal courts are authorized to ask and that gives the government the authority to keep it secret, if it so desires,” Young said.

Yang, arguing for the federal government, supported Young’s argument, saying private companies have agreed to give over the food stamps data with the expectation that it would remain secret.

But Robert Loeb, who argued for Argus, said the National Parks standard has been built into the law over the 45 years since the decision. He downplayed the trouble courts have encountered in applying the standard, saying the same is true for any judicial test.

He also said the proposal Food Marketing Institute urged the justices to adopt would severely damage FOIA, potentially preventing the disclosure of critical information about how the government spends its money, particularly when that money flows through contractors.

“Under their test, that could all now be claimed confidential by the parties saying, look, this reveals our side of the business,” Loeb said. “Two sides of the coin. You spend the money, we submit it. We did the work. We don’t want you to reveal that. That would be a dramatic change of the way that FOIA has been applied for more than 40 years.”

The justices did not clearly signal towards which argument they leaned on Monday.

Justice Ruth Bader Ginsburg questioned both Young and Yang about whether their proposed reading of the exemption runs directly against the whole point of the cornerstone public records law.

“But wasn’t the whole purpose of – FOIA says disclose and one of the concerns was the government official, for one reason or another, doesn’t want to disclose,” Ginsburg said. “There have been cases of a captive agency, for example. So to say the government can control this by making a promise that it won’t disclose, that seems to run counter to the whole idea of FOIA.”  

Justice Neil Gorsuch, however, pressed Loeb on how an average person could understand which records are kept secret and which are not under the current arrangement, posing a hypothetical in which all courts in the country have decided the number 30 in a particular law actually means 50.

“The average person who’s supposed to have fair notice of the statutes opens up the book and sees 30 days, but in fact, is supposed to know that it means 50 because a lot of district courts have said so?” Gorsuch asked. “Is that consistent with fair notice or due process or any normal statutory interpretation methodology you’re familiar with?”

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