Food Marketing Institute: A Preliminary Assessment (Part II)

by Bernard Bell — Monday, July 8, 2019

Summary:  In this two-part series I discuss the Supreme Court’s June 24, 2019 decision in Food Marketing Institute v. Argus Leader Media, which upended over fifty years of doctrine defining FOIA Exemption 4’s scope, and the decision’s implications.

In Food Marketing Institute v. Argus Leader Media, 2019 WL 2570624 (June 24, 2019), the Supreme Court invalidated the National Parks test for determining when commercial and financial information involuntarily supplied to the government could be considered “confidential” and thus protected by FOIA Exemption 4.  Under National Parks & Conservation Assn. v. Morton, 498 F. 2d 765 (D.C. Cir. 1974), such information qualified as “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.” Id. at 770.  In Food Marketing, the Court held that such information was confidential if the person supplying it customarily kept it private (or at least closely held).  The Court did not decide whether the information also had to be provided under an assurance of confidentiality.  The ruling came in a case involving store-level redemption data for retail grocers participating in the SNAP program.

The Court’s decision has at least five implications.

(1) It may reduce fiscal transparency by allowing private entities or the government to assert that transactional information regarding government expenditures can/must be withheld under Exemption 4.

(2) It may undermine the caselaw involving FOIA’s privacy exemptions, by allowing the government or private entities to assert Exemption 4 in cases involving government payments to natural persons previously resolved under Exemptions 6 and 7(C).

(3) The application of the decision to FOIA requests post-dating the FOIA Improvement Act of 2016, in light of that Act’s “foreseeable harm” standard, may involve complications the Court did not fully appreciate.

(4)  The decision may lead courts to question the long-standing interpretive principle that FOIA exemptions are to be construed narrowly.

(5) Particularly given Justice Breyer’s observations, the case may expand private entities’ right to insist upon the government withholding information relevant to the safety of consumers or the welfare of its employees.

I discuss each of these implication below.

1. Fiscal Transparency: Is Transactional Information Obtained From A Private Party?

The Court granted certiorari in Food Marketing to excise an atextual doctrine from FOIA jurisprudence, namely the National Parks test for withholding commercial and financial information supplied to the government under compulsion.  But the Court chose an unfortunate case in which to do so.  Before deciding that information held by the government is a private person’s “confidential” commercial or financial information, a court must conclude that the information has been obtained from that person (or some other non-governmental source).[1]  See, e.g., Getman v. NLRB, 450 F.2d 670, 673 (D.C. Cir. 1971)(Exemption 4 “exempts only (1) trade secrets and (2) information which is (a) commercial or financial, (b) obtained from a person, and (c) privileged or confidential” (emphasis added)).  SNAP redemption data is not really the food retailer’s commercial or financial information.  Such data documents transactions between the government and the retailer; it is an accounting of government expenditures.

For example, in Bloomberg, L.P. v. Board of Governors of the Federal Reserve System, 601 F.3d 143 (2d Cir. 2010), the Second Circuit held that information regarding Reserve Bank loans to private banks during the 2008 financial crisis could not be withheld under Exemption 4 because the information had not been supplied by the borrowers.  Id. at 148-49.  Rather, the information, such as the borrower’s identity, the loan’s amount, origination date and maturity date, and the collateral provided simply “disclos[ed] . . . the agency’s own executive actions.”  Id.  The government cannot be considered to have “obtained” information as to its own actions from external sources.  Id. at 149.[2]  Indeed, Argus Leader cited Bloomberg as the principal case supporting its argument that the USDA had not obtained the SNAP redemption data from the retailers. Brief of Respondent, Food Marketing Institute v. Argues Leader Media, Dkt. No. 18-481, 64-65 (March 18, 2019)(accessible at 2019 WL 1310225).

In Food Marketing, the Court did not address the issue, not even in a footnote.  Nor did it remand the case for a determination of the issue (having resolved the issue it took the case to decide).  So the Court arguably decided the issue sub silentio; concluding that the SNAP redemption data was obtained from the retailers is essential to the Court’s resolution of the case.  The Court may have cast doubt on cases like Bloomberg holding that accounts of transactions between the government and private entities are not records obtained from a private individual, but records of the government itself.[3]  Such a sub silentio decision could undermine the federal government’s fiscal transparency.  I discussed the constitutional and statutory foundation for a fiscal transparency imperative in Bernard Bell, Oh SNAP!: The Battle Over ‘Food Stamp’ Redemption Data That May Radically Reshape FOIA Exemption 4 Part II, 36 Yale J. on Reg.: Notice & Comment (Sept. 12. 2018) (Section I: Fiscal Transparency — “Follow the Money”).

2. The New Relationship Between Exemptions 4 and Exemptions 6 and 7(C)

Formally, at least, Exemption 4 and Exemptions 6 and 7(C) are distinct.  Non-natural persons cannot assert “privacy” interests under Exemptions 6 and 7(C).  FCC v. AT&T, Inc., 562 U.S. 397 (2011).  The privacy exemptions focus on information regarding natural persons’ personal and family life, not their business or professional activities.  See, Sims v. CIA, 642 F.2d 562, 575 (D.C. Cir. 1980); Consumer Checkbook v. HHS, 502 F. Supp. 2d 70, 85 (D.D.C. 2007).  Exemption 4 is primarily invoked by commercial enterprises, and is designed to protect their business interests.

However, both the privacy exemptions and Exemption 4 can apply to information regarding natural persons’ finances.  Often agencies will invoke Exemption 6 to protect financial information regarding payments received from the government, in the form of fees for services, prices paid for realty and personal property, subsidies, grants, annuities, and the like. See, e.g., Checkbook Center for the Study of Services v. HHS, 554 F.3d 1046, 1051 (D.C. Cir. 2009) (physician’s Medicaid compensation), Multi Ag Media LLC v. Department of Agriculture, 515 F.3d 1224, 1232 (D.C. Cir. 2008)(agricultural subsidy and benefit programs), National Association of Retired Federal Employees v. Horner, 879 F.2d 873, 876 (D.C. Cir. 1989) (federal employee annuity payments), and National Public Radio v. FEMA, 2017 WL 5633090 (D.D.C. Nov. 21, 2017)(identification of individuals from whom FEMA purchased property pursuant to its Hazard Mitigation Grant Program).  Food Marketing may have an unanticipated impact on this cohort of cases.  The Food Marketing Court’s expansion of Exemptions 4’s scope may undermine doctrine developed under Exemption 6 (and 7(C)) that have restrained agency efforts to keep government payments to individuals secret.

Food Marketing now makes Exemption 4 far easier to invoke than Exemptions 6 and 7(C) in such cases.   Under Food Marketing, financial information provided to the government is “confidential” if the person providing the information keeps it secret or closely held.  At most, the Court will also require an assurance of confidentiality.

By way of contrast, to rely on Exemption 6 the agency must establish a substantial privacy interest.  See, e.g., American Immigration Lawyers Association v. Executive Office for Immigration Review, 830 F.3d 667, 673-74 (D.C. Cir. 2016); Tuffly v. U.S. Dep’t of Homeland Security, 870 F.3d 1086, 1092-93 (9th Cir. 2017).  While the requirement is not a demanding one, the cases do not suggest that the agency need merely show that the person who supplied the information keeps it private.  Moreover, even if a substantial privacy interest exists, the court must engage in further analysis.  In particular, the court must determine whether there is a public interest in disclosure, i.e., whether the release of the information will help the public understand what the government it up to.  See, e.g., Tuffly, 870 F.3d at 1093; American Immigration Lawyers, 830 F.3d at 674.  The Court then balances the public interest against the privacy interest.  See, e.g., American Immigration Lawyers, 830 F.3d at 674; Tuffly, 870 F.3d at 1093.[4]  While a promise of confidentiality is relevant in deciding whether the information supplied is exempt under the privacy exemptions, it is not dispositive.  U.S. Department of State v. Ray, 502 U.S. 164, 177 (1991)(“a promise of confidentiality does not necessarily prohibit disclosure”).[5]

Two cases exemplify this balancing approach.  In National Public Radio v. FEMA, given the extent of expenditures and number of properties purchased under the Hazard Mitigation Grant Program the Court found that the public interest in monitoring the government stewardship of the program outweighed the property sellers’ privacy interests.   National Public Radio v. FEMA, at *9-*11.  Similarly in Multi Ag Media, the Court held that the “special need for public scrutiny of agency action that distributes extensive amounts of public funds in the form of subsidies and other financial benefits” outweighed the recipient’s substantial interest in protecting the privacy of their financial affairs.  515 F.3d. at 1232-33.

In short, after Food Marketing, it is far easier to satisfy the Exemption 4 test, a test which, as the majority conceives of it, has no place for ad hoc balancing of the public interest in the government’s financial transparency, a balancing the plays a pivotal role in resolving privacy exemption disputes.

3. The Implications of the 2016 Improvements Act

The Argus Leader submitted its FOIA requests before Congress enacted the FOIA Improvement Act of 2016, Pub. L. No. 114-185, 130 Stat. 538 (2016) (“the FOIA Improvements Act”), so the Food Marketing Court did not have to consider the Act. But the Court’s decision may well have implications for litigation of post-Act FOIA requests.

Until 2016, the agency discretion to withhold documents covered by an exemption was statutorily unconstrained, Chrysler Corp. v. Brown, 441 U.S. 281, 293 (1979), but subject to shifting Department of Justice directives.[6] The FOIA Improvement Act amended FOIA to codify a “foreseeable harm” standard, requiring release of a record even if it falls within a FOIA exemption, if its disclosure is not prohibited by law and would not harm any interest served by the exemption.[7]  Two statutes that might be viewed as removing agency discretion to disclose “confidential” financial and commercial information protected by Exemption 4 merit mention here: the Trade Secrets Act and 7 U.S.C. § 2018(c).

Section 2018 can be addressed briefly.  It requires USDA to adopt regulations protecting information provided by retail stores applying to participate in the SNAP program.  The Eighth Circuit held that SNAP redemption data fell outside section 2018(c) for two reasons.  Argus Leader Media v. USDA, 740 F.3d 1172 (8th Cir. 2014).  First, the aggregate “redemption” data is submitted by third party-processors, not the retail outlets.  Id. at 1176. Second, USDA does not use such data to determine retailer’s eligibility for the SNAP program.  Id.  Perhaps other Circuits will read section 2018 less literally or the Supreme Court will overturn the Eighth Circuit interpretation of the statute.[8]

The Trade Secrets Act, 18 U.S.C. §1905, protects from disclosure information that “concerns or relates to the trade secrets, processes, operations, style of work, or apparatus, or to the identity, confidential statistical data, amount or source of any income, profits, losses, or expenditures of any person, firm, partnership, corporation, or association.”  In Chrysler Corp. v. Brown, 441 U.S. 281 (1979), the U.S. Supreme Court held that the Act limits the government’s discretion to disclose information covered by a FOIA exemption.  Id. at 317-19.  Chrysler Corp. v. Brown also formally recognized an enforcement mechanism, the “reverse FOIA” suit, id. at 285.  In particular, private entities may challenge decisions to release information covered by the Trade Secrets Act by bringing an Administrative Procedure Act challenge alleging that the agency’s decision to release the information is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” 5 U.S.C. 706(2)(A).  Id. at 317-19.  The Senate Committee Report on the bill that was to become the FOIA Improvement Act endorsed the Justice Department’s view that information protected by the Trade Secrets Act was not subject to discretionary disclosure.[9]   While the Trade Secrets Act does limit ad hoc agency decisions to release information covered by the Act, it does not prohibit an agency from adopting a legislative rule authorizing disclosure of information covered by the Act.  Chrysler Corp. v. Brown, 441 U.S. at 312-16.

Courts have generally considered the scope of section 1905 and Exemption 4 coterminous.[10]  However, under a textualist approach it is not clear why this is so.  And indeed, the implications of a broad interpretation of the Trade Secrets Act are more serious.

Exemption 4 merely grants the government the discretion to withhold a business entity’s commercial and financial information from release to the public.  The Trade Secrets Act precludes agencies from advising the public of such information, even when such disclosures further the agency’s regulatory goals or enhances the autonomy of the commercial entity’s customers or employees.  The agency, by notice and comment rulemaking, may grant itself the power to release such information.  But even then, the agency must have statutory authorization to issue rules with regard to the disclosure of commercial and financial information covered by the Trade Secrets Act. Id. at 301-12.  Chrysler v. Brown suggests that potential authorization statutes will not be liberally construed.[11]

Moreover, because the Trade Secrets Act, unlike FOIA, is a criminal statute, the rule of lenity should apply.  Granted, the Court did not appear to follow such an approach in Chrysler Corp. v. Brown.

There is little indication that the enacting Congresses actually considered the scope of the Trade Secrets Act and FOIA Exemption 4 coterminous.  Section 1905 was adopted as a part of Congress’ general revision of the Criminal Code in 1948, 18 years before FOIA was adopted.  CNA Financial Corp. v. Donovan, 830 F.2d 1132, 1151 (D.C. Cir. 1987); see, Chrysler Corp. v. Brown, 441 U.S. at 296-301.  Exemption 4 neither mentions the Trade Secrets Act, nor adopts its language.  Nor do the relevant portions of the congressional reports accompanying FOIA appear to reference the statute.  The cases that find the statutes coterminous offer little supporting analysis.  For example, CNA Financial Corp. v. Donovan, which holds the statutes co-extensive, discusses the Trade Secrets Act’s legislative history in great detail, CNA Financial Corp. v. Donovan, 830 F.2d 1144-1151, but then offers only one conclusory sentence on the statute’s relationship to FOIA Exemption 4, id. at 1151.  The origin of the view that the two are coterminous may be Chrysler Corp. v. Brown itself.  There the Court said in a footnote:

We, of course, do not here attempt to determine the relative ambits of Exemption 4 and § 1905, . . . Although there is a theoretical possibility that material might be outside Exemption 4 yet within the substantive provisions of § 1905, and that therefore the FOIA might provide the necessary “authoriz[ation] by law” for purposes of § 1905[, allowing the agency to disclose information otherwise protected by the Trade Secrets Act], that possibility is at most of limited practical significance in view of the similarity of language between Exemption 4 and the substantive provisions of § 1905.

Chrysler Corp. v. Brown, 441 U.S. at 318 n.49.  The current, more textualist Court may be less likely to find significant similarities between the texts of Exemption 4 and section 1905.  See Food Marketing, at *6 (finding significant dissimilarity between the phrases “confidential commercial information” and “commercial . . . information obtained from a person and . . . confidential”).

In some respects the Trade Secrets Act might be viewed as broader than the newly-defined scope of Exemption 4. After all, with the exception of statistical data, there is no textual requirement that the information be confidential.  On the other hand the list of matters enumerated in the Trade Secrets Act is not necessarily as broad as the scope of matters encompassed within Exemption 4’s general term “commercial and financial information.”  That said, SNAP redemption data certainly falls within the Trade Secret Act’s enumeration of the amount or source of any income, profits, losses, or expenditures of the business entity.

But more broadly, to the extent that the Trade Secrets Act no longer covers as broad a range of information as that covered by the newly-reinterpreted Exemption 4, the FOIA Improvements Act foreseeable harm standard comes into play.  That standard directs the government to release records covered by Exemption 4 unless such disclosure would cause the type of harm the Exemption was designed to protect.  The “foreseeable harm” provision has rarely been interpreted in the three years since its codification.  Rosenberg v. United States Dep’t of Defense, 342 F. Supp. 3d 62 (D.D.C. 2018).  The most significant discussion to date regarding the standard for judicial scrutiny of agency “foreseeable harm” determinations came in a case involving assertion of Exemption 5’s deliberative process privilege.  In that case, Rosenberg, the court held that the agency “must explain how a particular Exemption 5 withholding would harm the agency’s deliberative process.” Id. at 78.[12]  It remains to be seen whether the Court will adopt a deferential standard of review for agency “foreseeable harm” determinations, which are, after all, discretionary agency decisions.

How would the foreseeable harm standard be applied with regard to “confidential” financial and commercial information protected by Exemption 4?  The textualist basis for withholding “confidential” financial and commercial information, merely that it is closely guarded by the source, would presumably provide an insufficient basis for a foreseeable harm finding.[13] Thus the foreseeable harm analysis might require courts to get right back into defining the type of harm Exemption 4 was intended to prevent, precisely what the D.C. Circuit attempted to do in National Parks.  If so, courts would likely reach the same conclusions that they would arrive at under either the National Parks analysis or Justice Breyer’s alternative analysis in Food Marketing.

4. Questioning the Principle That Exceptions to FOIA Are to Be Construed Narrowly

Justice Gorsuch questioned the long-standing principle that FOIA’s exemptions are to be construed narrowly.  Food Marketing, at *6.  He asserted that the FOIA’s exemptions should be “fairly construed” and suggested placing the policies underlying the exemptions on par with FOIA’s overall transparency goals.  Id.  Such an approach might well significantly alter FOIA interpretation.  The majority’s discussion could have an impact on lower courts, suggesting that they too jettison the approach of narrowly construing FOIA’s exemptions.  Of course the courts have sometimes departed from that principle on an ad hoc basis in order to make FOIA workable, see, e.g. Federal Open Market Committee v. Merrill,[14]  Department of State v. Washington Post,[15] Milner v. Department of the Navy (Alito, J. concurring),[16] Public Employees for Environmental. Responsibility v. U.S. Section, Int’l Boundary and Water Comm’n (Kavnaugh, J.),[17] John Doe Agency v. John Doe Corp.,[18] and Phillippi v. CIA.[19]  Indeed, in addition to basing its decision on a close reading of the text, in John Doe Agency, the Supreme Court, per Justice Blackmun, opined:

This Court consistently has taken a practical approach when it has been confronted with an issue of interpretation of the Act. It has endeavored to apply a workable balance between the interests of the public in greater access to information and the needs of the Government to protect certain kinds of information from disclosure. The Court looks to the reasons for exemption from the disclosure requirements in determining whether the Government has properly invoked a particular exemption.

John Doe Agency, 493 U.S. at 157 (emphasis added).  Ultimately, Food Marketing may merely be one of those relatively rare situations in which the increasingly ascendant textualist approach to construing FOIA leads to an expansion, rather than a contraction, of an exemption’s scope.  Thus perhaps the courts will focus less on Justice Gorsuch’s rejection of the principle of narrow interpretation of exemptions, and place greater emphasis upon grounding interpretations of FOIA inthe statutory language.

5. Confidential Information that Undermines Consumer Autonomy or Public Safety

In concluding that the National Parks test offers insufficiently broad protection for commercial and financial information, Justice Beyer’s suggests that information that a turns away customers, even if it does not help competitors, should be considered “confidential” merely because it harms the business enterprise. Food Marketing, at *7 (Breyer, J., concurring and dissenting).[20]  His comment raises a broader disturbing possibility.  Should jealously guarded commercial and financial information regarding potential harm to private citizens be considered confidential, such that the agency can withhold it or the private enterprise can require the government to do so?[21]  Are concerns about the welfare of consumers, employees, or the general public relevant to the question of whether government must release such information in response to a FOIA request?  See generally, Public Citizen Health Research Group v. FDA, 185 F.3d 898, 907-910 (D.C. Cir. 1999)(Garland, J., concurring).

A few cases have raised this issue.  Perhaps most notably, in Teich v. FDA, 751 F. Supp. 243 (D.D.C. 1990),  a district court grappled with the issue in the context of a FOIA request for the results of a series of animal studies conducted to assess the safety of Dow Corning’s breast implants. Dow Corning had submitted the studies to the FDA under the FDA’s presubmission review regulation. Id. at 245 (citing 21 C.F.R. § 20.44).  That regulation provided that the FDA would hold such information “confidentially and separately,” and deemed it “not received as part of FDA’s files” pending the determination that Exemption 4 protected it from disclosure. 21 C.F.R. § 20.44(b), (c).  When the FDA concluded that Dow Corning’s information could not be protected, the company withdrew the information, as the presubmission review regulations expressly permitted.

The Court concluded that “[t]he benefit of releasing [the] type of information [Teich requested] far outstrips the negligible competitive harm that defendants allege.”  Id. at 253.  The Court explained:

This Court first notes that disclosure of the positive tests, which demonstrate that a product poses a danger when used in a certain manner, is unquestionably in the public interest. To argue that this type of information is confidential suggests that, in order to protect whatever marginal commercial benefit Dow Corning may get from having independently discovered certain risks, other manufacturers be permitted to blindly put out potentially damaging products. Certainly Dow Corning, as a good citizen, would not risk the public health in this manner.  Id.

In another case, Utah v. U.S. Department of Interior, 256 F.3d 967 (10th Cir. 2001), the Tenth Circuit grappled with the State of Utah’s FOIA request to the Bureau of Indian Affairs for the lease agreement between a private company, Private Fuel Storage, L.L.C. (“PFS”) and the Skull Valley Band of Goshute Indians (“the Band”).  The lease allowed PFS to store tons spent nuclear fuel on the Band’s property within the State of Utah.  Id. at 968-69.  The Court noted the State’s “strong public policy argument in favor of a rough ‘balancing of interests’ test under Exemption Four.” Id. at 971.[22]  And it “agree[d] in principle with the State that the public interest in disclosure of information regarding the handling, storage, and disposal of dangerous materials such as spent nuclear fuel is high.”  Id.  The Court ultimately concluded that the competitive harm was so great that even under a balancing test it would uphold the BIA’s invocation of Exemption 4.  Id.[23]

Under the definition of the term “confidential” adopted in Food Marketing, concerns about harms done by private enterprises that might be avoided by release of such information would not seem to figure in the Exemption 4 analysis.  Such potential harm is irrelevant to the question of whether the company keeps the information closely held.  Indeed the greater the risk of adverse consumer or employee reaction, the more likely a company might be to jealously guard the information.  Nor is potential harm to consumers or employees relevant to whether the government obtained the commercial or financial information under a governmental promise of confidentiality.

Indeed, the potential harm to consumers and employees would customarily not even figure in the general balancing of the interest in transparency.  The only interest supporting disclosure under FOIA focuses on ensuring public knowledge of the operation of the government, not the operation of the private entities with whom the government interacts.  Department of Justice v. Reporters Committee for the Freedom of the Press, 489 U.S. 749, 773 (1989).  Indeed, cases that reject the type of balancing the Teich and the Utah v. U.S. Department of Interior decisions suggest is appropriate often state that in specifying that commercial and financial information should be withheld if “confidential” Congress has done all the balancing that is appropriate.  Public Citizen Health Research Group v. FDA, 185 F.3d 898, 903 (D.C. Cir. 1999)(refusing to consider “the strong public interest in safeguarding the health of human trial participants” because Congress has already struck the appropriate balance between public and private interests in Exemption 4’s test, as interpreted in National Parks).

And, of course, under Justice Breyer’s approach these consumer autonomy and public safety concerns would fare no better.  As noted above, Justice Breyer suggests that such concerns about harms to consumers would be sufficient to meet the “harm” standard he would impose in construing the term “confidential” for purposes of Exemption 4.

Yet it seems troubling to allow the government to withhold from consumers and the broader public the dangers or deficiencies of a product because the private entity treats it as confidential.  It seems only slightly less troubling to allow the government to do so simply because the private entity holds it closely and has extracted a promise of confidentiality from the government.  This concern provides yet another reason to recognize that the term “confidential” should include a normative component. In particular, not only must the private entity, and perhaps the recipient federal agency, actually consider the information in question confidential, but that the information must be of a type that the private entity could reasonably consider confidential.

Conclusion

In some ways, Food Marketing simplifies the law — its test for confidentiality is surely much easier to apply than the National Parks test.  Nevertheless, as outlined above, the Justices’ opinions raises at least five issues that we may well see “play out” in the coming years.


[1] Commercial and financial information falls within Exemption 4 even if it the entity that provided it to the Government has no direct interest in its confidentiality.  Board of Trade v. Commodity Futures Trading Comm’n, 627 F.2d 392, 405 (D.C. Cir. 1980). In other words, even if an entity’s “confidential” commercial or financial information is revealed by a third party, such as a bank revealing a borrower’s information, Exemption 4 can apply.  Miami Herald Publ’g Co. v. SBA, 670 F.2d 610, 614 & n.7 (5th Cir. 1982).

However, in such circumstances, Exemption 4 should apply only if it is “confidential in both senses of the word identified by Justice Gorsuch in Food Marketing.  Not only must the entity imparting the information consider it private, but the private recipient, which ultimately supplies the information to the government, must have assumed, contractually or by operation of law, an obligation to safeguard the information. In this circumstance, at least, both the practice of the entity’s whose commercial or financial information is at issue and the recipient’s undertaking to maintain confidentiality should be considered essential.

[2] Accord, Detention Watch Network v. U.S. Immigration and Customs Enforcement, 215 F. Supp. 3d 256, 262-63 (S.D.N.Y. 2016)(bed-day rates, unit pricing and staffing plans included in final government contracts); Buffalo Evening News, Inc. v. SBA, 666 F. Supp. 467, 469 (W.D.N.Y.1987).

[3] E.g., Board of Trade v. Commodity Futures Trading Comm’n, 627 F.2d at 404 (information generated by the federal government itself is not “obtained from a person” and is therefore excluded from Exemption 4).

[4] Given Exemption 6 and 7(C)’s respective texts, the balancing under the latter exemption is weighted more heavily toward the privacy interest.  Department of the Air Force v. Rose, 425 U.S. 378-79 n.16 (1976).

[5] E.g., Washington Post v. HHS; 690 F.2d 252, 263-64 (D.C. Cir. 1982); Kurzon v. HHS, 649 F.2d 65, 69-70 (1st Cir. 1981); Robles v. EPA, 484 F.2d 843, 846 (4th Cir. 1973).

[6]  Attorney General Janet Reno, FOIA Update: Attorney General Reno’s FIOA Memorandum, THE UNITED STATES DEPARTMENT OF JUSTICE (Jan. 1, 1993)(establishing “foreseeable harm” standard); Memorandum from John Ashcroft, Attorney Gen., The U.S. Dep’t of Justice, to Heads of Departments and Agencies on the Freedom of Information Act, (Oct. 12, 2001)(authorizing withholdings so long as a sound legal basis for doing so exists); Memorandum from Eric Holder, Attorney Gen., The U.S. Dep’t of Justice, to Heads of Departments and Agencies on the Freedom of Information Act, (March 19, 2009),(reestablishing Reno policy).

[7] 5 U.S.C. § 552(a)(8)(A) (“[a]n agency shall . . . withhold information under this section only if [ ] (I) the agency reasonably foresees that disclosure would harm an interest protected by [a FOIA] exemption described in [5 U.S.C. § 552(b) (2012)]; or (II) disclosure is prohibited by law[.]”).

[8] Exemption 3 statutes remove such discretion, but courts have not reached a consistent answer on whether the Trade Secrets Act is an Exemption 3 statute. Compare, National Parks and Conservation Ass’n v. Kleppe, 547 F.2d 673, 686, (D.C. Cir. 1976)(Trade Secrets Act is not an Exemption 3 statute); Charles River Park “A,” Inc. v. HUD, 519 F.2d 935 n.7 (D.C. Cir. 1975)(same), with, Westinghouse Elec. Corp. v. Schlesinger, 542 F.2d 1190, 1999–1203  (4th Cir. 1976).  In a report accompanying the 1976 amendment of Exemption 3, Congress spoke directly, but ambiguously, to the issue.  H.R. Rep. No. 94–880, pt. 1, p. 23 (1976), reprinted in 1976 U.S. CODE CONG. & ADMIN. NEWS 2183, 2205.  The Supreme Court avoided the issue in Chrysler Corp. v. Brown, 441 U.S. 281, 318 n.49 (1979).

Quite possibly Congress had the Trade Secrets Act in mind when it specified in the FOIA Improvements Act of 2016 that statutes other the Exemption 3 statutes could preclude application of the foreseeable harm standard, 5 U.S.C. § 552(a)(8)(B)(“Nothing in this paragraph requires disclosure of information that is otherwise prohibited from disclosure by law, or otherwise exempted from disclosure under subsection (b)(3)” (emphasis added)).

[9] Sen. Rep. No. 114-4, at 8, n.11 (2015)(citing U.S. Department of Justice, Guide to the Freedom of Information Act 687–689 (2009)).

[10] See, e.g., Frazee v. U.S. Forest Service, 97 F.3d 367, 373 (9th Cir. 1996); McDonnell Douglas Corp. v. Widnall, 57 F.3d 1162, 1164, (D.C. Cir. 1995); Pacific Architects and Engineers Inc. v. U.S. Dept. of State, 906 F.2d 1345 (9th Cir. 1990); General Motors Corp. v. Marshall, 654 F.2d 294, 297 (4th Cir. 1981).

[11] In Chrysler v. Brown, the Court closely scrutinized agency claims that the housekeeping statute, 5 U.S.C. § 301, granted agencies the discretion to adopt rules that authorized disclosure of confidential commercial information submitted to it.  The Court eschewed a textualist interpretation of the statute and did a “deep dive” into the provision’s legislative history.  Id. at 308-312.

[12] For an interesting, though obscure, pre-FOIA-Improvements-Act case, see Andrus v. U.S. Department of Energy, Dkt. No. 15 Civ. 453, 2016 WL 4186917 (D. Idaho Aug. 8, 2016).  The Department of Energy’s (“DOE”) FOIA regulations provided that “[t]o the extent permitted by other laws, DOE will make records available which it is authorized to withhold under 5 U.S.C. §552 whenever it determines that such disclosure is in the public interest.”  On that basis the District Court found the agency’s invocation of Exemption 5 deliberative process privilege deficient, and remanded.  It said: “[i]n the event DOE determines information is not in the public interest, it should articulate justifications in a highly detailed and specific manner, addressing the substance of the information, not merely the policy underlying [E]xemption [5].”  Id. at *12.

[13] If the private entity received a valid promise of confidentiality from the agency, release of the information without first obtaining permission from the private entity might itself constitute foreseeable harm of the type Exemption 4 was designed to prevent, namely the loss of credibility resulting from the Government’s failure to live up to its promises.  (Presumably, the courts would endorse such an approach with respect to Exemption 7(D) regarding withholding the identity of confidential informants.)

[14] 443 U.S. 340, 356-60 (1979) (finding the Federal Reserve’s Domestic Policy Directives to be “confidential commercial information” of the government that could be withheld under Exemption 5).

[15] 456 U.S.595, 599-600, 602 (interpreting the phrase “personnel and medical files and similar files” to cover any “detailed Government records on an individual which can be identified as applying to that individual,” rather than “a narrow class of files containing only a discrete kind of personal information”).

[16] 562 U.S. 562, 584-85 (2011)(Alito, J., concurring) (arguing that the phrase “compiled for law enforcement purposes.” reasonably encompasses the Navy’s Explosive Safety Quantity Distance (ESQD) documents prescribing and mapping “minimum separation distances” to prevent secondary explosions in its munitions facilities).

[17] 740 F.3d 195 (D.C. Cir. 2014) (Kavanaugh, J.)(“preventing dam attacks and maintaining order and ensuring dam security during dam emergencies qualify as valid law enforcement purposes under FOIA”)

[18] 493 U.S. 146, 157 (1989)(refusing to construe Exemption 7’s requirement the documents be “compiled for law enforcement purposes” narrowly).

[19] 546 F.2d 1009, 1013 (D.C. Cir. 1976)(permitting the government to neither confirm or deny the existence of responsive documents, i.e., a “Glomar” response)).

Of course, Chrysler Corp. v. Brown, in which the Court found a cause of action to preclude agencies from releasing information in response to a FOIA request, even though FOIA itself neither provides such a right of action nor establishes any right to demand that the government withhold information, was itself an act of creative interpretation. 411 U.S. at 285 (noting FOIA’s “largely unforeseen tendency to exacerbate the uneasiness of those who comply with governmental demands for information” (emphasis added)).

[20] Indeed, courts have consistently held that disclosures that merely cause “customer or employee disgruntlement,” Public Citizen Health Research Group v. FDA, 704 F.2d 1280, 1291 n.30 (D.C. Cir. 1983), or “reputational harm caused by negative publicity,” In Defense of Animals v. USDA, 587 F. Supp. 2d at 178, 182 (D.D.C. 2008); accord, Public Citizen, 704 F.2d at 1291 n.30, do not constitute competitive harm.

[21] See, Thomas O. McGarity & Sidney A. Shapiro, The Trade Secret Status of Health and Safety Testing Information: Reforming Agency Disclosure Policies, 93 HARV.L.REV. 837, 844-45 (1980)(“[m]embers of the public have a legitimate interest in knowing the full health effects of products which receive agency approval so that they can decide for themselves whether to use them”).

[22] The Tenth Circuit cited a later-repudiated D.C. Circuit precedent, Washington Post Co. v. United States Department of Health & Human Services, 865 F.2d 320, 326–28 (D.C.Cir.1989), in support.  The D.C. Circcuit repudiated Washington Post in Public Citizen Health Research Group v. FDA, 185 F.3d 898, 903 (D.C. Cir. 1999)

[23] While I focus on concerns about the physical safety of consumers or the general public, a similar issue can arise with regard to employment issues.  Chrysler Corp. v. Brown involved a request for the affirmative action plan for a Chrysler plant and documents relating to Chrysler’s compliance review.  Similarly, CNA Financial Corp. v. Donovan, 830 F.2d 1132 (D.C. Cir. 1987), involved a request for the 1976–77 affirmative action programs and EEO–1 reports for CNA’s midwest regional office, and the 1974–75 affirmative action programs and EEO–1 reports for CNA’s home office, inter alia.  Moreover, individuals should have the ability to decide to refuse to patronize or invest in a company because the company engages in environmental or labor practices with which the individual disagrees.

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