Cooperative federalism often involves information sharing between different levels of government. What are the implications of such information sharing for application of federal and state freedom of information/public records statutes?  When private entities are required to share information with state governments under a federal mandate, is release of that information governed by the federal Freedom of Information Act or by state FOI and public records laws?  This issue was raised recently in Union Pacific v. Pipeline & Hazardous Materials Safety Administration, —F.3d. —, 2020 WL 1264220 (D.C. Cir. March 17, 2020).

All Aboard!

Our story begins with several derailments of trains transporting oil, Bakkan oil to be precise, between July 6, 2013 and April 30, 2014.  The first, and most noteworthy, was a “catastrophic railroad” accident that destroyed Lac-Mégantic, Quebec, Canada.[1]  An unattended U.S.-owned train loaded with Bakkan oil rolled into downtown Lac-Mégantic and derailed, causing massive explosions, fires, and the release of hazardous material.[2]  The accident killed 47 people, required evacuation of 2000 others, caused extensive physical damage, and required substantial and costly clean-up efforts. Bakken fuel oil “rides the rails” due to the absence of accessible pipelines.[3]  As it turned out, the markings on the rail cars involved in the Lac-Mégantic disaster understated the volatility of their contents.[4]

An Emergency Order and Its Immediate Aftermath

By emergency order issued May 2014, the Department of Transportation (“DOT”) required railroads operating trains transporting at least 1,000,000 gallons of Bakken crude oil to notify the appropriate State Emergency Response Commission (“SERC”) of such trains’ expected route, as well as the quantity and type of oil transported. In re Petroleum Crude Oil R.R. Carriers, Docket No. DOT-OST-2014-0067 (May 7, 2014).  The first set of notifications was due in June 2014.[5]

Almost immediately the railroads expressed concerns that the information reported would be subject to public disclosure under states open records laws.  Within a month DOT issued an undated FAQ document addressing the issue.[6]  DOT explained that the mandated information was intended solely for persons “with a need-to-know,” namely first responders and emergency response planners.  “Frequently Asked Questions on DOT’s May 7, 2014, Emergency Order (EO) Regarding Notification to Communities of Bakken Crude Oil Shipments,” Response to Question 3.  DOT expressed its expectation that SERC’s would limit dissemination of information accordingly and explained that railroads could require reasonable confidentiality agreements “prior to providing the information.”  Id.  DOT noted that this had been the historical practice.  Id.  DOT urged railroads and states to work together to address the railroad’s confidentiality concerns, suggesting that confidentiality might be better assured if the mandatory notification were made to state fusion centers, which already had confidentiality protocols in place. Id., Response to Question 4.[7] 

News outlets and nongovernmental organizations filed public records requests in states across the country seeking access to notifications made pursuant to the Emergency Order. (Earthjustice alone filed requests in over a dozen states). Conservation Group Comments on Proposed Rule on Enhanced Tank Car Standards and Operational Controls For High-Hazard Flammable Trains 43 (Sept. 30, 2014)(“Conservation Group Sept. 30, 2014 Comments”).[8]  According to a coalition of Conservation Groups, “[m]ost states determined that the notifications did not contain confidential business information and had to be released to the public.” Id. at 43 & nn. 40-41.[9] 

Notices of Proposed Rulemaking and Information Collection

On August 1, 2014, the Pipeline & Hazardous Materials Safety Administration (“the PHMSA”) issued a notice of proposed rulemaking to codify and clarify the Emergency Order’s notification requirements, inter alia. Pipelines and Hazardous Materials Safety Administration, Notice of Proposed Rulemaking, Hazardous Materials: Enhanced Tank Car Standards and Operational Controls for High-Hazard Flammable Trains, 79 Fed. Reg. 45016, 45041 (Aug. 1, 2014).    The agency noted that DOT had sought to address the railroads’ confidentiality concerns by “engag[ing] in discussions with railroads and states,” and expressed its preference that the “information be kept confidential.”  Id.  Nevertheless, it invited comment on the issue, particularly whether the “data contained in the notifications to SERCs” should be accorded “confidential treatment” and “[w]hether PHMSA should place restrictions . . . on the disclosure of the notification information provided to SERCs or to another state or local government entity.”  Id. at 45042.

Proceeding on a parallel track, so to speak, in October, the Federal Railroad Administration (“FRA”) presented a proposed information request to the Office of Management and Budget (“OMB”) pursuant to the Paperwork Reduction Act (“the PRA”).[10]  Federal Railroad Administration, Notice of Proposed Information Collection Activities, 79 Fed. Reg. 59,891, 59,892 (Oct. 3, 2014).  The FRA noted that it had published PRA notices on June 30, 2014 soliciting comments on the contemplated information collection needed to effectuate the mandatory notification obligation.[11]  FRA reported that on August 29, 2014, two industry groups, the Association of American Railroads (“AAR”) and the American Short Line and Regional Railroad Association (“ASLRRA”) had provided comments.  Among their concerns was the lack of confidentiality protections for the commercially-sensitive information to be included in the mandatory disclosure.[12]  

FRA responded by affirming AAR’s and ASLRRA’s understanding that “DOT’s intent in issuing the [Emergency Order (“the EO”)] was not to cause the widespread public disclosure of the information,” but rather to ensure that emergency responders had sufficient information to “prepare their response plans and resources.”  Id. at 59852.  However, momentously as it turned out, DOT concluded that the Commenters failed to “document any actual harm that has occurred by the public release of the information required to be provided to the States under the EO.”  Id.[13]

DOT acknowledged that state public records laws might recognize that information in the mandatory disclosures qualified as confidential business information under the applicable state law.  Id.  In its view, however, federal law provided no such protection.  Presumably the agencies’ conclusions rested upon then-extant FOIA Exemption 4 doctrine.  Id.[14]  At the time, the federal courts of appeals had held, with virtual unanimity, that commercial and financial information provided to a federal agency involuntarily did not qualify as “confidential” if it neither led to competitive harm nor impaired the government’s ability to obtain the information in the future.[15]  See National Parks & Conservation Assn. v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974).[16]

A coalition of conservation groups took the opposite approach.  They “urge[d] DOT to require the railroads to submit their notifications to DOT,” which would: (1) “lessen the burdens on states to facilitate public access” (and no doubt the burden on themselves to make public records requests in 50 different states), (2) “subject the notifications to uniform public access standards,” and (3) “enable DOT to fulfill its obligations to make regularly sought information easily accessible to the public.”  Conservation Group Sept. 30, 2014 Comments, supra, at 45.  With regard to the diversity in state approaches to the issue of confidentiality, the Coalition noted: “It is hard to imagine what public policy would be served by allowing the public to know the contents of a unit train up to the border of a state and then stop again until the train enters the next state that embraces public disclosure.”  Id. at 45-46.[17]

But the Coalition assumed, of course, that Exemption 4 doctrine would remain static (an assumption that would turn out to be flawed).   The Coalition asserted that the notification would fall outside of FOIA’s exemptions.  Indeed, the Coalition assumed that FOIA would mandate “affirmative disclosure.”  Id. at 46.  In particular, “requiring submission of the notifications to DOT would trigger the Electronic FOIA.”  Id.  It thus urged DOT to affirmatively mandate that railroads make their notifications “in a form that would facilitate immediate posting on DOT’s website.”  Id.

The Final Rule (or the Rule PHMSA Naively Thought to be Final)

In its final rule, PHMSA sought to offer state fusion centers’ existing confidentiality protocol as an alternative means for railroads to make their mandated disclosures regarding Bakken oil rail traffic.  Even so, it noted, confidentiality in terms of FOI records requests would be determined by the applicable state public records law.  See Pipelines and Hazardous Materials Safety Administration, Final Rule, Hazardous Materials: Enhanced Tank Car Standards and Operational Controls for High-Hazard Flammable Trains, 80 Fed. Reg. 26644, 26648 (May 8, 2015).  DOT expressed its preference that the railroads’ routing and related information with regard to aggregate volume of oil transportation “be kept confidential for security reasons,” and acknowledged that, depending on the states to which a disclosure was made, the railroads might be able to protect the information as confidential business information.  Id. at 26712.  DOT once again urged the railroads and the states to collaborate on the matter.  Id.

But, it explained, the agencies had jointly concluded that providing for notice through the fusion centers, i.e., a notification approach, would be best.  Such an approach would: (1) “[a]void the negative security and business implications of widespread public disclosure of routing and volume data”; while (2) “preserving the intent of the Order, namely enhancing information sharing with emergency responders.”  Id. at 26712. 

Almost immediately, PHMSA discovered that its approach had not brought about consensus.  Members of Congress, state and local officials, representatives of emergency response and planning organizations, and members of the general public expressed concern about the agency’s decision to rely solely on the consultation and communication requirements in existing 49 C.F.R. §172.820, focusing on fusion centers, rather than continuing in force the special affirmative notification obligations of the May 7, 2014 emergency order.[18]  In their view the frequent rail transportation of large quantities of flammable liquids, including Bakken crude oil, “posed unique risks.”[19]  On May 28, 2015, PHMSA announced that it would extend the May 7, 2014 Order indefinitely, while reconsidering its options for permanent codification of the order.  Id.[20]  Before PHMSA could proceed further, Congress intervened.[21]

Congress Steps In: The Fixing America’s Surface Transportation (FAST) Act (Pub. L. No. 114-94)

On December 4, 2015, President Obama signed the Fixing America’s Surface Transportation (“FAST”) Act (Pub. L. No. 114-94).[22]  The massive piece of legislation included a provision clearly addressed to disclosure of Bakken oil rail transport routing information. The provision, section 7302, included three subsections of particular importance to our story.[23]  First, section 7302(a)(3) required railroads to provide information covered by the mandatory disclosure provision of DOT’s May 7, 2014 emergency order to SERCs.  7302(a)(3).  Section 7302 required SERCs, the recipients of the mandatory disclosure, “to provide to [any] political subdivision of a State, or public agency responsible for emergency response or law enforcement, the information railroads reported upon request (including updates),” 7302(a)(4).  Most importantly for our purposes, section 7302(a)(6) imposed upon DOT the obligation to   

(6) establish security and confidentiality protections, including protections from the public release of proprietary information or security-sensitive information, to prevent the release to unauthorized persons any electronic train consist information or advanced notification or information provided by Class I railroads under this section. [24]

The Conference Report accompanying the FAST Act explains the provision:

“The FAST Act requires Class I railroads to generate accurate, real-time, electronic train composition information for first responders through agreements with fusion centers and to provide information about certain flammable liquid shipments to State Emergency Response Commissions (SERCs). . . The Act requires the USDOT to establish security and confidentiality protections for the release of any information intended for fusion centers, SERCs, or other authorized persons.”[25]

This passage clearly suggests that the agency’s security and confidentiality protections should distinguish between (a) disclosure of information to government agencies, like fusion centers, SERCS, and other public bodies, i.e., “political subdivision[s] of a State, or public agenc[ies],” with “responsib[ilities] for emergency response or law enforcement” and (b) provision of information to the general public (who possessed no such responsibilities).  Moreover, Congress’ use of the term “proprietary information,” which is distinct from “confidential commercial information,” is arguably important.  At the time, the latter term, used in Exemption 4, required a showing of competitive harm.[26]  Indeed, in an admittedly unrelated provision dealing with bidding, the FAST Act seems to distinguish “confidential” and “proprietary” information.  Section 11307 (amending 49 U.S.C. §24711) §24711(b)(1)(C) (the pilot program shall “require that each bid . . . be made available by the winning bidder to the public after the bid award with any appropriate redactions for confidential or proprietary information”).  However, the word choice is somewhat ambiguous because it is not clear that in its ordinary English usage the term “proprietary information” is any more expansive that “confidential commercial information.”[27]

The FAST Act is chalk full of provisions protecting the security and confidentiality of information, including those that specify protection of confidential business information and proprietary data.  A search of the Act’s text reveals 37 references to “confidentiality” (although not all are relevant to business records).  The Act contains six references to either “proprietary information” or “proprietary data.”  The number of such provisions certainly suggests Congress’ concerns about protecting the confidentiality of business entities’ information. For example, under the Port Performance freight statistics program, the “Director” is to ensure that— ‘‘(1) the statistics compiled under this section— (A) are readily accessible to the public; and (B) are consistent with applicable security constraints and confidentiality interests.”  FAST Act, supra, §6018 (amending 49 U.S.C. §6314(d)(1)).

Would PHMSA view the Fixing Surface Transportation Act as having “fixed its wagon” (or, in this case, tanker car)?  Would the agency decide that it could not avoid resolving the competing claims regarding the public’s right to know?

PHMSA’s Response: Keeping on Track

The FAST Act certainly did not derail PHMSA’s efforts (which was presumably not Congress’ intent); but it barely even caused the agency to switch tracks.  The agency published an NPRM approximately six months after the FAST Act was adopted.  Hazardous Materials: Oil Spill Response Plans and Information Sharing for High-Hazard Flammable Trains, 81 Fed. Reg. 50068, 50072 (July 29, 2016).

The railroads once again asserted that the mandatory disclosures contained proprietary information (alertly adopting the lingua franca of the FAST Act) and urged PHMSA to preclude its public disclosure. PHMSA noted that it had already rejected the railroad’s claims to protection under federal law, noting that it had already found “that the railroads [had] not specifically identif[ied] any prospective harm caused by the sharing of this information.” Id. at 50084.  And the PHMSA reasserted it view that any such protection must emanate from state law.  Id (citing Oct. 2014 Notice).  The agency explained that the mandatory notice merely required provision of “aggregated information about the volumes of crude oil that travel through a jurisdiction on a weekly basis,” and did not require disclosure of “customer information” or “business identifying details.”  Id. at 50084-85. Accordingly, PHMSA viewed itself as “limited in its ability to establish security and confidentiality protections, particularly in light of the FAST Act’s dual mandates for PHMSA to ensure free-flowing information to SERCs and first responders and provide protections for further disclosures.”  Id. at 50085.

Asserting that “State laws control, . . . the disclosure and dissemination of this information,” PHMSA opted to supplement the notification requirements.  Id.  In particular, it added a “rule” declaring: ‘‘If the disclosure includes information that railroads believe is security sensitive or proprietary and exempt from public disclosure, the railroads should indicate that in the notification.’’ Id.  In its view, this would “help guard against inadvertent public disclosure by ensuring that the information that railroads believe to be business confidential is marked appropriately.”  Id.  It would do so by putting states on notice that they should consider invoking the applicable state exemptions in response to public records requests.  Id. 

The federal government had instituted a notification procedure that would advise businesses that had submitted information that they were subject to a FOIA request and allowed the businesses involved to convince the agency controlling the document that is should be withheld as confidential commercial or financial information.  Executive Order 12600, Predisclosure Notification Procedures for Confidential Commercial Information, 52 Fed. Reg. 23781 (1987).  President Reagan promulgated the Executive Order in response to complaints that agencies would produce such information in response to FOIA requests without consultation.[28]  In its proposal, however, PHMSA did not propose requiring state governments to consult with railroads before disclosing information they designated as confidential.  Thus the proposal added no protections, substantive or procedural, that were not already available to the railroads.[29]

In any event, PHMSA solicited comments on it “new” approach, id., perhaps hoping to attain the consensus that had so far proven elusive. 

PHMSA soon discovered that its proposal had not successfully navigated the interested parties’ competing positions.  See, Hazardous Materials: Oil Spill Response Plans and Information for High-Hazard Flammable Trains (FAST Act), 84 Fed. Reg. 6910 (Feb. 29, 2019).  In the preamble to its final rule, PHMSA reported that state governments and environmental organizations had advocated for public accessibility.  They had argued that making the information private would both (1) put SERCs in “undue legal jeopardy,’’ requiring them to navigate potentially conflicting federal and state laws, and (2) “cause confusion and delays in further providing information to appropriate entities.”  Id. at 6931.  Some had reminded the agency of its own October 2014 determination that the information in the mandatory disclosure was neither commercial nor proprietary information.  Id.  Industry commenters, such as Union Pacific, had proven equally adamant, continuing to advocate withholding the reported information from the public.  Id.  PHMSA seems to have viewed the industry commenters as focusing more on the security, as distinct from the proprietary or commercial, implications of public release the reported information.  Id. 

PHMSA adhered to the approach it had proposed.  In rebuffing those who had urged it to ensure public availability, the agency explained that: “[t]he purpose of SERCs . . . is to share information with local planning authorities.”  Id. at 6932.  In its view, adopting “prescriptive measures to disseminate information” would exceed “the scope of the proposed rulemaking and place an additional burden on states.”  Id.  In rebuffing the industry once again, the agency noted that its proposal, providing that the railroads themselves identify records they considered confidential under the applicable state law, provided sufficient “security and confidentiality exceptions.” Id.  The agency found that approach appealing because it would “provide[] flexibility to ensure” that SERCs and other governmental entities would “disseminate information in accordance with State laws and procedures.”  Id.  And PHMSA reiterated its October 2014 conclusion that the railroads had failed to show any potential competitive harm from release of the information subject to mandatory disclosure.  Id.  It also noted the aggregate nature of the information required, reprising the observations it had made in the NPRM.  Id.

Speaking metaphorically, with PHMSA’s promulgation of the final rule, the train had finally reached the station.

An Excursion to the D.C. Circuit: Union Pacific v. Pipeline & Hazardous Materials Safety Administration

Union Pacific challenged the provisions regarding the SERC’s treatment of the information, filing a petition for review in the D.C. Circuit.

A divided panel upheld the agency’s approach. Judge Williams wrote for himself and Judge Garland.  Judge Henderson dissented.  Union Pacific, supra, 2020 WL 1264220.

The Majority Decision

Acknowledging the FAST Act’s mandate to “establish security and confidentiality protections, including protections from the public release of proprietary information,” the majority asked whether that mandate required the agency to adopt rules governing public disclosure or permitted the agency merely to establish “a scheme in which railroads alert the relevant state agency to the data that they believe” immune from disclosure under state law. Id. at *2.

Union Pacific argued“that the PHMSA rule fail[ed] to fulfill the purpose of the security and confidentiality protections.” Id.  In particular, “[b]ecause in states with FOIA laws that require[d] their emergency response commissions to release such information,” “competitors might glean the identity of a railroad’s customers from the aggregated data, and . . . poach [its] business.” Id.  Also, in its view, PHMSA’s approach rendered nugatory section 7302(a)(6)’s directive that PHMSA “prevent the release [of the information] to unauthorized persons.” Id.[30]  Union Pacific explained: “[i]f a state releases this information to the public, everyone will have access to the information;” in such a state “the statutory category “unauthorized person’” would “include no one at all.”  Id.  The dissenting judge offered yet a third argument, that PHMSA had merely sub-delegated its regulatory authority to the states, improperly abdicating its congressionally-assigned responsibilities.  Id. at 3; id. at 6 (Henderson, J. dissenting).

The majority explained that the agency’s admittedly “very modest” approach did not drain the term “unauthorized persons” of all meaning.  Id. at *3.  Even under the agency’s approach, “unauthorized persons” is not a null set — “viewed across the nation, the regulation treats as unauthorized those persons not entitled to the information under the relevant state’s freedom of information law.”  Id.[31]  Parrying the assertion that the agency has “improperly subdelegate[d] the agency’s regulatory authority to states,” the majority observed that it should come as “no surprise that a statute which weaves state institutions into its program should lead the implementing agency to coordinate its action with aspects of state law.” Id. By way of example, it noted, § 7302(a)(4) delineated when a SERC is to disseminate information to a state “political subdivision,” “public agency,” or “law enforcement” agency.  Id.

The majority relied heavily on PHMSA’s specific, and more importantly, uncontradicted, finding that requiring the railroad to flag the information to the state response commissions was “sufficient to ensure confidentiality and security.” Id. at 3 (citing Final Rule, 84 Fed. Reg. at 6932).  Central to its reasoning was Union Pacific’s own failure to provide “a mote of evidence that the type of data” for which it sought confidential treatment “ha[d] been or even could be . . . exploited” by competitors.  Id.  Indeed, it observed, the agency had repeatedly noted the railroads’ failure to demonstrate any “specific prospective harm that would be caused by the release of such aggregated information.”  Id.  This led it to make the observation alluded to in the title of this post: Neither before the agency not in this court, can the agency “be asked to make silk purse responses to sow’s ear arguments.” Id. (citing City of Vernon v. FERC, 845 F.2d 1042, 1047 (D.C. Cir. 1988)).[32] 

The result was no different viewing Union Pacific’s challenge as “an APA arbitrary and capricious challenge,” rather than as a challenge to the agency interpretation of section 7302(a)(6), and for similar reasons.  Id. at 4.  The aggrieved party, not the government, must shoulder “the burden of proof” in such a challenge.  Id. Accordingly, Union Pacific had to proffer some evidence to substantiate its claim of competitive harm. Id.

Union Pacific argued that it would be difficult to marshal historical evidence of competitive harm, namely that its competitors had already used the reported aggregated data to identify and poach its customers.  Id. The Court refused to concede that Union Pacific was quite so helpless, observing that “the railroad could (for example) have conducted an experimental analysis to demonstrate how a competing carrier might identify a customer by piecing together county-by-county information.”  Id.  The majority then deployed its second folksy adage: “something (an agency’s finding) beats nothing (Union Pacific’s unsupported assertion) every time.”  Id.

The majority closed: “[f]rom our vantage point, the scope of disagreement between the majority and dissent is quite narrow. We all agree that the statute requires the agency to establish something to protect the information at issue. . . . Where we disagree is whether the agency has met the statutory directive. Here, the agency developed a mechanism to prevent inadvertent disclosure.”  Id.

The Dissent

Wielding a Benjamin Franklin adage, “Well done is better than well said,” to scold the agency, Judge Henderson asserted that though the agency claimed to have acquitted its 7302(a)(6) obligation, in actuality it had failed to do so.

In his view, the majority had answered the wrong question.  The FAST Act had unambiguously commanded the Secretary to protect the railroads’ advanced notification information. Id. at *5.  Thus, the FAST Act itself had already answered the question for which the majority had found a lack of “evidence” to support Union Pacific’s position, namely whether federal law should protect the information in the mandatory disclosure.  Id. at *4.  The FAST Act made any failure to establish competitive harm irrelevant.  The FAST Act merely delegated to DOT the question of how (not whether) federal law would protect the information.  Id. at *4.

Judge Henderson argued that the PHMSA’s position, “that it need not protect advanced notification information because it is adequately protected by state law” was not faithful to section 7302’s text.  Id. at *6.  If the agency can satisfy § 7302(a)(6) “by leaving in place, . . . the state enforcement status quo, the entire paragraph—or at least its reference to advanced notification information—is superfluous in that it can be totally ignored.”  Id.

Given the statutory context, Judge Henderson found especially “off key” the majority’s observation that a statute that “weaves state institutions into its program” would naturally “lead the implementing agency to coordinate its action with aspects of state law.” Id. at 7.  In particular, it observed, nothing in § 7302(a)(6) “suggests that the Secretary’s duty to establish security and confidentiality protections is to be shared with the states, much less left to them.” Id.  “By upholding the Rule’s information-sharing provision, the majority [had ventured] beyond deference and permit[ted] the Agency to ignore unambiguous statutory text.”  Id.

But as a modern-day Ben Franklin might observe, for those in dissent there is only “well said.”

Upcoming: Part II of This Series

The second post in the series will focus on my observations regarding the issues raised by the PHMSA’s dilemma and the D.C. Circuit’s decision.

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[1] In re Petrol. Crude Oil R.R. Carriers, Docket No. DOT-OST-2014-0067 6 (May 7, 2014).

[2] Id. at 6-7.  See generally, Transportation Safety Board of Canada, Lac-Mégantic Runaway Train and Derailment Investigation Summary. .

[3] Ian Austen, Deadly Derailment in Quebec Underlines Oil Debate, N.Y. TIMES (July 7, 2013); Government Accountability Office, Hazardous Materials Rail Shipments, Emergency Responders Receive Support, but DOT Could Improve Oversight of Information Sharing 5 (Nov. 2016) .

[4] Ian Austen, Canada: Crude Oil in Runaway Train Was Mislabeled, N.Y. TIMES (Sept. 11, 2013).  Though accurate marking would not have lead to any change in the emergency response.  Id.

[5] Conservation Group Comments on Proposed Rule on Enhanced Tank Car Standards and Operational Controls for High-Hazard Flammable Trains 40 (Sept. 30, 2014).

[6] The document is item 3 in Docket No. DOT–OST–2014–0067.  While the FAQ document is undated, the Ohio SERC refers to the document in a resolution adopted June 11, 2014. Ohio Emergency Response Commission, USDOT Emergency Order: Bakken Oil Rail Shipping, Resolution 2014-68 (June 11 2014).

[7] Accord, Pipelines and Hazardous Materials Safety Administration, Notice of Proposed Rulemaking, Hazardous Materials: Enhanced Tank Car Standards and Operational Controls for High-Hazard Flammable Trains, 79 Fed. Reg. 45016, 45041 (Aug. 1, 2014).

[8] The Coalition consisted of Earthjustice, Forest Ethics, Sierra Club, the Natural Resources Defense Council, and Oil Change International.

[9] I was unable to verify these assertions in the two sources cited in the Coalition’s submission.  The sources did discuss efforts to obtain disclosure of the information in New York and New Jersey.  Several other sources discuss various states’ positions on the issue. Noel Brinkerhoff & Steve Straehley, 5 States Refuse to Reveal Details of Oil-Train Routes and Volumes; Montana Disagrees (June 26, 2014) (listing California, New Jersey, Virginia, Minnesota, and Colorado as states withholding the information from requesters); Reporters Committee for Freedom of the Press, Department of Transportation To Continue Mandating Oil Train Disclosures, But States Vary Widely on Requirements (June 5, 2015) (Wisconsin, Montana, Illinois, North Dakota, Idaho, and Washington have explicitly refused to sign confidentiality agreements, at least some citing their state’s open records laws); see generally, Curtis Tate, Norfolk Southern Sues To Block Disclosure Of Crude Oil Shipments, MCCLATCHY (July 24, 2014)(reporting Norfolk Southern’s reverse-FOI suit against Maryland to prevent the state from releasing information in the disclosures mandated by DOT’s May 7, 2014 Order). 

[10] For a discussion of those procedures see Bernard W. Bell.  “Equal Pay for Equal Work” & Overturning Close to ‘Midnight’ Actions,” YALE J. ON REG.: NOTICE & COMMENT (March 10, 2019).

[11] Whether prompted by the request for comment or not, on August 26, 2014, the National Transportation Safety Board (“NTSB”) issued a safety recommendation following up on its recently completed report on a November 30, 2012 freight train derailment near Paulsboro, New Jersey, which resulted in spillage vinyl chloride into Mantua Creek, a tributary of the Delaware River.  The document highlighted the Board’s recommendations to the PHMSA, including a recommendation that it “[r]equire railroads transporting hazardous materials to develop, implement, and periodically evaluate a public education program . . . for the communities along railroad hazardous materials routes,” and “[w]ork together to develop regulations requiring that railroads immediately provide to emergency responders accurate, real-time information about the identity and location of all hazardous materials on a train.”  NTSB, Safety Recommendation (Aug. 26, 2014).

[12] Shortly after the groups sent the letter, the Texas Attorney General advised his state’s Director of Public Safety that because the mandated disclosures by BNSF Railway potentially constituted sensitive security information under federal law, disclosure of the information was not controlled by Texas law.  Thus the Attorney General did not recommend withholding the documents pursuant to Section 552.101 of the Texas Government Code, the provision of the State’s public records act that exempts from disclosure “information considered to be confidential by law, either constitutional, statutory, or by judicial decision,” viewing the confidentiality issue as being within the federal government’s purview.  Tex. Atty. Gen. Op. OR2014-15674, 2014 WL 4694087 (September 5, 2014).

[13] This the agency’s discussion of its conclusions was as follows:

The Commenters are correct in that DOT’s intent in issuing the EO was not to cause the widespread public disclosure of the information, but rather to ensure that emergency responders have an understanding of the volume and frequency with which Bakken crude oil is transported through their communities so that they can prepare their response plans and resources accordingly. DOT notes that the Commenters do not document any actual harm that has occurred by the public release of the information required to be provided to the States under the EO. That being said, DOT understands that railroads may have an appropriate claim that the information required to be provided to the SERCs constitutes confidential business information, but the merit of such claims may differ by State depending on each State’s open records and sunshine laws. For these reasons, FRA concludes that the information required to be provided to the SERCs under the EO is neither security-sensitive nor commercially-sensitive information that is protected by Federal law.

Id. (emphasis added).

[14] Exemption 4 of the federal Freedom of Information Act allows federal agencies to withhold “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” 5 U.S.C. §552(b)(4).

[15] DOT had previously concluded that railroads were providing the information required by the May 7 Bakken Oil Emergency Order despite the concerns about its vulnerability to state public records requests. 148 Fed. Reg. at 45041-42. The Environmental Coalition, in an analysis submitted in the parallel proceeding, certainly based its analysis on the then-extant National Parks test, Conservation Group Sept. 30, 2014 Comments, supra, at 44-45 (emphasizing the need to show competitive harm).

[16] Exemption 4 doctrine was radically revised with the Supreme Court’s June 24, 2019 decision in Food Marketing Institute v. Argus Leader Media, 139 S.Ct. 2356 (2019). In that decision, to establish confidentiality, at most the business entity would have to establish that it kept the information closely held and that the recipient agency had given assurances that it would hold the information in confidence.  Id. at 2363; see, Bernard W. Bell, Food Marketing Institute: A Preliminary Assessment, YALE J. ON REG.: NOTICE & COMMENT (July 1, 2019).

[17] The diversity of state exemptions of confidential business records is evident in the Reporters Committee for Freedom of the Press’ summary of the state open records laws regarding such information.  See here.

[18] Pipeline and Hazardous Materials Safety Administration, Notice of Proposed Rulemaking, Hazardous Materials: Oil Spill Response Plans and Information Sharing for High-Hazard Flammable Trains, 81 Fed. Reg. 50068, 50083 (July 29, 2016)(“2016 NPRM”).

[19] Id. The text of an early May 2015 joint letter from U.S. Senators Bob Casey, Maria Cantwell, Chuck Schumer, Tammy Baldwin, Dick Durbin, Al Franken, Patty Murray, and Kirsten Gillibrand can be found here. 

[20] See Hazardous Materials: Oil Spill Response Plans and Information for High-Hazard Flammable Trains (FAST Act), 84 Fed. Reg. 6910, 6917 (Feb. 29, 2019).  As PHMSA would later report, the notice explained that the agency “recognized the desire of local communities to know what hazardous materials [were] moving through their cities and towns and noted that transparency is a critical [component] of the Department’s comprehensive approach to safety.” 2016 NPRM, supra, at 50083.  Further, PHMSA expressed support for “the public disclosure of this information to the extent allowed by the applicable state, local and tribal laws.”  Id.

[21] During this period, there were legislative efforts in at least two states to address these issues directly.  Michigan House Bill 4540 (2015), introduced May 13, 2015, sought to preclude the disclosure of “critical energy infrastructure information,” which included information about the transport of fuel or energy. Mich. H.B. 4540 (2015); Legislative Analysis of H.B. 4540 as Introduced.  In New Jersey, there were proposals in successive legislative sessions to mandate disclosure of such information to the public by the railroad operator on its website, S.B. 2858, §4 (introduced May 7, 2015); S.B. 806 S.B. §4 (pre-filed for introduction), the second of which was passed by the Legislature, but vetoed by Governor Chris Christie based on security concerns.  The legislative history for each bill can be accessed on the New Jersey Legislature’s websites.

[22] The Department of Transportation maintains a webpage that contains links to the text of the FAST Act, subsequent changes to its provisions, and a key piece of the legislative history of the Act.  The site can be accessed at https://www.fhwa.dot.gov/fastact/legislation.cfm.

[23] Section 7302 is codified at as a note to 49 U.S.C. § 20103.

[24] Section 7302 does not seem to authorize railroads to withhold data from SERC contingent upon the SERC’s promise to accord the disclosure confidential treatment.  A savings clause in section 7302(c) provides that nothing in section 7302 “may be construed to prohibit a . . . railroad from voluntarily entering into a memorandum of understanding, as described in subsection (a)(1)(B), with” any SERC or an entity representing or including first responders, emergency response officials, and law enforcement personnel. §7302(c).  The referenced provision allows railroads to enter into a “memorandum of understanding with a fusion center to provide secure and confidential access to the electronic train consist information for each train transporting hazardous materials in the jurisdiction of the fusion center.”  §7302(a)(1)(B).  Thus, presumably, section 7302(c) preserves railroads’ ability to make similar arrangement for access to electronic train consist information with SERCs.

[25] Conference Report to Accompany H. 22, H.R. 114-367, 114^th Cong., 1^st Sess. 509 (Dec. 1, 2015).

[26] Congress used terms arguably indistinguishable from Exemption 4’s language in a number of statutes, including some enacted after National Parks had won wide-acceptance as the proper interpretation of Exemption 4.  Bernard W. Bell, Oh SNAP!: The Battle Over ‘Food Stamp’ Redemption Data That May Radically Reshape FOIA Exemption 4 (Part I) YALE J. ON REG.: NOTICE & COMMENT (Sept. 6, 2018)(“Other Provisions in the United States Code”) .  Granted, the Food Marketing Court did not find the existence of such later statutes, which might have been taken as evidencing congressional acquiescence to National Parks, an impediment to jettisoning the National Parks test.   Food Marketing Institute v. Argus Leader Media, 139 S.Ct. at 2365.

[27] See, Chris Montville, Reforming the Law of Proprietary Information, 56 DUKE L.J. 1159, 1160 (2007).

[28] For a discussion regarding the concerns of business entities and legislative efforts involving pre-disclosure notification of “confidential commercial information,” see, Bernard W. Bell, Oh SNAP!: The Battle Over ‘Food Stamp’ Redemption Data That May Radically Reshape FOIA Exemption 4 (Part III-A) YALE J. ON REG.: NOTICE & COMMENT (Sept. 23, 2018) (Section III.  Acquiescence in the FOIA Context).

[29] Indeed, the PHMSA proposal was hardly an improvement upon the recommended practices for protecting all sensitive commercial information.  THOMPSON REUTERS, CORPORATE COUNSEL’S GUIDE TO PROTECTING TRADE SECRETS § 8:21 (available on westlaw)(advising counsel to “[c]arefully mark all trade secret and proprietary information when it submits information to a government agency, so that a clerk “going through it to satisfy a FOIA request . . . will at least have that information pointed out to him.” The clerk “may, therefore, take out the marked information and not give that to the requester”).

[30] Technically, section 7302(a)(6) required DOT to establish security and confidentiality protections for the release of any information intended for fusion centers, SERCs, or other authorized persons.”

[31] Of course, all but a handful of states allow out-of-staters to make FOIA requests.  See, McBurney v. Young, 569 U.S. 221, 226 (2013)(listing seven states that did not permit out-of-staters to make FOIA requests).  Moreover, people who obtain documents by way of public records request presumably have the right to publish it indiscriminately.  For example, under federal FOIA agencies cannot restrict FOIA requesters’ further dissemination of records produced.  See, e.g., Nat’l Archives & Records v. Favish, 541 U.S. 157, 172 (2004); Yonemoto v. Department of Veteran Affairs, 686 F. 3d 681, 689-90 (9th Cir. 2011).

[32] The Word histories.net entry for the proverb explains that it means “you can’t create a fine product from inferior materials.” Word Histories reports that the colorful saying originated in Scotland, making it first written appearance in A New Dictionary of the Terms Ancient and Modern of the Canting Crew (1699).