In a 6-3 decision, SCOTUS rejected the “substantial competitive harm” test, as applied to FOIA’s Exemption 4, established by the D. C. Circuit in National Parks & Conservation Assn. v. Morton, 498 F. 2d 765, 767 (D.C. Cir. 1974) (“the National Parks test”) and adopted by many other appellate courts since that time. See Food Marketing Institute v. Argus Leader Media, 588 U.S. ____ (2019). After overcoming the jurisdictional hurdle facing FMI—known as “standing”—the Court undertook a traditional review of the meaning of the statutory text of Exemption 4, as enacted by Congress in 1966.
Exemption 4 shields from mandatory disclosure ‘commercial or financial information obtained from a person and privileged or confidential.’ See, id (quoting 5 U.S.C. §552(b)(4).
With no statutory definition of “confidential,” the Court analyzed the definitions of the term in 1966-contemporaneous dictionaries to determine the “ordinary, contemporary, common meaning” of “confidential” at that time. At issue in this case, was the confidential nature of sales data from grocery stores participating in the SNAP USDA program, where the data provided to the government was privately guarded and provided to USDA with the understanding that the government would not disclose it to anyone.
The Court’s holding that the National Parks’ test requiring a heightened standard—proof that release of the confidential information would cause the releasing entity substantial competitive harm—was not supported by the plain meaning of the statute and which Congress had left untouched. This decision is important, not only to the grocers involved in the at-issue USDA program, but to the hundreds of other businesses and industries represented by the multitude of amicus curiae briefs filed in support of FMI’s Petition. See, e.g., Brief amicus curiae of Retail Litigation Center, Inc., Brief amici curiae of Alliance of Marine Mammal Parks & Aquariums, et al., Brief amicus curiae of Chamber of Commerce of the United States of America, and Brief amici curiae of National Association of Convenience Stores, et al.
Importantly, the Court found “National Parks’ contrary approach [to statutory interpretation] . . . a relic from a ‘bygone era of statutory construction.’” Now, in additional to protecting confidential information a private entity voluntarily provides to the government, confidential information required to be provided to the government should also be exempt from disclosure pursuant to Exemption 4.
The Court concluded,
At least where commercial or financial information is both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy the information is ‘confidential’ within the meaning of Exemption 4.
At least one tool in the weaponization of FOIA has been removed.