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June 24, 2019

Supreme Court Decides Food Marketing Institute v. Argus Leader Media

On June 24, 2019, the Supreme Court decided Food Marketing Institute v. Argus Leader Media, No. 18–481, holding that commercial or financial information that is customarily and actually treated as private by its owner and provided to the government under an assurance of privacy is “confidential” under Exemption 4 to the Freedom of Information Act (FOIA) and is therefore shielded from disclosure.

FOIA generally requires the government to disclose, upon request, previously unreleased information and documents that it has collected. Congress, however, created certain exceptions to this broad duty. One such exception, Exemption 4, protects from disclosure “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”

This case arose when Argus Leader, a South Dakota newspaper, filed a FOIA request for data collected by the U.S. Department of Agriculture (USDA). Specifically, Argus Leader sought the names and addresses of all retail stores that participate in the Supplemental Nutrition Assistance Program (SNAP). Argus Leader also sought each participating store’s annual SNAP redemption data.

The USDA provided the names of addresses of the stores that participate in SNAP. It did not, however, supply the store-level data that Argus Leader requested. Instead, the USDA withheld that information as protected from disclosure under Exemption 4. Argus Leader responded by suing the USDA to compel release of the store-level redemption data. The District Court held a two-day trial to determine whether disclosure of the redemption data would cause “substantial competitive harm” to the stores that provided it—a test that the Eight Circuit (among others) has engrafted onto Exemption 4.

The District Court concluded that disclosing store-level redemption data would not cause substantial competitive harm to the affected stores, and therefore ordered the USDA to supply that information. The USDA declined to appeal the District Court’s decision, so Food Marketing Institute (a trade association for grocery retailers) intervened before the Eighth Circuit. The Eighth Circuit affirmed the decision below.

The Supreme Court reversed. When Congress enacted FOIA in 1966, it did not define what it meant by “confidential” as used in Exemption 4. As a result, the Supreme Court focused on the “ordinary, contemporary common meaning” of that term at the time of enactment. “Contemporary dictionaries suggest two conditions that might be required for information communicated to another to be considered confidential[,]” the Court wrote. First, “information communicated to another remains confidential whenever it is customarily kept private, or at least closely held, by the person imparting it.” And second, “information might be considered confidential only if the party receiving it provides some assurance that it will remain secret.” Applying these conditions here, the Supreme Court concluded that store-level redemption data is not customarily disclosed to the public and that the USDA promised the participating stores to keep their data private. It is therefore “confidential” information that Exemption 4 protects from disclosure.

The Supreme Court next turned to the Eighth Circuit’s “substantial competitive harm” test. It noted that such language is “[n]otably lacking from dictionary definitions, early case law, or any other usual source that might shed light on” what Congress meant by protecting “confidential” information in Exemption 4. The “substantial competitive harm” test, the Court chronicled, instead arose from National Parks & Conservation Association v. Morton, a 1974 opinion from the D.C. Circuit. In creating the test, National Parks journeyed on a “selective tour [of] legislative history.” The Supreme Court admonished the D.C. Circuit for this “casual disregard of the rules of statutory interpretation.” The Court instructed that, when interpreting Exemption 4, “a court’s proper starting point lies in a careful examination of the ordinary meaning and structure of the law itself.” Because those sources clearly lack a “substantial competitive harm” component, the Eighth Circuit (and the D.C. Circuit before it) was wrong to write such a requirement into Exemption 4.

Justice Gorsuch delivered the opinion for the Court, joined by Chief Justice Roberts and Justices Thomas, Alito, Kagan, and Kavanaugh. Justice Breyer filed an opinion concurring in part and dissenting in part, joined by Justices Ginsburg and Sotomayor.

Download Opinion of the Court.

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