Food Marketing Institute v. Argus Leader Media
2019 U.S. LEXIS 4200, 204 L. Ed. 2d 742, 139 S. Ct. 2356 (2019)
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Rule of Law:
Under Exemption 4 of the Freedom of Information Act (FOIA), commercial or financial information is considered "confidential" if it is both customarily and actually treated as private by its owner and has been provided to the government under an assurance of privacy.
Facts:
- The United States Department of Agriculture (USDA) administers the Supplemental Nutrition Assistance Program (SNAP), also known as the food-stamp program.
- As a condition of participation, the USDA collects annual SNAP redemption data from all participating retail stores.
- Retailers, represented by the Food Marketing Institute, customarily and actually treat their individual store-level SNAP data as private and do not make it publicly available.
- The USDA provided assurances to the retailers that it would keep their individual store-level SNAP data confidential.
- A South Dakota newspaper, Argus Leader, filed a FOIA request with the USDA seeking the release of this store-level SNAP data for all participating retailers.
- Retailers feared that disclosure of their SNAP data would allow competitors to gain insights into their sales figures, customer base, and overall business strategies, thereby creating a competitive disadvantage.
Procedural Posture:
- Argus Leader Media sued the United States Department of Agriculture (USDA) in the U.S. District Court for the District of South Dakota to compel disclosure of SNAP data under FOIA.
- After a bench trial, the district court applied the 'substantial competitive harm' test and ordered the USDA to release the data, finding the retailers had not proven the harm would be substantial.
- The Food Marketing Institute (FMI), a trade association for the retailers, successfully intervened to protect its members' interests after the USDA declined to appeal.
- FMI, as appellant, appealed the district court's order to the U.S. Court of Appeals for the Eighth Circuit, with Argus Leader as appellee.
- The Eighth Circuit affirmed the district court's decision, continuing to apply the 'substantial competitive harm' test.
- The Supreme Court of the United States granted FMI's petition for a writ of certiorari.
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Issue:
Does the term 'confidential' under Exemption 4 of the Freedom of Information Act (FOIA) require a showing that disclosure of commercial or financial information is likely to cause substantial competitive harm to the person from whom it was obtained?
Opinions:
Majority - Justice Gorsuch
No. The term 'confidential' under FOIA Exemption 4 does not require a showing of substantial competitive harm. The Court holds that the proper inquiry is based on the ordinary meaning of 'confidential' at the time FOIA was enacted, which means 'private' or 'secret'. The 'substantial competitive harm' test, established in National Parks & Conservation Assn. v. Morton, was a judicial invention that improperly relied on legislative history to add a requirement not present in the statute's text. Instead, information is confidential at least where it is both (1) customarily and actually treated as private by its owner and (2) provided to the government under an assurance of privacy. Because the retailers' store-level SNAP data meets this standard, it is confidential and exempt from disclosure under Exemption 4.
Dissenting - Justice Breyer
No, but the majority's new test goes too far in the other direction. While agreeing that the 'substantial competitive harm' test is too stringent, the dissent argues that the majority's test eliminates any harm requirement whatsoever. This approach is contrary to FOIA's core purpose of broad disclosure and the principle that its exemptions should be narrowly construed. The term 'confidential' implies that disclosure would cause some genuine harm to the owner's economic or business interests. By allowing secrecy based merely on a company's private treatment of data and a government promise, the majority's rule permits government and business to shield information from the public for reasons of mere convenience or bureaucratic inertia, undermining the statute's transparency goals. The case should be remanded to determine if disclosure would cause such genuine harm.
Analysis:
This decision significantly alters the landscape of FOIA Exemption 4 by explicitly rejecting the long-standing 'substantial competitive harm' test used by nearly all federal circuits for over 40 years. It replaces an effects-based inquiry (will disclosure cause harm?) with a status-based one (is the information treated as private?). This makes it substantially easier for private entities to protect commercial data submitted to the government, likely resulting in decreased transparency and greater difficulty for journalists, researchers, and watchdog groups in obtaining business-related information from federal agencies.
