On January 11, the United States Supreme Court announced it accepted the Food Marketing Institute’s cert petition to review the Eighth Circuit’s decision in Food Marketing Institute v. Argus Leader Media. This represents the latest development toward resolving a conundrum we have described here before (October 2018/June 2018)—how to protect confidential and trade secret information provided to the government in light of public disclosure laws.
The Freedom of Information Act’s (FOIA) Exemption 4 exempts “trade secrets and commercial or financial information obtained from a person and privileged or confidential” from disclosure in response to a FOIA request. 5 U.S.C. § 552(b)(4). In Food Marketing Institute, the Eighth Circuit considered whether the U.S. Department of Agriculture (USDA) could withhold information provided to the USDA regarding recipients of aid under the Supplemental Nutrition Assistance Program (SNAP). The USDA argued that the data was within Exemption 4 because releasing that data was likely to cause substantial harm to the competitive position of SNAP retailers. After a bench trial, the District Court held that the USDA had not proved a likelihood of substantial competitive injury, and Food Marketing Institute (representing the interests of those who provided that data) intervened and appealed to the Eighth Circuit. In a six page opinion, the Eighth Circuit affirmed, finding that while the USDA showed that the information was commercially useful and the release of the information might cause some competitive harm, it would not cause “substantial” competitive harm.
The Supreme Court has now taken up the review, with the issues to be decided described as:
“(1) Whether the statutory term ‘confidential’ in the Freedom of Information Act’s Exemption 4 bears its ordinary meaning, thus requiring the government to withhold all ‘commercial or financial information’ that is confidentially held and not publicly disseminated—regardless of whether a party establishes substantial competitive harm from disclosure—which would resolve at least five circuit splits; and (2) whether, in the alternative, if the Supreme Court retains the substantial-competitive-harm test, that test is satisfied when the requested information could be potentially useful to a competitor, as the U.S. Courts of Appeals for the 1st and 10th Circuits have held, or whether the party opposing disclosure must establish with near certainty a defined competitive harm like lost market share, as the U.S. Courts of Appeals for the 9th and District of Columbia Circuits have held, and as the U.S. Court of Appeals for the 8th Circuit required here.”
This will be an important case for government contractors—and anyone else providing information to the federal government—to watch. If the Supreme Court agrees with the Eighth Circuit’s standard, it will become harder to prevent disclosure of confidential information to competitors when dealing with the federal government.
