In a ruling that critics say could hinder access to public records, the U.S. Supreme Court has made it easier for the government and businesses to keep commercial information that is shared with federal agencies confidential.
The 6-3 decision, released Monday, came in a case that pitted a South Dakota newspaper, the Argus Leader, against the food marketing industry. The paper sought records about grocery store transactions in the U.S. Department of Agriculture’s $67 billion-a-year food-stamp program for Americans with low- or no income.
The record request came under the Freedom of Information Act (FOIA), a law that allows public access to federal documents and other records, although with certain exemptions.
One such exception, meant to protect trade secrets, was at the center of the case.
Overturning a 45-year precedent, the majority ruled that normally private commercial or financial information shared with the government on assurance of privacy is "confidential" and must be protected. Previously, such information was subject to release unless disclosing it would cause “substantial competitive harm” to the submitting company.
The FOIA law was passed in 1966 and strengthened after the Watergate scandal led to the resignation of President Richard Nixon. The law has become a vital tool for journalists and others working to shine a light on the inner workings of government.
Reaction to the court's ruling has been mixed.
Adam A. Marshall of the Reporters Committee for Freedom of the Press said the decision is bad for government transparency. He said the effect may be limited, however, because the newspaper’s request was made before Congress amended the law in 2016 to make it harder for agencies to withhold information, even under the law's exemptions.
“The state of FOIA is not great to begin with, and this certainly doesn’t help,” Marshall said. “I don’t think anyone would really say that FOIA is working well in terms of informing the public.”
The Argus Leader in Sioux Falls, South Dakota, is owned by Gannett Co., whose flagship paper is the national daily USA Today.
“The court’s decision effectively gives businesses relying on taxpayer dollars the ability to decide for themselves what data the public will see about how that money is spent," USA Today publisher Maribel Perez Wadsworth said in the paper’s report on the ruling.
In its FOIA filing, the Argus Leader sought the names and addresses of all grocery stores that participate in the Supplemental Nutrition Assistance Program (SNAP) and each store’s annual SNAP transaction data for five years.
The Agriculture Department disclosed the grocery stores’ names and addresses but not their SNAP transaction data, citing FOIA law exemption No. 4, which shields from disclosure “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”
The Argus Leader then sued the department in federal court. The court’s ruling in favor of the paper was later appealed and upheld. Then the Agriculture Department dropped out of the case before the grocers appealed it to the Supreme Court.
Justice Neil Gorsuch, writing for the court’s majority, said the prior requirement to show a “substantial competitive harm” to protect private information was a relic of the past.
Citing contemporary dictionaries, he said two conditions defined what is “confidential” under the FOIA law. “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,’ ” Gorsuch wrote.
In a dissent for the minority, Justice Stephen Breyer countered that just because a private company treats information as secret doesn’t alone justify not releasing it.
“The whole point of FOIA is to give the public access to information it cannot otherwise obtain,” Breyer wrote. “I fear the majority’s reading will deprive the public of information for reasons no better than convenience, skittishness or bureaucratic inertia.”
Evan Young, a partner at the law firm Baker Botts representing the Food Marketing Institute, said the ruling got it right.
“When it comes to an individual or company’s privacy, and for one reason or another the government has your information, for them to say the interest in your confidentiality and privacy would be harmed strikes me as an obvious one,” he said.
Argus Leader reporter Jonathan Ellis submitted the original FOIA request in 2011. Now, he hopes the decision won’t have a big impact.
"We’re just a small newspaper in South Dakota,” Ellis said. “I feel bad that I submitted a FOIA request ... that today was used by the Supreme Court to limit FOIA.
“It’s unfortunate that the Supreme Court has decided to side with the industry to keep the information secret," he added.
