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Supreme Court Expands Confidentiality Protections for Private Companies

In Food Marketing Institute v. Argus Leader Media, the U.S. Supreme Court held that government agencies can withhold a private company’s records from public disclosure under Exemption 4 of the Freedom of Information Act (“FOIA”) if the company has treated the information as confidential and also received promises from the government agency to maintain the information’s confidentiality.

The Dispute. The case began with a simple FOIA request sent by a local newspaper in South Dakota to the United States Department of Agriculture (“USDA”). The newspaper wanted to know the names, addresses, and annual sales data for every retail store participating in the Supplemental Nutrition Assistance Program. The USDA released the names and addresses of all participating stores but withheld the annual sales data under FOIA’s Exemption 4, which protects  from disclosure “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” The South Dakota newspaper was not satisfied with the USDA’s FOIA response and filed suit to compel disclosure of each participating store’s annual sales data.

The Decision. Previously, lower federal courts had created a hurdle for FOIA’s Exemption to apply. A private company would need to show that disclosure of information through a FOIA request would cause “substantial competitive harm.” Both the trial and appellate courts followed this line of cases. They ruled that the USDA must disclose the annual sales data for participating stores. The Supreme Court, however, refused to impose the additional judge-made burden of proving “substantial competitive harm.” Instead, it relied solely on the words of the statute. It found that Exemption 4 protects confidential, commercial, or financial information, and that the ordinary meaning of “confidential” is anything kept private or secret. The Supreme Court concluded that a private company’s information will remain “confidential” and protected from disclosure under Exemption 4, so long as the private company customarily and actually treats the information as private and has received assurance from the government that it will maintain the information’s confidentiality.

The Take Away. The Supreme Court’s ruling adds significant protections for private companies. Companies must be sure to clearly designate information as confidential as well as receive assurances from the government before disclosing it. If the private company does these two simple things, its confidential information is not at risk of being disclosed through a FOIA request.

© 2019 Jones Walker LLP

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About this Author

Thomas P. Hubert, Jones Walker, Defamation Lawsuits Lawyer, Unfair Trade Practices Attorney
Partner

Thomas Hubert is a partner in Jones Walker's Labor & Employment Practice Group and a lead trial attorney for the firm's Trade Secret Non-Compete Team. Since 1989, Mr. Hubert has practiced primarily in the area of labor and employment law, as well as in areas that fall under more traditional commercial claims. Specifically, Mr. Hubert has focused on business and commercial litigation, as well as labor and employment (including commercial contracts, Unfair Trade Practices Act, Trade Secret Act, covenant not to compete agreements, defamation, errors and omissions for...

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Jason Culotta, Jones Walker Law Firm, Labor and Employment Attorney
Associate

Jason Culotta is an associate in the firm's Labor & Employment Practice Group and practices from the firm's New Orleans office.

Mr. Culotta received his juris doctor degree, cum laude, from Loyola University New Orleans College of Law, where he was a member of the Moot Court National Team, the Loyola Law Review and the Trial Advocacy National Team. In addition, Mr. Culotta was selected as a William L. Crowe Scholar and to the Order of the Barristers. He earned his Masters of Business Administration with a concentration in Finance from the University of New Orleans and his bachelor's degree from Louisiana State University.

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