In the early 1970s, the National Parks and Conservation Association (Association), an independent organization focused on advocacy related to the National Parks System, sought records under the Freedom of Information Act (FOIA) pertaining to concession operations run at National Parks around the United States. The Association had asked the Director of the National Park Service to disclose specified documents pertaining to these operations. Although the Park Service provided some documents obtained “without extensive research,” it refused to provide the “results of audits upon the books of several companies operating concessions in the national parks, the annual financial statements filed with the Park Service by these concessioners, and other financial information.”
The Park Service cited Exemption 4 of FOIA, which protects “trade secrets and commercial or financial information obtained from a person [that are] privileged or confidential.” The National Parks and Conservation Association ultimately filed a lawsuit in the U.S. District Court for the District of Columbia, which held that the “sales statistics, inventories, holdings, expenses, statements of profits and gross receipts, securities, liabilities, and salaries and bonuses by position” contained within the requested materials constituted “confidential” information under Exemption 4. However, the case would take on significant importance when, in 1974, the U.S. Court of Appeals for the D.C. Circuit created a two-part test requiring that, in order to withhold records, the agency must show disclosure of the requested information would either impair the federal government’s ability to obtain related information in the future or cause “substantial harm” to the “competitive position” of the individual or organization from whom the materials were obtained.
Significantly, this test would be used in FOIA Exemption 4 cases for the next several decades but would be rejected by the U.S. Supreme Court on June 24, 2019, when the majority held that such a showing of harm was not necessary under the statutory language of the exemption. The Court held that Exemption 4 allows a federal agency to withhold “confidential” financial information when it is “customarily and actually” treated as private by the owner of the information and is provided to the government under an assurance of privacy. Observers criticized the ruling for several reasons, including that expanding the scope of information protected from disclosure by Exemption 4 would limit newsgathering, government transparency, and the free flow of information. Others argued that the ruling could potentially conflict with the “foreseeable harm standard,” which states that a federal agency can withhold information only if it “reasonably foresees that disclosure would harm an interest protected by [a FOIA] exemption.”
This article joins other observers in arguing that this holding by the Supreme Court was problematic in several ways, necessitating action by Congress to clarify the meaning of “confidential” in Exemption 4. More specifically, this article argues that Congress can, and should, ensure that Exemption 4 does not prohibit the disclosure of information of public concern, absent a showing of at least some harm, as Justice Stephen Breyer argued in his dissenting opinion. By limiting the scope of Exemption 4, Congress would promote government openness and transparency. Such an action would also ensure that the news media and others can obtain information of public interest necessary to hold government agencies accountable, including in their connections to private businesses.
This article first reviews the legislative history of Exemption 4. It argues that the question of whether Exemption 4 requires a showing of harm was not resolved explicitly either way by Congress. Second, this article discusses key federal court cases that have dealt with Exemption 4, including National Parks, demonstrating that the two-part test articulated by the D.C. Circuit has been adopted by most federal circuits in the decades since that ruling. Third, this article discusses the Supreme Court’s ruling in Food Marketing Institute v. Argus Leader Media, including the arguments made by both sides in their briefs before the Court, as well as the facts and opinions in the case. Fourth, this article joins other commentators in arguing for Congressional action following Food Marketing Institute. Specifically, it seeks clarification of whether harm is required under Exemption 4 to ensure the free flow of information in cases like Food Marketing Institute, where the requested records contain only proprietary or secret commercial information but also raise significant matters of public concern. Finally, this article highlights a piece of legislation introduced in the U.S. Senate in June 2019, demonstrating that Congressional action is not only needed, but possible.