Notice & Comment

Food Marketing Institute: A Preliminary Assessment (Part I)

Summary:  In this two-part series I discuss the Supreme Court’s June 24, 2019 decision in Food Marketing Institute v. Argus Leader Media, which upended over fifty years of doctrine defining the scope of FOIA Exemption 4, and explore five implications of the Court’s decision.

“[I]t is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary.” Learned Hand (Cabell v. Markham, 148 F.2d 737, 739 (2d Cir. 1945))

The Supreme Court opined on the scope of FOIA Exemption 4’s protection of “confidential” financial and commercial information in Food Marketing Institute v. Argus Leader Media, 2019 WL 2570624 (June 24, 2019), overturning long-settled lower court doctrine.  This post summarizes the decision and identifies some of its implications.

Exemption 4 allows agencies to withhold “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”  5 U.S.C. §552(b)(4).  The National Parks/Critical Mass test has been the reigning test for determining when commercial or financial information qualifies as “confidential.” Under National Parks & Conservation Assn. v. Morton, 498 F. 2d 765, 770 (D.C. Cir. 1974), commercial or financial information the government obtains involuntarily,” is “confidential” if [its] disclosure would either (i) “impair the Government’s ability to obtain necessary information in the future;” or (ii) “cause substantial harm to the competitive position of the person from whom the information was obtained.”  Under Critical Mass Energy Project v. NRC, 975 F. 2d 871 (D.C. Cir. 1992) (en banc), “financial or commercial information” voluntarily provided to the Government is “confidential” if it “would customarily not be released to the public by the person from whom it was obtained,” id. at 879.

In Food Marketing, the Supreme Court invalidated the National Parks test in favor of a dictionary-based interpretation of the term “confidential” that closely tracks the Critical Mass test for voluntarily‑provided information.  But the ruling came in an odd case, involving information about government payments to retailers under the Supplemental Nutrition Assistance Program (SNAP) program.

The Argues Leader had sought the names and addresses of all retail stores enrolled in SNAP and each store’s annual SNAP redemption data for each of five fiscal years. Food Marketing, at *2. The U.S. Department of Agriculture (“USDA”) invoked FOIA Exemption 4, asserting that the redemption data was “confidential” commercial or financial information.  Id.  Employing the National Parks test, the District Court concluded that the information was not confidential, and the Eighth Circuit affirmed.

The Decision and the Dissent

Justice Gorsuch, for a six-Justice majority, referenced contemporary dictionaries to identify two senses in which “confidential” is used when discussing information communicated to another.  Id. at *4.   Such information is confidential when the person imparting it “customarily” keeps it private, or “at least closely held.”  Id.[1]  In another sense such information might be considered “confidential” only if the recipient provides some assurance that it will not disclose the information.  Id.[2]

The SNAP redemption data satisfied both definitions: retail grocers customarily do not disclose or make publicly available such data, and the USDA had long promised to keep redemption figures secret.  Id. at *5.[3]  The majority held that confidentiality in the first sense, that the party imparting the information keeps it private (or, at least “closely held”), is always essential.  Id.  Whether confidentiality in the second sense, requiring a recipient’s promise of confidentiality, was necessary was left unresolved.  Id.

The majority attacked the National Parks decision as a relic from a “bygone era of statutory construction,” id. at *5 (adopting the Solicitor General’s characterization).  It then provided a primer on statutory interpretation in the more enlightened modern era.  The majority accused the National Parks Court of grounding its test upon “a selective tour through the legislative history.”  Id. at *5.[4]  But, the majority asserted, “[i]n statutory interpretation disputes, a court’s proper starting point lies in a careful examination of the ordinary meaning and structure of the law itself,” adding “[w]here, as here, that examination yields a clear answer, judges must stop.”  Id.

The majority also refused to uphold the National Parks standard on the grounds that FOIA exemptions should be narrowly construed.  Id. at *6.[5]  Justice Gorsuch explained that the Court normally has “no license to give [statutory] exemption[s] anything but a fair reading.”  Id. at *6 (quoting Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134, 1142 (2018)).  And there was no reason to depart from that rule in the FOIA context, given that FOIA’s express recognition of the “important interests” its exemptions serve.  Id.

The majority did not discuss why records documenting transactions between the government and retail grocers should be considered the grocer’s commercial information, as opposed to commercial information of both the grocer and the government.  Nor did it consider that the redemption data was not provided by food retailers, but rather third-party entities that processed SNAP redemptions.  Respondent had raised both points.  Brief of Respondent, Food Marketing Institute v. Argues Leader Media, Dkt. No. 18-481, 64-65 (March 18, 2019)(accessible at 2019 WL 1310225).

Three Justices concurred in part and dissented in part; Justice Breyer wrote the opinion for the group.  He argued that confidentiality required more than treatment of information as secret by relevant business entity and the government recipient.  Id. at *8 (Breyer, J., concurring in part and dissenting in part).  Indeed, he observed, as “a tool used to probe the relationship between government and business [FOIA] should not be unavailable whenever government and business wish it so.”  Id.

In his view, the concept of “confidentiality” required that the release of the information be harmful.  Id.  Exhibiting his own facility with dictionaries, Justice Breyer noted that the word “confidential” sometimes refers, at least in the national security context, to information whose disclosure would cause harm.  Id.[6]     Moreover, he explained, “a speaker can more sensibly refer to his Social Security number as ‘confidential’ than his favorite color, in part because release of the former is more likely to cause harm.”  Id.    In his view, the word “confidential,” “conveys something about the nature of the information itself, not just how it is kept by those who possess it.”  Id.

But Justice Breyer had his own critique of the National Parks test.  In insisting “that the only form of private harm that can warrant nondisclosure is ‘competitive’ harm, the National Parks test is too narrow.” Id. at *7 (Breyer, J., concurring in part and dissenting in part).[7]  Disclosure of confidential information could do a business serious harm in other ways. Disclosure might “discourage customers from using a firm’s products, without substantial increasing its rivals’ prospects.”  Id.  It could mean increased potential competition, which may not ever materialize. Id.  Or, by revealing customers’ buying habits, release of commercial or financial information could undermine a regulated firm that has no competitors.  Id.[8]

Justice Breyer also offered a practical criticism of National Parks. “[T]he need to prove ‘substantial’ competitive harm can sometimes produce complex debates about the nature of competition and the degree of injury.”  Id. at *8 (Breyer, J., concurring in part and dissenting in part).  And “those debates can mean long, onerous court proceedings concerning issues far removed from the genuine fear of harm that leads firms to keep information secret in the first place.”  Id.

Food Marketing’s Implications

In one sense, the Court’s decision may not appear to raise many questions.  The existing caselaw developed over the last 27 years based on Critical Mass for information voluntarily disclosed to the government would appear to provide guidance on how the court’s new test for involuntary disclosure should be applied.[9]  And by re-unifying the test for involuntarily-provided and voluntarily-provided information, the Court’s decision will remove the need for the substantial caselaw that delineates the boundary between involuntary and voluntary provision of information.[10]

Nevertheless, the Court’s decision has at least five implications.

(1) It may reduce fiscal transparency by allowing private entities and the government to assert that transaction information regarding government expenditures can/must be withheld under Exemption 4.

(2) It may undermine the caselaw involving FOIA’s privacy exemptions, by allowing the government or private entities to assert Exemption 4 in cases involving government payments to natural persons previously resolved under Exemptions 6 and 7(C) (FOIA’s privacy exemptions).

(3) The application of the decision in cases post-dating the FOIA Improvement Act of 2016, Pub. L. No. 114-185, 130 Stat. 538 (2016), in light of that Act’s “foreseeable harm” standard, may involve complications the Food Marketing Court did not fully appreciate.

(4)  The decision may lead lower courts to question the long-standing interpretive principle that FOIA exemptions are to be construed narrowly, as well as augur a change in the Supreme Court’s approach.

(5) Particularly given Justice Breyer’s observations, the case may have implications for private entities ability to insist upon the government withholding information relevant to the safety of its consumers or the welfare of its employees.

I will discuss each of these implication in Part II of this series.

[1] Id. (citing WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 476 (1961); BLACK’S LAW DICTIONARY 370 (rev. 4th ed. 1968).


[3] Id.  These assurances of confidentiality appear to have been based on the USDA’s view that 7 U.S.C. § 2018(c), requiring it to promulgate regulations limiting “the use or disclosure of information obtained” [from retailers applying to participate in the food stamp program] to purposes directly connected with administration and enforcement of the provisions of this chapter or the regulations issued pursuant to this chapter.”  See, Brief of the United States as Amicus Curiae, Food Marketing Institute v. Argues Leader Media, Dkt. No. 18-481, 27-30 (Feb. 22, 2019)(accessible at 2019 WL 929184).  But in Argus Leader Media v. USDA, 740 F.3d 1172, 1176 (8th Cir. 2014), the Court held that the provision inapplicable to aggregate redemption data because such data was supplied to USDA by third-party processors.

[4] Id. at *5.  Indeed, it heaped scorn on the National Park Court’s reliance on statements at legislative hearings — “we can all agree that ‘excerpts from committee hearings’ are ‘“‘among the least illuminating forms of legislative history.”’” Id. (citing Advocate Health Care Network v. Stapleton, 137 S.Ct. 1652, 1661 (2017) and Kelly v. Robinson, 479 U. S. 36, 51 n.13 (1986).  All the more so when, as in the case before it, “the witness statements do not comport with official committee reports” and the statutory text.  Id.

[5] Id. at *6.  The statement that FOIA’s exemptions are to be construed narrowly is a commonplace in FOIA precedents (including those of the current era).  See, e.g., Department of the Air Force v. Rose, 425 U.S. 352, 360-61 (1976); Department of Interior v. Klamath Water Users Protective Assn, 532 U.S. 1, 7-8 (2001); Milner v. Department of the Navy, 562 U.S. 562, 571 (2011).   Justice Breyer noted such precedents in his separate opinion.

[6] He cited WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 476 (1966) (defining “confidential” to mean “characterized by or relating to information considered prejudicial to a country’s interests”) and WEBSTER’S NEW COLLEGIATE DICTIONARY 237 (1974) (defining “confidential” to mean “containing information whose unauthorized disclosure could be prejudicial to the national interest”)).

[7] He cited two D.C. Circuit cases, Niagara Mohawk Power Corp. v. Department of Energy, 169 F. 3d 16, 19 (D.C. Cir. 1999), and Public Citizen Health Research Group v. FDA, 704 F. 2d 1280, 1291, n. 30 (D.C. Cir. 1983), as cases reflecting an unduly narrow interpretation of competitive harm.

[8] The National Parks test, as applied by the lower courts, may be sufficiently inflexible to encompass these scenarios.  See, National Parks, 498 F.2d at 770 n.17; 9 to 5 Org. for Women Office Workers v. Bd. of Governors of the Fed. Reserve Sys., 721 F.2d 1, 10 (1st Cir. 1983)(two primary prongs of National Parks are not “the exclusive criteria for determining confidentiality”).  For example, in New Hampshire Right to Life v. U.S. Dept. of Health and Human Services, 778 F.3d 43 (1st Cir. 2015), cert. denied, 136 S. Ct. 383 (2015), the First Circuit found competitive harm to Planned Parenthood even though it was the only qualified Title X provider in the relevant area.  The Court noted that Planned Parenthood faces competition for patients from hospitals and clinics that offer similar services.  See id. at 51.  Moreover, even with respect to “competition” for Title X grant money, other entities could submit competitive applications in the future.  Id.


[10] Id. at 278-94.

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