This is my third post regarding the stay of the mandate in Food Marketing Institute v. Argus Leader Media. The Supreme Court appears ready to consider, and potentially upend, the well-developed Circuit law defining the scope of Freedom of Information Act (“FOIA”) Exemption 4 — the National Parks/Critical Mass doctrine. My first post described the doctrine’s development. The second argued that even under a more textualist approach, SNAP aggregate redemption data should still fall outside Exemption 4. This third post (of which this is Part A, with Part B to follow) addresses the interaction between lower court stare decisis and devotion to textualism. Even if the current Court would adopt a textualist interpretation of Exemption 4 were there no contrary Circuit precedent, should it uphold Circuit precedent established for over 40 years?
I. The Simple Answer?
At first blush, the answer seems simple. The Supreme Court has no obligation to defer to courts of appeals on questions of federal law. The Court’s very reason for existence is providing final interpretations of federal law; failing to give its own best judgment regarding a federal statute’s meaning arguably constitutes an abdication of that responsibility.
Rivers v. Roadway Express, 511 U.S. 298 (1994), is instructive in this regard. In Patterson v. McLean Credit Union, 491 U.S. 164 (1989), the Supreme Court held that 42 U.S.C. §1981, prohibiting discrimination in the making of contracts, did not cover wrongful termination. The decision upended settled Circuit law. In Rivers v. Roadway Express, plaintiff argued that section 101(b) of the Civil Rights Act of 1991, Pub. L. 102-166, 105 Stat. 1071, which overturned Patterson, should be presumed to have retroactive effect because it merely “restored” the pre-Patterson “law.” The Court rejected the argument, observing that its opinions “finally decide what [the law] had always meant” and establish that prior contrary lower court opinions “ha[ve] misinterpreted the will of the enacting Congress.” Id. at 313, n.12. The pre-Patterson court of appeals precedent was never “the law.” Such precedents “were incorrect,” not by some abstract standard of interpretive validity, but by the rules that govern the hierarchical federal court system. Id. at 312.
The federal courts’ hierarchical structure does not preclude the Court from deferring to the weight of lower court opinion on occasion as a matter of discretion; but a 2011 FOIA case suggests the Court’s rejection of even that approach. In Milner v. Department of the Navy, 562 U.S. 562 (2011), the Court overturned Crooker v. Bureau of Alcohol, Tobacco and Firearms, 670 F.2d 1051 (D.C. Cir. 1981)(en banc), finding that there was no “high-2” exemption that shielded from disclosure materials whose release would facilitate circumvention of agency enforcement efforts. Milner, 562 U.S. at 573-77. Eight members of the Court rejected Justice Breyer’s argument that the Court should defer to the weight of lower court authority embracing Crooker’s atextual construction of Exemption 2. See, id. at 585-92 (Breyer, J., dissenting). Justice Kagan, writing for the Court, abruptly rejected Justice Breyer’s plea — the Court has “no warrant to ignore clear statutory language on the ground that other courts have done so.” Id. at 576. But she also noted the sharp split in the Circuits over Crooker, observing that the case had been cited a sum total of 5 times outside the D.C. Circuit in the preceding 30 years. Id. at 576-77.
But might the Court consider deferring to lower court precedent in more appropriate circumstances, where the Circuit law does less violence to the statutory language or where the Circuit precedent is virtually uniform? Before discussing that question, lets us consider more conventional doctrines — the doctrines of legislative reenactment and acquiescence.
II. Reenactment and Acquiescence
Judicial or executive construction of statutes can become authoritative on a theory of legislative reenactment or acquiescence. Most of the major reenactment and acquiescence cases involve interpretations of statutes by the Supreme Court or federal agencies that Congress has arguably implicitly endorsed. Almost all of the caselaw below involves either of those two scenarios.
Applicability to Lower Court Precedent
Conceptually at least, uniform court of appeal doctrine can also provide the basis for reenactment or acquiescence arguments, and the Supreme Court has accorded some significance to congressional action or inaction in such circumstances. E.g., General Dynamics Land Systems, Inc. v. Cline, 540 U.S. 581, 593-94 (2004)(Souter, J.); Evans v. United States, 504 U.S. 255, 268–269 (1992)(Stevens, J.); see Milner, 562 U.S. at 586-87 (Breyer, dissenting)(listing cases). Review of the cases Justice Breyer lists in his Milner dissent reveals that the Justices most devoted to textualism rarely rely on such reasoning, and at times vigorously contest such arguments, see, Evans v. United States, 504 U.S. at 293, n.7 (Thomas, J., dissenting).
Granted, court of appeals precedent is subject to de novo Supreme Court consideration, and thus can only ever be considered tentative until explicitly confirmed by the Supreme Court. Rivers v. Roadway Express, 511 U.S. at 312, 313 n.12. Theoretically, then, Congress could not consider any lower court precedents firmly established. But to a large extent, the same is true for agency decisions, which are subject to Supreme Court disapproval or administrative reversal. The inherently tentative nature of intermediate appellate court precedent may simply suggest greater caution before finding that Congressional reenactment or acquiescence encodes those precedents.
Distinguishing Reenactment and Acquiescence
Legislative reenactment occurs when Congress reenacts a statutory provision after it has been construed by a court or administrative agency. Lindahl v. Office of Personnel Management, 470 U.S. 768, 782 n.15 (1985). “Congress is presumed to be aware of an administrative or judicial interpretation of a statute and to adopt that interpretation when it reenacts a statute without change.” Id. FOIA cannot serve as a basis for a classic reenactment argument. Though Congress regularly amends FOIA, the statute does not “sunset,” and thus Congress need not formally reenact it.
Reenactment might also encompass enacting a similar provision that reflects a judicial or administrative interpretation of a statute. For example, the Glomar doctrine, which allows intelligence agencies to refuse to affirm or deny the existence of records, was arguably given implicit congressional imprimatur in the Freedom of Information Reform Act of 1986 (“FOI Reform Act of 1986”), Pub. L. 99-570, tit. IN, 100 Stat. 3207-48, §1802(b) (adding a new 5 U.S.C. §552(c)). The new subsection (c) authorized the FBI to refuse to acknowledge the existence of documents responsive to a FOIA request if the acknowledgement of documents would result in certain harms.
Legislative acquiescence occurs when Congress fails to amend a statute after the courts or the relevant federal agency have construed it. Legislative acquiescence has been found only in relatively rare circumstances, Bob Jones University v. United States, 461 U.S. 574, 600-602 (1983); accord, Kimbrough v. United States, 552 U.S. 85, 106 (2007); Flood v. Kuhn, 407 U.S. 258, 281-83 (1972). Courts generally refrain from finding acquiescence based on legislative inaction because Congress’ failure to act can be ambiguous, Bob Jones University, 461 U.S. at 600; Zuber v. Allen, 396 U.S. 168, 185 n.21 (1969)(“[t]he verdict of quiescent years cannot be invoked to baptize a statutory gloss that is otherwise impermissible”); Solid Waste Agency v. U.S. Army Corps of Engineers, 531 U.S. 159, 169-70 & n.5 (2001); accord, Rapanos v. United States, 547 U.S. 715, 750 (2006). As the Court explained in Zuber v. Allen, “[t]his Court has many times reconsidered statutory constructions that have been passively abided by Congress[;] [c]ongressional inaction frequently betokens unawareness, preoccupation, or paralysis.” 396 U.S. at 185 n.21. Indeed, the Court has opined generally on the choice between finding congressional endorsement of atextual precedents by virtue of inaction and honoring the statute’s clear meaning derived from its text and evidence of the enacting legislators’ original understanding. In Solid Waste Agency, the Court asserted that “[a]bsent . . . overwhelming evidence of acquiescence, we are loath to replace the plain text and original understanding of a statute with an amended agency interpretation.” 531 U.S. at 169-70 & n.5.
Between the prototypical reenactment and “inaction” scenarios falls situations in which Congress alters the language of a statute, indeed provisions proximate to one the courts or an agency have construed, but leaves the particular provision at issue undisturbed. E.g., General Dynamics, 540 U.S. at 594 n.7; Monessen Southwestern Railway v. Morgan, 486 U.S. 330, 338-39 (1988); Lindahl v. Office of Personnel Management, 470 U.S. at 782 n.15; see, EINER ELHAUGE, STATUTORY DEFAULT RULES: HOW TO INTERPRET UNCLEAR LEGISLATION 72 (2008). This might best be categorized as acquiescence, after all Congress has not affirmatively reenacted the particular provision at issue. However, in contrast to pure “inaction” scenarios, Congress’ failure to change a provision in a frequently-amended statute more likely reflects a conscious decision to leave undisturbed the extant judicial or executive construction of the unamended portions of the statute. And this may be particularly true “when the area is one of traditional year-by-year supervision, like tax, where watchdog committees are considering and revising the statutory scheme.” Zuber v. Allen, 396 U.S. at 185 n.21.
Note that the Government proffered such an argument in Milner. It asserted that when Congress, in 1986, modified Exemption 7 but left Exemption 2 unchanged, it had acquiesced in the D.C. Circuit’s Crooker doctrine. 562 U.S. at 574-75. But the majority noted that had Congress shared the D.C. Circuit’s understanding of Exemption 2, some of the revisions Congress made in Exemption 7 would have been superfluous. Id. at 575. So the Milner majority rejected the acquiescence argument because it clashed with the changes made in 1986.
III. Acquiescence in the FOIA Context
Notwithstanding Milner, a legislative acquiescence argument should be particularly potent in the FOIA context in general and with regard to the lower courts’ uniform construction of Exemption 4 in particular. FOIA is not just any statute and the Exemption 4 caselaw is not just any caselaw.
FOIA has garnered a great deal of congressional attention over the years. Indeed, in the Openness Promotes Effectiveness In Our National Government Act of 2007 (“the OPEN Government Act”), Pub. L. 110-175, 121 Stat. 2524, Congress specifically committed itself to periodically reviewing FOIA. Paragraph 6 of Congress’ legislative findings asserts:
Congress should regularly review . . . the Freedom of Information Act in order to determine whether further changes and improvements are necessary to ensure that the Government remains open and accessible to the American people and is always based not upon the “need to know” but upon the fundamental “right to know”.
Since 1974, Congress has ensured that it remains abreast of caselaw construing FOIA’s exemptions. Section 3 of the FOIA Act amendments of 1974, Pub. L. 93-502, 88 Stat. 1561, directed the Attorney General to provide Congress, annually, a listing of (1) “the number of cases arising under [FOIA],” (2) “the exemption involved in each case,” and (3) “the disposition of such case.” Id. at §3 (codified at 5 U.S.C. §552(d)), amended and recodified as, 5 U.S.C. §552(e)(6)(A), the FOIA Improvement Act of 2016, Pub. L. 114-185, 130 Stat. 538).
FOIA has been amended twelve times since its enactment, with major revisions at relatively regular intervals — 1974, 1986, 1996, 2007, and 2016. Several exemptions have been modified, some in reaction to judicial doctrine. Congress amended Exemption 1 in response to EPA v. Mink, 410 U.S. 73 (1973), see, Pub. L. 93–502, supra, §2(a) (1974). Congress has twice revised Exemption 3, to limit the number of non-FOIA statutes that empower agencies to withhold records, first in 1976, the Government in the Sunshine Act, Pub. L. 94–409, §5(b), 90 Stat. 1247, and again in 2007, the OPEN Government Act, supra, §12. Similarly, Congress modified Exemption 7 in reaction to the caselaw, to tighten up the circumstances under which agencies could invoke the law enforcement exemption, in both 1974, Pub. L. 93‑502, supra, §2(b), and 1986, FOIA Reform Act of 1986, supra, §1802(a). Congress amended Exemption 5 in the FOIA Improvement Act of 2016, supra, §2(2). Almost uniformly the exemptions have been modified to make more records available. Granted other amendments to FOIA have limited its reach, such as those that allow the FBI to refuse to acknowledge the existence of certain documents, FOI Reform Act of 1986, supra, §1802(b)(adding 5 U.S.C. §552(c)), and limit foreign government entities from invoking FOIA to access information held by U.S. intelligence agencies, Intelligence Authorization Act for Fiscal Year 2003, Pub. L. 107–306, 116 Stat. 2383, tit. IIIB, §312(1)(adding 5 U.S.C. §552(a)(3)).
Moreover, House and Senate committees have held numerous hearings on FOIA and FOIA-related matters in the statute’s 52-year history. See UNITED STATE CONGRESS SERIAL SET, SERIAL NO. 14774, Appendix 2 at 43-47 (U.S. Government Printing Office 2004)(listing hearings, inter alia, regarding FOIA from 1964-1999)[available in google books]; FOIA Advocates, Links & Resources (listing 34 hearings from 1964-1996); National Archives, Congressional Hearings (listing hearings regarding FOIA and transparency in the 111th through the 115th Congress). So both before 2006, when it explicitly undertook to do so, and thereafter, Congress has held hearings to maintain awareness of developments in FOIA law and practice.
And Exemption 4 is not an obscure exemption. Courts have rendered numerous Exemption 4 decisions that apply the National Parks/Critical Masses test. A search of the relevant key number in the westlaw data base (Records key number 59) on September 21, 2018, showed numerous reference to headnotes in cases — 262 court of appeals references and 1046 district court references.
In 1977, shortly after the National Parks litigation concluded, a House Committee on Government Operations subcommittee devoted an entire hearing to examining FOIA requests for business data and reverse “FOIA” lawsuits. Business Record Exemption of the Freedom of Information Act: Hearings Before a Subcomm. of the House Comm. on Government Operations, 95TH CONG., 1ST SESS. 2 (1977). The hearing was sparked, in part, by the Government’s assertion that the National Parks doctrine required it to engage in detailed factfinding, Office of Information Policy, U.S. Department of Justice, FOIA Update, Protection Business Information (Vol. IV, No. 4 Jan. 1, 1983). The Committee subsequently produced a report on the issue. House of Representatives Committee on Government Operations, Freedom of Information Act Requests for Business Data and Reverse FOIA Lawsuits, H.R. REP. NO. 95-1382, 95TH CONG., 2D SESS. (1978).
While the report said it was “too early to make final judgments about the competitive harm test,” in part because the courts were still defining the precise contours of the National Parks doctrine, it did note that the approaches preceding the National Parks test were unacceptable. Id. at 22. It rejected the concept that business records would be shielded from disclosure “because a business would prefer its records to be confidential.” Id. And, it said, “any test based on actual business policies for release of information,” i.e., customary business practice, were inadequate “because of the widespread practice of withholding information whether or not there is a legitimate reason for the withholding.” Id. at 18. Thus, “[t]he proper inquiry under the fourth exemption is not whether the information is customarily withheld, but why the information should be withheld.” Id. (emphasis added). Indeed, the Committee asserted, “[a]ny test for determining the confidentiality of business records “must evaluate both the legitimate need for confidentiality and the consequences of disclosure.” Id. at 22-23. But most importantly, the report set Congress and the Executive Branch on the course they would pursue for the next decade, crafting procedural protections for business information while leaving the courts’ explication of Exemption 4 in National Parks undisturbed. Id. at 2, 12. In the Committee’s view, clerical errors and failures to consider all the relevant confidentiality arguments were more significant causes of agency failures to properly protect submitters’ records than any shortcomings in the National Parks test. Id. at 12. The following year, as the Committee anticipated, the Supreme Court held that submitters could bring suit to enjoin agencies from releasing business records covered by Exemption 4, in Chrylser Corp. v. Brown, 441 U.S. 281, 293-94 (1979), H.R. REP. NO. 95-1382, at 4, 59, 63, firmly establishing one of the procedural protections the Committee believed important.
Five years later, the 1984 House subcommittee hearings on a proposed FOIA overhaul featured a panel of five witnesses discussing concerns about the protection of confidential business data. S. 774, AN ACT ENTITLED “THE FREEDOM OF INFORMATION REFORM ACT,” Hearings Before a Subcomm. of the House Comm. on Government Operations, 98TH CONG., 2D SESS. 279-401 (1984)(“1984 House Hearings”) (testimony of Richard M. Patterson, Burt A. Braverman , Richard F. deLima, Ralph Engel, and Thomas M. Sussman). While the witnesses recognized the effects of both National Parks and Public Citizen Health Research Group v. Food & Drug Administration, 704 F.2d 1280 (D.C. Cir. 1983) on the protection for trade secrets (Public Citizen), as well as financial and commercial information (National Parks), they advocated for procedural protections giving business entities “due process” in protecting information rather than changing the substantive standard for disclosure, i.e., the National Parks test. See, e.g., 1984 House Hearings at 401 (colloquy between Representative Lewis, Burt Braverman, and Thomas Sussman).
Unlike in many acquiescence cases, where bills are introduced to reverse an agency or court decision, the bills introduced in the wake of National Parks did not seek to reverse National Parks or re-establish the more text-based interpretation of Exemption 4 that seemed to be emerging prior to that decision. Over several years in the early 1980’s Senator Orrin Hatch introduced FOIA reform bills that included provisions regarding FOIA requests for business information. Freedom of Information Reform Act, S.150, 99TH CONG. (Orrin Hatch) (unenacted); Freedom of Information Reform Act, S.774 98TH CONG. (Orrin Hatch) (unenacted); Freedom of Information Improvements Act of 1981, S.1751 97TH CONG. (Orrin Hatch) (unenacted); Freedom of Information Reform Act, S.1730, 97TH CONG. (Orrin Hatch) (unenacted) (1981-1982). Representative Glenn English, Chair of the Government Information Subcommittee of the House Government Operations Committee, introduced companion bills in the 97th and 98th Congresses. Freedom of Information Improvements Act of 1984, H.R.6414, 97TH CONG. (Glen English) (unenacted); Freedom of Information Improvements Act of 1981, H.R.4805, 97TH CONG. (Glen English) (unenacted). Summaries of all of the Hatch and English bills are available at www.congress.gov.
Each of the bills proposed ensuring commercial entities’ right to enforce the governing doctrine regarding agency withholding of information. They did not propose changing the language of section 4 to reiterate that protection for financial and commercial information records turned on the submitting business entity’s customary confidentiality practices. On the contrary, the proposals would have, in large part, explicitly incorporated the National Parks test. In particular, instead of merely providing that commercial or financial information obtained from a person could be withheld if “confidential,” the amended statute would have provided that such information could be withheld if “its release may impair either the legitimate competitive, financial, or business interests of any person or the government’s ability to obtain such information in the future.” See, Office of Information Policy, U.S. Department of Justice, Text Of Freedom Of Information Act, Showing Changes Proposed In S. 1751/H.R. 4805, FOIA Update (Vol. III, No. 1 Jan. 1, 1981). Indeed, the version of the Freedom of Information Reform Act Hatch introduced in the 97th Congress, S.1730, was reported out of the Committee, S. REP. 97-690, 97TH CONG. 2D SESS. (1982).
Both Senator Hatch and Representative English were deeply involved in the 1986 revisions to FOIA, 132 Cong. Rec. S16496 (Oct. 15, 1986)(colloquy between Senators Leahy and Kerry); 132 Cong. Rec. 10433 (Sept. 27, 1986). That legislation substantially revised the law enforcement exemption, but left Exemption 4 undisturbed. Shortly after the 1986 legislation was enacted, President Reagan promulgated Executive Order 12600, 52 FED. REG. 23781 (1987), which directed agencies to establish a system of consulting business entities who submitted commercial and financial information before they responded to a FOIA request. At that point, legislative proposals regarding Exemption 4 ceased.
IV. Acquiescence Based on Congress’ Enactment of Other Statutes
Acquiescence can be found based on the use of language that has obtained a judicial gloss in other statutes. As noted in the first post in this series, numerous statutes include the words “confidential” and “privileged” in connection with commercial and financial data. A search for provisions of the U.S. Code that contain “privileged” and “confidential” in the Office of Law Revision, United States Code database yielded 79 results. While I have not canvassed all those statutes, many were enacted after 1974, the year National Parks was decided.
Congress’ use of the phrase “privileged or confidential” in connection with financial and commercial information could be ambiguous. It may not signal endorsement of the National Parks/Critical Mass doctrine. Instead, Congress’ adoption of the phraseology used in Exemption 4 could represent an effort to maintain a consistent standard in related statutes involving government handling of information. Many uses of the Exemption 4 phrasing relate to the protection of information private entities submit to the government, e.g., National Aeronautics and Space Administration Authorization Act, Fiscal Year 1993, Pub. L. 102–588, tit. V, § 509, 106 Stat. 5107, 5129 (1992)(currently codified at 51 U.S.C. §20131); Air Transportation Security Act of 1974, Pub. L. 93–366, tit. II, §202, 88 Stat. 409, 417 (currently codified at 49 U.S.C. §40119); ICC Termination Act of 1995, Pub. L. 104–88, tit. I, § 103, 109 Stat. 893 (codified at 49 U.S.C. §14123(b)(2). At least two relate to the closure of meetings of a multi-member commission, the Government in the Sunshine Act, supra, §3(a) (codified at 5 U.S.C. §552b(c)(4)(permitting agency-heading commissions and boards to close meetings to prevent disclosure of “disclose trade secrets and commercial or financial information obtained from a person and privileged or confidential”); Middle Class Tax Relief And Job Creation Act of 2012, Pub. L. 112-96, tit. VI, §6204, 126 Stat. 156, 210 (codified at 47 U.S.C. §1424)(Board of the First Responder Network Authority may close its meetings when necessary “to preserve the confidentiality of commercial or financial information that is privileged or confidential”).
But other statutes suggest that the use of Exemption 4 language without modification may signal congressional endorsement of the National Park’s rejection of business practice as the controlling factor in determining confidentiality. Congress has specified in at least one statute a provision that appears to give business entities the power to determine whether commercial or financial information is “confidential,” the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act, Pub. L. 109-53, tit. III, § 328, 119 Stat. 494 (2005)(codified at 19 U.S.C.A. §4088). And at least one statute that uses of the term “confidential commercial information” is not one that require coordination with government information statutes, the Consumer Review Fairness Act of 2016, Pub. L. 114–258, §2, 130 Stat. 1355 (codified at 15 U.S.C. §45b(b)(3)(A)).
There is substantial reason to conclude that Congress has implicitly endorsed the National Parks/Critical Mass gloss on Exemption 4 (or at the very least has endorsed judicial rejection of tests that give primacy to business policies regarding confidentiality). The forthcoming Part B of this third post will discuss whether lower court precedent should be given special weight even if the Court finds the legislative acquiescence argument set forth above unconvincing.