Trade Secrets v. FOIA

On June 24, 2019, SCOTUS issued its decision in Food Marketing Institute v. Argus Leader Media, a case placing trade secret protection against the Freedom of Information Act (FOIA) by asking “when does the information provided to a federal agency qualify as ‘confidential’?”

Argus Leader Media sought information from the US Department of Agriculture (USDA) concerning the names, addresses, and annual SNAP redemption data of all retail stores participating in SNAP. The USDA declined the request, citing FOIA’s Exemption 4. This exemption shields against the disclosure of privileged or confidential “trade secrets and commercial or financial information obtained from a person.”

The District Court applied the “competitive harm” test, which states “commercial information cannot be deemed ‘confidential’ unless disclosure is ‘likely… to cause substantial harm to the competitive position of the person from whom the information was obtained.” It determined that although some competitive harm may result from the disclosure, it wasn’t necessarily substantial competitive harm, ruling in favor of Argus Leader Media. The Eighth Circuit affirmed the judgment, favoring the competitive harm test over the ordinary public meaning of “confidential.”

SCOTUS, however, reversed the decision, favoring the common meaning of “confidential” and stating the competitive harm test does not appear anywhere in FOIA and its implied requirement was erroneously read into the statute. The Court held, “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’ within the meaning of Exemption 4.”