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Amazon, Other Retailers Pick Up Win in High Court FOIA Case (2)

June 24, 2019, 2:28 PMUpdated: June 24, 2019, 6:58 PM

The U.S. Supreme Court limited the amount of information grocery operations, including those run by Amazon, Walmart and other retailers, have to disclose under the Freedom of Information Act.

The court ruled unanimously to undo a decades-old rule that governed the disclosure of “confidential” commercial or financial information held by the government in every federal circuit to have considered the issue. They were split 6-3 as to what the new rule should be.

The decision in the Agriculture Department food stamp case is a loss for South Dakota newspaper Argus Leader. It had requested Supplemental Nutrition Assistance program—or SNAP—redemption information for individual grocers in 2011.

Justice Neil Gorsuch wrote the majority opinion that was joined by Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, Elena Kagan and Brett Kavanaugh.

They concluded that such information is now subject to a FOIA exemption that shields from mandatory disclosure “commercial or financial information” considered “privileged or confidential.”

Lower courts had held that such information couldn’t be deemed confidential unless disclosing it was likely to result in “substantial competitive harm.”

Here, the U.S. District Court for the District of South Dakota allowed the disclosure, saying any competitive harm wasn’t “substantial.”

Intervening after that ruling, the Food Marketing Institute was unsuccessful at the U.S. Court of Appeals for the Eighth Circuit before turning to the Supreme Court, where Gorsuch wrote in the decision that “confidential” should instead simply take its common meaning of “private” or “secret.”

Since retailers customarily do not disclose store-level SNAP data publicly, that information is covered under the exemption.

Such data would provide an unfair advantage to competitors if released, said Leslie Sarasin, president and CEO of the FMI trade group.

“Legislative history tells us … FOIA was created to shine a light on actions by the government, not on that of private parties,” Sarasin said in a statement.

Justice Stephen Breyer wrote an opinion concurring in part and dissenting in part, in which Justices Ruth Bader Ginsburg and Sonia Sotomayor joined.

Breyer agreed that FOIA does not require the “stringent” requirement of substantial competitive harm, but said FOIA’s exemption for confidential information should include a harm requirement “so long as it is genuine.”

Tools like this, which are used to “probe the relationship” between government and businesses, should not be unavailable simply because the government or business wish to keep it so, he wrote.

“[G]iven the temptation, common across the private and public sectors, to regard as secret all information that need not be disclosed,” Breyer wrote, “I fear the majority’s reading will deprive the public of information for reasons no better than convenience, skittishness, or bureaucratic inertia.”

Open the Government, a group that advocates for transparency, said agencies and contractors will use this interpretation to “bypass” FOIA. The group filed an amicus brief in support of the South Dakota newspaper.

The ruling will likely handicap the ability of journalists and public interest organizations to use FOIA to access government information and provide it to the public, said Freddy Martinez, a policy analyst for Open the Government.

Chip Stewart, a lawyer and journalism professor at Texas Christian University, agreed.

“Decisions like this pull transparency away,” Stewart said. “It’s a way for businesses receiving public dollars to not be transparent about how they spend them.”

Gorsuch criticized the dissent for citing from specialized dictionary definitions that have “no bearing” on the FOIA exemption.

“Really, our colleagues’ submission boils down to a policy argument about the benefits of broad disclosure,” Gorsuch wrote.

The case is Food Marketing Institute v. Argus Leader Media, U.S., No. 18-481, reversed and remanded 6/24/19.

With assistance from Jordan Rubin.

(Adds comment from TCU professor, and trims and edits throughout.)

To contact the reporter on this story: Kimberly Strawbridge Robinson in Washington at krobinson@bloomberglaw.com

To contact the editor responsible for this story: Jessie Kokrda Kamens at jkamens@bloomberglaw.com

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