Food Marketing Institute v. Argus Leader Media

Concerning the withholding of “confidential” information requested under the Freedom of Information Act

Summary

The Food Marketing Institute challenges the Eighth Circuit’s decision to require the USDA to release data on SNAP redemptions at individual stores. The Food Marketing Institute intervened after the USDA declined to appeal the district court’s decision that Exemption 4 did not apply because “any potential competitive harm from the release of the requested SNAP data is speculative at best.” The Eighth Circuit adopted D.C. Circuit’s approach to whether information is “confidential” from National Parks & Conservation Association v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974). Under that test, Exemption 4’s applicability turns on whether disclosure would likely cause substantial competitive harm. The Eighth Circuit found that there would be no substantial harm because the data would only cause a “marginal improvement in accuracy” of competitors’ models. The court also said that a “likelihood of commercial usefulness” was “not the same as a likelihood of substantial competitive harm.” Food Marketing filed a petition for review at the U.S. Supreme Court. The petition was granted.

Background

Factual Background

The Supplemental Nutrition Assistance Program (SNAP) is a federal program that provides nutritious food to low-income families. The U.S. Department of Agriculture (USDA) receives and maintains a record when a SNAP recipient makes an eligible purchase at a participating store.

The USDA releases monthly compilations of SNAP redemption data. The public can access national, state, and congressional-district level SNAP cost data on the USDA’s website. The USDA, however, does not disclose the amount of SNAP redemptions at individual stores.

In 2011, respondent Argus Leader, a newspaper in Sioux Falls, North Dakota, filed a Freedom of Information Act request for SNAP data. Argus Leader requested the store identifier, name, address, store type, and total SNAP sales on an annual sales basis for 2005 to 2010. The USDA released most of the requested information but withheld the store-level SNAP sales data.

Legal Background

The Freedom of Information Act (FOIA) allows the public to request and receive information from executive branch agencies. The law presumes that information is releasable. However, there are nine exemptions. Exemption 4 covers (1) trade secrets, and (2) information that is (a) commercial or financial, (b) obtained from a person, and (c) privileged or confidential.

This case involves the proper test for when information is “confidential.” Until 1974, courts had read “confidential” as information a company held as such, a subjective standard. In 1974, the D.C. Circuit adopted an objective test that requires showing substantial competitive harm in National Parks & Conservation Association v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974). In subsequent decisions, the D.C. Circuit has reaffirmed the National Parks standard. Several circuits, including the Eighth Circuit, have adopted the National Parks substantial competitive harm test.

Procedural History

U.S. District Court for the District of South Dakota

After the USDA refused to provide the requested information, Argus Leader brought suit. The USDA claimed that the store-level SNAP data was protected under the Exemption 4 as “confidential.”

The District Court applied the D.C. Circuit’s substantial competitive harm test. At trial, the USDA proposed two theories for substantial competitive harm: competitors could use the SNAP data to lure away clients and high SNAP sales could stigmatize stores. The court rejected both, finding that any potential competitive harm was speculative because the amount of information released is marginal compared to the data already available for competitor’s models.

U.S. Court of Appeals for the Eighth Circuit

When the USDA declined to appeal the trial court’s decision, a trade group, Food Marketing Institute, which represents grocery stores, appealed the case on the USDA’s behalf. The Eighth Circuit found that there would be no substantial harm because the data would only cause a “marginal improvement in accuracy” of competitors’ models. The court said that a “likelihood of commercial usefulness” was “not the same as a likelihood of substantial competitive harm.” The court also found that there was no evidence stores would be stigmatized or stop accepting SNAP participants if the information were released.

In a footnote, the Eighth Circuit rejected Food Marketing’s argument that “confidential” should be given its “dictionary definition.” The Eighth Circuit, quoting the district court, found this argument precluded by “the Supreme Court’s admonition that FOIA exemptions ‘must be narrowly construed.'” The Eighth Circuit added that “Under FMI’s reading, Exemption 4 would swallow FOIA nearly whole.”

U.S. Supreme Court

The Supreme Court granted certiorari on two questions:

1. Whether the statutory term “confidential” in the Freedom of Information Act’s Exemption 4 bears its ordinary meaning, thus requiring the government to withhold all “commercial or financial information” that is confidentially held and not publicly disseminated—regardless of whether a party establishes substantial competitive harm from disclosure—which would resolve at least five circuit splits.
2. Whether, in the alternative, if the Supreme Court retains the substantial-competitive-harm test, that test is satisfied when the requested information could be potentially useful to a competitor (as the U.S. Courts of Appeals for the 1st and 10th Circuits have held) or whether the party opposing disclosure must establish with near certainty a defined competitive harm like lost market share (as the U.S. Courts of Appeals for the 9th and District of Columbia Circuits have held, and as the U.S. Court of Appeals for the 8th Circuit required here).

EPIC’s Interest

This case bears directly on EPIC’s case against the FTC for Facebook assessments, EPIC v. FTC. EPIC seeks documents from the FTC that Facebook claims are “confidential” and thus should be withheld from the public.

Legal Documents

U.S. Supreme Court, No. 18-481

Petition Stage

• Petition for Writ of Certiorari (Oct. 11, 2018)
• Amicus Briefs in Support of Petitioner
  • Amicus Brief of the Retail Litigation Center (Nov. 14, 2018)
  • Amicus Brief of Alliance of Marine Mammal Parks & Aquariums, Animal Agriculture Alliance, Fur Information Council of American, Institute for Marine Mammal Studies, National Association for Biomedical Research, Protect the Harvest, United States Association of Reptile Keepers, and Zoological Association of America (Nov. 14, 2018)
  • Amicus Brief of the U.S. Chamber of Commerce (Nov. 14, 2018)
  • Amicus Brief of National Association of Convenience Stores, National Grocers Association, and National Retail Federation (Nov. 14, 2018)
• Opposition to Petition for Writ of Certiorari (Dec. 14, 2018)
• Reply to Opposition to Writ of Certiorari (Dec. 24, 2018)

Merits Stage

• Food Marketing Opening Brief (Feb. 15, 2019)
• Amicus Briefs in Support of Petitioner
  • Amicus Brief of National Association of Convenience Stores and others (Feb. 21, 2019)
  • Amicus Brief of the United States Solicitor General (Feb. 22, 2019)
  • Amicus Brief of the U.S. Chamber of Commerce (Feb. 22, 2019)
  • Amicus Brief of Alliance of Marine Mammal Parks & Aquariums and others (Feb. 22, 2019)
  • Amicus Brief of the Retail Litigation Center and others (Feb. 22, 2019)
• Respondent Argus Leader’s Brief (Mar. 18, 2019)
• Amicus Briefs in Support of Respondent
  • Amicus Brief of EPIC (Mar. 25, 2019)
  • Amicus Brief of New Hampshire Right to Life (Mar. 25, 2019)
  • Amicus Brief of the Cause of Action Institute and others (Mar. 25, 2019)
  • Amicus Brief of the Reporters Committee and others (Mar. 25, 2019)
  • Amicus Brief of FOIA and First Amendment Scholars (Mar. 25, 2019)
  • Amicus Brief of the Small Business League (Mar. 25, 2019)
  • Amicus Brief of the Detention Watch Network and others (Mar. 25, 2019)
  • Amicus Brief of Public Citizen and others (Mar. 25, 2019)
  • Amicus Brief of Bioscience Advisors (Mar. 25, 2019)
  • Amicus Brief of AI Now Institute and others (Mar. 25, 2019)
• Oral Argument (Apr. 22, 2019)
  • Transcript
  • Audio
• Opinion (June 24, 2019)

U.S. Court of Appeals for the Eighth Circuit, No. 17-1346

• Appellant Foot Marketing Institute’s Brief (Aug. 15, 2017)
• Amicus Briefs in Support of Appellant
  • Amicus Brief of National Grocers Association (Aug. 23, 2017)
• Appellee Argus Leader Media’s Brief (Oct. 17, 2017)
• Appellant’s Reply Brief (Nov. 30, 2017)
• Opinion (May 8, 2018)

U.S. District Court for the District of South Dakota, No. 4:11-cv-04121

• Complaint (Aug. 26, 2011)
• Opinion (Nov. 30, 2016)

News

• Jonathan Ellis, Supreme Court to Determine it Taxpayer Payments to Businesses Are Confidential, USA Today (Feb. 11, 2019)
• Justices To Consider FOIA’s Exemption 4 In SNAP Grocer Row, Law360 (Jan. 11, 2019)