On June 24, the US Supreme Court issued its opinion in Food Marketing Institute v. Argus Leader Media, expanding the scope of information protected under Exemption 4 of the Freedom of Information Act (FOIA). FOIA establishes an expansive right for the public to access records from executive agencies to hold the government accountable. Limiting that broad right, FOIA includes several broadly worded exceptions whereby the release of certain information may not be compelled under FOIA. One such exemption, Exemption 4, states that “trade secrets and commercial or financial information obtained from a person” that are “privileged or confidential” are protected from mandatory public disclosure. The statute does not define “confidential,” so the question of what “commercial or financial information” is protected from disclosure has resulted in much litigation.
Justice Neil Gorsuch’s majority opinion held that commercial or financial information that is both customarily and actually treated as private by its owner—and that is provided to the government under an assurance of privacy—is exempt from disclosure under FOIA. This holding has significant implications for all businesses that turn any information over to the US government. No longer may courts require proof that the information, if disclosed, would “cause substantial harm” to the company’s competitive position. Mere confidentiality, plus agency representations that the information will remain confidential, is enough.
Given the significant amount of confidential and proprietary information that electric utilities must provide to the Federal Energy Regulatory Commission as part of their existing regulatory obligations, the Court’s decision significantly strengthens the protections provided to such information under FOIA.
A more in-depth analysis of this Supreme Court ruling can be found on Morgan Lewis’s Law Flash. Morgan Lewis will continue to monitor developments in FOIA interpretations as they impact electric utilities.