Last month, the Department of Justice Office of Information Policy issued new guidance on the definition of confidential information under Exemption 4 of the Freedom of Information Act. This new guidance addresses the meaning of “confidential” in light of the Supreme Court’s decision in Food Mktg. Inst. v. Argus Leader Media, 139 S. Ct. 2356 (2019). While not determinative, this DOJ Guidance offers contractors critical insight into how agencies will respond in the first instance to FOIA requests for information that may be subject to Exemption 4. This exemption protects “trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential.” 5 U.S.C. § 552(b)(4).

As covered in this space earlier this year, in Food Marketing Institute, the Supreme Court jettisoned 40 years of established FOIA case law on how agencies defined confidential under Exemption 4. It rejected the well-established “competitive harm” test from National Parks & Conservation Association v. Morton, 498 F.2d 765 (D.C. Cir. 1974) based on the lack of support in the statutory language. In its place, it adopted a “plain language” interpretation of confidential, finding two potential definitions: (1) information “customarily kept private, or at least closely held,” by the submitting party; and (2) information disclosed when the receiving party provides “some assurance that it will remain secret.” The Supreme Court held that the first condition was mandatory but expressly left open whether confidential information could lose that status if provided to the government “without assurances that the government will keep it private.” As a result, contractors and agencies alike were left without clear guidance as to whether, or when, a government “assurance” may be required.
Continue Reading DOJ Issues New Guidance for Treatment of Confidential Information Under Recent Supreme Court FOIA Decision

On Monday, the Supreme Court significantly altered how government agencies will treat confidential commercial information protected from disclosure by Exemption 4 of the Freedom of Information Act (“FOIA”) — an issue that recurs repeatedly with respect to information submitted by contractors to government agencies.  Food Marketing Institute v. Argus Leader Media, No. 18-481 (U.S. June 24, 2019). The Court overturned 45 years of lower-court precedent requiring that the submitter show both that the information was not publicly disclosed, and that its release would cause substantial competitive harm.  The Court’s decision seemingly expands the scope of Exemption 4 by removing the “substantial competitive harm” requirement. However, the effect of this apparent expansion is unclear, because the Court suggested but did not resolve whether Exemption 4 also requires a new element: a showing that the submitter’s information was provided under an assurance by the government that it would keep the information confidential.

Notwithstanding the question left open by the Court, Food Marketing points the way to several steps that contractors can take to protect their commercial and financial information from release under the new interpretation of Exemption 4.


Continue Reading Supreme Court Shakes Up FOIA Exemption for Confidential Information

Although the Freedom of Information Act (FOIA) allows citizens to request agency records and thus keep a close eye on their government, proprietary information is exempt from disclosure under Exemption 4, which protects “trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential.” A substantial body of case law has developed regarding what does and does not qualify as proprietary, and therefore exempt, under FOIA. For example, the total price paid under a government contract is rarely exempt, but a contractor’s line-item pricing often can be. However, there is no per se rule that line-item pricing is exempt from release under FOIA. Instead, contractors must show on a case-by-case basis that the disclosure of the line-item pricing would cause competitive harm.

On September 28, 2018, the D.C. District Court issued two noteworthy decisions holding that line-item pricing data and commission rates were exempt from release under FOIA Exemption 4. Northrop Grumman Systems Corp. v. NASA, No. 17-1902, 2018 WL 4681012 (D.D.C. Sept. 28, 2018); Hodes v. Treasury, No. 17-0219 (D.D.C. issued Sept. 28, 2018). Although these decisions do not break new ground, they are nonetheless significant as the latest examples of a court preventing the disclosure of pricing information. They suggest that courts are willing to apply a broad definition of confidential commercial or financial information where the contractor makes the necessary showing. They also reject common agency arguments for disclosing pricing information, such as the information is too old or not final. Thus, these opinions provide useful authority in defending against the public release of contractor pricing information.
Continue Reading New Cases Confirm that FOIA Exemption 4 Protects Line-Item Pricing Information

The Ninth Circuit recently confirmed that predicting the future with near certainty is not required when seeking to protect information from disclosure under Exemption 4 of FOIA. In a recent unpublished decision, the Ninth Circuit concluded that Sikorsky Aircraft’s small business subcontracting plan was “confidential commercial or financial information” exempt from disclosure under Freedom of Information Act, Exemption 4. See Am. Small Business League v. Department of Defense, No. 15-15120, 2017 WL 65399 (9th Cir. Jan. 6, 2017) (ASBL II). Although the non-precedential decision merely reaffirmed the existing standard for determining competitive harm, the decision was significant because it rejected the lower court’s position that Exemption 4 required a party to show that release in effect “would” produce competitive harm rather than simply “could” lead to such harm.  In addition, the ruling confirmed that employee contact information and signatures are protected from disclosure by Exemption 6 (Personal Privacy).

Continue Reading Ninth Circuit Rejects Heightened Standard for Demonstrating Likelihood of Competitive Harm Under FOIA Exemption 4