Supreme Court sides with FMI (SNAP) to keep store-level sales data confidential

In a recent development in June 2019, the US Supreme court gave a judgment that will ultimately limit access to information regarding the business of the grocery dealers and shops, which the general public and journalists can have. It would end the 45 years history of open access to this kind of information by the general public under the Freedom of Information Act (FOIA).

History

  • Back in 2011 ‘Agrus Leader’ a South Dakota newspaper requested the information under the FOIA from the United States Department of Agriculture (USDA) about store-level data including the SNAP funds earned by the businesses dealing in groceries. The USDA refused to share the data citing it confidential business information also protected by the law. Consequently, the Newspaper litigated and finally the case reached the Supreme Court in April 2019.
  • The key was how the word ‘Confidential’ be defined as for many years the courts have been struggling to decide whether or not a piece of company information be revealed to the public, as it could damage the competitiveness of a business so the government departments cannot be obligated to provide the same under FOIA. The Newspaper “Argus leader” repeatedly argued that the SNAP was funded through common American’s tax money and they have every right to know this information which will, by no means, damage the profits of the retailers in question.
  • The USDA lost the case in lower courts but a trade organization of retailers called ‘ Food Marketing Institute (FMI)’ took up the case. The FMI maintained that the court should accept the standard definition of confidentiality that the information or detail needs to be remained private or be given to the party only under the strict condition that it will remain secret. FMI also upheld that the “competitive harm” to the business community in the SNAP has not been properly tested.
  • The business groups and others against the disclosure compulsion had advocated and appealed the high court to turn down the longstanding practice while the news organizations and other open government advocated been pleading for the contrary to leave the practice unchanged.
  • FMI argued that it has been a long practice that the sales of grocery stores have been kept secret paid in whatever manner (debit/credit card, cash or the SNAP benefits). Making this data public can possibly give an unfair advantage to the compotators not participating in SNAP.

Final Judgment

  • After a series of appeals to establish whether or not the requested data falls under the ambit of confidential information under Exemption 4.The final judgment by the US Supreme Court reflected that there was a majority opinion (6-3) that favored the businesses participating in the assistance programs funded by the taxpayers’ money, to decide the amount of data they desire to make public about the financial side of the SNAP, they were involved in. In the Court ruling, it accepted that the dictionary definition of the word ‘confidential’ and that if a business organization or company declares some information as confidential then it could not be obtained under FOIA, so the government should refuse to make that particular information public.
  • The court also added in the order that when the financial or other business data is called private by the business owner and provided to the government on condition of privacy, it needs to be treated so except Exemption 4.
  • Although the decision was based on majority opinion, the judge, who wrote the dissenting note, said that it is against the very spirit of FOIA that offers access to the general public to information it could not have otherwise. He said that the mere fact of financial or commercial information declared confidential by the business owners is not a reason sound enough to rationalize the decision of holding it back. The people or institutions’ request information under FOIA when information is not provided because all major information is available online.

Impacts

  • According to many legal experts and magazines, the order reversed the decades-old precedent set in D.C. Circuit Court that declared private data of the business can not be classified as confidential under FOIA except when the disclosure of such information could potentially negatively impact the particular business commonly known as causing “competitive harm”.
  • The recent judgment can be interpreted as the expansion of the term confidential and now more business information in the United States will be classified as ‘private’ and access to which would be refused.
  • A press release by the FMI says that the 22nd June decision is ‘landmark’ and that it reestablished the balance to how the Court and Federal departments should interpret Exemption 4.

Reactions 

The widespread disappointment is expressed by different quarters especially of the journalist community and other press freedom advocates including major actor like USA TODAY. In their opinion the court decision will further expand the domain of information the businesses, participating in the programs funded by the taxpayers’ money, to decide to hide from public simply by declaring it ‘Confidential’ and public will never be able to know how the money is spent. It can be called a misinterpretation of FOIA.

The journalist community and access to information campaigners planning to demand Congress to reintroduce and explain the notion of “substantial competitive harm” in light of this recent US Supreme Court Judgment.  The director of a coalition of news organizations called “News Media for Open Government’ advocating the freedom of the press also announced that Congress is the next step to check on the judicial branch that hints their consulting to congress against the Supreme court order.

The National Grocers Association (NGA) who was also a party in the case welcomed the decision and emphasized that in the market the data disclosing businesses will be at a disadvantage.

 

The Argus Leader expressed their regret on the decision and declared it as immense damage to the Americans’ right to know how their tax money is spent and the real beneficiaries of that money. They also said that they will continue to struggle for the just cause and the American dream of government openness, accountability and transparency.

Was this article helpful to you?

welfareservice

Leave a Reply

You must be logged in to post a comment.