WASHINGTON — The Supreme Court has ruled in favor of the Food Marketing Institute (FMI) in a lawsuit concerning the confidentiality of store-level sales data provided to the government by retailers participating in the Supplemental Nutrition Assistance Program (SNAP).
The case stemmed from a 2011 Freedom of Information Act (FOIA) request by a Sioux Falls, S.D., newspaper, the Argus Leader, to obtain from the Department of Agriculture (USDA) the names and addresses of stores that participate in the SNAP program as well as each store’s annual SNAP redemption data for the years 2005 to 2010. The USDA refused to provide the data, citing FOIA’s Exemption 4 clause, which protects from mandatory disclosure private parties’ “commercial or financial information” when that information is “confidential.”
The Argus Leader subsequently sued the USDA, and after defending its position in court for several years, the agency eventually abandoned the case. At that point FMI entered the fray on behalf of its members.
“We took this step because throughout the process many FMI members were deeply concerned that releasing this information would give competitors access to proprietary information that retailers keep confidential for a reason,” explained Leslie Sarasin, president and chief executive officer of FMI.
But an Appeals Court ruled against the trade group, citing a 1974 interpretation by the Circuit Court of Washington, D.C., that private information should not be considered “confidential” unless its disclosure would cause “substantial competitive harm.” In January, though, the Supreme Court agreed to hear FMI’s appeal.
“We support FOIA … but FOIA was not intended to open the books to a store’s confidential business information or impede the competitive landscape,” argued Jennifer Hatcher, chief public policy officer and senior vice president of government and public affairs for FMI. “A substantial amount of SNAP data is already disclosed by month, state, county and year.”
In April, both sides presented oral arguments to the Supreme Court. The court’s decision, handed down late last month, rejected the 1974 interpretation. In a 6-3 decision written by Associate Justice Neil Gorsuch, it upheld the plain statutory text of Exemption 4.
“At least where commercial or financial information is both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy, the information is ‘confidential’ within the meaning of Exemption 4,” the court determined.
According to FMI, the court’s ruling should protect private financial information in the future.
“We agree with the U.S. Supreme Court’s ruling that a 45-year-old interpretation of what constitutes ‘confidential commercial and financial information’ required reexamination,” said Sarasin.