The Government's Commercial Data Pririleze Under Exemption Fire of the Freedom of Information Act

• Author: by Steven V. Feldman
• Pages: 05

1. INTRODUCTION

   In Federal Open Market Committee v. rMerrzll,l the United States Supreme Court held in 1979 that Exemption Five of the Freedom of Information Act (FOIAlZ contains a qualified privilege foarconfidential commercial data that the government generates incident to the award of a federal ~antract.~

   The Merrill Court ruled that the information is protected only if the agency establishes that the data has sufficient commercial "sensitivity" and that public disclosure wuld cause significant harm to the government's legitimate commercial interests.' The Court further stated that the privilege would expire

   when its rationale disappears. for example, "[olnce the contract is awarded or the offer [is] w~thdrawn."~

   Unfortunately, the Merrill Court did little more than recognize a new privilege under Exemption Fire and articulate a general balancing test for determining the releasability of the government's commercial This article. therefore, will attempt to mark the contours of the new FOIA privilege. The article will pravide an overview of the Act, analyze Merrdl and its progeny. and finally, attempt to answer the questions created by Merrili.

   11. OVERVIEW OF THE FREEDOM OF INFORMATION ACT

   19841 COMMERCIAL DATA PRIVILEGE

   FOIA now affords any person a judicially-enforceable right to obtain releasable agency records.'O The Act contains a general philosophy af full agency disclosure of government records unless the information is exempted by clearly delineated statutory language." As the Supreme Court stated in National Labor Relations Board D. Rabbins Tire and Rubber Co.,12 "the basic purpose of [the] FOIA is to ensure an informed citizenry, vital to the functioning ofa democratic society. needed to check against corruption and to hold the governors accountable to the governed.'s

   FOIA contains nine exemptions from disclosure for classified records. internal personnel rules and practices. recordsexernpted by other federal withholding statutes, confidential business data, privileged agency records, personnel, medical. and similar files, investigatory records compiled for law enforcement purposes. reports of financial institutions, and scientific data concerning wells.I( The Supreme Court has indicated that ail FOIA exemptions are permissive rather than mandatory.'s A typical standard for permissive disclosure of exempt records is whenit isdetermined thatnogovern-mental interest will be jeopardized by their reiease.'e Based on FOIA's overriding disclosure policy, courts have construed these exemptions narrowly." Further, the agency bears the burden of

   I.

   mmiftee I

   Mlerrlll 443 US 340, 311 $2 119791

   '6 U S C I552Lbl11976) In eelrain reipeeti Exemption Four IS eloael, related toExemption Five See fextaceampan)mg notes 43-46 83-901nfra Thmformerexemption rafeguards 'tradeaecrets and e0mmeiei8larfinaneial infarmatran obtainedfram

   B person and prwileged or eanfidential" 5 U S C B 552(bll4X1976l For B gmd

   Exemption Four, ~ e e

   Campbell Rrr,ersr Freedom of Informahon Act he Sred/ov Congiissmol Action 61 Geo L.J 103 (19781 Clement The

   Frdeioi Agency Disclosrrr te "Reoerstng"1he Fnedom nlton', 51 St John's L Rev

   i.

   I I ,

   ."".

   establishing the exempt Status of the requested records's and must disclose reasonably negregable portions of exempt documents."

   All federal agencies must publish their regulations implementing the Act in the Federal Register.20These regulations typically inform the public af addresses for requests, records maintained by the agency. prerequisites for a valid FOIA request, fee schedules for search and duplication costs. and administrative appeal procedures.l'

   Although the Act offers no definition ofreleasableagency records, courts have attempted to develop uniform standards. As one commentator has noted:

   A record must be an "agency record.". . .Physical posses-sion by an agency of a record generated by an entity not subject to the Act does not, by itself, dictate agencystatus. Evidence of dominion and control appears to be the evolv-ing standard. While possession is only one of several factars which must be considered ~n making this determination. possession IS essential to status as an agency record Agencies are not required ta retrieve records formerly in their P O S S ~ S S ~

   Similarly. agencies are not required by the Act to obtain or create records ~norder to satisfy a FOIA request. Agencies are required instead to release identifiable records which presently exist and are under the controi of the agency ai

   The Act sets forth three methods of public access to government records: publication, indexing for public inspection. and a c c e ~ ~ upon

   request.23 The agency must publish in the Federal Register documents containing agency organizational structure, operational methods. form materials. statements of policy and rules of general applicability, and amendments. revisions, or repeals of the above records.2' The agency also must index and make available for public inspection and copying the agency's final opinions and orders made in the adjudication of cases, statements of policy and Interpretation adopted by the agency not otherwise available in the Federal

   Register. and administrative staff manuals or staff instructions affecting a member ai the pubiic.ZS Finally. the Act provides for access to records upon request only when the requestor reasonably describes the desired documents and complies with the agency's published procedural guidelines.26

   Upon receipt of a proper FOIA request, the government agency must inform the requestor of its decision within ten working days.2' If the request IS denied, this notice must both explain the reasons for denial and advise the requestor oi available administrative appeliate remedies.28 The agency may extend the time limits for initial denial and subsequent administrative appeals for an additional ten work-ing days.29 In so doing, the agency must give the requestor written notice of bath the unusual circumstances substantiating the delay and the expected date the agency will dispatch its decisian.80

   After exhausting administrative remedies, the requestor may sue in federal district court to obtain any records or parts of records withheld by the agency.31 "In such a case. the court shall determine the matter de novo, and may examine the contents of such agency records in camera to determine whether such records or any part thereoi shall be withheld.. , ,"sz

   111. FEDERAL OPEN MARKET COMMITTEE w. MERRILL

   V d ai 9 552(al(21 The mly exception to this rule IS when the V d . at g S52(a)131#-Id at I 652(alLGl.

   SEId. st D 55Z(aWS).

   "Id. at 5 552(all61iBlaoId Therequebtar isdemedta haveexhausted hisor her administi 11 the asency fails io comply with the applicable time limit8 Id st g

   81M. at I SSP(a)(41(BI O r Hedley Y United States 594 F.2d 1043.

   "5 U.S.C. 5 662 (aH4liB) 11976) 'a443 LT S at 343-47

   published prompili and copies we offered for sale. Id.

   V d ai 9 552(al(21 The mly exception to this rule IS when the material8 are V d . at g S52(a)131#-Id at I 652(alLGl.

   SEId. st D 55Z(aWS).

   "Id. at 5 552(all61iBlaoId Therequebtar isdemedta haveexhausted hisor hiradministrativeiemedies 81M. at I SSP(a)(41(BI O r Hedley Y United States 594 F.2d 1043. 1044 (5th Cir "5 U.S.C. 5 662 (aH4liB) 11976)'a443 LT S at 343-47

   published prompili and copies we...