Privacy, personhood, and the courts: FOIA exemption 7(C) in context.

• Author: Hartman, Scott A.
• Position: Freedom of Information Act

Must federal agencies consider the "personal privacy" of corporations in determining whether to release records pursuant to the Freedom of Information Act (1) (FOIA)? The U.S. Court of Appeals for the Third Circuit recently answered this question affirmatively in a decision that the Supreme Court will review this Term. The case, AT & T v. FCC (AT&T),2 comes in the midst of a heated public debate over the proper scope of corporate personhood that was sparked by the Supreme Court's recent pronouncement that artificial entities, like natural persons, enjoy a right to free speech that is protected by the First Amendment. (3) The Court's decision in Citizens United has been subjected to withering criticism by President Obama, members of Congress, and Court-watchers for allegedly failing to recognize that the policy justifications for a robust right of individual expression are not readily translatable to the corporate context. (4) Supporters of the decision respond that there is a long tradition in Anglo-American law of analogizing corporations to natural persons for the purposes of establishing their rights and duties (5) and cite 1 U.S.C. [section] 1 in support of this contention. (6)

At first glance, one might be tempted to understand the Third Circuit's decision in AT&T as compelled by the understanding of corporate personhood embraced by a majority of the Supreme Court in Citizens United. Although the Court of Appeals reached its decision before the Court's landmark campaign finance opinion was released, the appeals court's opinion discussed at length the meaning of personhood in concluding that AT&T could invoke FOIA's "personal privacy" exception to prevent the disclosures. Early press coverage of the Supreme Court's certiorari grant has likewise tended to associate FCC v. AT&T with the issue of corporate personhood that the Court confronted in Citizens United. To take one particularly revealing example, a blogger on the website of The Atlantic recently suggested that Citizens United might provide insight into the Court's likely holding in AT&T, since "both cases have at their core the issue of corporate 'personhood' and the rights that accompany it." (7) The implicit understanding among those who emphasize the Citizens United connection is that the robust conception of corporate personhood evidenced by a majority of the Court in that case is likely to dictate an outcome favorable to AT&T.

But this need not and (as I argue below) should not be the case. What neither the Third Circuit's opinion nor the analogy to Citizens United recognizes is that it is the term "privacy," not the term "personal," that most severely limits the scope of [section] 552(b)(7)(C) (Exemption 7(C)). Indeed, as I argue below, a more nuanced understanding of the concept of privacy--as it is employed in FOIA and elsewhere in American law--would lead the Supreme Court to conclude that Exemption 7(C) is inapplicable to AT&T. This is so, not because a corporation cannot be a "person" for the purposes of the statute, but because "privacy" is a concept that has meaning only when applied to natural persons.

In the Part that follows, I recount the facts giving rise to AT&T and provide a short summary of the Third Circuit's decision and reasoning. Part II goes beyond the court's decision, developing a more robust notion of privacy by examining occurrences of the term within the FOIA statute. Parts III and W provide support for my reading of the statute by noting that other sources of law, as well as theoretical explorations of privacy, conceive of it as a right particular to individuals.

1. THE THIRD CIRCUIT DECISION

   AT & T v. FCC grew out of an investigation by the Federal Communications Commission (FCC) into allegations that AT&T had overcharged the federal government for certain telecommunications equipment. As part of that investigation, the FCC required AT&T to produce sensitive information, including internal e-mails, billing information, and invoices. The matter terminated with a consent decree, but in 2005 a group of AT&T's competitors filed a FOIA request aimed at obtaining "[a]ll pleadings and correspondence contained in" the Commission's investigative file. (8)

   AT&T opposed the request on the grounds that the records were protected by FOIA Exemption 7(C). That provision authorizes federal agencies to withhold "records or information compiled for law enforcement purposes," the disclosure of which "could reasonably be expected to constitute an unwarranted invasion of personal privacy." (9) AT&T argued that the purpose of the exemption was to prevent embarrassment and stigmatization as a result of FOIA disclosures and that the corporation ran such a risk if the challenged documents were in fact released. (10) The FCC rejected this position after concluding that corporations lack "personal privacy" under the exemption.

   AT&T filed a petition for review of the FCC's order, arguing that the Commission's interpretation of Exemption 7(C) was incorrect as a matter of law. In reviewing the petition, the Third Circuit relied heavily on the plain text of the Act. The court found it particularly relevant that FOIA "defines 'person' to 'include an individual, partnership, corporation, association, or public or private organization other than an agency."' (11) Although the statute does not define "personal privacy," the construction that is at the heart of Exemption 7(C), the court reasoned that "[i]t would be very odd indeed for an adjectival form of a defined term not to refer back to that defined term." (12)

   Consistent with this reading of the text, the Third Circuit rejected the FCC's attempt to analogize Exemption 7(C) to [section] 552(b)(6) (Exemption 6). That provision, which covers "personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy," (13) has been interpreted by a number of courts to apply only to individuals. (14) The Third Circuit questioned the accuracy of these decisions but also noted that, even if the government's characterization of Exemption 6 as inapplicable to artificial entities was correct, "[t]his does not mean that each and every component phrase in that exemption, taken on its own, limits Exemption 6 to individuals." (15) Because only individuals may be the subjects of "personnel and medical files," that phrase, rather than the "personal privacy" language, could limit Exemption 6 to individuals. The court reasoned that Exemption 7(C), which does not contain the reference to "personnel and medical files," might therefore be available to a wider class of claimants.

   In holding that Exemption 7(C) may be invoked by corporations, the Third Circuit also sought to distinguish several precedents in the D.C. Circuit that suggested that court would apply the exemption only where a disclosure was likely to implicate an individual's privacy interests. Although the FOIA decisions of the D.C. courts, which have universal though not exclusive jurisdiction in this area, (16) are generally given substantial weight by other courts, the Third Circuit dispensed with the competing precedents in a footnote. (17)

   While most of the D.C. Circuit cases concerned the meaning of "personal privacy" in the context of Exemption 6, (18) upon which Exemption 7(C) was in part modeled, Washington Post Co. v. U.S. Department of Justice (19) was more directly on point. In Washington Post Co., Judge Abner Mikva, writing for an ideologically diverse panel that also included Judges Patricia Wald and David Sentelle, concluded that Exemption 7(C) does not prevent the disclosure of "[i]nformation relating to business judgments and relationships." (20) The Post sought records from the Food and Drug Administration concerning an investigation into whether the Eli Lilly Company had failed to disclose adverse reactions to an arthritis drug that it marketed. Lilly attempted to block the disclosure on several grounds, including that it would compromise the company's "personal privacy" as protected by Exemption 7(C). In rejecting the claim, the D.C. Circuit noted that "[t]he disclosures with which the statute is concerned are those of 'an intimate personal nature' such as marital status, legitimacy of children, identity of fathers of children, medical condition, welfare payments, alcoholic consumption, family fights, and reputation." (21)

   The Third Circuit did not discuss Washington Post Co. in detail, noting only that, like an individual, a corporation has "a strong interest in protecting its reputation." (22) The panel then added, "to the extent that [the D.C. Circuit's] cases can be read to conflict with our textual analysis, we decline to follow them." (23) But, as this Comment argues below, even engaging the Third Circuit on its own textualist terms, there were strong arguments for Exemption 7(C)'s inapplicability that neither the court nor the litigants adequately considered. These arguments turn on the meaning of the term "privacy," a matter to which the court devoted only passing attention.

2. FOIA PRIVACY

   The Third Circuit's analysis of Exemption 7(C)'s plain language is open to the same critique to which the court subjected the FCC's Exemption 6 analogy. In emphasizing the broad statutory definition of the term "personal," the court overlooked the possibility that the noun that it modifies--"privacy"--might itself restrict the scope of the exemption. Indeed, careful attention to the term "privacy," as it is used both in the statute and in the law more generally, reveals the court's holding to be anomalous. Privacy, as it is properly understood, is an interest that is unique to individuals...