Retailers’ store-level data of federal food benefit redemption is confidential information, the U.S. Supreme Court ruled Monday, reversing a lower court’s decision and providing a victory for the Food Marketing Institute (FMI), which picked up an appeal of the eight-year-old case it said had far-reaching implications for its member companies.
Associate Justice Neil Gorsuch wrote the 6-3 decision, with Justices Stephen Breyer, Ruth Bader Ginsburg and Sonia Sotomayor dissenting.
At issue in Food Marketing Institute v. Argus Leader Media was whether Exemption 4 to the Freedom of Information Act protects from mandatory disclosure Supplemental Nutrition Assistance Program (SNAP) redemption data, which FMI argued is sensitive and has significant value to competitors.
The decision prevents the public release of SNAP information sought by the Argus Leader, a newspaper in South Dakota. The paper sought the data though the Freedom of Information Act and 2011 and sued the USDA, which oversees the program, when it declined to provide it. The USDA dropped the case in 2017 after losing a bench trial in U.S. Federal District Court in South Dakota, but FMI intervened and appealed to the 8th Circuit court, which last summer also ruled in favor of Argus Media. FMI then appealed the case to the U.S. Supreme Court last year.
“The nation’s grocery stores have long kept confidential the amount consumers spend at individual stores, whether through payment by cash, credit, debit or the Supplemental Nutrition Assistance Program, or SNAP,” FMI President and CEO Leslie Sarasin said in a statement. “This store-level sales data undoubtedly must be considered confidential because its release would provide an unfair advantage to competitors. Legislative history tells us the Freedom of Information Act, or FOIA, was created to shine a light on actions by the government, not on that of private parties, and the court’s expressed desire to refer our case back to the lower courts demonstrates that our case sets an important precedent well beyond disclosing store-level SNAP sales in grocery.”
“We respect the Supreme Court’s decision and we thank our amici partners and our members for their support and counsel throughout this legal journey,” Sarasin continued, adding that the trade association “appreciate[s] the opportunity for a clear interpretation of confidentiality regarding private businesses’ commercial data.”
FMI had argued that releasing SNAP data would make it easier to gauge sales volumes of stores, and subsequently allow competitors to benefit.
The decision said, “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 concluded that the store-level SNAP data qualifies as “confidential” under this standard.
Judge Breyer, in his dissenting opinion wrote, “For the majority, a business holding information as private and submitting it under an assurance of privacy is enough to deprive the public of access. But a tool used to probe the relationship between government and business should not be unavailable whenever government and business wish it so. And given the temptation, common across the private and public sectors, to regard as secret all information that need not be disclosed, I fear the majority’s reading will deprive the public of information for reasons no better than convenience, skittishness or bureaucratic inertia.”
The National Grocers Association (NGA) also applauded the decision. “NGA has maintained that a retailer’s SNAP store data should remain private because its release would harm competition in the food retail industry,” the trade group said in a statement. “Knowing that their confidential business information will remain protected by the government, independent supermarkets will continue to be strong partners in the SNAP food delivery system, serving the millions of American families who rely on domestic food assistance.”
NGA participated in the litigation after the lawsuit was originally filed. NGA President and CEO Peter Larkin testified as an expert witness at a 2016 district court trial, and NGA filed amici briefs at each stage in the appeals process.
Ben Kappleman, a partner at the international law firm Dorsey & Whitney, said the decision “simplifies the test for when commercial or financial information is shielded from a FOIA request.
“Businesses will have an easier time knowing whether the government will keep their confidential information private—either the government said it would, or not. People challenging FOIA denials can focus on simple questions—does the source of the information actually treat it as private, and did the government promise it would maintain that privacy? Those will probably be easier questions to answer than the more complicated ‘substantial competitive harm’ test the Supreme Court rejected,” Kappleman said.