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              Congressional                                             ______
            *.Research Service






When Does the Government Have to Disclose

Private Business Information in its

Possession?



April  24, 2019

On Monday, April 22, the Supreme Court heard oral arguments in Food Marketing Institute (FMI) v.
Argus Leader Media, in which the Court is considering the scope of Exemption 4 of the Freedom of
Information Act (FOIA). That exemption authorizes agencies to withhold from disclosure under FOIA
confidential commercial or financial information that a non-governmental entity has supplied an
agency. While Exemption 4 has generated significant case law in the lower federal courts, the Supreme
Court has never-until now-considered the issue. Third parties regularly submit sensitive proprietary
information to the federal government in a diverse array of contexts, including such varied situations as
applications for government loans; applications for drug approvals by the Food and Drug Administration;
military and other government contracts; and settlement negotiations with agencies. As a result, the
Court's decision in FMI implicates a public policy debate about the scope of Exemption 4. On one hand, a
narrow view of the exemption could affect private parties' willingness to share information submitted to
the government under these and other contexts. At the same time, financial and commercial information
may often be associated with federal programs and activities that implicate public health and safety, the
allocation of federal funds, and other matters of public interest that may warrant public scrutiny.
Accordingly, a decision that broadens agencies' discretion to withhold under Exemption 4 may effect a
corresponding limitation on the public's access to such important data. In anticipation of the Court's
decision in FMI, this Sidebar provides a general overview of Exemption 4 and FMI.

FOIA and Exemption 4

Congress enacted FOIA in 1966 by amending the Administrative Procedure Act (APA). Congress
intended the 1966 law 'to pierce the veil of administrative secrecy and to open agency action to the light
of public scrutiny.' While the original APA contained requirements for agencies to make various
documents publicly available, the exceptions to disclosure in the APA's public information section had, in
the estimation of FOIA's drafters, become the maj or statutory excuse for withholding Government
records from public view. FOIA therefore established a general presumption of public accessibility to
agency information. In this vein, FOIA directs agencies to disclose certain types of information

                                                                Congressional Research Service
                                                                https://crsreports.congress.gov
                                                                                    LSB10294

CRS Legal Sidebar
Prepared for Members and
Committees of Congress

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