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Oh, SNAP! The Supreme Court Holds Store Level SNAP Redemption Data is Confidential Under FOIA Exemption 4

In a major victory for grocers, the United States Supreme Court (in a 6-3 decision) held that store level SNAP retailer data is exempt from disclosure under Exemption 4 of the Freedom of Information Act (“FOIA”). Exemption 4 precludes the disclosure of “commercial or financial information obtained from a person and privileged or confidential.”  5 U.S.C. § 552(b)(4).  The case began nearly a decade ago following the submission of a FOIA Request by the Argus Leader, a Sioux Falls, South Dakota newspaper seeking nationwide store level SNAP retailer redemption data.  In response to the Argus Leader’s FOIA Request, USDA’s Food and Nutrition Service (FNS) asserted that the requested records were exempt from disclosure pursuant to Exemption 4 (and several other grounds ultimately rejected by the lower courts). On June 24, 2019, the Supreme Court reversed the decisions issued by the Eighth Circuit Court of Appeals and the District Court against the retailers, concluding that store level SNAP redemption data was exempt from disclosure under Exemption 4.

The Court reviewed the language used by Congress when it enacted FOIA in 1966 and found that the word “confidential” should be given its “ordinary, contemporary, common meaning” at the time the legislation was drafted. There is no dispute that the word “confidential” meant (back in 1966) and still means “private” or “secret.”  While those federal courts that initially interpreted Exemption 4 did so in a manner consistent with its plain meaning, for the last four decades that has not been the case. Since 1974, when the D.C. Circuit issued its decision in National Parks v. Morton, most circuit courts have adopted a “substantial competitive harm” test.  Those words were not used by Congress when it enacted FOIA.  Justice Gorsuch, who wrote the opinion, was rather blunt in his criticism of the D.C. Circuit’s substantial competitive harm test: “[w]e cannot approve such a casual disregard of the rules of statutory interpretation.”  The opinion continued by describing the National Parks test as a “relic from a ‘bygone era of statutory construction,” noting that it relied on legislative history despite the “clear statutory language.”

The Court concluded that the retailers established that information requested by the Argus Leader was customarily and actually treated as private. It also determined that retailers did so after FNS provided them with repeated assurances that the information would be kept private.  The newspaper, which called no witnesses, did not rebut this testimony.  As a result, the Supreme Court found that store level SNAP retailer data constituted commercial or financial information that was “customarily and actually treated as private by its owner and provided to the government under an assurance of privacy, that the information is ‘confidential’ within the meaning of Exemption 4.”

Finally, in a portion of the decision that will likely warm the hearts of association lawyers across the county, the opinion noted that the Food Marketing Institute (“FMI”) had standing to pursue the appeal.  The Court held that FMI demonstrated that its members have or will suffer harm if store-level SNAP retailer data is disclosed, that such harm is “fairly traceable” to the district court’s judgment, and that such harm could be addressed by a favorable ruling.  This determination is consistent with more than two decades of Supreme Court precedent that provides that plaintiffs need only demonstrate that they have or will suffer an injury-in-fact to have standing to sue.

In sum, the Argus Leader decision restores the proper balance to how federal agencies and courts must interpret Exemption 4 – based on the plain meaning of the word “confidential,” not a judicially created requirement inconsistent with the statutory language used by Congress more than 50 years ago.

OFW Principal Stewart Fried devotes a majority of his practice towards representing retailers and retailer associations on SNAP-related matters before FNS and the federal courts.  Mr. Fried submitted an amicus brief on behalf of a retailer association during appellate proceedings.

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