Part 1, we discussed access to information requests in Canada.
In the United States, businesses that interact with the federal agencies as defined in the Freedom of Information Act may be similarly subject to a freedom of information (FOIA) request. A FOIA request compels the federal agency to disclose records in its possession should any person make a formal request. As such, a FOIA request may be used in the United States to gain information about competitors.
The goal of the Act is to encourage accountability through transparency. Under the Act, any person, regardless of citizenship or residency, has the right to request access to federal agency records. The Act defines “agency” as any executive department, military department, Government corporation, Government controlled corporation, or other establishment in the executive branch of the Government (including the Executive Office of the President), or any independent regulatory agency. The Act defines “records” as any information that would be an agency record maintained by an agency in any format, including an electronic format; and any information maintained for an agency by an entity under Government contract, for the purposes of records management. Any record that a federal agency creates or receives in relation to a business may be subject to a FOIA request, regardless of whether the records contain sensitive, confidential, or proprietary information.
Each state has its own FOIA legislation that applies to state agencies. State agency obligations and exemptions can vary and may be more onerous than the federal Act, as such, different considerations and safeguards may apply.
FOIA applies to only records that are in the possession of federal agencies, not information. Therefore, images viewed, but not copied or downloaded, are not subject to FOIA disclosure (emails are considered records subject to FOIA disclosure). An information sharing systems that does not allow for copying or downloading of information, may be used to protect information, however, any notes related thereto may be subject to disclosure.
Exemptions from Disclosure
Records in the possession or control of a federal agency, may be protected from disclosure under one of FOIA’s nine exemptions: (1) classified records, (2) records related to internal personnel rules, (3) records specifically exempted by statute, (4) confidential commercial information, (5) inter or intra agency memorandums not available other than by an agency in litigation with another agency, (6) personnel and medical files, (7) records or information compiled for law enforcement purposes, (8) information generated by an agency supervising financial institutions, and (9) geological and geophysical information.
The federal agency determines whether or not to apply an exemption. The party that seeks to prevent disclosure may appeal the federal agency’s decision by proving that, in making the decision to disclose the relevant records, the federal agency acted in an arbitrary and capricious manner (McDonnell Douglas v NASA).
Exemptions for Businesses
The confidential and commercial information exemption (Exemption 4) is the most salient for businesses. Exemption 4 prohibits federal agencies from disclosing trade secrets and commercial or financial information. Pursuant to Public Citizen Health Research Group v FDA, trade secret means a secret, commercially valuable plan, formula, process or device that is used for the making, preparing, compounding or processing of trade commodities and that can be said to be the end product of either innovation or substantial effort. Public Citizen defined commercial or financial information as any records that relate to business or trade that are provided by an individual or legal person (such as a corporation) that are considered to be either privileged or confidential.
To ensure that a federal agency considers Exemption 4, trade secrets and commercial or financial information should be marked as containing confidential commercial information. Pursuant to Executive Order 12,600, when records are marked as confidential, the US Government policy is to provide notice of a FOIA request and an opportunity to explain why an exemption should apply.
The author would like to thank Gianrico DePasquale and Roseanna Dat, students-at-law enrolled under the Law Practice Program of the Law Society of Upper Canada under placement with Fasken Martineau, for their research and contributions to this post.