Can a corporation suffer an “unwarranted invasion of personal privacy” from release of information it turned over to federal investigators? Yesterday, the Supreme Court heard oral argument in FCC v. AT&T, Inc., in which the Court will decide whether the Third Circuit Court of Appeals was correct in holding that corporations—as well as individuals—may claim that information is exempt from disclosure under Exemption 7(C) of the Freedom of Information Act (“FOIA”). That exemption prevents disclosure of “records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information . . . could reasonably be expected to constitute an unwarranted invasion of personal privacy.” If the Court affirms the Third Circuit, corporations may have a powerful new weapon for preventing release of a new class of information—“private,” in addition to “proprietary,” information.
Some commentators have said the Supreme Court’s recent decisions favor business interests. The New York Times reported in December that business interests had prevailed in 13 of the 16 cases from last term in which the Chamber of Commerce filed an amicus brief. (The Chamber filed a brief in AT&T.) The most notable case in this supposed pattern is Citizens United v. Federal Election Commission, in which the Court held that like people, corporations have First Amendment rights regarding regulation of political speech. Yesterday’s lively argument, however, suggests that the Court may have difficulty extending that equivalence to personal privacy rights, at least under the FOIA statute.
Much of yesterday’s argument centered on the word: “personal.” In its brief, AT&T argued that because “person” is defined for purposes of FOIA to include corporations, the word “personal” in Exemption 7(C) must include them, too. Justice Alito’s opening question to the government pointed out that certain legal terms, such as “personal jurisdiction” may refer to corporations. Anthony Yang, Assistant to the Solicitor General (appearing for the FCC), countered that the phrase “personal jurisdiction” was coined to distinguish between in personam and in rem jurisdiction. Accordingly, the “evolution of the term [personal] in the law as a term of art does not reflect what the ordinary meaning of ‘personal’ is.”
Indeed, following Justice Alito’s opening salvo, the Court shifted its focus to that “ordinary meaning.” Chief Justice Roberts pointed out that “it is not hard at all” to “come up with other examples where the adjective was very different from the root noun,” pointing to “craft and crafty,” “squirrel [and] squirrely” and “pastor and pastoral”—and flat out told Geoffrey Klineberg, counsel for AT&T, that “I don’t think there’s much to” AT&T’s argument that FOIA’s use of “personal” necessarily was tied to its definition of “person.” In response, Mr. Klineberg backed away from the so-called “grammatical imperative” that use of the adjectival form of a defined noun necessarily referred to the statutorily defined term, instead proposing “that where the adjective means ‘of or relating to a term that Congress has expressly defined,’ that definition should be applied, so long as it makes sense to do so in light of the text and structure of the statute as a whole.” Mr. Yang, however, argued that the Court’s opinion in American Express Co. v. Koerner was “fatal” to AT&T’s position. That case interpreted the use “personal” in the Truth in Lending Act (“TILA”) in a manner that excludes corporations, even though corporations are included in TILA’s definition of “person.”
The Court also probed how corporations can ever have a privacy interest (as opposed to a property interest) in information. Therein may lie the rub for corporations following this case. It is uncontroversial that some corporate information—namely trade secrets and confidential commercial and financial information—falls within FOIA Exemption 4, and thus is protected from mandatory release. If the Court affirms in AT&T, would Exemption 7(C) simply create a redundant exemption for corporate information? Put another way, is “private” corporate information already protected under Exemption 4? The government claims that it is. AT&T, meanwhile, asserts that a separate class of information would be subject to exemption, which it characterizes as “confidential internal information about  alleged wrongdoing that, even if not proprietary . . . could nevertheless be used in an effort to damage [the corporation’s] reputation.” During argument, the Court asked what type of corporate information might be exempt under Exemption 7(C). Mr. Klineberg gave the example of “a series of emails among corporate officers [in which] they engage in a frank exchange about the competence and intelligence of a would-be regulator of the corporation.” He pointed out that “increasingly, FOIA is being used by competitors and legal adversaries to obtain information, not about what the government is doing . . . but about what evidence the government might have gathered from private parties.”
The government disputes that corporations can have such a reputational interest in the first place, noting in its briefs that “[a]rtificial entities like corporations cannot experience the emotions (e.g., embarrassment, annoyance, shame, or stigma) that are at the heart of what personal privacy is all about.” AT&T, on the other hand, cites the protection of corporate privacy and dignitary interests in other contexts—such as case law affording corporate premises the protections of the Fourth Amendment and the ability of corporations to sue for defamation—to show that corporations can indeed have privacy interests in information.
AT&T is the second of three FOIA cases the Court will consider this term. The first case, Milner v. Dep’t of the Navy, argued on December 1, concerned whether the military could assert Exemption 2 (exempting information relating to an agency’s “internal personnel rules and practices”) in response to a FOIA request for the blast radius of storage facilities. (During the Milner argument, Chief Justice Roberts noted that given the large number of FOIA requests received by the various agencies of the Federal government, “it takes forever to get the documents.” The Chief Justice did not expand on that line of inquiry during the AT&T argument despite the fact that, presumably, enabling corporations to claim an additional FOIA exemption would do nothing to quicken agency response time.)
The issue in the last FOIA-related case of the term, Schindler Elevator Corp. v. U.S. ex rel. Kirk (oral argument on which is set for March 1) involves whether a federal agency’s response to a FOIA request may serve as the basis for a qui tam suit brought by a private individual under the False Claims Act. While these three cases involve three separate features of FOIA, they serve as a reminder that FOIA information may be used to obtain potentially sensitive information relating or belonging not only to government agencies themselves (as in Milner), but to private entities who submit information to the government in a variety of contexts (as in AT&T and Schindler Elevator).
A decision in FCC v. AT&T is expected by June. We will have a full analysis of that decision, and its implications for businesses, at that time.