The U.S. Supreme Court on June 24, 2019, removed a decades-long restriction to withholding confidential business records under Exemption 4 of the federal Freedom of Information Act (FOIA), likely to result in more business records being withheld from public disclosure. Food Marketing Institute v. Argus Leader Media, Case No. 18-481, 588 U. S. ____ (decided June 24, 2019).

The Exemption at issue permits the government to withhold "trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential." 5 U.S.C. § 552(b)(4). "Confidential" is not defined in the statute, but courts have long interpreted it to mean information that is customarily kept private and information that the receiver has provided some assurance that it will remain private. In the 1974 case National Parks & Conservation Assn. v. Morton, 498 F. 2d 765, the D.C. Circuit Court expanded the definition of "confidential" to include a required showing that disclosure would result in "substantial competitive harm" to the business.

Since the 1974 National Parks decision, some courts have been reticent to apply the "substantial competitive harm" test broadly, and the D.C. Circuit itself has limited its application to documents required to be submitted to the federal government. Documents that are voluntarily supplied to the government are held to the more permissive pre-National Parks definition.

The U.S. Supreme Court on Monday held that National Parks was wrongly decided, and that the plain text of the Exemption does not require a showing of harm. Instead, the Court held that information is "confidential" 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."

This case stems from a FOIA request from the Argus Leader newspaper in Sioux Falls, South Dakota, for information about the Supplemental Nutrition Assistance Program (SNAP) program. The Food Marketing Institute objected to disclosure of the information, arguing that disclosure would reveal "confidential" information that Food Marketing Institute provided to the government about Food Marketing Institute's participation in SNAP. Because Food Marketing Institute customarily treats this information as private and provided the information under an assurance from the government it would be kept private, the Court held the records should be withheld, even if releasing them would cause no competitive harm to the Food Marketing Institute.

Because the Court held that Food Marketing Institute both (1) customarily treats the requested information private and (2) the information was provided under an assurance it would be kept private, the Court held there is "no need to resolve [the] question in this case" whether both conditions must be met to be deemed "confidential." Surely the first condition must always be met, the Court said, because "it is hard to see how information could be deemed confidential if its owner shares it freely." But the Court left open for another day the question whether the second condition is required to prove information is "confidential" under Exemption 4.