• R.D. Lieberman,Consultant

Supreme Court Eases the Definition of Confidential Commercial Information Exempt from FOIA

The Freedom of Information Act (5 USC 552, or “FOIA”) requires that upon request, an agency shall “shall make [] records promptly available to any person.” However, there are nine exemptions under which an agency may deny the requested records, as follows: (All are in section (b) of the FOIA).

· (1)[] specifically authorized under criteria established by an Executive order to be kept secret in the interest of national defense or foreign policy [];

· (2) related solely to the internal personnel rules and practices of an agency;

· (3) specifically exempted from disclosure by statute (other than section 552b of this title), if that statute [];

· (4) trade secrets and commercial or financial information obtained from a person and privileged or confidential;

· (5) inter-agency or intra-agency memorandums or letters that would not be available by law to a party other than an agency in litigation with the agency[];

· (6) personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy;

· (7) records or information compiled for law enforcement purposes [with further explanation];

· (8) contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions; or

· (9) geological and geophysical information and data, including maps, concerning wells.

The Supreme Court recently considered exemption at 5 USC 552 (b)(4), Confidential commercial information, and narrowed the basis on which an agency may withhold information. Food Marketing Institute v. Argus Leader Media, No 18-481, (U.S. Sup. Ct. June 24, 2019). Previously, most courts had held that contractors must show that the disclosure of the information would cause “substantial competitive harm.” See Nat’l Parks & Cons. Assn. v. Morton, 498 F. 2d 765, 770 (DC Cir. 1974). Food Marketing rejected this test, indicating that the statutory language could not support the requirement for a competitive harm determination.

The Court reviewed the plain meaning of the term “confidential” and found two potential conditions:

(1) information customarily kept private or at least closely held; and (2) information disclosed when the receiving party provides some assurance that it will remain secret. The Court concluded that Exemption 4 imposed no showing of “harm” whatsoever.

The definition that the Supreme Court endorsed is substantially broader, and much easier for a government contractor to meet than the “substantial competitive harm” test previously used in Nat’l Parks.

The Takeaway. If a government contractor can establish that the information it provides to the government is customarily kept private or at least closely held, and there is some assurance that the government will keep that information secret, then the contractor (and the agency) will be able to withhold that information in response to a FOIA request for it.

For other helpful suggestions on government contracting, visit:

Richard D. Lieberman’s FAR Consulting & Training at https://www.richarddlieberman.com/, and Mistakes in Government Contracting at https://richarddlieberman.wixsite.com/mistakes.

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The website of Richard Donald Lieberman, a government contracts consultant and retired attorney who is the author of both "The 100 Worst Mistakes in Government Contracting" (with Jason Morgan) and "The 100 Worst Government Mistakes in Government Contracting." Richard Lieberman concentrates on Federal Acquisition Regulation (FAR) consulting and training, including  commercial item contracting (FAR Part 12), compliance with proposal requirements (FAR Part 15 negotiated procurement), sealed bidding (FAR Part 14), compliance with solicitation requirements, contract administration (FAR Part 42), contract modifications and changes (FAR Part 43), subcontracting and flowdown requirements (FAR Part 44), government property (FAR Part 45), quality assurance (FAR Part 46), obtaining invoiced payments owed to contractors,  and other compliance with the FAR. Mr.Lieberman is also involved in numerous community service activities.  See LinkedIn profile at https://www.linkedin.com/in/richard-d-lieberman-3a25257a/.This website and blog are for educational and information purposes only.  Nothing posted on this website constitutes legal advice, which can only be obtained from a qualified attorney. Website Owner/Consultant does not engage in the practice of law and will not provide legal advice or legal services based on competence and standing in the law. Legal filings and other aspects of a legal practice must be performed by an appropriate attorney. Using this website does not establish an attorney-client relationship. Although the author strives to present accurate information, the information provided on this site is not guaranteed to be complete, correct or up-to-date.  The views expressed on this blog are solely those of the author. FAR Consulting & Training, Bethesda, Maryland, Tel. 202-520-5780, rliebermanconsultant@gmail.com

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