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FOIA ruling denies corporate exemption

By: Denise M. Champagne//March 7, 2011

FOIA ruling denies corporate exemption

By: Denise M. Champagne//March 7, 2011

Corporations cannot use a “personal privacy” exemption in responding to a Freedom of Information request, the U.S. Supreme Court has ruled.

Its unanimous opinion, issued last week, reverses a lower court in Philadelphia that sided with AT&T in a 2009 case in which the Dallas-based communications corporation tried to block the release of communications with the Federal Communications Commission related to alleged over billing of a Connecticut public school district.

The case was argued Jan. 19.

Jeffrey A. Wadsworth, a partner at Harter Secrest & Emery LLP, doesn’t think the decision will have much impact on corporations because they still fall under other protections within the law.

“I don’t think it really changed the law as it had been interpreted,” he said. “It answered a question as to whether or not corporations could fall within the personal privacy protection with in FOIA. The Third Circuit, from what I understand, is the only federal Court of Appeals to have extended that protection to corporations.”

The Freedom of Information Act, as noted by Chief Justice John Roberts, requires federal agencies to make records and documents publicly available upon request, subject to several statutory exemptions. One — Exemption 7(C) — involves the disclosure of law enforcement records which “could reasonably be expected to constitute an unwarranted invasion of personal privacy.”

The gist of the case came down to the interpretation of “personal.” AT&T argued the word incorporates the statutory definition of “person” which includes corporations.

In this case, CompTel, a trade association, submitted a FOIA request for documents AT&T had provided to the Federal Communications Commission Enforcement Bureau during an investigation of that company.

The bureau found that Exemption 7(C) applied to individuals identified in AT&T’s submissions, but not to the company itself, concluding that corporations do not have “personal privacy” interests as required by the exemption.

The FCC agreed with the bureau, but the court of appeals for the Third Circuit did not. It held that Exemption 7(C) extends to the “personal privacy” of corporations, reasoning that “personal” is the adjective form of the term “person.”

“We disagree,” Chief Justice Roberts wrote, noting the word “personal” ordinarily refers to individuals and when speaking of personal characteristics, personal effects etc., people are not usually referring to corporations.

“In fact, we often use the word ‘personal’ to mean precisely the opposite of business-related: We speak of personal expenses and business expenses, personal life and work life, personal opinion and a company’s view.”

CompTel’s Freedom of Information Act request, according to the decision, related to an investigation by the FCC of its Education-Rate program, created to enhance access for schools and libraries to advanced telecommunications and information services.

AT&T, a program participant, voluntarily reported to FCC in August 2004 that it might have overcharged the government for services it provided as part of the program.

As part of the investigation, AT&T provided the bureau with various documents, including responses to interrogatories, invoices, e-mails with pricing and billing information, names and job descriptions of employees involved, and AT&T’s assessment of whether those employees had violated the company’s code of conduct.

The FCC and AT&T resolved the matter in December 2004 through a consent decree in which AT&T — without conceding liability — agreed to pay the government $500,000 and to institute a plan to ensure future compliance with the program.

Several months later, CompTel — “a trade association representing some of AT&T’s competitors” — submitted a FOIA request for information in the bureau’s file on the AT&T investigation.

AT&T opposed. The bureau, in a letter, concluded that some of the information AT&T had provided (including cost and pricing data, billing-related information and identifying information about staff, contractors, and customer representatives) should be protected from disclosure under FOIA Exemption 4, which relates to “trade secrets and commercial or financial information.”

It decided to withhold other information under FOIA Exemption 7(C), concluding that “individuals identified in [AT&T’s] submissions” have “privacy rights” that warrant protection.

The bureau did not, however, apply that exemption to the corporation itself, reasoning that “businesses do not possess ‘personal privacy’ interests as required” by the exemption.

AT&T sought review in the Court of Appeals for the Third Circuit which rejected the FCC’s reasoning. The FCC then petitioned the U.S. Supreme Court for review with CompTel filing as a respondent supporting petitioners.

AT&T’s argument, according to the decision, treats the term “personal privacy” as the sum of its two words: the privacy of a person. Under that view, the defined meaning of the noun “person,” or the asserted specialized legal meaning, takes on greater significance. But two words together may assume a more particular meaning than those words in isolation.

“Personal” in the phrase “personal privacy” conveys more than just “of a person,’” Justice Roberts wrote. “It suggests a type of privacy evocative of human concerns — not the sort usually associated with an entity like, say, AT&T.

“The protection in FOIA against disclosure of law enforcement information on the ground that it would constitute an unwarranted invasion of personal privacy does not extend to corporations,” Justice Roberts added. “We trust that AT&T will not take it personally.”

Wadsworth said based on the fact that the matter was decided so quickly (six weeks) and that the decision was unanimous shows the issue wasn’t controversial.

“That suggests to me it wasn’t a case that the court really had to wrestle with,” he said. “I think that this decision stands in contrast to the perception that the Roberts Court has a pro-corporate bent.”

Wadsworth also found humor in Justice Roberts’ closing remark and other parts of the decision, Federal Communications Commission et al. v. AT&T Inc. et al. 09-1279.

“The chief justice showed good humor in the decision which is somewhat unusual of the court in published decisions,” he said. “And refreshing.”

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