Retail Operations

By: Leslie G. Sarasin, President and CEO, Food Marketing Institute

Associations often collaborate to help amplify each other’s voices for a common cause, so when the U.S. Supreme Court agreed to hear FMI’s appeal regarding a critically important case for the business community, we were grateful to the multiple organizations that filed amicus briefs in support of our petition.

The Retail Litigation Center was one of these industry groups to step forward and explain how its members rely on Exemption 4 of the Freedom of Information Act to ensure that the confidential information their members disclose to the government will not be released to the general public. In its amicus brief, the Retail Litigation Center demonstrates the significance of how FMI’s Supreme Court case and its ramifications extend far beyond the retail grocery industry.

Deborah White oversees RILA’s corporate legal, compliance and litigation responsibilities. She also serves as President of the Retail Litigation Center, a public policy organization that identifies and contributes to legal proceedings affecting the retail industry. I asked Deborah a few questions to clarify the Retail Litigation Center’s passion about contributing their argument to this Supreme Court Case:

Leslie Sarasin: I must emphasize that this case goes well beyond store-level SNAP data; it has implications for any business owner when it comes to what that business considers “confidential” business information. So, why are RILA and the Retail Litigation Center invested in this case?

Deborah White: “The Retail Litigation Center decided to weigh in on FMI v. Argus because we believe confidentiality is crucial to competition. Exemption 4 of the Freedom of Information Act (FOIA) protects from mandatory disclosure commercial or financial information that is deemed privileged or confidential under the law. When companies disclose confidential information to the government, they rely on Exemption 4 to ensure that the information will not be released. While the RLC and our members are in full support of the transparency FOIA provides, we believe the Eighth Circuit’s decision to upend the very definition of what is considered ‘confidential,’ could have far-reaching, unintended consequences.”

Sarasin: By deciding to hear our appeal, the U.S. Supreme Court agreed this case warrants further discussion and that the application of Exemption 4 should extend at least to store-level SNAP sales data. Out of thousands of cases, why do you think the Supreme Court is willing to hear this case?

White: “While it is impossible to tell why the Court grants certiorari in any case, there are several hallmarks of this case that has made it attractive to the Court. This Court, in particular, seems to take cases that lend themselves to narrow discrete rulings and when the essence of the case is a straightforward question of statutory interpretation. Moreover, Justice Thomas has expressed interest in this issue in previous opinions.

“The case also implicates a doctrine that some Justices seem interested in trimming. Under the so-called ‘canon of remedial interpretation,’ the general language of so-called ‘remedial statutes,’ such as the Fair Labor Standards Act, is read broadly, but the exceptions are read narrowly.

“In Encino Motor Cars v. Navarro, Justice Thomas, writing the for the majority, rejected the principle that exemptions should be construed narrowly, which is exactly what the 8^th Circuit did in its opinion in this case. In our amicus brief, the RLC draws direct parallels between the Encino decision and the statute in FMI v. Argus. We are encouraging the Court to, once again, assert that all words in a statute enacted by Congress should be given equal and fair weight.”

Sarasin: FMI maintains that store-level sales data is confidential, in much the same way the amount business grocers do in cash, credit, debit, checks, or even gift cards is confidential. With the definition of FOIA under review, what’s deemed “confidential” may alter the way retailers view competitive data. It’s important to note that FOIA was not intended to make businesses anti-competitive or to impact the competitive landscape through the release of “confidential “data. If FOIA is applied more liberally what does this mean for businesses?

White: “If the Court allows agencies to release sensitive, confidential data it would put retailers – indeed, any business who provides confidential information to the government – at a competitive disadvantage. Exemption 4 of FOIA has applied and should continue to apply to confidential information that the disclosing party reasonably believes to be confidential. The Court should not permit judges to erect a higher ‘substantial competitive harm’ standard than Congress wrote into FOIA.”

Sarasin: Of course, we’re going to hear more as the government probes deeper into data privacy concerns, exploring which and how information can and cannot be gathered, shared, used or mined. In a transparency-driven world, how do you balance competing needs for confidentiality and information?

White: “In this case, the answer is found in the language of FOIA and its exemptions. Congress spoke precisely to this issue and courts are bound to follow the legislature’s direction. To paraphrase Justice Scalia: there is a reason why Article I of the Constitution, which gives Congress its authority, is more robust than Article III, which is the provision that gives federal courts their authority. In situations in which Congress has spoken, federal courts must give a fair reading to the legislation that Congress enacted. Here, that means that the information that retailers submitted to USDA should be protected from disclosure as Congress clearly intended.”