Law Enforcement Investigates, Competitors Reap the Data

Can we now finally put to rest the specious and political claim that the U.S. Supreme Court is a pro-business court?

On Tuesday, the Court handed down an 8-0 opinion [here] in FCC v. AT&T, Inc, holding that corporations cannot make use of personal privacy exception under the Freedom of Information Act to protect company information obtained by law enforcement. As the NAM Manufacturing Law Center’s entry on the case explains:

An exemption in the Freedom of Information Act (FOIA) applies to 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.” AT&T turned over records to the FCC in connection with an investigation of some bills, and a trade association [CompTel] representing some of its competitors sought all the records. In this suit to prevent the FCC from releasing the records, the Third Circuit held that a corporation is included in the statute’s definition of a “person” and thus has personal privacy interests protected from disclosure by Exemption 7(C) of FOIA.

The National Association of Manufacturers filed an amicus brief [available here] on December 15, 2010, arguing that corporations enjoy easily recognizable privacy interests other than those involving financial or trade secrets, and the government’s investigative powers should not be used to serve private ends, or to cause harm or embarrassment unrelated to proper investigative purposes. Billions of private messages should not become available for public display merely because a business entity is swept up in a government investigation, either as a target, a victim, or a source of information. A wide range of in-house communications, in the hands of a competitor or a third party, including the press or trial lawyers, could be deployed to harm the company, its shareholders and employees. It is improper and abusive for the government’s broad investigative power to be used to serve private ends and cause private injury.

On March 1, 2011, the Supreme Court unanimously decided that “personal privacy” is a term that is not defined in the statute, and its ordinary meaning does not include the privacy interests of corporations. Chief Justice Roberts issued the Court’s opinion, citing other sections of FOIA where personal privacy has been interpreted to include only an individual’s privacy interests. As a result of the decision, companies that provide information to the government will only be able to argue that it should not be publicly disclosed because it falls within Exemption 4 of FOIA, relating to “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”

UPDATE (4:35 p.m., Thursday): The Supreme Court reversed the Third Circuit, notes Ed Whelan, and thus AT&T’s legal theory was a serious one:

Those sneaky “corporatist” justices are at it again, cleverly disguising their biases by ruling in favor of employees and/or against corporations in two Supreme Court decisions issued today:

1. In Staub v. Proctor Hospital, the Court, reversing the Seventh Circuit, ruled unanimously that an employer could be held liable for employment discrimination based on the discriminatory animus of an employee who influenced, but did not make, the ultimate employment decision. Justice Scalia wrote the lead opinion.

2. In FCC v. AT&T, the Court, in a unanimous opinion by Chief Justice Roberts, ruled that corporations do not have “personal privacy” for purposes of a Freedom of Information Act exemption. The ruling reversed a Third Circuit decision.

Join the discussion 2 Comments

  • Carter Wood says:

    Guess you’ll have no problem turning over your info to your competitors, too. Super generous of you.

  • Arthur says:

    When writing comedy, it’s always good to go with the crowd pleaser’s. That anyone could open an article the way you do in light of Citizens United is pure comic gold. In any case, the court ruled that AT&T couldn’t have extra protection not already written in to the statute. That is hardly a blow against the corporate machine. But please, keep telling us about those poor, down-trodden corporations and the terrible, horrible, no good, very bad courts. I do enjoy a good comedy.

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