AT&T v. FCC: 3rd Circuit Rules that Corporations May Invoke Personal Privacy Exception to FOIA Disclosure

AT&T v. FCC: 3rd Circuit Rules that Corporations May Invoke Personal Privacy Exception to FOIA Disclosure

Courts have long recognized that corporations have rights that are at least akin to individual privacy rights. Recognized corporate privacy rights include trade secrets and the exercise of the attorney-client privilege. However, the scope of corporate privacy rights is not nearly as broad as the scope of individual privacy rights. Many federal and state privacy laws only apply to individuals, not corporations. For example, the Federal Privacy Act only prohibits the government from collecting and disclosing certain types of information about “individuals” — a term defined to only include U.S. citizens and permanent resident aliens. See 5 U.S.C. § 552a(a)(2).

When dealing with a law that provides protection for privacy rights, attorneys and judges are often unsure whether the law applies only to individuals or covers corporations, as well. An opportunity for such line-drawing has recently arisen as to the scope of a “personal privacy” exception to the Freedom of Information Act (FOIA). 5 U.S.C. §552(b)(7).

Under FOIA, a government agency is generally obligated to produce any records in its possession upon a request form any person. 5 U.S.C. § 552(a)(3). However, there are many exceptions to this rule. Among these are, matters that are:

Exception 4: trade secrets and commercial or financial information obtained from a person and privileged or confidential (5 U.S.C. § 552(b)(4));

Exception 6: personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy (Id. at § 552(b)(6)); and

Exception 7(C): records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information . . . (C) could reasonably be expected to constitute an unwarranted invasion of personal privacy (Id. at § 552(b)(7)(C)).

Prior decisions in the D.C. Circuit, which handles the plurality of FOIA appeals, have held that Exception 4, for “trade secrets,” does apply to business entities, such as corporations. Judicial Watch, Inc. v. U.S. Dept. of Energy, 310 F.Supp.2d 271 (D.D.C. 2004), affm’d in part, 412 F.3d 125 (D.D.C. 2004) (§(b)(4) exemption “serves the interest of the government in operating efficiently and effectively by enabling it to obtain necessary commercial and financial information from private persons and business entities”).

However, Exception 6, for “personal and medical files,” has so far only been applied to individuals. For example, in Multi Ag Media LLC v. Dept. of Agriculture, 515 F.3d 1224 (D.D.C. 2008), the Court stated that “Exemption 6 “has not been extended to protect the privacy interests of businesses or corporations”. Of course, this statement does not necessarily mean that Exception 6 might not also one day be extended to cover corporations as well.

Similar laconic statements have been made about Exception 7(C). However, the restriction of Exception 7(C) to individuals has now been soundly rejected by the 3rd Circuit.