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U.S. Supreme Court Finds Corporations Have No "Personal Privacy" Under FOIA

By Francis G.X. Pileggi

The United States Supreme Court in Federal Communications Commission v. AT&T Inc., No. 09-1279 (U.S., Mar. 1, 2011), found that corporations have no 'personal privacy' for the purposes of the Freedom of Information Act ('FOIA') which requires federal agencies to make records and documents publicly available upon request, unless they fall within one of several statutory exemptions. Read opinion here.

Kevin F. Brady of Connolly Bove Lodge & Hutz LLP in Wilmington prepared this summary.

The FOIA request at issue related to an investigation by the Federal Communications Commission ('FCC') of AT&T, which had participated in an FCC-administered program to enhance access for schools and libraries to advanced telecommunications and information services. AT&T had voluntarily reported to the FCC that it might have overcharged the Government for services it provided as part of the program. AT&T provided the FCC with various documents, including discovery responses, invoices, emails 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. Several months after the FCC and AT&T settled the matter, a trade association representing some of AT&T's competitors submitted a FOIA request seeking '‘[a]ll pleadings and correspondence'' in the FCC's file on the AT&T investigation.

AT&T opposed the request and the FCC's Enforcement Bureau issued a ruling 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) was protected from disclosure under FOIA Exemption 4, which relates to 'trade secrets and commercial or financial information.' The Enforcement Bureau also determined that other information was protected under FOIA Exemption 7(C) which exempts 'records or information compiled for law enforcement purposes' that 'could reasonably be expected to constitute an unwarranted invasion of personal privacy.' The Enforcement Bureau concluded that 'individuals identified in [AT&T's] submissions' had 'privacy rights' that warranted protection under Exemption 7(C). The Enforcement Bureau, however, did not find that Exemption 7(C) applied to AT&T as a corporate entity, reasoning that 'businesses do not possess ‘personal privacy' interests as required' by the exemption. The FCC reviewed and agreed with Enforcement Bureau's decision rejecting AT&T's position that it is 'a ‘private corporate citizen' with personal privacy rights that should be protected from disclosure that would ‘embarrass' it . . . within the meaning of Exemption 7(C) as being at odds with established FCC and judicial precedent.

AT&T appealed that decision to the Court of Appeals for the Third Circuit arguing that the word 'personal' in Exemption 7(C) incorporates the statutory definition of the word 'person.' AT&T noted that the Administrative Procedure Act defines 'person' to include 'an individual, partnership, corporation, association, or public or private organization other than an agency.' AT&T then argued that 'personal' must mean relating to those 'person[s]': namely, corporations and other entities as well as individuals and '[b]y expressly defining the noun ‘person' to include corporations, Congress necessarily defined the adjective form of that noun—‘personal'—also to include corporations.'

The Third Circuit agreed with AT&T, stating that 'Congress had defined the word 'person' to include corporations as well as individuals, and that Exemption 7(C) extends to the 'personal privacy' of corporations, since 'the root from which the statutory word [personal] . . . is derived' is the defined term 'person.' The FCC petitioned the Supreme Court for review and the Court granted certiorari.

The Supreme Court disagreed with AT&T and reversed the Third Circuit's decision noting that AT&T found no court decisions to support its position because no court (other than the Third Circuit in the opinion below) had expressly referred to a corporation's personal privacy. In an analysis reminiscent of Chancellor Chandler's analysis in the Airgas bylaw decision, the Court parsed through the language in the statute and reviewed definitions in Webster's Third New International Dictionary and the Oxford English Dictionary.

The Court also noted that the meaning of 'personal privacy' in Exemption 7(C) was further clarified by the rest of the statute. The phrase 'personal privacy' was first used in Exemption 6, which Congress enacted eight years before Exemption 7(C). Exemption 6 covered 'personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.' The Supreme Court noted that it has regularly referred to Exemption 6 as involving an 'individual's right of privacy. Moreover, the Court noted that Congress used the same phrase—'personal privacy'— in Exemption 7(C) that was used in Exemption 6. By comparison, the Court noted that Exemption 4 applies to corporations and that Congress did not use any language similar to that in Exemption 4 in Exemption 7(C).

In the end, the Supreme Court rejected AT&T's argument that because 'person' was defined for purposes of FOIA to include a corporation, the phrase 'personal privacy' in Exemption 7(C) reaches corporations as well. The Court concluded that 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.
 

Full post as published by Delaware Corporate and Commercial Litigation Blog on March 13, 2011 (boomark / email).