No such thing as personal privacy for corporations

From the Spring 2011 issue of The News Media & The Law, page 14.

In a decision that many observers said stated the obvious, the U.S. Supreme Court ruled in March that AT&T does not have personal privacy rights under the federal Freedom of Information Act.

The appeal in Federal Communications Commission v. AT&T focused on the communication company’s controversial claim that documents about the company “compiled for law enforcement purposes” could be withheld if disclosure “could reasonably be expected to constitute an unwarranted invasion of personal privacy.”

The Court’s holding in the case was decidedly uncontroversial. In an 8-0 opinion — Justice Elena Kagan recused herself because she was U.S. solicitor general when the case was moving through the lower courts — issued on March 1, the Court found that corporations have no right of personal privacy under FOIA.

Ultimately, the Court resolved what was considered by many to be an outlier case. No court had ever found corporations to have personal privacy rights before a decision by a panel of the U.S. Court of Appeals in Philadelphia (3rd Cir.), sitting in Newark, N.J., prompted the Supreme Court to take notice.

AT&T self-reported in 2004 that it overcharged the government for its participation in a federal program known as E-Rate, an initiative to provide enhanced telecommunications and information services to schools and libraries, particularly in rural and economically disadvantaged areas. The FCC launched an investigation into the incident and settled the matter with AT&T for $500,000 and the promise to institute a plan to ensure future compliance with the E-Rate program.

CompTel, a trade association that includes some of AT&T’s competitors, requested the investigative documents under FOIA in early 2005.

The FCC decided to release the requested documents to CompTel after redacting parts under Exemption 7(C), in relation to specific AT&T employees, and Exemption 4, for confidential, commercial and financial information.

AT&T filed an administrative appeal with the FCC in 2008, which found that AT&T, as a corporation, does not have personal privacy rights under Exemption 7(C) and that the documents must be released. AT&T filed suit, arguing the personal privacy rights in the exemption apply to corporations as well as to individuals.

AT&T contended that the term “personal privacy,” as set forth in Exemption 7(C), applied to corporations, in addition to individuals, because the term “person” is defined in the Administrative Procedure Act as including “an individual, partnership, corporation, association, or public or private organization other than an agency.” FOIA is a section within the Administrative Procedures Act. Because the term “personal” is the adjective form of the defined “person,” it should follow that the statutory definition of personal privacy also includes corporate entities, AT&T argued.

The Third Circuit agreed, finding that, similar to individuals, corporations can be embarrassed and stigmatized.

Therefore, the lower court held that Exemption 7(C)’s protections could be extended to include corporate interests, though the court did not go further and rule that AT&T should get the protection in this instance.

Section 7(C) requires a balancing test to determine whether records should be withheld. A balancing test is an analysis where the interests of the person must be weighed against the public interest in disclosure.

In the opinion, written by Chief Justice John Roberts, the Court held that the term “personal” has no direct correlation to the defined term “person” in the Administrative Procedure Act.

“When it comes to the word ‘personal,’ there is little support for the notion that it denotes corporations, even in the legal context,” the Court held.

The text of the statute and its context provide “no sound reason” for the Court “to disregard the ordinary meaning of the phrase ‘personal privacy.’”

As the Court’s questions did during oral arguments for the case in January, Roberts’ opinion focused heavily on the plain meaning of the term “personal privacy” and on other adjectives that can have distinct definitions from their root noun.

Examples the opinion cited include: “crab” and “crabby,” “crank” and “cranky,” and “pastor” and “pastoral.” None of these adjective-noun combinations have linked definitions according to the court. Like “personal,” the adjectives have “acquire[d] distinct meanings of their own,” the Court held.

The decision also examined how the terms “person” and “personal” were used in other parts of FOIA.

The definition of “personal privacy” and the decision to use that exact term in Exemption 7(C) was informative to the Court when it looked at other instances in FOIA where Congress chose to use, and not use, that exact phrasing.

Exemption 6, another “personal privacy” exemption, uses the same term as 7(C) and it applies only to individuals, a position unchallenged by AT&T because, it conceded, the types of records exempted by Exemption 6 — personnel files, medical files and “similar files” — do not have a corporate equivalent.

Exemption 4, which applies to corporations, does not use the phrase “personal privacy” or the term “personal.”

The exemption specifically uses the statutorily defined term “person” to include corporations within its protections, the Court found.

Exemptions 4 and 6 show a clear intent by Congress not to include corporations in Exemption 7(C), the Court held.

The Court also cited a memorandum issued by the U.S. attorney general shortly after Exemption 7(C) was added in 1974 that said the personal privacy exemption applies to individuals and “does not seem applicable to corporations.”

Adina Rosenbaum, an attorney at Public Citizen Litigation Group, which acted as co-counsel for CompTel in the case, said it is important to remember that the decision has not changed FOIA.

“This is how the system has worked without problems since Exemption 7 was enacted,” Rosenbaum said. “It would have been a seismic shift had AT&T won.”

The decision shows that the Court recognizes “the words ‘personal privacy’ have meaning,” Rosenbaum said.

And that meaning does not include corporate interests and corporate secrecy, she added.

A corporation may be given similar legal rights as a person in some respects, but “that doesn’t mean they are the same as a natural born person.”

The Reporters Committee for Freedom of the Press filed a friend-of-the-court brief urging the Court to reject recognition of corporate privacy rights under FOIA.