Win, lose or draw?

From the Spring 2011 issue of The News Media & The Law, page 16.

The most recent U.S. Supreme Court term was an unusually busy one for the federal Freedom of Information Act. On March 1, the Court ruled against AT&T in Federal Communications Commission v. AT&T, holding 8-0 that corporate entities could not assert a right to “personal privacy” under FOIA Exemption 7(C).

Less than one week later, the Court, in an 8-1 decision in Milner v. Department of the Navy, rejected the “High 2” interpretation of Exemption 2 that had been judicially sanctioned since the early 1980s.

Finally, on March 21, the Court refused to hear the Bloomberg-Fox News case from the U.S. Court of Appeals in New York (2nd Cir.), letting stand a decision that Federal Reserve emergency discount window lending records could not be withheld under Exemption 4 and must be disclosed. The records were subsequently released to the media, ending a more than two-year battle for the information.

Many might conclude that open government went 3-0 this term. But is the FOIA truly more open now than it was three months ago? Perhaps not.

The AT&T case did not establish any greater rights under FOIA than those that were previously thought to exist until a decision by a panel of the U.S. Court of Appeals in Philadelphia (3rd Cir.), sitting in Newark, N.J., held that Exemption 7(C) personal privacy right claims could be asserted by a corporate entity. To be sure, journalists should celebrate the fact that the U.S. Supreme Court affirmatively stated that such rights do not exist.

As the Reporters Committee for Freedom of the Press highlighted in its friend-of-the-court brief, recognizing such rights could significantly hinder the media’s ability to report on government investigations into corporate behavior.

However, in my view, what the Court really did was simply — and correctly — reset the status quo rather than expanding access rights under FOIA. Its decision did nothing to roll back the long-standing and overly broad privacy protections that the Court has, in the past, extended to individuals — even individuals within a corporation — under 7(C).

Indeed, if the Court had ruled in AT&T’s favor, some in Congress were prepared to amend FOIA to make clear that corporations are not protected under 7(C). H.R. 484, the Personal Privacy Clarification Act, was introduced on Jan. 26. It would have amended Exemption 7(C) to replace the phrase “personal privacy” with the words “the privacy of any individual.” This would have negated the Vulcan-like logic of AT&T’s legal argument that because “person” is defined under the Administrative Procedure Act to include a corporation it can claim a personal privacy right under FOIA.

But the government is just as willing to strip away access rights if a court finds records should be disclosed under FOIA. This is exactly what happened in the Bloomberg-Fox News case. On July 21, 2010, while the Federal Reserve was still fighting its losing FOIA case in the Second Circuit, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Buried within that massive piece of legislation are provisions that allow the Federal Reserve to keep secret the exact kind of lending documents at issue in the Bloomberg-Fox News litigation for up to two years after a loan is extended. While the law specifically states that any ongoing litigation for such records would not be affected by the law, those interested in keeping future similar records under wraps succeeded in getting the long-term win.

The Bloomberg-Fox News case clearly illustrates how a FOIA win can be short-lived and that those interested in maintaining secrecy will simply go directly to Congress for relief.

And congressional action may ultimately be what dismantles the holding in Milner.

In Milner, the Supreme Court struck down the “High 2” interpretation of Exemption 2. The government, for roughly 30 years, had continued to stretch and contort Exemption 2 far beyond the bounds of its text and plain meaning. The Court rightfully rejected this interpretation.

However, the Court took pains to note that while it could not support a “High 2” reading under FOIA, it was sensitive to the fact that, in its view, the holding left a wealth of potentially sensitive information exposed to disclosure.

Writing for the Court, Justice Elena Kagan suggested a variety of alternative avenues of relief for the government including: retroactive classification; seeking specific statutory exemptions from Congress for the Navy Explosive Safety Quantity Distance information at issue; application of Exemption 7(F), which protects from mandatory disclosure law enforcement records whose release “could reasonably be expected to endanger the life or physical safety of an individual”; and amending FOIA to include a new exemption codifying “High 2.”

The case was remanded back to a panel of the U.S. Court of Appeals in San Francisco (9th Cir.), sitting in Seattle, with instructions to determine the applicability of Exemption 7(F) to the records. In his concurrence, Justice Samuel Alito appeared to heavily support a 7(F) withholding and laid out specifically why the Navy records should be considered records compiled for law enforcement purposes.

The “win” in Milner is simply that “High 2” does not exist and that is certainly a welcome result for the media, whose reporting on issues such as infrastructure and security have certainly been stymied by its overbroad use.

However, in its wake, agencies have been left scrambling to protect information previously withheld under “High 2.” This will certainly include requesting a variety of specific statutory exemptions — as the Department of Defense has already begun to propose to Congress — and greater reliance on alternative exemptions.

Ultimately, there may also be a significant push to codify some form of “High 2” as a new, stand-alone exemption. Current and former Department of Homeland Security officials have already voiced support for such a measure. The Reporters Committee continues to monitor any such efforts and has been helping to lay groundwork to prevent a legislative “fix” that reinstitutes a statutory “High 2.”

So what should we conclude about FOIA this term? Will it be more open one year from now? The answer hinges largely on what congressional actions take place in Milner’s wake because, as some continue to cheer “victory,” I’m left wondering what our prize will be.