Personal preference; Supreme Court will decide if "personal privacy" under FOIA applies to corporations.
AT&T objected to the release of information based on a novel interpretation of one of the exemptions to FOIA, 7(c), which protects personal information in law enforcement records when its disclosure "could reasonably be expected to constitute an unwarranted invasion of personal privacy." The FCC found that Exemption 7(c)'s "personal privacy" protection doesn't cover corporations, but AT&T appealed the matter, and the 3rd Circuit last year agreed with the company that Exemption 7(c) "unambiguously" applies to corporations. "After all," Judge Michael Chagares wrote for the 3rd Circuit, "'personal' is the adjectival form of 'person,' and FOIA defines 'person' to include a corporation." The 3rd Circuit also reasoned that excluding corporations from Exemption 7(c) would vitiate its purpose of "encouraging corporations--like human beings--to cooperate and be forthcoming in [law enforcement] investigations."
In September, the Supreme Court granted cert in the case, which could have a significant impact on FOIA exemptions if the 3rd Circuit's reasoning is upheld.
"This is the first time in 35 years that an appellate court has looked at that language and seen [this interpretation]," says Max Kennerly, an associate at The Beasley Firm. Kennerly, who has covered the case for his Litigation and Trial Blog, adds that the Supreme Court has repeatedly said the purpose of FOIA is to release information. "It may indeed be good policy to create some sort of privacy exemption so that corporations can share records with federal law enforcement," he says, "but it's almost certainly not what the Congress that drafted [FOIA] thought of it."
The 3rd Circuit's decision surprised Mary Albert, assistant general counsel of CompTel, which made the FOIA request for information on the AT&T investigation. All bets are off for the Supreme Court's interpretation of the issue, she says--while other companies have invoked the personal privacy exemption to attempt to prevent FOIA releases, courts have struck them down. FCC v. AT&T marks the first time the argument has been taken so far.
"It's really going to be a matter of statutory interpretation," Albert says. "There are very strong arguments in our favor, but I was so shocked that the 3rd Circuit went down this road that I can't place my money anywhere on what the Supreme Court will look at."
Experts expect the high court to parse through definitions of "personal privacy" as it relates to FOIA exemptions.
"[The Supreme Court may] come to another conclusion from the defined term 'person,'" says Kristen Mathews, head of Proskauer Rose's Privacy and Data Security group. "To me, 'personal,' especially followed by the word 'privacy,' doesn't seem to me to be derived from the word 'person,' as defined to include corporations. ... I would venture to say that most privacy practitioners, including myself, would not have thought that a corporation could have personal privacy rights."
Give and Take
The fact the court even took the case has some lawyers expecting the emergence of a clear rule on FOIA exemptions.
"There are a lot of questions why the Supreme Court granted cert in this particular case," Kennerly says. "One option is that the Supreme Court looked at the ruling and said, 'This is just wrong, we need to correct what the 3rd Circuit did.' Another option is that the Supreme Court wants to clarify how courts in general should look at FOIA."
That would impact Kennerly, who as a litigator frequently uses FOIA to obtain information in cases that follow a government investigation. And it would of course impact companies that have been subject to federal investigations.
"FOIA requests are a common issue," Mathews says. "Regulators often request that companies provide information in connection with investigations that are pending, and companies often provide it--this case impacts whether a third party can then obtain that information under FOIA."
And if a company believes a FOIA request could provide it with valuable information about a competitor, the company will make the request. If a company believes its competitor is using illegal business practices, for instance, and wants to find out what a government investigation has uncovered about it, a blanket exception would mean the company can't reach that information at all. So in FCC v. AT&T, corporations might be able to see the issue from different perspectives.
"If I'm a GC, my concern is, what if I cooperate with the government in a criminal investigation, and those records can be released to anyone who asks for them? ... The default position of corporate counsel would be to hope the Supreme Court affirms that corporations can invoke the unwarranted personal privacy exemption," Kennerly says. "On the same token, every time one corporation is able to conceal information, another corporation can't get that information."
Processing for Privacy
If the Supreme Court affirms the 3rd Circuit, Albert says it will have a significant impact on how the government processes FOIA requests. First it will have to figure out what "personal Privacy" might encompass for a corporation.
"How that would be interpreted for a corporation is something the government's going to have to figure out if we don't win here," Albert says.
Indeed, the government's brief in the Supreme Court matter says such a sea change would "require a massive administrative effort to process and litigate the newly found 'Privacy' right."
Adina Rosenbaum, an attorney at Public Citizen, which is co-counsel to CompTel in the Supreme Court case, says the questions of interpretation the 3rd Circuit's reasoning raised could lead to some corporations taking advantage of the exemption.
"[The 3rd Circuit's interpretation] inserts into the processing of these records a consideration that's never been there before," she says. "There's a risk of it leading to corporations, if they don't want embarrassing things to get out about them, objecting to information being released through FOIA requests just to delay the process."
In the wake of the outcr y over Citizens United v. FEC, which dealt with corporations' First Amendment rights in the campaign speech context (see "Corporate Personification," p. 20), FCC v. AT&T is also gaining notice by a public that hasn't forgotten about the shady corporate scandals of recent years, from Enron to Toyota.
A recent Slate article on the case declared, "It used to be the case that embarrassment, harassment and stigma were the best check against corporate wrongdoing. But that was before corporations had feelings."
In a court brief, the Obama Administration cited some high-profile corporate disasters to show what kind of information the public might lose if the Supreme Court upholds the 3rd Circuit's broader interpretation of Exemption 7(c).
"Under the court of appeals' reasoning," wrote Neal Kumar Katyal, the acting solicitor general, "information obtained by law-enforcement agencies, including agencies that may investigate BP's offshore drilling practices or Goldman Sachs' trading practices, could be withheld simply to protect a corporation from purported 'embarrassment' or 'stigma.' That decision is clearly wrong."
RELATED ARTICLE: Corporate Personification
FCC v. AT&T DEALS WITH CORPORATE PERSONHOOD, THE CONCEPT THAT made the Supreme Court's decision in Citizens United v. FEC such a bombshell. The pending case even considers whether corporations have feelings, in a sense. "Corporations, like human beings, face public embarrassment, harassment, and stigma," the 3rd Circuit noted in a footnote to its opinion in FCC v. AT&T.
"Do we really think corporations should be treated as people with all the same rights and concerns about embarrassment and First Amendment rights?" asks Max Kennerly, an attorney and editor of the Litigation and Trial Blog. "The old theory is of seeing corporations as people, but in each particular case it's limited to a specific example."
While the AT &T case only deals with corporate personal privacy in the context of FOIA, Kennerly says the case could be a step toward courts recognizing more equality between persons and corporations.
Kristen Mathews, head of the Privacy & Data Security group at Proskauer Rose, points out that other privacy statutes at the state and federal level are written to expressly apply only to the privacy of a natural person. "This case does not change the scope of those laws," she says. "However, the case could potentially be used as precedent to find privacy rights for corporations in other areas of the law."
AT&T objects to FOIA release
3rd Circuit applies personal privacy to company
Case deals with "corporate personhood"
|Printer friendly Cite/link Email Feedback|
|Date:||Nov 30, 2010|
|Previous Article:||Immense earmark.|
|Next Article:||Resale Rights: ruling may impose tough restrictions on customers' use of copyrighted works they have paid for.|