FOIA Update: OIP Guidance: Submitters' Rights

January 1, 1982

FOIA Update
Vol. III, No. 3
1982

OIP Guidance


Submitters' Rights

The free flow of useful information into administrative agencies is essential to the operation of the Federal Government. To perform its regulatory and other administrative functions effectively, the Government requires the submission of millions of items of information annually from the private sector. Much of this information is submitted by corporations or other business entities and consists of trade secrets or other commercially valuable data.

Federal agencies have a responsibility to protect such sensitive business information from disclosure and they may do so pursuant to Exemption 4 of the Freedom of Information Act (FOIA), 5 U.S.C. § 552(b)(4). In order to ensure that the vital flow of such information is not impeded, agencies should exercise this responsibility to the fullest and with great care.

In 1979, the Supreme Court issued a landmark decision in this area, Chrysler Corp. v. Brown, 441 U.S. 281 (1979), in which it held that submitters of business information may sue under the Administrative Procedure Act, 5 U.S.C. §§ 701,et seq., in so-called "reverse" FOIA lawsuits to enjoin agencies from disclosing their information in response to FOIA requests. The procedure established by the Supreme Court for the litigation of such matters, however, made it imperative that business submitters be afforded a full opportunity to state their disclosure objections to the agencies for consideration at the administrative level.

To alert agencies to this litigation imperative, and to encourage the establishment of sound administrative practices in this area. the Department of Justice issued two guidance memoranda on this subject in June 1979. In one, the Department's Civil Division formally advised all agency general counsels of the procedures to be followed in connection with "reverse" FOIA cases. See Memorandum From Assistant Attorney General Barbara Allen Babcock To All Agency General Counsels, dated June 21, 1979, reproduced at PH Gov. Disclosure Service, Vol. 1, ¶ 300,791 (1979), summarized at 48 U.S.L.W. 2011-12 (July 3, 1979). In a companion guidance memorandum, the Department's Office of Information Law and Policy (a predecessor office to the Office of Information and Privacy) generally emphasized that all agencies should afford business submitters timely notice and a full opportunity to object to any possible disclosure of submitted business information. See Memorandum From Office Of Information Law And Policy Director Robert L. Saloschin To All Federal Departments And Agencies, dated June 15, 1979, reproduced at PH Gov. Disclosure Service, Vol. 1, ¶ 300,789 (1979).

Recently, however, it has come to the attention of the Department of Justice that there is need for substantial improvement in the notice and objection procedures made available to submitters of business information. A recent Office of Information and Privacy survey of administrative practices in this area revealed that several agencies still have no formal procedures for providing submitters with full notice and objection rights and that even many agencies which have formal practices in this area do not ensure that they are followed in all instances. As a result there is a widespread concern within the business community that submitted business information is not universally receiving the protection that it requires, which in turn has led to a growing reluctance among business submitters to provide valuable information to many federal agencies.

In light of these considerations, and pursuant to the Department of Justice's government-wide FOIA implementation responsibilities under 5 U.S.C. § 552(d), the Office of Information and Privacy, in coordination with the Presidential Task Force on Regulatory Relief, issues the following specific guidance to all federal agencies in possession of submitted business information. All such agencies should:

• Provide business submitters with prompt written notice of any FOIA request for submitted information (unless it is readily determined by the agency that the information should not be disclosed or, on the other hand, that the information lawfully has been published or otherwise made available to the public).

• Afford business submitters a period of at least ten working days in which to object to the disclosure of any specified portion of the information and to state fully all grounds upon which disclosure is opposed.

• Give careful consideration to all such specified grounds for nondisclosure prior to making an administrative determination of the issue and, in all instances in which the determination is to disclose, provide the submitter with a detailed statement of the reasons for which its disclosure objections are not sustained.

• Provide business submitters with written notice of any final administrative disclosure determination not less than ten working days prior to a specified disclosure date, in order that the matter may be considered for possible judicial intervention.

• Notify business submitters promptly of all instances in which FOIA requesters bring suit seeking to compel disclosure of their information.

• Establish formal written procedures, preferably by regulation, according to which the above steps are to be followed agency-wide in all instances.

These should be the fundamental elements of each agency's program to ensure proper protection of all submitted business information in its possession. Business submitters are entitled, at a minimum, to these basic rights of formal notice and a full opportunity to object to the disclosure of their information. The Administration is attempting through its proposed FOIA reform legislation to establish these submitters' rights within the FOIA itself; but until such reform is enacted it is still, as District Court Judge Gerhard A. Gesell recently phrased it, "[t]he better practice . . . obviously" to follow such procedures. British Airports Authority v. United States Department of State, 530 F. Supp. 46, 50 (D.D.C. 1981). Only through the full and careful compliance with such procedures by all agencies in possession of submitted business information in all instances can the vital flow of valuable commercial information from the business community to the Federal Government be maintained.

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