Waiving Goodbye To The Freedom Of Information: Government Confidentiality Waivers In FOIA Exemption 4

Adam Wilson
Sunday, October 21, 2012

Patrick Henry once said, “The liberties of the people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them.”[2] Presumably embracing a sentiment similar to Henry’s, Congress enacted the Freedom of Information Act (FOIA).[3]  The FOIA’s purpose was to “ensure an informed citizenry, vital to the functioning of a democratic society, needed to check against corruption and to hold the governors accountable to the governed.”[4]  Under the FOIA, citizens may make requests to the government for information.
However, recognizing that some information must be withheld from the public, the FOIA has a list of nine exemptions that allow the government to withhold information under certain circumstances.[5]  Exemption 4 covers information which constitutes trade secrets or confidential financial information.  The Ninth Circuit has created a circuit split over what constitutes a waiver of confidentiality[6] under Exemption 4, and thus requires the government to disclose information even if it qualifies for the exemption. [7]

The D.C. Circuit applies a test called the “public domain test” to determine whether information is no longer confidential under Exemption 4.[8]  Under the public domain test, the plaintiff must demonstrate that “the specific information sought must have already been disclosed and preserved in a permanent public record.”[9]
The Ninth Circuit decision that created the split was Watkins v. United States Bureau of Customs and Border Protection.[10]  That case dealt with a FOIA request for information from the U.S. Customs Bureau (hereinafter, “Customs Bureau”).[11]  When the Customs Bureau seizes imported goods that are suspected of being counterfeit, they require the importer of the goods to produce information regarding those goods.[12]  Some of this information is financially valuable to the firm because it includes detailed shipping information such as the quantities of the goods, descriptions of the goods, country of origin, etc.[13]  The Customs Bureau discloses the information that they obtain to the owners of the trademarks that are suspected to have been counterfeited, and does not place any limitations on further dissemination of that information by those trademark owners.[14]
The plaintiff in Watkins made a FOIA request to the Customs Bureau for the information contained in the seizure notices, but was denied.[15]  The Watkins court refused to employ the public domain test.[16]  While noting the continuing utility of the public domain test, the court explicitly rejected it as the exclusive test for determining whether the government has waived confidentiality under Exemption 4.[17]  Additionally, the court announced a new rule that a government disclosure of confidential information to a third party, which is not accompanied by limits on further disclosure, constitutes a waiver of confidentiality under Exemption 4.[18]
The court distinguished the facts of Watkins from the cases in other jurisdictions which follow the public domain test, by noting that most of those cases dealt with other FOIA exemptions which involved questions of national security and public safety.[19]  In those cases, the court agreed that national security and public safety concerns could override the usual requirement of disclosure, but that those concerns were inapplicable to an Exemption 4 analysis.[20]
I agree with the Watkins court’s ruling, and I would reject the rigid application of the public domain test as the only means for determining whether the government has waived confidentiality.  As discussed above, under the public domain test, a plaintiff must demonstrate that information identical to that which they are seeking already exists in the public domain.[21]  However, if a plaintiff is able to meet this burden, what good is a FOIA request?  The information they are looking for already exists and is available to the public.  It seems clear that the public domain test, when applied as an inflexible rule, invariably comes to some nonsensical results.
The purpose of FOIA was to “ensure an informed citizenry, vital to the functioning of a democratic society, needed to check against corruption and to hold the governors accountable to the governed."[22]  I see no way in which the burdensome requirements placed on the plaintiff under the public domain test satisfy this central purpose of FOIA.  The purposes of FOIA are better served by a waiver rule that would allow more information to fall under the mandatory disclosure section of the statute.
Additionally, the exceptions to FOIA must be narrowly construed.[23]  The Ninth Circuit’s test is superior to the public domain test in that it construes Exception 4 in a narrow fashion that more accurately reflects the purposes of FOIA.
The Ninth Circuit test also has the advantage of interpreting the meanings of “public” and “confidential” more consistently with other areas of law.  If you consider patent law, for example, a piece of information is considered to be in the public domain for the purpose of patentability if it has been published in even one location anywhere in the world.  However, under the public domain test, information is not considered public unless it is preserved in a permanent public record.[24]  This ruling can lead us to some bizarre factual results.   Consider that under the public domain test, there could be information which is generally known throughout an industry (or even throughout the world), but which the government could withhold from disclosing because it is considered “confidential.”[25]
I won’t deny that the D.C. Circuit’s public domain test has its appeal.  Not only is the public domain test the only standard as yet applied to Exemption 4 in the other circuits, but it also provides a bright line rule that is easy to judicially administer.[26]  However, these reasons for adopting the test are not compelling.  The judiciary must not shirk its responsibility to faithfully enforce a proper interpretation of the law by adopting a test simply because it is easy to administer.  Judges are very often required to apply non-rigid legal tests to complicated factual situations. 
The Ninth Circuit’s test is more faithful to the purposes of FOIA, and is more consistent with the statute and other areas of intellectual property law.  The other circuits should follow the Ninth Circuit’s lead in abandoning a rigid application of the public domain test as the only way to determine whether the government has waived confidentiality under Exemption 4.

[1] Adam Wilson is a May, 2013 J.D. Candidate and a Managing Articles Editor for the Rutgers Journal of Law & Public Policy. 
[2] Patrick Henry, Speech at the Virginia Ratifying Convention (June 9, 1788).
[3] 5 U.S.C.A. § 522.
[4] John Doe Agency v. John Doe Corp., 493 U.S. 146, 152 (1989) (quoting N.L.R.B. v. Robbins Tire & Rubber Co., 437 U.S. 214 (1978)).
[5] 5 U.S.C.A. § 522(b)(1-9).
See Watkins v. U.S. Bureau of Customs and Border Protection, 643 F.3d 1189 (2011).
[7] See id.
[8] Students Against Genocide v. Dep’t of State, 257 F.3d 828, 836 (2001).
[9] Id. at 836. Internal Citations Omitted.
[10] Watkins, 643 F.3d 1189.
[11] Id.
[12] Id. at 1192.
[13] Id. at 1197-98.
[14] Id. at 1197.
[15] Id.
[16] Watkins, 643 F.3d 1189 at 1196.
[17] Id. at 1198.
[18] Id. at 1196.
[19] Id. at 1197.
[20] Id.
[21] Students Against Genocide v. Dep’t. of State, 257 F.3d 828, 836.
[23] Watkins, 643 F.3d 1189 at 1194.
[24] Students Against Genocide v. Dep’t of State, 257 F.3d 828.
[25] Other areas of intellectual property law, like trade secret law, follow narrow constructions of the word “confidential.”
[26] See Watkins, 643 F.3d 1189 at 1199 (Rymer, J.,concurring in part and dissenting in part).