Cornell University: Clinics win battle over meaning of 2016 FOIA amendments

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A team including Cornell Law School’s First Amendment Clinic has won a precedent-setting case before a federal appeals court concerning the scope of 2016 amendments to the Freedom of Information Act (FOIA).

In the first ruling on this critical issue, the U.S. Court of Appeals for the 2nd Circuit agreed that the amendments require federal agencies to disclose confidential commercial and financial information they obtain from third parties, unless they can show that disclosing the confidential material will cause affirmative harm to the commercial interests of the entity that provided the information.

The victory for Cornell Law, Yale Law School’s Media Freedom and Information Access Clinic and the SMU Dedman School of Law First Amendment Clinic – all part of the Free Expression Legal Network, a coalition of clinics devoted to free speech and government transparency – came in a case concerning Exemption 4 to FOIA. That exemption permits an agency to withhold from the public all commercial or financial information it obtains from third parties if that information is “confidential.”

For several decades, courts had construed this exemption narrowly to allow the withholding of such confidential information only if its disclosure would cause “competitive harm.” But in a 2019 decision, the U.S. Supreme Court held in Food Marketing Institute v. Argus Leader that the plain language of Exemption 4 allows an agency to withhold any confidential commercial or financial information, regardless of whether its disclosure would cause any harm. According to the court, all confidential commercial and financial information falls within the literal terms of Exemption 4 and can be withheld.

The clinics’ case, Seife v. Food and Drug Administration, involved the meaning of a 2016 amendment to FOIA that did not apply to the FOIA request in Argus Leader. That amendment requires agencies to disclose information even when it falls within one of FOIA’s exemptions, unless the agency can show that disclosure is likely to cause the type of harm the exemption was intended to prevent. The FDA contended in Seife that Exemption 4 seeks only to prevent a destruction of confidentiality, so all confidential information can be withheld even under the 2016 amendment.

The clinics argued that Exemption 4 did not seek to protect confidentiality for the sake of confidentiality, but sought to avoid the commercial harm that can result from disclosure of certain confidential business information. Under that reading of the 2016 amendment, an agency invoking Exemption 4 is required to show both that commercial or financial information is confidential and that its disclosure is likely to cause some specific commercial harm. In the first appellate ruling to address the issue, the 2nd Circuit agreed with the clinics.

The plaintiff in the precedent-setting case is Charles Seife, an award-winning science reporter and journalism professor at New York University. Seife was seeking to obtain documents from the FDA related to its approval of a controversial drug – Exondys 51 – created by pharmaceutical company Sarepta. The FDA largely rejected Seife’s request for information pertaining to the drug’s approval, asserting that the clinical trial data and other information he sought could be withheld under Exemption 4 since Sarepta considered it confidential. While ultimately affirming the FDA’s decision to withhold much of the information, the 2nd Circuit rejected its contention that information can be withheld under Exemption 4 simply by virtue of its being confidential.

The Seife case originated with a 2016 email to Cortelyou Kenney, then a staff attorney at Yale Law School and later the associate director of the Cornell clinic. The email posed a simple inquiry – “lawsuit?” – as a possible way to promote transparency for clinical trial data in the wake of multiple scandals involving drugs that turned out to be less safe and effective than suggested by the analysis of the confidential trial data conducted by the pharmaceutical companies themselves. The case went through three rounds of summary judgment briefing in the district court before finally landing in the 2nd Circuit Court of Appeals in 2021.

Kenney believes the years of effort were well worthwhile. “This case sets a vital precedent,” Kenney said. “The 2nd Circuit is the first court of appeals in the nation to take up the question of the meaning of the foreseeable harm standard under the 2016 amendments, and this ruling will have an important spillover effect as other circuits address the issue.”

Seife agrees: “The decision circumscribes Exemption 4 in a really important way,” he said, “and in my future FOIAs I will be able to quote this every time and make sure FOIA officers understand that they must be able to show a foreseeable harm from disclosure in order to withhold confidential commercial information.”

Added Jared Carter, an attorney with the Cornell clinic, who argued the case before the 2nd Circuit: “This decision holds federal agencies to the standard Congress directed and promotes a more open government.”

Many attorneys and students contributed to this case over the past five years. They included Lily Coad, J.D. ’21, who drafted the reply brief for the 2nd Circuit; Tyler Valeska, who oversaw drafting of the 2nd Circuit’s opening brief as a fellow at Cornell Law; and Cornell Law students Eric James Cummings, George R. El-Khoury, Hayden Rutledge, Jamie N. Smith, Lucas Lonergan, Michael Mapp and Robert Ward.

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